    [Senate Hearing 109-827]
    [From the U.S. Government Publishing Office]

                                                     S. Hrg. 109-827, Pt. 1

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                      2007

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

                                    HEARINGS

                                   before the

                          COMMITTEE ON ARMED SERVICES
                              UNITED STATES SENATE

                           ONE HUNDRED NINTH CONGRESS

                                 SECOND SESSION

                                       ON

                                    S. 2766

         TO AUTHORIZE APPROPRIATIONS FOR FISCAL YEAR 2007 FOR MILITARY
    ACTIVITIES OF THE DEPARTMENT OF DEFENSE, FOR MILITARY CONSTRUCTION, AND
       FOR DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY, TO PRESCRIBE
    PERSONNEL STRENGTHS FOR SUCH FISCAL YEAR FOR THE ARMED FORCES, AND FOR
                                 OTHER PURPOSES

                                   ----------

                                     PART 1

                                MILITARY POSTURE
                                  ARMY POSTURE
          ATOMIC ENERGY DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY
                               AIR FORCE POSTURE
                              COMBATANT COMMANDERS
                                  NAVY POSTURE
               JOINT STRIKE FIGHTER F136 ALTERNATE ENGINE PROGRAM

                                   ----------

              FEBRUARY 7, 14, 16; MARCH 2, 7, 9, 14, 15, 16, 2006

             Printed for the use of the Committee on Armed Services
    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                  2007--Part 1

         MILITARY POSTURE  b   ARMY POSTURE  b   ATOMIC ENERGY DEFENSE
      ACTIVITIES OF THE DEPARTMENT OF ENERGY  b   AIR FORCE POSTURE  b
     COMBATANT COMMANDERS  b   NAVY POSTURE  b   JOINT STRIKE FIGHTER F136
                            ALTERNATE ENGINE PROGRAM

                                                     S. Hrg. 109-827, Pt. 1

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                      2007

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

                                    HEARINGS

                                   before the

                          COMMITTEE ON ARMED SERVICES
                              UNITED STATES SENATE

                           ONE HUNDRED NINTH CONGRESS

                                 SECOND SESSION

                                       ON

                                    S. 2766

         TO AUTHORIZE APPROPRIATIONS FOR FISCAL YEAR 2007 FOR MILITARY
    ACTIVITIES OF THE DEPARTMENT OF DEFENSE, FOR MILITARY CONSTRUCTION, AND
       FOR DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY, TO PRESCRIBE
    PERSONNEL STRENGTHS FOR SUCH FISCAL YEAR FOR THE ARMED FORCES, AND FOR
                                 OTHER PURPOSES

                                   __________

                                     PART 1

                                MILITARY POSTURE
                                  ARMY POSTURE
          ATOMIC ENERGY DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY
                               AIR FORCE POSTURE
                              COMBATANT COMMANDERS
                                  NAVY POSTURE
               JOINT STRIKE FIGHTER F136 ALTERNATE ENGINE PROGRAM

                                   __________

              FEBRUARY 7, 14, 16; MARCH 2, 7, 9, 14, 15, 16, 2006

             Printed for the use of the Committee on Armed Services

                         U.S. GOVERNMENT PRINTING OFFICE
    30-347 PDF                 WASHINGTON DC:  2008
    ---------------------------------------------------------------------
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                          COMMITTEE ON ARMED SERVICES

                        JOHN WARNER, Virginia, Chairman

    JOHN McCAIN, Arizona                 CARL LEVIN, Michigan
    JAMES M. INHOFE, Oklahoma            EDWARD M. KENNEDY, Massachusetts
    PAT ROBERTS, Kansas                  ROBERT C. BYRD, West Virginia
    JEFF SESSIONS, Alabama               JOSEPH I. LIEBERMAN, Connecticut
    SUSAN M. COLLINS, Maine              JACK REED, Rhode Island
    JOHN ENSIGN, Nevada                  DANIEL K. AKAKA, Hawaii
    JAMES M. TALENT, Missouri            BILL NELSON, Florida
    SAXBY CHAMBLISS, Georgia             E. BENJAMIN NELSON, Nebraska
    LINDSEY O. GRAHAM, South Carolina    MARK DAYTON, Minnesota
    ELIZABETH DOLE, North Carolina       EVAN BAYH, Indiana
    JOHN CORNYN, Texas                   HILLARY RODHAM CLINTON, New York
    JOHN THUNE, South Dakota

                        Charles S. Abell, Staff Director

                 Richard D. DeBobes, Democratic Staff Director

                                      (ii)
                                C O N T E N T S

                                  ----------

                        CHRONOLOGICAL LIST OF WITNESSES
                                Military Posture
                                february 7, 2006

                                                                       Page

    Rumsfeld, Hon. Donald, Secretary of Defense; Accompanied by Gen.
      Peter Pace, USMC, Chairman, Joint Chiefs of Staff; and GEN Pete
      Schoomaker, USA, Chief of Staff, U.S. Army.....................    12

                                  Army Posture
                               february 14, 2006

    Harvey, Hon. Frances J., Secretary of the Army; Accompanied by
      GEN Peter J. Schoomaker, USA, Chief of Staff, United States
      Army; and LTG Steven Blum, U.S. Army National Guard............   144

     Priorities and Plans for the Atomic Energy Defense Activities of the
      Department of Energy and to Review the Fiscal Year 2007 President's
     Budget Request for Atomic Energy Defense Activities of the Department
           of Energy and the National Nuclear Security Administration
                               february 16, 2006

    Bodman, Hon. Samuel W., Secretary of Energy......................   274

                               Air Force Posture
                                 march 2, 2006

    Wynne, Hon. Michael W., Secretary of the Air Force...............   350
    Moseley, Gen. T. Michael, USAF, Chief of Staff, United States Air
      Force..........................................................   377

        Combatant Commanders on their Military Strategy and Operational
                                  Requirements
                                 march 7, 2006

    Fallon, ADM William J., USN, Commander, United States Pacific
      Command........................................................   445
    Bell, GEN Burwell B., III, USA, Commander, United Nations Command
      and Republic of Korea/United States Combined Forces Command,
      and Commander, United States Forces Korea......................   457
    Jones, Gen. James L., Jr., USMC, Commander, United States
      European Command and Supreme Allied Commander, Europe..........   472

                                  Navy Posture
                                 march 9, 2006

    Winter, Hon. Donald C., Secretary of the Navy....................   570
    Mullen, ADM Michael G., USN, Chief of Naval Operations...........   587
    Hagee, Gen. Michael W., USMC, Commandant of the Marine Corps.....   612

        Combatant Commanders on their Military Strategy and Operational
                                  Requirements
                                 march 14, 2006

    Craddock, GEN Bantz J., USA, Commander, U.S. Southern Command....   702

               Joint Strike Fighter F136 Alternate Engine Program
                                 march 14, 2006

    Drayson, Lord Paul, Minister for Defence Procurement, United
      Kingdom........................................................   788
    Stirrup, Sir Jock, Chief of the Air Staff, United Kingdom........   793
    Bernardis, Lieutenant General Giuseppe, Chief of Department for
      Armament Programs, Secretariate for Defence and National
      Armaments, Italy...............................................   813
    Gates, Rear Admiral Raydon W., Ao, CSM, Head of the Australian
      Defence Staff (Washington), Australia..........................   814

       To Continue to Receive Testimony on the Joint Strike Fighter F136
                            Alternate Engine Program
                                 march 15, 2006

    England, Hon. Gordon R., Deputy Secretary of Defense.............   842
    Donnelly, Scott C., President and CEO, GE Aviation...............   997
    Guyette, James M., President and CEO, Rolls-Royce Aviation.......   999
    Chenevert, Louis, President and Chief Operating Officer, United
      Technologies Corporation, Pratt & Whitney......................  1008

        Combatant Commanders on their Military Strategy and Operational
                                  Requirements
                                 march 16, 2006

    Abizaid, GEN John P., USA, Commander, United States Central
      Command........................................................  1129
    Brown, GEN Bryan D., USA, Commander, United States Special
      Operations Command.............................................  1154

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                      2007

                                  ----------

                           TUESDAY, FEBRUARY 7, 2006

                                           U.S. Senate,
                                   Committee on Armed Services,
                                                        Washington, DC.

                                MILITARY POSTURE

        The committee met, pursuant to notice, at 9:30 a.m. in room
    SD-106, Dirksen Senate Office Building, Senator John Warner
    (chairman) presiding.
        Committee members present: Senators Warner, McCain, Inhofe,
    Sessions, Collins, Ensign, Talent, Graham, Dole, Cornyn, Thune,
    Levin, Byrd, Lieberman, Reed, Akaka, Bill Nelson, E. Benjamin
    Nelson, and Dayton.
        Committee staff members present: Charles S. Abell, staff
    director; Leah C. Brewer, nominations and hearings clerk; and
    John H. Quirk V, security clerk.
        Majority staff members present: William M. Caniano,
    professional staff member; Regina A. Dubey, research assistant;
    Ambrose R. Hock, professional staff member; Gregory T. Kiley,
    professional staff member; Sandra E. Luff, professional staff
    member; Derek J. Maurer, professional staff member; Elaine A.
    McCusker, professional staff member; David M. Morriss, counsel;
    Lucian L. Niemeyer, professional staff member; Stanley R.
    O'Connor, Jr., professional staff member; Lynn F. Rusten,
    professional staff member; Robert M. Soofer, professional staff
    member; Sean G. Stackley, professional staff member; Scott W.
    Stucky, general counsel; Kristine L. Svinicki, professional
    staff member; and Diana G. Tabler, professional staff member.
        Minority staff members present: Richard D. DeBobes,
    Democratic staff director; Jonathan D. Clark, minority counsel;
    Daniel J. Cox, Jr., professional staff member; Madelyn R.
    Creedon, minority counsel; Gabriella Eisen, research assistant;
    Richard W. Fieldhouse, professional staff member; Creighton
    Greene, professional staff member; Bridget W. Higgins, research
    assistant; Michael J. Kuiken, professional staff member; Gerald
    J. Leeling, minority counsel; Peter K. Levine, minority
    counsel; Michael J. McCord, professional staff member; William
    G.P. Monahan, minority counsel; and Arun A. Seraphin,
    professional staff member.
        Staff assistants present: Micah H. Harris, Jill L.
    Simodejka, and Pendred K. Wilson.
        Committee members' assistants present: Cord Sterling,
    assistant to Senator Warner; Christopher J. Paul, assistant to
    Senator McCain; John A. Bonsell, assistant to Senator Inhofe;
    Arch Galloway II, assistant to Senator Sessions; Mackenzie M.
    Eaglen, assistant to Senator Collins; D'Arcy Grisier, assistant
    to Senator Ensign; Lindsey R. Neas, assistant to Senator
    Talent; Clyde A. Taylor IV, assistant to Senator Chambliss;
    Meredith Beck, assistant to Senator Graham; Russell J.
    Thomasson, assistant to Senator Cornyn; Stuart C. Mallory,
    assistant to Senator Thune; Christine Evans and Erik Raven,
    assistants to Senator Byrd; Frederick M. Downey, assistant to
    Senator Lieberman; Elizabeth King, assistant to Senator Reed;
    Darcie Tokioka, assistant to Senator Akaka; William K. Sutey,
    assistant to Senator Bill Nelson; Eric Pierce, assistant to
    Senator Ben Nelson; Kimberly Jackson, assistant to Senator
    Dayton; and Andrew Shapiro, assistant to Senator Clinton.

           OPENING STATEMENT OF SENATOR JOHN WARNER, CHAIRMAN

        Chairman Warner. Good morning, everyone. Before we begin
    our hearing today, all members wish to acknowledge that not
    only the United States, but the world notes with sadness the
    passing of one of our most courageous and distinguished
    citizens, Coretta Scott King. Two of our colleagues, Senator
    Kennedy and Senator Clinton, are joining with four Presidents
    to acknowledge the courage of this great lady. We open our
    hearing today in recognition of her contributions to freedom
    and justice, not unlike the goals that our men and women of the
    Armed Forces are fighting for all over the world.
        The committee meets today to receive the annual testimony
    of the Secretary of Defense and the Chairman of the Joint
    Chiefs of Staff on the posture of the U.S. Armed Forces and
    President Bush's defense budget for the fiscal year 2007 and
    future years. We also recognize our distinguished Chief of
    Staff of the Army. We are delighted that you joined us this
    morning, given that it is your leadership, together with that
    of the Secretary and the Chairman, that will forge the effort
    to get the major part of this budget, namely the Army, through
    and accepted by Congress. I wish you well, chief.
        We meet today as the Iraqi people are working to form a
    permanent democratic government in the aftermath of yet another
    round of historically successful elections. Iraqis have spoken
    for freedom and democracy, but their voice would not have been
    heard without the service and sacrifice of the men and women of
    the Armed Forces of the United States and their coalition
    partners and the Iraqi security forces (ISF). We extend our
    profound respect to those who serve and our thoughts and
    prayers are with their families and particularly those families
    who are experiencing the loss or the wounding of one of their
    beloved members.
        As we were finishing work on last year's Defense
    Authorization Bill--it seems like just 6 weeks ago, Senator
    Levin, is my recollection--I stated that the next 6 months
    would be the most critical period of the conflict in Iraq. The
    key to success in Iraq and the eventual phaseout in an orderly
    way, depending on the ground situation and that of our
    commanders, of the United States troops and those of the
    coalition forces, that is dependent upon the training and
    equipping and the advising of ISF to a level of military
    proficiency and courage and dependability such that they can
    continue assuming a greater and greater responsibility for
    defending their nation's sovereignty and freedom.
        I commend you, Mr. Secretary and your associates, for the
    success that we have made here of recent in that restructuring
    of those forces and the training and equipping. Substantial
    progress is being made and will continue to be made, I am
    confident.
        We need, however, Mr. Secretary, as a part of your
    presentation this morning your assessment of the operations in
    Iraq and Afghanistan and an update about our continuing efforts
    to forge and secure a democratic future for those nations.
        This is a time for hope for Iraq and Afghanistan, but
    difficult work lies ahead in these lands and others in the long
    war on terror. I noted in this very room just a few days ago,
    Mr. Secretary, my concern, and it is shared by others, of the
    increasing level of corruption and criminality in Iraq and the
    difficulty that our coalition forces are finding in performing
    military missions in the face of this very significant
    corruption and criminality that is obscuring so much of the
    really success that has been made in Iraq. I hope that you will
    address that issue.
        The manpower demands of ongoing stabilization operations
    along with the requirements to build more agile, deployable
    forces for the United States is an extreme challenge. You have
    to do both at the same time. The President's budget request
    arrives this year at a critical time of change, not just in the
    global war on terrorism, but here at home as well. The first
    Quadrennial Defense Review (QDR) fully focused on post-
    September 11 threats has just been delivered to Congress. I
    have been reviewing it together with my colleagues, and it
    seems to me to be a very constructive contribution towards the
    structuring of our future forces and a guidepost for us to
    follow.
        I commend the President of the United States for his
    continuing commitment to strengthening our defenses,
    capabilities, and providing our forces with the resources they
    need to successfully fulfill their missions. The budget
    priorities of supporting the global war on terror,
    restructuring our forces, and our global posture, building
    joint capabilities for future threats, all this at the same
    time, and taking care of our troops and their families, are
    clearly the right emphasis in this budget.
        One of the committee's most important duties is to provide
    oversight over the management of hundreds of billions of
    dollars the Department spends each year on the acquisition of
    supplies, services, and equipment. This committee will focus on
    that under the leadership of Senators McCain, Ensign,
    Lieberman, and Akaka, who have taken on that, in a bipartisan
    way to strengthen the situation so as to make certain that our
    taxpayers' dollars are wisely expended.
        The committee is committed to doing all we can to ensure
    the safety of our soldiers. Taking lessons from recent
    operations in the war on terrorism, two specific areas. I wish
    to again commend the Department of Defense (DOD) under your
    leadership for upgrading a structure under a four-star officer
    to deal with the improvised explosive devices (IEDs) and to
    increase substantially that budget. This committee has
    communicated our thoughts on that some weeks ago to you, and we
    see that it has come into fruition now.
        Likewise, the unmanned aerial vehicles (UAVs) have made the
    warfighter a much stronger and agile individual and better
    informed in the intelligence world. So, this technology is
    important for our future. Years ago, our committee tried to
    emphasize the need for the unmanned vehicles, both air and
    ground and sea, that can be employed in our defense structure.
        The shipbuilding budget is of particular concern to the
    committee. In a hearing before this committee on February 10,
    2005, the Chief of Naval Operations (CNO) stated that, given
    the current rate of ship purchases and production, the Navy
    could be faced with a decreasing fleet of ships, eventually
    dropping below 250 major combatants. A fleet of this small size
    may well jeopardize the Navy's ability to meet its mission
    requirements and the financial viability of the vital
    shipbuilding industrial base. I think this budget makes the
    best move forward in the number of new acquisition of ships
    available under this budget.
        I shall put the balance of my statement in the record
    because we have a strong attendance here this morning. We are
    anxious to hear from our distinguished witnesses. I thank you,
    Mr. Secretary, Mr. Chairman, and General Schoomaker.
        [The prepared statement of Senator Warner follows:]
                   Prepared Statement by Senator John Warner
        Before we begin, I note that several of our members are not here
    today. This morning in Georgia, those members--and indeed our entire
    Nation--are paying their last respects to Corretta Scott King. To quote
    our President on her passing, ``Our Nation lost a beloved, graceful,
    courageous woman who called America to its founding ideals and carried
    on a noble dream.''
        Dr. and Mrs. King were seen not only as leaders of the American
    civil rights movement, but as symbols of an international struggle
    against racism, colonialism, and all forms of oppression and
    discrimination. It is only fitting that we take a moment to remember
    this great woman here today as our military forces are engaged around
    the world, similarly dedicated to ending the oppression of peoples.
        The committee meets today to receive the annual testimony of the
    Secretary of Defense and the Chairman of the Joint Chiefs of Staff on
    the posture of the U.S. Armed Forces and President Bush's defense
    budget request for fiscal year 2007 and the Future Years Defense
    Program (FYDP).
        Secretary Rumsfeld and Chairman Pace, I welcome you back before the
    committee and commend you for the outstanding leadership, as a team you
    both provide our Nation, and our men and women serving in the
    Department of Defense (DOD) and their families.
        We meet today as the Iraqi people are working to form a permanent,
    democratic government in the aftermath of yet another round of very
    successful elections--again, in defiance of terrorists and of dire
    predictions of failure. Iraqis have spoken for freedom and democracy,
    but their voice would not have been heard without the service and
    sacrifice of the United States Armed Forces, our coalition partners,
    and the Iraqi security forces (ISF). We extend our thanks to those who
    serve, and our thoughts and prayers are with the families and friends
    of those who have been lost or wounded, defending liberty around the
    world.
        As we were finishing work on last year's Defense Authorization Bill
    a mere 6 weeks ago, I stated that the next 6 months would be the most
    critical period of the conflict in Iraq. The key to success in Iraq--
    and the withdrawal of U.S. troops--is the training and equipping, and
    advising of ISF to a level of proficiency and dependability that they
    can begin assuming principal responsibility for defending their
    sovereignty and freedom. We look forward to your assessment of our
    operations in Iraq, and also your insights about forging a secure,
    democratic future for Iraq and Afghanistan.
        This is a time of hope for Iraq and Afghanistan, but difficult work
    lies ahead in these lands and others in this long war on terror. The
    manpower demands of ongoing stabilization operations, along with the
    requirements to build more agile, deployable forces for the future,
    will continue to place considerable stress on the men and women of our
    Armed Forces and their families. With these competing demands in mind,
    we consider this year's budget request.
        The President's budget request arrives this year at a critical time
    of change--not just in the global war on terrorism, but here at home,
    as well. The first Quadrennial Defense Review fully focused on post-
    September 11 threats has just been delivered to Congress. We will need
    to carefully analyze and evaluate this document. For the first time in
    a decade, a Base Realignment and Closure round has been completed.
    These results now need to be implemented. We must take into
    consideration these ``moving parts,'' as we review this year's budget
    request in the coming weeks and months. It is important to ensure that
    we not only enhance our capability to win today's wars, but that we
    will retain the strength to deter, and if necessary win, conflicts of
    the future as well.
        The budget request delivered to Congress on February 6 for the DOD
    is for $439.3 billion, an increase of $19.8 billion over the authorized
    fiscal year 2006 base budget, and represents the sixth consecutive year
    of growth in the defense budget. I commend the President for his
    continuing commitment to improving our defense capabilities and
    providing our forces with the resources and capabilities they need to
    successfully fulfill their missions. The budget priorities of
    supporting the global war on terror, restructuring our forces and our
    global posture, building joint capabilities for future threats, and
    taking care of our troops and their families are clearly the right
    emphasis.
        While supportive of the overall request, I have some concerns on
    which I look forward to working with you and the Department over the
    coming months.
        One of the committee's most important duties is to provide
    oversight over the management of the hundreds of billions of dollars
    that the Department spends each year on the acquisition of supplies,
    services, and equipment--everything from office supplies to weapon
    systems. We have become aware over the last several years of emerging
    problems in the acquisition arena and have initiated numerous
    legislative provisions in an effort to direct the Department towards
    more sound acquisition practices. We will continue to work with you to
    explore ways to ensure the Department acts as a good steward of
    taxpayer dollars.
        This committee is committed to doing all we can to ensure the
    safety of our soldiers. Taking lessons from recent operations in the
    war on terrorism, two specific areas bear mentioning. The area of
    counter improvised explosive devices has and will continue to command
    our attention. Second, recognizing the invaluable contributions
    unmanned aerial vehicles have made to the warfighter, we need to
    explore a greater use of this technology--including ground vehicles,
    ships, and high performance aircraft.
        The shipbuilding budget is of particular concern. In a hearing
    before this committee on February 10, 2005, the Chief of Naval
    Operations (CNO) stated that given the current rate of ship purchases
    and production, the Navy could be faced with a decreasing fleet of
    ships, eventually dropping below 250 major combatant ships. A fleet of
    this small size may well jeopardize the Navy's ability to meet its
    mission requirements, and the financial viability of the vital
    shipbuilding industrial base could easily be threatened. More
    encouraging was the CNO's recent brief to the committee on December 16,
    2005, outlining a naval force structure of 313 ships. I look forward to
    examining the shipbuilding budget in the fiscal year 2007 budget
    request and working with the Secretary of the Navy and the CNO to
    ensure we have a plan that will maintain the United States Navy as the
    premier naval force.
        Finally, Congress has not received the administration's
    supplemental funding request for fiscal year 2006. Congress included a
    ``bridge'' fund of $50.0 billion in the fiscal year 2006 Defense
    Authorization and Appropriation Acts, but that amount most likely will
    not be enough to cover the full costs of the war on terror through the
    fiscal year. It is also clear that many of the costs for the ongoing
    global war on terrorism are not included as part of the President's
    fiscal year 2007 budget request. This committee is interested in
    hearing your views on the need and timing of a fiscal year 2006
    supplemental, and how funding for the global war on terrorism fits into
    the fiscal year 2007 budget request.
        I thank you all for your distinguished service and look forward to
    your testimony.

        Chairman Warner. Senator Levin.

                    STATEMENT OF SENATOR CARL LEVIN

        Senator Levin. Mr. Chairman, first let me join you in
    welcoming our distinguished witnesses this morning. I also join
    you in praising the life of Coretta Scott King and in
    expressing our condolences to the King family. Coretta Scott
    King helped lead us to a more just Nation and world. We are
    with our colleagues at that funeral in spirit, although we are
    here in Washington carrying out our responsibilities this
    morning.
        Today and every day our men and women in uniform are
    risking their lives representing our Nation around the world.
    We join together in recognizing and commending them for their
    work and for what they are doing with such extraordinary
    bravery and dedication. They have our full support, and we will
    continue to attempt to provide them with everything that they
    need to succeed.
        The situation in Iraq has reached a pivotal point. The next
    several months are likely to determine whether Iraq will be
    engulfed in all-out civil war or move towards nationhood.
    Negotiations are ongoing for the formation of a new Iraq
    government, and as soon as the new Iraq parliament is seated it
    is to appoint a panel to review and recommend changes to the
    Iraqi constitution, a job to which 4 months have been allotted
    by that same constitution.
        In testimony before this committee on September 29 last
    year, General George Casey, Commanding General Multinational
    Force-Iraq, stated that, ``We have looked for the constitution
    to be a national compact and the perception now is that it is
    not, particularly among the Sunni.'' Now, most other observers
    have agreed that the new constitution as it stands is a
    divisive document. The International Crisis Group, a highly
    respected, independent, nonprofit, nongovernmental
    organization, in a report released last September, wrote as
    follows: ``Without a strong U.S.-led initiative to assuage
    Sunni Arab concerns, the constitution is likely to fuel rather
    than dampen the insurgency, encourage ethnic and sectarian
    violence, and hasten the country's violent breakup.''
        But the message that President Bush has sent is
    inconsistent with the vital effort to get Iraqis to agree on
    amendments to their constitution. Instead of urging Iraqis to
    make modifications in the constitution so as to produce a
    document which unifies them, the President on December 12
    called the Iraqi constitution ``a bold constitution that
    guarantees the rule of law and freedom of assembly and property
    rights and freedom of speech and the press and women's rights
    and the right to vote.'' The President's effusive praise is the
    wrong message because it lessens the likelihood that the
    compromises necessary to change the constitution will be made.
        The future of Iraq depends on Iraqis making changes in
    their constitution to assure fair sharing of power and oil
    resources and adequate protection of minorities.
        It is surely true that the United States cannot amend the
    Iraqi constitution. Only the Iraqis can do that. But, it is
    also surely true that we have the standing, given the
    sacrifices our men and women in uniform have made and given the
    other costs of this war to our Nation, to tell the Iraqis that
    they need to make that essential step. If they do not, the
    level of our troop strength will not make much difference;
    Iraqis will continue to descend into sectarian strife and into
    civil war.
        We need to clearly tell the Iraqi factions: Our willingness
    to commit further lives and resources to your future depends on
    your willingness to amend your constitution so that there is a
    future as an Iraqi nation.
        I have no doubt that there will be significant reduction in
    the number of U.S. forces in Iraq this year. The question is
    whether the significant reduction will be in the context of the
    Iraqis having made the political compromises necessary to move
    forward towards nationhood and the defeat of the insurgency or
    in the context of the Iraqis having failed to do so, with the
    insurgency continuing and all-out civil war waiting to break
    out. The need to address the political situation in Iraq is
    just one of the many issues that require this committee's
    attention and oversight, but there are other obviously
    important issues as well.
        Responsible budgeting means making choices and setting
    priorities. This budget request fails that test. It understates
    the true cost of our defense program because it does not fully
    recognize or pay for the cost of ongoing operations of Iraq and
    Afghanistan in 2007. Funds for those will apparently be
    requested later this year on an emergency, non-paid-for basis.
    That is not responsible budgeting. Those costs should be
    planned on and paid for now. Honest budgeting requires no less.
        I am also concerned that maintaining our current troop
    levels in Iraq is not sustainable over the long term. The
    grueling operational tempo is wearing down people and wearing
    out equipment. While reenlistment rates in the Army and Marine
    Corps are strong and are a credit to the dedication and
    devotion to duty of our soldiers and marines, some indicators,
    such as increasing strains on military families, are indicative
    of a force under stress and give rise to concerns that those
    reenlistment rates cannot be maintained. There is also clear
    evidence that the Services are having difficulty in recruiting
    new first-term soldiers and marines who are critical to a
    balanced force across all ranks and grades.
        There are numerous other issues that require our attention.
    For instance, in the area of national missile defense, although
    we have already deployed 10 ground-based midcourse defense
    interceptors, this operationally configured missile defense
    system has never had a single successful intercept test. The
    simple truth is we do not know if the system will work.
        Despite this glaring problem and despite the facts that the
    Department has already obtained funds from Congress for
    building and deploying 30 interceptors and that the next
    planned intercept flight test will not occur until the end of
    this year, the Department is seeking additional funds in this
    budget request to build and deploy more of these untested and
    unproven interceptors.
        Finally, we have received interim reports from the Under
    Secretary of Defense for Intelligence regarding the so-called
    ``TALON'' reporting system, which is supposed to collect
    information relating to possible foreign terrorist threats to
    defense personnel and facilities, and the review underway to
    ensure that the rules governing the retention of data are
    followed. The Department has sent us an interim letter
    informing us that a small percent of reports were submitted
    that inappropriately dealt with demonstrations and anti-war
    activity rather than foreign terrorist threats and that the
    Department of Defense will soon conclude its review of the
    program to determine precisely what needs to be done to correct
    its flaws. It will then issue detailed guidance outlining the
    proper procedures. The usefulness of congressional oversight
    has been demonstrated in this matter. I thank our chairman in
    joining that initiative to make that happen. I would hope that
    we would have a briefing for members once the review is
    complete and I would ask, Mr. Chairman, that the interim letter
    from the Department be made part of the record.
        Chairman Warner. Without objection.
        [The information referred to follows:]

        Senator Levin. Mr. Chairman, we have, as you say, much work
    to do in our review of the defense program for fiscal year 2007
    and in carrying out our oversight responsibilities. Through no
    fault of yours surely, we barely got our bill passed last year.
    In fact, I might say, despite your herculean efforts, we barely
    got our bill passed last year. You deserve, our troops deserve,
    even more importantly, the total cooperation of everybody
    involved to avoid a repeat of the unfortunate series of events
    which so delayed our 2006 Defense Authorization Bill.
        I look forward to the testimony of our witnesses this
    morning and I would ask that my full statement be inserted in
    the record.
        Chairman Warner. Without objection. Thank you. Thank you
    very much, Senator Levin.
        [The prepared statement of Senator Levin follows:]
                    Prepared Statement by Senator Carl Levin
        Mr. Chairman, I join you in welcoming our witnesses this morning. I
    also join you in praising the life of Coretta Scott King and expressing
    our condolences to the King family. I know Senator Kennedy and Senator
    Clinton and perhaps others are not here today because they are
    attending Mrs. King's funeral.
        Today and every day our men and women in uniform are risking their
    lives representing our Nation around the world. We join together in
    recognizing and commending them for the work that they are doing with
    such extraordinary bravery and dedication. They have our full support,
    and we will continue to attempt to provide them with everything they
    need to succeed.
        The situation in Iraq has reached a pivotal point--the next several
    months are likely to determine whether Iraq will be engulfed in all-out
    civil war or move towards nationhood. Negotiations are ongoing for the
    formation of a new Iraqi government, and as soon as the new Iraqi
    Parliament is seated, it is to appoint a panel to review and recommend
    changes to the Iraqi constitution--a job to which 4 months have been
    allotted by that same constitution.
        In testimony before this committee on September 29 of last year,
    General George Casey, the Commanding General Multinational Force-Iraq,
    stated that ``We've looked for the constitution to be a national
    compact, and the perception now is that it's not, particularly among
    the Sunni.'' Most other observers have agreed that the new constitution
    as it stands is a divisive document. The International Crisis Group, a
    highly respected independent, non-profit, non-governmental
    organization, in a report released last September wrote: ``Without a
    strong U.S.-led initiative to assuage Sunni Arab concerns, the
    Constitution is likely to fuel rather than dampen the insurgency,
    encourage ethnic and sectarian violence, and hasten the country's
    violent breakup.''
        But the message President Bush has sent undermines the vital effort
    to get Iraqis to agree on amendments to their constitution. Instead of
    urging Iraqis to make modifications in the constitution so as to
    produce a document which unifies them, the President on December 12
    called the Iraq constitution a ``bold constitution that guarantees the
    rule of law and freedom of assembly, and property rights, and freedom
    of speech and the press, and women's rights, and the right to vote.''
    The President's effusive praise is the wrong message because it lessens
    the likelihood that the compromises necessary to change the
    constitution will be made.
        The future of Iraq depends on Iraqis making changes in their
    constitution to assure fair sharing of power and oil resources and
    adequate protection of minorities. Yet when the President was asked at
    a recent press conference, ``How hard will you push Iraq's competing
    political parties to get a government and a constitutional
    compromise?'' he responded, ``There is an opportunity to amend the
    constitution.'' He did not say that he will push them hard. He didn't
    even say he would urge them to do so. He would only say what is
    obvious--they have an ``opportunity'' to do so.
        It is surely true that the U.S. can't amend the Iraqi constitution.
    Only the Iraqis can do that. But it is also surely true that we have
    the standing, given the sacrifices our men and women in uniform have
    made and given the other costs of this war to our Nation, to tell the
    Iraqis that they need to take that essential step. If they don't, the
    level of our troop strength won't make a difference--Iraqis will
    continue to descend into civil war. Having a unifying constitution is
    critical because, as our military leaders have repeatedly told us,
    there won't be a military success over the insurgency without a
    political coming together of the major Iraqi groups.
        In a resolution with bipartisan support in November, 79 U.S.
    Senators agreed that: ``The administration should tell the leaders of
    all groups and political parties in Iraq that they need to make the
    compromises necessary to achieve the broadbased and sustainable
    political settlement that is essential for defeating the insurgency in
    Iraq, within the schedule they set for themselves.'' That language is
    now incorporated in the National Defense Authorization Act for Fiscal
    Year 2006.
        Failure to heed that congressional advice could contribute to a
    stalemated negotiation among Iraqi leaders. When the administration
    repeats the mantra ``we'll stay in Iraq as long as we are needed,''
    that open-ended commitment removes pressure on the Iraqis to get their
    political house in order.
        We need to clearly tell the Iraqis factions: ``our willingness to
    commit further lives and resources to your future depends on your
    willingness to amend your constitution so that there is a future as an
    Iraqi nation.''
        I have no doubt that there will be a significant reduction in the
    number of U.S. forces in Iraq this year. The question is whether the
    significant reduction will be in the context of the Iraqis having made
    the political compromises necessary to move forward toward nationhood
    and the defeat of the insurgency, or in the context of the Iraqis
    having failed to do so with the insurgency continuing and all-out civil
    war waiting to break out.
        The need to address the political situation in Iraq is just one of
    the many issues that require this committee's attention and oversight,
    but there are other important issues as well.
        Responsible budgeting means making choices and setting priorities.
    This budget request fails that test. It understates the true cost of
    our defense program because it does not fully recognize or pay for the
    cost of ongoing operations in Iraq and Afghanistan in 2007. Funds for
    those will apparently be requested later this year on an emergency,
    non-paid for, basis. That is not responsible budgeting. Those costs
    should be planned on and paid for now. Honest budgeting requires no
    less.
        I am also very concerned that maintaining our current troop levels
    in Iraq is not sustainable over the long term. The grueling operational
    tempo is wearing down people and wearing out equipment. While re-
    enlistment rates in the Army and Marine Corps are strong--and are a
    credit to the dedication and devotion to duty of our soldiers and
    marines--some indicators, such as increasing strains on military
    families, are indicative of a force under stress and give rise to
    concerns that those re-enlistment rates cannot be maintained. There is
    also clear evidence that the Services are having difficulty in
    recruiting new first-term soldiers and marines who are critical to a
    balanced force across all ranks and grades.
        There are numerous other issues that require our attention. For
    instance, in the area of national missile defense, although we have
    already deployed 10 Ground-based Midcourse Defense interceptors, this
    operationally configured missile defense system has never had a single
    successful intercept test. The simple truth is that we do not know if
    the system will work.
        Despite this glaring problem, and despite the facts that the
    Department has already obtained funds from Congress for building and
    deploying 30 interceptors, and that the next planned intercept flight
    test will not occur until the end of this year, the Department is
    seeking additional funds in this budget request to build and deploy
    more of these untested and unproven interceptors.
        Finally, we have received interim reports from the Under Secretary
    of Defense for Intelligence regarding the so-called TALON reporting
    system, which is supposed to collect information relating to possible
    foreign terrorist threats to defense personnel and facilities, and the
    review underway to ensure that the rules governing the collection and
    retention of data are followed. The Department has sent us an interim
    letter informing us that a small percent of reports were submitted that
    inappropriately dealt with demonstrations and anti-war activity rather
    than foreign terrorist threats, and that DOD will soon conclude its
    review of the program to determine precisely what needs to be done to
    correct its flaws. It will then issue detailed guidance outlining the
    proper procedures. I would hope we would have a briefing for members
    once the review is complete. I ask that the interim letter from the
    Department be made part of the record.
        I would also hope, as I previously requested, that the committee
    will hold a hearing to inquire into Department of Defense's (DOD) and
    National Security Agency's (NSA) program relating to the surveillance
    of communications involving U.S. persons. NSA oversight is clearly a
    responsibility of ours along with the Intelligence and Judiciary
    Committees. I would also note that while we are spending a huge amount
    of manpower to subject the communications of apparently thousands of
    Americans to surveillance, known al Qaeda leaders, including one
    convicted of helping plan and organize the attack on the destroyer
    U.S.S. Cole in 2000, escaped last Friday for the second time from
    custody in a Yemen prison. I hope the administration will investigate
    this fiasco that resulted in the loss of known al Qaeda operatives from
    custody with the same vigor that it is surveilling Americans.
        Mr. Chairman, we have much work to do in our review of the defense
    program for fiscal year 2007, and in carrying out our oversight
    responsibilities.
        Through no fault of yours surely, we barely got our bill passed
    last year. You deserve, our troops deserve, the total cooperation of
    everybody involved to avoid a repeat of the unfortunate series of
    events, delays which plagued our 2006 bill.
        I look forward to the testimony of our witnesses.

        Chairman Warner. Secretary Rumsfeld, delighted to have you.

       STATEMENT OF HON. DONALD RUMSFELD, SECRETARY OF DEFENSE;
    ACCOMPANIED BY GEN. PETER PACE, USMC, CHAIRMAN, JOINT CHIEFS OF
     STAFF; AND GEN PETE SCHOOMAKER, USA, CHIEF OF STAFF, U.S. ARMY

        Secretary Rumsfeld. Thank you. Mr. Chairman, Senator Levin,
    members of the committee: I would plan to make an abbreviated
    statement and then ask that my entire statement be placed in
    the record.
        Chairman Warner. Without objection, the full statement of
    all witnesses will be included in the record.
        Secretary Rumsfeld. Mr. Chairman, this is the first
    appearance before your committee of General Pace in his new
    role as Chairman of the Joint Chiefs of Staff. Many of you have
    come to know General Pace in his earlier roles as the combatant
    commander for the Southern Command (SOUTHCOM) and then the Vice
    Chairman of the Joint Chiefs. General Pace understands well the
    decisions he helps to make will have a profound impact on the
    men and women in uniform, on the security of our country.
        Chairman Warner. He is a superb choice by the President and
    yourself, Mr. Secretary.
        Secretary Rumsfeld. I thank you, sir. He is doing an
    outstanding job for our country.
        Also with us today is not the comptroller of the
    Department, who is normally here for this hearing. Instead,
    because a number of the issues involve the Army, it struck me
    that it would be appropriate to have the Chief of Staff of the
    Army, General Pete Schoomaker, join us so that the members of
    the committee will have an opportunity to talk to him about the
    issues involving the National Guard, for example, the issues
    involving stress on the force, and the modernization of the
    force, the modularization process that is taking place, and the
    equipping of the force.
        This is the sixth consecutive year I have appeared before
    your committee to discuss the Department's budget. We have met
    during times of war and at a time when war seemed unlikely. We
    have met during periods of national unity and in the midst of
    great controversy and debate over the course that our country
    has taken. In every instance, the American people expected us
    to put the defense of this Nation before political or parochial
    views and concerns. We have tried to do just that in making
    tough decisions in the Department, the kinds of decisions that
    we believe our troops merit.
        We meet today again as the Nation is engaged in what will
    be a long struggle, a long war, a conflict that has put our
    military on a path of continuous change for the past 5 years, a
    conflict which also is having the effect of transforming the
    way our forces fight and defend our country.
        Not long before Pearl Harbor was attacked on December 7,
    1941, the United States had a standing army of some 200,000,
    putting it somewhere below Romania among the world's
    militaries. Just a few years earlier, American soldiers had
    been training with wooden rifles. Almost starting from scratch,
    America began to field huge armies and stand up armament
    industries and turned out massive fleets of ships, aircraft,
    tanks, and equipment of every kind.
        When our country was attacked on September 11, we found
    ourselves in another global conflict, though one that had been
    started years earlier by our enemies. Fortunately, the process
    of rethinking and reconfiguring our military for such an
    eventuality was already somewhat underway. Within 3 months, the
    Taliban regime and its Al Qaeda guests were routed in a
    landlocked country several thousand miles away. Within 3 years,
    the military had removed a dangerous and brutal regime from
    Iraq and helped to stand up a new democratically elected
    government that is now fighting terrorists instead of harboring
    them. This would not have been possible without an historic
    change in the way the military is arranged and operates.
        The urgency of these changes were made all too plain some
    53 months ago on that mid-September morning by 19 men carrying
    tourist visas, boarding passes, and box cutters. Today the
    enemy, though under constant pressure and on the defensive,
    still intends to bring its cult of murder and suicide to our
    shores and our cities and to those of our closest allies as
    well.
        Last month, bin Laden warned of yet more attacks on
    America. He has said, ``Let every person come forward to fight
    those Jews and Americans. Their killing is the most important
    duties and most pressing things.''
        His top lieutenant Zawahiri warned us last year. He said:
    ``Oh Americans in New York and Washington, the losses you are
    having in Afghanistan and Iraq are only the losses of the
    initial clashes.''
        The enemy cannot win any conventional battles, so they
    challenge us through nontraditional, asymmetric means, using
    terror as their weapon of choice. Their goal is to break
    America's resolve through the deft use of propaganda and
    carefully plotted attacks to garner headlines. They are willing
    to employ every means, every lie, every atrocity, every
    available technology and means of communication, to achieve
    their ends.
        In a few short years they have become experts at
    manipulating the global media to both inspire and intimidate.
    They have media committees and handbooks that advise operatives
    when and how to lie to generate coverage and commentary that
    damages antiterrorism efforts. They have multiple Web sites
    that display videos of bombings and beheadings that are shown
    around the world.
        Their priority is to force us to abandon Iraq before the
    country is ready to defend itself, so they can turn it into a
    base of operation, as was Afghanistan before September 11. In a
    letter written by Zawahiri, he spelled out their strategy:
    ``The first stage: expel the Americans from Iraq; the second
    stage: establish an Islamic authority; the third stage: extend
    the jihad.'' Have no doubt, should these fanatics obtain the
    weapons of mass destruction (WMD) they seek, the survival of
    our way of life would be at risk.
        The enemy would like to define this war as a conflict
    between Islam and the West, but it is not. It is in fact a war
    within the Muslim world, between the overwhelming majority of
    moderates and a much smaller number of violent extremists. The
    vast majority of Muslims do not share the violent ideology of
    al Qaeda. They have children and families they care about. They
    hope for a better future for themselves and their children.
    They do not want the extremists to win and many are opposing
    them at every opportunity.
        In Iraq, the marginalization of the terrorists on election
    day last December was due in large part to the growth in the
    size and the confidence and capability of the ISFs that the
    chairman mentioned, increasing from 120,000 to 220,000 over the
    course of last year. Already some 30 U.S. military bases have
    been returned to Iraqi control or closed altogether.
        The 8th Army Iraqi Division recently took over a battle
    space about the size of Kentucky, the largest such area
    transferred to date. So far this division has seized nearly
    5,000 weapons, confiscated more than 1,000 pounds of
    explosives, and detained more than 1,000 suspects.
        Consider the progress from the enemy's perspective. The
    terrorists tried to stop the Afghan presidential and
    parliamentary elections and they failed. They tried to stop the
    elections for a provisional Iraqi government a year ago and
    they failed. They tried to stop the drafting and approval of
    the new constitution and they failed. They tried to stop the
    elections last December for a permanent democratic government
    and they failed again.
        Senator Levin mentioned the constitution of the Iraqis. It
    is not perfect, as he suggested. Nor was ours. Our Constitution
    still permitted slavery and women could not vote. So it strikes
    me that they have some work to do, just as we do, and I am
    encouraged that they will accomplish that work.
        It is true that violence, corruption, and criminality
    continue to pose challenges in Iraq. The chairman mentioned
    corruption, suggesting it is on the increase. I do not know
    that it is on the increase. What is on the increase is our
    awareness of corruption because there are a number of
    inspectors general out there looking for corruption and finding
    it and reporting it and there is press of it. There has been
    historically corruption in that country and it is something
    that is so corrosive of democracy that I quite agree with you
    that it is critically important that it be attacked and that
    the new leadership in that country be measured against their
    commitment to attacking corruption.
        The people of the United States have contributed and
    sacrificed a great deal helping to set Iraq on the path to
    democracy. Our finest young men and women in uniform launched a
    mission of liberation and our outstanding civilian and military
    leaders represent our Nation there today. In my view, it is
    clearly up to the Iraqis to seize hold of their country, to
    seize the opportunity, take responsibility for their own
    security and for their own affairs. This means assembling a
    government that respects the interests of all of the ethnic and
    religious groups in the country and, importantly, a government
    that is competent and a government that is not simply inclusive
    of all of those groups, but a government where the people
    involved, inclusive to be sure, commit to governing from the
    center and have a program that they agree to and then will go
    about implementing, that will move the country forward.
        If America has the patience and the will to see this noble
    and necessary mission to completion--and we must--Iraq can
    emerge as a nation with a representative government, at peace
    with its neighbors, and one that can become an ally in the
    global war on terror.
        In this long war, the task ahead, to continue to pursue the
    enemy, bolster our defenses, and enable our friends and allies
    to manage their own defense, requires us not only to meet
    today's threats, but to plan for tomorrow's uncertainties. At
    this time, for example, we are fighting a war against terrorist
    cells dispersed throughout the world, but we might one day find
    ourselves facing any number of other challenges as well: a
    chemical or biological attack in a major American city, a rogue
    missile launched by a hostile regime, a friendly government
    overthrown by Islamic radicals, loose nuclear weapons falling
    into unknown hands.
        No nation, no matter how powerful, has the resources and
    capability to defend everywhere at every moment of the day or
    night against every conceivable type of technique. The only way
    to protect the American people, therefore, is to provide our
    military with as wide a range of options as possible, to focus
    on developing a range of capabilities, rather than preparing to
    any one threat.
        The major initiatives that have been underway in the
    Department over the past 5 years have been undertaken with this
    in mind and they have been informed by operations in
    Afghanistan, Iraq, and other locations in the global war on
    terror. This approach, providing more options and developing a
    wider range of capability, has governed decisions made in
    developing both the President's budget and the QDR.
        The word ``transformation'' has attracted a good deal of
    attention, but in many ways it is more accurate to see this
    process of continuous change as a shift in emphasis or a shift
    in weight from the practices and the assumptions of the past to
    the kinds of arrangements necessary for the 21st century. We
    have shifted, for example, from preparing to fight conventional
    wars, which we are still prepared to do, to a greater emphasis
    on fighting unconventional or irregular or asymmetric wars
    against terrorist cells or enemy guerrillas. To that end, we
    are more than doubling the budget since fiscal year 2001 for
    Special Operations Forces, expanding the size and scope, to
    include a new Marine component. The Special Operations Forces
    will be the largest they have been in many decades,
    representing roughly a 50 percent increase in personnel between
    2001 and 2011. Increasing skill sets across the force in
    foreign language and cultural awareness and information
    technology; and assigning priority to post-conflict and
    stability operations in the military's overall training and
    doctrine.
        One of the most important shifts underway is the role and
    importance of intelligence. The U.S. military has long excelled
    at engaging targets once they have been identified. In the
    future, we must be better in ascertaining where the enemy is
    going next, rather than simply where the enemy was. We have to
    be able to find the enemy and to fix the enemy, as well as to
    be able to finish. The United States military has enormous
    capacity to finish and insufficient capacity to find and fix.
    This means upgrading U.S. intelligence capabilities, both human
    and technological, and more effectively linking technology to
    operations in real time in the field.
        We are also shifting from the typically American impulse to
    try to do everything ourselves to helping partners and allies
    develop their own capacity to better govern and defend
    themselves. This is particularly important in the global war on
    terror, where many of our Nation's most dangerous enemies exist
    within the borders of countries that we are not at war with.
    The shift is at the heart of the effort in Iraq and
    Afghanistan, as well as smaller scale train and equip missions
    in places like the Republic of Georgia and the Philippines.
        There are many other important shifts in our posture and
    thinking: from a peacetime tempo to a wartime sense of urgency,
    from operating in an era of certainty to one of surprise, from
    avoiding risk to managing and balancing risks, from confronting
    other nation states to confronting decentralized terrorist
    networks, from garrison force defending fixed frontiers to
    expeditionary forces that can be deployed rapidly anywhere in
    the world, from having the bulk of personnel in the
    institutional military, the so-called ``tail'' to moving troops
    to the operational side that deploys and fights, the ``teeth.''
        Our Nation's oldest military service is undergoing a
    remarkable transformation, from being a peacetime Army prepared
    for a major conventional war against another large military to
    a consistently more agile and deployable force capable of
    taking on and sustaining a full range of missions around the
    globe. General Schoomaker will be commenting in greater detail
    on the significant changes that are taking place.
        I want to comment on several issues that have been raised
    about the health of the United States Army, however. Some ask,
    what is the current state of the Army? I would say that we have
    the most agile, most skilled, most expeditionary Army in
    history, and that any who use the word ``broken'' with respect
    to the Army are incorrect. I hope that the Chief of Staff of
    the Army will comment on that.
        Today's Army has demonstrated its capability, not in
    garrisons or in training exercises or through statistical
    readiness formulas, but in the crucible of combat. Think about
    the many rapid, complex, and dangerous operations the Army now
    undertakes on a regular basis in Iraq, Afghanistan, and around
    the globe. They have made the extraordinary so routine that it
    is sometimes hard for people to notice just how much has
    changed and how good they have become at what they do.
        I will leave the question of the Guard and the Reserve to
    the chief. The new concept of fully-funded, fully-manned, and
    fully-equipped Guard brigades, which is what he will explain,
    particularly the support units, is a development that State and
    local officials should welcome. By any measure, they will be a
    vast improvement over the undermanned and underequipped Guard
    and Reserve units of the past decade.
        Mr. Chairman, senior leadership of the Department will be
    describing a process of continuous change in everything from
    the way we fight wars to the way we manage personnel, and one
    may well ask, where is this heading? Imagine a colonel
    proficient in Arabic, whose knowledge of city management equals
    his skill in marksmanship, a commander with the flexibility in
    tactics and options that President Roosevelt entrusted to
    General Eisenhower, a self-sustaining brigade that surges
    rapidly from the U.S. to a forward operating facility elsewhere
    in the world to work with newly-trained allies against
    terrorist cells that threaten a new democracy. As we imagine
    that soldier, the commander, the brigade, that facility, we
    have a notion of what America's transformed Armed Forces might
    well look like in the years ahead. Changes that will be
    essential to defeating a range of enemies, changes essential to
    keeping our Nation safe.
        In discussing the budget and the QDR, the tendency will be
    to talk about numbers, numbers of troops, numbers of weapons,
    platforms, and the like. But I want to conclude by talking
    about a different metric that crossed my desk a few months ago.
    The number is 371. That is the total number of Silver Stars and
    Service Crosses that have been awarded since September 11 to
    our Nation's soldiers, sailors, airmen, and marines. Were it
    not for the exacting standards the military has for these
    awards, I suspect the numbers would be much higher, given the
    superb performance of our troops in places like Fallujah,
    Ramadi, Kandahar, and other grueling battlefields in this
    global war on terror.
        In a conversation about the war a few weeks ago, I was
    asked, where are the heroes? In prior wars everyone knew the
    heroes. Well, there are a great many and they are doing exactly
    what needs to be done to keep our country safe and to preserve
    freedom for our children and theirs. I think we could probably
    all do a better job, the media and the military alike, in
    telling their stories.
        They are volunteers, every one of them, who could be doing
    something else, certainly something much easier, much safer,
    better compensated very likely. But they step forward each year
    to raise their hands and say: Send me. They do so fully aware
    of the risks and justifiably proud of the noble history they
    are making.
        Mr. Chairman, members of the committee, I thank you for
    your support of the men and women who wear our country's
    uniform. I look forward to working with the committee. I am
    reminded of what President Eisenhower said once about another
    long struggle, the Cold War, comments that I believe have
    resonance today. President Eisenhower said, ``We face a hostile
    ideology, global in scope, ruthless in purpose, and insidious
    in method. To meet it successfully, we must carry forward
    steadily, surely, and without complaint the burdens of a long
    and complex struggle, with liberty the stake.''
        Mr. Chairman, just as we did during the Cold War, what
    President Kennedy called ``a long twilight struggle,'' we will
    persevere in the long war we face today and, with the help of
    Congress and the American people, provide our country with the
    security it needs and deserves in this new century.
        Thank you.
        [The prepared statement of Secretary Rumsfeld follows:]
                 Prepared Statement by Hon. Donald H. Rumsfeld
        Mr. Chairman, members of the committee: It is appropriate to note
    that this is my first appearance before this committee with General
    Pete Pace in his new role as Chairman of the Joint Chiefs of Staff
    (JCS). Many of you have come to know General Pace and to appreciate his
    abilities. He understands that the decisions he helps to make have a
    profound impact on our men and women in uniform and their families. He
    is doing a fine job for our country.
        Also with us is the Chief of Staff of the Army, General Pete
    Schoomaker. Because so many of the key issues involve the Army, we
    thought it would be useful to have General Schoomaker here to join in
    responding to your questions.
        This is the sixth consecutive year I've appeared before you to
    discuss the Department's budget. We've met during times of war, and at
    a time when war seemed unlikely. We've met during periods of national
    unity, and in the midst of great controversy and debate over the course
    recent wars have taken. In every instance, the American people expected
    us to put the defense of this nation before political or parochial
    concerns. We have tried to do just that in making the tough decisions
    that our troops merit and that history will remember.
        We meet today--again--as a Nation engaged in what will be a ``long
    war''--a conflict that has put our military on a path of near
    continuous change for the past 5 years. A conflict which also is having
    the effect of transforming the way our forces fight and defend the
    Nation.
        Not long before Pearl Harbor was attacked on December 7, 1941, the
    United States had a standing army of about 200,000, putting us
    somewhere below Romania among the world's militaries. Just a few years
    earlier, American soldiers had been training with wooden rifles. Almost
    starting from scratch, America began to field huge armies and stand up
    an armaments industry that turned out massive fleets of ships,
    aircraft, tanks and equipment of every kind.
        After Pearl Harbor, there were many setbacks and false starts--
    think of the losses at Kasserine Pass, the bloody landings at Tarawa
    and Anzio, and the frustrating inability of American tanks to be able
    to go one on one against German Panzers. Over the following several
    years, our Nation would learn some tough lessons and marshal the forces
    necessary to eventually triumph over two fascist empires.
        When our country was attacked again on September 11, we found
    ourselves in another global conflict, though one that had been started
    years earlier by our enemies. Fortunately, the process of rethinking
    and reconfiguring our military for such an eventuality was already well
    underway. Within 3 months, the Taliban regime and its al Qaeda
    ``guests'' were routed in a landlocked country several thousand miles
    away. Within 3 years, our military had removed a dangerous and brutal
    regime from Iraq and helped to stand up a new democratically elected
    government that is now fighting terrorists instead of harboring them.
        This would not have been possible without an historic change in the
    way our military is arranged and operates.
        Consider that when I first assumed this post more than 30 years
    ago, America's military establishment was understandably organized,
    trained and equipped to deter the Soviet Union and to do battle against
    large armies, navies, and air forces.
        When I returned to the Department in 2001, the Armed Forces--though
    smaller--were in many respects still pretty much organized the same way
    they were during the Cold War.
        The President recognized this and charged the Department with
    making the changes necessary to adapt to the new circumstances and
    threats of an uncertain era--an environment where the greatest threats
    were less likely to come from large armies, navies and air forces, but
    instead from the evil designs of terrorists and rogue nations.
        The urgency of these changes were made all too plain 53 months ago
    on that mid-September morning, by 19 men carrying visas, boarding
    passes, and box cutters.
        Today, this enemy, though under constant pressure and on the
    defensive, still intends to bring its cult of murder and suicide to our
    shores, and our cities--and to those of our closest allies as well.
        This ``long war'' is the central security issue of our time. The
    ensuing campaigns in Iraq, Afghanistan, and other theaters in the
    global war on terror have added new impetus and urgency to
    transformation efforts that were already underway in this Department.
        This process of continuous change and adaptation is so critical
    because of the nature of the enemy we face, one that has left little
    doubt about its intentions.
        Last month, Osama bin Laden warned of yet more attacks on America.
    He has said:

            ``Let every person . . . come forward to fight those Jews and
            Americans . . . their killing is from the most important duties
            and most pressing things.''

        His top lieutenant, Zawahiri, warned us last year:

            ``Oh, Americans, in New York and Washington and the losses you
            are having in Afghanistan and Iraq . . . are only the losses of
            the initial clashes.''

        The enemy cannot win any conventional battle, so they challenge us
    through nontraditional, or asymmetric means, using terror as their
    weapon of choice. Their goal is to break America's resolve through the
    deft use of propaganda and carefully plotted attacks that garner
    headlines.
        They are willing to employ every means--every lie, every atrocity,
    and every available technology and means of communication--to achieve
    their aims. In a few short years they have become experts at
    manipulating the global media to both inspire and intimidate. They have
    media committees and handbooks that advise their operatives when and
    how to lie--in particular to claim torture when captured--in order to
    generate coverage and commentary that damages vigorous anti-terrorism
    efforts. They have multiple Web sites that display videos of bombings
    and beheadings that are shown around the world.
        Their priority is to force us to abandon Iraq before that country
    is ready to defend itself so they can turn it into a base of
    operation--as was Afghanistan before September 11.
        In a letter written by Zawahiri, he spelled out their strategy:

            ``The first stage: expel the Americans from Iraq. The second
            stage: establish an Islamic authority. The third stage: extend
            the jihad.''

        Have no doubt: should these fanatics obtain the weapons of mass
    destruction they actively seek, the survival of our free way of life
    would be at risk.
        The enemy would like to define this war as a conflict between Islam
    and the west, but it is not. It is, in fact, a war within the Muslim
    world between the overwhelming majority of moderates and a much smaller
    number of violent extremists. The vast majority of Muslims do not share
    the violent ideology of al Qaeda. They have children and families they
    care about. They hope for a better future for themselves and their
    countries. They do not want the extremists to win. And many are
    opposing them at every opportunity.
                                      iraq
        We see this dynamic at work in Iraq. On December 15, it was the
    brave and decent people of Iraq--Shia, Kurds, Sunnis, and others--who
    seized the headlines and captured the attention and admiration of the
    world. Some 12 million Iraqis--about 70 percent of eligible voters--and
    thousands of candidates came together in a remarkably peaceful and
    orderly election. The jihadists, Baathist holdouts and criminals who
    dominate the daily news from Iraq were unable to halt yet another
    important milestone in that country's remarkable transformation.
        Consider that compared to the successful provisional elections held
    last January, nearly 4 million more Iraqis voted and there were about
    80 percent fewer violent attacks. And Sunnis, who had previously
    boycotted the political process, participated in large numbers,
    encouraged by their leaders not to make the same mistake again. In the
    Sunni majority Anbar province, turnout rose from 2 percent in January
    to 86 percent of registered voters in December.
        The marginalization of the terrorists on election day last December
    was due in large part to the growth in the size, confidence and
    capability of the Iraqi security forces--increasing from some 120,000
    to 220,000 over the course of the year. Already, some 30 U.S. military
    bases have either been returned to Iraqi control or closed altogether.
    The 8th Iraqi Army Division recently assumed the operational lead in
    battle space the size of Kentucky, the largest such area transferred to
    date. So far, this division has seized nearly 5,000 weapons,
    confiscated more than 1,000 pounds of explosives and detained more than
    1,000 suspects.
        Consider the progress from the enemy's perspective:

             They tried to stop the elections for a provisional
            Iraqi government a year ago--and they failed;
             They tried to stop the drafting and approval of a new
            Constitution--and they failed; and
             They tried to stop elections last December for a
            permanent democratic government--and they failed again.

        Because of the progress on the security, political, and economic
    fronts, U.S. military commanders recommended, and the President has
    directed, that the United States reduce its combat strength in Iraq by
    about two brigades, from 17 to 15. At the same time, the U.S military
    will be shifting more to a supporting role, as Iraqi forces take even
    more of a leading role in securing their own country.
        However, as the President has stated, force level decisions will be
    condition based. They have been and will continue to be determined by
    an assessment of Iraq's progress on the political, economic, and
    security fronts.
        They will include such factors as:

             The capability and effectiveness of the Iraqi security
            forces;
             The quality and competence of Iraqi leadership and its
            organization, particularly in the various ministries; and
             The threat level, which can be affected by the
            behavior of neighbors like Syria and Iran, who have been
            notably unhelpful.

        Shortly, the Department will provide to Congress a report,
    Measuring Stability and Security in Iraq, that will describe the
    progress being made in these areas in more detail.
        It is true that violence, corruption, and criminality continue to
    pose challenges in Iraq. Each has been a part of the fabric of that
    country for decades and they are unlikely to disappear overnight. But
    Iraq's liberation and the subsequent political progress have ignited
    what may turn out to be a momentous shift in the region. One prominent
    Lebanese politician--and a periodic critic of the U.S.--has called Iraq
    possibly the ``start of a new Arab world'' and has compared the
    progress there to the fall of the Berlin Wall.
        The people of the United States have contributed and sacrificed a
    great deal helping to set Iraq on the path to democracy. Our finest
    young men and women in uniform launched on a mission of liberation and
    our most outstanding civilian and military leaders represent our Nation
    there today.
        It is now up to the Iraqis to seize the opportunity and take more
    responsibility for their own security and their own affairs. This means
    assembling a government that respects the interests of all the ethnic
    and religious groups in the country and, importantly, a competent team
    with a program to govern from the center, not from the edges.
        A word on what has often been referred to as ``nation building.''
    The fact of the matter is that only the Iraqi people can build their
    nation. All that outsiders can do is help to set the conditions that
    will give them the opportunity to do so. That has been our goal over
    the past 3 years. But it cannot be an effort without end.
        Our objective from the start has been not to create a dependency,
    but rather to encourage Iraqi independence and capacity by
    transitioning increasing responsibility to Iraqis--over time--to have
    them take charge of their security and governance of their country.
        If America has the patience and the will to see this noble and
    necessary mission to completion--and we must--Iraq can emerge as a
    nation with a representative government, at peace with its neighbors,
    and one that can become an ally in the global war on terror.
        This would be a truly amazing achievement--one that members of our
    Armed Forces, their families, and future generations of Americans will
    be able to look back on, decades from now, with great pride.
                          preparing for the unexpected
        In this ``long war,'' the task ahead--to continue to pursue the
    enemy, bolster our defenses, and enable our friends and allies to
    manage their own defense--requires us to not only meet today's threats,
    but to plan for tomorrow's uncertainties.
        At this time, for example, we are fighting a war against terrorist
    cells dispersed throughout the world. But we might one day find
    ourselves facing any of a number of other scenarios as well:

             An anthrax attack in a major American city;
             A rogue missile launched by a hostile regime;
             A friendly government overthrown by Islamic radicals;
            or
             Loose nuclear weapons falling into unknown hands.

        No nation, no matter how powerful, has the resources or capability
    to defend everywhere, at every time, against every conceivable type of
    attack. The only way to protect the American people, therefore, is to
    provide our military with as wide a range of options as possible--to
    focus on developing a range of capabilities, rather than preparing to
    confront any one particular threat.
        The way to keep one's balance in a time of war is to consider
    worst-case scenarios, develop a wide range of tactics, and then plan on
    being surprised.
        The major initiatives that have been underway in the Department
    over the past 5 years have been undertaken with this in mind. They have
    been informed by operations in Afghanistan, Iraq, and other locations
    in the global war on terror.
        In Iraq, the lessons learned process began on day one. An embedded
    team of observers at Central Command, along with strategists in the
    United States, analyzed successes and setbacks each day, with an eye
    toward the way we train troops, equip forces, and fight wars in the
    future--everything from body armor to business practices. Consider one
    example in an area that has been of concern: up-armored High Utility
    Mobile Mechanized Vehicles (HMMWVs). In 2001, the entire U.S. Army had
    450 up-armored HMMWVs. Today, it has over 11,000.
        The concept of adapting to confront a wider range of threats also
    informed recent changes to U.S. global posture. We surveyed where U.S.
    forces were stationed abroad and noted that they were more or less
    where they had been at the height of the Cold War. So we resolved to
    re-position them for diffuse global threats. Instead of keeping armored
    divisions garrisoned in Germany to protect against a Soviet invasion,
    for example, we are moving many troops to bases in the U.S. and
    establishing more flexible--and less intrusive--forward operating sites
    that can assist in moving our forces closer to potential future trouble
    spots.
        The latest Base Realignment and Closure round--the largest in the
    Department's history--is another example. As with the global posture
    decisions, military and civilian experts made a thorough assessment of
    DOD's domestic base structure to determine how the Department might
    eliminate unnecessary duplication and bring the various Services closer
    together. This in turn should save the taxpayers tens of billions of
    dollars in future decades--money that can be directed to fighting the
    war and taking care of the troops and their families.
        This approach--providing more options and developing a wider range
    of capabilities--has governed decisions made in developing both the
    President's budget and the Quadrennial Defense Review (QDR).
        The QDR is a broad assessment of what the Department is doing to
    confront a wide range of threats and offers guideposts for the changes
    necessary in the decades ahead.
        Military and civilian strategists have devoted thousands of hours
    to:

             War gaming worst-case scenarios;
             Examining new technologies;
             Consulting with military commanders in the field; and
             Applying the lessons learned from operations in
            Afghanistan and Iraq, disaster relief after Hurricanes Rita and
            Katrina, and the rescue and humanitarian efforts in the
            Southeast Asia tsunami and the Pakistan earthquake.

        The QDR is not a budget document, but it has benefited from a
    change in legislation that required this report and the budget to be
    submitted at the same time. This permitted some ``leading edge''
    investments suggested in the QDR to be included in the fiscal year 2007
    budget, with additional changes to be reflected in next year's budget
    request.
        At $439.3 billion, the President's Department of Defense budget for
    fiscal year 2007 represents a 7-percent increase from what was enacted
    last year, and continues the necessary growth begun in 2001. This is a
    great deal of money, though at about 3.7 percent of gross domestic
    product (GDP), it represents a much smaller fraction of America's gross
    domestic product then when I entered Congress during the Kennedy
    administration. As important as the numbers, are the choices we make
    and the priorities the President has set to fulfill his oath to protect
    this and future generations of Americans.

                              shifting our weight

        The word ``transformation'' has attracted a lot of attention, but
    in many ways it is more accurate to see this process of continuous
    analysis and change as a shift of emphasis, or weight, from the
    practices and assumptions of the past.
        We have shifted, for example, from preparing to fight conventional
    wars--which we are still prepared to do--to a greater emphasis on
    fighting unconventional, or irregular, or asymmetric, wars against
    terrorist cells or enemy guerrillas. To that end, we are:

             More than doubling the budget since fiscal year 2001
            for Special Operations Forces and expanding its size and scope
            to include a new Marine Corps component. The Special Operations
            Forces will be the largest they have been in over 30 years,
            representing a 50-percent increase in personnel from 2001 to
            2011;
             Increasing skill sets across the force in foreign
            languages, cultural awareness and information technology; and
             Assigning priority to post-conflict and stability
            operations in the military's overall training and doctrine.

        We have also shifted from simply de-conflicting the branches of the
    Armed Services--essentially keeping them out of each others way on the
    battlefield--to more fully integrating the Services in ways that
    complement and leverage each Service's strengths.
        Consider the opening phase of Operation Enduring Freedom (OEF)--
    where Special Forces linked up with CIA operatives and local fighters,
    called in air strikes from Navy jets and supply drops from Air Force
    cargo planes. This jointness continued and increased not just in Iraq,
    but in virtually everything the Department does--whether training,
    logistics, and administration--at home and abroad.
        Not just our military, but our government, is shifting from
    reacting to crises--as has been the case for much of our country's
    history--to preventive action to keep problems from becoming crises,
    and crises from becoming conflicts. For example, the military has
    undertaken security and development missions in places such as the Horn
    of Africa to try to keep them from becoming a new haven for terrorist
    activity--such as Afghanistan became during the 1990s.
        One of the most important shifts underway is the role and
    importance of intelligence. The U.S. military has long excelled at
    engaging targets once they have been identified. In the future we must
    better ascertain where the enemy is going next, rather than where the
    enemy was--to be able to ``find'' and ``fix,'' as well as be able to
    ``finish.'' This means upgrading U.S. intelligence capabilities--both
    human and technological--and more effectively linking intelligence to
    operations in real time in the field. We are working closely with the
    Director of the Office of National Intelligence to ensure that we get
    the maximum integration from our National and military intelligence
    capabilities.
        We are also shifting from the typically American impulse to try to
    do everything ourselves to helping partners and allies develop their
    own capacity to better govern and defend themselves. This is
    particularly important in a global war on terror where many of our
    Nation's most dangerous enemies exist within the borders of countries
    with whom we are not at war. This shift is at the heart of the effort
    in Iraq and Afghanistan, as well as smaller-scale train and equip
    missions in places like the Republic of Georgia and The Philippines.
        It is abundantly clear that these kinds of complex and
    unconventional conflicts cannot be the task of any one country, or any
    one department. Within the executive branch, we are seeking ways to
    work more closely and seamlessly with partners in the Departments of
    State, Justice, Treasury, Homeland Security (DHS), and the Central
    Intelligence Agency (CIA). This means overcoming the legacy of
    industrial age practices and habits inherited from the Cold War. The
    Department will seek new, and more flexible authorities in budget,
    finance, acquisition, and personnel.
        There are many other important shifts in our posture and thinking:

             From a peacetime tempo to a wartime sense of urgency;
             From operating in an era of certainty to one of
            surprise;
             From avoiding risk to managing and balancing risk;
             From confronting other nation states to confronting
            decentralized terrorists networks;
             From garrison forces defending fixed frontiers to
            expeditionary forces that can be deployed anywhere;
             From having the bulk of personnel in the institutional
            military--the so-called ``tail''--to moving troops to the
            operational side that deploys and fights--the ``teeth''; and
             From separating people and information in vertical
            ``stove pipes'' to sharing data and coordinating operations
            across organizations, military services, and agencies.

        Another thing that has become clear in recent years is that raw
    numbers and mass do not necessarily equate with capability.
    Technological advances, including dramatic improvements in satellite
    communications, information technology, and precision weaponry have
    allowed our military to generate considerably more combat capability
    with the same or, in some cases, fewer numbers of people and weapons
    systems. These advances in the ability to deliver precision firepower
    quickly and over great distances, have major implications for the way
    we think about deterrence and defense.
                                      navy
        Consider that until recently three out of every four ships in the
    U.S. Navy were not deployable at any given moment because of long
    maintenance and training cycles--the product of a peacetime culture and
    mindset.
        Today, the percentage of the fleet routinely at sea has increased
    by more than 50 percent. The Navy can rapidly deploy six Carrier Strike
    Groups within 30 days and surge up to two additional Groups within 90
    days.
        By applying advanced research and development, innovative
    maintenance and training, and a variety of cost savings initiatives,
    Navy leaders have changed the way our fleet operates and deploys.
        The Navy has increased its capacity and readiness in a variety of
    ways, including:

             Swapping crews by flying them to ships, rather than
            bringing ships all the way back home and then all the way back
            to the theater;
             Investing in more spare parts to significantly reduce
            maintenance down time; and
             Keeping manning at high readiness levels throughout
            the fleet at all times.

        As a result, our ships and Sailors are better-equipped, better
    trained and more capable--and are able to strike more targets with
    precision in far less time. As late as 1997, the airplanes aboard a
    single carrier could engage about 200 targets per day. In the opening
    phase of Operation Iraqi Freedom (OIF), this capability rose to more
    than 600 targets per day.

                                   air force

        We see a similar dynamic at work in the Air Force. Today, one B-2
    bomber on one sortie can drop 80 different satellite guided bombs on 80
    different target points. During Operation Desert Storm this would have
    required multiple aircraft on multiple missions. Despite the fact that
    the first Gulf War was widely associated with the video footage of
    ``smart bombs'' hitting their targets, over 90 percent of the munitions
    dropped in that war were conventional ``dumb'' bombs.
        It is important to note, however, that the Air Force fleet is
    aging. It is not uncommon for pilots today to find themselves flying
    planes that are older then they are. An aging fleet means increased
    maintenance costs and flight restrictions. It is important that we
    recapitalize the fleet to retain America's air dominance and strategic
    flexibility.

                                      army

        Our Nation's oldest military service is undergoing a remarkable
    transformation--from being a peacetime Army preparing for a major
    conventional war against another large military, to a consistently more
    agile and deployable force capable of taking on--and sustaining--a full
    range of missions around the globe.
        These operations have placed demands on men and women wearing the
    Army uniform and their families. Despite having over 1 million soldiers
    in the Army's active and Reserve components--and over 2.4 million in
    the military overall--the deployments to Afghanistan and Iraq of a
    relatively small portion of that total--currently less than 14 percent
    of the Army and less than 8 percent of the total military--have
    produced stress on selected parts of the force.
        The Army leadership under Secretary Francis Harvey and Army Chief
    of Staff General Pete Schoomaker took a hard look at this and
    identified that the real issue was not the total number of people in
    uniform, but rather the outdated way the force was organized. In
    particular, there needed to be an increase in the size of what's called
    ``Operational Army''--the available pool of soldiers and deployable
    units with the skills and capabilities required for today's missions.
        The centerpiece of the Army reorganization plan is a shift away
    from a structure based on large divisions--the ``building block'' of
    the Army since World War I--into an Active and Reserve Force configured
    into 70 more capable combat brigades and more than 200 support
    brigades--all fully manned and fully equipped. The ``modular'' brigade
    combat teams can deploy quickly with enough firepower, logistics, and
    administrative support to operate on their own. They will be modernized
    with the Future Combat Systems (FCS)--a network of weapons and sensors.
    The result of these changes is that a relatively small increase in the
    size of the Army is producing a dramatic increase--about 30 percent--in
    the amount of its deployable combat power.
        With this restructuring, the Army should be able to maintain, when
    necessary, a force generation cycle of 2 years at home station for
    every year an active duty combat brigade is available to deploy abroad.
    For the Reserve component, the deployment ratio should be 5 years at
    home to one year deployed if needed.
        The Army is also in the process of realigning some 44,000 personnel
    spaces across the active, Guard, and Reserve elements to have more
    troops with the skill sets in highest demand. For example, Reserve and
    National Guard soldiers who are infantry, military police, civil
    affairs, and engineers have been in high demand during the global war
    on terror--while those in field artillery, air defense and armor units
    less so. In addition, 12,000 soldiers formerly assigned to jobs--mostly
    administrative and facilities support--that could be performed by
    civilians--are being brought into the operational part of the force.
        These ``rebalancing'' steps will produce a 50-percent increase in
    infantry capabilities, with similar increases in military police, civil
    affairs, intelligence, and other critical skills. By enlarging the pool
    of available people with the needed skills and training, individual
    soldiers can expect to deploy and mobilize less often, for shorter
    periods of time, and with more notice and predictability.
        Changes to the U.S. global force posture will also bring home
    170,000 active duty troops and families home to bases in the United
    States. Therefore, instead of being rotated every 2 to 3 years to new
    postings, soldiers will be able to remain with units for up to 7 years.
    In addition to building greater unit cohesion, this system should
    greatly reduce the strain on families from moving households and
    changing schools.
        These changes are already resulting in a larger ``Operational
    Army''--by some 40,000 soldiers by the end of the next fiscal year --
    with more cohesive and combat-ready formations, a more predictable
    career path for soldiers and their families, and more troops available
    with the skills needed to fight the challenges we can expect to face.
        I want to comment on several issues that have been raised about the
    health of the United States Army.
        First, some ask, what is the current state of the U.S. Army? We
    have the most agile, most skilled, and most expeditionary Army in
    history. Those who use words like ``broken army'' are wrong.
        Consider:

             A ``broken Army'' would not be exceeding, by large
            margins, the highest re-enlistment goals they've had for 5
            years. The 3rd Infantry Division, for example, which recently
            returned from its second Iraq deployment in 3 years, met over
            130 percent of its retention target;
             A ``broken'' Army would not have met its recruiting
            goals the last 8 months despite the strong U.S. job market and
            the known--and well publicized--dangers and sacrifices of
            military life. In fact, the number of recruits who signed an
            enlistment contract almost 25 percent higher than it was at the
            same point last year.

        General Schoomaker points out that he remembers what a ``broken''
    Army looks like when he was a young officer. The Vietnam War had just
    ended, the All-Volunteer Force was in its infancy, and though we had
    many fine soldiers and officers, the force was also troubled by
    multiple problems. The difference between that Army and the
    professional and motivated force we have today could not be more
    dramatic.
        Many of the criticisms and dire predictions about the Army have
    come from people who may be well-intentioned, but who nonetheless are
    proceeding from outdated and inaccurate information.
        Today's Army has demonstrated its capability not in garrisons, or
    in training exercises, or through statistical readiness formulas, but
    in the crucible of combat.
        Think about the many rapid, complex, and dangerous operations that
    the Army now undertakes on a regular basis in Iraq, Afghanistan and
    around the globe. They have made the extraordinary so routine that it
    is sometimes hard for people to notice just how much has changed, and
    just how good they have become.
        A second question that is being asked is: Is the Army ``cutting''
    the size of the Army Guard and Reserve?
        The answer is no. The Army is not cutting the Army National Guard
    or Reserves. That rumor is false.
        At the present time the Army National Guard is authorized by law to
    reach 350,000 soldiers. It is currently manned at approximately
    333,000. The Army Reserve is authorized to reach 205,000 troops. It
    currently has 188,000.
        The Army's plan is to fund the Guard and Reserve at their actual
    current troop strength. In addition, the Department is prepared to
    increase funding should the Army National Guard or the Army Reserves
    actually grow past their current levels. Each component will retain the
    same number of total brigades--106 for the Guard, 58 for the Reserves--
    as they have today. The reorganization underway will ultimately result
    in a force that is more agile, fully manned, fully equipped, and with
    capabilities that will greatly aid its homeland security missions.
        A little background on what exactly is underway. In the past, the
    Army Reserve and National Guard served as a strategic Reserve, to be
    called on once in a generation or a lifetime for a major war. As a
    result, they received relatively low priority for funding. Many units
    may have existed ``on paper'' but they were not fully manned and lacked
    sufficient training and equipment.
        Today, the Army National Guard and the Army Reserve are shifting to
    an operational Reserve, to be able to play a key role in homeland
    security, as required, as well as in support of the global war on
    terror.
        America has come to rely much more on the Army's Reserve components
    than before. In keeping with these new requirements, the Army, over the
    past 2 years, has initiated a series of changes--and made additional
    proposals in this budget--to the way its Reserve components are
    arranged, manned, and operated--changes that arguably should have
    started a decade ago.
        This shift has also been reflected in the Department's budget
    priorities. This administration has increased spending on the Guard and
    Reserves by over 50 percent since 2001, and the Army proposes spending
    $21 billion on new equipment and modernization for the Guard through
    fiscal year 2011.
        Some changes have had a positive impact already, as demands put on
    the Guard and Reserve have actually decreased in recent months. Some
    160,000 Reserve component soldiers were mobilized and deployed this
    time last year versus roughly 110,000 today.
        Some ask why these changes are being made now, at a time of war?
        Well, change is hard at any time, but the changes are essential
    because we are at war. Indeed, I would suggest that the recent demands
    on the force--and the threats our country faces in the global war on
    terror--have made these long overdue changes even more urgently needed.
    This is a historic opportunity to get it right.
        But how, some are asking, will this affect the Guard's ability to
    respond to an emergency or natural disaster at home?
        The Army's proposal does not change the total number of brigades in
    the Guard, but it does adjust the mix of units in a way that better
    suits the Guard's unique roles and responsibilities. Specifically, six
    combat brigades are being converted to six support brigades. These
    support units include assets such as military police, engineers, and
    civil affairs--specialties that are increasingly necessary for homeland
    defense or to respond to natural disasters.
        The new concept of fully funded, fully manned, and fully equipped
    Guard brigades--particularly support units--is a development that state
    and local officials should welcome. By any measure, they will be a vast
    improvement over the under-manned, and under-equipped Guard and Reserve
    units of the past decade.
    Guard Equipment and Readiness
        Some also ask, if there will be a cut in support for equipment for
    the National Guard and why the Guard is leaving some of the equipment
    in Iraq, rather than returning it immediately to units here at home.
        First, it is important to remember that the challenge of properly
    equipping the Army did not start with this war. The Army leadership
    estimates that they began the global war on terror in 2001 with a $56
    billion shortfall across all components of the Army--shortages were
    particularly acute in the Reserves components.
        In years past, there was uneven quality and readiness between
    different states and different units across the Guard. This was
    particularly the case with combat brigades. Of the 34 combat brigades,
    only 15--less than half--were labeled ``enhanced,'' meaning that they
    were supposed to receive the highest priority for training and
    resources.
        But because of these inherited deficiencies, the Army had to
    ``cross level'' people and equipment across the Guard to make deploying
    units whole--including the so-called ``enhanced'' brigades.
        Once a deployment is completed, it makes little sense to expend
    enormous resources to move repeatedly heavy equipment back and forth
    from the Middle East. This is particularly the case for items like up-
    armored HMMWVs, tanks, or Bradley Fighting Vehicles that have
    relatively little use at home, but are needed in theater.
        Significantly, these deployments and redeployments offer a needed
    opportunity to reset the Guard units with the skills and equipment the
    Army will need in the future, instead of simply resetting them with
    what they had had in the past.
        Under the Army's proposal, instead of having 15 Guard combat
    brigades considered, but not really ``enhanced,'' there will be 28
    brigade combat teams that will, in fact, for the first time, be fully
    manned, trained, and equipped--just like their active duty
    counterparts.
        The process of fully transforming the Army--active and Reserve
    component alike--will not be all fixed or finished in this or the next
    fiscal year. It is a process that involves resetting dozens of units
    and adjusting the specialties and assignments of tens of thousands of
    soldiers. It is an enormous task and a tough challenge, one that
    General Schoomaker has compared to tuning an engine while the car is
    moving.
        At any given time a close observer could drop a plumb line in the
    process and identify any number of deficiencies. That is to be
    expected.
        But as one considers the changes taking place in the Army, it is
    important to view what is happening not in terms of the immediate
    moment, but where things are heading--and the U.S. Army is heading
    toward a properly funded Guard and Reserve fully capable of protecting
    America at home and abroad.
        That is something every American concerned about our Nation's
    security, as well as the well being of our ``citizen soldiers,'' should
    welcome and support.
    Army End Strength
        Nonetheless, many continue to ask, given the pace of deployments
    and the stress of the force, shouldn't the size of the active Army be
    increased?
        The answer is that we have already increased the size of the active
    Army by some 12,000, under the emergency authorities granted by
    Congress, with plans to go up by a total of 30,000 if required. More
    important, we have increased the size of the warfighting Army--the
    teeth--and reduced the size of the institutional Army--the tail--in
    ways that do not require an increase in statutory end strength.
        At issue is whether there should be a permanent increase in the
    statutory end strength--meaning that the U.S. Army would be required by
    law to maintain tens of thousands of additional troops on the
    payrolls--regardless of whether the Army leadership thinks that is
    necessary or desirable--and in the face of the enormous cost that that
    would build into future budgets at the expense of needed procurement
    and quality of life for the troops. We do not think that necessary or
    wise at this time.

                              protecting the force

        Protecting our troops in combat theaters continues to be the top
    priority of this Department. We face a thinking and adaptive enemy. The
    military is aggressively developing new equipment, technologies and
    procedures to counter the threats from Improved Explosive Devices and
    other methods employed by the terrorists to attack coalition troops.
        Last year, over 4,400 new, Level 1, factory-built, up-armored
    HMMWVs, and more than 16,000 add-on armor kits were fielded by the Army
    in Iraq and Afghanistan.
        Almost 700,000 sets of interceptor body armor have been fielded
    since the beginning of the war, and over 170,000 sets of additional
    protection for shoulder and upper-arm areas have also been sent to the
    combat theaters in Iraq and Afghanistan. This protection is the best
    available in the world, and has saved a great many lives. The Army's
    goal is 201,000--one for every servicemember and civilian in the U.S
    Central Command (CENTCOM) area of operations.

                                  health costs

        The pattern of imposing new programs and costs on the military--
    without considering the unintended consequences--is most evident in the
    area of health care. We all are on notice of this growing problem that
    threatens the Department's ability to fund its other priorities, and
    therefore future U.S. military capabilities.
        As with the changes underway in the Army, there has been a good
    deal of confusion and misstatement about what the Department is
    proposing in regard to health care.
        Let me be clear: the United States military provides--and will
    continue to provide--the best possible care for those who have served
    our country. But the reality is that the way the current health care
    system is funded is not sustainable. Mainly as a result of benefits
    added by Congress, often without hearings, the Department's health care
    costs have almost doubled over the past 5 years--from $19 billion in
    2001 to over $37 billion in fiscal year 2006 ($39 billion in fiscal
    year 2007). This year's proposed shipbuilding budget, by comparison, is
    $11 billion.
        Using a conservative projection, these health care costs will
    likely reach $64 billion in fiscal year 2015, an estimated 12 percent
    of the total Department budget projected for that year. By comparison,
    health costs were 4.5 percent of the Department's budget back in 1990.
        Because the health coverage offered by the Department is so
    comprehensive, many private employers are dropping their employer
    coverage for military retirees and directing their employees to rely on
    TRICARE instead. In fact, several State governments have passed rules
    that encourage their employees who are military retirees to use TRICARE
    and not their state health care systems. In effect, the military is
    increasingly subsidizing the health care costs of private corporations,
    organizations, and State and local governments. This is a classic
    example of good intentions leading to unintended, unwelcome, and
    expensive consequences. Today nearly 60 percent of the Department's
    inpatient and outpatient expenditures are for retirees and their
    families, and this percentage is projected to keep rising.
        To place the health benefit program on a sound fiscal basis for the
    long term, the Department is proposing to rebalance the share of costs
    between retired individuals and the government to approach the levels
    TRICARE had when the program was initiated by Congress in 1995.
    Further, we propose that cost shares be indexed so they will be
    adjusted annually for inflation.
        To provide context, in 1995, beneficiaries paid 27 percent of their
    total health care costs. Today, because there has been no change in
    TRICARE annual premiums for 11 years, beneficiaries currently pay not
    27 percent, but just 12 percent of costs. The proposed plan would ask
    retirees to pay somewhat more in premiums and for certain co-payments.
    However, even after adjustments, TRICARE would still be more generous
    than the best private employer plans. For a single retired junior
    enlisted servicemember, the average price increase for TRICARE Prime
    enrollment fees would equate to 26 cents per day by fiscal year 2008,
    according to one study. For a retired officer's family the change would
    amount to $2.58 per day.
        We also want to explore for new, innovative benefit alternatives
    such as health savings accounts, which are currently available to other
    government employees.
        A few points should be underscored. Active duty troops and their
    families--people who rely on military hospitals as their sole provider
    of health care--will not be affected, except for minimal changes to
    pharmacy co-payments for family members. Those retirees over age 65 in
    TRICARE for life are not affected, except for minimal changes to
    pharmacy co-payments. No one will be forced to leave TRICARE.
        The plan being proposed, though undeniably necessary and offered
    with the best interests of the men and women in uniform in mind, has
    led to predictable concern. But it is worth repeating: the way the
    current system is funded is simply not sustainable. Indeed, if current
    trends continue, health funding pressures will soon cut into budgets
    for training, equipment, and a range of other investments vital to
    winning the war on terror and maintaining the quality of life for our
    troops and their families.
        The Chairman, and the Joint Chiefs of Staff and I, unanimously urge
    Congress to join in taking the necessary steps to ensure that we
    sustain a superior health benefit for the Armed Forces, their families,
    and all retirees, and to ensure needed future U.S. military capability
    and a strong national defense.

                            help for wounded troops

        One program underway is the newly created support center for
    severely injured troops and their families. This center augments
    efforts already underway in the service branches, and has helped
    thousands of people during a difficult period in their lives.
        The Department remains committed to helping those who have risked
    their lives for their country in every way possible. I never fail to
    come away enormously impressed and inspired when I meet with the
    wounded and their courageous families. They are truly remarkable
    examples of American patriotism and resilience.

                              imagining the future

        Mr. Chairman, the leadership of the Department will be describing a
    process of continuous change in everything from the way we fight wars
    to the way we manage personnel. Where, one might ask, is this heading?
        Imagine:

             A colonel proficient in Arabic whose knowledge of city
            management equals his skills in marksmanship;
             A commander with the flexibility in tactics and
            options that President Roosevelt entrusted to General
            Eisenhower;
             A self-sustaining brigade that surges rapidly from the
            U.S. to a forward operating facility in Central Asia to work
            with newly trained allies against terrorist cells that threaten
            a new democracy;
             A sea-based combat ship with the ability to insert and
            change its combat payload depending on its mission.

        As we imagine that soldier, that commander, that brigade, that
    facility, and that ship--we have a notion of what America's transformed
    Armed forces might well look like in the years ahead. Changes that will
    be essential to defeating a range of enemies--changes essential to
    keeping our Nation safe.
        In discussing the budget and the QDR, the tendency will be to talk
    about a lot of numbers--numbers of troops, numbers of weapons
    platforms, and the like.
        But I want to conclude by talking about a different metric that
    crossed my desk in December. That number is 371--the total number of
    Silver Stars and Service Crosses that had been awarded since September
    11 to our Nation's soldiers, sailors, airmen, and marines.
        Were it not for the exacting standards the military has for these
    awards, I suspect the numbers would be much higher, given the superb
    performance of our troops in places like Fallujah, Ramadi, Kandahar,
    and other grueling battlefields in the global war on terror.
        In a conversation about the war a few weeks ago, I was asked
    ``Where are the heroes?'' There are a great many heroes. They are doing
    exactly what needs to be done to keep our country safe and to preserve
    freedom for our children and their children. We all could do a better
    job--media and military alike--in telling their stories.
        Let me briefly highlight just one. Suran Sar was born in Cambodia
    and came to this country at the age of 15, after most of his family was
    killed by the Khmer Rouge. He became an American citizen and later
    volunteered to become an American soldier. He fought in the first Gulf
    War, rose to the rank of Master Sergeant in the Special Forces, and was
    deployed to Afghanistan after September 11.
        On March 2, 2005, his team of 12 landed in their Black Hawk
    helicopters to inspect some suspicious-looking buildings on a snow
    capped mountain. They immediately came under fire, and Sergeant Sar
    chased after one of the gunman. He was hit in the head by an enemy
    bullet, but kept fighting to help the rest of his team that was still
    pinned down. They ultimately routed the terrorists, seized several
    weapons, and secured the site.
        For his actions on that day he received the Silver Star, the Army's
    third highest medal for bravery. He would later tell a reporter:

            ``I kind of feel ashamed to accept such a prestigious award
            because I feel all I'm doing is something that I love to do . .
            . fighting to serve my country and protecting my guys.''

        Sergeant Sar is but one of thousands of remarkable people who make
    up our country's Armed Forces. Some of their accomplishments are known
    beyond the immediate circle of family and comrades, but most are not.
        They are volunteers who could be doing something much easier,
    safer, and better compensated, but they step forward each year to raise
    their hand and say, ``Send me.'' They do so fully aware of the risks
    and are justifiably proud of the noble history they are making.
        They have done everything asked of them--and have done it with
    resilience and courage. We owe it to them--and the country they have
    sworn to protect--to provide the resources, the capabilities and the
    innovative institutional culture that will not only win today's wars,
    but also best position them to win America's wars in the decades ahead.
        Thank you for your support of the men and women who wear our
    Nation's uniform. I look forward to working with this committee as our
    Nation engages in a ``long war.'' I am reminded of what President
    Eisenhower once said about another long struggle--the Cold War--
    comments that seem to have resonance today.

            ``We face a hostile ideology--global in scope . . . ruthless in
            purpose, and insidious in method . . . to meet it successfully
            we must carry forward steadily, surely, and without complaint
            the burdens of a prolonged and complex struggle--with liberty
            the stake.''

        Mr. Chairman, just as we did during the Cold War--what President
    Kennedy called a ``long twilight struggle''--we will persevere in this
    ``long war'' we face today. With the help of Congress, we will provide
    our country with the security it needs and deserves in this new
    century.

        Chairman Warner. Thank you, Mr. Secretary, and I join you
    in saying the quotes of both of those two distinguished
    Presidents describe the situation that our President is facing
    up to in every way.
        Chairman Pace, we welcome you.
        General Pace. Thank you, Mr. Chairman, Senator Levin,
    members of the committee. It is my great honor and privilege to
    sit before you today representing the men and women of your
    Armed Forces and on their behalf to thank you for your strong
    bipartisan support of all of us who have the honor and
    privilege to defend this Nation, also to thank them, the men
    and women who serve in our Armed Forces, for all that they are
    doing every day to protect us, and especially to thank their
    families, who serve this country as well as anyone who has ever
    served in uniform. They wait at home patiently saying their
    prayers, hoping that their loved one is not injured, and we owe
    our families a great debt of gratitude.
        Over the past year we have participated, the senior
    military leadership and senior civilian leadership of the
    Department, in what I think is an unprecedented number of
    meetings, hours and hours, hundreds and thousands of hours of
    meeting together, to produce the budget, to produce the QDR, to
    look at the national military strategy. Based on all those
    hours of deliberation and analysis, I am very proud and
    confident to tell you that your military is fully prepared to
    execute all of the missions in the national military strategy.
        I would also tell you that I believe that the budget as
    presented allows us to prosecute the war on terror, to
    accelerate transformation, to enhance our joint warfighting,
    and to increase the quality of life of our servicemembers and
    their families.
        We are involved in a long war, against an enemy that is
    ruthless, adaptive, and patient, and they are trying to destroy
    the resolve of the American people through gradual attrition.
    Iraq is certainly the central battle, the center of gravity, in
    this war on terrorism, and we have had great progress there and
    some challenges, as the Secretary has already outlined.
        We are fighting this long war for the first time with an
    All-Volunteer Force--2.4 million Americans, Active, Guard, and
    Reserve, protecting 300 million Americans. It is important, as
    you do frequently, not only through the way that you support us
    in legislation, but in your visits to the field, in your visits
    to the hospitals, we thank you for the way that you tell your
    Armed Forces how important their service is to this country.
        Sustaining our All-Volunteer Force will be critical in the
    years ahead. One of the key elements of sustaining that force
    will be to sustain the health care system. We have a superb
    health care system that you have provided for us. Over the past
    5 years, the cost of that health care system to the Nation has
    doubled. In 2001 it was $19 billion. In 2006 it will be just
    over $37 billion, and on its current trend, within the time
    frame between now and 2015 it will be about $64 billion per
    year.
        There are multiple reasons for this. First, is the simple
    fact of the increase in the cost of health care. Second, is
    that private employers are telling their retired military
    employees to use the military health care system, allowing
    those private employers to not have to pay the premiums that
    they would otherwise have to pay for that insurance. We also
    have some State and local governments doing the same thing,
    encouraging their military retirees to use the TRICARE system
    as opposed to the system provided by State and local
    government.
        Another factor is the fact that since 1995 the premiums
    have not changed for our military forces. The legislation that
    you all passed in 1995 provided and has continued to provide
    superior health care at, in 1995, very reasonable cost to the
    individual member. As part of our deliberations this year at
    every level in the Department, to include multiple times in
    discussions with the Joint Chiefs, the Joint Chiefs have
    unanimously recommended that we re-norm the cost of health care
    to what you established in your 1995 legislation. Some very
    important points.
        First, Active-Duty troops and their families would not be
    impacted by this renorming.
        Second, retirees over age 65 would not be impacted by this
    renorming.
        Third, the catastrophic cap would not change from its
    current $3,000 for a family.
        We believe that this health care benefit is unique and
    superb. We want it to continue for all of our members of the
    Active, retired community, and we believe that re-norming to
    what you established in 1995 is one way to assist in helping us
    achieve the goal of long-term sustained health care.
        To conclude, I would like to just mention a thought about
    the way ahead for our country. The war on terrorism will
    present to your Armed Forces tremendous responsibilities and
    opportunities. But, as many have said before and I will say
    today, we cannot and will not win this war on terror alone.
    This will very much need the collective capacities of all
    elements of national power that we derive through our
    interagency coordination and cooperation.
        Twenty years ago your Armed Forces faced significant
    obstacles in being joint and working together. In no small part
    because you passed the Goldwater-Nichols Act, we are now a
    truly joint force, becoming an interdependent force. I believe
    we need to find ways inside of our government to encourage and
    reward interagency collaboration, interagency experiences,
    interagency education, interagency planning. We need the
    ability to deploy our key interagency experts along side of our
    military, so that we can do the kinds of work that we need to
    do overseas quickly and efficiently.
        It is my great privilege, as I said, to sit before you
    today, to be able to thank you for your support, to be able to
    thank our Armed Forces for what they are doing. I look forward
    to answering your questions. Thank you, sir.
        [The prepared statement of General Pace follows:]

                  Prepared Statement by Gen. Peter Pace, USMC

        Chairman Warner, Senator Levin, distinguished members of the
    committee, it is my pleasure to report to you on the posture of the
    U.S. Armed Forces. On behalf of all soldiers, sailors, airmen, marines,
    Department of Defense (DOD) civilians, and our families, thank you for
    your continued bipartisan support. That support has been exemplified
    this past year by congressional visits to our troops in Iraq,
    Afghanistan, and elsewhere around the world; visits to those
    hospitalized; your funding for operations; your support of
    transformation and recapitalization initiatives; and the improved pay
    and benefits you have provided to our servicemembers and their
    families.
        Our successes in the war on terrorism are due in large measure to
    the dedicated and patriotic sacrifice of our Nation's servicemembers. I
    want to thank them and their families for all they have done and
    continue to do to maintain our freedom.
        We are in a long war. Our enemy intends to destroy our way of life.
    They seek to expel American influence from the Middle East, overthrow
    the existing secular governments of the region, and establish a
    fundamentalist religious empire on which to base eventual global
    domination. To accomplish this they intend to defeat the United States
    and our allies--not militarily, but by targeting our unity and our
    will. They aim to undermine our resolve by attacking civilians; taking
    hostages; inflicting casualties on coalition forces; and using
    propaganda. They believe they can win against the world's most powerful
    nation because they see us as lacking the moral stamina to persevere in
    defense of our beliefs.
        This is not a struggle between America and Islam. Rather it is a
    conflict between those who love freedom and a terrorist minority
    attempting to take power from the majority. Our opponents are loosely
    networked and transnational. They are ruthless, adaptive, and convinced
    that they will win. They intend to do so by destroying the resolve of
    the America people by gradual attrition. They are a patient foe.
        For the first time, America's All-Volunteer Force is fighting a
    long war. Our troops and their families know their Nation truly
    appreciates their service and values their sacrifice. Sustaining our
    troops and upholding the resolve of our Nation requires our collective
    leadership. We must underscore for the American public both the nature
    and importance of the conflict we are fighting.
        We traditionally think of war in conventional terms such as the
    Second World War during which the average American had a family member
    serving in combat, and shared their sacrifice on the home front through
    the rationing of goods. This is not the conflict in which we find
    ourselves today. Thankfully, the daily life of the average American
    citizen reflects none of the hardships or shortages we associate with a
    nation at war.
        Unlike past wars, territory conquered and enemy armies destroyed
    are not apt measures of success. The true metrics are public perception
    and the resolve of free peoples to determine their own future. Our
    national commitment to a long-term effort is key in this fight, because
    the enemy neither expects nor intends to defeat us in the short term.
        It is also important to acknowledge that the U.S. military has a
    significant role to play, but that it will not win this war operating
    alone. Our interagency partners play vital roles in bringing to bear
    all the elements of national power to ensure long term success.
        To defeat our enemies and protect our Nation, we must
    simultaneously prevail in the war on terrorism and prepare for the
    future. The proposed fiscal year 2007 budget ensures we have the
    ability to conduct a broad spectrum of operations. Major conventional
    conflict, counterinsurgency, counterterrorism, antiterrorism, stability
    operations, humanitarian assistance at home and abroad, disaster
    relief, forward presence, global deterrence, support to civil
    authorities, and homeland defense each require the application of
    tailored forces. The proposed budget funds this wide range of military
    capabilities, and provides our forces with the superbly trained and
    equipped men and women we need to defend America and its interests.
        As stated in our recently completed biennial review of the National
    Military Strategy, we are well positioned to accomplish our missions.
    Our Armed Forces stand ready to defend the homeland, deter conflict,
    and defeat adversaries. Allies and coalition partners play important
    roles in meeting these challenges. If an unanticipated contingency
    should occur, our formidable capabilities and those of our many
    partners around the world will ensure we prevail.
        The Quadrennial Defense Review (QDR) underscores the need to
    address today's operational requirements and those of tomorrow. It
    emphasizes the importance of winning the war on terrorism, accelerating
    transformation, strengthening joint warfighting, and taking care of our
    most precious resource--our people. The QDR represents a significant
    effort to understand what capabilities are needed over the next two
    decades and is part of an ongoing continuum of change for the Nation's
    Armed forces. In particular, it underscores the value of speed and
    precision as force multipliers. The QDR reflects an unprecedented level
    of collaboration and teamwork amongst the senior civilian and military
    leaders of the Department. Our senior defense leaders will continue
    this dialogue, and we will develop roadmaps this year to achieve the
    review's goals for the future.

                            win the war on terrorism

        Iraq remains the central front in the war on terrorism. Our mission
    there is clear. We are fighting to defeat terrorists and to help the
    Iraqis build a democratic, secure, and economically sound nation--an
    ally in the war on terrorism. Our ultimate victory in Iraq will
    profoundly affect the security of the United States, our allies, and
    the entire globe.
        The past year in Iraq has seen significant challenges, but also
    remarkable successes. This month's Defense Department Report to
    Congress on ``Measuring Stability and Security in Iraq'' describes the
    situation in detail. The steadily growing participation in three
    national elections in 2005 vividly illustrated the determination of the
    Iraqi people--Shia, Sunni, and Kurd--to embrace democracy.
    Entrepreneurial activity has significantly increased. Most importantly,
    the Iraqi people are increasingly taking greater responsibility for
    their own security. These successes demonstrate genuine progress and
    flow directly from the hard work of our troops and interagency
    partners.
        Effective governance, the rule of law, economic growth, and social
    well-being can only flourish on a strong foundation of security. Over
    the course of the next year, we will continue to aggressively assist
    Iraqi security forces to assume greater responsibility for a stable and
    secure Iraq. Commanders on the ground will continue to make force level
    recommendations based on conditions not timetables.
        The war on terrorism is not restricted to the boundaries of Iraq.
    We are combating terrorism in Afghanistan, where our forces continue to
    root out al Qaeda and Taliban in partnership with the Afghan National
    Army. Likewise, our Provincial Reconstruction Teams, consisting of
    civilian and military professionals from the U.S. and our Coalition
    partners, assist Afghans at the local level in building a stable and
    free society. An indicator of our accomplishments in Afghanistan, as
    well as a catalyst for continued success, is the North Atlantic Treaty
    Organization's (NATO) initiative to take on more responsibility for
    security and development. These international efforts reach beyond
    Afghan borders and help the region choose stability over conflict.
        We are combating terrorism in Southeast Asia. The Abu Sayaf Group
    in the southern Philippines and al Qaeda's partner Jemaah Islamiyah in
    Indonesia present these friendly nations unique challenges. We are
    forging relationships, building capacity, sharing information, and
    conducting focused training with these valued allies. We are also
    working with other nations to strengthen maritime security in the
    Strait of Malacca and other strategic waterways. Our efforts contribute
    substantively to regional security and freedom of the seas.
        In Africa, we continue to partner with regional organizations and
    individual nations to improve their capacity to combat terrorism,
    secure borders and coastlines, and reduce ungoverned space. The
    Combined Joint Task Force-Horn of Africa and the Trans-Sahara Counter-
    Terrorism Initiative--developed in coordination with the Department of
    State--improve the ability of countries to foster security and
    stability within their own borders.
        In addition to regional initiatives, an array of coalition and
    interagency partners continue to work with us globally against the
    proliferation of Weapons of Mass Destruction (WMD). Legislation
    authored over a decade ago for cooperative threat reduction and
    counterproliferation of WMD anticipated one of today's most serious
    challenges. We continue that effort. The Proliferation Security
    Initiative expands international intelligence sharing, coordinated
    planning, and capabilities integration. Similarly, our ability to
    execute counterproliferation operations is enhanced by the Weapons of
    Mass Destruction Maritime Interdiction initiative.
        Defense of the homeland itself remains a key mission in the war on
    terror. Our efforts to defeat employment of WMD by terror groups, as
    well as a strong response capability should those efforts fail, are
    critical. Terrorist attacks here at home against the Nation's citizens,
    its infrastructure, and its leadership must be prevented. Our efforts
    to date have been successful but constant vigilance is necessary.
        We are also confronting the threat of narco-terrorism. Ongoing
    multilateral operations promote security, improve effective border
    control, deny safe havens, and impede the ability of narcoterrorists to
    destabilize societies. Combating drug trafficking has particular
    importance for strengthening security and democracy in our hemisphere.
    Engagement with our Latin American neighbors to shape events and
    forestall crises is vital to protecting democracy for us all.
        Strategic communication is a significant component of the war on
    terror. Terrorists rely upon propaganda to deliver their message and
    justify their actions and are not constrained by truth. We must counter
    those efforts. Our actions, policies, and words must reflect and
    reinforce our strategic goals and national ideals. What we communicate
    to our friends and foes is at least as important, if not more so, as
    what we do on the battlefield. We need a more cohesive U.S. Government
    effort in this area.
        In the war on terror, our allies and coalition partners execute key
    roles in defeating terrorists on and off the battlefield. Their
    capabilities and regional expertise are complementary to our own. As we
    move ahead in combating terror, we do so increasingly in combination
    with other nations who understand the danger terrorism poses to their
    citizens.

                           accelerate transformation

        As the threats to our Nation evolve, so must the capabilities of
    our Armed Forces. Transformation today remains vital to the defense of
    the United States tomorrow. It is a process, not an end state.
        Transformation is more than harnessing advanced technology.
    Transformation includes rethinking our doctrine and operational
    concepts; adapting professional education and training to meet new
    challenges; restructuring our organizations and business practices to
    be more agile and responsive; improving our personnel policies; and
    reforming our acquisition and budget processes. Nowhere is this more
    evident than in our effort to increase interagency collaboration.
    Defeating terrorists requires more than the use of military force. We
    must harness and synchronize all the instruments of national power to
    win the war on terrorism.
        Advancing a transformational mindset and culture that readily
    embraces interagency integration begins with our Nation's strategic
    guidance documents. Interagency collaboration is a theme throughout our
    National Security Strategy, QDR, National Defense Strategy, National
    Military Strategy, Joint Strategic Capabilities Plan, Security
    Cooperation Guidance, and Unified Command Plan.
        Nonetheless, we can still do more to enhance interagency
    effectiveness. Twenty years ago, there were serious institutional
    obstacles to our armed services operating as a joint team. Today, in no
    small part due to the 1986 Goldwater-Nichols legislation, the U.S.
    military is increasingly a true joint force, interoperable and moving
    towards interdependence.
        The Goldwater-Nichols legislation established a system of
    incentives and requirements to foster Jointness among military
    officers. We need to find similar ways to encourage interagency
    expertise. Rewarding interagency work experience, education, and
    training will facilitate better synergy between departments. Likewise,
    we need and should reward individuals and agencies that rapidly deploy
    and sustain civilian expertise in tandem with our military. Shared
    deliberate and crisis planning capacity among our interagency partners
    will also improve our Nation's readiness for contingencies.
        We are working to better integrate our Nation's diplomatic,
    military, intelligence, information, and economic instruments to
    forestall and address crises overseas, and to be ready to deal with
    catastrophic terrorism, natural disasters, and pandemic disease at
    home. Defense support to civil authorities is an essential component of
    protecting the Nation. Hurricanes Katrina and Rita brought this home.
    The American people expect their Armed Forces to respond in times of
    crisis. Teamwork among our Armed Forces and Federal, State, and local
    government agencies--as well as private and volunteer organizations--is
    vital to the security of our Nation's citizens. Accordingly, we are
    preparing now to deal with circumstances that have the potential to
    overwhelm local government and private institutions. U.S. Northern
    Command (USNORTHCOM) is expanding its ability to take action swiftly in
    a variety of incidents, including providing military support to large-
    scale disaster relief operations and responding to the outbreak of
    pandemic disease.
        While transformation will allow us to better deal with
    contingencies at home, it will also improve our ability to boost the
    capacity of other nations to defeat terrorism and stop its spread while
    contributing to the security and stability of nations. The Army's Joint
    Center for International Security Force Assistance at Fort Leavenworth
    and the Marine Corps' Foreign Military Training Units are breaking new
    ground in this endeavor. Likewise, International Military Education and
    Training is a proven means of creating friendships that pay long term
    dividends when international classmates later work alongside U.S.
    forces in overseas operations. Constraints on our ability to implement
    this important program warrant review. These and other initiatives are
    examples of the value of developing capabilities and relationships to
    help promote security and stability worldwide, potentially precluding a
    need to commit significant amounts of U.S. resources to stabilize
    troubled nations abroad.
        Our foreign assistance framework was designed to influence and
    reward behavior during the Cold War. We need a new foreign assistance
    framework for the war on terrorism to develop the security capabilities
    of fledging democracies and advance regional stability. The support we
    provide other countries is essential to helping them police their own
    land and eradicate terrorist safe havens. Continual assessment of the
    countries that we assist, and the aid we allot, ensures that we are
    helping appropriate nations in the right way.
        It is not enough for us to be successful in responding to today's
    challenges. We need to shape the future with like-minded allies and
    partners. An essential element of this process is the transformation of
    our Global Posture. We are implementing a new Global Posture for
    defeating terrorism, deterring conflict, and bolstering the security of
    both established and nascent democratic states. This realignment will
    better position us to shape the future. This is well illustrated in
    U.S. European Command's (USEUCOM) reorientation of its forces from Cold
    War-era basing to an expeditionary forward presence that supports our
    friends and helps deny havens for our foes.
        In addition to transforming our conventional force posture, while
    maintaining a reliable nuclear force, we are shifting from our Cold War
    strategic deterrence to a New Triad with broadened focus on
    conventional long range strike. Prompt global conventional strike
    capabilities are required in the war on terror as well as in future
    contingencies. In parallel with our efforts to develop a conventional
    long range strike capability, we are improving our missile defenses and
    national command capability. Your support for these efforts will turn
    our traditional triad into a strategic deterrence capability relevant
    to tomorrow's challenges.
        Finally, as we transform our warfighting forces, the Department
    will do the same for the acquisition and budget processes that provide
    material resources for our troops. Transforming the way capabilities
    are developed, fielded, and integrated enhances our capacity to execute
    a wide range of missions.

                          strengthen joint warfighting

        The U.S. Armed Forces' capacity to operate as an integrated joint
    team is one of America's chief advantages on the battlefield. By
    jointly employing our armed services we leverage their complementary
    capabilities as a team.
        We can and should go beyond our current level of jointness.
    Strengthening our joint warfighting ability enables us to make strides
    forward in the war on terrorism. It also accelerates transformation. To
    maximize our operational performance, we will transition from an
    interoperable force into an interdependent force. While doing this, we
    must maintain the expertise, culture, and traditions of the Services
    from which our military competence flows.
        Joint Professional Military Education (JPME) of our military and
    civilian professionals provides the foundation of our force. We intend
    to better integrate our interagency and international partners in these
    successful education programs. In addition, our Joint Exercise Program
    provides valuable training for the Combatant Commanders' Joint and
    multi-national forces. At home, we are working with the Homeland
    Security Council and the Department of Homeland Security (DHS) to
    establish a national security exercise program to help prepare senior
    leaders across the Federal Government to confront crises more
    effectively.
        In strengthening joint warfighting, we continue to review, develop,
    and disseminate doctrine and operating concepts. The Joint Chiefs in
    consultation with the combatant commanders ensure that our doctrine and
    concepts provide a solid foundation for warfighting. Those same
    concepts and doctrine also help shape the strategic guidance which
    drives operational execution.
        Our education and training, as well as our doctrine and operational
    concepts, are kept relevant by capturing lessons gained from
    experience. Our professional development and organizational agility is
    significantly enhanced by lessons learned from the war on terrorism,
    and other operations, including disaster relief at home and abroad.
        As seen in deployments to the Asian Tsunami, Hurricane Katrina, and
    the Pakistan earthquake, our standing, rapidly deployable Joint Task
    Force (JTF) headquarters dramatically improve our operational
    responsiveness. To enhance this capability, we will organize, man,
    train, and equip selected three-star and two-star Service headquarters
    to rapidly deploy as JTF headquarters.
        We are adapting our organizational structure to better exploit the
    intelligence we collect. The creation of Joint Intelligence Operations
    Centers at our combatant commands increases support to units in the
    field. In addition, the Joint Functional Component Command--
    Intelligence, Surveillance and Reconnaissance, set up this year under
    the leadership of U.S. Strategic Command, deconflicts competing demands
    by coordinating the allocation of intelligence collection assets. These
    initiatives bring the analytical firepower of the Intelligence
    Community to bear for our troops on the ground, in the air, and on the
    sea.
        We are also harnessing technological developments to enable faster
    sharing of data among agencies, but we cannot rely solely upon
    technology. Intelligence collection, analysis, fusion, and
    dissemination depend upon our intelligence professionals. Human
    intelligence is a vital enabler for collecting, understanding, and
    communicating information on threats and contingencies. Service
    programs for recruiting, training, and retaining key intelligence
    specialties have been refined to ensure we meet the increasing demand
    for intelligence personnel.
        We continue to examine how best to recapitalize and invest in our
    Intelligence, Surveillance, and Reconnaissance capabilities. Sensor
    platforms that collect across multiple mediums are one approach. High
    altitude, long loiter unmanned aerial vehicles are another. Space based
    platforms should focus on surveillance capabilities that we cannot
    readily replicate elsewhere.
        In addition to benefiting our surveillance, space based platforms
    also play a central role in communications. Our deployed forces'
    strategic, operational, and tactical connectivity depends on the use of
    global, high bandwidth communications currently only available via
    satellites. As the gap between operational demands and military
    satellite communications capacity grows, we will continue to rely upon
    commercial vendors for the foreseeable future. We are also exploring
    alternatives to space-based communications.
        Networked ground, air, and maritime communications systems are the
    means with which the U.S. Armed Forces share information and work
    together as a team. New joint acquisition strategies to replace
    Service-unique communications systems will advance our communications
    capacity across the electromagnetic spectrum. Common secure networks
    with allies will further increase coalition capability. In addition,
    the exponentially increasing importance of cyberspace requires that we
    increase our efforts to operate effectively both offensively and
    defensively throughout the information domain.
        In the realm of logistics, we are actively working to leverage our
    unmatched capabilities. The Joint Staff, the Services, the U.S.
    Transportation Command, and the Defense Logistics Agency work together
    to meet the personnel, equipment, and materiel needs of our combatant
    commanders. However, both the challenge of adapting to changing
    operational requirements and the demand to increase efficiencies
    require that we continue to enhance our logistics capabilities. Along
    these lines, we are working to improve unity of effort, domain-wide
    visibility, and rapid and precise logistics response.
        Reconstituting the force presents real challenges. Our weapons
    systems and vehicles have experienced extensive use in Iraq and
    Afghanistan. Supplemental appropriations have helped us repair and
    refit during combat operations, nonetheless, we have more work ahead to
    ensure our forces remain combat-ready. Your support for resetting the
    future force is critical.
        As we reset, the combat power of our Total Force is being
    increased. By moving the Reserve component from a strategic Reserve to
    an operational Reserve, we ensure it will be accessible, ready, and
    responsive. The Services have already rebalanced approximately 70,000
    positions within or between the Active and Reserve components. We plan
    to rebalance an additional 55,000 military personnel by the end of the
    decade and also continue converting selected military positions to
    civilian billets. This revised Total Force structure will provide us
    with greater combat capability and leverage the complementary strengths
    of our Active, Reserve, and civilian workforces.
       improve the quality of life of our servicemembers and our families
        Taking care of our people is fundamental to the ethos of the
    American Armed Forces. Our men and women in uniform are our most
    precious resource. We must continue to ensure their welfare and that of
    the families who support them. The most advanced ship, aircraft, or
    weapon system is of limited value without motivated and well-trained
    people. Our experiences in Iraq and Afghanistan remind us that the
    Nation's security rests in the capable hands of the individual soldier,
    sailor, airman, and marine.
        Quality of life, of course, transcends material considerations. Our
    young men and women join the armed services to patriotically and
    selflessly serve something larger than themselves. They serve with
    pride, and their families willingly bear the burden of sacrifice,
    because they believe they make a difference.
        A clear indication that our personnel in uniform understand the
    importance of their service and appreciate the quality of life that we
    provide them is their decision to stay in our Armed Forces. Our
    retention levels are over 100 percent of Service goals. To underscore
    the point that our men and women serve because they know they are
    making a difference, units that have deployed multiple times to combat
    have seen the highest rates of retention. We are also seeing success in
    our recruiting.
        We are grateful to the administration and to Congress for closing
    the pay gap between the private sector and the military, as well for
    vastly improving military housing and enabling our family members to
    enjoy a good standard of housing if they choose to live in the local
    community.
        To our families, protecting our troops in combat is the most
    important measure of quality of life. Since April 2004, all Defense
    Department personnel in Iraq, both military and civilian, have been
    provided Interceptor Body Armor. However, as the threat has changed, we
    have continually improved body armor to ensure our troops have the
    latest and the best possible protection. Our latest improvements defeat
    armor piercing rounds and include shoulder armor and side plates.
        In addition to body armor, armored vehicles are important to force
    protection. Thanks to your support we have had great success increasing
    production and fielding up-armored Humvees to protect our troops.
    Nearly all the approximately 40,000 tactical wheeled vehicles in the
    U.S. Central Command area of responsibility now have armor protection.
    We will continue to adapt as the threat evolves.
        Improvised Explosive Devices illustrate the asymmetric challenges
    we will face in the future. The Joint Improvised Explosive Device
    Defeat Organization spearheads our effort to meet that threat. With the
    development and testing of technologies, tactics, techniques, and
    procedures we are learning to defeat the tactics of our adversaries and
    increasing the survivability of our servicemembers. Our
    transformational work with private industry to experiment with emerging
    technologies promises to break new ground in this vital endeavor. Thank
    you for helping us provide the best possible protective equipment for
    our troops.
        Taking care of our troops and their families also means taking care
    of our wounded. During World War II, Korea, Vietnam, and Operation
    Desert Storm 24 to 30 percent of Americans injured in combat eventually
    died from their wounds. Today, due to tremendous improvements in our
    military medical system, nine of ten troops wounded in Iraq and
    Afghanistan survive. This dramatic improvement is the direct result of
    the hard work of our forward surgical teams and combat support
    hospitals, and the rapid evacuation of the seriously wounded to higher
    level care facilities in the United States. In Vietnam, it took 45 days
    on average to return wounded back to the United States. It now takes 4
    days or less.
        Our remarkable medical professionals return to duty over half of
    our wounded in less than 72 hours. Advances in medicine, technology,
    and rehabilitation techniques enable us to provide much better care for
    those more seriously wounded. We make every attempt to bring willing
    servicemembers back to duty--or return them to society empowered to
    continue to make a difference. Congressional funding for this effort is
    greatly appreciated. In particular, thank you for your support for our
    two new Advanced Amputee Training Centers--at Walter Reed Army Medical
    Center, here in our Nation's capital, and Brooke Army Medical Center at
    Fort Sam Houston, Texas.

                                   conclusion

        I testify before you today with tremendous pride in the bravery,
    sacrifice, and performance of today's Armed Forces. Around the world,
    in every climate, and often far from home and family, America's men and
    women in uniform are making a difference. They do so willingly and
    unflinchingly--volunteers all. Their valor and heroism are awe
    inspiring and they serve this Nation superbly, as have so many who have
    gone before them. It is an honor to serve alongside them.
        The past year saw the U.S. Armed Forces engaged in combat in Iraq
    and Afghanistan while we also provided humanitarian assistance to
    victims of the Asian tsunami, hurricanes along the U.S. Gulf Coast, and
    the earthquake in Pakistan. There are likely equal challenges and
    opportunities ahead for the U.S. Armed Forces in 2006. The imperatives
    to defend our homeland, defeat global terrorism, and transform for the
    future remain. With your continuing support, our military stands ready
    for the challenges and opportunities ahead.
        Thank you for your unwavering support in time of war.

        Chairman Warner. Thank you, Mr. Chairman. My first question
    will be to the Secretary eventually on that very issue of the
    interagency cooperation that you have raised.
        General Schoomaker, report on your Army, sir.
        General Schoomaker. Sir, good morning. I would be glad to.
    Good morning, Mr. Chairman, Senator Levin, and distinguished
    members of the committee. It is a pleasure to be with you today
    and I appreciate this opportunity to join Secretary Rumsfeld
    and General Pace, our Chairman, during their hearing to
    represent our Army, our soldiers, and our families who are
    serving so well today our Nation.
        I would like to make a brief statement that covers really
    three things: where we were when all of this started on
    September 11, what we have been doing, and where we are going.
    Then I will be glad to get into any detail you would like
    during questioning, but with the reminder that next week I will
    be testifying with Secretary Harvey on the specific details of
    our Army and we will jointly issue a posture statement to the
    committee at that time for the record.
        First of all, where we were. We went through a decade in
    the 1990s where the Army's portion of the peace dividend was
    about $100 billion in our investment accounts. Of course, we
    reduced our Army across the Active, Guard, and Reserve by a
    half a million soldiers. We started September 11 with a $56
    billion shortfall in equipment across our Army, Active, Guard,
    and Reserve. That was $56 billion if you replaced it in kind;
    if you modernized it and replaced it, $68 billion roughly. Of
    course, these are our best estimates.
        We also started with an Army that was largely structured
    for the Cold War we had just finished. Although it was a little
    smaller, it was still largely structured that way. What we
    found was that we had a significant amount of overstructure,
    which meant that we had more spaces, more jobs in the Army,
    than we had people or end strength to fill. This was
    particularly true in our Reserve components, who served as
    strategic Reserves during the Cold War.
        We had a considerable imbalance between our Active
    component and our Reserve component. We have testified many
    times and I know you have heard from both the Guard and Reserve
    leadership that the Guard and Reserve were equipped at a lesser
    level than was the Active Force. Part of the very good reason
    for that was the Active Force also had holes in it, it had some
    disparity in terms of its modernization, and therefore the
    equipment that was cascaded to the Reserve components was not
    equal to what had been fielded to the Active Force. We had some
    challenges in readiness, in our training, and in our equipage
    for deployment in that force.
        We then get into this global war on terror and what is now
    known as the long war. I agree that it will be a long war, and
    it will be a redefinition of the paradigm that we have lived
    with through certainly most of my career and I would say much
    of my father's career of 30 years. We are now in the business
    of, as an Army and, quite frankly, as a joint force, learning
    and adapting to the world which we are entering. The 21st
    century is going to be far more dangerous and far more complex
    than what we have experienced in the past, and it is going to
    require a whole different set of dance steps, so to speak, to
    be able to operate in a way that we will need to.
        We must take advantage of the momentum that we are having
    during this long war as we get the resources from you that you
    have been so good in giving us to not only fight the long war
    as we reset ourselves, as we consume this equipment and set
    ourselves forward. We must use this momentum with an eye to the
    future, not an eye to the past. We must use these resources to
    set ourselves forward the way we want to be and not the way we
    were when we started.
        So it is tremendously complex and there is a tremendous
    amount of responsibility on it, but that is what we are
    learning as we go forward. Where we are going is growing both
    capability and capacity across our force. I agree with General
    Pace. We are moving from a largely service-centric force to one
    that was interoperable, to one that then became joint in a
    sense of the classical term of ``jointness,'' towards one now
    that is interdependent, where we can rely upon other aspects of
    the joint force to provide a synergistic effect on any one of
    the components.
        I think, as you take a look at the way that we are
    currently fighting the global war on terror, that there are
    ample examples of how we are now working better and better
    together, leveraging each other's capabilities, passing them
    off to each other, and able to be much more agile than we have
    been in the past.
        But, we have also found that we lack capacity in certain
    areas. Certainly one of the areas that we find ourselves
    stressed more than others is in the combat service support and
    transportation, military police (MPs), civil affairs, these
    kinds of capabilities that are important, not only for duties
    here at home in the domestic scene, but also in the away game
    as we do the things that we do in Iraq, Afghanistan, and
    elsewhere.
        Additionally, we are attempting to accelerate our
    modernization because, quite frankly, without the Future Combat
    System (FCS) spinouts that we have and without pushing through
    the FCS, we will spend almost 4 decades without a new start in
    the United States Army on equipment, on modernization. This is
    something we cannot go into the future and allow to happen,
    and, of course, we are rebalancing across the Active, Guard,
    and Reserve.
        While I make this last statement, if you could put that
    rope chart up very quickly.
        [The chart referred to follows:]

        While they are doing that, I will just make one other
    statement here. We are moving our Reserve components from
    Strategic Reserve to an Operational Reserve. This means that we
    must give more predictability to Reserve components. We must
    count on them in their readiness. They must be identical to the
    kind of capability and they must deliver with a great deal of
    readiness.
        Now, I want to talk about this notion of a broken force. Up
    here on this rope chart I have is a picture of all of the
    things that we are doing during the period that is of most
    interest to us today, 2006 and the budget that has just been
    submitted for 2007. I think if you take a look at that you will
    see that Operation Iraqi Freedom and Operation Enduring Freedom
    (OEF) is the fifth bullet down. But, your Army is involved in
    all of these other activities that are major activities during
    this period. We are balancing the Active component and Reserve
    component.
        This notion that we are cutting the National Guard and
    Reserves is false. We are maintaining the end strength of the
    National Guard and we are maintaining the end strength of the
    Reserves, but we are rebalancing them both, just like we are
    rebalancing the Army, to do things that are more useful, have a
    better capability for the kinds of things that we are moving
    toward.
        As a matter of fact, you will notice that the Active
    component is building to 42 brigades instead of 43, like I said
    before. That 43rd brigade turned into special forces, five
    special forces battalions, a Ranger battalion's worth of
    companies, aviation battalion for special operations, and we
    are doubling the civil affairs companies that are in the
    Reserve component. So all of that is still within the Army end
    strength, but it is being rebalanced to things we need.
        We are building a modular force, the second bullet down.
    That means we will be able to plug and play across the force,
    regardless of component, and that we do not have to scrape
    together across the country half-filled units or partially
    filled units to create a whole one, like we have had to do in
    the past.
        The third bullet down, Integrated Global Presence and
    Basing System (IGPBS), that is our global posture that we are
    taking, moving units and capabilities from all over the world
    and reposturing in a way that is more relevant to the strategic
    agility that will be required for the 21st century and the
    kinds of requirements that we are going to have.
        That is associated with the next one down, which is Base
    Realignment and Closure (BRAC). Major moves in BRAC for the
    Army. In fact, we are the preponderance of any of it of the
    BRAC process.
        OEF, the 30,000 additional overstrength that you have
    authorized us and provided supplemental funding for; our reset
    and modernization I have talked to; and finally, the major
    business transformations that we are going through to move many
    spaces that were otherwise outside of the operational force of
    the Army and growing the actual operational strength of the
    Army inside the Army by 40,000.
        So, when you talk about an Army having stresses on it, yes,
    we are busy. Yes, there is stress from being busy. But this is
    not a broken Army. I will just say it one more time. I have
    mentioned it to many people. Any of us that have been around
    the Armed Forces for the last 25, 30 years had experience in a
    force that I would call bordered on being broken, if it was not
    broken. Most of you might remember the Armed Forces post-
    Vietnam, where we had major problems in discipline, major
    problems in readiness, major problems across the board.
        The United States Army is not broken. Neither is the Marine
    Corps, the Navy, nor the Air Force. I can speak for the Army.
    We are meeting our recruiting goals. We are at our eighth month
    in a row now that we have made those across the force, and we
    are reenlisting in record numbers. I just left the 3rd Infantry
    Division in Baghdad prior to their return over the holidays.
    The 3rd Infantry Division, on their second 1-year tour in Iraq,
    made 136 percent of their reenlistment goal. Talking to those
    soldiers, they are proud of what they have done and they are
    going to be with us.
        I thank you for the opportunity to say these words today. I
    would be glad to get into more detail and we certainly will be
    prepared to go in extraordinary detail at our Army posture
    hearing. I look forward to answering any questions you may
    have.
        Thanks very much for your support.
        Chairman Warner. Thank you very much, General.
        We will now proceed to a round of questions, 6 minutes for
    each member.
        Mr. Secretary, the QDR stated the following, and I quote it
    directly: ``The Department of Defense cannot meet today's
    complex changes alone. Success requires unified statecraft, the
    ability of the U.S. Government to bring to bear all elements of
    national power.''
        That is a very profound and perceptive and I believe,
    regrettably, accurate statement. I say regrettably because it
    has been the judgment of this Senator that the DOD has done its
    work through the heroic service of the men and women of the
    Armed Forces and continues to do it, but we are not getting, as
    the Chairman said, the collective capacities that was your
    quote, Mr. Chairman, of the other elements of our Government to
    bring to bear to conclude this conflict and perform the mission
    and bring our forces back.
        In my own discussions with young people coming back from
    Iraq, they talk about we apprehend the lawbreakers, the
    insurgents, we turn them over to their law enforcement. There
    are no jails, there are no judges, there is no way to
    administer justice, and all too often they are back on the
    streets.
        Jobs. Jobs is the root cause in all probability for this, I
    believe, exponential rise in criminal activity and the graft.
        We have failed to bring together all the resources
    necessary, and it is not fully--by no means the responsibility
    of the military--to restore the oil industry. They are sitting
    on, what, the second largest reserve of oil in the world. Your
    former colleague, Deputy Secretary of Defense Paul Wolfowitz,
    said at one time that he felt that that industry would be able
    to begin to bear the brunt of the costs that the American
    taxpayers and others are bearing today. Oil production is
    slipping.
        The producing of the necessary potable water, the health
    situation, it is just not matching the efforts of the military,
    and it is going to obscure the gains that have been made. We
    cannot allow that to happen, given the courageous and the loss
    of life and the casualties and the sacrifice by the families
    and the contributions of the American taxpayer.
        I call on you at this point in time. This is your time to
    make your public judgment of it. Do you agree or disagree with
    my view that we are not pulling together all elements of our
    government with equal force as is the men and women of the
    Armed Forces?
        Secretary Rumsfeld. Mr. Chairman, you and General Pace have
    of course elevated this issue, which is a critically important
    one, as you have said. You have to begin with the beginning,
    and the beginning is that we are still organized in the
    executive branch and in Congress with committees and
    subcommittees basically the way we were in the last century,
    with the exception of the new Department of Homeland Security
    (DHS) and a few other things.
        There has not been a Goldwater-Nichols for the United
    States Government, just to put it simply. As a result, the
    working together is improving in my personal view every month
    and every year. On the other hand, the DOD has a culture of
    deployments. They are used to it. They sign up for it. That is
    part of the way they are. That is their expectation level. The
    other departments do not have a culture of being deployed and
    therefore, if the task is a military one, we can do that. If
    the task then becomes one of creating a justice system in a
    country or border patrols or customs, the things that are
    different, off line from the Defense Department's major
    responsibilities, the task is more difficult because we need to
    try to find people, whether our country or from other
    countries, who can help out.
        Remember the Bonn process in Afghanistan put lead countries
    in charge, and it said that Germany would be in charge of the
    police and the U.K. would be in charge of narcotics and the
    U.S. would be in charge of training the military, and the
    police would be the Germans, and the border patrol the Germans;
    somebody else, the Italians, civil justice. They were not able
    to deploy the kinds of numbers of people into Afghanistan to do
    those to the extent that the military can deploy people into
    Afghanistan to do their job.
        Now, it is a big task. I would go to something Senator
    Levin said. On the other hand, other countries are not likely
    to nation-build a country. The people of Iraq and Afghanistan
    in the last analysis are going to be the ones who are going to
    build their country. What we need to do is to create an
    environment where they can do that and allow them to do that,
    encourage them to do that, assist them in doing that, but not
    do it for them. If you do it for people, you end up creating a
    dependency.
        You mentioned the infrastructure. The infrastructure in
    Iraq is decrepit. It is fragile from decades of
    underinvestment. It is going to take decades for them to get
    the infrastructure back where a modern country would have it.
    Anyone who expects it can be done in 15 minutes or a year or 3
    years or 5 years, I think just does not appreciate the extent
    to which the underinvestment has created the fragility of these
    systems.
        It is going to take patience. In the last analysis the
    Iraqi people are going to have to rebuild that country and it
    is our job to do what we have been doing, to help create an
    environment where they can do that, to launch them on the path
    to democracy, to train up their forces so that they can provide
    security while the building process takes place in the years
    ahead by the Iraqi people.
        Chairman Warner. Mr. Secretary, the message that has been
    employed by this administration is that we can bring our forces
    home as soon as we train the Iraqi military and other
    infrastructure of security. However, you better add another
    component, and it is of equal weight, and that is we cannot
    really pull out unless those people can pull together that
    government in such a way and put into the ministries people
    with strong backbones, not subject to secular pulls, but will
    perform those missions in such a way that all of the rest of
    the components of a sovereign nation can come together with the
    confluence of the security forces.
        I am sure that you quietly speak with our President on this
    issue and the Chief of Staff. We have to redouble our efforts
    in this area.
        Now, just for a few seconds, you brought this up in your
    direct testimony, Chairman Pace. Do you have anything you wish
    to add to this discussion?
        General Pace. Sir, thank you. We have a world-class
    Department of State and a world-class Department of Treasury,
    so I would not want my comments to be in any way considered
    disparaging to them. They are great Americans, doing a great
    job.
        Our system simply at this point in time, just like our
    system for the military 20 years ago, is not designed to
    encourage or reward tours of duty between various departments
    of our government or to reward joint, interagency education, or
    to facilitate and reward those who would want to volunteer or
    be assigned on deployments. We have an opportunity to increase
    our efficiency as a government by seeking ways to do that.
        Chairman Warner. General, those are nice words, but we have
    been at this thing over 2 years now. I am not trying to put
    people on report for past actions. I am looking towards the
    future. We have to have a redirection of a full emphasis on
    this, equal to what we are doing militarily in the retraining
    program of the security forces.
        Senator Levin.
        Senator Levin. First, let me fully agree with what the
    chairman has said. It is absolutely essential that there be a
    national government created in Iraq. We know they are working
    on trying to put together such a government now. It is
    essential those ministries reflect the nation and not sectarian
    groups. We have our work cut out for us. More importantly, more
    accurately, they have their work cut out for us.
        But, we have to put the pressure on them to achieve these
    goals. We have the right to do so. We have made the sacrifices
    which give us that right. Even though they are the only ones
    who can make the decisions, we have to keep the pressure on
    them to make those decisions to make their government a truly
    national one, reflective of the nation and not just a bunch of
    different sectarian groups.
        Mr. Secretary, you said relative to my comments that they
    need to amend their constitution in order to share power more
    equitably and to share their resources more equitably and to
    bring in all the major factions, including the Sunni Arabs,
    that, well, it took us a long time to end slavery and to
    provide for women's rights. I think that sends the wrong
    message to them. It took us much too long to do those things.
    They do not have that time.
        The analogy that you have utilized just simply is off the
    mark. It is not a useful analogy for a number of reasons. First
    of all, when our Constitution was formed each of the States
    signed onto the Constitution with its imperfections. In Iraq,
    one major group has not signed onto this constitution and a
    number of provinces where that group is in the majority have
    not signed onto the constitution. So it is going to take
    amendments to the constitution in order to bring all the
    factions onboard. The constitution itself provides for a 4-
    month period for changes to be recommended to the constitution.
    I think the analogy is wrong historically since all of our
    States signed onto that Constitution, a situation which does
    not exist in Iraq today.
        Second, the failures and internal contradictions of our
    Constitution led to a Civil War and 600,000 casualties and
    generations of bitterness. We should be using our hard-found
    wisdom in that regard to impress upon the Iraqis that they
    might avoid a similar civil war and a similar fate if they will
    make those compromises now rather than later or think they can
    make them later.
        Your analogy is off the mark for a third reason. It takes
    the Iraqis off the hook and I think that is a fundamental
    mistake. Our commanders, our military leaders in the field,
    have repeatedly told us that there will not be a military
    success over the insurgency without a political coming together
    of the major Iraqi groups. General Casey specifically said that
    the constitution turned out in the eyes of one of those major
    groups not to be a national document and that the Sunni Arab
    vote against the constitution could actually lead to a
    worsening political situation rather than a better one.
        My first question is: Do you agree with our uniformed
    leaders that there will not be a military success over the
    insurgency without a political coming together of the major
    Iraqi groups?
        Secretary Rumsfeld. There is no question about it. I would
    add, however, that the reality is the Iraqi people overall did
    vote for the constitution. You are quite right, the Sunnis
    voted in large measure against it. But there is an agreement,
    an understanding, as I am aware, that there will be discussions
    and some sort of an entity appointed to consider amendments to
    the constitution. Everyone agrees that is a good thing.
    Everyone agrees it is critical that the Sunnis come onboard.
    Nothing I said was inconsistent with that.
        Senator Levin. There was an amendment which was adopted in
    the Senate with bipartisan support. Seventy-nine U.S. Senators
    said the following: ``The administration should tell the
    leaders of all groups and political parties in Iraq'' key words
    there, ``should tell the leaders of all groups and political
    parties in Iraq that they need to make the compromises
    necessary to achieve the broad-based and sustainable political
    settlement that is essential for defeating the insurgency in
    Iraq within the schedule they set for themselves.''
        Secretary Rumsfeld. Everyone agrees with that.
        Senator Levin. Has the administration told the leaders? Not
    said simply, you have an opportunity, which is so far all the
    administration has said, which is obvious. They have an
    opportunity to do that. The question is will the administration
    tell the leaders in Iraq of all the factions that it is
    essential that they make the compromises necessary in order to
    achieve that broad-based sustainable political settlement? Will
    you say that to them?
        Secretary Rumsfeld. It has been said to them.
        Senator Levin. By whom?
        Secretary Rumsfeld. Oh, I am sure by the ambassador and by
    General Casey, and certainly by me when I visited with these
    people.
        Senator Levin. That is good news.
        Secretary Rumsfeld. Everyone agrees that it will require
    acceptance on the part of the elements in that country for the
    country to succeed, for the security situation to improve. We
    all agree with that. The way you get acceptance is having a
    national compact, an understanding on the part of all the
    participants, that they have a voice and a stake in the success
    of that activity. That means you simply have to reach out and
    see that the Sunnis are included in a way that is reasonable to
    everybody, including them.
        Senator Levin. Mr. Secretary, I have tried now for 6
    months, and my colleagues probably get tired of hearing me say
    this, but I am glad to hear you say that. I hope the President
    says publicly to the factions in Iraq that it is essential they
    make constitutional compromises to share power and share
    resources, so that the Sunnis come on board. That is the only
    way to bring a nation about and it is the only way to defeat
    the insurgency.
        We cannot write those provisions for them, but we can tell
    them it is essential that they write them. I am glad to hear
    you say today that you have told them that it is essential that
    they make those constitutional changes, that our ambassador has
    told them that. I would love to hear the President say that
    rather than much more qualified, cautious words like they have
    an opportunity to do that. There is a big difference between
    the two. One carries hopefully a message that that constitution
    is flawed, it will not do the job, it will not help bring them
    together to defeat the insurgency. The other one is a message
    of, hey, we are with you regardless of what you do, we are
    there for an unlimited period of time. That it seems to me is a
    flawed message and not one that is likely to produce those
    changes in the constitution, those compromises that need to be
    made.
        We are talking about power sharing, resource sharing here,
    and those are difficult compromises. The only hope we have of
    defeating that insurgency is if they will put their house in
    order politically. I am glad to hear you say that you have
    carried that message to them because it is the most important
    single message that can be delivered to them.
        Chairman Warner. Thank you, Senator Levin.
        Senator McCain.
        Senator McCain. Thank you very much, Mr. Chairman.
        I thank the witnesses for being here today. I agree,
    General Schoomaker, that this is the best Army in history. I
    also think it is important to note that members of this
    committee do not operate in a vacuum. We talk to a lot of
    people in the military, retired as well as others, and most of
    them tell us that the Army and Guard are under great strain
    because of these continued commitments. Many of us have felt
    that a larger Army and a larger Marine Corps would have
    relieved some of these strains.
        On Iraq, it is a three-legged stool here. One is the
    military equation, which I believe we are making significant
    progress. There are many areas of Iraq which are very secure
    and progress is being made.
        The other obviously is the political leg of the stool,
    which I met with a number of Iraqi leaders a couple of weeks
    ago and they are optimistic about reaching an agreement which
    will include the Sunni as part of the government, and that is
    very encouraging news, although it is going to be extremely
    difficult. Great credit goes to our ambassador in Iraq, who is
    doing an outstanding job.
        The third leg, the news is not so good. Mr. Secretary, you
    said it would take a long time to restore their economy. I
    agree. Your former deputy testified before this committee that
    Iraqi oil revenues would pay for the war. Unfortunately, oil
    revenues now are less than what they were before we invaded
    Iraq. If that is not fixed, if that is not fixed, we are in
    significant difficulty, and we all recognize that is a matter
    of security.
        Mr. Secretary, the issue I want to raise with you is part
    of a larger debate that is taking place here in the Senate and
    in Congress, and that is the issue of trying to restore the
    authority and responsibility of the authorizing committees. A
    lot of the attention is on earmarks. A lot of the attention is
    on emergency supplementals.
        As I count it, this year you will be submitting your
    seventh emergency supplemental of some $50 billion, we are
    told, coming to a total of some $400 billion in the last 5
    years to 4 years that are emergency supplementals.
        I do not know how you call it an emergency any more when we
    know that we are going to have costs for a number of years
    associated with the Iraq war. So what it effectively is, is an
    end run around the authorization process, going directly to the
    appropriations committees. For example, in last year's
    emergency request I counted $5 billion in unauthorized
    earmarks.
        It has to stop. Your requests have to be included in the
    normal budget process, in the normal authorization and
    appropriations process, because we all know and can estimate
    that the war in Iraq and Afghanistan is going to cost a certain
    amount of money. So to continuously come up here with an
    emergency, which we all fully anticipate, although maybe not
    the exact numbers, and not go through the authorizing process,
    is something that has become unacceptable and it has to stop.
        Now, Mr. Secretary, are you going to continue to do
    business by coming up here with emergency supplementals which
    thoroughly bypass the entire authorizing process, which is
    supposed to be the way the Congress of the United States
    operates?
        Secretary Rumsfeld. Senator, this is an issue that the
    senior leadership of Congress works out with the President and
    the Office of Management and Budget (OMB). From my standpoint,
    I could do it either way. Indeed, we tried to do it by
    estimating what the Afghanistan war costs would be and proposed
    an amount of money and gave a theory as to how it might be
    reasonably appropriate. The Senate and the House rejected that
    several years back and asked us to fund the war in
    supplementals.
        From my standpoint the criticism was a fair one. The
    criticism was that the theory we propounded for funding the
    Afghan war aftermath was not solid fact, and of course it was
    not. It was what we expected or what we guessed or what we
    thought and what we could speculate. People said: Do not do
    that; come in when you have information and ask for a
    supplemental.
        Now, I understand the problem for the authorizing
    committee. There is no question but that once it goes into a
    supplemental it goes straight. Maybe there is a way to change
    the rules of Congress so that the authorizing committee gets a
    look at a supplemental as well as a basic budget. I do not know
    what the answer is. We could do it either way.
        Senator McCain. If we could start out with the
    administration making a budget request that includes funding
    fully anticipated for conduct of the war on Iraq, then that
    would be a good beginning and would give us some added
    influence in this battle, and it is going to be a big battle,
    with the process that now has become corrupted here in
    Congress.
        General Pace, I am hearing from a lot of people in the
    Guard that they do not like this plan for the reorganization of
    the Guard. Have you talked to the adjutants general (TAGs) in
    the various States about this issue? Or should I be directing
    that question at Secretary Rumsfeld?
        General Pace. Sir, happy to take a shot at it. I have
    personally talked to the leaders who are from the Guard and
    Reserve who are part of my staff and through them have gotten
    information from the TAGs. I have not met personally with the
    TAGs. I know that the Army yesterday, for example, had a
    conference call on which they had all 50 States on the phone
    call. I am told by General Cody it lasted about 2 hours. I know
    there was a conference about a week or so ago where the TAGs
    were all in town and the Army met with them and they talked in
    great detail.
        What I do know is that the plan that the Army has to be
    able to provide 28 fully manned, fully trained, fully equipped
    brigade combat teams in the National Guard is a huge
    improvement over where we were several years ago, when we had
    15 of what we called enhanced brigades, but even their
    equipment was not up to the standards that it needs to be. The
    total number of brigades that the Guard has today and will
    retain stays at 106 and the total number of brigades that are
    fully manned, trained, and equipped in the combat role will be
    28. That will allow us then to have a very solid base of fully
    trained, manned, and equipped folks.
        Senator McCain. I strongly suggest, Mr. Secretary, close
    consultation with TAGs. We are getting initial negative
    feedback, and obviously it is important to have these very
    trusted individuals onboard in any reorganization plan.
        I thank the witnesses.
        Thank you, Mr. Chairman.
        Chairman Warner. Thank you, Senator McCain. I concur in
    your observation.
        Secretary Rumsfeld. Thank you, Senator. There is a chart
    that you might want to put up if you have it here, the National
    Guard funding.
        [The chart referred to follows:]

        I agree with you completely. We have to stay in close touch
    with them. This is the funding. Pete, you may want to describe
    it.
        General Schoomaker. Sure, if I could. In fact, if I could
    help answer part of your question. The answer is that we met
    with all of the TAGs last week, and there were some objections
    to some of the plans that we had, and we listened to those
    objections and we are making adjustments and working with them
    on it.
        Yesterday the Vice Chief of Staff of the Army, as General
    Pace said, was on a meeting with the chiefs of staff of the
    governors where we worked through the whole thing. We are
    working very carefully, and their concerns are really local
    concerns about the impact at the local level, at the armory
    level. We are working with them to make it as neutral as
    possible as we do this transformation and rebalancing of the
    Guard. I believe we will get there and I think that we are
    starting to get some very good traction.
        If you look at the chart that Secretary Rumsfeld asked to
    put up, it will give you some idea of the increase in funding
    for the National Guard to meet some of the traditional
    complaints they have had. In fact, the Army Guard is being
    funded across this next POM at about four times the rate that
    it was in 1999.
        Senator McCain. General Schoomaker, in all due respect, we
    have 40 percent of the Guard over in Iraq. I mean, 40 percent
    of our forces are in Iraq, deployed and working there. Of
    course the funding has to go up. In 1999 none of them were
    deployed anywhere, in all due respect.
        General Schoomaker. This is not supplemental funding. This
    is funding inside of our program.
        Senator McCain. That has nothing to do with their
    deployments overseas?
        General Schoomaker. It has to do with making them whole and
    rebalancing them, providing them equipment that is equivalent
    to the equipment in the Active Force, and to doing exactly what
    I said.
        Senator McCain. Replace the equipment that they are wearing
    out in deployments?
        General Schoomaker. Some of that is happening with
    supplemental funding, but I am talking about fundamental
    investment in making them whole. We are moving their helicopter
    fielding, modern helicopter fielding, 5 years to the left in
    this program, which is a huge investment that is historic.
        So we are listening, and we are very proud of what the
    Guard and Reserve has done and contributed to our whole Army,
    because we are working as one Army.
        Senator McCain. So are we.
        General Schoomaker. Yes, sir, I know you are. It is through
    your help that we are able to do this. So we are getting past
    communicating past each other. We are listening and we are
    talking to everybody we can talk to, to get this right.
        Senator McCain. Thank you very much, General.
        Thank you.
        Chairman Warner. Thank you, Senator McCain.
        This committee will very assuredly listen to the Guard and
    Reserve representatives in the course of our review of this
    budget.
        Senator Byrd.
        Senator Byrd. Thank you, Mr. Chairman.
        Mr. Secretary, the President's 2007 budget request for
    defense is $439.3 billion. That is $439 for every minute since
    Jesus Christ was born. This does not include $50 billion for an
    emergency bridge fund tacked onto the budget for the Iraq war
    for next year or an estimated $70 billion in supplemental
    funding that the President intends to request for the wars in
    Iraq and Afghanistan. When these costs are included, the
    defense budget balloons to nearly $560 billion, well over half
    a trillion dollars.
        This is a mind-boggling sum of money for defense. The
    American taxpayers deserve to know whether this is in fact
    money well spent. I stand second to none in my support of and
    in my gratitude to America's military forces. Our soldiers,
    sailors, marines, and airmen are the finest in the world. All
    Americans owe them a debt of gratitude for their service to our
    country.
        But, we owe them something more. We owe them a forward-
    looking defense policy that includes a definitive strategy for
    transitioning U.S. troops out of Iraq sooner rather than later.
    We owe them not only megamillion dollar missiles and tanks and
    airplanes, but also basic body armor and detection devices to
    protect them from the deadly nickel-and-dime IEDs of the Iraqi
    insurgency. We owe them a military health care system and a
    veterans benefits program that serves them as well as they have
    served the Nation.
        Amid all the buzzwords, like ``the long war,'' ``military
    transformation,'' and ``capabilities-based planning,'' this
    budget falls short of the mark of making the needed investments
    in the people who serve in our Armed Forces. We here in
    Washington can never afford to lose sight of the fact that our
    military is made up of people.
        General Schoomaker, let me shift to the center of the
    world. This morning's Charleston, West Virginia, Gazette has a
    story about a soldier who was wounded in Iraq and medically
    discharged from the Army. According to this report, upon his
    separation the Army presented him with a bill for $700 for the
    body armor that was destroyed when he was wounded. Lieutenant
    William Rebrook gathered up the money from his friends and paid
    the bill.
        General Schoomaker, how can it be that the Army is charging
    wounded soldiers for replacing damaged body armor? Rebrook, of
    course, scrounged up the cash from his Army buddies and
    returned home to Charleston last Friday. Let us hear what he
    has to say: ``I last saw the body armor when it was pulled off
    my bleeding body while I was being evacuated in a helicopter,''
    Rebrook said. ``They took it off me and burned it.''
        But no one documented that he lost his kevlar body armor
    during battle, he said. No one wrote down that the armor had
    apparently been incinerated as a biohazard.
        General Pace, Mr. Secretary, or General Schoomaker, how can
    it be that the Army is charging wounded soldiers for replacing
    damaged body armor? Is this standard practice?
        General Schoomaker. That is a very unusual story. I do not
    deny that it is not in the newspaper, but we will be glad to
    follow up. I have no idea why we would ever do something like
    that. We have issued over 700,000 sets of body armor, the very
    best that exists in the world. Every soldier has it. We
    certainly have procedures that account for battle loss, and I
    just find it a highly unusual story. But, we will certainly
    follow up and correct it if there is any truth to it.
        Senator Byrd. Will you also supply this committee with the
    answers to my questions?
        General Schoomaker. Yes, sir, I would be glad to.
        [The information referred to follows:]

        Senator Byrd. Will you supply me with the answers to my
    questions? That will not be hard to do. Would you do that?
        General Schoomaker. Provide the committee with the answers
    to your questions?
        Senator Byrd. Sir?
        General Schoomaker. I am sorry, I am not understanding you.
    Provide the committee with the answers to your questions?
        Senator Byrd. Provide the committee with the answers, and
    also come and see me and let me know what the answers are, too.
        General Schoomaker. Absolutely, be glad to, sir.
        Senator Byrd. I do not sound like I have my mouth full of
    turnips now, do I?
        General Schoomaker. No, sir. It is my problem. I have Army-
    provided hearing aids. They are supposedly the best in the
    world.
        Senator Byrd. I do not use hearing aids.
        How can it be that the Defense Department--she says my time
    has expired?
        Chairman Warner. You can complete your question.
        Senator Byrd. I thank the Chairman.
        How can it be that the Defense Department, which is
    requesting $439 billion in this budget, has to resort to
    dunning a wounded soldier for $700 to replace a piece of body
    armor? General Schoomaker, will you look into Lieutenant
    Rebrook's case to see what can be done about this?
        General Schoomaker. Sir, absolutely.
        Senator Byrd. Will you supply this committee with the
    answers?
        General Schoomaker. I will.
        Senator Byrd. Will you supply me with the answers?
        General Schoomaker. I will.
        Senator Byrd. Bless your heart. Thank you. Thank you.
        Mr. Chairman, my time is up.
        Chairman Warner. Thank you, Senator Byrd. Those responses
    should be in writing, because all members of the committee will
    want to have personal knowledge of that response.
        Senator Inhofe.
        Senator Inhofe. General Schoomaker, do you know of any
    policy whereby damaged body armor from combat is charged to the
    individual?
        General Schoomaker. Sir, I know of my policy, other than
    if, obviously, a soldier abuses equipment or loses or damages
    it as a result of negligence, obviously we have policies to
    recoup that. But, this does not sound like such a case.
        Senator Inhofe. Yes, I understand that. Let me get on with
    the questions here.
        First of all, I am going to resurrect a question I have not
    asked in a long time because I saw a statement that was made in
    the QDR concerning media. This morning at the breakfast,
    General Schoomaker, you made a comment about the opening of
    that health center in Iraq, where all the media was involved,
    40-some members of the Iraqi media showed up, not one showed up
    from the United States, from the American media over there.
        I know that is true because I have been over there. I made
    my tenth trip to the area of responsibility (AOR) and every
    time I come back it is with more stories, great heroic stories
    that I hear from these guys, and of great accomplishments that
    we are making. They talk about in the Sunni Triangle. You
    mentioned this morning, General Schoomaker, that the eastern
    half of Baghdad is now secured by the Iraqis, not by the
    Americans. What you did not mention is that the general in
    charge of that is General Madhi, who was, General Pace, the
    brigade commander in Fallujah for Saddam Hussein, who hated
    Americans. I was over there when they started the embedded
    training with the marines, and he learned to love the Americans
    so much that he told me that when they rotated the marines out
    he cried. In fact, he renamed the Fallujah Iraqi security
    forces the ``Fallujah Marines.'' Now that same general is over
    there in the eastern half of Baghdad. We do not have any of our
    boots in the eastern half of Baghdad providing security.
        These great success stories like that just seem to go
    unnoticed. I was glad when General Jordisada actually came to
    my office in Tulsa during the break and gave me all the
    details, which are now coming out public, and he has now shared
    those with General Maples and with the Intelligence Committees
    of both the House and the Senate, that in fact the WMDs, which
    I consider to be the phoniest issue in the characterization of
    this war, they were there, we knew they were there. He also has
    information now as to where they were transported in Syria and
    even the names of the pilots and some of the telephone numbers.
    So that, thank God, is going to be a dead issue.
        What we should be concentrating on is the real reason. Here
    we had a guy with a bloody regime, torturing thousands and
    thousands of people. We had terrorist training camps in Salman
    Pak, Ramadi, Samarrah, and other places that are now out of
    business. So that is the real issue over there.
        Now, we have talked about the various troops and some of
    the things that they said, like Lieutenant Colonel Tim Ryan,
    who made the statement--it is a lengthy statement that I read
    before in these hearings. The last sentence is: ``Many members
    of the media covering the war in Iraq are aiding and abetting
    the enemy.'' Having been over there and watched this, I believe
    that is the case.
        Now, it seems to me that we are winning the war and losing
    the Public Relations (PR) war. The QDR accurately states that
    we need to effectively communicate U.S. actions. Now, I would
    ask you, Secretary Rumsfeld, is there anything specific that we
    are doing to try to communicate the truth back here?
        Secretary Rumsfeld. The DOD has public affairs activities
    where they try to explain and discuss and elaborate on what the
    DOD is doing in every respect. In terms of trying to
    communicate back to the United States from Iraq, we have
    battlefield commanders who at least once a week are there
    discussing what is going on.
        One of the most effective things is what you point out, is
    the 138,000 men and women over there in uniform who are
    emailing back and telling the truth about what they see. That
    is a powerful force in this country.
        Senator Inhofe. That too, and Fuzzy Webster bringing back
    the 3rd I.D. after two tours over there and a 133 to 136
    percent retention. These are success stories.
        Let me get into another thing real quick because our time
    is so limited here. The Senator from West Virginia talked a lot
    about the exorbitant amount of money that is being appropriated
    for our Nation's defense. You might remember, Mr. Secretary,
    years ago in your first appearance before this committee I
    asked you the question, in terms of a percentage of the gross
    domestic product (GDP) that is spent on defense, where do you
    think it should be. At that time, it was after the drawdown of
    the 1990s. It got down to 2.9 percent.
        Your response to me was--and I am going from memory now,
    and I do not know how your memory has served you so well,
    because you came right up with it--that in the last 100 years
    it has averaged 5.7 percent of GDP for a 100-year period, and
    that was averaging war times and peace times. You said
    something to the effect somewhere around 5 percent.
        Last year when we talked about it, you said maybe 4.5 to 6
    percent. Is that still a general range where you think some day
    we may be and we should be?
        Secretary Rumsfeld. Certainly if you think about it, when I
    came to Washington in 1957 and served in the 1960s in Congress
    in the Kennedy and Eisenhower period, it was 10 percent of GDP.
    When I was Secretary of Defense 30 years ago, it was about 5
    percent. Today it is about 3.6 or 3.7 percent. So, it is not a
    large fraction of the GDP, and certainly this country is
    perfectly capable of spending whatever it is we need to provide
    for the security of the American people.
        We also have an obligation to see that we spend the money
    efficiently and effectively, and we are trying very hard to get
    more bang for the buck.
        Senator Inhofe. Thank you, Mr. Secretary. I could not agree
    more with you. Going through the 1990s, if you take just a
    static line and apply inflation to it, we actually went down by
    $412 billion, if you take the amount that the President had
    requested. Since the Bush administration went in, it has been
    above that line by $334 billion, plus that amount which is in
    the supplementals, but still not getting anywhere near. We are
    right now at 3.8 percent.
        I just hope that we would be able to relook at this and
    say, what are we really supposed to be doing up here in terms
    of defending America? That is the number one thing we are
    supposed to do.
        I would ask you, General Schoomaker, and you, General Pace,
    that in the event that we went back up to, let us say, 4.5
    percent, that would be an additional $80 billion, what do you
    two think we should do with that if that were the case? My time
    expired a while ago. Thank you.
        Chairman Warner. Thank you very much, Senator.
        Senator Inhofe. That is for the record.
        [The information referred to follows:]

        General Schoomaker. The Army will use all available resources to
    meet its title 10 responsibilities to support four overarching,
    interrelated strategies:

              a. Provide relevant and ready land power for the 21st century
            security environment;
              b. Train and equip soldiers to serve as warriors and growing
            adaptive leaders;
              c. Sustain an All-Volunteer Force composed of highly
            competent soldiers that are provided an equally high quality of
            life; and
              d. Provide infrastructure and support to enable the force to
            fulfill its strategic roles and missions.

        General Pace. A topline increase of any amount would provide
    additional funds no resource joint warfighting capabilities necessary
    to win the global war on terrorism, accelerate transformation of our
    legacy systems, and improve the quality of life of our servicemembers
    and their families. Of particular consideration, due to the extensive
    use our weapons systems and vehicles have experienced in Iraq and
    Afghanistan, additional funding would accelerate the repair and refit
    of our equipment to ensure that our forces remain combat-ready.

        Chairman Warner. Senator Lieberman.
        Senator Lieberman. Thanks, Mr. Chairman.
        Mr. Secretary and Generals, thanks very much for your
    testimony. General Schoomaker, I do want to say first that I
    looked at that National Guard chart and I asked Senator Reed if
    he could read all the small print. He said to me that if I
    could you would immediately take me into the Special Operations
    Forces. I cannot, but I got the basic point.
        I want to make three points quickly before I ask a
    question. The first, I cannot resist getting into the
    constitutional debate, the Iraqi constitutional debate. While
    it is not a perfect document, it is a remarkable accomplishment
    when one considers the context: three major groups in Iraq, one
    group, the Sunnis, dominant for decades, dominant not only in
    terms of their own status, but suppressing, brutally
    suppressing, the other two groups.
        We, the coalition forces, overthrow Saddam and they enter
    into a constitution-writing process, which ends up with a
    product which is really ultimately much more unifying than
    divisive. In the context of that particular part of the world,
    an extraordinary, in fact historic, document.
        It isn't perfect, and the Sunnis are particularly unhappy
    because they think there ought to be more power at the center,
    there ought not to be as much federalism, power to the
    provinces, as there is. Also, they are troubled by the
    allocation of resources or revenue from oil. Two legitimate
    concerns. But, now there is a promise that they will negotiate
    on it, all three parties will.
        I agree with Senator Levin and everybody else, the
    involvement of the Sunnis is critical to the success of the
    military operation, because history tells us that insurgencies,
    terrorist insurgencies, do not go on if there is not popular
    support, and the Sunni insurgency will inevitably be weakened
    as the Sunnis come more into government.
        I am heartened also by the fact that, as Senator McCain
    said, the Kurds and the Shias have agreed that the Sunnis will
    play a significant, at least proportionate, role in the new
    government, that is proportionate to the 20 percent vote that
    they got. So, there is work to be done. I do think that the
    constitution, considering the history there, is a remarkable
    step forward.
        Second, on the discussion that you started out, General
    Pace, very important--Senator Warner took you up on it--about
    the non-military aspects of our involvement there and that they
    will ultimately determine how we do as much as our military
    success because, Lord knows, we know that the enemy can inflict
    damage, but they never can beat us. We are making real
    significant progress training the ISF.
        In this regard, I must say, though it does not relate to
    the three of you, that I was very troubled by the suggestions
    from the administration that there would not be increases
    recommended in reconstruction funding for the Iraqi economy.
    Look, you can cut and run economically as well as you can
    militarily. There is so much on the line for our investment in
    the economy, as the chairman has said, our investment in the
    capability of their ministries--yes, our allies in the Arab
    world and throughout ought to be giving more money. The fact
    is, we took a lot of the money we appropriated from this
    Congress for reconstruction and put it into security,
    understandably. A lot of it, unfortunately, according to the
    special inspector general, was stolen.
        We cannot stop funding that non-military part of our
    involvement. We need more of it and I hope the supplemental
    will include it.
        Third, the DOD budget has gone up, and the newspapers and
    the media overnight and today highlight that as the most
    significant increase in the Bush administration recommendation.
    We are at war and it would be bizarre and irresponsible if it
    did not go up. It is a hot war. People are dying, people are
    trying to kill us, not only our soldiers in the field, but us
    right here at home.
        My gripe is not about the increase in the military budget.
    I worry that some parts of the budget we are actually not
    funding enough in the DOD. But also, because we have not asked
    the American taxpayers, particularly those of higher income, to
    do a little more, to pay a little more to support the country
    that allows them to earn the money they do in time of war, we
    are forcing the Department, both in the budget and in the QDR,
    to make resource-constrained, budget-constrained decisions.
    Incidentally, in the budget the President has given us, very
    badly underfunding a host of non-military parts of our budget:
    Medicare, education, et cetera, et cetera. That is an argument
    for another time and day.
        But, that is my preface to ask this question. The budget
    you have put before us makes some significant and very positive
    increases in our preparations for what might be called
    irregular or nontraditional war--the increases in funding for
    special operations, for unmanned surveillance planes, et
    cetera. Combining that with the basic status quo increases in
    the weapons systems that we are funding, you are asking us to
    fund, that are more conventional and traditional, it seems to
    me puts us in an untenable position over the years ahead.
        I hear this from a lot of people who analyze the budget,
    that unless we either increase defense spending dramatically in
    the next 5 years or we cut some programs, we are not going to
    be able to afford the budget that you put before us. I want to
    ask you to respond, if you would, to that question.
        Secretary Rumsfeld. Every year the budget looks out 4 or 5,
    6 years, and every year the adjustments are made as to what
    those years would look like. This is true, obviously, in
    business, just as it is with respect to a government budget,
    because the world changes, things happen, programs that are in
    a forward year defense plan do not work out and they stop
    because the technology is not there or something. Things that
    were not in there at all come on the scene and are injected
    into it. Predator unmanned aircraft, for example, was still
    experimental. Now we have a sizable amount of money in there
    for Predator aircraft.
        So, there is always going to be changes. It is hard to
    predict as to what will happen, but I personally have for years
    been aware that there has always been a bow wave, as they
    describe that big bite that it looks like is coming at us.
    Every bow wave has always been manageable. Everyone has always
    been able to deal with it.
        Furthermore, we are undertaking a series of efficiencies in
    the Department that are giving us added capability. The number
    of ships in the Navy has gone down. We have almost doubled the
    number of days that ships are deployed, with the lower number
    of ships. I looked at a chart the other day from Buz Moseley,
    General Moseley, the Chief of Staff of the Air Force, and it
    showed the number of wings coming down and it showed the number
    of targets that are able to be tackled in a given day going up
    dramatically. The lethality and the ability to put power on a
    target in the Army, the Navy, the Air Force, and the Marine
    Corps today is vastly different from before.
        We are shifting our weight over into the combat military as
    opposed to the institutional military. We are moving military
    people out of civilian jobs into military jobs, where they
    belong. There is a great many things happening, a lot of moving
    parts. But, the capabilities of the four Services, I think, are
    significantly increasing.
        Senator Lieberman. My time is up, but I would just say I
    hear you, and I remain concerned that we are not going to be
    able to fund the increases that you have quite correctly asked
    for to support our ability to face the irregular,
    nontraditional enemy we have and still support the conventional
    systems that we need. We have really got to have some enormous
    increases in our procurement effectiveness or we have to spend
    more money for defense to be able to afford all that you are
    asking for and I believe we need. In fact, I think we are
    underfunding the number of ships in the Navy and there is not
    enough money for long-range strike for the Air Force, and I am
    one of those who believes that we actually do need more people
    in the Army. I believe that we are only reducing the number for
    budget reasons and in the normal course if you had enough money
    you would keep the numbers higher because of the tremendous
    stress on the force.
        I thank you for the answer.
        Thank you, Mr. Chairman.
        Secretary Rumsfeld. Senator, a powerful example. If you
    have 12 carrier battle groups and 6 years ago you were able to
    have 3 deployed and the ability to surge 2 out of 12, the rest
    are in drydock, the rest are refitting, the rest the crews are
    in training, the rest they are steaming back and forth going to
    or from the AOR. Today, with 11 carrier battle groups
    functional, we have 6 deployed and a surge of one. That is
    because of sea swaps: flying people out to their ships and not
    having to steam them back and forth.
        It is because of keeping repairs and maintenance and the
    ability to get them moving faster. It is an expensive, a
    carrier battle group is an enormously expensive thing. Yet, to
    only have 3 plus 2 surge when you have 12 of them is not an
    efficient use of them. God bless Gordon England and Vern Clark,
    Admiral Clark as CNO, and Mike Mullen, the new CNO. They are
    now, I believe it is correct to say, at six deployed and a
    surge capability of one, which is impressive and vastly more
    capable for our country, and not at an increased cost.
        Senator Lieberman. I thank you. Look, this is an important
    discussion, critical to our military future, and I look forward
    to continuing it with the Service Chiefs and the Secretaries as
    they come before us.
        Thanks very much, Mr. Chairman.
        Chairman Warner. Thank you very much, Senator Lieberman.
        Senator Collins.
        Senator Collins. Thank you, Mr. Chairman.
        General Schoomaker, I remain so concerned about the strain
    on the National Guard, and I know that you recently met with
    the TAGs to discuss deployment of troops. But, I want to follow
    up on the conversation that you had with Senator McCain. I want
    to use my home State of Maine as an example.
        Of the 2,000 members of Maine's Army National Guard, more
    than 1,600 have been deployed to either Afghanistan or Iraq. Of
    the approximately 400 troops remaining, more than 100 were
    identified just this past weekend for mobilization and the
    official alert order is expected within the month. That leaves
    fewer than 300 Maine Army National Guard soldiers remaining who
    are available for active duty service without violating the
    policy that restricts the total aggregate time a Guard member
    may be placed on active duty involuntarily to 24 months.
        Maine's adjutant general has recently said to the press
    that Maine is going to be out of the fight in another year; we
    are simply not going to have any more soldiers that are
    available.
        Now, during the past few years, as many as 40 percent of
    all the forces in Iraq were members of the Guard and Reserve.
    Today the number, I am told by the Army Liaison Office, is
    about 30 percent. But, it is still a significant component of
    our forces in Iraq.
        If the experience of the Maine Army National Guard is
    typical, it appears that we are quickly approaching a wall
    where we will run out of Guard members with time left on their
    mobilization clocks.
        Now, of course all of us hope that conditions will improve
    in Iraq and we will be able to draw down our forces. If the
    conditions do not improve, the heavy reliance on the Guard and
    Reserve is cause for concern. How do you intend to ensure that
    there are a sufficient number of troops available without
    further stressing the Guard and seeking a change in the 24-
    month rule.
        General Schoomaker. There is a lot to that question. Let me
    see if I can hit a couple. First of all, I am not sure that is
    a typical description across the force, but I will certainly
    look at it, at Maine, and find out exactly what the numbers are
    and what you are talking about.
        Second, I would say that one of the reasons we surged
    National Guard presence over the last year, year and a half,
    was to provide time for us to restructure and modularize the
    Active Force. In other words, we deployed 10 National Guard
    brigades into Iraq over the last 18 months, buying time for us
    to modularize 101st Airborne Division and their four brigades,
    the 3rd Infantry Division, the 4th I.D., which now by the way,
    are in Iraq in a modular formation, covering a lot more
    territory with a lot more modern organization.
        We bought time, using the National Guard to do that. Now we
    must get the National Guard modularized, organized, and
    equipped and the way we want. We have an Army campaign plan
    that goes out over several years, that goes out over this
    program, this year and next year to have some of the highest
    levels of activities in this, and we are moving towards a
    predictable rotational model that will provide us 18 and 19
    brigades from across the entire Army. I am talking about
    brigade combat teams now, that we can sustain our level of
    operation within the rules that we have.
        The last thing I would say is the policies that you are
    talking about are internal policies. These policies are not in
    law. They are management policies the DOD set. We are trying to
    manage our Reserve components on a predictable and manageable
    level that basically deploys them, gives them about five times
    the amount of dwell time as it does deployment time. We want to
    deploy them on a one in six model. One year gone let us say, or
    for every month gone, 5 months back; a year out, 5 years back,
    that is the direction in which we are moving.
        So, kind of in summary, I will look at and provide you an
    answer for your specific State, but it does not sound typical
    of where we are.
        General Pace. Senator, if I may add to what General
    Schoomaker has already said. Across the 800,000-man Guard and
    Reserve, to date we have mobilized about 50 percent. You are
    rightly so proud of what the soldiers from your State have
    done. You are also right that when we first went into combat
    about 40 percent of the total force was Guard and Reserve. It
    is 30 percent now. The force that is deploying over the next
    year, from March of this year to March of next year, will be
    about 19 percent Guard and Reserve.
        The size of the force is coming down and the need for
    contribution from the Guard and Reserve is coming down. In
    addition, that 50 percent of the Guard and Reserve that has not
    yet been mobilized, we are looking at 2 or 3 years. In the
    possibility that we may need to sustain today's level of
    forces, we are identifying those individuals whose training and
    skill set need to be changed so that they can do a military
    police function, for example, instead of artillery.
        We are looking out as far as we can. But overall, what
    General Schoomaker has indicated, the Guard and Reserve has not
    only served us exceptionally well in combat, but they have also
    allowed the regular Army to modularize in a way that provides
    us much more combat capability on the Active side so we will
    have to rely less on the Guard and Reserve.
        [The information referred to follows:]

        Currently, there are 1,996 soldiers assigned to the Army National
    Guard. Of these soldiers, there are 307 soldiers currently mobilized in
    support of current military actions (Operation Iraqi Freedom/Operation
    Enduring Freedom/global war on terrorism/continental United States
    support).
        Since September 11, 2001, 1,430 Maine Army National Guard soldiers
    have been mobilized and returned from Active-Duty. This does not
    include the 307 soldiers currently mobilized. Of the 1,430 soldiers
    mobilized, 3 have completed all 730 days of their mobilization time.
    Forty-eight have between 545 and 729 days of mobilization time. Six
    hundred twenty-four have between 365 and 544 days, and 34 have between
    180 and 365 days of mobilization time. There are 51 soldiers with less
    than 180 days mobilization time. There are 750 Maine Army National
    Guard soldiers with no mobilization time at all. Currently, there are
    no Maine Army National Guard soldiers officially alerted.
        The apparent discrepancies with the numbers are due to various
    reasons. The most common reason is the turnover of soldiers since
    September 11. There are soldiers that were mobilized during Operation
    Iraqi Freedom I and Operation Iraqi Freedom II that are no longer in
    the Maine Army National Guard. They would also have new recruits and
    transfers in the Maine Army National Guard that were not there 3 years
    ago.

        Senator Collins. Thank you.
        Chairman Warner. Thank you very much, Senator Collins. We
    are all concerned about that in our States likewise and I am
    glad you brought that up.
        Senator Reed.
        Senator Reed. Thank you very much, Mr. Chairman. First let
    me associate myself with your remarks about the need to deploy
    our whole spectrum of national power rather than just military
    power. I returned from a trip just about 3 weeks ago from Iraq
    and that was my conclusion, which I also shared with the
    Chairman.
        General Schoomaker, can you give me an idea of the total
    today in dollars of the recap and reset figures that you are
    looking at, the equipment you know you have to repair?
        General Schoomaker. Steady state, it is about $4 billion
    annually for reset.
        Senator Reed. For how long?
        General Schoomaker. As I have testified before, we
    anticipate that will be 2 years beyond the end of whenever this
    level of operation terminates.
        Senator Reed. Ten years, 20 years? I mean, that is pretty
    imprecise. Let me ask another question. What is the total
    amount of money for recapitalization? You must know that. How
    much are you going to have to spend to recapitalize the force
    today?
        General Schoomaker. As I said, we started with about a $56
    billion hole. To totally modernize it is about $68 billion.
    Part of what we do when we reset is chip away at that
    recapitalization. Some of it is in the base budget, we are
    actually initially capitalizing the force. So it is about that
    magnitude.
        Senator Reed. We are talking about $60 billion, roughly?
        General Schoomaker. Roughly.
        Senator Reed. $60 billion. How much of that do you have in
    the current budget, the budget the President sent up yesterday?
        General Schoomaker. I will have to give you that for the
    record.
        [The information referred to follows:]

        In the Army's fiscal year 2007 budget, approximately $4 billion is
    programmed for recapitalization and depot maintenance. This funding
    includes $2.5 billion for procurement upgrades, $0.3 billion for
    operations and maintenance funded recapitalization, and $1.2 billion
    for depot maintenance.

        Senator Reed. Fine. Some of it will be in supplementals?
        General Schoomaker. About $4 billion annually of that is in
    the supplemental.
        Senator Reed. So at a $4 billion rate, $60 billion, my math
    is not that good, but that is around 15 years?
        General Schoomaker. If you are talking purely supplemental.
    But because we have increased our investment account in our
    base budget, we are making our biggest moves not in the
    resetting of equipment that has been consumed, but in
    actually--in fact, I think if I could--where is the ``Holes in
    the Yard'' chart, the first chart?
        [The chart referred to follows:]

        Secretary Rumsfeld. I think there may be a little confusion
    between the word ``reset'' for resetting the force when they
    come back and ``recapitalization'' of the force because of the
    procurement holiday. It is not clear to me which you were
    talking about.
        General Schoomaker. I am talking to both. We are
    recapitalizing the force that has deployed and is returning and
    resetting it, replacing equipment lost or worn out in combat,
    with supplemental funding, because it is consumed in the war,
    and in our base budget we are capitalizing the force.
        I use this chart right here, and I know you cannot see
    those numbers, but below there is about $14.5 billion of
    supplemental funding that were unprogrammed, unknowns, since
    September 11 that you have provided. Above there is the $41
    billion worth of a lack of capitalization that was inside the
    actual base budget. It is that kind of a relationship that we
    are managing.
        Senator Reed. My concern is more of the total amount of
    resources that you claim today you need to either rehabilitate
    the equipment from service, active service, or to improve the
    equipment, recapitalize it.
        General Schoomaker. That is correct.
        Senator Reed. That totals about $60 billion, both?
        General Schoomaker. Let me back up and let us approach it
    this way. I have testified before you today that we need about
    $3 billion a year for the additional manpower that we are
    bringing on active duty. We need $5 billion a year to
    modularize the Army, which is the piece you are talking about,
    to capitalize the new structure in the Army, and $4 billion a
    year to reset the Army that has been consumed as a result of
    operations.
        Some of that has to do with depot costs, some of that has
    to do with actual hardware that is being replaced on the deal.
    So if you talk about just the capitalization part, it is about
    $9 billion a year currently that is spread between the base
    budget and the supplemental.
        Senator Reed. You claim that you will need this
    supplemental funding every year that we are engaged in Iraq
    plus 2 years?
        General Schoomaker. As long as we are at this level of
    operations we will continue to have to do it, not unlike we did
    in Operations Desert Shield/Desert Storm.
        Senator Reed. Just a point. This is confusing and I think
    when you come up for the next hearing hopefully we can make it
    clearer. But, it goes to the point I think Senator McCain made.
    We know these costs are already accrued. We know we cannot
    avoid fixing this equipment, changing the force. To the extent
    that we are going to rely for X years forward plus 2 on
    supplementals, it is probably in this environment not the best
    budget strategy, and it begs the question, why do we not put
    this, these numbers at least, into the budget?
        General Schoomaker. Senator Reed, the numbers that I just
    gave you for the past 2 years, 2005 and 2006, were in
    supplemental funding. This year we moved the $5 billion, in the
    2007 budget, for Army modularity, moves inside the Army's
    budget. The supplemental funding for resetting the force is
    going to be dependent upon the amount of the force that we
    deploy and the rate at which we operate and consume equipment
    and have to reset it.
        Senator Reed. Let me ask another question, stop-loss. How
    many soldiers are subject to stop-loss today, General?
        General Schoomaker. I will have to give you that for the
    record. It is typically several thousand.
        [The information referred to follows:]

        For the month of January 2006, the number of soldiers affected by
    stop-loss was: Active-Duty 8,826; Army Reserve 2,238; and Army National
    Guard 2,250; for a total of 13,314. This figure fluctuates monthly
    based on deployed strength and length of individual enlistment
    contracts.

        Senator Reed. Several thousand. It goes to the issue of
    retention, recruitment, personnel strength. How long do you
    think we have to maintain a stop-loss policy that prevents
    soldiers from leaving when their enlisted term is up?
        General Schoomaker. I think we will get better at that as
    we get the Army fully into the predictable force rotation
    model. The reason we are having to use stop-loss today is
    because we have to stabilize the forces at a time prior to
    their deployment and hold them stable through their deployment.
    We typically stop-loss at a preset time ahead of their
    deployment so that the soldiers that we train up with that unit
    deploy stay with the unit during their deployment.
        Senator Reed. Mr. Secretary, in September 2004 General
    Curran testified that, after his inspection was completed, that
    the DOD Inspector General (IG) was investigating the issue of
    ghost detainees. A year later, September 29, 2005, I asked you
    about the status of that investigation and you indicated to me,
    and I think probably fairly, that you did not have any
    information at that time and you would get back to me.
        Subsequently, our inquiries have led us to the conclusion
    that no such investigation is taking place. Have you directed
    that no investigation take place or have you directed that the
    investigation be suspended or are you directing that the
    investigation go forward, but it is just taking an awfully long
    time, now almost a year and a half?
        Secretary Rumsfeld. Certainly I have not directed that
    anything be stopped or not go forward at all. My impression is
    that there was only one investigation that was still open. Do
    you recall, General Pace?
        General Pace. No, sir.
        Secretary Rumsfeld. But, I will be happy to look at that
    this afternoon and give you a call this afternoon.
        Senator Reed. I appreciate that, Mr. Secretary, because
    again I understand that this is a complicated, difficult, and
    sensitive issue, but I think it is now almost 5 months since
    our last exchange and the information we have tried to obtain
    from your staff in the DOD.
        Secretary Rumsfeld. You used the phrase ``ghost
    detainees.'' We do not have any ghost detainees.
        Senator Reed. There are reports General Curran was looking
    at several years ago that prisoners were being kept in Iraq
    without proper registration under the Geneva Conventions.
        Secretary Rumsfeld. Oh, okay.
        Senator Reed. In fact, there are newspaper reports that
    some prisoners were moved out of the country, moved back into
    the country, in a collaboration between the DOD and the Central
    Intelligence Agency (CIA). I specifically asked General Curran
    because this is a very important issue. He indicated after his
    exhaustive investigation that the task had been passed on or
    appreciated by the DOD IG.
        I asked you 5 months ago and I received the answer that I
    read, which is basically: I will get back to you. Subsequent to
    that, we have asked the DOD and it does not appear that there
    is any active investigation going on. If that is the case, then
    I think we should make it clear and also give the rationale why
    this issue is not being fully investigated.
        Chairman Warner. Perhaps the Secretary can take this for
    the record if you wish.
        Secretary Rumsfeld. I am told by staff that it is the CIA
    IG that is doing an investigation on this that is outstanding.
    I will get back to you with the facts this afternoon.
        Senator Reed. I appreciate that. But again, the impression
    I received from General Curran in open testimony was that this
    was part of his task to look into the operations of Defense
    personnel and that task was being taken over by DOD IG.
        I would also suggest, since this was apparently some type
    of joint operation, that a CIA investigation might be looking
    at their operatives, but I wonder who is looking at DOD
    personnel.
        Secretary Rumsfeld. We will find out.
        Senator Reed. Thank you, Mr. Chairman.
        Chairman Warner. Thank you, Senator.
        Senator Ensign.
        Senator Ensign. Thank you, Mr. Chairman.
        General Schoomaker, could you comment on the recent study
    by the Institute for Defense Analyses (IDA)? I do not think
    anybody has brought that up. It has to do with the Army's
    transformation into the brigade combat teams. The study
    indicates that the number of maneuver battalions would be 20
    percent below the number that was available in 2003. The study
    points out that there would be an increase of almost 11.5
    percent at headquarters level while reducing the number of
    troops in the field.
        When we get reports like that, that seem contradictory to
    what you are saying, it is important to at least bring them up
    so that you will have an opportunity to address some of the
    things that were mentioned in the report.
        General Schoomaker. I am not familiar with that report, but
    what you are saying does not sound logical to me. We have
    restructured the modular brigade combat team to--we used to
    have three battalions of three companies. We now have two
    battalions of four companies. So we have gone from nine
    maneuver companies to eight, but we have increased by 30
    percent the number of brigades we have created.
        When you go down to the maneuver company level--and what is
    not counted in that is the fact that each brigade also has a
    Reconnaissance, Surveillance, and Target Acquisition (RSTA)
    squadron, which is a cavalry-like squadron, of three maneuver
    units. So, you have actually moved the number of maneuver units
    from in the previous configuration from 9 to now 11, and you
    have increased the number of brigades. So any way you cut it
    there is more combat power available, plus it is more relevant
    combat power to the century we are in. We do not want to
    structure the way we were during the Cold War period.
        So it sounds incomplete to me. I am sure the IDA does good
    work and so I would have to look at it and see.
        Senator Ensign. I would appreciate if you could get back to
    me on your analysis of the report and some of the claims that
    they are making. It does not seem to be complementary to some
    of the things that you are trying to do. It is important when
    we have a credible source like that out there that is saying
    something that is not so complementary at least to see what
    your analysis is and see if we are going in the right
    direction.
        General Schoomaker. I want to assure you that we have
    looked at a number of different possibilities and we have
    modeled them, and we have brought the very best people we can
    together with the most experienced, to include a lot of
    critics, and have come up with what we believe is the best
    course of action across the board. It is not perfect, but it is
    more appropriate to the century and the kind of challenges we
    are going to have in the future. It is clearly different than
    what we were organized to do in the past.
        But I remind you again that in the past we were also less
    whole than the formations that we are building today. So all
    the way around, I am very confident that we are on the right
    path.
        Senator Ensign. Mr. Secretary, if you could address the way
    Congress does some parts of our funding for the military.
    Sometimes the military wants something, a certain product, that
    is made in a Member of Congress's district and they fight to
    get that into the military budget instead of fulfilling exactly
    what the military needs. The whole earmarking process is
    obviously what I am referring to.
        Could you address the amount of money you think goes as
    part of that earmarking process? Do you have any idea? Have you
    looked at the amount of money that would actually be more
    efficiently used by the military, by the DOD?
        Secretary Rumsfeld. Senator, I think the debate is over
    your phrase ``more efficiently.'' Under article I of the
    Constitution, obviously, Congress has the right to appropriate
    funds and they can decide those things they wish to do. The
    President proposes what he thinks is best and then there is a
    debate and a discussion and a compromise and something happens
    in Congress between the two houses. Then it goes to the
    President and he either signs it or does not.
        My recollection, and I could be wrong, General Pace may
    have a better memory, is that in the last year something like
    $10 or $12 billion has been taken out of other parts of the
    budget that we proposed and some $10 or $11 billion has been
    put into things that Members of Congress have proposed.
        Now, to characterize that as less efficient it was not what
    we proposed, but in some instances Congress has inserted things
    into the budget that have led to capabilities that were
    important. In other instances, Congress has required that we
    continue doing things that we think we should not continue
    doing. It is a debate, it is an issue.
        Are those numbers about right?
        General Pace. Yes.
        Senator Ensign. The reason that I bring that up is because
    there is always going to be the give-and-take and I understand
    that, but I guess one of the things that disturbs me is when
    Members of Congress have put their own districts before the
    national interest, and we do see that sometimes. We see that
    with pieces of equipment.
        It was brought to my attention just on one example, but I
    have many others on one piece of equipment that happened to
    have been made in the State of Nevada. That is the only reason
    it was brought to my attention, and it was the same type of
    product made by a different company in another State. The
    military wanted the product from the State of Nevada, but
    somebody a little more senior on an appropriations committee
    was representing a district where the inferior product was made
    and the military ended up getting that inferior product.
        That is the kind of thing that we have to take a look at
    and try to clean up around here. We have to put the interests
    of our warfighter out there before we put the interest of our
    own congressional districts or our States.
        Secretary Rumsfeld. Thank you.
        Chairman Warner. Senator, I certainly concur in those
    observations.
        Senator Dayton.
        Senator Dayton. Thank you, Mr. Chairman.
        Mr. Secretary, I certainly agree with what you said about
    our military, not only not being not broken, but also, I think
    your quote, battle-hardened and an enormously capable force. I
    was just 2 weeks ago in Camp Shelby, Mississippi, with over
    2,600 Minnesota National Guard men and women who were training
    down there. They told me they are receiving the equipment they
    need, some of it on a just-in-time basis, but they have
    received it. They were told that they are now probably the best
    trained and equipped force in the Army, so that is to the
    credit of the training they have received. I want to pass that
    on and I think that is a real tribute to all of you and to them
    as well.
        I think what we are trying to get at here is the
    sustainability of this level of effort in what you, Mr.
    Secretary, and the President have described as the ``long
    war.'' I also think you are correct, and my memory is at least
    the same, that you did try to fund the ongoing military
    operations in Iraq and Afghanistan through the regular budget
    process and were rebuffed in that attempt, and that is what led
    to these continuing supplemental requests.
        I also agree with Senator Levin that method obscures the
    present and the future costs of our overall military effort as
    it is likely to be continued in those theaters of war. I refer
    to others that have said that the 5-year budget that has been
    presented understates some of the weapons systems and the
    health care, and also underfunds some of the critical
    objectives.
        Mr. Chairman, I would hope that we can be a beacon of
    truthfulness in present and future budgeting in this whole
    operation, which involves both the executive and legislative
    branches in some of these games and gimmicks to obscure the
    real costs of the various things that we want to do: cutting
    taxes, making tax cuts permanent, along with whatever--and
    since the military and the homeland security are what are
    driving the spending side of the discretionary part of the
    budget, if we understate these future costs or, as Senator
    Inhofe pointed out and I concur, if we need to increase by some
    $50 to $80 billion a year to actually fund these, all these
    necessary programs, as well as continue our ongoing military
    operations around the world, if we understate by that order of
    magnitude we are talking about a huge difference. Conversely,
    if we do state it accurately I think we are going to inject a
    much-needed note of reality into the desire to continue these
    tax cuts, as Senator Lieberman pointed out.
        I just hope we can factor these predictable continuing
    operations. Some of the questions about the Guard we can get to
    next week, as General Schoomaker said, about the costs. I see
    that there are 17,000 positions and we are going to need
    amending the budget to reflect that switch according to General
    Stanton. I do not know if that is included in this.
        I hope we can get these numbers squared away, Mr. Chairman,
    so that we can be honest with ourselves, with the American
    people, with our colleagues, about what we do need to do,
    because we do need to do, in my opinion, everything that has
    been outlined here and we need to do it as well as possible. I
    hope you will assist us in that effort.
        General Pace, I wondered if you could just be a little bit
    more specific about what constitutes your phrase ``renorming''
    the health care? Specifically, does that mean that there will
    be additional costs for the individual Active-Duty soldiers,
    the National Guard men and women, reservists?
        General Pace. No, sir. Thank you. There is zero impact on
    Active-Duty. The impact would be on retired under the age of
    65. The Joint Chiefs' recommendation was that we take the
    legislation as enacted in 1995 and the cost to the individual
    in 1995 and renorm that to 2006-2007 numbers to be able to
    sustain for the foreseeable future the tremendous capacity and
    benefit that it provides to both active and retired, sir.
        Senator Dayton. I would agree with you about the value of
    that, the fact that they deserve the best. They certainly earn
    it, and their families as well. I think also in terms of
    retention of our forces. I know with the National Guard men and
    women, their families, that availability of top-notch health
    care is really vital, and also to private sector employers in
    terms of hiring National Guard men and women.
        I hope those costs, again, are accurately reflected looking
    forward, because that is a huge factor. If we understate those
    and we fool ourselves, we do a disservice again to the whole
    enterprise.
        Yesterday in the Post former Defense Secretary Melvin Laird
    claimed the QDR reduces the Guard and Reserves overall by more
    than 45,000 members, and it appears to be a polite way of
    starting downsizing. Could one of you, Mr. Secretary or
    Generals, comment on whether that is accurate or not?
        General Schoomaker. That is totally inaccurate. The
    National Guard's end strength remains the same, 350,000.
        Senator Dayton. At the end of the QDR timetable?
        General Schoomaker. It has not impacted them at all.
        Senator Dayton. All right.
        General Schoomaker. I will be glad to get into the other
    numbers for the record or in a separate session.
        [The information referred to follows:]

        We are not reducing the number of Reserve component soldiers in
    uniform. To date, the National Guard has only been able to recruit to a
    level of 334,000 and the Army Reserve 189,000 soldiers, both of which
    are below the authorized end strengths of 350,000 and 205,000
    respectively. However, since December 2004, we have increased the
    number of Army National Guard recruiters by over 1,100, and the number
    of Army Reserve recruiters by almost 800, as well as providing funds
    for recruiting costs and advertising in the fiscal year 2007 budget to
    assist the Reserve components in meeting their recruiting goals.
    Finally, the Army will still program for up to 350,000 National Guard
    soldiers and 205,000 for the U.S. Army Reserve.

        Senator Dayton. I think that concludes mine. I yield back
    my time. Thank you, Mr. Chairman.
        Chairman Warner. Thank you, Senator Dayton.
        General Schoomaker, yesterday you will recall that we had
    this very productive meeting with the Secretary of Defense and
    I raised that question about the end strength of 350,000 versus
    the actual status today, which is about 335,000? What is it?
        General Schoomaker. Yes, sir, it is 333,000, 334,000.
        Chairman Warner. Right. Congress wants to authorize, keep
    that 350,000, but you are only asking for the funding to go to
    335,000 and try and escrow a fund to go from 335,000 to 350,000
    if you can access the balance of those individuals. I cannot
    take up a Senator's time here, but we need to go back and
    clarify that and perhaps in the course of this testimony we
    can.
        General Schoomaker. Sir, as I stated yesterday, we want
    them to recruit to 350,000, too. If they do, they will be
    funded to that. There is no sense in funding what is not there.
    We can use that money to do other things and accelerate what we
    are doing.
        Chairman Warner. Understood.
        Senator Talent.
        Senator Talent. Thank you, Mr. Chairman.
        I appreciate you all being here yet again and continue to
    respect your leadership. You have always, Mr. Secretary, had a
    plan. It has always been plausible. You have stuck to it and
    defended it. I have not agreed with everything all the time,
    but I appreciate that leadership over the years.
        I am going to pick up on what Senator Reed, Senator
    Lieberman, Senator Dayton, and to some degree Senator Inhofe
    were talking about, although without getting into overall
    fiscal policy for the government, because one of my concerns is
    that the tax reductions are driving the economic growth without
    which we cannot do any of this.
        So, let me just go back to the issue of the top line over
    the next few years and go over a little history. For the first
    4 years under your leadership, the administration sustained
    real, if modest, increases in the defense budgets as against
    inflation, and I think--I was concerned at the time that they
    may not have been enough because of the procurement holiday in
    the 1990s, for which you are not responsible, the increased
    personnel costs, they have gone from $92 billion in fiscal year
    1999 to $109 billion today without end strength going up, and
    increased strain due to the war and mission creep.
        I am sort of with Senator Inhofe that we need as a Nation
    to commit to increasing the percentage of GDP that we spend on
    defense. It is historically at a pretty low level.
        Now, the last 2 budget years, at the end of the budget
    cycles the OMB has demanded from you $62 billion in reductions
    over the Future Years Defense Plan (FYDP). That was not based
    on your analysis of your needs and I think it was contradictory
    to the longstanding analysis that you had had. I think it has
    already either contributed to or resulted in reducing the
    number of Virginia-class subs we are planning on buying, DDX,
    LPD-17. We have an F-22 restructure that I think is at least
    partly due to that; now a proposed 45,000 decrease in Air Force
    personnel; and the Guard and Reserve reductions which may occur
    if they do not recruit up to the authorized strength.
        Yet, as I figure it you still have $50 billion delta to
    cover over 4 years from 2008 to fiscal year 2011 as a result of
    those two OMB directives, $50 billion less than what 2 years
    ago you had projected you would need according to the
    consistent plan that you developed from the time you took over,
    and this is going to occur when that next generation of
    platforms is coming on line.
        I have a concern. I want to ask you in your professional
    judgment whether we can reduce over the next 4 years by that
    $50 billion and also buy DDX, buy Joint Strike Fighter (JSF),
    buy F-22, design this new cargo tanker, meet the increases in
    health care costs that you are projecting, reset the force,
    which you talked about before, General, reverse the negative
    wedges in military construction (MILCON) which I see in the
    budget, and then any other unexpected contingencies?
        Can you do that, will you be going further out on a margin
    of risk than you are comfortable doing? I say this--I think we
    all have a basic level of confidence that the men and women in
    America's military will under any circumstances complete the
    mission that we assign them. But the question is can we follow
    through with those $50 billion in reductions over the next 4
    years without going further out on a margin of safety than you
    in your professional judgment would prefer to go?
        Secretary Rumsfeld. Senator, this is a critically important
    question and all I can say is this: that the senior leadership
    in the Department, military and civilian, spent the better part
    of the year balancing risks, and there are always risks. There
    is present investment versus future investment. There is
    hardware investment versus research and development (R&D) types
    of things and the investment in the force, the personnel, to
    make sure you can attract and retain the people you need. They
    spent a lot of time, as General Pace said, hundreds of hours
    and they came out with a QDR that sets a course that they
    believe and we believe and I believe is the correct one.
        The current top-line proposals were taken into account in
    that. The Joint Chiefs then proceeded to analyze a whole host
    of different scenarios and contingency plans and make judgments
    about them, and the conclusions are expressed in the QDR and in
    our forward year defense plan. Would everyone always like more?
    You bet, that is just realistic.
        But, all of us have been around this business for a good
    many years now and there has always been a big so-called bow
    wave out there that you look like you cannot fund, and in fact
    it always becomes manageable. A little pain once in a while.
    You have to give up something, but that is true in any
    budgeting exercise. I feel pretty good about the budget we are
    presenting. I feel pretty good about the forward year defense
    plan. I do not know what the nature of the world will be out
    there and it may very well require changes.
        Someone handed me a note saying during World War II we were
    spending 38 percent of GDP, Korea 14 percent, Vietnam 9
    percent, during the Reagan buildup 6.2 percent, post-Cold War
    drawdown 4.8 percent, today 3.7 percent. So it is a relatively
    modest portion of the GDP that is invested in defense, and I
    guess it is a matter of balancing risks and making judgments.
        Senator Talent. I appreciate that and that is very fair. I
    think what is also fair to say is that all of us sitting up
    here and you have to have a level of concern that at some point
    maybe we can do it, maybe we cannot or maybe we are further out
    on that margin than we want. When we consider the level of
    additional safety and security that we could get just by
    sticking to where you were 2 years ago, and when you consider
    how much depends on the reality and perception of American
    power in the world, you certainly begin to see the case being
    made for buying that extra piece of insurance at such a low
    cost.
        But, I appreciate your fair answer, Mr. Secretary.
        Thank you, Mr. Chairman.
        Chairman Warner. Thank you very much, Senator.
        Senator Bill Nelson.
        Senator Bill Nelson. Thank you, Mr. Chairman.
        Good morning, gentlemen. I want to take just the
    opportunity to thank you, Mr. Secretary, for stepping up to the
    plate before Christmas, responding to the chairman and the
    ranking member, who had requested your policy position, at my
    request, regarding the testing and training area in the Gulf of
    Mexico off of Florida. We have this battle Senator Martinez and
    I fight ever day of the oil industry wanting to drill off of
    Florida's coast. Of course, we will fight that battle on the
    substance.
        One of the overlooked key essential elements is the
    protection of the interests of the United States military in
    one of the largest testing and training areas, where you have
    virtually all of the Gulf of Mexico that is restricted space
    off of the State of Florida.
        In your letter, and this is what I wanted to thank you
    publicly for, you basically said this line that DOD set up in
    1981, called the Military Mission Line, longitude 86-41 north-
    south, comes basically off of Fort Walton Beach, Eglin Air
    Force Base, and it goes straight south. Your words in the
    letter were something to the effect, anything east of that line
    where there would be oil drilling it would be incompatible, was
    your words, with the mission of the military in the training
    and the testing.
        Now, that having said, I wanted to thank you. I want you
    just to know that Senator Martinez and I in trying to pass
    legislation that will put this into permanent protection, for
    the next 5-year period we have given you an additional 25-mile
    cushion to the west, so that in the course of the next 5 years
    should you decide that because of the weapons systems that you
    are testing that you need more space than the line that was set
    up in the early 1980s, that it would be available to you. Then
    after 5 years, if you decided that you did not need that area,
    then you could relinquish that additional 25-mile buffer.
        I am not asking anything. I just want to tell about the
    battles that we are doing up here and what was the reason for
    the legislation that Senator Martinez and I filed.
        Secretary Rumsfeld. Thank you very much.
        Senator Bill Nelson. Furthermore, I would just echo some of
    the comments of my colleagues and tell you that comments that
    we are receiving from our National Guards are not the kind of
    comments that have been presented here, and comments that we
    are getting from our Governors are comments that are of
    considerable concern.
        It may be one thing in a State where the National Guard is
    not considered so essential to the public welfare as is our
    State of Florida, where the National Guard is now recognized as
    someone that can move in in the aftermath of a hurricane and
    establish order pretty quick. It is interesting that the
    Florida Guard arrived about 4 days after Katrina into New
    Orleans. Remember, they are battle-hardened with regard to
    hurricanes because we had four hurricanes within a 6-week
    period the previous year, which is 2004. They know how to move
    in, establish order, assist the local government, set up supply
    lines, and get things in by truck and helicopter, if needed.
        But, in what you are proposing, we are hearing everything
    from the cutting out of possibly 1,000, 2,000, 3,000 of our
    Guard. They are talking about removing our only airlift
    capability battalion in our Guard, which is the helicopter.
    That is about 300 people, but it is 22 helicopters that are
    essential to our mission in the aftermath of a hurricane, not
    even to speak of the value that the Guard is, as you all
    recognize.
        The Florida Guard was in Iraq, first in. They were actually
    in Iraq before the war started. They were in western Iraq with
    Special Operations Forces. That is how good they are.
        So as you evaluate that, I want you to understand the
    pushback that you are getting from us because of what we are
    hearing back from our people and from our Governors.
        Thank you, Mr. Chairman.
        Chairman Warner. Thank you.
        Secretary Rumsfeld. Senator, I have been over this with
    General Pace and General Schoomaker and Secretary Harvey many
    times, and I would like General Schoomaker to comment, but from
    everything I have been told I am persuaded that the program
    that has been laid out will provide a Guard and Reserve that
    will be fully manned and fully equipped and, as the rebalancing
    of skill sets takes place within the Reserve component and
    between the Active and the Reserve components, the Guard will
    have the kinds of capabilities that will be vastly more useful
    to a governor and to a State in a domestic disaster of some
    kind than exist today. The long drought in the Guard with
    respect to the best equipment will end, and they will be
    equipped appropriately. That I cannot promise anything, but I
    would think it is almost certain that the Governors and TAGs
    will be very pleased with the program that has been put forward
    and the investment that has been committed.
        General Schoomaker.
        General Schoomaker. Sir, I will say what I said again.
    Number one, we are listening to the Governors, the TAGs, to the
    National Guard, and we are going to reconcile all discomfort
    that we can in the plan.
        Senator Bill Nelson. I heard what you said, General, in
    your opening comments and I appreciate that. You need to hear
    what we are hearing.
        General Schoomaker. Yes, sir, and I know what you are
    hearing, and we are listening to everybody that is doing it.
    The kinds of things that you are talking about wanting we are
    accelerating into the force and increasing the density of the
    things that you need to do exactly what you just said. We are
    accelerating helicopter fielding in the force, and more modern
    helicopters. We are accelerating engineering capability. We are
    accelerating security forces, like MPs and these kinds of
    things. Plus we are making whole the combat forces, and we have
    had this conversation before about the underequipping of your
    brigades in Florida and how we have to do better with that. We
    are addressing that.
        I believe we need to continue the dialogue. I think we need
    to listen to everybody. We are committed to making it better,
    to making it right, and making it whole, to having a force that
    minimizes the impact to any State or to any local area. We are
    going to try to work this very carefully.
        I will just say it one more time: We are not going to cut
    the National Guard.
        Chairman Warner. Thank you very much, Senator Nelson.
        Senator Bill Nelson. Mr. Chairman, would you put the map of
    the Gulf of Mexico off of Florida in the record on the line,
    the Military Mission Line, that Senator Martinez and I have
    drawn and the 25-mile buffer?
        Chairman Warner. We will do that, and we thank you,
    General, because I think you are leaving the clear impression
    before this committee that you are listening to the Guard and
    if they come up with ideas that you feel are enhancing to your
    own studies you will accept them. Thank you.
        [The information referred to follows:]

        Chairman Warner. Senator Dole.
        Senator Dole. Thank you, Mr. Chairman.
        Let me say first of all that I have the greatest respect
    and profound admiration for the gentlemen who are seated before
    us this morning and for the men and women that they lead. You
    represent all that is best in America: service before self,
    patriotism, and leadership. I want to thank you for your
    service.
        I also want to underscore what has been said with regard to
    National Guard issues, and I am pleased that there is going to
    be continuing consultation and dialogue with the Governors and
    TAGs because I too have been hearing a great deal about
    concerns that do need to be more fully addressed.
        Now, I want to ask a couple of more specific questions. Mr.
    Secretary, a 2005 Department of Veterans Affairs (VA) study was
    published in the New England Journal of Medicine recently and
    it showed that more than 26 percent of Afghanistan and Iraq
    combat veterans treated at VA hospitals were diagnosed with
    mental disorders. Many have reported symptoms of depression,
    anxiety, or post-traumatic stress disorder. We have the best-
    trained, best-equipped troops in the world, but are we falling
    short when it comes to mental health services when they return
    home?
        This is especially important to me because, obviously,
    representing North Carolina, we have so many troops from bases
    in North Carolina who have seen combat on the ground. What are
    we doing to ensure that when our troops come home they have
    professional counseling that is readily available and that they
    know how and where to seek that type of counseling?
        Secretary Rumsfeld. Thank you, Senator. Your State does
    indeed have a great many military personnel, Active and Guard
    and Reserve, and they do a superb job.
        If you take the health care broadly from the war zone, it
    is better today than it has ever been. The lives that are being
    saved are just amazing. You have all seen that out there. The
    treatment when they return back to the United States and the
    rehabilitation process while they are still within the military
    handling, both from a physical health and mental health
    standpoint, is extensive and in my view, from everything I have
    been told, thorough.
        There is a passover where some people then leave the
    Service, but get connected to the VA, and they have done a
    great deal to try to make sure that that passover takes place
    in a manner that is in the best interest of the soldiers. I do
    not have the data at my fingertips with respect to the VA, the
    information that they accumulate on the troops. Do you, General
    Schoomaker? Do you want to comment on it at all?
        General Schoomaker. Sir, I do not have the specific details
    of it, but I will tell you that this process starts with our
    reintegration process early in the return from deployment, and
    there is increased recognition that the mental health side of
    this--in other words, that we have to address more than just
    the physical health of the soldier. We have to work on the
    reintegration of the soldier, sailor, airman, or marine back
    with their family upon return, and there has to be
    encouragement to seek out and to use the help that is
    available. All of the indicators are--and I would be glad to
    get you some statistics--in the Army that we are having
    increased usage of counseling and mental health counselors and
    other follow-up kinds of services while on Active-Duty, and
    then of course post-Active-Duty there is this handoff to the
    VA, et cetera, as we go.
        My view is the trend is positive. It probably will need to
    continue to improve, but I believe that we have done very
    positive things over the last several years in recognition of
    this problem and it is paying off for us.
        General Pace. Senator, if I might add?
        Senator Dole. Yes.
        General Pace. We do have pre-deployment screening. We have
    post-deployment screening. We have 3- to 6-month follow-up
    after the post-deployment. Equally important I think is the
    focus on the families, because there are reintegration problems
    with the families, and there are some terrific organizations
    now that have been stood up both inside the military, but also
    through just groups that want to help, that allow us to provide
    the screening and assistance not only to the active duty
    member, but to the families if needed.
        [The information referred to follows:]

        We cannot comment on Department of Veterans Affairs (VA) workload
    for post traumatic stress disorder (PTSD) or research on the prevalence
    of combat stress disorders among VA patients. Army surveys of soldiers
    deployed during Operation Iraqi Freedom indicate approximately 15-17
    percent will experience PTSD and nearly 23 percent will experience
    other behavioral health problems.
        The Army's Deployment Cycle Support Program is designed to help
    soldiers and their families cope with the stress of deployment as well
    as the reintegration process and are briefed on what stressors to
    expect upon homecoming, the common symptoms of post-deployment stress
    disorder, ways to ameliorate these symptoms, how to recognize when
    further professional help is needed, and how to access treatment
    services.
        All soldiers redeploying from overseas are required to complete a
    post deployment health assessment before leaving theater to screen for
    PTSD, major depression, concerns about family issues, and concerns
    about drug and alcohol abuse. The health care provider reviews the
    form, interviews the soldier as required, and refers the soldier to a
    behavioral health care specialist as required. The Army is currently
    implementing an expanded Post-Deployment Health Reassessment of global
    health with a specific emphasis on mental health. This assessment is
    performed 90 to 180 days after redeployment.
        The Military OneSource Program offers 24/7/365 telephonic support
    and referral for six or more confidential counseling sessions for
    soldiers and their family members. Military OneSource is not designed
    to offer psychotherapy, but does maintain lists of military and
    civilian mental health providers as a referral resource for soldiers
    and families.
        Despite these screening and outreach programs, we remain concerned
    about shortages of mental health professionals in civilian communities.
    We continue to work closely with the TRICARE management activity and
    TRICARE regional offices to ensure we have a robust network of mental
    health providers to care for our soldiers and their families.

        Senator Dole. Thank you.
        General Pace, in your submitted testimony you point out
    that during World War II, Korea, Vietnam, and Operation Desert
    Storm, 24 to 30 percent of Americans who were injured in combat
    eventually died from their wounds. Today, 9 of 10 troops
    wounded in Iraq and Afghanistan survive. What advances in
    battlefield medicine are responsible for this vast improvement
    in the survival rate and, more importantly, where can we do
    more and what funding are you requesting to further improve
    battlefield medicine for our injured troops?
        General Pace. Thank you for pointing that out, Senator. We
    have an incredible professional medical team that is part of
    our Armed Forces. The biggest thing we have is exceptionally
    well-trained doctors, nurses, corpsmen, and medics. Those who
    provide inside that first golden hour the medical treatment on
    the battlefield to get the injured person to a waiting
    helicopter, to get them to the hospital in country, that allows
    them to stabilize that patient.
        Examples: In Vietnam it took on average about 45 days, 40
    to 45 days, to get a wounded soldier or marine back home. Today
    it takes less than 4 days from the time they are wounded to the
    time they are in the world-class facilities that we have here
    at home. In the process, they stop at a world-class facility in
    a place like Balad in Iraq and in Landstuhl in Germany.
        Those precious hours of getting to the expert medical
    doctors that we have on scene both forward and here in country
    make all the difference in the world.
        I do not know the exact figures that we have requested on
    the medical side of the house, but I do know that our medical
    professionals continue to seek every possible advantage in
    saving lives.
        Senator Dole. Thank you.
        Mr. Secretary, the QDR has identified the importance, of
    course, of Special Operations Forces. We will be increasing
    Army Special Forces by one-third, augmenting our Navy Sea/Air/
    Land teams. I was particularly pleased that four of the five
    components of the newly formed Marine Special Operations
    Command (MARSOC) will be based at Camp Lejeune, North Carolina.
        How do you envision MARSOC operating within the current
    special forces command structure and how will it be funded?
        Secretary Rumsfeld. Do you want to go ahead?
        General Pace. I would be happy to, sir.
        Thank you, Senator. There are several elements of the
    MARSOC. One will be the one that will be stood up in February
    as the command itself forms, February of this year, and that
    will be the companies that are formed to help train other
    countries' militaries to do their job. The other part will be
    the 2,400 marines who will be trained to special operations-
    level skills, who will deploy with our Marine Expeditionary
    Units aboard amphibious ships, and while they are aboard those
    ships will be part of the special operations chain of command.
    They will be inside the Marine Corps structure, but they will
    be working specifically for General Brown, Special Operations
    Command, through the theater commander, and through the theater
    commander's special operations commander.
        The Marine Corps will have the ability to do more training
    of indigenous personnel, but also to be able to reinforce the
    very capable Special Operations Forces that our country has
    been fortunate to have for several decades now.
        Senator Dole. Thank you very much.
        Thank you, Mr. Chairman.
        Chairman Warner. Thank you, Senator.
        Senator Akaka.
        Senator Akaka. Thank you very much, Mr. Chairman.
        Mr. Secretary, I want to wish you well this year in all
    that you do. Mr. Secretary, the DOD has made a commitment to
    investing in new equipment and technology for the forces. I am
    concerned that this will come at the expense of maintaining
    technology currently in use. Can you assure me that expenditure
    of funds necessary for DOD's planned technology transformation
    will not undercut efforts to implement sustainable corrosion
    prevention policy which is necessary for the upkeep of military
    equipment and infrastructure?
        Secretary Rumsfeld. I think we can, Senator. All of the
    senior people in the Department, military and civilian, spent
    an enormous number of hours balancing the investment proposals
    and we believe we have found a proper balance where we maintain
    the capabilities we have, where we invest in our personnel and
    being able to attract and retain the people we need, investing
    in the research and development necessary to advance the force
    in the future, but at the same time assuring that we have both
    the ability to deter and defend from a conventional standpoint
    and to deter and defend, to the extent that is possible,
    against asymmetric or irregular warfare challenges.
        No one can say with perfect certainty that we have done it
    exactly the right way and my guess is next year you will find
    we will make changes in the forward year defense plan because
    we will have learned more and the experiences we will have had
    will have informed us in a way that will enable us to have a
    better insight.
        Senator Akaka. Mr. Secretary, you have argued that the
    Armed Forces must adapt and change in order to win a long and
    irregular war outside of the scope of conventional warfare. At
    the same time, recent successful operations in Afghanistan,
    Kosovo, and Iraq have demonstrated the effectiveness of
    conventional warfare tactics. Given the high costs associated
    with transformation, would not routine modernization and
    systems maintenance be sufficient to maintain the superiority
    of America's defense for many years?
        Secretary Rumsfeld. Our answer would be no, that first of
    all, the cost of failing to be able to deter and defend against
    whatever challenges come up, the cost to the country would be
    enormous. Second, all one has to do, it seems to me, is to
    compare the challenges we face today to the challenges of the
    Cold War. In the Cold War there was the Soviet Union. It was
    large, it was expansive, it was purposeful. We could understand
    it, look at it, see it, know where the armies, navies, and air
    forces were.
        Today the challenges are quite different. They are
    networks, they are people operating viciously against us and
    against our friends and allies around the world, sometimes in
    countries that we are not at war with, sometimes at the seams
    between countries, that make the task very complex. We simply
    have to shift our weight from being able to finish a task by
    capturing or killing a target and shift it over towards being
    able to do a better job of finding the targets and fixing them
    in a way that enables us to use that knowledge to finish
    properly.
        I think just hanging onto what we have would leave us with
    an imbalance in the ability to finish and too light on the
    ability to find and fix.
        General Pace. If I might add, Senator. We have taken over
    the course of this last year the process for the 2007 budget
    plus the forward year defense plan plus the QDR and the force
    that will be available to the Nation over the next 20 years,
    and then done a large number of iterations of war games that
    take war plans from today, war plans that we believe we will
    have in the near future, possible threats from the future, and
    mixed and matched those in the most difficult way we could,
    thinking through the most difficult scenario for the Marine
    Corps, the most difficult scenario for the Army, et cetera, and
    wargamed against that, and in every case this process that we
    have been through and the program that is being laid out has
    been sufficient to take care of any potential adversary we can
    envision on the horizon.
        Senator Akaka. Mr. Secretary, in its December 2004 report
    the GAO reported that key practices for successful
    transformation of the Armed Forces include leadership that sets
    the direction and assigns accountability for results. Mr.
    Secretary, can you tell me what, if any, formal mechanisms have
    been or will be put into place to ensure that clear and
    consistent priorities are set amongst the key organizations
    involved in the transformation, and that the appropriate
    resources are allocated to these priorities?
        Secretary Rumsfeld. Senator, one of the outcomes of the QDR
    was to establish a set of tasks and priorities. The Deputy
    Secretary of Defense, Gordon England, is assigning a series of
    tasks for people to monitor, to try to determine the pace at
    which the execution is taking place and the success or lack of
    success that is being achieved in tracking those priorities
    that came out of the QDR.
        So there is a process in place. Needless to say, that does
    not guarantee that it will work or that everything will happen
    the way one would want. But we are serious about it and a great
    deal of time was put into it. I know that, working with General
    Pace, the Deputy Secretary believes that they have put in place
    a process that is appropriate.
        Chairman Warner. Thank you very much, Senator.
        Senator Akaka. Thank you very much, Mr. Chairman.
        Chairman Warner. Colleagues, I have committed to the
    Secretary to see that he has other engagements beginning at 1
    o'clock. So we are going to be able to finish if everybody will
    stay within their times, and we will have Senator Sessions at
    this time.
        Senator Sessions. Thank you, Mr. Chairman. I would like to
    join with you on this day to express my sympathy to the family
    of Coretta Scott King and to recognize her contribution to
    making our country a better place. She is a native of Barry
    County, Alabama, and was with Dr. King and Rosa Parks at the
    bus boycott that was really the event that began to alter the
    legalized discrimination that existed in our country, and we
    are all better for her life, and we respect her and would note
    that today.
        General Pace, I have just been thinking about that
    remarkable statistic that you or General Schoomaker mentioned,
    that the 3rd Infantry Division is at a 131 percent reenlistment
    rate, far above their goals and far above what we would
    normally see. I think some of that, from my experience, is the
    concern and leadership provided by the officers, who seem to be
    so committed to their soldiers in extraordinary ways. I know
    the Marines likewise and the other Services have, too.
        The highest numbers come from the units who have served in
    Iraq and have come back from a tour in Iraq or Afghanistan.
    Would you share some thoughts on what it is that having our
    young soldiers feel good about their service and choosing to
    reenlist?
        General Pace. Sir, thank you for the opportunity. First of
    all, they are proud of what they are doing. They feel good
    about 27 million free Afghan people and 27, give or take,
    million free Iraqis and the opportunity to serve our country
    and to provide freedom for our own country. They know that what
    they are doing is important because they have been doing it.
    They are on the ground. They see for themselves.
        They also appreciate very much the collective leadership of
    this country, both inside and outside the DOD. When Members of
    Congress provide the kind of resources you do, that is a very
    loud message. When you go visit them in the field and listen to
    their stories and come back and take action, when you visit
    them in the hospitals, when leaders at every level in uniform
    and in civilian clothes in the Department do the things that we
    should be doing to take care of them, that sends a very loud
    message.
        It is true not only for the troops who are serving
    currently in Iraq and Afghanistan. I had the privilege of being
    in Korea last Friday for the change of command. I had the
    opportunity to go to a tank gunnery range in Korea, and 29
    soldiers from 2nd Infantry Division were waiting for me to
    reenlist them. We did it in a platoon formation. It was
    fabulous--first term reenlistments, second, and third.
        The fact that they value their own service to the country
    and, equally important, that the country tells them how
    important their service is is a huge plus in their decisions to
    stay.
        Senator Sessions. I think you are close to that. I think
    that you are close to the truth on that, because we certainly
    have utilized them, we certainly have asked them to go into
    harm's way, we certainly have asked them to serve under
    difficult circumstances. They are not coming back whining and
    complaining. They are reenlisting. It is really remarkable, and
    I do believe that from the leadership on down to the lowest
    recruit they seem to be excited about their mission, and that
    is something that we can take pride in.
        General Pace. Sir, I forgot one very important factor.
    Please excuse me, if I can add it because it is important. That
    is the families of these servicemembers. They are serving this
    country, and when a servicemember comes home and their family
    tells that servicemember they are proud of them for what they
    are doing, they support what they are doing, they are willing
    to continue to support them in the future, that makes all the
    difference in the world.
        So we reenlist families, not just soldiers, sir.
        Senator Sessions. It would be shame on us if we break faith
    with these young people. They have given their all. They put
    their life on their line. Many of them have lost their lives
    and been injured. I do hear them say their number one concern
    is Congress, that we might somehow screw up what they have
    sacrificed to achieve, and I think it is a challenge to all of
    us, I really do.
        I would like to follow up a little on the Chairman's
    comments. Secretary Rumsfeld, you understand your role. First,
    let me say how much I appreciate your leadership. You come to
    this Secretary of Defense job at this critical point in history
    with unprecedented experience in government and as a former
    Secretary of Defense, and you have challenged this Department
    repeatedly. We are not only fighting successfully a war, we are
    also transforming the military at the same time.
        But, we are asking you questions about the government of
    Iraq. We are asking you questions about oil production and
    turning on the water and creating a new government and the
    constitution and all those things. I know you are not going to
    be critical, but is it not true that this is a sovereign nation
    that has been created and that our formalized relationships are
    now through the ambassador and through the State Department,
    and the military is a supporting part of that, a critically
    supportive part of that? How is that relationship going and are
    there are any things that we could do to enhance it?
        Secretary Rumsfeld. Senator, thank you very much. I do not
    think the relationship could be any better between the
    ambassador and General Casey, between the embassy team and the
    military team, Multinational Force. They are together
    continuously. When we have National Security Council meetings
    or principals meetings, they are almost always both sitting
    there together next to each other.
        It is critically important that we be well-linked in
    Washington for this task because it does require all elements
    of national power. It is also critically important that they be
    well-linked in the field and they are, and it is going
    exceedingly well, I believe.
        Senator Sessions. I would just conclude by noting that I
    know General Bowen, our Adjutant General, will not hesitate to
    express his views on what is best for America and our Guard.
    General Schoomaker, I appreciate your listening to that. I do
    believe you are committed to seeing that it is better and more
    strongly supported than ever, and I do think that is important.
        My time has expired.
        Chairman Warner. Thank you, Senator, for that strong
    endorsement of our military.
        Senator Thune.
        Senator Thune. Thank you, Mr. Chairman.
        I wanted to again thank our witnesses today, our panelists,
    for their extraordinary service to the country, and also
    associate myself with some of the comments that have been made
    earlier by some of my colleagues about the importance of making
    the necessary investment to keep America strong. We need to
    ensure that you have all the resources at your disposal to
    complete the missions that this country asks you and the young
    men and women who serve under you to complete. I believe as
    well that I would much rather see us investing in technology as
    we look at the future and the challenges that we are going to
    face around the planet, and you look at Iran and hot spots in
    Asia. We just flat have to make sure that this country is
    prepared for any of those challenges. Militarily, we are looked
    to around the world as the leader and the expectations are
    high, and if we do not have that as a priority, if we do not
    make the necessary commitment we need for the defense of this
    country and to the military people who serve it, everything
    else we do around here, is conversation. It is just that
    important. I would associate myself with many of the comments
    that have been made about investment and also about the fine
    work that our troops are doing.
        In that vein, I guess I have a couple of questions with
    respect to the future and the completion of the QDR and looking
    at some of the observations that are contained there. There are
    some platforms as we look down the road that put us in a
    position where we are investing more in technology. I would
    much rather invest in technology than in American lives.
        One of the things that the fiscal year 2007 budget will
    focus on is expanding missile defense to protect the United
    States against intercontinental and theater ballistic missiles.
    I guess I would be curious to know what the developmental
    status is of the airborne laser (ABL). It is a platform that I
    had an opportunity to look at out at Edwards Air Force Base.
        General Pace. Sir, the ABL program now has been made into a
    program, proof of concept to take it out to where it can
    function to do its job, see then what size that is and what the
    cost is, and then determine the proper way forward. But, the
    current program will take the laser to the point where it can
    do its mission and then determine from there what we should do
    next.
        Senator Thune. One of the other questions I had with
    respect to maintaining America's military superiority is, I
    think, investing in air dominance and in global strike
    capabilities. I am curious to know what your views are about
    the role that the B-1 bomber will play in performing that
    mission and ability to fly long ranges, the flexible payload
    that it possesses. That is something obviously I have a
    particular interest in because of my State, but I am also in a
    more global way interested in long-range strike and what some
    of the priorities there are going forward. So, Mr. Secretary or
    General Pace, anybody who would like to comment on that?
        Secretary Rumsfeld. The B-1 bomber is considered a key part
    of our air dominance and there to my recollection have not been
    significant proposals made to adjust it in any way. So, we look
    forward to having it continue as a critical part of the Air
    Force and of the joint warfighting capability of the
    Department.
        Senator Thune. Thank you, Mr. Chairman, and I yield back
    the balance of my time.
        Chairman Warner. Thank you very much.
        We will now have Senator Cornyn.
        Senator Cornyn. Thank you, Mr. Chairman.
        Gentlemen, thank you for sticking in here with us. We are
    almost through. One of the priority areas of the QDR was
    defending the homeland in depth. My question really relates to
    how the Federal Government integrates its efforts to protect
    the homeland through the interaction of the DHS and the DOD.
    Recently we had an episode in Texas where there were some
    reports of border incursions by, it was initially thought or
    suspected to be members of the Mexican military. That matter is
    still being investigated. It appears that it could well be drug
    cartels operating along the border region. We are looking into
    it and we do not want to jump to any conclusions about it until
    we have the facts.
        But, as a result, I called General Riojas down at Joint
    Task Force North, and also placed a call to Admiral Keating at
    Northern Command (NORTHCOM), so I could understand how we were
    using our national assets, whether they are within the DOD or
    DHS, to make sure that we protect ourselves along the border. I
    am sure you will agree with me that the terrorist threat that
    we have in the world today will exploit vulnerabilities where
    they find them, including our porous border, which is a matter
    obviously of grave concern.
        So I wonder, Secretary Rumsfeld, if you would share with us
    your thoughts on DOD's supporting role to the lead role played
    by the DHS. Also, give us some reassurance and perhaps the
    American people some reassurance that we are using all of the
    assets that we have available to us to defend the homeland,
    including to secure our border and protect ourselves against
    any threats that may come at us.
        Secretary Rumsfeld. Thank you, Senator. The QDR process
    over the past year worked closely with the DHS, recognizing
    that defense of the homeland is a critical responsibility of
    the Government of the United States. As you pointed out, the
    DOD has a mixed role. We have the responsibility for the
    Operation Noble Eagle activities with respect to the air and we
    have responsibilities that we coordinate with the Coast Guard
    with respect to varying distances on the coasts. The DHS, of
    course, has the borders and from time to time the DOD has been
    asked to assist in support of various things, but it is only in
    support. The last, most recent one happened to be on the
    Canadian border, as I recall, where we were asked to provide
    some capabilities for a specific activity and did so.
        Another example might be the Hurricane Katrina, where I
    guess the National Guard had something like 50,000 people in a
    relatively short period of time available and the Active Forces
    had 22,000 available in a relatively short period of time, at
    the request of the Government. We do have a lot of capabilities
    that are available, but in almost every instance it is in
    support of one other department or agency.
        Senator Cornyn. In relaying to you the reports that I have
    read about and heard of the source or the reasons or the people
    responsible for the incursion, I did not want to suggest that I
    have reached any conclusion or that we really know what the
    reason is. In that vein, I would say that the reports I am
    getting is that our cooperation, mil-to-mil cooperation with
    Mexico, is improving, and I think that is very reassuring news.
        Let me just, before I close here on one final note, just
    congratulate you and really applaud the Department for setting
    up the Joint IED Defeat Organization and committing additional
    resources to this threat. It is absolutely critical that we
    continue to do everything that is within our capacity to defeat
    the use of IEDs. We all know the sort of ravages that it has
    resulted in and the lives and the injuries sustained by our men
    and women in uniform.
        Finally, let me just say that I want to congratulate the
    Joint Chiefs, General Pace, you and the other chiefs, for a
    letter that you wrote on January 31, 2006, to the Washington
    Post condemning a cartoon that had been run in the Post which
    depicted a military person with amputations. They used a bad
    attempt at humor, but one that really trivialized, I believe,
    the sacrifices being made by our men and women in uniform. We
    are a country that believes strongly in the freedom of the
    press, but I think we believe just as strongly in the
    importance of identifying as in bad taste and even a
    demoralizing sort of use, attempt to use humor that such a
    cartoon depicted.
        I want to say that we believe in the freedom of the press,
    but we believe that we ought to defend the integrity of our
    military and particularly the reputations of those men and
    women who have sacrificed so much so that we can be free. Thank
    you for standing up for them and standing up for all of us in
    the process.
        Chairman Warner. Thank you very much, Senator.
        Mr. Secretary, I am delighted the Senator brought up the
    DHS. All reports that we received are that you have an
    excellent working relationship with that department and the men
    and women of the Armed Forces, the American people should know,
    are standing by to support, as you carefully underlined. The
    National Guards of the several States, the other entities in
    the several States, we have 52 highly-trained teams under your
    jurisdiction to respond, one in each State, should there be a
    WMD or other type of weapon used that requires special
    equipment.
        NORTHCOM, I visited with the Admiral here this past week--
    as you say, out in Colorado is constantly looking at the entire
    Nation, the lower 48 as well as Hawaii and Alaska, to monitor
    any incursions or other threats to this country. Quite a
    considerable amount of your assets were utilized to secure the
    Nation's Capitol for the State of the Union and other major
    events. Quietly you are backing them up. I really want to
    credit your Department for that, because the American people
    are gravely concerned about the security here in our Nation.
        Senator Graham.
        Senator Graham. Thank you, Mr. Chairman.
        I would like to associate myself with Senator Sessions'
    comments in this regard, that the military has performed above
    and beyond the call of duty. If you really wanted to help your
    country as a young person and you are wondering, what could I
    do with my life to make a difference, join the military. Now is
    the time to stand up to the forces of evil and wear the
    country's uniform. I assure you, you will get more out of it
    than you gave. I would like to associate myself with that idea,
    that those that are serving really are making a difference.
        Mr. Secretary, thank you for sending over the nomination of
    General Jack Rives to be the Judge Advocate General (JAG) of
    the Air Force. I think I got it today. I know him. He is a
    great officer. It has been held up for different reasons for a
    while, but it is coming over. I want to thank you and the
    Secretary of the Air Force for sending him over to be the new
    JAG of the Air Force.
        Senator Sessions said something too that was very
    important: Shame on us if we let the troops down, as far as
    funding, as far as support. This budget is robust and these are
    robust times, so I am completely supportive of what you are
    wanting to do.
        I want to acknowledge something that has happened with my
    ranking member and my chairman, about a problem that I think we
    need to look at as to whether or not we are letting the troops
    down. The chairman has expressed concerns about a two-star
    general--I think it is General Geoffrey Miller--invoking his
    Article 31 rights when he was called to a courtmartial to
    testify in a case involving two enlisted personnel who are
    being accused of abusing prisoners through the use of military
    dogs.
        I have been concerned about this for a very long time.
    General Miller was the former Deputy Commanding General for
    Detention Operations for Iraq. He was sent to the region I
    think at the request of General Sanchez to try to get a hand on
    the insurgency and get good intelligence. I can understand
    that.
        Colonel Pappas was the commander of the prison, and there
    are two stories out there that cannot be reconciled in my
    opinion. One story is that Colonel Pappas was told by General
    Miller how to use the dogs in interrogation to get useful
    information. General Miller says he only mentioned the dogs in
    terms of perimeter security.
        We have two enlisted people facing courtmartial. How that
    story is resolved matters, and the legal proceedings are going
    to go forward and it is up to the military legal system to
    handle these matters at that level. I think it is important for
    this committee, because General Miller came before our
    committee to testify, that we get to the bottom of what
    happened. Shame on us if we allow a story to go forward that is
    not true and the two dog handlers are paying the price.
        I look forward to those hearings.
        Chairman Warner. Senator, I have indicated to you, in
    consultation with the ranking member, that this committee
    stands by to address that issue at such time as it is the
    judgment that we will not in any way interfere with the normal
    course of the Uniform Code of Military Justice (UCMJ) in
    addressing this question.
        Senator Graham. I want to congratulate both you and the
    ranking member for having that attitude. There will come a day.
    It is not now, but there will come a day.
        Senator Levin. If the Senator would just yield so I could
    add my support for his point. The lack of accountability for
    those above the enlisted levels here has been stunning,
    unacceptable. The inconsistencies have been unacceptable. I
    commend Senator Graham and the chairman of the committee for
    their determination that there be some justice brought to bear
    here and that there not be an injustice perpetrated on enlisted
    personnel in any way in these courtmartials. They should have
    access to all the information which can help their case. That
    is what they are entitled to. That is what our system of
    justice is all about.
        I just want to commend you, Senator Graham, and our
    chairman for the statements that you have made and, as the
    chairman knows, I am taking on a responsibility of conducting
    some additional factfinding also in this area. I think it is
    important for the reason you give, Senator.
        Senator Graham. Thank you both.
        Now, Mr. Secretary, I have a lot of confidence in the legal
    system in the military, by the way, a tremendous amount of
    confidence. I want people who have heard my comments not to
    believe for a moment that I do not think these people will be
    treated well. We have good lawyers, we have good prosecutors,
    good defense attorneys, and we have fair-minded juries. But, we
    do need to get to the bottom of an inconsistency.
        The growth of military health care. This is a great budget,
    but, Mr. Secretary, I want to compliment you on bringing reform
    to the table. These are not pleasant topics to talk about. I
    will soon one day, if I can get 3 more good years, be retired,
    and when I get to 60, if I ever live that long, I will be
    eligible for my Reserve retirement. I am sure that, of all the
    people you will pay as reservists, I will probably deserve it
    the least, but I am going to take it.
        But, what I am willing to do as a reservist one day is to
    contribute a little bit more when it comes to my health care,
    because you are having to choose between health care premiums,
    guns, bullets, airplanes, and ships. The TRICARE system that
    our chairman helped design is a wonderful military health care
    delivery system. The Guard and Reserve now have an opportunity
    to be part of it. That is a long-overdue reform. I appreciate
    what we have been able to do together on that front.
        To my colleagues who are worried about budgets, the
    premiums for those under-65 retired community have not changed
    since the inception of the program. The military health care
    budget is doubling every 10 years. It will be 12 percent of the
    entire military expenditure soon.
        Mr. Secretary, Secretary England, and others have come over
    to my office, and I want to applaud you and thank you for
    putting on the table some new ways of looking at military
    health care and, quite frankly, some new choices.
        Could you comment on what you think is necessary for us as
    an institution to get a handle on the growth of military health
    care?
        Secretary Rumsfeld. Senator, thank you, and thank you for
    your personal interest and support in finding ways to see that
    the health care costs that are imposed on the budget are
    brought under control.
        The facts you cited are correct. There is one other fact
    that is an interesting one and that is that currently the
    taxpayers are spending about $84 billion, if you look, for
    military health present and past, if you combine the amount
    that goes to the Treasury, the amount that goes to the VA, and
    the amount we are currently spending. That is an enormous sum
    of money.
        We have a terrific health care system and we want to keep
    it. The only way we can keep it is to put it on a basis that is
    sustainable. The chairman has taken the lead in the Department,
    along with Dr. Chu, and, as you know well, has taken this
    matter to the members of the Joint Chiefs of Staff on a number
    of occasions, and they have unanimously supported the proposals
    that have been fashioned, which we believe are fair and
    equitable and will in fact put it on a sustainable basis.
        Senator Graham. I stand ready to help, and think big. One
    day maybe the VA should handle retiree health care and we
    should have a military health care footprint for the Active
    Forces. Think big.
        Chairman Warner. Thank you very much, Senator, for
    monitoring that and the number of personnel issues that you
    have taken a leadership role on, on behalf of the men and women
    and their families.
        Senator Levin?
        Senator Levin. Just a few questions because I know that 1
    o'clock is soon here.
        We have had some numbers that were given to us a few months
    ago as to the number of Iraqi army battalions, as to how they
    were rated, how many were rated at level one, how many at level
    two, level one being operating independently, level two being
    able to take the lead with coalition support. What is the
    current number of level two Iraqi battalions if you could tell
    us, General?
        General Pace. Sir, level two Iraqi battalions today are 60.
    For clarification, as a rifle battalion commander myself in
    1983 to 1985, if I were to grade myself and my battalion on
    that scale, I would have been level two.
        Senator Levin. And level one?
        General Pace. Level one is one.
        Senator Levin. Still one, okay.
        In the New York Times a couple days ago there was a report
    that, while there is a decline in the number of attacks on
    coalition and Iraqi military units, that sectarian violence has
    risen sharply in recent months, particularly in mixed Sunni-
    Shiite neighborhoods, where people are being expelled from
    their homes or killed. According to the Iraq national security
    adviser and the chairman of the joint Iraqi-American committee
    planning for the transition to Iraqi military control--it also
    includes, this committee, our ambassador and General Casey--
    quote, according to now the Iraqi security adviser: ``The
    Americans do not want to intervene in stopping sectarian
    violence.''
        What is our policy on that? Mr. Secretary, you can answer
    it, or General, whoever can tell us that.
        Secretary Rumsfeld. I will start. Commanders on the ground
    have a great deal of discretion and the circumstance on the
    ground varies dramatically in different parts of Iraq. It
    requires making judgment calls. I would submit I doubt if there
    is an overall policy that is rigid because of the differing
    circumstances on the ground.
        Needless to say, our commanders are concerned when there is
    violence and to the extent they can, they contribute to a
    situation where the violence does not exist.
        I think that the people in that country have had arguments
    and difficulties and differences among tribes and militias for
    a great many years, and thinking that it is all suddenly going
    to end or that there is some way for a coalition set of forces
    to make it end I think is unlikely. I am impressed, however,
    that there have been people who have been predicting that there
    would be civil war and sectarian violence of a major nature and
    it has not happened. We have been very fortunate. The people
    have gone through this period, this political period, and made
    judgments that everyone would lose if that were to deteriorate
    into that circumstance.
        We did have a policy in Afghanistan where we avoided using
    U.S. and coalition forces to go directly against warlords if
    they were engaged in various types of activities and solved it
    politically.
        Senator Levin. I will just end with my thanks for your
    assurance on the Guard issue in terms of consultation and
    funding. I think that is important to all of us and all of our
    States, and your assurances are helpful in that regard. We
    thank you for them, General.
        General Pace. To your last question, if I may, Senator,
    also just one additional point. That is, our commanders on the
    ground also strive to have the ISF and the Iraqi police deal
    with Iraqis on Iraqi problems. So although it is not a standing
    policy, as best we can, where the capacity exists, we prefer to
    have the Iraqis deal with it.
        Senator Levin. Are those integrated Iraqi forces or are
    they mainly sectarian-dominated forces?
        General Pace. Sir, they are getting better integrated. They
    are not as well integrated as they should be, and everyone in
    the Iraqi leadership understands and is vetting right now
    former Iraq, mostly Sunni, majors and below, to be able to get
    a better mix of Kurd, Shia, and Sunni inside the organizations.
        Senator Levin. Thank you.
        Secretary Rumsfeld. The Ministry of Defense (MOD) forces
    are much more integrated than the Ministry of the Interior
    (MOI) forces, because the MOI forces are for the most part
    recruited locally, the police and the like.
        Chairman Warner. Senator Lieberman.
        Senator Lieberman. Thanks very much, Mr. Chairman. One
    question and I do want to ask that, I have a statement on the
    budget generally, that it be included in the record.
        Chairman Warner. Without objection.
        [The prepared statement of Senator Lieberman follows:]
               Prepared Statement by Senator Joseph I. Lieberman
        Good morning and thank you for attending. This hearing begins our
    examination of our Nation's military strategy for today and tomorrow
    and how well the budget request offers a defense program to support
    that strategy. I want to thank Senators Warner and Levin for holding
    this hearing which gives us the opportunity to ask questions about the
    2007 defense budget, the Quadrennial Defense Review (QDR), and the
    continuing operations in Iraq. Our purpose must be to guarantee that
    the men and women of our armed services have the resources and support
    they need to protect the United States and the American people, who
    live in an all too dangerous world. Good morning to Secretary Rumsfeld,
    General Pace, and General Schoomaker. I appreciate all the hard work
    you have done to ensure our Nation's security.
        I believe that 2006 is an extremely important year for our
    military. It is imperative that coalition forces make significant
    progress in securing and stabilizing Iraq. In order to do that, the
    military must receive the necessary support in both equipment and
    personnel to get the job done. We must also look forward in our
    planning with the assumption that our military will not return to a
    comfortable conventional warfare posture. Instead, we must be ready to
    defeat the kind of threats that have confronted us for the past 15
    years. I am concerned that the decisions represented in the budget and
    the QDR do not adequately consider the extent and duration of
    operations to defeat these threats.
        We must evaluate what defense programs will help us transition from
    a traditional fighting force into a military that can respond to
    nonconventional threats, as well as conventional ones, and sustain that
    response, for years if necessary. We must discuss many of these
    programs and where they fit into our future military.
        Given the new strategic threat environment described in the QDR, I
    want to focus on the adequate size of land forces we need to meet these
    demands. Our soldiers in the Army are the most technologically advanced
    in the history of our Nation and this budget will help them become even
    more so. We are doing them a disservice if we do not make sure we have
    enough brigades to both deploy and support troop rotation for extended
    periods of time, and to be able to do so in more than one place, if
    necessary. We also must maintain the institutional Army--the training,
    support, and educational part of the Army that has made our combat
    units so successful. We cannot outsource these vital, core
    institutional functions and remain as good as we are.
        The 2007 budget also calls for a reduction in the authorized end
    strength of the National Guard, which is a decision that seems to
    reflect the tight fiscal environment rather than the military's
    operational demands. I must ask the obvious, yet difficult question: if
    we are transitioning from a traditional force to a military more
    responsive to irregular and potentially catastrophic threats, then why
    have all the traditional weapons systems remained in the budget, in
    many cases receiving an increase in funding, while funding for
    personnel has been reduced?
        I am also concerned about the size of our Navy, particularly in
    light of the aggressive development of submarines by other nations--
    such as China. If we wait until 2012 to increase our sub production to
    two a year, we will fall beneath the number of boats needed to satisfy
    the Navy's force structure requirement and to remain the world's
    dominant undersea warfare force in the future.
        Although the QDR recognizes the need for increased long-range
    strike capability by 2018, I do not find any funding in the 2007 budget
    request for this. There continues to be a lot of money for short-range
    strike capability. Even if we start now, which we aren't, I doubt it is
    possible to field the land based bomber part of this capability by 2018
    as the QDR calls for. That is 11 years from now, and we normally take
    15 or more years to field such a program.
        The bottom line is that I see critical discontinuities between the
    strategic threats outlined in the QDR, and the resource decisions
    allocated in the 2007 defense budget. Our military must continue to
    transform from a conventional to an irregular and conventional fighting
    force, and we must increase and shift our resources to achieve this
    goal. We are engaged in a ``long war'' against terrorism. It is
    imperative that our choices reflect that new strategic reality.

        Senator Lieberman. Thank you.
        Mr. Secretary, we talked before about the money available
    and the possible efficiencies that can be obtained internally
    to free up some more funding for programs. I was pleased that
    the QDR recognizes the acquisition process, the procurement
    process, as a problem area, and uses the term it is hampered by
    ``inefficient business practices,'' and agrees that there is a
    lack of confidence.
        Senator McCain and I in the Airland Subcommittee focused on
    this in the last year or so, and the full committee has, too.
    In the QDR there is not a specific plan of action as to how to
    deal with this. I wanted first to say that I think it would be
    great if we could work executive/legislative together to see if
    we can really stretch to achieve some reforms in procurement as
    soon as possible, because, needless to say, the average
    acquisition time I think is now 15 years. That is from the
    conception to the development of a weapon system. That adds
    costs and means that we do not get the systems as soon as we
    could.
        I wanted to just extend that hand to you, and also ask if
    you have any specific thoughts about what course of action we
    might take together to save some money on procurement.
        Secretary Rumsfeld. Senator, it is a very big concern of
    ours in the Department. Gordon England, the deputy, is devoting
    a lot of his time to the subject. I would be happy to accept
    your invitation and work closely with you and your committee
    and Senator McCain.
        Since 30 years ago, the time it takes in the procurement
    cycle, the acquisition cycle, has about doubled.
        Senator Lieberman. Yes.
        Secretary Rumsfeld. During that period, Moore's Law has
    been at work and technologies have in fact every 18 months
    doubled their power and changed at a much more rapid pace. One
    would have thought just the opposite, instead of elongating the
    acquisition process. Time is money. It is hurting.
        Partly, I think there was a pattern in terms of costs, a
    pattern of using lower costs in hopefulness. We came in and
    said, look, it has been consistently wrong, it has always been
    more, and we took some different cost accounting approaches and
    have been trying to use a higher level of cost which we hope
    would be more realistic. I think that is proving out.
        Under Secretary of Defense Ken Krieg is working closely
    with the deputy and we will be happy to connect with you.
        Senator Lieberman. Excellent. Thank you very much. Thanks
    to you, and to you, General Pace, General Schoomaker, for your
    testimony and your service every day.
        Chairman Warner. Thank you very much.
        Mr. Secretary, I am just going to ask a short question
    here. The JSF seems to have received strong support in the
    budget, which is very important. That is a key weapons system
    that we have expended a great deal of effort to bring about and
    it has the appearance of being an effective system.
        We do take notice of the budget, which a decision has been
    made not to pursue a second engine. That has, understandably,
    raised concern among the eight nations that are partners in
    that program. Could you describe first the procedures that were
    followed in such consultation as was done with those partners,
    and your own views as to that decision?
        I believe you are the first military-trained aviator ever
    to be Secretary of Defense. Would that be right?
        Secretary Rumsfeld. You got me.
        Chairman Warner. I did a little research. I think you are.
        Secretary Rumsfeld. Is that right?
        Chairman Warner. So, you are eminently qualified to answer
    to this question.
        Secretary Rumsfeld. I am not so sure of that. I feel like a
    broken-down ex-Navy pilot, that is all.
        Chairman Warner. You are not broken down. We can recall
    you. [Laughter.]
        Secretary Rumsfeld. The original plan had been to have a
    backup engine for the JSF and it was in the program. We have a
    wide number of partners, as your question suggested. The
    decision was made, and there has been extensive consultation
    with others. Some are very happy about it because it saves
    money, about $1.8 billion by discontinuing it. Others are not
    happy about it.
        But, the senior leadership in the Department looked at it.
    They made a recommendation to me. I found it persuasive. The
    history suggests that we will be fine with a single engine as
    opposed to the engine with a backup and we are going forward on
    that basis. It has been true with other programs that a single
    engine has worked out, and to the extent there are difficulties
    you can manage your way through them.
        It is the right decision and we appreciate the cooperation
    of all of our partners around the world who are participating
    in the JSF program.
        Chairman Warner. Mr. Secretary, we have just received that
    information here in the committee yesterday with the delivery
    of the budget. We have a responsibility, particularly because
    of the international aspects of that program, and particularly
    Great Britain, who has been our most steadfast partner in the
    Iraqi coalition forces. It is deserving of the careful
    attention by the committee, and I think you appreciate and
    understand that.
        Secretary Rumsfeld. I appreciate that. My recollection is
    that U.K. industry is participating in other aspects of that
    program. Is that not right?
        General Pace. Yes.
        Secretary Rumsfeld. There are a couple of things, Mr.
    Chairman, if I could clarify.
        Chairman Warner. Yes, if you want to wrap up.
        Secretary Rumsfeld. One involves the questions by Senator
    Reed that had to do with a possibility of a DOD IG looking into
    so-called ghost detainees. We have checked with the office and
    we are told that it is the CIA IG that is doing that and the
    Director of the Defense Intelligence Agency (DIA) will be
    meeting with Senator Reed this afternoon.
        I want to say, I appreciate the previous exchange with
    Senator Graham on the question of accountability over the
    treatment of detainees, and I just want to make sure that the
    record is clear. There have been something like 251 individuals
    that have been held accountable for detainee mistreatment.
    There have been 87 courtmartials and 91 nonjudicial
    punishments. There has been extensive functioning of the UCMJ.
        Chairman Warner. He was particularly concerned--and you and
    I have been associated with the DOD for a very long time and I
    cannot recall a flag or a general officer invoking this
    privilege, which he has the right under the UCMJ. But it does
    bring to mind that the heart and the soul of the officer corps
    and the noncommissioned officers is something that is always
    entrusted to the current Secretary of Defense and the current
    Joint Chiefs, and particularly the Chairman. I discussed this
    issue privately with the Chairman yesterday and received
    assurances that the Department is going to look into this
    situation, as will this committee because this individual did
    testify under oath before the Committee of the Armed Services.
        Lastly, the record should note that we all are mindful of
    what is taking place in the world today by reason of
    extraordinary protests occasioned by certain actions by the
    Danish media. Hopefully, that will not further spread. But
    should it occur in Iraq, it would be my expectation that the
    ISF would have the primary mission for such containment as the
    government of Iraq felt is necessary. Could you just give us
    that assurance?
        Secretary Rumsfeld. That certainly would be one's first
    choice. The qualification to that of course is that there are
    locations where the ISF are in the lead and there are other
    locations where coalition forces are, and it would be really
    dependent on the circumstances on the ground. But to the extent
    that the MOI forces could handle it, that are located well
    across the country, that would be the preference.
        Chairman Warner. I certainly hope that is the case.
        Senator Levin. Would the Secretary provide for the record
    the list of all of the actions which have been taken relative
    to detainee abuse cases? You gave us the total. If you could
    just give us for the record the names of the people who were
    involved in those, it would be helpful.
        Secretary Rumsfeld. We will certainly do that.
        [The information referred to follows:]

        As of December 10, 2006, the 106 military members provided below
    were court-martialed for detainee related offenses.
        [Deleted.]

        Chairman Warner. Mr. Secretary and Chairman Pace and Chief
    of Staff of the Army, we have had a very fine hearing today,
    quite an important and constructive and indeed very courteous
    and respectful exchange of views and information here. I join
    all others on this committee in commending you for your
    leadership given to this great Nation, and particularly the men
    and women and their families of the Armed Forces.
        This hearing is now concluded.
        [Questions for the record with answers supplied follow:]
                   Questions Submitted by Senator John Warner
                                   biometrics
        1. Senator Warner. Secretary Rumsfeld, the effective employment of
    an integrated and coordinated biometrics system is a key component in
    efforts to track, locate, and detain terrorists in Iraq or anywhere in
    the world they seek to travel. I understand the Department is
    collecting biometric information from individuals detained in Iraq and
    from forensic investigations of improvised explosive device (IED)
    attacks. How is this information shared with relevant components within
    the Department?
        Secretary Rumsfeld. The Department of Defense (DOD) Automated
    Biometric Identification System (ABIS) is the central DOD repository
    for detainee biometric data. ABIS also receives latent fingerprint
    files derived from forensic investigations through various sources. The
    ABIS is modeled after the highly successful Federal Bureau of
    Investigation (FBI) system, the Integrated Automated Fingerprint
    Identification System (IAFIS). Within the Department, ABIS shares match
    results with the original source and with relevant entities from the
    Intelligence Community (IC), detainee operations, and interagency
    partners.
        All DOD match results on detainees, enemy combatants, and local
    (host nation or third country) employees are forwarded to the National
    Ground Intelligence Center (NGIC) in Charlottesville, Virginia, for
    processing, intelligence analysis, exploitation, and production. The
    results are made available via Biometric Intelligence Analysis Reports,
    which are posted to a classified Web site and e-mailed to intelligence
    consumers.
        The NGIC Counter IED Targeting Program and Weapons Intelligence
    Teams (WIT) collect forensic evidence, including biometrics, on the
    battlefield. The WIT are trained in basic evidence collection and basic
    latent print collection, consistent with environmental and operational
    limitations. There are currently 13 teams deployed in Iraq. They have
    been active there since December 2004.
        The NGIC augments the Combined Explosive Exploitation Cell-Iraq
    (CEXC-Iraq) to support IED forensic collection of latent finger prints
    and DNA from material that would not otherwise be collected or
    exploited. CEXC-Iraq has been active since December 2004 and is the
    most sophisticated forensics lab in the Iraqi theater of operations.
    The growing visibility and value of this program resulted in a similar
    capability being implemented in CEXC-Afghanistan in March 2006.
        Latent prints and forensics evidence collected either by CEXC or
    WIT are sent to facilities in the United States for processing and
    matching. In-country personnel electronically submit the top 5 percent
    of latent prints to Certified Latent Print Examiners at the DOD
    Biometrics Fusion Center (BFC) in Clarksburg, West Virginia. Those
    prints are formatted, submitted, and stored in both ABIS and IAFIS.
    Results are submitted back to the NGIC, U.S. Central Command
    Intelligence, and several other agencies. The highest priority cases
    are completed within a day of their receipt by the BFC. The Department
    of Homeland Security (DHS) has access to DOD latent prints through
    IAFIS.
        The remaining latent prints and physical evidence are packaged and
    physically shipped to the FBI Terrorist Explosive Device Analytical
    Center (TEDAC) in Quantico, Virginia. TEDAC forensically exploits
    physical evidence for additional latent prints as well as the entire
    suite of forensic evidence, such as DNA, hairs, fibers, etc. These
    remaining and additional latent prints are searched through the FBI's
    IAFIS and shared with the BFC for ABIS searching. Due to lengthy
    shipping times and manual transfer processes from IAFIS to ABIS, the
    process of obtaining a latent print identification from ABIS can take
    up to a month.
        Finally, the BFC, in conjunction with the Naval Criminal
    Investigative Service, developed a pilot project for a forward deployed
    forensic collection lab. The facility became operational at Camp
    Fallujah, Iraq on January 28, 2006. It processes biometric evidence,
    electronically formats it, and sends the fingerprints directly to
    latent experts at the DOD BFC for immediate processing. The evidence is
    then submitted to the DOD ABIS for matching. Over 100 latent prints
    have been received and processed using this new capability.

        2. Senator Warner. Secretary Rumsfeld, is the biometric data
    collected in theater connected to, or shared with, the Department of
    Justice (DOJ), the Department of State, and the DHS?
        Secretary Rumsfeld. The DOD established the DOD ABIS in July 2004
    as an automated means to share biometric information in the interagency
    environment. The ABIS is the DOD central repository of fingerprint data
    files on non-United States persons of interest and primary interface
    with the FBI IAFIS. As the preferred portal to interagency sharing of
    biometric information, ABIS normally receives persons of interest,
    including detainees, biometric data from theaters of operations
    worldwide the data is then entered into the database and an automated
    comparison is performed. Fingerprint file matches to candidate
    terrorists are then shared with the FBI Criminal Justice Information
    Services Division. Other U.S. Government entities then may access DOD
    match data through the FBI IAFIS.
        In order to speed and automate the interagency data-sharing process
    and reduce the time delay between data collection and data sharing,
    representatives from the DOJ and DHS met with representatives from the
    DOD Executive Agent for Biometrics, the Office of the Assistant
    Secretary of Defense for Homeland Defense and the Deputy Assistant
    Secretary of Defense for Detainee Affairs to agree on the rapid
    exchange of fingerprint files on persons of interest from the DOD ABIS
    data base. By the end of February 2006 over 320,000 files had been
    shared with DOJ and DHS.

        3. Senator Warner. Secretary Rumsfeld, if a detainee were to escape
    from custody, would our current system of screening people prevent him
    from entering the country using a forged name?
        Secretary Rumsfeld. The current watch list process that would stop
    such a scenario from happening is being refined. The DOD National
    Detainee Reporting Center (NDRC) submits all detainee information to
    include biometrics to the DOD Biometric Fusion Center, which in turn
    sends information to other U.S. Government intelligence agencies. NDRC
    also submits detainee information (excluding biometrics) to the Joint
    Intelligence Task Force for Combating Terrorism (JITF-CT). JITF-CT also
    has read-only access to the NDRC database on detainees in Iraq, which
    includes detainee status (e.g. in camp, released, repatriated, or
    escaped). Consistent with a Secretary of Defense directive, the JITF-CT
    passes certain information to the National Counterterrorism Center
    (NCTC), which prepares terrorist watch lists that are distributed
    throughout the government.
        Through the State Department visa issuance process, a person
    applies through the State Department name check system (CLASS). In
    addition, the State Department utilizes fingerprints and the US-VISIT
    database (IDENT) for their Bio Visa and Border Crossing Card programs.
    US-VISIT obtains their database information from an extract provided by
    the FBI IAFIS.

        4. Senator Warner. Secretary Rumsfeld, what is the Department's
    policy on the development, integration, and use of biometrics
    technology?
        Secretary Rumsfeld. DOD recognizes biometrics as a key enabling
    technology for combating asymmetric threats. All efforts to develop,
    integrate, and use biometrics are emphasized. Presently, considerable
    focus is being applied to institutionalizing the biometric capabilities
    of the DOD through programs and process development. Additionally, DOD
    is actively involved in national and international biometric standards
    bodies to ensure seamless integration of biometric capabilities with
    other information technology aspects of the Department. DOD serves as
    the U.S. Government lead for biometrics standards development through
    the National Science and Technology Council.
        The global war on terrorism is redefining combat capabilities
    required for networks and data sharing boundaries. Specific activities
    the DOD has identified to incorporate the development, integration, and
    use of biometrics technology include credentialing, management of a
    person's privileges and entitlements, authentication of a person's
    identity, dynamic decisionmaking for authorization to access
    information, privacy protection, and forensic data collection and
    analysis.
        DOD will also be assessing which biometric modalities, such as iris
    scans, voice prints, and facial recognition, to invest in to enable
    current and future mission success in the global war on terrorism.

        5. Senator Warner. Secretary Rumsfeld, what resources are included
    in the fiscal year 2007 budget to facilitate sharing of terrorist
    information with other departments as outlined by Homeland Security
    Presidential Directive?
        Secretary Rumsfeld. The DOD continues to support in the fiscal year
    2007 budget the DOD BFC in Clarksburg, West Virginia, the DOD
    Biometrics Management Office in Arlington, Virginia, the Program
    Manager, Biometrics at Fort Belvoir, Virginia, the NGIC in
    Charlottesville, Virginia, the DOD ABIS, the Biometric Automated
    Toolset, and the Biometric Identification System for Access. These
    resources all play a significant role in facilitating the sharing of
    terrorist biometric information.
                                     ______

                   Questions Submitted by Senator John McCain
                        emergency supplemental spending
        6. Senator McCain. Secretary Rumsfeld, a major issue in the
    congressional debate on funding continuing military operations and
    reconstruction in Iraq and Afghanistan is whether military and
    peacekeeping operations should be funded with supplemental requests or
    via the regular authorization and appropriation process. Last year, I
    urged you, as well as several of my colleagues on the Senate Armed
    Services Committee (SASC), to include the costs of current and future
    operations in Iraq and Afghanistan in the DOD's regular appropriations,
    arguing that these are now ongoing operations that should be planned
    for and funded in the annual defense budget. It is a responsibility,
    not a privilege, that the SASC exercises oversight in the normal
    authorization process at the beginning of the budget debate. During the
    last 2 years the SASC has provided for limited authorization in bridge
    supplemental requests in the defense authorization bill. The DOD
    assesses the incremental cost of Operation Iraqi Freedom (OIF) at
    approximately $4.4 billion a month and Operation Enduring Freedom (OEF)
    in Afghanistan at $800 million a month. As General Pace has
    appropriately stated in his testimony ``[w]e are in a long war.'' Do
    you intend to use supplemental appropriations as the vehicle to fund
    this long war?
        Secretary Rumsfeld. The President, not the Secretary of Defense,
    determines how to fund requirements such as DOD incremental costs for
    war. For fiscal year 2007, the President decided to include $50 billion
    in his budget request as an emergency allowance (estimated future
    emergency funding for the global war on terror) or bridge fund to
    finance the military war efforts through part of fiscal year 2007. Once
    fiscal year 2007 begins and the Department can estimate what its total
    fiscal year 2007 funding requirements for the war are likely to be, the
    President will decide how to finance these requirements. At that time,
    the President may decide how he will request war-related funding for
    fiscal year 2008.

                               acquisition reform
        7. Senator McCain. Secretary Rumsfeld, according to the Quadrennial
    Defense Review (QDR), the DOD is focused on bringing capabilities to
    the joint force more rapidly, by fashioning a more effective
    acquisition system and associated set of processes. The Center for
    Strategic and International Studies (CSIS) provided two reports on
    ``Beyond Goldwater-Nichols,'' referring to the 1986 legislation which
    reorganized the DOD into its current organization. In its reports, CSIS
    emphasized the need to include the combatant commanders (COCOMs) in the
    acquisition process. CSIS also made recommendations to increase the
    role of the Service Chiefs in the acquisition process as a means to
    increase Service responsibility into the system. How will the COCOMs be
    integrated into the requirements and budgeting process?
        Secretary Rumsfeld. We recognize and value the importance of COCOM
    participation and influence in the Department's requirements and
    budgeting processes and are taking steps not only to strengthen
    existing means available for that participation but creating new ones
    as well. Central to this is a COCOM's Integrated Priority List (IPL).
    The IPL details a COCOM's highest priority requirements across
    functional lines and defines shortfalls in key programs. In the past,
    the IPL was a fiscally unconstrained list but now includes detailed
    capability trade-off recommendations to inform funding choices.
    Moreover, the Joint Forces Command (JFCOM) has assumed a more prominent
    and proactive role in rationalizing and integrating capabilities across
    all unified and specified commands.
        The Joint Staff also sponsors periodic visits to the COCOMs to
    engage in direct discussions on requirements and budget issues. They
    have begun to expand the participation in these discussions to a much
    broader set of participants from Office of the Secretary of Defense
    (OSD) as well. Now, representatives from Program Analysis and
    Evaluation (PA&E), Comptroller, Policy and Acquisition, Technology and
    Logistics (AT&L) among others are there to discuss COCOMs' specific
    issues relating to programming, budgeting, and acquisition. Also,
    Senior Leadership Conferences are held throughout the year at junctures
    aligned with the budget process and provide COCOMs similar
    opportunities to participate directly in formulating programs and
    budgets.

        8. Senator McCain. General Schoomaker, the Service Chiefs already
    have influence over the requirements and budgeting processes. What are
    your thoughts regarding the increased role of Service Chiefs in the
    acquisition process?
        General Schoomaker. Under well-established public law,
    responsibility for the Headquarters, Department of the Army acquisition
    function resides solely in the Assistant Secretary of the Army for
    Acquisition, Logistics, and Technology, and the Department's
    acquisition process is ably executed by the dedicated Acquisition Corps
    professionals who work under his supervision. The Chief of Staff of the
    Army and other Army Staff principals have a crucial lead role with
    respect to certain closely related activities such as requirements
    generation and validation, resource allocation, testing, and
    determination of fielding priorities. While I always am receptive to
    exploring ways in which the Department can improve and streamline its
    processes, I am of the opinion that the Department is well-served by
    the current delineation of responsibilities.

        9. Senator McCain. Secretary Rumsfeld and General Pace, procurement
    reform will continue to be a priority for the SASC/Airland
    Subcommittee. A recent Government Accountability Office (GAO) report
    examined 20 Air Force and Army contracts and found that, over 4 years,
    $8+ billion was overpaid in incentive fees to defense contractors. Are
    the program offices receiving proper oversight from within the DOD?
        Secretary Rumsfeld. The Department generally agreed with the report
    findings that the application of award and incentive fee arrangements
    needs improvement. We are looking to make those improvements. We are
    committed to reviewing our policy and oversight structures on Award and
    Incentive Fee Contracts and expect to issue a comprehensive update on
    the proper use of award and incentive fees by March 31, 2006. A key to
    proper use of award and incentive fees contracts is training of the
    acquisition workforce, and we will work with Defense Acquisition
    University to ensure this topic is included in the curriculum.
        General Pace. Historically, some program officers have not received
    proper oversight within the DOD. I share your concern that the
    Department needs to more effectively use contract award and incentive
    fees as an enhancement tool for achieving desired acquisition outcomes.
    Oversight efforts need to be constantly reviewed and improved. The
    Under Secretary of Defense for Acquisition, Technology, and Logistics
    is formally addressing desired outcomes and the role award fees play in
    acquisition strategy via a policy memorandum in the coming months. I
    support Secretary Krieg's efforts to define the necessary oversight and
    the process for effectively administering contract management across
    the Department.

        10. Senator McCain. General Pace, reports have described the Boeing
    767 tanker deal as the most corrupt acquisition deal in more than 35
    years. A key finding in the Department of Defense Inspector General
    (DOD IG) report was that the Joint Requirements Oversight Council
    (JROC) process failed to recognize that an Air Force officer (LTC
    Lepanta) lied to the JROC (a $30 billion misrepresentation) on whether
    the tanker operational requirements document (ORD) was tailored to the
    Boeing 767. This officer's action makes a mockery of the joint
    requirements process and highlights the importance of the JROC process
    to be above reproach. What steps are you prepared to take to ensure
    that this does not happen again?
        General Pace. When creating the Joint Capabilities Integration and
    Development System (JCIDS), we recognized the lack of an independent
    assessment on programs coming before the JROC. To address this
    shortfall, the Functional Capabilities Boards (FCBs) were created. The
    FCBs are co-chaired by a Joint Flag Officer and a senior representative
    from the OSD with a permanently assigned staff and representation from
    the Services, combatant commands, and OSD. The FCBs assess each program
    that comes before the JROC, providing an independent assessment and
    recommendation that identifies key issues for the JROC. This
    independent assessment process is helping us avoid future issues like
    those experienced with the tanker ORD. We are continually identifying
    ways to improve the effectiveness of the JCIDS/JROC process in making
    program decisions and will press ahead to implement changes as
    necessary.

        11. Senator McCain. General Pace, can you assure this committee
    that you will do everything possible to promote the ideal of integrity
    within the military and civilian members of the Department?
        General Pace. I will do everything possible to promote the ideal of
    integrity with our military and civilian personnel. Integrity and
    ethics are fundamental tenets of our military, and you have my
    assurance that I will continue to promote these traits throughout our
    military.

            specific guidance for implementing the mccain amendment
        12. Senator McCain. Secretary Rumsfeld and General Pace, Deputy
    Secretary England has issued a high-level memo directing the
    implementation of the detainee legislation that became law this winter.
    This memo is less than a page in length, and merely restates the
    provisions--that the Army Field Manual (FM) shall become the uniform
    standard for interrogation, and that cruel, inhumane, and degrading
    treatment is barred. What specific guidance has been given to soldiers,
    military police, interrogators, translators, intelligence officers,
    medical personnel, etc. at Guantanamo and throughout Iraq and
    Afghanistan?
        Secretary Rumsfeld. DOD Directive 3115.09, DOD Intelligence
    Interrogations, Detainee Debriefings, and Tactical Questioning, was
    issued on November 3, 2005. It consolidates and codifies existing
    departmental policies, including the requirement for humane treatment
    during all intelligence interrogations, detainee debriefings, or
    tactical questioning to gain intelligence from captured or detained
    personnel. It further assigns responsibilities for intelligence
    interrogations, detainee debriefings, tactical questioning, and
    supporting activities conducted by DOD personnel.
        The U.S. Army Training and Doctrine Command has added additional
    blocks of instructions on the Geneva Conventions and Law of War to all
    programs of instruction. The U.S. Army Intelligence Center and School
    (USAICS) has updated their interrogation training program of
    instruction to ensure all training is in full compliance with the Army
    FM (FM 34-52) and emphasized legal, policy and regulatory requirements
    for human treatment of all detainees, as well as prohibitions against
    cruel, inhumane, and degrading treatment in the conduct of
    interrogation operations. USAICS' mobile training teams have deployed
    to provide reinforcement training to both deployed forces and ``next
    deploying'' units throughout the United States.
        General Pace. The Deputy Secretary of Defense issued a memorandum
    on 30 December 2005 that addressed the McCain Amendment. First, this
    memorandum clearly reiterated the McCain Amendment provision that no
    person in the custody or control of the DOD or under detention in a DOD
    facility shall be subject to any treatment or interrogation approach or
    technique that is not authorized by and listed in the United States
    Army FM on Intelligence Interrogation. Second, this memorandum directed
    that U.S. Armed Forces in the war on terrorism had the continuing
    obligation to ensure that no person in the custody or under the control
    of the DOD, regardless of nationality or physical location, was
    subjected to cruel, inhuman, or degrading treatment.

        13. Senator McCain. Secretary Rumsfeld and General Pace, have these
    individuals received directives with instructions?
        Secretary Rumsfeld. The Under Secretary of Defense issued DODD
    3115.09, DOD Intelligence Interrogation, Detainee Debriefings, and
    Tactical Questioning on November 3, 2005. It consolidates and codifies
    existing departmental policies, including the requirement for humane
    treatment during all intelligence interrogations, detainee debriefings,
    or tactical questioning to gain intelligence from captured or detained
    personnel. It further assigns responsibilities for intelligence
    interrogations, detainee debriefings, tactical questioning, and
    supporting activities conducted by DOD personnel. USD(I) is also
    updating DODD 2310, the DOD Detainee Program. This directive revises
    policy and responsibilities within the DOD for a Detainee Program to
    ensure compliance with the laws and policies of the United States, the
    law of war, including the Geneva Convention of 1949. A memorandum on
    Medical Program Principles and Procedures for the Protection and
    Treatment of Detainees in the Custody of the Armed Forces of the United
    States was also issued. The memorandum reaffirmed the historic
    responsibility of all health care personnel of the Armed Forces (to
    include physicians, nurses, and all other medical personnel including
    contractor personnel) to protect and treat, in the context of a
    professional treatment relationship and established principles of
    medical practice, all detainees in the custody of the Armed Forces
    during armed conflict.
        General Pace. The McCain amendment limited all interrogations to
    the Army FM on Intelligence Interrogation, currently embodied in FM 34-
    52, and prohibited the cruel, inhuman, and degrading treatment or
    punishment of detainees. FM 34-52 and DOD Directive 3115.09 provide
    sufficient guidance regarding detainee interrogations. The President's
    7 February 2002 memorandum directed that all detainees in the war on
    terrorism be treated humanely. Accordingly, and consistent with the
    President's memorandum, U.S. forces shall continue to ensure that no
    person in the custody or under the control of the DOD, regardless of
    nationality or physical location, are subjected to cruel, inhuman, or
    degrading treatment or punishment.

        14. Senator McCain. Secretary Rumsfeld and General Pace, has the
    Department developed regulations to implement the legislation?
        Secretary Rumsfeld. Army Regulation 350-1, Army Training and Leader
    Development, February 13, 2006, provides specific regulatory guidance
    concerning Law of War training and integration of detainee operations
    training into other appropriate training events.
        General Pace. The McCain amendment limited all interrogations to
    the Army FM on Intelligence Interrogation, currently embodied in FM 34-
    52, and prohibited the cruel, inhuman, and degrading treatment or
    punishment of detainees: FM 34-52 and DOD Directive 3115.09 provide
    sufficient guidance regarding detainee interrogations. The President's
    7 February 2002 memorandum directed that all detainees in the war on
    terrorism be treated humanely. Accordingly, and consistent with the
    President's memorandum, U.S. forces shall continue to ensure that no
    person in the custody or under the control of the DOD, regardless of
    nationality or physical location, are subjected to cruel, inhuman, or
    degrading treatment or punishment.

        15. Senator McCain. Secretary Rumsfeld and General Pace, how are
    the new rules being communicated down the chain of command?
        Secretary Rumsfeld. The new rules are being communicated through
    the Directives, Army Regulations, and FMs. The U.S. Army Intelligence
    Center and School is also training commanders and leaders, plus
    soldiers, airmen, sailors, and marines on the new rules through mobile
    training teams. U.S. Army Training and Doctrine Command has added
    additional blocks of instructions on the Geneva Convention and Law of
    War to all programs of instruction. All interrogators conducting
    interrogation operations receive Geneva Convention training every 90
    days.
        General Pace. As noted previously, the Deputy Secretary of Defense
    issued a memorandum on 30 December 2005 that addressed the requirements
    of the McCain amendment. This memorandum was sent directly to all
    COCOMs for immediate implementation.

                    cruel, inhumane, and degrading treatment
        16. Senator McCain. Secretary Rumsfeld and General Pace, in the
    Judiciary Committee last week, Attorney General Alberto Gonzales was
    asked whether the newly-passed prohibition on cruel, inhumane, and
    degrading treatment unconstitutionally interferes with the President's
    power as Commander in Chief. The Attorney General responded that he
    could not answer that question, because ``we have not done that
    analysis.'' What is your current operative understanding of the law we
    passed?
        Secretary Rumsfeld. DOD personnel are required to comply with the
    law. The Deputy Secretary of Defense issued a Department-wide
    memorandum on December 30, 2005, regarding the requirements of the
    Detainee Treatment Act of 2005. The Deputy Secretary noted that the
    President's February 7, 2002, direction that all persons detained by
    the U.S. Armed Forces in the war on terrorism shall be treated humanely
    remains in effect. He further directed that, consistent with the
    President's guidance, DOD shall continue to ensure that no person in
    the custody or under the physical control of the DOD, regardless of
    nationality or physical location, shall be subject to cruel, inhuman,
    or degrading treatment or punishment, as provided in U.S. law.
        General Pace. No individual in the custody or under the physical
    control of the U.S. Armed Forces, regardless of nationality or physical
    location, shall be subject to cruel, inhuman, or degrading treatment or
    punishment. The term ``cruel, inhuman, and degrading'' treatment or
    punishment means the cruel, unusual, and inhuman treatment or
    punishment prohibited by the 5th, 8th, and 14th Amendments to the
    Constitution of the United States, as defined in the United States
    Reservations, Declarations, and Understandings to the United Nations
    Convention Against Torture and Other Forms of Cruel, Inhuman, or
    Degrading Treatment or Punishment done at New York, 10 December 1984.

        17. Senator McCain. Secretary Rumsfeld and General Pace, are DOD
    employees prohibited from engaging in cruel, inhumane, and degrading
    treatment in all cases, even if ordered otherwise--even if ordered
    otherwise by the President?
        Secretary Rumsfeld. As I previously stated, DOD personnel are
    required to comply with the law. The President's February 7, 2002,
    direction regarding the humane treatment of detainees under DOD control
    is clear. The Deputy Secretary of Defense issued further guidance on
    December 30, 2005, that DOD personnel will comply with the requirements
    of the Detainee Treatment Act of 2005.
        General Pace. The President's 7 February 2002 memorandum directed
    that all detainees in the war on terrorism be treated humanely.
    Accordingly, and consistent with the President's memorandum, U.S.
    forces shall continue to ensure that no person in the custody or under
    the control of the DOD, regardless of nationality or physical location,
    are subjected to cruel, inhuman, or degrading treatment or punishment.
    Comments regarding hypothetical questions concerning the authority of
    the President to issue orders are more appropriately addressed to the
    White House.

                         president's signing statement
        18. Senator McCain. Secretary Rumsfeld and General Pace, when the
    President signed the legislation, he issued a statement indicating that
    he would construe it ``in a manner consistent with the constitutional
    authority of the President to supervise the unitary executive branch
    and as Commander in Chief and consistent with the constitutional
    limitations on the judicial power. . .'' What does this mean for
    Department interrogation and detention operations?
        Secretary Rumsfeld. The Deputy Secretary of Defense issued
    Department-wide guidance on December 30, 2005, concerning the
    requirements of the Detainee Treatment Act of 2005. The Deputy
    Secretary directed that pursuant to the act, ``effective immediately,
    and until further notice, no person in the custody or under the
    effective control of the DOD or under detention in a DOD facility shall
    be subject to any treatment or interrogation approach or technique that
    is not authorized by and listed in United States Army FM 34-52,
    ``Intelligence Interrogation,'' September 28, 1992.
        General Pace. While I do not believe it is appropriate for me to
    speculate as to the President's intended meaning of his signing
    statement, I will emphatically state that interrogation and detention
    operations conducted by U.S. Armed Forces will strictly adhere to the
    requirements of the Detainee Treatment Act of 2005 and other laws that
    prohibit cruel, inhuman, and degrading treatment or punishment of
    persons under our custody or control.

        19. Senator McCain. Secretary Rumsfeld and General Pace, in your
    understanding, does this mean that the President could authorize an
    exemption to the legislative prohibitions?
        Secretary Rumsfeld. The DOD is complying and will continue to
    comply with the requirements of the law, including the requirements of
    the Detainee Treatment Act of 2005.
        General Pace. I do not believe it is appropriate for me to comment
    on the separation of powers issues that are raised by this question
    concerning whether the President could properly authorize an exemption
    to the Detainee Treatment Act of 2005. Again, I express my strongest
    commitment to you that the U.S. Armed Forces will adhere to the
    requirements of the Detainee Treatment Act of 2005 and other laws,
    regulations, and guidance that clearly prohibit cruel, inhuman, and
    degrading treatment or punishment of all persons under our custody and
    control.

        20. Senator McCain. Secretary Rumsfeld and General Pace, is there
    any circumstance in which a Department employee could legally engage in
    cruel, inhumane, or degrading treatment?
        Secretary Rumsfeld. I am not aware of such a circumstance.
        General Pace. It is my firm view that no member of the U.S. Armed
    Forces could lawfully engage in cruel, inhuman, or degrading treatment
    of persons under our custody or control.

                              miller taking fifth
        21. Senator McCain. General Pace, MAJ GEN Geoffrey Miller, who ran
    Guantanamo from October 2002 to March 2004 and helped set up operations
    at Abu Ghraib, has asserted his Fifth Amendment, Article 31 right
    against self-incrimination in two court martial cases involving the use
    of dogs during interrogations. I do not contest General Miller's right
    under the Constitution, but would you agree that he also has a duty as
    an officer, especially a general officer, to take responsibility for
    his actions and orders?
        General Pace. All officers, regardless of rank, must take
    responsibility for their actions. Similarly, all officers must be held
    accountable if their conduct does not meet expected standards. I expect
    all general officers to always give truthful answers, but that in no
    way obligates them to forego the rights afforded under the U.S.
    Constitution and the Uniform Code of Military Justice.

        22. Senator McCain. General Pace, do you believe, given everything
    we know now, only low-level personnel were responsible for detainee
    abuse at Abu Ghraib, Guantanamo Bay, in Afghanistan, and elsewhere?
        General Pace. The U.S. military continues to treat allegations of
    abuse seriously, and the DOD has taken appropriate action against those
    found to have committed abuse against detainees. More than 466 criminal
    investigations have been conducted and more than 100 individuals have
    been held accountable for alleged detainee abuses.

                                  end strength
        23. Senator McCain. General Pace and General Schoomaker, please
    rate the current levels of retention and recruitment for the total
    force. Have the Active and Reserve components met their goals for the
    year, and what is the outlook with regard to achieving future levels
    specified in the QDR?
        General Pace. Recruitment and retention for the total force is
    presently on track. Across the board, our professional recruiters and
    retention experts are doing an outstanding job in assessing and
    retaining the forces we need to continue to be successful in the war on
    terrorism. Due to their great efforts and the support of Congress, we
    anticipate being able to meet the end strength levels specified in the
    QDR.
        I am pleased to report that through February 2006 all Active
    Services have met or exceeded their recruitment goals. In fact, the
    Army has met or exceeded its goal for 9 consecutive months.
        Our Reserve component recruiters, while extremely effective, have
    not shared the same level of success across the board. Four of six of
    these components are meeting or exceeding their goals, but we continue
    to experience some challenges with the Navy Reserve and Air National
    Guard. Although their recruiting production is lower than desired, this
    is mitigated by the fact that both of these components are at or near
    their prescribed end strengths for fiscal year 2006. With the continued
    support of Congress, we are aggressively working to meet recruiting
    goals in these areas. The Navy has recently transferred oversight of
    its Reserve component recruiting efforts to its Active component, and
    the Air National Guard is adding 100 new recruiters and is considering
    instituting a referral program similar to that of the Army National
    Guard (ARNG).
        Retention is an area where the Services (both Active and Reserve)
    are experiencing success. All Active Services have exceeded their
    retention goals through the month of January. Additionally, through the
    first quarter, fiscal year 2006, the overall retention rates in the
    Reserve components are ahead of those of the same period in fiscal year
    2005. We anticipate mission accomplishment in retention in both the
    Active and Reserve Forces in fiscal year 2006. This is mostly because
    the troops are proud of what they are doing. They feel good about the
    millions of free Afghan and Iraqi people and the opportunity to serve
    our country. They know what they are doing is important--they see it
    firsthand. This dedication and job satisfaction is exemplified in the
    3rd Infantry Division, which recently returned from OIF, achieved 136
    percent of their retention goals while in theater.
        General Schoomaker. The current recruiting and retention
    environment remains challenging. The Army is working to achieve all
    three components' fiscal year 2006 recruiting and retention goals. All
    three components have achieved their recruiting missions to date and
    are confident they will also meet their retention missions. Worldwide
    deployments and an improving economy directly affect recruiting and
    potentially affect retention. All components closely monitor leading
    indicators, including historic recruiting and reenlistment rates,
    retirement trends, first-term attrition, and DOD and Army attitudinal
    surveys across both areas to ensure we achieve total success. Moreover,
    all components are employing positive levers including increased
    enlistment bonuses, force stabilization policy initiatives, updates to
    the reenlistment bonus program, targeted specialty pays, and policy
    updates to positively influence the Army's recruiting and retention
    programs. These efforts will continue to be a challenge and the Army
    continues to reshape its resourcing priorities to meet that challenge.
        Given current success in meeting retention and recruiting goals and
    the availability of policies and tools to enhance continued success, we
    believe that the Army is well-positioned to achieve its target fiscal
    year 2011 QDR strengths.

        24. Senator McCain. General Pace and General Schoomaker, what are
    your greatest recruitment and retention problems and how do you intend
    to resolve them?
        General Pace. Superbly trained, well-equipped, and highly dedicated
    Americans have always been our Nation's ultimate advantage. Our ability
    to assess and retain these outstanding servicemembers is vital to our
    success in the long war. I am pleased to report that we are currently
    enjoying success in both recruiting and retention in the Active and
    Reserve components. However, we also understand that we cannot be
    satisfied today at the expense of tomorrow, so we will continue to
    closely monitor the progress of all recruiting and retention programs
    and are poised to meet challenges as they occur.
        Our primary concern is to ensure the Active Army is able to
    maintain the momentum that it has established in achieving recruiting
    objectives for the past 8 months. We are cautiously optimistic and are
    preparing now for the summer months because continued success will take
    a lot of hard work and effort, especially in today's challenging
    market. We are grateful for the tools that Congress has provided to us
    (such as increased recruiting bonuses and raising the maximum
    enlistment age) because they are proving to be valuable to our
    recruiting and retention efforts. However, these tools can carry us
    only so far. To compete with an improving economy, in an era when the
    main influencers of our youth (parents, teachers, etc.) are not
    inclined to recommend military service, it will take the entire
    Department and our Nation's senior leaders pulling together
    collectively to ensure the American people understand and appreciate
    the critical importance of service to our Nation.
        General Schoomaker. The current recruiting environment remains a
    challenge. The global war on terror and a strengthening economy
    continue to impact military recruiting. Increased private-sector
    competition, an upward trend in those pursuing higher education, and
    negative trends in centers of influence recommending military service
    are contributing to an erosion of recruiter productivity and could
    create significant challenges in fiscal year 2006 and beyond. With
    congressional assistance, the Army is aggressively adjusting its
    resources to meet these challenges. The key issue remains to attract
    high quality men and women to serve as soldiers and meet future manning
    requirements. We are working to overcome the market effects of
    increased alternatives to youth and a decreasing propensity to enlist,
    by increasing incentives, developing new programs, and reducing
    attrition. We must remember that this is not an Army issue alone, but a
    national issue.
        In fiscal year 2006, the Active Army retention mission is 64,200.
    We are ahead of last year's pace. We remain confident that we will
    achieve all assigned retention goals. Thus far, the Active Army has
    achieved 108 percent of the year-to-date mission, while the Army
    Reserve has achieved 96 percent of the year-to-date mission, and the
    ARNG has achieved 103 percent of their year-to-date mission.

        25. Senator McCain. General Pace and General Schoomaker, the QDR
    reduces the authorized level of Army Guard and Reserve from 350,000 to
    333,000--a 17,000 man reduction. Why would we reduce this authorization
    while we are engaged in operations in Afghanistan and Iraq, both of
    which require significant levels of Army and Reserve personnel?
        General Pace. The President's budget submission reduces the force
    size to 333,000 because the Army believes that it can retain and
    recruit to this amount. If the Army Guard/Reserve recruit/retains to
    above 333,000, the Service will have the authorization for the increase
    and will fund the increase in the Army budget. Through its
    modularization efforts, the Army is not reducing the size of the ARNG.
    In fact, the total number of brigades will remain at 106. The plan is
    that the Army has to be able to provide 28 fully-manned, fully-trained,
    fully-equipped brigade combat teams (BTCs) in the National Guard, which
    will be a huge improvement over where we were several years ago when we
    had 15 of what were called ``enhanced brigades.''
        General Schoomaker. Army is not reducing the size of the ARNG; the
    total number of brigades remains at 106. The Army will fund the ARNG up
    to its authorized end strength of 350,000. Prior to the 2005 QDR, the
    Army had developed a plan for 34 combat brigades and 72 support
    brigades in the ARNG and 43 combat brigades and 75 support brigades in
    the Active component. This provided up to 20 combat brigades for steady
    state operations. The QDR showed a lower requirement for combat
    brigades but a greater requirement for brigades able to respond more
    immediately to meet homeland defense/civil support. Therefore, we
    elected to increase the ARNG domestic capability by rebalancing six
    BCTs and one Combat Aviation Brigade to seven support brigades--four
    multi-functional brigades and three engineer brigades. These seven
    brigades provide engineer, communications, transportation, logistical,
    chemical, and medical capabilities critical to homeland defense and
    civil support.

        26. Senator McCain. General Pace and General Schoomaker, should we
    not be seeking to increase these authorizations, as well as taking
    other steps that would increase Army end strength?
        General Pace. Thanks to you and the other members of this committee
    and the support of Congress, the authorized temporary increases already
    approved for the Army and Marine Corps will ensure we have adequate end
    strength to meet the needs of the Nation.
        General Schoomaker. The Army is building the Active component force
    structure under a 30,000 temporary end strength increase above the
    482,400 program. Under the Secretary of the Army's End Strength Plan,
    the operational force will undergo transformation while at the same
    time deploying to meeting force commitments. Additionally, the
    institutional force will undergo restructuring between fiscal year 2007
    and fiscal year 2011. Therefore, the temporary end strength increase is
    required to ensure effective capabilities are provided as the Army
    transforms both its operational and institutional force structure.

        27. Senator McCain. General Schoomaker, please explain why the Army
    has utilized stop-loss on more than 50,000 soldiers while
    simultaneously planning to draw down the Reserve component by 17,000
    soldiers.
        General Schoomaker. Stop-loss policy is not about numbers but is a
    temporary measure that does not permanently affect the Army end
    strength. It has not been a planning element in determining potential
    cuts in authorized troop strength for the Active Army or the Reserve
    components. We have consistently stated since the onset of the global
    war on terror that the Army focus, indeed the charge, of Army
    deployments is to deliver to the COCOM trained and ready units, not
    individuals. Random and continuing unit losses caused by individually
    oriented separation, retirement, and replacement policies have the
    potential to adversely impact training, cohesion, stability, and
    readiness in the deploying units. Stop-loss is a means that effectively
    sustains a force, which has trained together, to remain a cohesive
    element throughout the unit's deployment. Our commitment to pursue the
    global war on terror and provide our warfighters with the cohesive,
    trained, and ready forces necessary to decisively defeat the enemy,
    requires us to continue the Army's stop-loss program to attain the
    above goals. Consequently, any proposal to reduce Reserve component end
    strength or reduce the Reserve component participation in Operations
    Iraqi and Enduring Freedom will not in and of itself determine the
    level of stop-loss we will need to honor our contract with the American
    people to fight and win our Nation's wars.
        The size of future troop rotations will in large measure determine
    the levels of stop-loss needed. Army leadership fully understands that
    by executing stop-loss, the policy has, to some degree, disrupted the
    lives of soldiers and their families. To minimize the impact of stop-
    loss on our soldiers, the program only affects soldiers assigned at the
    unit's mobilization/deployment date minus 90 days, continues through
    the demobilization/redeployment date, plus a maximum of 90 days.
    Consequently, since reaching large scale application, the average
    monthly number of soldiers affected by stop-loss is approximately
    13,000. It is also noted that many of the soldiers who were initially
    retained beyond their stop-loss obligation have voluntarily elected to
    remain in the military and reenlisted or extended. While it is not
    palatable to some, our ability to retain these fine soldiers and their
    expertise is contributing immeasurably to our continued success in the
    war on terror.

                                      iraq
        28. Senator McCain. Secretary Rumsfeld, General Pace, and General
    Schoomaker, to build a truly national Iraqi army, I believe it is
    necessary to build units of mixed ethnicities and religions (Shia,
    Sunni, Kurds)--not simply an army comprising homogenous units. How far
    have we gone toward the goal of building mixed units so far, and what
    steps are we taking to accelerate it?
        Secretary Rumsfeld, General Pace, and General Schoomaker. We agree
    it is important to build Iraqi units that are representative of the
    diverse ethnic and religious fabric of Iraq. In order to achieve this,
    the Ministry of Defense (MOD) is making a focused effort to recruit
    personnel from across the spectrum of Iraqi society, in accordance with
    the new Iraqi constitution that guarantees equal opportunities for all
    Iraqis. Mobile recruiting missions focused in areas such as the
    Euphrates River Valley have mitigated a lack of recruiting centers in
    largely Sunni areas. It is important to note that although these
    efforts are ensuring that current recruiting efforts are aimed at
    creating a representative force, this does not mean that all units are
    fully representative of the national ethnic composition. Indeed, some
    cross-leveling is being done, but it is not practical to achieve
    uniform balance across all 10 divisions at this time. Iraq's limited
    banking system requires soldiers to take their money home each month.
    The longer distances soldiers must travel increases unit attrition. We
    are mindful of this as we cross-level these soldiers. MOD policy
    strictly prohibits unit commanders from hiring their own personnel and
    clearly requires enlisted and commissioned personnel to attend national
    training schools to receive certification of their rank and duty
    specialty.

        29. Senator McCain. Secretary Rumsfeld, General Pace, and General
    Schoomaker, why does the Department persist in rotating senior officers
    in and out of Iraq, even after they have gained hard-won experience and
    expertise during their time there?
        Secretary Rumsfeld and General Pace. Senior leader continuity and
    combat proven experience are two significant factors that are
    considered in virtually every decision made with regard to the rotation
    of personnel. In some cases, these factors are sometimes mitigated with
    the inherent advantage of having commanders deploy with the units they
    have trained and led; thereby knowing their capabilities to a far
    greater degree. We keep our senior leaders in Iraq for a relatively
    long period of time. Recently, General Casey's tour in Iraq was
    extended as well as General Abizaid's as Commander, U.S. Central
    Command (CENTCOM). LTG Chiraelli has returned to Iraq as a corps
    commander, and LtGen Odierno will also be returning after serving a
    tour as my Assistant Chairman of the Joint Chiefs of Staff.
        General Schoomaker. Leaders train with their units for combat and
    deploy with those same units. The 12 months (sometimes more) spent in
    combat are preceded by a proportionate amount of time preparing the
    unit and followed by a proportionate amount of time refitting the unit
    for its next mission/deployment. This 24-36 month process must be
    viewed in relation to the 12-month combat tour. The positive
    effectiveness, cohesion, and morale of our units are the direct result
    of this process. Our most senior leaders (three- and four-stars) are
    routinely spending more than 12 months and are often capitalizing on
    their experiences from a previous tour. We routinely consult with
    General Abizaid to ensure he has the senior leaders he requires to
    achieve mission success.

        30. Senator McCain. Secretary Rumsfeld, General Pace, and General
    Schoomaker, the Department continues to assert that there will likely
    be significant U.S. troop withdrawals in 2006. Given that there appears
    to be no drop in the violence plaguing that country, why would we
    continue to make that assertion?
        Secretary Rumsfeld, General Pace, and General Schoomaker. There are
    several reasons why we are optimistic about U.S. troop withdrawals in
    2006. The first is the substantial progress being made in the
    operational capability of Iraqi security forces (ISF). The President of
    the United States recently authorized an adjustment to the U.S. force
    posture in Iraq, decreasing the number of combat brigades from 17 to
    15, a reduction of about 7,000 troops. This decision was based on
    several indicators of progress but primarily on the growing capability
    of the ISF. The number of Iraqi units able to take the lead in
    counterinsurgency operations continues to increase. Forty-three Iraqi
    army battalions now control their own battle space. Second, reductions
    in coalition forces are based on the conditions unique to their
    specific area of operation. The majority of attacks occur in only 4 of
    the 18 provinces. Multi-National Force-Iraq assessments determine when
    areas are ready for security transition. Third, reducing our visible
    military presence may diminish the perception of occupation that many
    Iraqis hold. This may remove some of the motivation behind the
    continuing violence and popular support for the insurgency.

        31. Senator McCain. Secretary Rumsfeld, General Pace, and General
    Schoomaker, why would we not combine the growing size of the Iraqi
    National Army with coalition forces to combat the violence, working to
    make it subside, and only then look at possibly reducing our presence?
        Secretary Rumsfeld. Iraqis are taking control of security for their
    country. They have asked us to assist them in securing Iraq and
    training and equipping their forces.
        In some places, the Iraqi National Army is already capable of
    taking responsibility for its own battlespace. Other locations require
    the combined efforts of coalition and ISF. As Iraqi units assume
    greater responsibilities, our commanders assess whether our forces are
    needed for other missions or whether they may return home.
        General Pace and General Schoomaker. We are conducting combined
    Iraqi Army and Coalition operations to combat the enemy. Since October
    2005, over 50 percent of all combat operations conducted in Iraq have
    been combined. Enemy activity is mainly occurring in 4 of Iraq's 18
    provinces. We conduct the majority of our operations to neutralize the
    insurgency in these areas. However, an increase in total number of
    combat forces will not directly translate into a reduction of violence
    or cause the insurgency to subside. In the areas where the levels of
    violence are negligible, we are reducing our presence without having an
    adverse effect on security and stability. These small reductions of our
    military presence may reduce the feelings of occupation that some
    Iraqis have, and thus remove the motivation for some of the Iraqis to
    continue the violence in their areas.

        32. Senator McCain. Secretary Rumsfeld, General Pace, and General
    Schoomaker, there have been reports that large numbers of Iraqi troops
    are deserting and that there is corruption among the troops. In one
    report, only half of an entire unit was actually present in an
    operation. In some places, Iraqi troops have gotten caught with bomb-
    making materials or allowed insurgents to attack U.S. convoys by
    looking the other way. These activities are fueling distrust for Iraqi
    soldiers. What is being done to fix these problems and how do we ensure
    that it will not happen in the future?
        Secretary Rumsfeld. I have not heard reports of large-scale
    desertion among the ISF. We do observe low levels of absenteeism.
    General Pace and General Schoomaker are in a better position to discuss
    how we track the rate of absenteeism and the response to ISF absentees.
        In general, our confidence in the ISF is increasing as the ISF
    become more capable of taking responsibility for Iraq's security.
    Nevertheless, fighting insurgent penetration and corruption will be a
    long-term effort. Coalition forces already partner with ISF units to
    provide expertise and leadership training. As these efforts continue at
    the unit level, it is also important that Iraq develop institutions
    capable of vetting and managing their security forces. We will continue
    to assist the Iraqi government in building effective Interior and
    Defense ministries to maintain loyal, professional forces that do not
    tolerate corruption.
        General Pace and General Schoomaker. I am not being told that large
    numbers of Iraqi army troops are in fact deserting. Absenteeism in the
    Iraqi military is dependent upon where a unit falls in its training and
    employment life cycle. During individual and collective training, some
    recruits determine that the life of a soldier is not for them and
    leave, while others fail to meet training course standards and are
    dismissed. Approximately 15 percent attrition is the norm for initial
    training. When a unit is fully trained and employed in combat
    operations, some soldiers find that they do not like the particular
    location, or they find that the danger of the counterinsurgency is too
    much for them. In either event, Iraqi army policy is that soldiers who
    leave are dropped from the rolls within a week and are prohibited from
    ever rejoining the ISF. What remains is a unit that is confident in its
    leaders and in its ability to fight. Although deployments to combat
    sometimes cause absentee spikes of 5-8 percent, soldiers in units in
    this final stage of development are unlikely to leave the service;
    absent without leave (AWOL) rates are typically about 1-4 percent for
    most divisions. As more and more ISF are generated, absenteeism has
    become less of a problem. Unit corruption is mitigated through the
    daily interaction provided by Coalition Military Transition Teams
    (MiTTs) embedded with every Iraqi battalion, brigade, and division, as
    well as partnership with coalition units. The MiTTs and partnership
    programs provide mentorship and expertise critical for development of
    Iraqi leadership that adheres to the rule of law and does not tolerate
    corruption in its ranks.

        33. Senator McCain. Secretary Rumsfeld, General Pace, and General
    Schoomaker, how is this going to affect transfer of command to the
    Iraqis and how do we guarantee that once the transfer occurs, they will
    be able to prevent corruption themselves?
        Secretary Rumsfeld. In addition to training and equipping the ISF,
    we are working with the Iraqi government to build Defense and Interior
    ministries capable of taking responsibility for the substantial
    security forces now being created. Part of that responsibility involves
    investigating reports of corruption and taking appropriate steps to
    correct any problems that may be found. We and our coalition partners
    cannot guarantee an end to corruption, but we will continue to work
    with the Iraqis to develop the institutions capable of fighting
    corruption.
        General Pace and General Schoomaker. Unit absenteeism and
    corruption are not affecting the transfer of battle space
    responsibility to the Iraqi army. Forty-three Iraqi army battalions now
    control their own battle space. Generating operational units that can
    assume battle space is only part of the challenge facing the Iraqi MOD;
    it must also develop the ability to operate and sustain Iraqi forces
    independently. Efforts to build such capabilities within the MOD have
    been hampered by assassination or intimidation of employees,
    corruption, and the relative inexperience of key civilian leaders. In
    the face of such challenges, the MOD needs to strengthen its
    capabilities across the board--in areas such as payroll, material
    readiness, contracting, and construction. Multi-National Security
    Transition Command-Iraq is now expanding upon previous efforts to help
    the MOD implement the processes that will allow the ministry to sustain
    and support its fielded forces.

        34. Senator McCain. General Schoomaker, I understand there are
    small soldier-teams supervising and training Iraqi forces. What
    feedback do you have from them regarding the capabilities of Iraqi
    troops?
        General Schoomaker. Yes, there are military and police transition
    teams which focus on training, coaching, and mentoring the Iraqi MOD
    forces and the Iraqi MOI police forces. Feedback from the teams has
    been very positive. While challenges exist based on the rapid growth
    and deployment of these forces, the Iraqis have performed remarkably
    well in combat operations. There are numerous reports of successes in
    combat and counterinsurgency operations to capture key targets and
    terrorists including members of the leadership of Abu Al Zarqawi's al
    Qaeda in Iraq organization. Well planned and executed Iraqi-led raids
    have significantly contributed to the counterinsurgency fight. The
    Iraqi National Police have also undertaken numerous successful hostage
    rescue operations.
        The Transition Team Headquarters elements report work remains to be
    done fostering improvements in the Iraqi MOD and MOI forces. The main
    effort continues on sustaining operations on a long-term basis. The MOI
    forces must also transition from military and counterinsurgency to
    civil law enforcement operations. Efforts must continue with the focus
    on leadership training of junior officers and the generation and
    training of noncommissioned officers. Training must continue with Iraqi
    forces emphasizing military and civil operations conducted in
    accordance with the appropriate rules of law.

        35. Senator McCain. General Schoomaker, how would you rate the
    success of these teams?
        General Schoomaker. The military and police transition teams have
    been the major factor improving the readiness and capabilities of ISF
    over the last 2 years. These improvements have transformed many Iraqi
    units from untrained forces into combat-capable units which are
    fighting and winning the counterinsurgency battle. The majority of
    units are able to perform operations alongside coalition forces. There
    are also a growing number of units capable of planning and conducting
    combat and counterinsurgency operations with limited or no coalition
    support. Efforts continue with the goal of moving the Iraqi forces
    toward more independent operations.
        These transition teams must continue to expand on their successes
    to develop cohesive forces which can sustain themselves independently
    in combat, counterinsurgency, and civil policing operations.

                      cost of operations in war on terror
        36. Senator McCain. Secretary Rumsfeld, since September 11, the
    Congressional Research Service (CRS) estimates that the administration
    has allocated more than $360 billion for military operations and
    reconstruction in Iraq and Afghanistan, a number that includes
    ``emergency'' and ``bridge'' funding. DOD's currently spending about $7
    billion per month in Iraq and Afghanistan. DOD has not provided an
    overall explanation of the administration of these funds by specific
    operation or by mission. Last year, the GAO found that DOD had ``lost
    visibility'' on more than $7 billion appropriated for the war on
    terror. Furthermore, it is clear that regular budget and war-related
    spending are not properly segregated. It would be an understatement to
    say that Congress's visibility into war spending has been obscured. How
    will you ensure accurate and transparent accounting in the future?
        Secretary Rumsfeld. The DOD has a comprehensive and detailed cost
    reporting system that reports obligations by operation, by component,
    by month, and by fiscal year. The system is managed by the Defense
    Finance and Accounting Service (DFAS) and generates reports monthly.
        The reporting system has captured the DOD costs of the war on
    terrorism going back to September 11, 2001, separately showing what was
    spent in Operation Iraqi Freedom, Operation Enduring Freedom (mostly
    Afghanistan), and Operation Noble Eagle to defend the United States.
    These costs are collected from DOD locations worldwide. Costs are
    structured in a commodity and functional categorization breakdown
    enabling insight into the activities being supported. Examples of the
    cost categories include: Reserve component mobilization, special pays,
    aircraft and vehicle procurement, etc.
        The cost information is reported routinely to Congress, the GAO,
    the CBO, and the OMB.
        There are ongoing efforts inside the Department to refine the
    systems and categories that we are using to track the cost of war. The
    GAO staff is aware that the Services are implementing improvements in
    the reporting of costs. We are committed to financial stewardship and
    are working tirelessly to perfect that task.

                                  afghanistan
        37. Senator McCain. General Pace and General Schoomaker, there has
    been a spike in violence in Afghanistan in recent months, with
    insurgents there applying lessons learned from Iraq. What new steps are
    we taking to combat this threat?
        General Pace and General Schoomaker. Yes, there has been an
    increase in the use of IEDs and suicide bombers in Afghanistan. This
    trend may be attributable to a variety of reasons. First, coalition
    forces have had success in killing insurgents that fight with other
    weapons and methods. Second, IED and suicide attacks appear to
    demonstrate relevancy and momentum to the insurgency support network.
    For a low financial and manpower investment, anti-coalition forces use
    IEDs and suicide attacks to achieve highly visible, widely reported
    effects. Third, a very mild Afghan winter may be allowing greater
    activity than in past years.
        Steps we are taking to combat these threats include:

            - Creating the Joint IED Defeat organization that is focusing
            our counter-IED efforts in Afghanistan and Iraq. [Deleted.]
            - Active patrolling of the border areas and interdiction of
            enablers coming from Pakistan.
            - Engagement with Pakistan to increase pressure on the Pakistan
            side of the border. President Karzai's recent visit with
            President Musharraf included provision of information on
            Taliban operatives in Pakistan.
            - Leveraging a tri-partite structure (U.S.-Afghanistan-
            Pakistan) to facilitate IED working group exchanges.
            - Information operations to expose the atrocities against the
            Afghan people and encourage popular rejection of the
            insurgents. We are seeing an increase in IED reporting by
            locals and public pronouncements by mullahs and local leaders
            against the IED and suicide tactics.

        [Deleted.]

                             future combat systems
        38. Senator McCain. General Pace and General Schoomaker, the DOD's
    Selected Acquisition Report (SAR), dated November 15, 2005, revised the
    Future Combat Systems (FCS) program costs from $98.9 billion to $161.4
    billion. This increase is due to a ``program restructure'' and adds 4
    years to the development schedule. Many of the technologies required to
    field FCS are not yet mature and I fully expect requirements creep to
    add more dollar signs to the program. What is the Army doing to rein in
    the runaway cost of this program?
        General Pace. You are correct that program restructuring (in 2004)
    resulted in the November 2005 adjustment to the Acquisition Program
    Baseline. That change actually accelerated the delivery of selected FCS
    capabilities to our forces in ``spin-outs'' planned every 2 years from
    2010-2014. The restructure also restored 4 deferred systems to the
    planned 18 core systems, delaying the first full FCS brigade by the 4
    years as you indicated in your question. The growth in FCS program
    costs is directly attributable to the programmatic changes in the 2004
    restructure and is not classified as a cost overrun as reviewed by the
    Department.
        The JROC has reviewed the FCS program's ORD every year since May
    2003. The result of all this activity validates that FCS Operational
    Requirements are stable, while refining the level of detail to assist
    the program as it translates requirements into engineering-level
    specifications. Of note, the program is presently undergoing a JROC
    review and the FCS program has added the congressionally-mandated key
    performance parameters for force protection and survivability.
        The FCS program restructure took into consideration the maturity of
    critical technology development. Those technologies deemed mature were
    grouped into FCS Spin-Out 1, to be delivered in 2010. In total, the FCS
    program is tracking 49 critical technologies and is on schedule to
    mature all technologies by the System-of-Systems Preliminary Design
    Review scheduled for August 2008. The current FCS program has adequate
    risk management measures in place, and the technology development
    approach is consistent with DOD acquisition policy.
        General Schoomaker. The cost growth was directly attributable to
    the programmatic nature of the 2004 restructure decision. Most of the
    growth (except the ``Revised/Updated Estimates'') was externally driven
    and not within the PM's control. It was not classified as a cost
    overrun as reviewed by the OSD.
        Acquisition programs are required to estimate their costs in base-
    year or constant dollars. Many individuals not associated with the
    program have misunderstood the comparative cost growth and the cost
    estimate conversion factors between the December 2004 SAR and the
    recently submitted November 2005 SAR.
        By law, the FCS program submits its SAR annually (February). The
    recently submitted SAR was a quarterly exception SAR to comply with
    reporting requirements of 10 U.S.C., Sec. 2432. The reporting
    requirement was directed by the Office of the Secretary of Defense for
    Acquisition and Technology (OSD/AT&L) with concurrence from the Army on
    October 21, 2005. The December 2004 SAR discussed in text, the
    restructured FCS program, but the actual cost and schedule parameters
    were not changed because an approved Acquisition Program Baseline (APB)
    reflecting the restructured program had not yet been approved by the
    Milestone Decision Authority (reflected 2003 Milestone B Decision
    baseline data). This guidance from OSD was also noted in the December
    2004 SAR. The current APB on which the 2005 SAR is based was approved
    by the Defense Acquisition Executive on November 2, 2005.
        Cost growth occurs when a funded, definitized scope of work
    increases. Increases to costs can also occur when scope is added to
    provide more capability. The FCS program increases predominantly fell
    into the latter category. The program restructuring restored four
    deferred systems to the current 18 core systems and accelerated the
    delivery of selected FCS capabilities to the Current Force (spin outs),
    while delaying the first full FCS brigade by 4 years. The adding of
    capability resulted in RDTE growth of 48 percent (based on fiscal year
    2003 constant dollars (C$)) broken down as follows:

             Previously Deferred Systems - 18 percent,
             Additional Technology/Reliability Maturation &
            Experimentation - 6 percent,
             Spin Out Requirements - 4 percent,
             Program Extension - 17 percent, and
             Revised/Updated Estimates - 3 percent.

        Similarly, the procurement estimates also increased by 55 percent
    (based on fiscal year 2003 C$) as a result of the program restructuring
    as follows:

             Previously Deferred Systems - 18 percent,
             Platform Qty Adjustments - 17 percent,
             Platforms Content (Capability Enhancement, e.g. APS on
            all) - 11 percent,
             Updated Estimates - 7 percent, and
             Extended Production (1.5 vs. 2 BCTs per year) - 2
            percent.

        39. Senator McCain. General Pace and General Schoomaker, has the
    FCS program made changes to reflect lessons learned in Iraq and
    Afghanistan?
        General Pace. Yes, the FCS program has evolved to reflect lessons
    learned in Iraq and Afghanistan. In fact, the FCS program restructure
    in November 2005 was, in part, brought about because of the desire to
    get better technology into the hands of our forces engaged in the
    current fight.
        The first FCS Spin-Out will field four different systems to the
    current force formations that, based on our experiences in Iraq and
    Afghanistan, will greatly enhance the combat effectiveness and force
    protection of our military. Those fielded systems include two different
    versions of unattended ground sensors and a non-line-of-sight launch
    system. In addition, FCS will deliver an intelligent munitions system
    that is compliant with the 2004 national land mine policy.
        General Schoomaker. Lessons learned in Iraq and Afghanistan are
    incorporated in the development of the FCS BCT. The most important
    lesson learned from Afghanistan and Iraq was the need to get emerging
    technology into the hands of our soldiers sooner and the Army is
    accomplishing this through the FCS Spin-Out Program. The program will
    spin-out unmanned systems, precision munitions, emerging network
    capabilities, and other technologies to support the force.
    Additionally, lessons from our Heavy and Stryker BCTs in Afghanistan
    and Iraq validated the requirement for a rapidly deployable,
    expeditionary force with a full spectrum capability, which the FCS BCT
    provides. These operations reinforce the criticality of: unmanned
    systems, like the PackBot and Unmanned Aerial Vehicles, to increase
    soldier survivability; improved countermine capabilities to counter
    IEDs; Active Protection Systems (APS) to counter a wide variety of
    threats including rocket propelled grenades; reconnaissance at all
    levels of command within the BCT; and a fully integrated network to
    provide increased battlefield awareness down to the platoon level.

        40. Senator McCain. General Schoomaker, the Department states that
    it is ``refocusing America's forces and capabilities for the future,''
    and that it must transition ``from major conventional combat campaigns
    to multiple irregular warfare operations.'' How does FCS contribute to
    conducting irregular warfare operations?
        General Schoomaker. Irregular warfare is the broad spectrum of
    operations and activities conducted by military or paramilitary forces.
    It is normally of long duration, against adversaries who deliberately
    seek to avoid accepted rules in the conduct of war. It includes, but is
    not limited to, unconventional warfare, guerrilla warfare, counter-
    guerrilla warfare, subversion, sabotage, intelligence activities, and
    unconventional assisted recovery and normally requires the support of
    the population. FCS BCTs are optimally configured for irregular warfare
    where information is the premium asset. FCS BCTs provide the capability
    to conduct distributed operations to keep the enemy dispersed and
    unable to connect with population, monitor vast territory with aerial
    and ground sensors to deny irregular forces freedom of movement, employ
    distributed precision to minimize damage and limit support, employ
    unmanned air and ground sensors to increase soldier survivability and
    protect the force from ambushes and raids, and establish a smaller
    footprint that is less invasive to population and reduces the number of
    soft logistical targets.

                              army force structure
        41. Senator McCain. Secretary Rumsfeld, General Pace, and General
    Schoomaker, the 2006 QDR directed that the Army continue to rebalance
    capabilities by creating modular brigades in all three Army components,
    including 42 BCTs in the Active component and 28 BCTs in the ARNG. This
    action represents a reduction of one Active component combat brigade
    and six ARNG brigades from last year's plan. At that time, the Army
    asserted that 43 Active component combat brigades and the 34 ARNG
    combat brigades would ensure the Army could maintain a 17 brigade force
    deployed with Active component brigades having 2 years between
    rotations and the ARNG combat brigades having 5 years between
    rotations. Has the QDR taken into consideration the ARNG's State
    mission, especially homeland defense and disaster relief?
        Secretary Rumsfeld and General Pace. The QDR has taken into account
    the State missions of the National Guard, to include homeland defense
    and disaster relief. We are initially funding three key programs that
    enhance the National Guard's capabilities in these areas. First, the
    National Guard is fielding 55 WMD civil support teams, one in each
    State, territory, and the District of Columbia. These teams have 22
    members each and will provide critical communications links, assessment
    of WMD attack damage, and consequence management support to local,
    State, and Federal agencies. Second, the National Guard is building 12
    enhanced response force packages to respond to chemical, biological,
    radiological, nuclear, and high-yield explosive attacks. These units
    will be trained to find and evacuate victims in WMD-contaminated
    environments, decontaminate casualties and patients, and provide
    medical treatment. Finally, the National Guard is creating a Joint
    Force Headquarters in each State to improve command and control
    capabilities for emergencies and major public events.
        Regarding combat brigades, the Army's programmed modular force is
    sufficient for the missions we will face. With a base force of 42
    Active and 28 National Guard combat brigades, the Army will be able to
    maintain 18-19 BCTs available for mission requirements on a 6-in-3-year
    basis in the Active Army and on a 1-in-6-year basis in the National
    Guard. Additionally, these combat brigades will be bolstered by a more
    robust force of 75 Active, 78 National Guard, and 58 Army Reserve
    support brigades.
        General Schoomaker. Options to rebalance forces and capabilities in
    the QDR were assessed in light of State and territorial employment of
    the National Guard. As a result of the Review's recommendations, ARNG
    forces will be more ready and relevant for expeditionary operations
    overseas, and homeland defense and disaster relief at home.
    Specifically, ARNG forces will have more capabilities that are of
    immediate value to Governors for operations at home, such as medical,
    transportation, and engineering.

                                 dod priorities
        42. Senator McCain. Secretary Rumsfeld, General Pace, and General
    Schoomaker, the President's budget request for fiscal year 2007 expands
    funding for new weapons systems like the F/A-22, which runs at a
    quarter billion dollars per copy, the DDX destroyer that, when the
    costs of R&D are factored in will cost $10 billion per ship, and the
    Army's FCS, recently been estimated to cost $160 billion. A recent
    briefing from Deputy Assistant Secretary of Defense Nadaner indicates
    that the DOD recognizes the challenges of nation building, which is now
    referred to as ``stability operations.'' Individual servicemembers face
    the greatest challenges when conducting stability missions and are
    asked to engage in both combat and peacekeeping operations, sometime
    simultaneously. I would like to know whether the DOD's focus on
    technological improvement is having a detrimental effect on the
    improvement of human skills. In an environment where soldiers are being
    asked to find and kill the enemy without killing civilians, speak
    foreign languages, understand alien cultures, and build nations, I
    hazard that more emphasis should be directed at producing capable
    soldiers rather than visionary weapons. I invite your thoughts on this
    issue, and would like to know what specific actions the Army and Marine
    Corps have/are taking to improve the individual soldier/marine's skill
    set and capabilities.
        Secretary Rumsfeld. The QDR establishes exactly the vector for the
    emphasis on producing capable soldiers that you describe.
    Operationalizing the Defense Strategy with the emphasis on defeating
    terrorist networks, preventing the acquisition or use of WMD, shaping
    the choices of countries at strategic crossroads, and defending the
    homeland defense requires continuation of many initiatives already
    underway that the Army and Marine Corps will address in greater detail.
    The QDR reorientation of the capabilities of ground forces and special
    operations forces highlights the need to understand foreign languages
    and cultures. Conducting counterinsurgency campaigns requires the
    continued rebalancing of all three components of the Army by creating
    modular brigades as well as the Marine Corps' increase in infantry and
    reconnaissance capacity. Technological improvement is not having a
    detrimental impact on the human skills and in fact the QDR specifically
    emphasizes the essential human skills you identify.
        General Pace. Our primary focus today is to prevail in the war on
    terrorism. We will succeed while continuing to look toward future
    operational requirements vital to the defense of the United States. Our
    efforts to transform for future challenges, strengthen joint
    warfighting capabilities, and improve servicemember quality of life
    will improve our capacity to defend our Nation both today and in the
    future.
        We are always cognizant of the fact that our soldiers, sailors,
    airmen, and marines are our most important, most valued assets. Success
    in today's irregular warfare arena requires us to gain and maintain new
    warfighting skills, including enhanced abilities to speak foreign
    languages, and understand and use knowledge of foreign cultures to our
    operational advantage. The focus of our efforts is to ensure that U.S.
    military personnel can navigate the human terrain as easily as they can
    navigate physical terrain.
        Soldiers and marines are provided with home-station, pre-
    deployment, and in-theater training targeted to region, culture,
    language, and operational scenarios. To be better prepared for combat,
    soldiers and marines receive advanced training in marksmanship and
    live-fire convoy procedures. Current training draws from recent combat
    experience and emphasizes warrior tasks and battle drills to enhance
    survivability. Training exercises feature nongovernmental
    organizations, contractors, media, coalition role players, and hundreds
    of civilians on the battlefield. The successes of soldiers and marines
    to date include continuous pre-deployment training focused on OIF and
    OEF, training exercises, training of foreign military training units,
    curriculum development in training, and professional military education
    schools from entry-level through advanced PME, providing language
    familiarization and counterinsurgency training for operating forces
    deploying to OIF/OEF, advisor teams, and military transition teams.
        Coordination to develop regionally focused programs continues among
    the U.S. Army TRADOC, U.S. Navy OPNAV, and CFFC, Marine Corps Combat
    Development Command, Air Force Air Combat Command, U.S. Naval Academy,
    and other military and civilian institutions.
        General Schoomaker. Army training has been redesigned to provide
    soldiers and units with increased capabilities and skills relevant to
    current and future operations. The Army focuses individual training on
    39 Warrior Tasks, grouped into Shoot, Move, Communicate, Fight, and
    Joint Urban Operations, and nine Battle Drills (39/9). To be combat
    ready, every soldier, regardless of specialty and experience, must be
    proficient in these skills. The Warrior Leader Course for junior
    Noncommissioned Officers (NCOs) has expanded its situational awareness
    training exercise to 96 hours, giving soldiers more field time to
    practice troop-leading procedures, work on mission planning, and
    execute the mission to standard, followed by a thorough after-action
    review. Basic and advanced NCO training in all of its progressive
    phases also builds on the 39/9 to teach leadership as it applies to
    current operating environments (COEs), including replicating forward
    operating bases, live-fire convoy exercises, and reaction to IEDs. The
    Sergeants Major Academy provides a common core built around the 39/9
    with emphasis on convoy operations, detainee operations, cultural
    awareness, and joint operations.
        The Officer Education System (OES) also focuses on the 39/9 and now
    includes a 6-week field leadership course attended by lieutenants from
    all branches followed by their functional courses. Another change is
    the resident intermediate level education for all Active-Duty majors
    that prepares them for a full spectrum operations in a joint,
    interagency, intergovernmental and multinational environment. Advanced
    civil schooling opportunities have expanded by 200 per year in
    disciplines such as cultural awareness, regional knowledge, foreign
    language, governance, diplomacy, national security, and social
    sciences. This program will develop critical intellectual skills while
    providing long-term retention of quality officers. Cultural awareness
    has been incorporated into every phase of the Army's professional
    military educational system. Formal language training has also been
    increased and modified to include languages relevant to current and
    potential operations. On-line language training (26 languages) is
    available to all Army personnel.
        Our premier training facilities, two dirt Combat Training Centers
    that replicate the realistic operational environments of Iraq and
    Afghanistan, are where we blend our 39/9 and OES/NCOES changes together
    with unit/collective training at the brigade/battalion/company level
    with real-time challenges.
        Simulators and other training devices such as the Engagement Skills
    Trainer, Laser Marksmanship Training System, and Visual Combat Convoy
    Trainer address soldier skills under situations and conditions relevant
    to today's combat. In addition, upgraded ranges help to improve soldier
    skills with advanced technologies (that help in evaluating and
    promoting soldier and unit weapons proficiency) and actual urban
    terrain that also reflects the COEs.
                                     ______

                  Questions Submitted by Senator Jeff Sessions
                                 global strike
        43. Senator Sessions. General Pace, on page 10 of your testimony,
    you note that ``prompt global conventional strike capabilities are
    required in the war on terror as well as in future contingencies.''
    What specific capabilities are needed?
        General Pace. Modified (conventional) ballistic missiles are
    required to rapidly strike targets whose known locations change
    relatively quickly over time and/or are located in distant and limited
    access areas. The capability to prosecute such targets anywhere in the
    world, at any time, with conventional ballistic missiles in less than 1
    hour will enhance our ability to most effectively fight the war on
    terrorism. The ability to strike these targets is also predicated on
    objective, accurate target aim point derivation provided by emerging,
    advanced ISR capabilities. Future contingencies will most likely
    involve disparate, small, highly lethal, and mobile targets. The need
    to rapidly deliver non-nuclear kinetic weapons to any location in the
    world where such a response is appropriate will become increasingly
    important.

        44. Senator Sessions. General Pace, under what scenarios do you
    imagine their usefulness?
        General Pace. Prompt global conventional strike capabilities will
    be useful in any scenario where a rapid, non-nuclear kinetic response
    is either the most appropriate and/or most tactically survivable option
    to strike a target. These targets may include, but are not limited to,
    WMD and their delivery systems, including mobile systems, hard and
    deeply buried facilities associated with WMD, strategic targets
    embedded in urban areas, and terrorist nodes or networks in any
    location. The only way to deliver a kinetic strike globally in less
    than an hour with current technology is to send it through space using
    a long-range ballistic missile. In the war on terrorism, and in
    potential future contingencies, critical targets may be fleeting or
    located in areas not readily accessible by current non-nuclear means.
    Conventional ballistic missiles will effectively address those
    targeting requirements.

        45. Senator Sessions. General Pace, explain why existing weapons,
    such as air- and sea-launched cruise missiles and long-range bombers
    cannot accomplish the global strike mission.
        General Pace. Existing weapons can and do accomplish a large
    portion of the current conventional global strike mission. However,
    long-range bombers and cruise missiles each have limitations.
        The response time for bombers may be too long to adequately
    prosecute a target whose known location is fleeting. Also, long-range
    bombers may require extensive support, including air refueling en route
    to distant targets and suppression of enemy air defenses to effectively
    penetrate the most sophisticated enemy airspace.
        Air- and sea-launched cruise missiles, while accurate and fairly
    prompt, may not have sufficient speed and range capabilities to
    successfully engage fleeting targets or targets in locations that
    preclude the use of long-range bombers.
        The prompt global conventional strike capabilities afforded by
    development and fielding of conventional ballistic missiles will
    effectively address targeting requirements not readily satisfied by
    long-range bombers and air- and sea-launched cruise missiles.
                                     ______

                 Questions Submitted by Senator Saxby Chambliss
                        status of the c/kc-130j contract
        46. Senator Chambliss. Secretary Rumsfeld, please provide the
    status of the conversion of the C/KC-130J multiyear contract from a FAR
    Part 12 to a FAR Part 15 contract.
        Secretary Rumsfeld. The Air Force and Lockheed Martin executed an
    undefinitized contractual action (UCA) on February 10, 2006. The UCA
    continues the multiyear contract, subject to the standard terms and
    conditions for a traditional contract under Part 15 of the Federal
    Acquisition Regulation (FAR), including the clauses requiring
    compliance with the Truth in Negotiations Act. The UCA sets forth the
    Government's commitment to evaluate a FAR deviation to permit
    recoupment of deferred independent research and development costs for
    the C-130J aircraft. That evaluation is ongoing. The UCA is based on
    ceiling prices that are equal to the commercial contract prices, but
    are subject to downward or upward negotiation following submission of
    detailed cost or pricing data that will be certified when negotiations
    are completed. The Air Force avoided contract termination costs through
    use of the UCA. Final negotiations are scheduled to be completed by
    October 2006.

        47. Senator Chambliss. Secretary Rumsfeld, it is my understanding
    that OSD/AT&L is the proper authority within DOD to review and certify
    that a contract meets the requirements of a FAR Part 15 contract.
    Please provide OSD/AT&L's assessment of what the Department has done
    and is doing to convert the C/KC-130J multiyear contract to a FAR 15
    compliant contract.
        Secretary Rumsfeld. The Under Secretary of Defense (Acquisition,
    Technology, and Logistics) (USD/AT&L)) is responsible for oversight of
    major defense acquisition programs. The Air Force is responsible for
    ensuring that the C-130J contract complies with statutory and policy
    direction, including the requirement, in section 135 of the National
    Defense Authorization Act for Fiscal Year 2006, that ``C-130J and KC-
    130J aircraft procured after fiscal year 2005 be procured through a
    contract under Part 15 of the FAR.'' In his oversight role, the USD/
    AT&L has been kept informed of progress in meeting the requirements of
    section 135. Our assessment is that the Air Force has taken appropriate
    action to convert the C-130J multiyear contract from a commercial
    contract to a contract that includes the terms and conditions normally
    found in a contract negotiated under Part 15 of the FAR. Most
    importantly, the contractor must comply with the Truth in Negotiations
    Act in submitting certified cost or pricing data to support the Air
    Force's negotiation of the price of the contract.

        48. Senator Chambliss. Secretary Rumsfeld, please provide the DOD
    IG's assessment of what the Department has done and is doing to convert
    the C/KC-130J multiyear contract to a FAR 15 compliant contract.
        Secretary Rumsfeld. The Air Force proceeded with the conversion of
    the C/KC-130J contract until November 2005 when my staff determined
    that the conversion would not result in a FAR Part 15 type contract for
    aircraft that were already under contract. The Air Force strategy
    called for adding FAR Part 15 terms and conditions to the existing
    contract that would apply to any future contract price adjustments. On
    November 29, 2005, I notified staff of the Senate Armed Services
    Airland Subcommittee that the Air Force did not intend to obtain
    certified cost or pricing data for the aircraft under contract or
    negotiate new prices. On December 1, 2005, Kenneth Miller, Air Force
    Deputy Assistant Secretary for Acquisition Governance and Transparency,
    met with the subcommittee staff and agreed with this assessment.
    Subsequent to this meeting, the Air Force agreed that the restructure
    should include pricing as well as terms and conditions for all 37
    aircraft on the existing contract that had not yet been delivered. On
    February 7, 2006, former Acting Secretary of the Air Force, Michael
    Dominguez, indicated to Senator McCain that his understanding of what
    it meant to convert the contract to FAR Part 15 had been significantly
    different than what Senator McCain expected. On February 10, 2006, the
    Air Force executed an undefinitized contract modification for fiscal
    years 2006 through 2008 aircraft procurements that will allow for
    repricing. The Air Force's current target date for completion of
    actions is October 2006.
        The new contract modification signed by the Air Force puts in place
    a framework to make the conversion to FAR Part 15. We cannot make a
    final assessment of the success of the conversion to FAR Part 15 until
    the additional processes for the definitization of the contract have
    been completed.

        49. Senator Chambliss. Secretary Rumsfeld, please provide the DOD
    General Counsel's assessment regarding whether the Department's plan
    and actions to convert the C/KC-130J multiyear contract to a FAR 15
    compliant contract meets the requirements of the National Defense
    Authorization Act for Fiscal Year 2006 (Public Law No: 109-163).
        Secretary Rumsfeld. The Acting General Counsel of the DOD provides
    the following assessment:

              ``I have determined that the Department has complied with
            section 135 of the National Defense Authorization Act for
            Fiscal Year 2006, which requires that C-130J and KC-130J
            aircraft procured after fiscal year 2005 . . . be procured
            through a contract under part 15 of the Federal Acquisition
            Regulation. . . The Air Force has informed me that it executed
            an UCA with Lockheed Martin on February 10, 2006. With respect
            to C-130J and KC-130J aircraft in program years 2006 through
            2008 under the current multiyear contract, the UCA incorporates
            the standard terms and conditions applicable to a contract
            negotiated under Part 15 of the FAR. Among these are clauses
            that subject the contractor to the requirements of the Truth in
            Negotiations Act. The Air Force expects that the negotiation of
            final, revised prices for program years 2006 through 2008 under
            the multiyear contract will be complete by October 2006. I
            conclude that this arrangement satisfies the requirements of
            section 135.''

                                     ______

                  Question Submitted by Senator Elizabeth Dole
                    combating the drug trade in afghanistan
        50. Senator Dole. Secretary Rumsfeld, the drug trade in Afghanistan
    remains a serious concern. Heroin trafficking makes up a large portion
    of that country's GDP, and money from this illicit trade is falling
    into the hands of warlords and the Taliban, to the point that this drug
    trade is a profound threat to the survival of this new democracy. The
    Senate version of the Defense Authorization Bill contained a provision
    that would have authorized ``the use of U.S. bases of operation or
    training facilities to facilitate the conduct of counterdrug activities
    in Afghanistan.'' However, the Conference Report did not contain this
    provision.
        What is the DOD currently doing to help combat the drug trade in
    Afghanistan, and are additional authorities and monies needed? Some,
    for example, have proposed making counternarcotics a higher priority
    for CENTCOM's core mission in Afghanistan.
        Secretary Rumsfeld. DOD is deeply committed to helping build
    Afghanistan's capacity to combat the drug trade. This capacity will
    allow the Afghans to conduct effective narcotics law enforcement
    operations, control their border, and reduce the illicit narcotics
    leaving and drug processing chemicals entering the country. With this
    increased security capacity, the Afghan government will control areas
    that are currently threatened by drug traffickers, insurgents, and the
    Taliban.
        With the funds provided for drug interdiction and counterdrug
    activities, the Department pursues the programs below designed to
    complement the efforts of the Departments of State and Justice to
    provide for security and police forces throughout Afghanistan:
        (1) Providing training, logistics support, infrastructure, and
    transportation for the Afghan National Interdiction Unit (NIU) and its
    associated Drug Enforcement Administration's (DEA) Foreign Deployed
    Advisory Support Team (FAST).

              (a) The DOD has provided training for 128 NIU personnel and 5
            DEA FAST teams and will provide additional training in 2006. On
            behalf of the NIU, the Department has procured weapons,
            ammunition, radios, and night vision devices and is
            constructing a base of operations and training facility.
              (b) The Department is building a helicopter unit to support
            Afghan NIU and DEA FAST teams. Ten MI-17 helicopters have been
            acquired and equipped, and Afghan pilots and crews are training
            at Fort Bliss, Texas. 16 MI-17 pilots and crew have completed
            training at Fort Bliss. Another 12 MI-17 pilots are currently
            undergoing training. The Department is constructing a aviation
            facility at the Kabul International Airport for maintenance
            support functions and forward operating bases at key points
            within Afghanistan to support NIU and the Counternarcotics
            Police of Afghanistan field operations.

        (2) Information sharing. The Department established a
    Counternarcotics Intelligence Fusion Center (IFC) in Kabul to support
    Afghan, U.S., and U.K. narcotics enforcement operations. The Department
    also built the U.K. and U.S. Interagency Operations Coordination Center
    (IOCC) in Kabul and is participating in development of a U.K. and U.S.
    Joint Narcotics Analysis Center (JNAC) in London that will be
    responsible for establishing a strategic picture of drug trafficking
    operations and flow in and out of Afghanistan. These centers provide
    the capability to coordinate all counternarcotics operations within
    Afghanistan while feeding and benefiting from a strategic approach to
    counternarcotics.
        (3) Helping build Afghan border control capacity. The Department is
    helping to train and equip Afghan border police and providing
    infrastructure from which countersmuggling operations can be based. The
    Department is constructing several border crossing points in
    Afghanistan and refurbished several border strong points along the
    Afghan/Pakistan border. The Department is providing scanners to assist
    searches at border crossing points and random checkpoints throughout
    the country.
        (4) The Department is currently on a joint DOD, DEA, and State plan
    to expand the Counternarcotics Police of Afghanistan. This will build a
    greater capacity to the Afghan forces to counter narcoterrorism forces.
    The Department is fielding a complete communications system for the
    Afghan Border Police to facilitate command and control of the outlying
    stations by the main headquarters. Additionally, the Department
    provided more than 12,000 9mm pistols and associated ammunition to the
    Afghan Border Police.
        (5) Supporting the Afghan Special Narcotics Force (ASNF). The
    Department has supported the ASNF, an interdiction force, with a
    refurbished MI-17 helicopter, pilot and crew training, and specialized
    equipment. The Department is also constructing a forward operating base
    for the ASNF at Kandahar.
        (6) Regional counternarcotics support. The Department operates CN
    support programs involving Uzbekistan, Pakistan, Tajikistan,
    Turkmenistan, Oman, Kyrgyzstan, Kazakhstan, and the Horn of Africa. All
    will receive some DOD counternarcotics support in the form of
    communications systems, patrol boats, sensors, vehicles, training,
    equipment, and related infrastructure.
        The authorities and monies to sustain these programs have been
    included in the DOD fiscal year 2006 Emergency Supplemental Request.
                                     ______

                   Questions Submitted by Senator John Cornyn
                             information assurance
        51. Senator Cornyn. Secretary Rumsfeld, protection of military
    networks, information, and communications is critical to our safety and
    operations. The DOD IG noted in a recent report that the Department
    does not yet have a comprehensive enterprise-wide inventory of
    information systems and that ``Without a complete inventory of DOD
    major information systems, answers to questions from OMB or Congress on
    major information systems may not be accurate and information assurance
    is at risk because there is little assurance that all systems are
    adequately protected.'' What is the status of the Department's efforts
    to inventory information systems?
        Secretary Rumsfeld. The inventory of major information systems
    under the control of the Department is as accurate as possible
    considering the dynamic environment and sheer number of systems
    deployed across the DOD enterprise. The Department is continuing the
    effort to complete a comprehensive enterprise-wide inventory, including
    mission support systems.

        52. Senator Cornyn. Secretary Rumsfeld, what is your guidance to
    commanders on the importance of protecting information and networks?
        Secretary Rumsfeld. The protection of information and networks is
    fundamental to ensuring the success of our network-centric, distributed
    forces. As the DOD transforms its people, processes, and military
    forces towards a network-centric environment, the protection of the
    information and networks that support that transformation becomes
    increasingly important. Most cyber attacks are used by the adversary as
    an inexpensive means of leveling the battlefield. The Department has
    issued the Transformation Planning Guidance that states:

              ``Assuring information systems in the face of attack and
            conducting effective and discriminate offensive information
            operations will deny the adversary hope of exploiting a new
            dimension of the battlespace as a low-cost and powerful
            asymmetric option while providing us an unwarned strike
            capability that contributes to a broad, simultaneous, and
            overwhelming range of effects that increases the likelihood of
            rapid collapse of an adversary's will to fight.''

        The protection of our information and networks and an interoperable
    force are critical to information assurance. Both issues are addressed
    in a variety of initiatives set out under the QDR. As part of the
    initiatives, the DOD Chief Information Officer (CIO) has undertaken an
    effort to train and certify all key DOD personnel who manage and
    operate our networks.
        The Department's Information Assurance (IA) policy framework
    provides overarching guidance for protecting information and networks.
    The capstone DODD 8500.1, Information Assurance, was issued in October
    2002. DODI 8500.2, Information Assurance Implementation, was issued in
    February 2003. Additional directives include guidance on computer
    network defense, certification, and accreditation of all DOD systems,
    and training and certification of the IA workforce. The DOD IA
    Strategic Plan serves as an IA planning and management guide for the
    combatant commands, Services, and defense agencies. It establishes the
    Department's IA goals, sets out strategic objectives for IA, and
    provides a consistent approach to assuring information across the DOD
    enterprise.
        For day-to-day operations, the Commander, U.S. Strategic Command,
    is charged with assessing and responding to cyber threats through the
    subordinate Commander Joint Task Force-Global Network Operations (JTF-
    GNO). JTF-GNO provides guidance to all commanders on the current cyber
    threat and directs actions to counter the threat.

        53. Senator Cornyn. Secretary Rumsfeld, what ongoing activities are
    you pursuing to ensure that information security practices are followed
    throughout the Department?
        Secretary Rumsfeld. The DOD has developed an IA policy framework
    that provides overarching IA guidance for protecting information and
    networks. The capstone DODD 8500.1, Information Assurance, was issued
    in October 2002. DODI 8500.2, Information Assurance Implementation, was
    issued in February 2003. Additional subordinate directives include
    guidance on computer network defense, certification, and accreditation
    of all DOD systems, and training and certification of the IA workforce.
    These policies and instructions are continually reviewed, updated, and
    promulgated to the DOD components.
        As part of the Federal Information Security Management Act (FISMA)
    reporting requirements, DOD Component CIOs annually verify the
    certification and accreditation status of their information systems.
    Those systems with security deficiencies must have an IT Security Plan
    of Action and Milestones (POA&M) to track and correct deficiencies.
    Also, as part of the FISMA process, the DOD IG conducts an independent
    audit of a subset of the DOD information systems.
        Each year the Department conducts a Computer Network Defense (CND)
    assessment and shares the assessment results with the components to
    highlight where progress has been made from year to year and to
    identify areas that need attention. Also, in conjunction with the
    Director, Operational Test and Evaluation, IA is integrated into DOD
    exercises. Further, the National Security Agency and the Defense
    Information Systems Agency (DISA) perform network penetration and
    readiness assessments.
        To mitigate the effects of network vulnerabilities and ensure DOD
    has an effective defensive posture against cyber attacks, the
    Department established the DOD IA and CND Enterprise Solutions Steering
    Group. Under the leadership of U.S. Strategic Command (STRATCOM), the
    steering group plans, coordinates, acquires, and implements enterprise
    CND solutions designed to stop, contain, and/or mitigate the effects of
    system and network attacks and vulnerabilities. Actions include a
    combination of procedural and technical capabilities implemented across
    the enterprise. Some examples of enterprise-wide solutions include
    automated vulnerability scanning and remediation tools that permit
    system administrators to scan and report compliance with DOD
    vulnerability patch policies and push patches to remote machines.
        The Department is committed to implementing a robust Public-Key
    Infrastructure (PKI). In December 2005, the Joint Task Force-Global
    Network Operations (JTF-GNO) directed the DOD components to implement
    and report on the status of the use of PKI for system logon. The use of
    PKI cryptographic logon inhibits adversaries from remotely accessing
    Department systems.
        Another ongoing activity being taken by the CIO and the JTF-GNO is
    the implementation of Ports, Protocols, and Services management and
    port closures. These efforts close unused ports, stop the use of
    vulnerable computer communication protocols that could easily allow
    hackers to access our systems, and to reduce the risk of potentially
    malicious traffic entering and leaving the Global Information Grid
    (GIG).
        For day-to-day operations, the Commander, STRATCOM, is charged with
    assessing and responding to cyber threats through the JTF-GNO. JTF-GNO
    provides guidance to all commanders on the current cyber threat and
    actions to counter the threat. Recent JTF-GNO actions include the
    following:

             In November 2005, the JTF-GNO directed a DOD-wide
            Network Stand-Down Day to conduct computer network defense
            refresher training to all DOD users. JTF-GNO required DOD
            elements to confirm all accounts and users were required to
            change passwords or their accounts were locked.
             Under the Enhanced Inspection Program, DOD scans DOD
            networks to discover networks in violation of DOD policies and
            then directs actions to mitigate any problems.

        Lastly, the Department has made IA a key component of our
    acquisition review process to ensure the integration of IA activities
    in systems development.
                                     ______

                    Question Submitted by Senator Carl Levin
                              qdr risk assessment
        54. Senator Levin. General Pace, the law requires the QDR to
    identify ``(A) the budget plan that would be required to provide
    sufficient resources to execute successfully the full range of missions
    called for in that National Defense Strategy at a low to medium risk,''
    and ``(B) any additional resources (beyond those programmed in the
    current Future Years Defense Program) required to achieve such a level
    of risk.'' The law also requires the Secretary in consultation with the
    Chairman to assess the risk and to define the nature and magnitude of
    the political, strategic, and military risks associated with executing
    the missions called for under the National Defense Strategy. Finally,
    the law requires the Chairman to prepare and submit to the Secretary
    the Chairman's assessment of the review, including the Chairman's
    assessment of risk.
        Your assessment of the risk states that ``this review has carefully
    balanced those areas where risk might best be taken in order to provide
    the needed resources for areas requiring new or additional investment''
    but it does not state what the level of risk is, nor does it identify
    the nature and magnitude of the political, strategic, and military
    risks associated with executing the missions called for under the
    National Defense Strategy.
        Please provide your assessment of the level of risk, and identify
    the nature and magnitude of the political, strategic, and military
    risks involved.
        General Pace. As title 10 requires, the QDR identifies a plan that
    will allow us to accomplish the full range of missions called for in
    the National Defense Strategy at a ``low-to-moderate'' level of risk.
        As I mention in my assessment of the QDR, any attempt to predict
    the nature of the future security environment is difficult. Therefore,
    the QDR recommends investing toward a fully transformed force that will
    be best prepared to meet the political, strategic, and military
    challenges we may face over the next 20 years.
        Today, the Armed Forces of the United States stand fully capable of
    accomplishing all the objectives of the National Defense Strategy. We
    must prevail now in the war on terrorism while we also prepare for the
    future. The recommendations of the QDR will allow us to accomplish
    these vital goals.
                                     ______

                Questions Submitted by Senator Edward M. Kennedy
                    university research initiative programs
        55. Senator Kennedy. Secretary Rumsfeld, the fiscal year 2007
    budget request calls for a combined $249.4 million in the Service
    University Research Initiatives (URI) programs. This program invests in
    university research projects in areas such as nanotechnology, robotics,
    and artificial intelligence that create the transformational
    technologies and military capabilities, and train the next generation
    of scientists, engineers, and technology entrepreneurs in defense
    technology disciplines.
        In constant dollars, this is below the total fiscal year 2004
    request for this important program. As a result, you are required to
    submit a report to Congress on the effect of this funding reduction on
    defense technology and research capabilities, as described in the
    National Defense Authorization Act for Fiscal Year 2004 Conference
    Report. This requirement was developed by Congress for fear that this
    program--which had been managed directly by the Office of the
    Secretary--would lose its funding support when it was transferred to
    the individual Services and had to compete with their priorities.
    Apparently this has occurred, since even though the DOD topline
    continues to increase--the important URI program loses ground to
    inflation.
        What is the reason for the reduced request relative to 2004 in URI?
        Secretary Rumsfeld. While it is true that the fiscal year 2007
    budget request for the URI program is less than that requested in
    fiscal year 2004, the Department's request seeks a total of $249.4
    million for URI, evidencing continued support for this program. The
    funding level requested for this program is the result of the very
    difficult choices that the Department must make in order to balance
    total program priorities.

        56. Senator Kennedy. Secretary Rumsfeld, what is the status of the
    development of the required report to Congress on this issue?
        Secretary Rumsfeld. The required report is being finalized and
    should be provided to Congress in April 2006.

                             counterterrorism study
        57. Senator Kennedy. General Pace, on February 5, The New York
    Times reported that your staff has completed a counterterrorism study.
    According to the Times, the report orders the DOD to undertake a broad
    campaign to find and attack or neutralize terrorist leaders, their
    havens, financial networks, methods of communication, and ability to
    move around the globe, but to be mindful that their military actions
    can have a negative impact on the fight against terror. Will you
    provide a copy of this report to the SASC?
        General Pace. The study referred to in the Times is actually the
    National Military Strategic Plan for the war on terrorism (NMSP-WOT).
    We have provided copies of the NMSP-WOT to the SASC.

        58. Senator Kennedy. General Pace, what are military actions that
    can have a negative attack on terror operations?
        General Pace. While any military actions can have negative effects,
    our offensive operations against terrorists present the greatest risk.
    For example, any time we use lethal force, enter private residences, or
    detain enemy combatants there is a risk of negative effects. Prior to
    conducting these operations, commanders balance the gains they intend
    to achieve with potentially negative second order effects and then
    determine if the mission is worth conducting. I continue to be
    impressed by our leaders and servicemembers who routinely show patience
    and ingenuity in their approach to operations to minimize collateral
    effects yet still accomplish their mission.

        59. Senator Kennedy. General Pace, how does the report recommend
    that our government balance the line between fighting terrorism and
    undertaking military operations that back fire and contribute to more
    terrorism?
        General Pace. This is an excellent question and strikes at the very
    heart of the complex nature of the war on terrorism. To address this
    challenge, the NMSP-WOT gives clear direction to our commanders:

              ``The way we conduct operations--choosing whether, when,
            where, and how--can affect ideological support for terrorism.
            Knowledge of indigenous population's culture and religious
            sensitivities and understanding of how the enemy uses the U.S.
            military's actions against us should inform the way the U.S.
            military operates. The U.S. military prefers to work in a
            supporting role where indigenous forces are capable of leading
            operations. Where effects can be achieved by means other than
            direct U.S. military actions, the U.S. Government may seek to
            do so. Where U.S. military involvement is necessary, military
            planners should build efforts into the operation to reduce
            potential negative effects. At the same time, we must, by our
            military actions, convey the sense that our power cannot be
            defeated and that, under the right circumstances, we are
            willing to use it. This will require careful balancing. The
            conduct of military operations should avoid undercutting the
            credibility and legitimacy of moderate authorities opposed to
            the extremists, while defeating extremists' ability to spread
            their ideology.''

                        protection of the united nations
        60. Senator Kennedy. General Pace, in December 2005 the United
    States and the United Nations (U.N.) signed an agreement concerning the
    protection of the U.N. presence in Iraq by the Multinational Force.
    Obviously, we all have an interest in a robust international presence
    in Iraq. The Secretary General of the U.N. has said that expansion of
    the U.N. presence into places like Basra or Irbil depends on obtaining
    dedicated air support. I understand, however, that we will not provide
    it. Why not? Shouldn't we be facilitating the U.N.'s efforts to expand
    its presence into Basra or Irbil?
        General Pace. U.N. mission requirements have been and will continue
    to be met in Iraq. Dedicating aircraft would be an inefficient use of
    resources and would likely result in less actual support to the U.N.
    All U.N. missions are prioritized as either elevated or high (rather
    than medium or routine). Between February and October 2005, the U.N.
    requested 73 UH-60 helicopter missions, none of which were refused.
    U.N. mission support rates (MSR) are consistently higher than other
    requests (100 percent vs. 92 percent average MSR for elevated requests,
    and 80 percent vs. 75 percent average MSR for high priority requests).
    Some missions are delayed due to inclement weather or aircraft
    maintenance issues, but these situations would be the same (weather) or
    exacerbated (maintenance, due to a significantly smaller aircraft pool)
    with dedicated aircraft. The Joint Staff, through the interagency
    Coalition Working Group, has worked diligently to facilitate the U.N.'s
    expansion in Iraq. We have equipped Fijian Personnel Security Details
    for U.N. principals. We have recruited coalition partners (Georgia in
    Baghdad, Romania in Basra, and Korea in Irbil) specifically to provide
    security for the U.N., and have provided equipment enhancements as
    needed to best accomplish this mission. Understanding the U.N.'s
    preference for dedicated aircraft, we are working to identify another
    nation willing to fill this request, while Multi-National Force-Iraq
    continues to provide airlift support.

                           gulf war prisoners of war
        61. Senator Kennedy. General Pace, Business Week has recently
    reported that Iraqi debts with foreign commercial corporations are
    being settled by issuance of new Iraqi bonds secured by Iraqi oil
    revenues. [``A Landmark Debt Deal for Iraq,'' Business Week online Jan.
    12, 2006.] Do you believe that the commercial debts of French and
    Korean corporations should be put ahead of the debt of honor owed to
    American prisoners of war (POWs) brutally tortured by Iraq during the
    1991 Gulf War?
        General Pace. Iraq is a sovereign country. As Chairman of the Joint
    Chiefs of Staff, I do not have a lot of visibility into bond issues and
    Iraqi foreign debt. I was appalled upon hearing about the brutal
    treatment of our prisoners of war during Operation Desert Storm.

        62. Senator Kennedy. General Pace, why is the administration
    encouraging settlement of these debts through issuance of Iraqi bonds
    while it is continuing in court on the side of Saddam Hussein and Iraq
    to absolve them of liability for the torture of our American POWs?
        General Pace. As mentioned in a previous answer, I find Iraq's
    treatment of our POWs deployable, but policy associated with the
    assurance of Iraq's bonds is well outside of my lane.

        63. Senator Kennedy. General Pace, twice during the period of
    ongoing torture of American POWs by Iraq during the Gulf War the Senate
    of the United States unanimously put Iraq on notice that it would be
    held accountable for the torture of American POWs. (See the Senate
    Resolutions of January 23 and January 31 of 1991.) More recently, on
    three occasions in reference to the case brought by American Gulf War
    POWs brutally tortured by Iraq during that war, the Senate unanimously
    accepted resolutions of support for the legal rights of these tortured
    American POWs against Iraq. (See S. Amdt. 1836 of Oct. 14, 2003; S.
    Amdt. 2194 of Nov. 17, 2003, and S. Amdt. 3307 of June 7, 2004.) These
    resolutions were passed by a unanimous Senate to ensure that United
    States actions will in every way seek to deter the torture of American
    POWs. Will you work to ensure that the DOD supports the efforts of the
    American Gulf War POWs and urge the Justice Department to end their
    litigation in court against our own POWs which is being pursued in
    order to effectively absolve Iraq of liability for their torture?
        General Pace. As the Chairman, I will provide my best military
    advice in all matters relating to the safety and welfare of American
    servicemembers, to include those who were or may be held as POWs or
    listed as MIAs.

        64. Senator Kennedy. General Pace, Article 131 of the Third Geneva
    Convention [the POW Convention] mandates that no party may ``absolve''
    a torturing state of ``any liability'' for the torture of POWs. In the
    aftermath of the Abu Ghraib affair the President said that the United
    States will fully adhere to the Geneva Conventions. Further, at the
    urging of the Joint Chiefs, and for the purpose of protecting future
    American POWs held by the enemy, the President, in his February 7,
    2002, Executive order, directed that the ``United States will hold
    states . . . who gain control of United States personnel responsible
    for treating such personnel humanely and consistent with applicable
    law.'' In light of this Article 131 Treaty obligation and repeated
    Presidential statements indicating support for it, by what legal
    authority are officials in the DOD encouraging the DOJ to spend
    taxpayer dollars to litigate in court against American POWs brutally
    tortured by Iraq during the Gulf War to seek to effectively absolve
    Iraq of liability for their torture?
        General Pace. DOD relationships with the DOJ regarding pending
    litigation are more appropriately addressed by the Departments of
    Defense and Justice.

        65. Senator Kennedy. General Pace, will you intervene to ensure
    that henceforth the DOD will support the POWs effort to hold Iraq
    accountable?
        General Pace. I remain committed to ensuring that all U.S. POWs
    from all past, present, and future conflicts are treated humanely and
    in accordance with relevant international law. As the Chairman, I will
    provide my best military advice in all matters relating to the safety
    and welfare of American servicemembers to include those who were or may
    be held as POWs or listed as MIAs.

                              joint strike fighter
        66. Senator Kennedy. Secretary Rumsfeld, during your testimony you
    implied that the cancellation of the Joint Strike Fighter (JSF)
    alternative engine had been addressed with the partner nations. In view
    of the importance of our international partners to this program, as
    well as the larger war on terrorism, can you clarify which partner
    nations were consulted on the alternate engine cancellation and what
    position they took regarding the cancellations.
        Secretary Rumsfeld. First, let me clarify that we did not consult
    with the JSF partners during our budget deliberations. As a rule, we do
    not discuss predecisional information outside of the DOD until we have
    submitted a President's budget. The JSF partners realize that program
    decisions must be weighed against what is best for the Department as a
    whole. As I mentioned in my testimony, the Department's senior
    leadership looked at many aspects of the JSF alternate engine, and
    their recommendation was that further investment in the alternate
    engine was not in the best interests of the JSF program, nor the larger
    defense budget. All of the partner nations are aware of the decision to
    cancel the alternate engine program and most view this as a U.S.
    decision. The partners are as interested as we are in doing the right
    thing from a cost perspective. Industrial participation among the
    partner countries is an important part of the program, and something
    that we are continually addressing as the program matures.

        67. Senator Kennedy. Secretary Rumsfeld, in addition, can you
    provide the committee with the analysis that was conducted to justify
    the cancellation of the alternate engine program, including the risks
    and cost/benefit analysis?
        Secretary Rumsfeld. The DOD has concluded that maintaining a second
    engine supplier for the JSF would not be cost-effective. This
    conclusion is based on data on engine cost and reliability, which show
    that:

             Maintaining two engine suppliers would not reduce
            overall procurement costs.
             Jet engine reliability has improved significantly over
            the past 30 years, and introducing a second supplier would not
            lead to dramatic improvements in reliability.
             Maintaining two engine suppliers would not
            significantly reduce operations and support (O&S) costs and
            could actually increase those costs over the life of the
            program when compared to costs with a single supplier.

        Maintaining a second engine supplier for the JSF would incur
    additional development costs (at least $2 billion from fiscal year 2007
    to fiscal year 2014), while potentially increasing the costs of
    procurement and future maintenance. Procurement costs could increase
    because, with two suppliers, each firm would produce a smaller number
    of engines. Smaller production runs can increase procurement costs
    because they reduce the advantages of ``learning curve'' effects
    (whereby costs decrease as a company produces more units) and of ``rate
    effects'' (whereby fixed costs are spread over the total number of
    units produced). Historical evidence from the Air Force ``Great Engine
    War'' and the Navy F404 engine program shows that competitions have
    tended to increase engine procurement costs.
        Supporters of the alternate JSF engine have asserted that
    competition would generate significant long-term O&S cost savings, and
    that these savings would outweigh the higher development and
    procurement costs. However, O&S costs would likely be higher in several
    areas with two engine suppliers. For example, most of the parts of the
    JSF engines--produced by Pratt & Whitney (P&W) and General Electric
    (GE)--are not interchangeable; the fans, turbines, combustors, and
    compressors are unique. Maintaining two types of engines would require
    the establishment of two separate pipelines in the fleet and at the
    depots for spares, training, maintenance, repairs, and enhancements.
        The debate on an alternative engine for the JSF is often viewed
    through the prism of the Great Engine War of the 1970s and 1980s,
    during which the establishment of a second engine supplier markedly
    improved engine reliability. Engine technology and testing techniques
    in use today are substantially different from those of the early 1970s.
    Fighter engines are now designed, manufactured, and tested to be
    reliable from the start. In particular, the number of test hours and
    cycles logged in engine development programs have increased markedly
    since the 1970s, and safety and reliability metrics are much improved
    as well. Reliability and cost have been key factors throughout the
    JSF's development. In fact, in the early days of the JSF program, all
    participants in the competition selected the P&W engine--a derivative
    of the P&W F119 engine used in the F-22--because they deemed it to have
    the lowest technical and cost risk.
        In summary, historical cost comparisons and current analyses
    indicate that savings in life-cycle costs would not offset the
    investment cost of developing two engine suppliers for the JSF.
    Background
        The original JSF program did not make provision for a second engine
    supplier, consistent with the F-22 and F/A-18E/F programs. There was
    opportunity for competition between engine suppliers early on in the
    JSF program (in the concept development and risk reduction phase), but
    all three competitors (Boeing, Lockheed Martin, and McDonnell Douglas)
    selected the P&W F119. The competitors selected the P&W engine over the
    GE engine because it appeared to be the better option for minimizing
    technical and cost risk.
        After a few years of supplemental funding from Congress for the
    alternate engine program, the National Defense Authorization Act for
    Fiscal Year 1998 called for the development of a second engine for the
    JSF. In August 2005, a $2.4 billion contract was officially awarded to
    GE to complete the development of the engine. Including the $336
    million in PB06 for 2006, approximately $1.2 billion has been invested
    in the alternate engine program to date.
    The Difficulty in Recouping Investment Costs
        To achieve a net cost savings, competition between two engine
    suppliers must generate cost savings that exceed the investment needed
    to establish a second engine supplier. Excluding the sunk costs of
    developing the JSF second engine, competition would have to reduce
    procurement and/or operations and support (O&S) costs by $2 billion in
    order to generate net savings. At issue is whether--given all the
    factors that drive costs up or down--splitting the buy between two
    suppliers will reduce costs by such a large amount.
        While competition can provide some production cost benefit,
    splitting a given production quantity between two contractors can have
    the net effect of increasing production costs. This is due to a reduced
    advantage from ``learning curve'' effects (whereby costs decrease as a
    company produces more units) and from ``rate effects'' (whereby fixed
    costs are spread over production units). The discussion below on the
    Air Force's Great Engine War and the Navy's F/A-18 engine competition
    experience indicates that competition does not, on balance, lower
    production costs.
        DOD did two major studies on engine competition in 1998 and 2002
    that assessed the percentage reduction in procurement costs needed to
    recoup the cost of developing an alternate engine for JSF. The study
    indicated at least 16-22 percent procurement savings from competition
    would be necessary to recover the development cost and make up for the
    cost penalty in the production learning curve from having two
    suppliers. Excluding sunk development costs to date, DOD would have to
    achieve procurement savings on the order of 10-12 percent to recover
    the remaining $2.0 billion in development costs for the GE engine.
        Some advocates of the alternative engine indicate that competition
    would mainly generate savings in the O&S accounts over the long term.
    O&S savings are much more difficult to assess than production savings;
    however, we know several areas where O&S costs will be higher with two
    engine suppliers than with one. Most of the parts in the GE and P&W
    engines are unique, including the fans, turbines, combustors, and
    compressors. Supporting two types of engines would involve establishing
    two separate spares pipelines in the fleet and at the depots, providing
    additional training and tools for fleet maintainers, creating two
    separate depot capabilities (thereby increasing non-recurring costs and
    recurring unit repair costs since each repair line would handle fewer
    units) and making future modifications for growth, reliability
    improvements, safety enhancements, and obsolescence management on two
    different engines.
        The main way to drive down O&S costs via competition is to
    significantly increase engine reliability. A key issue is whether we
    expect the primary engine, the P&W F135, to have reliability problems.
    The other issue is whether DOD could achieve reliability improvements
    at less cost by paying for reliability improvements in the P&W engine
    compared to establishing a second supplier. These issues are addressed
    in the paper below.
    Empirical Record
        This section will address our historical experience with engine
    competition since the 1970s. The section will discuss the two most
    widely known examples--the competition between P&W and GE for Air Force
    F-15 and F-16 engines and for Navy F/A-18 engines. This review will
    look at the extent to which we achieved savings in procurement and O&S
    and, in the case of the Air Force example, the similarities and
    differences in engine technology/reliability two or three decades ago
    compared to today.
    The Great Engine War
        The most well known example of competition in aircraft engine
    procurement is the Great Engine War, which began in the 1970s as the
    Air Force and Navy were searching for more reliable power plants for
    the F-15, F-16, and F-14 aircraft. There have been numerous comparisons
    of JSF engine competition to the Great Engine War; at issue is whether
    these comparisons are appropriate.
        There is little disagreement that the competition created by the
    Great Engine War resulted in critical improvements in engine
    performance and reliability; however, there are significant differences
    between the circumstances of the Great Engine War and where we are
    today. In order to make accurate comparisons, it is first necessary to
    understand the context of the Great Engine War and how the lessons
    learned from that era may or may not apply to current issues.
        In the early 1970s the Services were eager to field the next
    generation of fighter aircraft to counter the Soviet air threat. In
    their rush to outperform the Soviets, a premium was placed on
    performance and power requirements (thrust to weight) rather than
    reliability and durability metrics. The Air Force's stated order of
    priority in fielding the new engine was: ``thrust, weight, everything
    else.'' The P&W F100 was selected for the F-15 and the F-16 based on
    considerable advances P&W had achieved in thrust and weight. Although
    this engine was initially well received by the Air Force, it soon
    developed stall problems and turbine failures due to the extreme
    maneuvering levels achieved by these new air frames.
        In the rush to field new engines, P&W powerplants for the F-15 and
    F-16 were only tested for 150 hours on the test-stand and 50 hours in
    the aircraft before going into production. Although these early tests
    extensively stressed time at high Mach numbers to guard against stress
    failures, they did not address the significant factors related to
    throttle movement. Gradually engineers began to better understand the
    durability issues associated with engine cycles, which are defined as
    the movement from the idle position to maximum power and then to an
    idle or intermediate position. They discovered that engine cycles are
    profoundly more important than just the accumulation of hours in
    evaluating engine life.
        When the P&W F100 engine performance problems became apparent, the
    Air Force believed P&W was financially responsible for fixing them. P&W
    thought the Air Force should pay, since Pratt had provided the Air
    Force with the engine it requested. In his book ``The Air Force and the
    Great Engine War,'' Robert Drewes writes:

              ``Pratt was right in arguing the Air Force got what it asked
            for. The F100 was a superb propulsion system when it worked.
            All the concerns about durability to withstand thermal cycles,
            for example, were unspecified in the original F100 contract.
            Furthermore, incessant pressure to meet the IOC allowed little
            or no time to perfect the engine. Strictly speaking, Pratt was
            justified to some extent in holding out for more money before
            acting on various improvement programs.'' \1\
    ---------------------------------------------------------------------------
        \1\ Robert W. Drewes, ``The Air Force and The Great Engine War,''
    National Defense University Press, Washington, DC, March 1987, p. 99.

        The Air Force redirected government funds to improve the P&W engine
    while pursuing an alternate engine source with GE, thereby kicking off
    the Great Engine War.
        To avoid a repeat of the reliability issues experienced with the
    P&W F100, the Air Force Scientific Advisory Board proposed that engine
    usage be carefully defined at the beginning of engine development,
    thereby increasing the importance of reliability relative to thrust and
    weight. GE used a combination of corporate, Air Force, and
    congressional funds to develop a derivative of their F101 engine used
    to power the B-1. In contrast to P&W, GE designed their new engine,
    which eventually became the F110, to stringent durability and
    reliability specifications. These design criteria gave GE a distinct
    reliability advantage over P&W as the competition commenced.
        As indicated above, at the time of the Great Engine War DOD's
    emphasis was not on reliability and testing. However, despite the
    initial concerns with the F100, it was still more reliable than engines
    developed for the 1950s and 1960s vintage aircraft such as the F-104
    and F-100. Figure 1-1 addresses the trend in engine safety and
    reliability over the past several decades. With more stringent design
    specifications and expanded durability testing, DOD has achieved
    impressive improvements in engine reliability.

        In contrast to the focus on thrust and weight in 1970s fighter
    engines, reliability was a major factor in the selection of the P&W
    engine for JSF and continues to be a critical factor in the test
    program. Compared to the 200 engine test hours of the 1970s, the P&W
    engine in the JSF program has already amassed nearly 5,000 test-stand
    hours incorporating Accelerated Mission Test (AMT) profiles. These AMT
    profiles are designed to stress the engine cycles rather than just log
    operating time. This topic will be discussed in more detail later in
    this paper.
        Another important point about the Great Engine War is the nature of
    anticipated savings from competition. The Air Force never estimated any
    procurement cost benefit from competition. In fact, the Air Force
    Analysis of Alternative Procurements for Fighter Engines assessed that
    a split buy would actually cost the government more than a single
    supplier (Table 1-1).

        The Air Force did not expect to achieve procurement savings from
    competition but did anticipate large savings in maintenance costs. With
    more reliable engines they estimated they could save $1 billion by
    reducing one maintenance man-hour per flying hour. In testimony to
    Congress, the Air Force stated ``we have verified our projection of $2
    billion to $3 billion savings,'' over the estimated cost of $19.4
    billion for the unimproved F100.\2\ This projection amounts to a 10-15
    percent savings over the life of the program.
    ---------------------------------------------------------------------------
        \2\ Defense Department Authorization and Oversight, Hearings on
    H.R. 5167, pt. 2, pp. 255, 225.
    ---------------------------------------------------------------------------
        The above figures are Air Force estimates prior to the competition.
    We do not have empirical data on the actual savings the Air Force
    achieved through improved engine reliability, but we do know that one
    key assumption underlying the estimate was not realized. The Air Force
    projected a buy of 2,942 engines for the F-15 and F-16 aircraft, but
    actually only purchased about half that many engines, thus reducing the
    cost benefit (the Air Force never purchased the GE engine for the twin-
    engine F-15 and purchased only 1,560 aircraft/spares for the single-
    engine F-16). Furthermore, these Air Force estimates did not account
    for the GE F110 development costs.
        Finally, while it is clear that competition resulted in more
    reliable engines from both the P&W and GE in the Great Engine War, it
    is possible that the same maintenance savings could have been achieved
    with less up front investment by simply fixing the original P&W F100
    engine.
    USN F/A-18 F404 Competition
        In the 1980s Navy Secretary John Lehman was a big proponent of
    competition. Secretary Lehman introduced the Second Source Program to
    reduce procurement costs through competition. One of the programs
    selected for competition was the F/A-18 F404 engine. The Navy wanted to
    drive down the cost of the engine, improve contractor responsiveness,
    and allay concerns over a single supplier for their new strike fighter
    aircraft. Similar to the Air Force in the Great Engine War, the Navy
    anticipated a very large engine buy.
        The Navy chose P&W to develop a copy of GE's F404 engine in a
    ``Leader-Follower'' arrangement. Once the program started, however, it
    became apparent that relying on one manufacturer was less costly than a
    split-buy agreement between P&W and GE. Figure 1-2 shows actual engine
    procurement costs before and during the competition.
        In 1989, the new Secretary of the Navy, Lawrence Garrett, canceled
    the competition under the belief that eliminating P&W as a second
    supplier and relying solely on GE would save the government $176
    million over the remaining 6 years of F404 procurement. The program did
    not in fact realize this savings because the U.S. Government had to pay
    P&W $156 million for a contract settlement.

    Reliability and the Impact on O&S Costs
        Engine reliability improvements can reduce O&S costs by reducing
    maintenance hours and decreasing the frequency of replacing parts and
    subsystems. At issue is whether we expect engine competition to achieve
    significant reliability improvements beyond the gains already realized
    from technology and testing advancements over the past several decades.
    Also unclear is whether we could achieve greater reliability at lower
    cost by investing in the primary engine rather than creating a second
    engine supplier.
        Over the past 30 years, engine testing and design validation
    philosophy have evolved to the point that the Services have changed
    their key engine metric from hours to Total Accumulated Cycles (TACs).
    Thus, engine removals and maintenance actions are now often triggered
    on TACs, as opposed to hours. In addition to AMT mission execution,
    which primarily tests for Low Cycle Fatigue (LCF) effects, High Cycle
    Fatigue (HCF) testing has been incorporated to expose failure modes
    associated with high frequency/low amplitude effects. The combination
    of AMT and HCF testing has become the standard for testing propulsion
    systems to their limits to ensure a safe and reliable product.
        Some have argued that the twin-engine F-22's fighter mission and
    high-altitude flight regimes are significantly different than the
    single-engine strike-fighter mission and low-altitude flight regimes of
    the JSF and therefore should not be used as a reference to compare
    engine performance and reliability. Actually, the AMT profiles used on
    both these engines account for differences in operating regimes and
    altitudes, to include circumstances above and beyond the normal
    operating limits. These ground test AMT profiles now include conditions
    that simulate RAM air, low altitude/high mach number, and high altitude
    flight regimes.
        We expect the JSF's P&W F135 engine to achieve comparable
    reliability performance as the F-22 F119 engine because they have a
    similar core and were developed using similar techniques. The engine
    core is the power module containing the high pressure compressor, the
    combustor, and the high pressure turbine. The core represents about 50
    percent of the overall engine, but it is typically one of the most
    expensive parts to design due to the stresses placed on critical
    elements operating at extreme temperatures and pressures.
        By most any measure, the P&W F135 engine and its predecessor, the
    Fl19 in the F-22, are performing very well so far. A key safety metric
    pertinent to twin engine fighters, such as the F-22, is measured by in-
    flight shut downs (IFSD). As shown in Figure 1-3, the F119 fares
    considerably better than all models of the F100, the safest fighter
    engine in the USAF inventory today, by achieving over 18,000 engine
    flight hours (EFH) before experiencing an in-flight shut down. This is
    nearly six times greater than the most recent F100 model (F100-PW-229).
        The predecessor to the P&W F135 engine also fares well using other
    reliability metrics. Shop visit rate is the number of times the engine
    must be removed for maintenance over a given interval (a lower shop
    visit rate results in a higher number of flight hours between engine
    removal). Since becoming operational, the F119 shop visit rate has
    decreased to 1.4 visits per 1,000 engine flight hours (EFH)--a 67-
    percent improvement when compared to the F-16's F100-PW-229 engine at
    the same time in its life cycle. The F119 is currently demonstrating a
    mean time between engine removal of nearly 740 hours versus a goal of
    around 400 hours.

        We recognize that fighter aircraft can develop engine related
    problems later in their service life. For example, the durability
    problems discovered in the F/A-18's GE F404 engine did not emerge until
    the aircraft had been in service for over a decade. This was well past
    the operational engine maturity milestone of 200,000 engine flight
    hours and several years after P&W had ceased production as a second
    supplier of F404 engines. Although this was a serious issue at the
    time, it neither grounded the fleet nor required a second supplier to
    rectify the problem.
        If DOD is faced with engine reliability problems in the future, the
    most practical option will likely be to fix or improve the capability
    of the primary engine rather than incurring the high investment cost of
    creating a second supplier of engines. Considering the current proven
    reliability, fixing any problems with the original engine may cost far
    less than developing and producing a second engine--which might develop
    its own unique problems.
    Other Factors Affecting Savings from Competition
        There were several misconceptions about cost savings achieved
    through competition in recent Senate hearings and in the GAO report,
    ``Tactical Aircraft: DOD's Cancellation of the Joint Strike Fighter
    Alternate Engine Program Was Not Based on a Comprehensive Analysis.''
    One inaccuracy is that competition would drive down the price of spare
    engines and engine replacement parts. As mentioned earlier, although
    both the P&W and GE engines are designed to have identical external
    interfaces to the aircraft, the two internal designs are significantly
    different. These two different sets of engine spares and replacement
    parts are not purchased in a competitive environment, since, for
    example, DOD would not buy spares made by P&W to support the GE engine
    nor buy GE spares for P&W engines. Therefore, we do not expect
    competition to appreciably affect the price of engine spare parts or
    follow-on engine equivalents.
        Another factor that would further reduce competition savings is the
    possibility that one or more Services would opt for a single supplier
    rather than two. For example, due to the relatively small quantity of
    JSF engines required by the Navy, it would likely be more cost
    effective to buy from a single source than support duplicate efforts
    for two engines. In addition to a more costly shore establishment of
    two support and maintenance infrastructures, there is little space
    available on an aircraft carrier to support an additional engine shop.
        Also, aircraft weight tends to grow over time due to modifications
    and upgraded systems. Any increase in aircraft weight requires
    increased thrust (or ``growth''). At this time, neither engine has room
    for additional growth without a significant investment. The JSF Program
    Office has estimated that if standard aircraft weight growth is applied
    to the short take-off and vertical landing variant, it will cost
    approximately $1.4 billion to increase the thrust in the engine and
    lift system ($700 million for the F135 engine/$700 million for lift
    system). If the JSF program had two engine suppliers, any future engine
    growth investments must be doubled, thereby increasing cost and further
    offsetting any savings achieved through reliability improvements.
    Conclusion
        In summary, the question of whether to fund a second supplier for
    JSF engines is a difficult decision, but the Department believes the
    facts and the logic of the case weigh towards a single supplier--
    especially given the range of risks we must mitigate across the entire
    DOD program. Investing substantial amounts of money to create JSF
    engine competition that is unlikely to result in net cost savings is
    not an effective use of taxpayer dollars.
                                     ______

               Questions Submitted by Senator Joseph I. Lieberman
                      education in a conflict environment
        68. Senator Lieberman. Secretary Rumsfeld, we often talk about
    military transformation in terms of equipment and technology. In
    addition to these areas, I am also concerned about whether the military
    is keeping up with the more demanding educational requirements of an
    increasingly complicated combat environment. From our experiences in
    Iraq and Afghanistan, we know that our military must be more
    analytical, adept, and intuitive. They must have cultural training
    which enables them to interact on the ground to control the populations
    in question. This training must go beyond linguistics instruction, and
    help prepare our soldiers for interacting with indigenous populations.
    The QDR states that the military must create a ``new breed of warrior''
    that can take on the responsibilities of a special operations commando
    in fighting terrorists and insurgents. However, it is unclear how the
    military is planning to achieve this additional capability beyond more
    language training. In the Services today, there is less time given to
    officers for graduate study, and military fellowships have been cut.
    The importance of learning has increased, but I fear we've become a
    military that is too busy to learn because we have fewer people doing
    more. I am particularly concerned that people and time devoted to
    training and education have been reduced in order to add more people to
    combat units and still reduce end strength. This should not be an
    ``either/or'' decision. Furthermore, offering more opportunities for
    education can also help sustain the volunteer force. Do you agree with
    my assessment of this problem?
        Secretary Rumsfeld. We agree with your assessment that we need to
    provide increased opportunities for training and education in order to
    provide the warrior who can operate effectively in the asymmetric and
    complex battlefield. We have made the necessary policy changes at the
    Department and Service level to ensure that we offer training and
    educational learning opportunities for cultural and regional awareness
    not only for our language specialists but also the entire force.
        One example of this effort is the Defense Language Transformation
    Roadmap which outlines 43 action items that upon completion will ensure
    that foreign language capabilities and regional expertise are
    developed, maintained, and employed as strategic assets in current and
    future military operations.
        The Roadmap, which was published in February 2005, specifically
    requires the incorporation of regional area content in language
    training, professional military education and development, and pre-
    deployment training. The Services are moving forward in this area.
        A second example is in DOD Directive 3000.05 ``Military Support for
    Stability, Security, Transition, and Reconstruction Operations.'' This
    Directive establishes guidance on stability operations and addresses
    the need for skills such as regional area expertise. The Roadmap
    directs this courseware be developed and incorporated into Professional
    Military Education (PME) at all levels.
        DOD views cultural and regional awareness education and training as
    a part of Irregular Warfare. We are in the process of publishing a
    roadmap to implement the changes proposed in the QDR. We are continuing
    to gather lessons learned from current operations and incorporate them
    into new joint doctrine.
        Doctrine drives PME curriculum. Prior to doctrine being published,
    new and emerging operational concepts are incorporated so that our
    education and training programs are timely and relevant. We have
    increased education at our major level, so that 100 percent of Army
    majors must attend Command and General Staff College. The Army is also
    increasing by 200 per year the advanced civil degree program
    opportunities for company grade officers so that 1,000 officers at a
    time are in the program.
        We have also, through the QDR process, increased the emphasis on
    language programs at the military academies--which include regional
    studies. The QDR also has provided a mechanism for funding scholarships
    so that cadets/midshipmen can acquire language skills prior to
    commissioning.
        Across the board, the Services support education at all levels. To
    this end, the Services have not decreased any graduate education or
    military fellowship opportunities. In fact, the Air Force and Navy have
    increased their programs. The Air Force currently has 51 personnel
    participating in a fellowship program; an increase from 44 in 2002-
    2003. The graduate study programs increased from 672 quotas in 2002 to
    1,000 in 2007. The Navy has also increased graduate education
    opportunities and within the 2007 President's budget provided for
    further growth of about 44 quotas for resident study at the Naval
    Postgraduate School and about 21 quotas at the Senior War Colleges.

        69. Senator Lieberman. Secretary Rumsfeld, in what ways are the
    ``educational deficits'' addressed in the current QDR and the fiscal
    year 2007 budget?
        Secretary Rumsfeld. We don't believe we have ``educational
    deficits'' but are planning, organizing, and training in response to
    the type of irregular warfare that we expect to face this century. The
    fiscal year 2007 budget provides us with substantial funding to enhance
    our efforts to focus on language training prior to accession and to
    ensure that funding necessary to ensure current and relevant pre-
    deployment training is provided to all members prior to deployment.
    Specifically, the QDR provides education and training in the following
    areas:

             National Security Education Program: Funding will
            create three magnet K-12 pipelines, establish five new
            university programs, and enhance immersion opportunities in
            immediate investment and strategic languages as part of the
            National Language Initiative.
             Service Academy Language Training: Funding
            enhancements to the Service Academy (USMA, USNA, and USAFA)
            programs. The funding redirects the Service Academies language
            programs to focus on immediate investment and strategic
            stronghold languages and to enhance immersion programs,
            semester abroad opportunities, and interacademy foreign
            exchanges.
             Reserve Officer Training Corps (ROTC) Language
            Training: Allows us to award 3-year grants to 50 ROTC schools
            to promote the development of language programs in languages of
            strategic importance to DOD.
             Pre-deployment Training: Supports Defense Language
            Institute Foreign Language Center (DLIFLC) development of
            country/language familiarization packages and operationally
            focused language instruction modules to build distance learning
            capability and off-the-shelf modules.
             DLIFLC Technology Enhancements: DLIFLC will provide
            and manage contracts for satellite communications for distance
            learning and associate technology.

                             science and technology
        70. Senator Lieberman. Secretary Rumsfeld, DOD's request for
    innovative science and technology (S&T) programs that will shape our
    future military is $11.1 billion. This is a decrease of $2.3 billion
    from the 2006 appropriated level. It also represents 2.5 percent of the
    total defense budget, falling short of the 3 percent goal for S&T
    investment set by the Defense Science Board. Do you feel like you are
    investing enough in S&T programs to support the development of the new
    capabilities that we need to meet future threats?
        Secretary Rumsfeld. The S&T funding in the fiscal year 2007
    President's budget reflects a robust program that continues to explore
    new technologies and applications while conducting current military
    operations and the global war on terrorism. This request begins funding
    away from traditional into transformational technologies to address
    future threats, consistent with the QDR and National Security Strategy.
        The fiscal year 2007 S&T budget request is 3 percent higher than
    last year's request, in real terms, and our S&T investment has grown
    over 23 percent--almost $2.5 billion--over the past 6 years. In
    addition, the fiscal year 2007 S&T budget represents the largest
    request, in constant dollars, since the initiation of the current
    budget process in 1962.

                              force transformation
        71. Senator Lieberman. Secretary Rumsfeld, the DOD created the
    Office of Force Transformation (OFT) to help evaluate and implement
    proposals for military transformation. Currently, OFT reports directly
    to you. A replacement for the former director, retired Navy Vice
    Admiral Arthur Cebrowksi, has not been named. A report conducted by the
    Defense Science Board (DSB) suggested in 2005 that OFT might not prove
    necessary in the future. Can you provide us with an update on the
    status of OFT and tell us about its short- and long-term objectives?
        Secretary Rumsfeld. First, the DSB Summer Study ``Transformation: A
    Progress Assessment,'' contains no recommendation concerning OFT and
    certainly makes no judgment regarding its future. OFT continues to do
    the kind of work it was established to undertake, and that is to
    operate ahead of Department policy, identifying areas or gaps in
    emerging capabilities that the Department will not get to on its own,
    and creating new knowledge. The office operates at the intersection of
    unarticulated needs and non-consensual change, and remains committed to
    doing so, even in the absence of a follow-on director. Unlike most
    organizations that focus exclusively on either research or technology,
    OFT is unique in that it is both a THINK and a DO tank.
        OFT has experienced much success in its brief existence, catalyzing
    Department efforts in such diverse areas as Operationally Responsive
    Space with its TACSAT initiative; exploring new ground with the
    innovative suite of lethal and non-lethal capabilities integrated into
    the Sheriff vehicle; and OFT's Stiletto boat is pushing new boundaries
    in hydrodynamics understanding and shipbuilding business models. These
    concept-technology pairings, tied to robust operational
    experimentation, are critical enablers for acquisition in the
    Information Age.
        In addition, the office has launched nearly two dozen analytically
    rigorous case studies across the spectrum of Network Centric
    operations, providing Department leaders with hard evidence on the
    battlefield value derived from investments in information technology.
    Since cultural change is a critical element of transformation, OFT has
    created a series of ``Transformation Chairs'' at major institutions
    engaged in professional military education like the Army War College,
    U.S. Naval Academy, and Air University. These chairs constitute a
    distributed network and forum for championing new research ideas across
    the Services education system.
        For the future, OFT is investigating new concepts in directed and
    redirected energy, which the office firmly believes will fundamentally
    change the character of warfare; is exploring the national security
    implications and departmental impact of emerging pandemic diseases; and
    is launching an in-depth seminar series on energy to identify
    alternative paths the Department can take regarding conservation,
    efficiencies, and reuse.

        72. Senator Lieberman. Secretary Rumsfeld, does OFT have the
    appropriate level of funding and staffing to adequately promote
    transformation in the military?
        Secretary Rumsfeld. Yes. With a staff of never more than 17 action
    officers, OFT has worked with other elements within the DOD to produce
    or achieve the following:

              1. A new concept of ``operationally responsive space'' that
            promises to make rapidly deployable satellites with tailored
            payloads (TACSATs) an organic capability for Joint Force
            Commanders. Working with PACOM, the Naval Research Laboratory,
            and private industry, OFT has created a new ``paradigm'' for
            the military use of space.
              2. A DOD-wide architecture for the development of a range of
            small satellites for use by future Joint Force Commanders.
            Central to this architecture is a modular bus that will allow
            satellite developers to combine standard components to create
            ``tailored'' satellites. The development of the modular bus is
            essential to the effort to make space assets and forces
            operationally responsive.
              3. An experimental M-hull warship (``Stiletto'') that has
            proven it can: (a) move at high speeds without subjecting its
            crew and passengers to the shock of plowing through waves and
            surf; (b) carry a high payload for its size and weight; and (c)
            fit easily into the sort of network of sensors and platforms
            that is the basis of distributed military operations.
              4. A prototype urban warfare vehicle (the Full-Spectrum
            Effects Platform (F-SEP)) that successfully integrates lethal
            and non-lethal technologies to broaden the range of options
            available to a commander in an urban environment. The ability
            of OFT and its development partners to create the concept for
            this vehicle and then rapidly turn the concept into an
            effective system has demonstrated the potential of a new and
            innovative approach to defense acquisition.
              5. A conceptual framework for network centric warfare that
            has been adopted throughout DOD.
              6. A network of ``transformation chairs'' established in
            professional military schools to promote the cultural change
            that is at the heart of transformation. These chairs are
            supported by carefully crafted case studies, simulations, and
            other academic materials.
              7. Participation as the only regular representatives of the
            Secretary of Defense in joint concept development and
            experimentation (JCD&E). OFT has worked persistently and
            successfully with JFCOM, for example, to involve the staffs of
            the COCOMs in joint wargames.
              8. A Naval Force Structure study requested by Congress. The
            strategic and operational implications of that study will be
            explored in a series of exercises with the Navy starting this
            April.

        OFT has achieved these and other goals within its total budget.

                              submarine production
        73. Senator Lieberman. General Pace, the QDR recommends that
    submarine production remain at one boat a year until 2012, when
    production will accelerate to two boats a year. At this point, China's
    submarine force is on the road to matching the United States in size
    and capability. But their building rate is exceeding ours. Furthermore,
    the Chinese are building submarines that are quieter and more elusive.
    The latest Navy force structure plan calls for maintaining
    approximately 50 attack submarines. But if we wait until 2012 to
    accelerate to two ships a year, we will fall below the force structure
    level of 50 boats. It seems that our plans for submarines are
    determined by a constrained Navy ship building plan instead of the
    strategic requirements we are facing. Why is procurement for submarines
    remaining at the one boat per year level?
        General Pace. The QDR involved a thorough review of our submarine
    force structure requirements and determined that a production rate of
    one boat per year through 2012 is an acceptable level of risk. We
    understand the QDR is a point-in-time document in a very dynamic
    process, so we will continually assess our total force capabilities
    against both the current and future threats to our national interests.
    While submarines remain a key element of the total force, they are not
    the only component of our anti-submarine warfare (ASW) capabilities.
    With the help of Congress, the Department has invested significant
    resources in ASW platforms, sensors, and training so our overall
    capability in this challenging warfighting area continues to keep pace
    with the threat.

        74. Senator Lieberman. General Pace, what is the strategic impact
    if we fall below 50 submarines?
        General Pace. The QDR looked at shipbuilding programs, taking into
    account both quantity and quality in assessing overall capability and
    strategic risk. The multi-mission Virginia class submarines being built
    today provide significantly improved capabilities in littoral warfare
    and special operations over previous fast attack submarines. Balancing
    these improved capabilities against the Navy's submarine force
    structure requirements, the QDR determined that future force structure
    from the proposed building rates resulted in an acceptable level of
    risk. The Department will continually assess our total force
    capabilities against both the current and future threats to our
    national interests.

        75. Senator Lieberman. General Pace, if we wait until 2012 to
    increase production, can our industrial base in submarine production
    sustain itself?
        General Pace. The Department continues to closely monitor the
    health of the entire shipbuilding industry and we are confident that
    the industrial base can continue to function effectively at the
    programmed submarine construction rates. The support of Congress for
    the Virginia class multiyear procurements, for example, allowed the
    Navy and submarine builders to achieve efficiencies in current
    submarine production that would not otherwise be possible. These
    efficiencies keep the submarine industrial base healthy and able to
    flex to increased production in the future.

                             joint experimentation
        76. Senator Lieberman. General Pace, joint experimentation is an
    integral part of the military transformation effort. We need scientific
    experimentation of joint warfighting to determine the effectiveness of
    the endeavors. The 2002 joint exercise, the Millennium Challenge,
    helped determine the military's progress in joint tactics and
    technologies. Joint experimentation promotes efficiency and ultimately
    saves us resources in the future. I am concerned that the funding for
    joint experimentation has been reduced in the fiscal year 2007 budget.
    In particular, the Navy has suffered large cuts in advanced technology
    development and joint experimentation. Can you provide me with the
    rationale for this reduction?
        General Pace. USJFCOM's joint experimentation funding in the past
    has been provided through the U.S. Navy. The joint experimentation
    funding has not been reduced but, per the guidance from the National
    Defense Authorization Act for Fiscal Year 2005, the funding line has
    been shifted from a Navy account to a Defense-wide account with Office
    of the Secretary of Defense for Acquisition, Technology, and Logistics
    providing oversight.

        77. Senator Lieberman. General Pace, why was the Navy targeted for
    this budget decision?
        General Pace. The Navy was not targeted for a budget cut in this
    area; rather USJFCOM funding was simply relocated. Beginning in fiscal
    year 2007, the funding for USJFCOM joint experimentation will no longer
    reside under the Navy's research, development, testing, and evaluation
    accounts. The funding line will be shifted to a Defense-wide account
    instead.
                                     ______

                    Questions Submitted by Senator Jack Reed
               science and technology and defense labs in the qdr
        78. Senator Reed. Secretary Rumsfeld, I note that the QDR generally
    discusses the role that technology has played in transforming our
    military and creating new capabilities--for example in the ability to
    rapidly share information on the battlefield. However, I am
    disappointed that the document does not provide any specific guidance
    for the Department to shape its investments in this critical area--
    either in terms of funding targets, areas of emphasis, strategies for
    future investments, or new roles for our defense laboratories in
    accelerating the technological transformation of the Department. Why
    weren't any of these areas, or related research and technology issues,
    discussed in more detail in the QDR?
        Secretary Rumsfeld. The QDR reaffirms the vector for rapidly
    sharing information on the battlefield. The details of funding targets,
    specific areas of emphasis, and roles and responsibilities for
    accelerating technological transformation are more appropriately found
    in the Strategic Planning Guide and the Joint Program Guidance that
    will be published this spring. These documents will provide the
    guidance and detail you highlight.

                special operations science and technology budget
        79. Senator Reed. Secretary Rumsfeld, the 2007 budget you are
    proposing reduces Special Operations Command's (SOCOM) S&T program by
    nearly 50 percent relative to 2006 appropriated levels, down to $95
    million. The 2007 request is also below the original 2006 budget
    request. Given the important role that SOCOM is playing in current
    operations and the expanded capabilities that our special operators are
    deriving from new technologies, what was the justification for this
    reduction?
        Secretary Rumsfeld. Given the competing demands across the
    Department, the fiscal year 2007 President's budget request represents
    a balance among near- and long-term priorities. The SOCOM S&T request
    is properly prioritized and represents a balanced investment among
    near-term requirements and planning to meet future threats.

        80. Senator Reed. Secretary Rumsfeld, what areas of research and
    technology development of particular interest to SOCOM are underfunded
    due to this decrease?
        Secretary Rumsfeld. There are no underfunded efforts. The budget is
    properly balanced and prioritized.

                                   biometrics
        81. Senator Reed. Secretary Rumsfeld, I understand that the Army is
    acting as the Executive Agent for DOD biometrics, in regard to
    biometric technologies being used to fight the war on terror. I also
    understand that other efforts are being undertaken by the Intelligence
    Community, defense agencies, and the other Services. What are we doing
    to ensure our biometric efforts are not overlapping, are not
    disconnected, and are not falling into confusion of where the
    responsibility rests?
        Secretary Rumsfeld. DOD biometrics participates in national-level
    forums for information sharing and interoperability and is the
    recognized leader in the formulation of national and international
    biometrics standards. The Biometrics Community of Interest (COI),
    composed of representatives from across the government, meets quarterly
    to deal with biometric issues and requirements. The COI is supported by
    Standards, Requirements, Policy, and Information Sharing Working
    Groups. A Biometrics Advisory Council (BAC) is being established with
    senior members from across the government. The BAC will provide a forum
    to bring the right people and perspectives together to provide insight
    and assist the Executive Agent in making decisions regarding biometric
    issues. We have conducted data calls throughout DOD to ensure that we
    are aware of current biometric capabilities and requirements. DOD
    biometrics is also drafting policy that will specify and document
    responsibilities regarding biometrics throughout the DOD. Finally, we
    are undertaking several short-duration studies to develop a vision for
    DOD biometrics and assess how best to organize the DOD to support
    United States Government identity management efforts and DOD global war
    on terror missions.

        82. Senator Reed. Secretary Rumsfeld, what is the total investment
    being requested in this budget for biometrics technology development,
    procurement, and operation?
        Secretary Rumsfeld. The total Executive Agent investment for
    biometrics in fiscal year 2007 is $14.5 million (Research, Development,
    Test, and Evaluation Appropriation), $1.4 million (Other Procurement,
    Army Appropriation) and $11.8 million (Operations and Maintenance, Army
    Appropriation). The Army Intelligence investment for intelligence
    related R&D is $4 million, $13 million for Operations Maintenance, Army
    and $8 million for Other Procurement, Army. The U.S. Army Intelligence
    and Security Command has requested $80 million (Operations and
    Maintenance, Army Appropriation) for Contractor Analysis ($50 million),
    Contractor Forensics ($10 million), and Software and Equipment ($20
    million).

        83. Senator Reed. Secretary Rumsfeld, the Chief of Staff of the
    Army is the Executive Agent for DOD biometrics with responsibility
    delegated to the Army Chief Information Officer (G-6). What are the
    relative investments being made by Army Intelligence (G-2) and the Army
    CIO (G-6) on the biometric programs and how are their efforts
    coordinated?
        Secretary Rumsfeld. The Secretary of the Army is the Executive
    Agent for DOD. The Army Chief Information Officer (G-6) is closely
    partnered with Army Intelligence (G-2) in order to share biometric
    match results and subsequently perform intelligence analysis and
    exploitation. The G-2 provides leadership on in-theater biometric
    collection and matching, and synchronizes these capability developments
    with the G-6 and its biometric futures capability.
        The DOD ABIS is the central DOD repository for detainee biometric
    data. ABIS also receives latent fingerprint files derived from forensic
    investigations through various sources. The ABIS is modeled after the
    highly successful FBI system, the IAFIS. Within the Department, ABIS
    shares match results with the original source and with relevant
    entities from the Intelligence Community, detainee operations, and
    interagency partners.
        The Army NGIC is developing the Biometrics Intelligence Resource
    (BIR), which will be an automated system that ingests biometric
    signatures and associated intelligence collected from DOD biometric
    sensors for the purpose of positive identification and tracking of
    individuals. The BIR will serve as a central repository for biometric
    information and related intelligence collected by DOD sensor systems.
    Army G-2, in conjunction with the U.S. Army Intelligence Center and
    Fort Huachuca Language and Technology Office fielded the Biometrics
    Automated Toolset (BAT), which was initially developed under the Human
    Intelligence and Counterintelligence Support Tools Advanced Concept
    Technology Demonstration. BAT is a multimodal biometric system that
    collects fingerprints, iris images, and facial photos. It is a self-
    contained biometrics searching/matching tool which enrolls, identifies,
    and tracks persons of interest, and builds ``digital dossiers''
    including interrogation reports, intelligence reports, related records,
    incident reports, and relationships.
        The Biometric Identification System for Access (BISA) system is
    installed at 10 sites in Iraq. BISA is a nonportable system designed to
    enhance force protection by establishing a biometric identity record
    and issuing an access credential for the non-U.S. workforce at U.S.
    military facilities in Iraq. BISA enrollments are transmitted to the
    DOD ABIS, located in Clarksburg, West Virginia, where they are compared
    to previously collected biometric records and other name-based data.
    After this comparison, if no disqualifying information is discovered, a
    biometric access card is issued and used to verify that the person
    presenting it for access to U.S. facilities in Iraq is entitled to
    access.
        The Army Office of the Provost Marshal General (OPMG) is the DOD
    statutory and regulatory official responsible for administering and
    operating programs related to enemy prisoners of war (EPW), civilian
    internees (CI), and detained persons (DP). The OPMG is the sponsor of
    the Detainee Reporting System (DRS), which enrolls EPW, CI, and DP and
    assigns them with the official Internment Serial Number (ISN). DRS
    transmits enrollment data (ISN, biographic data, and fingerprints)
    through the National Detainee Reporting Center for inclusion in the DOD
    ABIS.
        As we continue to improve and expand our collection capabilities
    overseas, we are also working to enhance our ability to store and
    exploit the collected data within an enterprise environment that
    includes other government entities, such as the FBI. Innovative new
    enhancements to the DOD ABIS are being developed to promote government
    interoperability, increase throughput, and expand the capacity of the
    system. In the future, the ABIS will be able to conduct searches on
    individuals through the combined use of fingerprints, photographs, and
    iris information. The BFC continues to search for viable commercial
    products to provide the DOD with the most advanced and capable systems
    available.

                     robust nuclear earth penetrator study
        84. Senator Reed. Secretary Rumsfeld, Congress moved the $4.0
    million in Department of Energy (DOE) funds that had been requested for
    fiscal year 2006 for the Robust Nuclear Earth Penetrator (RNEP) to DOD
    to conduct a penetrator study that could support either a conventional
    or a nuclear earth penetrator. It is important that DOD clearly
    identify its plan for the $4.0 million available in fiscal year 2006
    and any additional funds requested for fiscal year 2007. The concern is
    that the DOD funds will be used to support the RNEP feasibility study.
    DOE has no funds for the RNEP in either the fiscal year 2006
    appropriation or the fiscal year 2007 request. DOD has no funds
    specifically designated for the RNEP in its fiscal year 2007 budget
    request. Will any DOD fiscal year 2006 funds or fiscal year 2007 funds
    be used to support the feasibility study for the RNEP?
        Secretary Rumsfeld. No. The RNEP study was terminated. While the
    Department supported the completion of this joint DOD-DOE study,
    Congress did not support it. We will use the fiscal year 2006 funds
    provided by Congress to conduct a penetrator sled test experiment in
    fiscal year 2006 at Holloman Air Force Base, New Mexico.

    conventional warheads on the trident d-5 sea-launched ballistic missile
        85. Senator Reed. Secretary Rumsfeld, as part of the effort to
    achieve a prompt global strike capability within 24 months, the Navy
    has proposed to put conventional warheads on some Trident D-5 sea-
    launched ballistic missiles (D-5 SLBM) on Trident submarines. There are
    many issues associated with this plan including serious concerns about
    distinguishing between a nuclear D-5 and a conventional D-5, command
    and control issues, treaty issues, and cost. In addition, a U.S.
    decision to use ballistic missiles to deliver non-nuclear warheads
    could provide countries of concern a cover story for suspect nuclear
    weapons and ballistic missile programs. A debate on the issue with you
    would probably not be productive, but it would be useful to highlight
    concerns about the proposal and obtain all analysis conducted to
    address the issues.
        The Department has proposed putting conventional warheads on
    Trident D-5 sea-launched ballistic missiles. This is a troubling
    proposal that has numerous associated issues. Could you please provide
    all studies and analyses that have been conducted addressing or
    discussing the issues associated with this proposal?
        Secretary Rumsfeld. The following studies and analyses are related
    to conventional warheads on some Trident D-5 sea-launched ballistic
    missiles:

              (1) The Quadrennial Defense Review Report, February 2006
              (2) The Strategic Capabilities Assessment, April 2005
              (3) U.S. Strategic Command, Conventional Kinetic Options for
            Global Deterrence, September 2005
              (4) Ballistic Missile ``Overflight''--An Assessment of the
            Issues, Prepared for U.S. Space Command, December 2004

        86. Senator Reed. Secretary Rumsfeld, could you also provide a list
    of ongoing, not yet completed, studies and any additional studies that
    are planned or will have to be completed?
        Secretary Rumsfeld. A prompt global strike analysis of alternatives
    is ongoing under the leadership of U.S. Air Force Space Command.

        87. Senator Reed. Secretary Rumsfeld, will Congress be receiving a
    reprogramming request to begin work on conventionally armed D-5
    missiles in fiscal year 2006?
        Secretary Rumsfeld. At this time the Department has not initiated a
    reprogramming of funds for fiscal year 2006 funds to support work on
    conventionally armed D-5 missiles.

        88. Senator Reed. Secretary Rumsfeld, has any money already been
    spent in support of conventionally armed D-5 missiles, and if yes, on
    what specific activities was the money spent?
        Secretary Rumsfeld. The Department is using funds appropriated for
    studies and concept development to explore a range of prompt global
    strike options, including the Conventional Trident Modification (CTM).
    However, there has not been any expenditure of funds for CTM-unique
    development, hardware, or software.

                        strategic arms reduction treaty
        89. Senator Reed. Secretary Rumsfeld and General Pace, the
    Strategic Arms Reduction Treaty (START) I will expire in 2009. In order
    to extend the treaty a party to the treaty must notify the other in
    2008. There is debate in the administration as to whether the treaty
    should be extended. The Intelligence Community is interested in seeing
    this treaty extended as it provides a wealth of knowledge into the
    Russian strategic forces, but DOD may not be as enthusiastic about
    extending the treaty. At a minimum the administration should begin to
    study the pros and cons of extending the treaty. Has the DOD initiated
    or are there any plans to initiate any studies to assess the benefits
    of extending the START I, which expires in 2009?
        Secretary Rumsfeld. START provisions require the parties to meet no
    later than 4 December 2008 to consider whether the treaty will be
    extended. Extension of START in accordance with its terms requires the
    agreement of all five parties to the treaty (Russian Federation,
    Ukraine, Belarus, Kazakhstan, and the United States). The
    administration is considering possible options, but has not yet reached
    a decision on how to proceed with respect to START.
        General Pace. The Cold War era START, with its many intrusive
    inspections and verifications measures, is outdated. The United States
    needs forces posture flexibility to meet emerging threats and to
    execute the war on terrorism. START provisions require the parties to
    meet no later than 4 December 2008 to consider whether the treaty will
    be extended. Extension of START in accordance with its own terms would
    require the agreement of all five parties to the treaty (Russia,
    Ukraine, Belarus, Kazakhstan, and the United States). The DOD is
    engaged in a review process concerning the direction for the post-START
    dialogue with the Parties to the START. A post-START dialogue should
    more closely match the security needs of the United States in the 21st
    century and be based upon trust and transparency.

                                nuclear weapons
        90. Senator Reed. Secretary Rumsfeld and General Pace, will any
    nuclear warheads be retired in fiscal year 2007?
        Secretary Rumsfeld and General Pace. Yes. The Joint DOD and DOE
    Requirements and Planning Document, approved by the Nuclear Weapons
    Council, includes warhead retirements in fiscal year 2007.

        91. Senator Reed. Secretary Rumsfeld and General Pace, will the W-
    62 warhead be dismantled, and if so, when will the process begin?
        Secretary Rumsfeld and General Pace. Yes. The Defense Threat
    Reduction Agency's Stockpile Executive Summary shows that W-62 warheads
    were dismantled in the third and fourth quarter of fiscal year 2005.
    The National Nuclear Security Administration's Nuclear Weapons
    Production and Planning Directive 2006-0 indicates that W-62 warheads
    are scheduled for dismantlement from fiscal year 2006 through fiscal
    year 2010.

        92. Senator Reed. Secretary Rumsfeld and General Pace, will the
    last phase of the W-76 life extension program transition to a Reliable
    Replacement Warhead (RRW)?
        Secretary Rumsfeld. The goal of the RRW program is to assure, over
    the long term, the Nation's ability to sustain the nuclear stockpile
    with replacement warheads that provide the same military capabilities
    as the warheads they replace. RRW will serve as a complement to, and
    potentially a more cost effective and reliable long-term replacement
    for, the current Stockpile Life Extension Programs. As part of a larger
    transformation strategy, all existing legacy warheads will be studied
    for the feasibility of their replacement over the next 25 to 30 years
    in lieu of life extension. The ongoing RRW program is specifically
    examining the potential to replace a portion of W-76 warheads on
    Submarine Launched Ballistic Missiles. Since the RRW feasibility study
    is ongoing and scheduled to be completed in November 2006, it is too
    early to decide on the exact impact that a RRW will have on the W-76
    life extension program.
        General Pace. It is too early to decide the exact impact that a RRW
    will have on the W-76 life extension program. The Nuclear Weapons
    Council formed a joint Project Officers Group, co-chaired by the Navy
    and the Air Force, to study the feasibility of a RRW. This study is
    scheduled to be completed in November 2006.
                                     ______

                 questions submitted by senator daniel k. akaka
                              force transformation
        93. Senator Akaka. Secretary Rumsfeld, in its December 2004 report,
    the GAO reported that key practices for successful transformation of
    the Armed Forces include leadership that sets the direction and assigns
    accountability for results. Can you tell me what, if any, formal
    mechanisms have been, or will be, put into place to ensure that clear
    and consistent priorities are set amongst the key organizations
    involved in the transformation and that the appropriate resources are
    allocated to these priorities?
        Secretary Rumsfeld. There are several formal mechanisms for making
    sure that there are clear and consistent priorities and that
    appropriate resources are allocated to them. First among them is the
    ``Transformation Planning Guidance'' (TPG) promulgated by myself in
    April 2003. The TPG set out a number of transformation goals and
    assigned responsibilities to elements of the DOD for the attainment of
    those goals.
        For example, the TPG directed OFT to prepare a Strategic
    Transformation Appraisal (STA) annually for myself based upon
    information provided by the Services and JFCOM in their
    ``transformation roadmaps.'' OFT has completed three Strategic
    Transformation Appraisals. More importantly, the Services have
    responded to the requirement that they prepare ``transformation
    roadmaps'' by creating documents that have strengthened their own
    planning processes. In addition, the new Business Transformation Agency
    (BTA) is now working closely with OFT on the next iterations of the TPG
    and STA in order to show I have the connections between business
    transformation and force transformation.
        I have also directed the Services, the Joint Staff, Joint Forces
    Command, the combatant commands, and the OSD staff to cooperate in the
    development of a ``family'' of operating and functional concepts that
    will place planning for the future on a strong conceptual foundation.
    This is part of my effort to move away from ``threat-based'' planning
    and toward ``capabilities-based'' planning. It has not been easy for
    DOD's components to agree on the specifics of several of the more
    challenging joint operating concepts, but the effort by all those
    involved to fulfill my guidance has produced a vigorous ongoing
    discussion that has highlighted operational-level risks and
    opportunities that would otherwise have been neglected.
        Once concepts have been approved, they are ``tested'' in wargames,
    simulations, and exercises, some of which are joint and the rest of
    which are paid for and managed by the separate Services. These JFCOM-
    sponsored and Service-sponsored ``experiments'' have already helped
    significantly to clarify the challenges that will face U.S. forces in
    the future. Recent ``experiments'' have influenced both the revision of
    warfighting concepts and plans for future ``experiments.'' The goal of
    OFT is to support an ongoing cycle of concept development and
    experimentation that will keep the armed services ahead conceptually of
    any likely opponent.
        The concepts, once validated through exercises and the analysis of
    ``lessons learned'' from actual operations, will lead logically to
    clusters of capabilities that the Services will convert into programs
    and budgets. Last May, I directed DOD's components to use the Joint
    Capability Area categories and terminology approved by the Joint Staff
    in force planning and budgeting for the next FYDP (fiscal year 2008-
    fiscal year 2013). OSD/PA&E will work with the Service staffs to make
    sure that their POMs use this terminology and reflect the capabilities
    needed for ``transformation.''

                                 navy qdr plans
        94. Senator Akaka. General Pace, according to the recently released
    2006 QDR, the Navy plans to adjust its force posture and basing to
    provide at least six operationally available and sustainable carriers
    and 60 percent of its submarines in the Pacific to support engagement,
    presence, and deterrence. With this in mind, what are the DOD's plans
    regarding future forward homeporting in Hawaii?
        General Pace. The Navy continues to review current and alternate
    carrier ports. The existing nuclear-powered carrier capable homeports--
    Norfolk, San Diego, Bremerton/Everett--will continue to have carriers
    commensurate with existing support infrastructure. In addition,
    Yokosuka, Japan, will transition to a nuclear-powered capable homeport
    when George Washington replaces Kitty Hawk in 2008. The Navy has been
    examining the role that Mayport, Pearl Harbor, and Guam will play with
    the all-nuclear carrier fleet. Pearl Harbor and Guam are both currently
    capable of hosting nuclear-powered carriers; these ports will continue
    to play a vital role in Pacific Theater strategic objectives. However,
    significant unfunded investment is necessary ($3.12 billion estimate),
    including basing an air wing in Hawaii to enable homeporting a carrier
    in Pearl Harbor.
        As for submarines in the Pacific, the Navy currently utilizes
    support facilities and infrastructure in San Diego, Pearl Harbor, and
    Guam. Currently, there are 17 attack submarines homeported in Hawaii.
    Over the next few years, Navy's force posture will include several
    submarine decommissionings, commissionings, and fleet transfers that
    will affect ships homeported in Pearl Harbor. By 2020, there will be 15
    Los Angeles class and 3 Virginia class submarines stationed in Hawaii
    out of an overall force structure of 48 attack submarines (37 percent).

                         army national guard reduction
        95. Senator Akaka. General Schoomaker, the President's budget
    proposal for fiscal year 2007 reduced the ARNG's combat brigade
    structure by 18 percent. This reduction will affect brigades in every
    State including the 29th BCT in Hawaii which recently returned from a
    year tour in Iraq. While I have received assurances from you and
    Secretary Rumsfeld that the ARNG will not be reduced, is it not a
    reduction if the ARNG, which I have been informed has 34 BCTs, is
    restructured to have 28 BCTs? If not, please explain why it is not a
    reduction.
        General Schoomaker. Army is not reducing the size of the ARNG; the
    total number of brigades remains at 106. The Army will fund the ARNG up
    to its authorized end strength of 350,000. Prior to the 2005 QDR, the
    Army had developed a plan for 34 combat brigades and 72 support
    brigades in the ARNG and 43 combat brigades and 75 support brigades in
    the Active component. This provided up to 20 combat brigades for steady
    state operations. The QDR showed a lower requirement for combat
    brigades but a greater requirement for brigades able to respond more
    immediately to meet homeland defense/civil support. Therefore, we
    elected to increase the ARNG domestic capability by rebalancing six
    BCTs and one Combat Aviation Brigade to seven support brigades, four
    multi-functional brigades, and three engineer brigades. These seven
    brigades provide engineer, communications, transportation, logistical,
    chemical, and medical capabilities critical to homeland defense and
    civil support.
                                     ______

                   Questions Submitted by Senator Bill Nelson
                             funding of navy fleet
        96. Senator Bill Nelson. Secretary Rumsfeld, last year, the
    Commander of U.S. Pacific Command, Admiral William Fallon, told
    Congress that China's military buildup is ``unprecedented and
    proceeding quite rapidly.'' More recently, the QDR directs the Navy to
    assume a ``greater presence'' in the western Pacific by adding at least
    one aircraft carrier and five nuclear submarines over the next decade.
    Given the current and potential growth of tension in the Pacific, and
    our continuing commitments in Central Asia, the geo-strategic risk
    associated with a reduction in the size of our carrier fleet is
    unjustified and unacceptable. DOD and Navy leadership argue that new
    operating practices in the Fleet Response Plan (FRP) mitigate the
    risks. However, a recent RAND study (American Carrier Airpower at the
    Dawn of a New Century, RAND, 2005) for the Navy notes that, ``FRP was
    conceived and formulated on the core premise that the Service would
    retain its longstanding post-Cold-War force structure of 12 deployable
    carriers and 10 active air wings.''
        Consistent with this assessment of current and future threats and
    requirements, Congress enacted legislation signed by the President that
    requires a minimum 12-carrier naval force structure in law. The Defense
    Department's budget request for fiscal year 2007 does not include
    funding necessary to meet this requirement. We appreciate that the law
    may have been enacted so late in your budget estimate process that the
    fiscal year 2007 budget request does not fully fund this requirement.
    What is the funding shortfall in your fiscal year 2007 budget request
    that will be necessary to ensure that the Nation has the 12 operational
    carriers required in law?
        Secretary Rumsfeld. The Department is asking Congress to amend the
    law so that the carrier fleet can be sized to the QDR's recommendation
    for 11 operational aircraft carriers. Therefore, the President's budget
    for fiscal year 2007 reflects the operation of 11 carriers.
        The Department has not determined what funding would be needed to
    maintain and operate the U.S.S. John F. Kennedy beyond fiscal year
    2006. The Department is submitting legislation to ask Congress to amend
    the law to allow the Department to operate 11 operational carriers as
    recommended by the recently completed QDR.

        97. Senator Bill Nelson. Secretary Rumsfeld, what is your plan to
    find or request the funds necessary to meet this requirement?
        Secretary Rumsfeld. We are asking Congress to amend the law so that
    the Department can reduce the fleet to the recently validated carrier
    fleet of 11.

        98. Senator Bill Nelson. Secretary Rumsfeld, will you include the
    necessary funding to sustain a 12-carrier fleet in either a budget
    amendment and/or a supplemental appropriations request?
        Secretary Rumsfeld. We are asking Congress to amend the law and
    allow the Department to retain 11 carriers as recommended by the QDR.
                                     ______

               Questions Submitted by Senator E. Benjamin Nelson
                  global information grid bandwidth expansion
        99. Senator Ben Nelson. Secretary Rumsfeld, it is my understanding
    that the Global Information Grid Bandwidth Expansion (GIG-BE) program
    was initiated prior to the war on terror, the establishment of Northern
    Command (NORTHCOM), and the 2005 BRAC recommendations. Does the current
    selection of sites currently connected to the GIG-BE provide for all
    the current and emerging needs of the DOD or was the total number of
    sites controlled by available funding?
        Secretary Rumsfeld. The GIG-BE sites were prioritized and validated
    by the Joint Staff. The GIG-BE sites were updated after the global war
    on terror began and NORTHCOM was established. New network requirements
    to expand the number of GIG-BE sites will be met by connecting key
    Defense Information System Network (DISN) nodes to GIG-BE nodes using
    leased telecommunication services.
    Forums exist for Services and agencies to submit their requests to the
    Capabilities Validation Working Group (CVWG), a subgroup that supports
    the DISN Customer Forum.

        100. Senator Ben Nelson. Secretary Rumsfeld, are there additional
    sites needing connection to the GIG-BE, as an outcome of the
    establishment of NORTHCOM?
        Secretary Rumsfeld. At present, we are not aware of additional
    sites needing connection to the Global Information Grid (GIG) as a
    result of the establishment of U.S. NORTHCOM. There are processes in
    place that allow Services and agencies to submit requests for
    connection to the GIG. Services and agencies may submit their requests
    to the CVWG, a subgroup that supports the DISN Customer Forum (DCF)
    requests that are validated by the CVWG are then submitted to the DISN
    Rates Management Council, which is made up of flag officers from each
    of the Services and meets semi-annually.

        101. Senator Ben Nelson. Secretary Rumsfeld, are there additional
    sites, as a result of base realignment (or other developments), which
    are now becoming critical, and which should be connected to the GIG-BE?
        Secretary Rumsfeld. At present, we are not aware of additional
    sites needing connection to the GIG as a result of the BRAC process.
    There are processes in place for Services and agencies to submit
    requests for connection to the GIG. Services and agencies may submit
    their requests to the CVWG, a subgroup that supports the DISN DCF.
    Requests that are validated by the CVWG are then submitted to the DISN
    Rates Management Council, which is made up of flag officers from each
    of the Services and meets semi-annually. Additional sites will be
    considered as part of ongoing reviews and incorporated into DISN
    expansion efforts.

        102. Senator Ben Nelson. Secretary Rumsfeld, some sites, originally
    identified and planned for connection to the GIG-BE, for reasons of
    budget or mission have not yet been connected to the GIG-BE. Should
    those sites be reviewed for connection in the future to the GIG-BE? If
    not, how will they be served and how will missions be affected?
        Secretary Rumsfeld. For those sites that were not included in the
    original GIG-BE upgrade, there will be ongoing reviews, within the DOD
    process, to determine future capability needs. All sites that did not
    receive GIG-BE upgrades will continue to use DISN services to fulfill
    mission requirements.

        103. Senator Ben Nelson. Secretary Rumsfeld, the QDR identifies the
    need for DOD to assist domestic agencies in the event of disaster, such
    as the Hurricanes Katrina and Rita disasters of last year. Does the
    GIG-BE have connectivity to necessary civilian agencies, such as the
    DHS?
        Secretary Rumsfeld. The GIG-BE program was intended and designed
    for DOD installations requiring long-term and continuous high bandwidth
    communications; the program also was to provide enhanced senior leader
    command and control, decisionmaking, and operations and intelligence
    capabilities. The GIG-BE provides the DOD with the capability to
    connect with necessary civilian agencies, such as the DHS.

        104. Senator Ben Nelson. Secretary Rumsfeld, is there sufficient
    diversification in the network to ensure reliable backup connectivity?
        Secretary Rumsfeld. Yes, there is sufficient diversification for
    the overall network.

        105. Senator Ben Nelson. Secretary Rumsfeld, is there funding in
    the 2007 budget request for additional GIG-BE sites?
        Secretary Rumsfeld. No. The fiscal year 2007 budget request
    reflects the sustainment of the entire DISN to include the GIG-BE
    segments, and the leased connection of key DISN nodes to GIG-BE.

                     service goals for gig-be connectivity
        106. Senator Ben Nelson. Secretary Rumsfeld, there are indications
    that the individual Services have additional sites which they would
    like to have connected to the GIG-BE. Please describe the process by
    which Services or COCOMs can requisition and establish such
    connections.
        Secretary Rumsfeld. A process has been developed for Services and
    COCOMs to submit requests for connection to the GIG-BE network.
    Services and agencies may submit their requests to the CVWG, a subgroup
    that supports the DISN Customer Forum. Requests that are validated by
    the Working Group are then submitted to the DISN Rates Management
    Council, which is comprised of flag officers from each of the Services
    for final approval. Using this process, the approved list of key DISN
    bases is updated annually.

        107. Senator Ben Nelson. Secretary Rumsfeld, does DOD regard this
    as a matter for the individual Services or will there be a Department-
    wide directive?
        Secretary Rumsfeld. A Department-wide process has been established
    with the full participation of the Services, to oversee GIG
    connectivity implementation. Services and agencies may submit their
    requests to the CVWG, a subgroup that supports the DISN Customer Forum.
    Requests that are validated by the working group are then submitted to
    the DISN Rates Management Council, which is comprised of flag officers
    from each of the Services for final approval. Using this process, the
    approved list of key DISN bases is updated annually.
                                     ______

                    Questions Submitted by Senator Evan Bayh
                              joint strike fighter
        108. Senator Bayh. Secretary Rumsfeld, with respect to the F-136
    alternate engine program for the JSF, do you think it's a good idea for
    us to be dependent on sole source suppliers for critical future
    technologies in a program this large and with so many international
    partners?
        Secretary Rumsfeld. The concepts of sole source suppliers has been
    applied over many product lines. The Department depends on sole
    suppliers for several large programs and understands the risks involved
    with sole-source dependence. Both the F/A-18E/F and the F-22 depend on
    sole engines sources. The Department regards this sole source
    dependency as an acceptable risk for both us and our international
    partners.

        109. Senator Bayh. Secretary Rumsfeld, has not the history of U.S.
    systems and weapons development and procurement since the mid-1970s
    demonstrated the importance of competition in terms of cost and supply?
        Secretary Rumsfeld. Please see the answer to question 67 for this
    response.

        110. Senator Bayh. Secretary Rumsfeld, do you expect the British
    Government to react negatively to the decision to terminate the F-136
    alternative engine program?
        Secretary Rumsfeld. It is reasonable to expect the British
    Government to express their concern over the decision to terminate the
    F-136 alternative engine program and possible reduction of industrial
    participation by Rolls-Royce. The Department is confident that the
    British Government will also recognize that this decision is important
    in keeping affordability a corner stone of the JSF program and is the
    right decision for all of the JSF partners. Rolls-Royce remains an
    integral and critical element of the JSF program, fully responsible for
    delivering the lift fan assembly for all Short Take Off and Vertical
    Landing engines. The Department continues to focus on JSF best-value
    industrial participation with all international partners.

        111. Senator Bayh. Secretary Rumsfeld, do you believe this may
    impact the number of British-procured JSFs?
        Secretary Rumsfeld. The Department does not believe the decision to
    cancel the F136 engine will have any impact on the number of JSFs the
    British Government procures. We are confident that canceling the F136
    engine is an important step in ensuring the affordability of the
    aircraft the British Government is scheduled to buy. From an industrial
    perspective, Rolls-Royce remains an integral and critical element of
    the JSF program, fully responsible for delivering the lift fan assembly
    for all short take-off and vertical landing engines.

        112. Senator Bayh. Secretary Rumsfeld, will a lower overall number
    of aircraft purchased drive up the cost-per-unit of the JSF?
        Secretary Rumsfeld. If fewer JSF are purchased, the smaller
    production runs can increase procurement costs because they reduce the
    advantages of ``learning curve'' effects (whereby costs decrease as a
    company produces more units) and of ``rate effects'' (whereby fixed
    costs are spread over the total number of units produced).
                                     ______

             Questions Submitted by Senator Hillary Rodham Clinton
                       small business innovative research
        113. Senator Clinton. Secretary Rumsfeld, are you requesting any
    funds to establish a formal Small Business Innovative Research (SBIR)
    Phase III program which would serve to transition successful programs
    out of Phase II SBIR programs into formal acquisition programs?
        Secretary Rumsfeld. The fiscal year 2007 budget does not contain a
    specific request for funds to aid in the transition of SBIR Phase II
    projects to Phase III and into formal acquisition programs. Title 15,
    section 638, specifically calls for SBIR Phase III, in which
    applications of SBIR-funded research are further developed, to be
    funded by non-SBIR funds. It is the administration's position that
    beyond Phase II, firms funded via SBIR must compete with the broader
    supply markets--including large and small firms--to win business. The
    reason for this is simple: the Department wants the very best equipment
    and materiel resources for our warfighter, regardless of the source, to
    maximize the benefits from full and open competition.
        Nevertheless, it is important that our early-stage investments,
    such as SBIR which funds technical feasibility and prototype
    demonstration of new technologies, are targeted to maximize the
    potential to transition to meet a technology need. To do this, we
    ensure that all SBIR projects are fully integrated into the DOD R&D
    investment strategy and roadmaps to acquisition, as documented in the
    DOD Basic Research Plan, Defense Technology Area Plan, and Joint
    Warfighting Science and Technology Plan.

        114. Senator Clinton. Secretary Rumsfeld, what programs exist in
    this request to help small businesses transition their technologies out
    of the SBIR program?
        Secretary Rumsfeld. The fiscal year 2007 budget does not contain a
    specific request for programs to aid in the transition of SBIR-funded
    projects exclusively. However, the budget contains several programs
    designed to facilitate the transition of technology--both SBIR-funded
    and non-SBIR-funded--through further development, testing, or
    evaluation:

             The Technology Transition Initiative (TTI) accelerates
            the transition of mature technologies from DOD Science and
            Technology (S&T) into DOD acquisition programs of record. This
            year, approximately 20 percent of the TTI projects selected for
            funding leveraged SBIR efforts.
             The Defense Acquisition Challenge Program (DACP)
            increases the introduction of innovative and cost-saving
            technologies into DOD acquisition programs. From fiscal year
            2003-2005, approximately 70 percent of the DACP projects were
            awarded to small and medium enterprises.
             Section 108(b)(2) of the Defense Production Act
            stipulates that the President shall accord a strong preference
            for small businesses in providing any assistance under the act.
            To better position small businesses to receive title III
            projects, the title III program has begun a process whereby
            SBIR Phase II topics are developed that directly correspond to
            future planned title III activities.
             An essential part of each Advanced Concept Technology
            Demonstration (ACTD) and Joint Capabilities Technology
            Demonstration (JCTD) is identifying the best-of-breed
            technologies that will contribute to solution of the
            warfighting problem or need. This best-of-breed analysis of
            alternatives reviews SBIR solutions that may support the
            desired capability. In addition, capability needs for which no
            acceptable technical solution exists are often submitted as
            SBIR topic areas.

                 fuel cells and alternative energy technologies
        115. Senator Clinton. Secretary Rumsfeld, a few years ago, the
    Department established energy and power technologies, including fuel
    cells, batteries, hybrid engines, and other research initiatives as one
    of its three major S&T thrust areas. Unfortunately, this emphasis was
    not matched by significant funding increases for these types of
    efforts, which could serve to improve the efficiency of military
    vehicles or develop new systems to power the many information
    technologies, computer networks, sensors, and radios we plan to deploy
    with our next generation defense systems. What is your planned
    investment in 2007 for research on energy and power technologies?
        Secretary Rumsfeld. The Energy and Power Technology Initiative
    (EPTI) focuses on electric power component technologies in the areas of
    power generation, energy storage and power control and distribution
    which includes many technologies in support of hybrid electric
    vehicles. Since fiscal year 2003, the Department's investment in
    applied research and advanced technology has grown from approximately
    $90 million to more than $240 million in fiscal year 2006. The fiscal
    year 2007 budget request includes more than $270 million for energy and
    power technologies within the Department. The fiscal year 2007
    investment is predominately in the areas of power generation (fuel
    cells, superconductivity technology, and other novel power technology)
    and control and distribution (silicon carbide materials, power
    electronics, and thermal management).

        116. Senator Clinton. Secretary Rumsfeld, how are these investments
    coordinated among the Services and defense agencies?
        Secretary Rumsfeld. The Department's investments in fuel cells,
    batteries, hybrids, and other alternative energy technologies are
    coordinated at several levels. First, there is the EPTI which is
    managed by the Office of the Director, Defense Research and
    Engineering. The EPTI provides oversight and coordination across the
    Services in three major electric power component technology areas:
    (generation, storage and distribution, and control). Next, there is the
    Interagency Advanced Power Group (IAPG) which includes NASA and the
    DOE. The IAPG is a venue for free information exchange among government
    researchers and program managers. There are also numerous technology
    specific work groups and technical conferences. Some of the work groups
    include the Tri-Service Capacitor Technologies Working Group, the
    Interagency Hydrogen and Fuel Cell R&D Work Group, and the Power
    Sources Work Group of the DOD Fuze Integrated Product Team. There are
    also recurring technical meetings including the Army-led Power Sources
    Conference, the Navy-led Electrochemical Power Sources R&D Symposium,
    and the DOD Logistics Fuel Processing Conference.

        [Whereupon, at 1:13 p.m., the committee adjourned.]

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                      2007

                                  ----------

                           TUESDAY, FEBRUARY 14, 2006

                                           U.S. Senate,
                                   Committee on Armed Services,
                                                        Washington, DC.

                                  ARMY POSTURE

        The committee met, pursuant to notice, at 2:40 p.m. in room
    SR-325, the Caucus Room, Russell Senate Office Building,
    Senator John Warner (chairman) presiding.
        Committee members present: Senators Warner, Inhofe, Thune,
    Levin, Kennedy, Lieberman, Reed, Akaka, Dayton, and Clinton.
        Committee staff members present: Charles S. Abell, staff
    director; Leah C. Brewer, nominations and hearings clerk; and
    John H. Quirk V, security clerk.
        Majority staff members present: William M. Caniano,
    professional staff member; Regina A. Dubey, professional staff
    member; Ambrose R. Hock, professional staff member; Gregory T.
    Kiley, professional staff member; Sandra E. Luff, professional
    staff member; Derek J. Maurer, professional staff member; David
    M. Morriss, counsel; Lucian L. Niemeyer, professional staff
    member; Stanley R. O'Connor, Jr., professional staff member;
    Sean G. Stackley, professional staff member; Scott W. Stucky,
    general counsel; Diana G. Tabler, professional staff member;
    and Richard F. Walsh, counsel.
        Minority staff members present: Richard D. DeBobes,
    Democratic staff director; Jonathan D. Clark, minority counsel;
    Daniel J. Cox, Jr., professional staff member; Gabriella Eisen,
    research assistant; Evelyn N. Farkas, professional staff
    member; Bridget W. Higgins, research assistant; Gerald J.
    Leeling, minority counsel; Peter K. Levine, minority counsel;
    and Michael J. McCord, professional staff member.
        Staff assistants present: Micah H. Harris, Jill L.
    Simodejka, and Pendred K. Wilson.
        Committee members' assistants present: Christopher J. Paul,
    assistant to Senator McCain; John A. Bonsell, assistant to
    Senator Inhofe; Arch Galloway II, assistant to Senator
    Sessions; Mackenzie M. Eaglen, assistant to Senator Collins;
    Stuart C. Mallory, assistant to Senator Thune; Mieke Y. Eoyang,
    assistant to Senator Kennedy; Frederick M. Downey, assistant to
    Senator Lieberman; Elizabeth King, assistant to Senator Reed;
    Darcie Tokioka, assistant to Senator Akaka; and Kimberly
    Jackson, assistant to Senator Dayton.

           OPENING STATEMENT OF SENATOR JOHN WARNER, CHAIRMAN

        Chairman Warner. Good afternoon. Mr. Secretary, General
    Schoomaker, we welcome you and your associates here today. We
    tender our apologies for the quick cancellation this morning.
    We were in through the evening. I had actually made other
    arrangements to try and continue this hearing through the
    morning session, but in consultations with my colleague here,
    Senator Levin, we thought it would serve the purposes best if
    we pull together and give the Army a full court press here this
    afternoon, and we are going to do that.
        Given that we have a number of members here and we want to
    get underway, and I gave a very complete opening statement in
    connection with the appearance of the Secretary of Defense, at
    which time General Schoomaker was present, I will forgo my
    opening statement at this time such that we can get right into
    the purpose for your being here.
        We always--and it is not just a matter of rote; it is a
    matter of utmost sincerity--open all of our hearings of this
    committee with a very special recognition to the men and women
    of the Armed Forces, wherever they are serving in the world,
    and most particularly those who are serving in Iraq and
    Afghanistan, and the families who have lost their loved ones
    and are caring for those that somehow have survived the battles
    and are home in rehabilitation. We are very proud of them, and
    this Nation stands steadfast behind the men and women of the
    Armed Forces.
        We also recognize that the United States Army is bearing a
    major, if not the principal, responsibility in this conflict,
    together with the Marine Corps, and that you have some very
    special needs, Secretary Harvey, and we are prepared to
    entertain those special requirements and needs. You have made
    considerable progress in the goals that you set forth together
    with the Chief of Staff for reorganization in the Army. We want
    to be supportive of that.
        We are happy to recognize General Blum of the National
    Guard, who is here today. Again, the Guard, acting with our
    Reserve Forces, did a magnificent job in the Katrina operation.
    All through the hearings I have been present and I have
    purposely asked time and time again the questions about that
    problem, and the troops that came out. Everybody acknowledged
    appreciation for what they did, Guard, Reserve, and Active-Duty
    troops.
        [The prepared statement of Senator Warner follows:]

                   Prepared Statement by Senator John Warner

        The committee meets today to receive the testimony of the Secretary
    of the Army and the Chief of the Army on the posture of the U.S. Armed
    Forces and President Bush's defense budget request for the Army for
    fiscal year 2007.
        We welcome Secretary Harvey and General Schoomaker and we extend
    our profound respect to those who serve. Our thoughts and prayers are
    with their families, and particularly those families who are
    experiencing the loss or the wounding of one of their beloved members.
        I stated at last year's posture hearing with the Secretary of
    Defense and the Chairman of the Joint Chiefs of Staff, that the next 6
    months would be the most critical period of the conflict in Iraq. I
    must say again, the key to success in Iraq and the eventual phase-out
    in an orderly way, depending on the ground situation and that of our
    commanders, of the United States troops and those of the coalition
    forces--that is dependent upon the training and the equipping and the
    advising of Iraqi security forces to a level of military proficiency
    and courage and dependability such that they can continue assuming a
    greater and greater responsibility for defending their nation's
    sovereignty and freedom.
        The President's budget request delivered to Congress on 6 February
    included a request of $111.8 billion for the Department of the Army, an
    increase of almost $12.0 billion over the fiscal year 2006 level. These
    figures do not include the $32.3 billion appropriated for the Army in
    the fiscal year 2006 bridge supplemental. By way of comparison, the
    Army requested $70.8 billion in fiscal year 2001. The $111.8 billion
    represents an increase of 56 percent over the fiscal year 2001 request.
    I commend the President for his continuing commitment to improving our
    defense capabilities and providing our forces with the resources and
    capabilities they need to successfully fulfill their missions. The
    budget priorities of supporting the global war on terror, restructuring
    our forces and our global posture, building joint capabilities for
    future threats, and taking care of our troops and their families are
    clearly the right emphasis.
        I applaud the Army's initiative to provide the necessary resources
    to fully man, equip, and train the Army National Guard so that they can
    transition from a strategic reserve to an operational reserve. Over the
    past weeks, we have heard varying accounts regarding the changes the
    Army has made to their plan to restructure the Guard. I share my
    colleagues' concern that we may not be providing the forces necessary
    for the Guard to accomplish their State missions.
        This committee is committed to doing all we can to ensure the
    safety of our soldiers. Taking lessons from recent operations in the
    war on terrorism, two specific areas bear mentioning. The area of
    counter improvised explosive devices (IEDs) has and will continue to
    command our attention. I am disappointed to note that your department
    did not specifically identify funding for research and development of
    IED countermeasures in the fiscal year 2007 request. While I recognize
    that overall responsibility for the Joint IED Defeat Office has
    transitioned to the Department of Defense, I still think it's important
    that the military Services program for the long term research and
    development of measures to defeat IEDs. This is not a problem that will
    go away once we leave Iraq.
        While I commend the Army's decision to robustly fund the Future
    Combat Systems (FCS) program--$3.7 billion in fiscal year 2007--I
    challenge the Army to explain why this program cannot ``spin out'' FCS
    technologies to Army forces deployed in Iraq and Afghanistan sooner.
    The unmanned systems under development in the FCS program could provide
    immediate capabilities to our deployed forces.
        Secretary Harvey and General Schoomaker, again let me thank you for
    appearing before this committee today and we look forward to your
    testimony.
        Senator Levin.

        Chairman Warner. So with that, Senator Levin, if you have a
    few comments, we will then go to our witnesses.

                    STATEMENT OF SENATOR CARL LEVIN

        Senator Levin. Mr. Chairman, I will follow your lead and
    put my statement in the record, just to have a very few moments
    of comments at the beginning. Also, immediately following my
    prepared statement, I will insert the prepared statement of
    Senator Daniel K. Akaka.
        First let me welcome Secretary Harvey and General
    Schoomaker and your colleagues, your guests, our guests to this
    hearing this afternoon. We want to thank you for your service
    to our Nation, to our soldiers, to the families that support
    them and us.
        Five years ago, there were many critics who were
    questioning the role of the ground combat power and the
    relevance of the Army for the 21st century. It is safe to say
    that the events of the last 5 years have put to rest any such
    questions. The ability to directly confront and defeat an enemy
    ground force, to seize and hold ground, and then to restore
    peace and stability can only be done by putting boots on the
    ground, as the Army has so ably demonstrated.
        The Army has shouldered the bulk of the responsibilities in
    Iraq and Afghanistan, has suffered by far the greatest number
    of killed and wounded. The soldiers of the Army, volunteers
    all, have served unselfishly and with great bravery,
    dedication, and distinction. All Americans, no matter what
    their opinions as to whether or how the war in Iraq should have
    been waged, are unified in their gratitude to the soldiers of
    the Army and their families and are committed to see that they
    are supported in all respects.
        So, Secretary Harvey and General Schoomaker, please pass on
    to the officers, enlisted men and women, civilians, and family
    members of the Army the great regard in which they are held by
    all of us in Congress and the reassurance from all of us that,
    working with you and the rest of the Army, we are determined to
    give them the training, the equipment, the quality of life, and
    the support of the families to allow them to continue to serve
    this Nation so well.
        Mr. Chairman, I will put the balance of my statement in the
    record.
        [The prepared statement of Senator Levin follows:]

                    Prepared Statement by Senator Carl Levin

        Thank you, Mr. Chairman. I too would like to welcome Secretary
    Harvey and General Schoomaker and to thank them for their service to
    the Nation and to our soldiers and their families.
        Five years ago there were many critics who were questioning the
    role of ground combat power and the relevance of the Army for the 21st
    century. It is safe to say that the events of the last 5 years have put
    to rest any such questions. The ability to directly confront and defeat
    an enemy ground force, to seize and hold ground, and then to restore
    peace and stability can only be done by ``putting boots on the
    ground,'' as the Army has so ably demonstrated. The Army has shouldered
    the bulk of the responsibilities in Iraq and Afghanistan, and has
    suffered by far the greatest number killed and wounded. The soldiers of
    the Army--volunteers all--have served unselfishly with great bravery,
    dedication, and distinction. All Americans, no matter what their
    opinions as to whether or how the war on Iraq should have been waged,
    are unified in their gratitude to the soldiers of the Army and their
    families, and are committed to see that they are supported in all
    respects.
        Secretary Harvey, General Schoomaker, please pass on to the
    officers, enlisted men, civilians, and family members of the Army the
    great regard in which they are held by the Congress of the United
    States, and the reassurance from the Congress of the United States
    that, working with you and the rest of the Army leadership, we are
    determined to give them the training, the equipment, and the quality of
    life to allow them to continue to serve this Nation so well.
        Hearings are essential elements in Congress' exercise of its
    oversight responsibilities toward the Department of Defense (DOD) and
    the Services. Sometimes it might seem that only the negative is
    stressed and seldom the positive. The story of the Army over the last 5
    years is, on the whole, a positive one. Where there are negatives, they
    are more likely to be sins of omission rather than sins of commission.
    There is no doubt that the Army failed early on to adequately
    prioritize the allocation of resources toward force protection
    measures. Our troops paid heavily because of the lack of sufficient
    body armor, truck armor, and aviation survivability equipment. In
    retrospect, we all should have recognized and acted to address the
    shortfalls before our troops went into harm's way. But all of us since
    have spared no effort, and no amount of resources, to correct early
    failures. Not only have we addressed, and continue to address the armor
    issue, but DOD, the Army, and Congress are doing the same to combat the
    ever-increasing lethality of the improvised explosive device (IED)
    threat. We in Congress stand ready to provide you whatever you need to
    address that problem.
        I continue to believe that maintaining current troop levels in Iraq
    is simply not sustainable over the long term. The grueling operational
    tempo is wearing down people and wearing out equipment. Equipment usage
    rates, with consequent wear and tear, are in some cases 10 times that
    of planned peacetime usage. While reenlistment rates in the Army are
    strong--and are a credit to the dedication and devotion to duty of our
    soldiers--some indicators, such as increasing strains on military
    families, are indicative of a force under stress and give rise to
    concerns that those reenlistment rates cannot be maintained. There is
    certainly clear evidence that the Army is having difficulty in
    recruiting new first-term soldiers who are critical to a balanced force
    across all ranks and grades, and if reenlistment rates fall, to
    replacing those veterans who will be leaving. History also gives one
    pause. Although the majority of the enlisted soldiers who served in
    Vietnam were draftees who served one tour and returned to civilian
    life, the officers and noncommissioned officers (NCO) were
    professionals who, in many cases, served multiple tours. This was
    particularly true of the NCO corps, which after several years of
    multiple tours came close to disintegrating. It took at least a decade
    to rebuild the NCO ``backbone'' of the Army. We cannot afford to let
    that happen again.
        While the overall relevance of the Army in the 21st century should
    no longer be in question, there are still serious questions that must
    be addressed. At our hearing last week, General Schoomaker testified
    adamantly that the Army was not broken. I agree, but such respected
    organizations as RAND and the Center for Strategic and Budgetary
    Assessment (CSBA) have sounded the alarm that the Army is what RAND
    called ``stretched thin,'' or what CSBA called `` the thin green
    line.'' Both analyses question whether the Army is large enough and
    properly organized to sustain such high levels of deployments while
    maintaining ready units for other possible contingencies. The Army has
    acknowledged that its Active-Duty units have had less than 2 years, and
    in some cases less than a year, between Iraq or Afghanistan rotations.
        Under Secretary Harvey's and General Schoomaker's leadership, the
    Army has been addressing the stress of frequent unit rotations by
    restructuring its brigades in the Active and Reserve components to make
    them more ``modular'' (with more standardized organizational designs
    and fewer number of different designs) and therefore more readily able
    to be mixed and matched as the situation would dictate, and at the same
    time, increasing the number of brigade combat in the Active Army.
        When the Army began its modularity program, it made a strong
    argument that additional brigades were necessary for its force
    generation process to ensure that it could maintain an 18-brigade force
    deployed--the size of the current Iraq and Afghanistan commitment--and
    still ensure that Active brigades would only be deployed 1 year in 3,
    and Guard and Reserve brigades would only be deployed 1 year in 6. Now
    we now learn that the Active Army will only grow by nine brigade combat
    teams, one less than planned, and six less than tentatively considered.
    The Army National Guard will be manned, trained, and equipped for six
    less brigade combat teams.
        I believe that the Army has made the right decision with respect to
    its decision to fully man, train, and equip these units to the higher
    states of readiness required of an expeditionary Army and an
    operational vice strategic Reserve. I support reasonable reductions in
    unnecessary force structure to apply freed-up resources to that task.
    However, I am concerned that this new force structure may make it more
    difficult for the Army to meet its force generation goals and, barring
    a more rapid draw down from Iraq, may not be sufficient to
    significantly reduce the stress on deployed and deploying forces. It
    would also seem to increase the risk that the Army may not be able to
    respond as needed to other contingencies in support of the national
    military strategy.
        I am also concerned about the apparent failure of the Army
    leadership to consult with the leaders of the Reserve components prior
    to this new restructure decision. We cannot afford to once again
    experience the rancor and mistrust between the Army and the Army
    National Guard that flourished so vehemently 9 years ago, and which was
    largely overcome by the close cooperation between the components as
    both recognized and respected the contributions of each other to
    fighting the current war. I urge, and expect, the leaders of both
    components to work together to do what is best for the Army, and for
    the Nation.
        There is still much confusion as to what each side has agreed to,
    and committed to, with respect to Reserve component force structure
    allocations and end strength. There is even more confusion as to what
    this current budget funds, what the Future Years Defense Program
    provides, and what shortfalls and unfunded requirements still exist in
    that regard. I hope that this hearing will clear up that confusion.
        The President's budget request for the Army is 12 percent higher
    than last year's. That is good news. Some of that increase is a result
    of including the cost of the Army modularity program in the base budget
    where it belongs vice the supplemental appropriations request of past
    years. I hope this hearing addresses any known shortfalls in resources
    for modularity and for reset. With the details of the administration's
    expected supplemental budget request unknown, it is not clear whether
    it will cover the Army's estimated fiscal year 2006 $13.5 billion
    requirement for reset--the repair, recapitalization, and replacement of
    equipment of units redeploying from Iraq and Afghanistan. Also, the
    Army's estimate of an additional $20 billion requirement for reset in
    fiscal years 2007-2011 assumes that units begin withdrawing in the
    summer of 2006 and complete that withdrawal within 2 years, and it
    includes no projected battle losses. Surely there will be more battle
    losses, and should the withdrawal assumption prove wrong, the
    programmed cost of reset will certainly have to be adjusted upwards.
        The continued high operational tempo may ultimately put the
    modernization of our military forces at risk. General Schoomaker has
    consistently said that the Army will need supplemental funding for at
    least 2 years after ``the end of the current emergency'' to reset its
    units in order to be ready for subsequent deployments. Last year, this
    committee was able to protect the Army's top modernization priority--
    the Future Combat Systems--from potentially damaging legislation. But
    should supplemental funding levels remain at such high levels, that
    program, as well as the modernization priorities of the other Services,
    will undoubtedly come under increased funding pressure. We do not want
    to be forced to choose current readiness at the expense of future
    readiness.
        I look forward to the testimony of our witnesses.

        [The prepared statement of Senator Akaka follows:]

                 Prepared Statement by Senator Daniel K. Akaka

        I wish to thank Chairman Warner for holding this important hearing.
    I also thank Secretary Harvey and General Schoomaker for your
    leadership and for being here with us today. I want to begin by
    acknowledging the brave men and women currently serving in the Army,
    Army Reserve, and Army National Guard and those veterans who have
    served in the past. We thank you for your dedication and service to
    your country. I would also like to thank the families of our Nation's
    soldiers both past and present for the many daily sacrifices they make.
    I am committed to ensuring that the members of our armed services
    receive the best training, equipment, and support that our Government
    can provide. I am also committed to ensuring that their families are
    assured a good quality of life by our Government and look forward to
    hearing the testimony of our witnesses.

        Chairman Warner. I thank my colleague.
        All right, Secretary Harvey.

      STATEMENT OF HON. FRANCES J. HARVEY, SECRETARY OF THE ARMY;
     ACCOMPANIED BY GEN PETER J. SCHOOMAKER, USA, CHIEF OF STAFF,
      UNITED STATES ARMY; AND LTG STEVEN BLUM, U.S. ARMY NATIONAL
                                 GUARD

        Secretary Harvey. Good afternoon, Mr. Chairman, Senator
    Levin, distinguished members of the committee. General
    Schoomaker and I appreciate this opportunity to be here this
    afternoon and to offer testimony on the posture of the United
    States Army.
        America's Army is the world's preeminent land power, with a
    quality force of over 1 million soldiers, supported by nearly
    240,000 Department of Army civilians, an Army of Active, Guard,
    and Reserve soldiers, deployed, forward stationed overseas or
    securing the homeland, soldiers from every State, soldiers from
    every corner of this country, serving the people of the United
    States with incredible honor and distinction.
        We provided the committee the 2006 Army Posture Statement
    as our written statement and I would like to take this
    opportunity to briefly highlight some of the Army's key
    initiatives and programs. General Schoomaker will also make an
    oral statement at the conclusion of my remarks.
        I know that this committee, like me, appreciates the
    insight and unique perspective that General Schoomaker provides
    from his distinguished career of service to our Nation as a
    soldier. The soldier remains the centerpiece of America's Army.
    General Schoomaker will introduce to you three of those
    soldiers here with us today during his remarks.
        The 2006 Army Posture Statement is a succinct summary of
    the Army plan which addresses the challenges of today while
    preparing us for those we will face tomorrow. The Army plan is
    a comprehensive, fully integrated strategic and operational
    plan which provides the road map to first build a more capable
    and relevant Army for the 21st century through transformation
    and modernization and, second, sustain the full range of Army's
    current commitments, particularly fighting and winning the
    global war on terror.
        On September 11, the Army's operational capabilities lacked
    the breadth and depth for the long war. We appreciate the
    continuing support of Congress as the Army shifts its center of
    gravity to provide a broader portfolio of operational
    capabilities to meet the complex challenges of the 21st century
    security environment, particularly irregular, asymmetric
    warfare.
        For example, we have already completed the first 2 years of
    converting the operational Army to a modular, brigade-based
    combat force. Our objective is 70 brigade combat teams (BCTs)
    and 211 support brigades. This is an increase of 46 percent in
    the number of BCTs over the current force. To date we have
    completed the conversion or activation of 19 BCTs to the
    modular design, or approximately 27 percent towards the
    objective of 70 BCTs. In addition, we have started the
    conversion or activation of another 18.
        Even though the modular force effort is not complete, it
    has already increased our operational capabilities and
    established the foundation for a rotational force generation
    model which is structured, predictable, and provides more
    combat-ready units while reducing stress on the force.
        In order to sustain the current missions and continue to
    posture for future commitments, the Army needs the full support
    of Congress for the Army plan and the Army's request for the
    2007 Presidential budget. Additionally, beyond the importance
    of maintaining full funding for the modular force
    transformation, the chief and I also want to emphasize the
    importance of fully funding the Future Combat Systems (FCS)
    program. This is a key modernization program for the Army and
    is really the first major modernization effort in over 4
    decades.
        Although the word ``future'' is in the program title, this
    is not a program that only exists on Powerpoint slides. FCS is
    becoming a reality today and spinouts of FCS technology into
    our current modular force will begin in 2008. Simply put, the
    FCS program is the fastest and surest way to modernize the
    Army. Furthermore, it is the only way to effectively modernize
    the Army in an integrated manner.
        The FCS program and the modular force initiative, in
    conjunction with the full spectrum of other programs in the
    areas of research and development (R&D), acquisition, training,
    advanced techniques, tactics and procedures, leadership
    development, business transformation, as well as the growth of
    the operational Army, will ensure that our overall capability
    to conduct both traditional and nontraditional operations,
    including the global war on terror, will continuously and
    methodically increase and improve as we go forward in the
    uncertain and unpredictable 21st century.
        We also need to draw your attention to the importance of
    our efforts with your support to sustain the All-Volunteer
    Force, including recruiting, retention, and providing a quality
    of life for our soldiers and their families that match the
    quality of their service. This is the first time in our modern
    history that the Nation has tested the concept of an All-
    Volunteer Force in a prolonged war. Full funding and support of
    Army programs in this way is critical to sustain the finest
    Army in the world.
        Finally, I want to emphasize that the Army plan is a total
    plan to transform the entire Army, Active, Guard, and Reserve.
    2005 reaffirmed to the people of the United States that we are
    truly an Army of One. Simply put, the Army could not perform
    full-spectrum operations without the tremendous contribution of
    the Army Guard and Reserve.
        For example, last year the Army National Guard had 10 BCTs
    and a division headquarters serving in Iraq, Afghanistan, and
    the Balkans for at least a portion of the year. Despite this
    overseas commitment, the National Guard was still capable of
    responding with 42,000 soldiers in little over a week to
    support Hurricane Katrina relief operations. I might add that
    there were still tens of thousands more National Guard and Army
    Reserve soldiers available if needed.
        Based on the insights of September 11, homeland defense
    operations, hurricane recovery operations, and lessons learned
    from the global war on terror, the Army plan shifts the focus
    of the Reserve component from a strategic Reserve to an
    operational force and rebalances the Reserve component's force
    structure to the operational skills they need for the 21st
    century security environment.
        For example, in the current plan the Army National Guard
    will continue to maintain a total of 106 brigades, which are
    beginning to be transformed to the same modular design as the
    active Army. However, we are changing the organizational mix of
    BCTs and support brigades based on the capabilities needed to
    conduct both their national defense as well as their State
    missions. In essence, the Army National Guard and the Army
    Reserve are transforming and modernizing from an underresourced
    standby force to fully equipped, manned, and trained
    operational ready units.
        Let me close and give General Schoomaker an opportunity to
    address the committee by saying that I remain confident that,
    with the continued strong support of Congress, America's Army
    can accomplish its mission and reach our strategic goal of
    being relevant and ready both today and tomorrow. Thank you,
    Mr. Chairman.
        [The prepared statement of Secretary Harvey follows:]

        Chairman Warner. Thank you, Mr. Secretary, for a very
    powerful statement.
        General Schoomaker, I wish to ask you once again to recite,
    as you did with the hearing with the Secretary of Defense, your
    personal observation about the state of the Army today compared
    to the Army that you came into during the Vietnam era. I think
    that sets a very profound tenor for the situation before us
    today.
        General Schoomaker. Mr. Chairman, Senator Levin,
    distinguished members of the committee: Good afternoon. Mr.
    Chairman, I would be glad to do that in the most succinct way I
    can. We were severely challenged, if not broken, in the post-
    Vietnam Army. Although it was filled with great people, we were
    challenged in almost every dimension. This Army today, although
    we are challenged and we are busy, our tempo of operations
    (OPTEMPO) is very high. Some would call us stretched. This is
    not a broken Army. This is a very strong Army, the best that I
    have been in in my entire service and, quite frankly, observing
    my father's three decades of service, I do not remember one as
    a kid that was as good as this Army the way it is.
        Sir, I would like to recognize some other senior leaders
    that are present today, important parts of our Army. First of
    all, Lieutenant General Steve Blum of the Army National Guard
    and his sidekick, Lieutenant General Vaughn, who are sitting
    right to my right rear; and Lieutenant General Ron Helmly, U.S.
    Army Reserve. Of course, these are very important leaders in
    the Army. I just wanted to recognize the fact that they are
    present today and with us.
        Last week when I spoke, I talked about where we were, where
    we are, and where we are going. I am sure we will get into more
    of that during the testimony here. But today we have with us
    our posture statement, that I hope is at your position. I know
    that we are submitting this for the record, if we could, as
    part of our official testimony.
        Chairman Warner. Without objection, all of your statements
    in entirety, together with other items that you wish to have
    put in the record, will be done.
        General Schoomaker. Thank you, sir. I would just reference
    during the time that we are here, if you would take a look at
    page 2 some time. I will be referring to that because it shows
    you some figures there and some charts about the history of
    where we have been that backs up some of the things I said
    previously, to include the fact that we had about $100 billion
    in lack of investment over the previous decade in the United
    States Army that we are now trying to overcome.
        I made the statement that we started the current operations
    following September 11, 2001, at some $56 billion in the hole
    in equipment. You can see there in those three charts on page
    2, actually figures 4, 5, and 6, a graphic history of the kinds
    of things that were occurring and what our traditional fiscal
    representation has been for the Army.
        Of particular note, you might notice that on the bar chart
    at the very bottom the gold band shows you the relatively small
    percentage of our total budget that goes towards the investment
    accounts. The United States Army typically has been funded at
    about 16.5 percent of the Department of Defense (DOD) on our
    equipment procurement, et cetera. So when I take all of this in
    context, I think it supports what I said and have testified to.
        We are on the right path, there is no question about it,
    and I believe that we have presented a very balanced force
    structure that is consistent with the level of resourcing we
    have. If we were to have more resources I would accelerate what
    we are doing. I would not necessarily grow it bigger. I think
    this is an important point. I think what we have done is
    achieved a sense of balance across the specialties, the
    capabilities, and the capacities in the Army that are relevant
    to the 21st century and I believe that we must continue on that
    path.
        So, having said that, what I would like to now do before I
    conclude my oral statement, I would like to introduce three
    soldiers. As you have heard me say many times, I cannot tell
    you what a privilege it is to be associated with the men and
    women of the United States Army, those in uniform and those
    civilians and their families that support us.
        Today we have three soldiers, one each from the Guard, the
    Reserve, and the Active component, and I would like to
    introduce them one at a time, tell you just a little bit
    something about them. The first is Sergeant First Class Judith
    Quiroz on my far left. Sergeant Quiroz is with the U.S. Army
    Reserve and her specialty is personnel. She deployed during
    2003 from January to December to both Kuwait and Baghdad, where
    she served as Noncomissioned Officer in Charge (NCOIC) in the
    personnel business supporting our soldiers over there in a very
    important function. She was recognized with two Army
    commendation medals for her period of service during Operation
    Iraqi Freedom (OIF) and she now resides in Hanover, Maryland,
    here in the local area. So I am very proud of Sergeant Quiroz
    and her associates from the Army Reserve. Thank you, Sergeant
    Quiroz.
        Second, I would like to introduce Specialist David Yancey.
    Specialist Yancey is from the Army National Guard, from
    Mississippi as a matter of fact, the 155th, Dixie Thunder. He
    was deployed from January 2005 to 29 March 2005, when he was
    wounded. He and three of his compatriots were struck by an
    improvised explosive device (IED). He suffered a broken left
    femur, a severed artery in his leg, a collapsed lung, a closed
    head injury, a damaged spleen, rib fractures, and a T1
    fracture. According to Specialist Yancey: ``These actions have
    changed my life, but I am driving on with new goals and a new
    career as an American soldier would.''
        He is currently under our Operation Warfighter program and
    he is seeking employment in the U.S. Postal Service and I am
    sure that he will be as fine an employee in the Postal Service
    as he has been a soldier. We are very proud of him. Thanks.
        Chairman Warner. We wish you well. We are hoping that you
    will meet this new challenge with the same vigor that you
    performed your military duties, sir. Well done.
        General Schoomaker. He also wears the Combat Action Badge,
    which is something that our soldiers wear very proudly who have
    engaged in direct ground combat.
        Our third soldier is from the Active component, Staff
    Sergeant Wesley Holt. Sergeant Holt is an infantryman, served
    in a Stryker brigade for a year, comes out of Fort Lewis,
    Washington. He was with what has gotten a certain amount of
    fame, the Deuce-Four out of the 1st Brigade, 25th Infantry
    Division, Fort Lewis. They were up in Mosul.
        He received a Silver Star for action on 29 December 2004
    when he displayed extraordinary heroism while under heavy fire
    and personally was responsible for saving over 40 men's lives
    during that action. To give you an example of the kind of Army
    we have today, during his time in Iraq Staff Sergeant Holt's
    platoon accounted for over 100 enemy killed and over 15 high-
    value targets captured, and his platoon was awarded 22 Purple
    Hearts--this is a platoon of roughly 40 people--22 Purple
    Hearts, 3 Silver Stars, 4 Bronze Stars with V, and 19 Army
    Commendation Medals with V for valor.
        He reenlisted in Iraq and was recently selected to become
    an aviation warrant officer in the United States Army. So we
    are very proud of him as well.
        Chairman Warner. You are an inspiration to all men and
    women of the Armed Forces. Well done, sir.
        General Schoomaker. Sir, with that introduction, I stand
    with the Secretary, prepared to answer your questions.
        Chairman Warner. We thank you very much.
        We will go into a round of 6 minutes on the first, and
    hopefully we will have a second and a third if necessary.
        Always foremost in our minds here on the committee again is
    the care for our wounded. Nearly 16,000 men and women have been
    injured or wounded in the war, and with advances in medical
    care soldiers have lived that otherwise would not have in
    earlier conflicts. Please describe for the committee, Mr.
    Secretary, the programs in this budget that will support our
    wounded soldiers, and are there other programs or other
    legislative things that Congress can do to support you as
    Secretary and the others in the Army to care for those
    individuals and their families?
        Secretary Harvey. Thank you, Mr. Chairman. As you may know,
    we have a program called the Army Wounded Warrior Program,
    which is primarily aimed at taking care of our wounded soldiers
    in the sense of ensuring that they get the proper medical
    attention and once they leave the Army that continues, and
    also, importantly, that they get a good job in the government
    or in the private sector. To that end, we have partnered with
    four other Cabinet Departments--Homeland Security, Labor,
    Transportation, and Veterans Administration--and also through
    our Army Career and Alumni Program (ACAP), we have identified
    70 employers who have signed up to hire disabled soldiers. So
    that and our own internal programs, one of which we call Always
    a Soldier, another transition to Army civilian.
        So I think at this time we have a comprehensive set of
    programs to help our wounded warriors, they continue to receive
    the medical treatment they need to fully recover from their
    injuries and wounds, and also to help them transition back to
    their communities and get a very good, well-paying job. So I
    think we initiated that program a couple of years ago. We
    initially called it the Disabled Soldier Support Program, and
    we have changed it at the request of the wounded soldiers to
    the Army Wounded Warrior Program.
        So I think at this time we have a solid programmatic base
    to help them to do that.
        Chairman Warner. A few years ago this committee put into
    the authorization bill legislation to enable the Service
    secretaries to retain those who had experienced wounds, yet had
    recovered to the point where they could continue to serve in
    uniform. Has that worked out successfully and do you need any
    additional authority? Because I find and each of us on this
    committee have found when you visit the wounded, so many of
    them are anxious to return to active service and continue to
    wear the uniform and perform their duties.
        Secretary Harvey. Thank you, Mr. Chairman. You have
    provided the authorities we need. I know personally, I know the
    chief personally, when we go up to Walter Reed--I was there
    just yesterday, but a couple of weeks ago I met Staff Sergeant
    Rummell Bradley, who is a double amputee and a remarkable young
    man of courage, who personally asked me to stay in the Army. I
    said: ``You just give me your name and number and when you are
    ready and you are recovered we will ensure that you stay in the
    Army.''
        There are a number of examples like that. So I think we
    have the authority we need. The Always a Soldier Program is a
    program in our Army Materiel Command that offers either
    military or civilian jobs to wounded soldiers. So I think we
    are in good shape. Thanks for that question.
        Chairman Warner. Let us recognize really the extraordinary
    chapter in the history of our military. That was not the case
    when you and I served in different positions during the war in
    Vietnam, General. But it is today.
        Do you have anything to add on this subject?
        General Schoomaker. Sir, I think in almost every dimension
    that we are doing very well. I subscribe to what the Secretary
    just said. I will remind you that over time soldiers make
    different decisions about their future once wounded. I believe
    that leaving the options open and encouraging soldiers to reach
    as far as they can reach is very important for them, very
    healthy and helpful, and then of course they will make
    decisions based upon how they recuperate physically.
        But I do believe that it is worth saying--for instance,
    Sergeant Yancey back here. Some of you may recall we had some
    discussions about tourniquets at one time. Sergeant Yancey is
    alive today because of the one-handed tourniquet that we
    fielded, the tourniquet that a lot of people said we did not
    have.
        Chairman Warner. I remember it well.
        General Schoomaker. I suggested that we had solved that
    problem.
        I might also tell you that the 91 Whiskey program, which is
    the combat medic and our combat lifesaver program, has paid
    extraordinary dividends to us. The fact that we are now having
    less than 10 percent of our soldiers wounded die of those
    wounds is historically just a wonderful story, the fact that we
    are able to do that.
        Chairman Warner. We are going to get into the questions on
    that eventually here, about the equipping.
        General Schoomaker. Yes, sir.
        Chairman Warner. But to both the Secretary and you,
    General: Under the President's budget, the Department does not
    intend--I repeat, does not intend--to seek a permanent increase
    in end strength for the Active-Duty Army. In fact, the Army is
    funding the Army Reserve and National Guard to levels which are
    5,000 and 17,000 lower respectively from the end strength
    levels authorized in fiscal year 2006.
        Can you address those two issues and how hopefully it is
    your professional judgment that this will not cause a decrement
    in the combat capabilities of the Army and the Reserve?
        Secretary Harvey. Let me address the Active component. We
    have a plan for the Active component that will increase the
    size of the operational Army by 40,000, keeping in mind that
    the Active Army is really divided into three parts: the
    operational Army--that is the Army that fights the war--the
    institutional Army, as we like to call it, which generates the
    force; and then the overhead account, which we refer to as
    Trainees, Transients, Holdees, and Students (TTHS).
        So we have a master plan starting in the fiscal year 2004
    baseline of 482.4, which we will grow the operational Army from
    315,355. Then, following that, a little bit later, we will
    convert through military to civilian conversions a number of
    military positions in the institutional force to civilians. So
    that when you do all the arithmetic, in fiscal year 2011 our
    plan is to end up at 482.4, but with a much bigger operational
    Army, that is the Army that fights the war.
        In terms of the Guard and Reserve, our approach is to, in
    the last few years we have had difficulty in meeting the
    congressionally-mandated end strength. We are currently at
    334,000 versus 350,000 in the Guard and about 188,000 versus
    205,000 in the Reserves. So our plan is to fund the Guard to
    whatever troop strength, I should call them, they can achieve.
    So if they achieve anywhere between and up to 350, we will plan
    to find it.
        For fiscal year 2007, we thought it was the prudent and
    responsible thing to do just to fund them going into the budget
    at a troop strength of 333,000, where they were, they have been
    on the average for about the last 14 to 15 months. So again,
    signs are right now that they'll be able to grow, but this is a
    tough recruiting market and we are prepared to reprogram and
    fund them to whatever level they will achieve.
        Chairman Warner. In our meeting with the Secretary of
    Defense we discussed this issue. There may be some technical
    budgeting problems there, but we will work with you to achieve
    those goals.
        Secretary Harvey. We appreciate that.
        Chairman Warner. General, do you have anything to add to
    that, sir?
        General Schoomaker. Three very quick points. We have no
    intention to cut the Guard and Reserve, and we have made that
    point very clear; and we have the flexibility, second point to
    fund it, with your help, to the levels that we need. The third
    thing is that we are balancing this Army across these
    components in a way that is necessary to balance them, and my
    view is that we are on the right path in that regard.
        Chairman Warner. Thank you.
        I would like at this time to ask the Chief of the National
    Guard, General Blum, to comment on this question and such views
    as you might have as to the status of the Guard in the coming
    fiscal year. We can hear you very clearly. That voice carries.
        General Blum. Mr. Chairman, the National Guard supports the
    principles outlined by the Secretary of the Army and the Chief
    of Staff of the Army. We see nothing but advantage to the
    Nation to have its Army, both Active, Guard, and Reserve, fully
    manned, fully equipped, and adequately resourced for the
    challenges of the future.
        As you pointed out, we are working together with the Army
    to bring that great theme and message in line with the
    realities of the bookkeeping. We are working very closely with
    Congress on that at this time.
        Chairman Warner. Thank you.
        Do either of the Reserve officers care to add anything? [No
    response.]
        Fine. Thank you very much.
        Senator Levin.
        Senator Levin. Just on that last point, last year we
    authorized the Guard 350,000 and the actual strength that it
    reached was 333,000. Since you are willing and determined that
    you would fund it up to 350,000 should they be able to recruit
    that many, what is the reason not to put the same authorization
    in this year as last year at 350? What is the harm that is done
    to the budget?
        Secretary Harvey. Just that we have to give it back or
    underspend. This is at a level that I think goes back into I
    believe at least calendar year 2004, where we have been at this
    range, plus or minus, on the average 333,000. We just thought
    from a management standpoint that it is prudent to budget at a
    troop strength that has some history to it rather than the 350
    and if necessary ask to reprogram the funds to make up for it.
    So it was just a management approach to funding the actuals
    rather than some number that we have not met for some period of
    time.
        Chairman Warner. Not to--I will give you the time.
        Senator Levin. That is okay.
        Chairman Warner. We are working on an escrow concept with
    your team now whereby the funds could be placed in escrow as a
    challenge to both the Guard and the Reserve, and indeed the
    Active, to move up to their full statutory end strengths. So I
    am confident this will work.
        Secretary Harvey. We appreciate that, Mr. Chairman. I think
    that is a very good approach and if we need it we have it. If
    we do not, it is a prudent use of taxpayers' money.
        Chairman Warner. Thank you, Senator.
        Senator Levin. That is fine. This approach which you have
    just outlined and the chairman has just mentioned is agreeable,
    as I understand it, to both you and the Guard? You have reached
    basically an agreement in terms of what you are recommending
    basically to us, is that right?
        Secretary Harvey. Yes.
        Senator Levin. General Blum?
        General Blum. Senator Levin, I trust General Schoomaker
    with my life----
        Chairman Warner. General, I think you should just borrow
    the Secretary's microphone to make sure that this message is
    carried to the press and others.
        General Blum. Mr. Chairman, Senator Levin, members of the
    committee: I trust these gentlemen with my life. If they say
    they are going to resource us at a force structure allowance of
    348,000 and up to an end strength of 350,000, I have to take
    them at their word. How they are going to do that has to be
    worked out, but I trust that it will be worked out.
        Senator Levin. That is fine.
        General Schoomaker, I should have called on you first. I
    take it you are satisfied, comfortable that this agreement
    makes sense for the Army, including the Guard?
        General Schoomaker. Sir, I do. Let me throw in my
    explanation here. First of all, all of us want to have the
    Guard and the Reserve at their end strength. All of us want to
    have the Guard and Reserve, under the principles we have agreed
    to, fully resourced and manned. That is where we want to go.
    But we do not need idle money. We have to accelerate what we
    are doing.
        So, in 2006 we have funded to the levels that you are
    talking about. We have all the way to the end of this year to
    determine whether or not we are on the path to reach it, and we
    have a lot of time in 2007 to make a determination how to
    adjust to the realities. So we are committed and on the record
    that what we want is--there is no intent to cut anything. We
    are looking forward to having this fully resourced.
        I might add one more thing. Our insurance policy across the
    Army is the additional 30,000 soldiers that you have authorized
    using supplemental money that we can grow to, and that is yet
    to be determined out, probably out in 2009, somewhere like
    that, whether or not more of that will be needed to be kept. So
    although we have a plan to stay within the end strength
    structure that we have, we do have options, and we are running
    a parallel program to recruit these soldiers with the resources
    that you have given us. So you might know how difficult that
    has been. We have been at it now 2 years and we have grown
    about 10,000 to 12,000 soldiers.
        Senator Levin. Thank you, General.
        Secretary, in your introduction to your posture statement
    you say that you are depending on congressional leadership for,
    ``obtaining legislative authorities to assure predictable
    access to our Army National Guard and Army Reserve soldiers who
    have become by necessity our operational rather than our
    strategic Reserve.'' What legislative authorities do you need?
        Secretary Harvey. I think there is going to be a proposal
    coming over--it should be part of the 2007 budget--to ask to
    extend the Presidential Reserve Call-up (PRC), from its current
    in-statute, 270 days. We want to be able to do that up to a
    year. That is one of the proposals that we want.
        Also, part of that, I think we do need some legislative
    authority to ask people who join high demand units to
    voluntarily agree to be available for more than the 37 days a
    year, so that we--for example, civil affairs, the shore people,
    the people that open up ports and so forth, have the ability to
    train them, because they are very high demand, low density,
    units and that we have enough time to get them ready for their
    particular mission.
        Senator Levin. Thank you.
        General, the budget proposes to increase some TRICARE
    premiums and deductibles for working age military retirees. Do
    you support those proposals and why do you think they are
    necessary?
        General Schoomaker. Sir, I support what the Chairman
    testified to last week in the hearing, that he represents
    consensus on the part of the chiefs that we believe this has to
    be balanced back to the proportion that it was in 1995. It has
    never been adjusted since then in the copay payments. We
    believe that these adjustments are relatively minor, given the
    problem that we face. I understand there are other proposals
    working to deal with this extraordinary growth that is in the
    defense health care program. But it is a serious problem that
    we are going to have to face soon.
        Senator Levin. My time is up. Thank you.
        Senator Inhofe [presiding]. Thank you, Senator Levin.
        First of all, let me say to both of you how much I
    appreciate your coming to our Army Caucus. Senator Akaka and I
    started that Army Caucus some time ago and it has really
    focused the attention on where it should be. Our needs change
    so often and it was great of both of you to be there.
        Now, you have heard me say this before, but as you look at
    the big picture, 6 years ago we asked Secretary Rumsfeld where
    should we be. When I look at what is happening in all the
    Services, where they are giving up here and giving up here and
    trying to predict so that we will be prepared for any kind of
    asymmetrical threat that should come along, it is reminiscent
    of the old days when we were ready for just about anything out
    there.
        I think it goes back to the overall defense funding. We
    have talked about the fact that during the entire century of
    the 20th century the percentage of GDP was 5.7 percent. That
    was both at times of war and peace. During the Eisenhower
    presidency it was up to 10 percent. In the early 1990s it was
    at 6.1 percent. Now, after the drawdown of the 1990s it got
    down to 2.9 percent and now at 3.8 percent.
        I go through all of these because I think at some time we
    are going to have to be addressing this in terms of what the
    real needs are. Now, on page 6 of your report, which I was
    looking through, it talks about the investment--let me get it
    right here--the investment accounts. Now, the investment
    accounts from 1990 to 1995 for the Army were only 16 percent of
    the total, compared to the Navy having 33 percent and the Air
    Force 35 percent.
        Now, so you have two problems. First of all, we are
    unfunded as a military. We are underfunded, I should say.
    Second, in terms of the investment accounts, which gives us the
    capability of modernizing, it is at 16 percent. I asked John
    Bonsell of my staff to go back and get me what it was between
    2000 and 2005. It was still 16 percent. So your plight has not
    gotten any better over that period of time.
        I guess I would just have to ask you, in the event that you
    did have something closer to what the others have or have a
    higher percentage, what would be the first thing, Secretary
    Harvey, that you would need that you think perhaps should be
    funded now that is not funded now? What would it be? Would it
    be force strength, modernization, advancing in the FCS program?
    What would it be?
        Secretary Harvey. Thanks for the question, Senator. The
    chief and I have done a lot of talking about that and I think
    developed a strategy that says that we feel coming out of the
    QDR and the operational assessments right now that the force
    structure that we have in terms of the 70 BCTs, supported by
    the robust FCS program, and I might note a very excellent Army
    aviation program, are adequate for us to meet the threats of
    the 21st century.
        Having said that, we can certainly accelerate that effort.
    So if we were to do anything with additional funding, we would
    accelerate the conversion to the Army modular force. Technology
    development, systems development, I do not think permit you to
    accelerate the FCS program. I think we have a balanced program
    right now in terms of balancing risks against technology
    against systems development.
        Because of the foresight of the chief and others, we
    restructured the aviation program a couple of years ago under
    the chief's leadership. We feel that we have a very robust
    program in terms of the next generation of Blackhawk, upgrading
    the Chinooks, upgrading the Apaches, and two new helicopters in
    terms of the Army Reconnaissance Helicopter and the Light
    Utility Helicopter.
        So I think we look across that. We have doubled or tripled
    the size of the ammo accounts. We are requesting, because of
    the war, supplementals and reset and recapitalization of
    upwards to $10 billion. So I think we feel good, at least I do,
    and the chief and I talk about it a lot, about the force
    structure in all components, the modernization program centered
    around FCS, and our ability to recap and reset the force. But
    we could do it quicker.
        Senator Inhofe. Before getting a response from General
    Schoomaker, let me just put it a little bit different way. I
    had Air Force General Schwartz of the United States
    Transportation Command (USTRANSCOM) in my office yesterday and
    we were talking about some problems that the Air Force has. He
    was talking about the blend of lift vehicles, where are the C-
    17s, what is the right level for that, what is going to happen
    to our C-5s, and then of course the new C-27s, some of the two-
    engine varieties, and the C-130Js, and all of that.
        I said that these are decisions that are tough to make
    because you do not know what kind of a threat is going to be
    out there. If we knew that we would have all of the above. But
    if you think you have it bad, look at the Army.
        I think you said it just now, General, in your opening
    statement. You said it has been four decades since we have had
    really major modernization programs. I think it would be
    worthwhile for you to use the same example you used during the
    Army Caucus a couple of days ago in terms of--one of the
    frailties that we have in terms of our equipment, the cannon,
    the fact that we are still operating with the Paladin. I
    remember telling this committee a couple of years ago about the
    Paladin, that it is World War II technology. You have to get
    out and swab the breach after every shot.
        Now, compare that in terms of capability and of crew, if
    you would, please, with the Non-Line-of Sight Cannon (NLOS-C),
    the lead security for the FCS?
        General Schoomaker. Sir, I would be glad to. I would like
    to put it in context. What you mentioned a minute ago was on
    page 2 of the posture statement. It shows the charts and it
    shows the history of what you talked about, percentage of GDP
    over time, the Army's percentage of the pie, et cetera. The big
    issue that we have today before us is the fact that much of our
    recapitalization and reset is in supplemental funding. Now, we
    have moved in the 2007 budget about $5 billion for modularity
    inside the base budget and we have about the standard $2.5
    billion for recapitalization and about $1.5 billion for depot.
        But what we have the opportunity to do here is to
    accelerate and fix the Army that you are talking about because
    of the war that we are in and the capacity that is running. One
    of the things that we would like to see come in sooner is
    things like the NLOS-C. The NLOS-C has a two-man crew. One gun
    can fire six rounds in the air and they will impact the ground
    simultaneously on the target. That is what right now it takes a
    six-gun battery with one round each, each gun with a six-man
    crew, plus a Fire Direction Center (FDC). So two people are
    doing about 40 people's work with precision with the NLOS-C.
    Those are the kinds of capabilities that allow us now to move.
        If we move into the FCS level technology, we will take 900
    people out of the BCT, but we will double the amount of
    infantry that is in squads inside of that.
        Senator Inhofe. That is the example that I wanted you to
    use. When you stop and think about it, there are now five
    countries, including South Africa, that make a better cannon
    than we have. I just do not think that is acceptable. So I
    appreciate the fact that you are rushing into this and that we
    are going to be modernizing.
        Senator Reed.
        Senator Reed. Thank you very much, Mr. Chairman.
        Thank you, Mr. Secretary, General Schoomaker. General
    Schoomaker, last week when you appeared before the committee I
    asked you what the reset-recap course of the Army was and you
    replied $4 billion per year over the next 6 years. On Friday my
    staff and the staff of the committee received a briefing, the
    Army equip and reset update. This is one of the charts that was
    included in--I think you have a copy of it. I have also had a
    chance to talk with some of your staff about these numbers.
        First, let me clear up the definitions as I understand
    them. ``Reset'' is made up of three components: repair,
    replacement, and recapitalization. I believe, General, that you
    only spoke about repair and replacement last week and did not
    include recapitalization. If you just look at repair and
    replacement, that is $24 billion over 6 years. But
    recapitalization is an additional $12 billion over that time.
    As I understand it, this is only with respect to equipment that
    is in the inventory being used. This is not modularity, this is
    not new equipment you are buying. This is equipment we must
    repair.
        Second, you said reset costs about $4 billion a year, but
    if you look at this chart the cost incurred this year in 2006
    is $13.47 billion. Next in the chart the reset and recap costs
    start to drop significantly over the 5-year projection. But
    this chart assumes that beginning in July of this year we start
    to draw down our forces and by December 2008 we literally have
    no forces left in Iraq. I think we would all like to see that
    happen, but I think you have to ask seriously, is that a
    realistic assumption to make about the conduct of operations in
    Iraq?
        Now, let me just get a few points clear so that we can have
    a discussion. First, General, the $13.47 billion is the total
    recap, reset obligation this year, the amount of money that we
    need; is that correct?
        General Schoomaker. I think first of all let me concede
    that I was talking in a much narrower band than what you have
    described, and I agree with you. I would also increase your
    band to include force protection, because there are many things
    that we have had to bring into the Army that we did not have
    prior to September 11 as a result of our experiences, and you
    know what many of these are: up-armoring vehicles, jammers, and
    this kind of stuff.
        Senator Reed. Yes, sir.
        General Schoomaker. So I think when you expand the
    definition, which I think is properly proper, your figures are
    much closer to the mark.
        We also have a bow wave in this, based upon things that
    have been pushed forward from previous years. You know that it
    was just recently that we started getting procurement money for
    reset in our supplemental funding. So that is part of that
    problem, too, in terms of what we can deal with.
        Senator Reed. The number is accurate this year?
        General Schoomaker. I believe it is in the ballpark.
        Secretary Harvey. Can I add something, Senator? The
    baseline number that we have in our plan for fiscal year 2006
    now, for fiscal year 2006, is a total of, in round numbers, $15
    billion, of which $12 billion is in the supplemental and $3
    billion is in the base. Remember, we also have to----
        Senator Reed. Mr. Secretary, that $3 billion in the base is
    the steady state----
        Secretary Harvey. Yes, right.
        Senator Reed.--numbers that we have had in practically
    every budget going back over the last decade.
        Secretary Harvey. Right.
        Senator Reed. We are really talking about roughly $12 to
    $13 billion of recap, reset, that is a result of activities,
    Iraq, Afghanistan. All of that is in the supplemental. There is
    nothing in the budget.
        Secretary Harvey. Yes, $12 billion.
        Senator Reed. $12 billion, and the assumption underlying
    these projections, though, is that we will begin a significant
    drawdown this summer and that we will, for all intents and
    purposes, be out of Iraq by 2008.
        Secretary Harvey. I do not think--this is a plan put
    together by the Army equipment campaign. I think they made
    certain assumptions that may or may not come to fruition.
        Senator Reed. That is my point, I believe. If these
    assumptions do not come to fruition, the annual cost of reset
    and recap is closer to $12 billion than $4 billion.
        Secretary Harvey. I think you appreciate, Senator, that
    this is not an easy number to come up with. Besides the number
    of people in theater, it also depends on their OPTEMPO and
    whether or not they participate and perform the same operations
    that they did a year ago. So I think this is probably a
    reasonably good planning number. I would expect that with the
    standup of the Iraqi Security Forces for this number to come
    down.
        Senator Reed. Was this the planning guidance given to you
    by the DOD, that you would begin the withdrawal this summer and
    be completed by 2008?
        Secretary Harvey. No, no. This is an Army equipment
    campaign exercise based on assumptions.
        Senator Reed. Mr. Secretary, we have been at this now, and
    General Schoomaker, since March 2003. We have never seen these
    numbers go down. They seem to go up. I also understand that
    under the policy you cannot anticipate the loss of equipment,
    the battle loss of equipment. That has been happening. So those
    numbers are not even in here.
        Secretary Harvey. The battle loss is in here.
        Senator Reed. Going forward?
        Secretary Harvey. Well, at least this year the battle loss
    numbers are in here.
        Senator Reed. But going forward there is no, as I
    understand it, anticipation of battle loss until it is actually
    accrued, if you will? That is a strange term to use for this
    type of calculation. But more than that, there is also here an
    assumption that no equipment will be left behind for the Iraqi
    forces. Is that a correct assumption also?
        General Schoomaker. I do not believe that--I think these
    are unknowns, and I believe that, if I could----
        Senator Reed. Yes, sir.
        General Schoomaker.--because I may be misunderstanding you,
    but I think that we had this conversation when the Secretary of
    Defense was here, that the supplemental is to be used for war-
    related costs, much of which is unpredictable. We did not
    predict early on that we would have the number of electronic
    jammers that we have. We did not predict we would have as many
    up-armored vehicles as we have, nor did we have a good
    prediction about what our battle losses would be. So in many
    respects this is a rolling number, and I do not know of any
    assumptions----
        Senator Reed. General, I think an alternate way to look at
    it is that you are assuming away the problem. You have accrued
    $13 billion in recap and reset funds this year. You think you
    will have $10 billion next year, even though you are beginning
    to redeploy your forces according to your assumptions. These
    are absolutely unrealistic numbers, the notion that this is
    simply going to conclude at $36 billion, that we are going to
    be out of there in 2 years; and that is what I object to,
    sending budgets up here that underestimate, deliberately
    underestimate in my view, what you can reasonably anticipate in
    terms of the costs of reset and reequip.
        General Schoomaker. I do not know what the 2007
    supplemental numbers are that have been sent up here, whether
    you have seen them. But that will answer part of your question.
        Secretary Harvey. We really have not sent up a 2007
    supplemental, Senator. We have not sent it up yet. We have
    sent--the 2006 will be--I think as a result, when you passed
    the 2006 base budget you gave us a so-called bridge
    supplemental of, I think our part was $30 billion, and we call
    it a title 9 bridge supplemental. But we will submit the entire
    supplemental. It is still being worked through the Office of
    the Secretary of Defense (OSD) and the Office of Management and
    Budget (OMB) as we speak. So the final numbers on the 2006
    supplemental are not yet finalized. We will then after that
    begin formulating the 2007.
        But I think there is a degree of unknowableness here and we
    try to react to it.
        Senator Reed. My time has expired. Mr. Secretary, we all
    understand this is a projection. I do not think it is a
    terribly realistic one. If you incur at least $12 billion, $10
    billion a year and you do not assume, as you just indicated
    that you are going to have a significant withdrawal of forces
    over the next several years, you cannot assume away at least
    that much cost. Perhaps it is a little less. Maybe it is just
    $9 billion. But it does not trail out to effectively zero in
    2008, 2009, 2010, and 2011.
        I think unless we have realistic assumptions--in fact,
    frankly, I think we would be in better position if you were
    giving us the worst case or the medium case, rather than what
    looks to be like a very saccharin best case.
        Secretary Harvey. Well, again, as I said, this is--a lot of
    this is unknowable at the present time and it depends on force
    levels, which you know have gone down somewhat. It also depends
    on the level of engagement of the troops in theater, which has
    gone down. So we try to do our best job in putting this,
    plugging this into our equipment campaign, because we need to
    give our depots, we need to give our suppliers, some planning
    numbers. These are, believe me, in the out years are very rough
    planning numbers, and the number I think that you can say has a
    lot degree of surety is what will come over in the 2006
    supplemental. The 2007 has not been formulated.
        General Schoomaker. Sir, before we close this, for the
    record, I would just like to make sure that I am clear. Number
    one, I do not subscribe to the assumptions. I have never heard
    those assumptions, nor have I planned against them, what you
    have said. That I would say--
        Senator Reed. Can I ask you what assumptions you are
    planning against, sir?
        General Schoomaker. We are planning to provide the current
    level of effort, as we have briefed before, because we do not
    know. It is going to be determined by the combatant commander
    on the ground.
        Second, you do not know the supplemental figures, nor do I
    know the supplemental figures that will be pushed for 2007. But
    we have stated what we believe to be our true requirement. It
    is not in our best interest to understate this requirement
    because we must get this Army balanced and resourced and make
    up for the situation that I have described here in the past.
        The last thing I will say is that we have to think, on the
    basis of the Army, because of the way that we are supported by
    supplemental funding, to think about this in tandem. We cannot
    think about it separately. So any war-related costs that we
    have, reset, recapitalization, combat losses, force protection,
    all the rest of it, we are articulating to OSD and it is going
    forward in the appropriate way.
        Chairman Warner [presiding]. Thank you very much, Senator.
    We appreciate that.
        Senator Dayton.
        Senator Dayton. Thank you, Mr. Chairman.
        I want to recognize and appreciate the remarks of Senator
    Inhofe regarding the NLOS-C and recognize the leadership that
    he provided in that measure.
        General Schoomaker, you said last week in your testimony
    before this committee that you are trying to manage our Reserve
    components on a predictable and manageable level that basically
    deploys them and gives them about five times the amount of
    dwell time as it does deployment time. My understanding is the
    Army's initial force structure design calls for reducing the
    number of Guard BCTs from 34 to 28, the number of division
    headquarters from 8 to 6. You stated earlier today that you are
    talking about 106 brigades total for the National Guard. How is
    that reduction going to affect this deployment rotation and
    what is the rebalancing going on then with the Guard if you
    keep the same number of brigades overall and going from 34 to
    28 combat?
        General Schoomaker. I think it is a great question. Active,
    we are building from 33 not completely resourced active
    brigades to 42, and we are building 75 support units of action
    fully resourced. It is in the support units of action that we
    are most stressed. In the National Guard, we are building
    from--remember the National Guard had 34 brigades on paper, 15
    of them called enhanced brigades that were more enhanced than
    the 34 but not as well off, equipment, et cetera, as the Active
    brigades. I prefer to say that we are going from 15 enhanced
    brigades to 28 fully resourced brigades, plus we are building--
    the residual is 78 support units of action in National Guard,
    fully manned, fully equipped, fully resourced, and within their
    350,000 end strength we are building a TTHS account, which is
    the transients, trainees, holdees, and students account, that
    allows us now to get them the requisite training and education
    like their Active-Duty counterparts, without degrading the
    units from which the soldiers come.
        In the U.S. Army Reserve we are doing exactly the same
    thing: 58 support brigades, fully resourced, with a TTHS
    account that allows them to do the same thing. We believe that
    what we are building to is the best equipped, best trained,
    best resourced Army, Active, Guard and Reserve, that we have
    ever had. That is why it is important for us to do it this way.
        We have this window of opportunity, as I have said, with
    this extraordinary level of activity that we have going on with
    the war effort and the funding that you have supported us with
    to get this right. But this window will not last forever, and
    that is why there is the sense of urgency about getting it
    done. I hope that helps put it into context.
        Senator Dayton. Very much so. Thank you.
        One of the reasons that we are in this recurring discussion
    about the Guard is because at least some of the adjutants
    general (TAGs), some of the Governors, I believe, felt that
    they were not fully apprised of your at least preliminary
    intentions. How are you going to, each of you, involve TAGs and
    the Governors, for that matter, but especially TAGs, in this
    shaping of the force and making sure that, on some of these
    things like the recruiting, the end strength, and the like,
    they are involved and engaged and aware of what the plans are?
        Secretary Harvey. A couple of weeks ago, or 2 to 3 weeks
    ago, we had a 2 to 3-hour meeting. General Blum brought all the
    TAGs in from all over the United States and we had a meeting to
    further roll out the force structure and answer their
    questions.
        Senator Dayton. Mr. Secretary, at that point they were, at
    least I had heard from my adjutant general, pretty concerned
    based on the rumors or preliminary information. I guess that
    that's exactly what I would like to see how are we going to
    avoid.
        Secretary Harvey. The intention of that meeting was exactly
    that, Senator, to make sure they were fully informed, as the
    chief said, of the details of the plan in terms of growing the
    number of brigades from 15 to 28.
        I might add that we also showed them that we are standing
    up an additional type of support brigade called the combat
    support brigade, which has functionality in it which we think
    that has great applicability to their State missions. In the
    combat support brigade we have engineers, military police
    officers (MPs), we have air defense, chemical, civil affairs,
    functions like that, which help us in overseas deployment, but
    also have great applicability to State missions, and also stood
    up a number--we increased those by 40 percent and we increased
    the number of engineer brigades, strictly engineer brigades, by
    60 percent. We revealed all those force structure changes.
        Senator Dayton. General?
        General Schoomaker. If I could just make one statement
    here. I will take responsibility for this. It was not handled
    as well as it should have been and I will accept
    responsibility.
        Senator Dayton. Thank you for that. Can we trust that there
    is a commitment now to engage them on an ongoing basis?
        General Schoomaker. We are now listening and in a very real
    way we have the leadership that is interfacing with the States.
    We are working to make sure that we meet the local demands, the
    State demands, and the National demands in a way that is as
    good for all of us as we can make it.
        Senator Dayton. That is good enough for me. Thank you.
        Just for my information, when we are talking about the
    difference between 333,000 and 350,000, approximately how much
    money is that on an annual basis? What kind of differential are
    we talking about here? Maybe you can give me an answer to that
    in writing afterwards.
        Secretary Harvey. I think it is a couple billion. Could we
    add that to the record?
        Senator Dayton. Sure, just let me know.
        Secretary Harvey. We will add that to the record.
        [The information referred to follows:]
                       Funding for Potential End Strength
        The table below outlines funding necessary to resource the Army
    National Guard (ARNG) at an end strength of 350,000 provided
    mobilizations continue as anticipated, approximately 40,000 mobilized
    annually. The National Guard Personnel, Army and Medicare-Retired
    contribution, Army is specifically needed to pay the additional 17,100
    ARNG soldiers and provide the required Defense Health Program funding.
    Additional funding is needed in operations and maintenance and military
    construction to continue providing the necessary support to these
    soldiers. Current negotiations are ongoing regarding equipment/
    investment (procurement) restoral, and the total dollar amount depends
    on the final outcome of force structure adjustments.
        It is important to note that current funding levels in fiscal years
    2008-2011 will only support an ARNG end strength of 324,000 not
    333,000.

                                                [In millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                               Fiscal Year
                                                   -----------------------------------------------------------------
                                                      2007      2008      2009      2010      2011       2007-2011
    ----------------------------------------------------------------------------------------------------------------
    NGPA..........................................    $188.8    $536.1    $554.7    $567.1    $579.9        $2,426.6
    Medicare--ret HFC (NGPM)......................      62.4      66.4      70.7      75.3      80.1           354.9
    OMNG..........................................     219.6     252.1     292.8     323.8     332.1         1,420.4
    MCNG..........................................       0.0      80.3      30.6      88.7      42.6           242.1
    ARNG specific procurement.....................     318.0     111.5       0.0     106.6     413.2           949.3
                                                   -----------------------------------------------------------------
      Total.......................................    $788.8  $1,046.4    $948.9  $1,161.5  $1,447.8        $5,393.3
    ----------------------------------------------------------------------------------------------------------------
    ARNG funded end strength: Fiscal Year 2006-350,000, Fiscal Year 2007-333,000, Fiscal Year 2008-324,000.

        Senator Dayton. Mr. Secretary, last week the Secretary of
    Defense indicated on a chart that there was, I guess I call it
    the international Base Realignment and Closure (BRAC), the
    consolidation of the deployment of our forces, which I believe
    are in over 130 countries around the world. It seems that part
    of the strain on our forces is the need to continue to deploy
    to that number of countries, which is in part what we have from
    the past rather than what we are trying to do for the present.
        Is that process both in terms of bases and personnel
    deployed internationally going as far advanced as the domestic
    BRAC and reconsolidation?
        Secretary Harvey. We call that Integrated Global
    Positioning Basing Study. You have to discriminate between
    forward stationed overseas and deployed. When they are deployed
    they are not forward stationed. What our master plan is, which
    includes the BRAC recommendations and approvals, this
    Integrated Global Rebasing, and the standup that General
    Schoomaker mentioned of the nine additional brigades. That
    ensemble together represents our restationing plan.
        In particular, we are bringing approximately 47,000 troops
    back from Germany and Korea. That is the major restationing and
    that amounts to, as I said, about 47,000.
        Senator Dayton. Is that considered to be the end point or
    is that----
        Secretary Harvey. Yes.
        Senator Dayton. My time has expired.
        Secretary Harvey. No, that is the end point.
        Senator Dayton. Thank you, Mr. Chairman.
        Chairman Warner. Thank you very much, Senator.
        Senator Clinton, followed by Senator Kennedy.
        Senator Clinton. Thank you very much, Mr. Chairman, and I
    would like to thank both of our witnesses for your service and
    your efforts on behalf of an Army which is bearing the brunt of
    our operations in Iraq and Afghanistan.
        I would like to focus on two issues with both of you, body
    armor and pay problems of wounded soldiers. Secretary Harvey,
    on January 9, 2006, I sent you a letter regarding recent press
    reports that revealed a study by the Armed Forces medical
    examiner suggested that more extensive armor could have saved
    the lives of more than 80 percent of the marines killed by
    upper body wounds in Iraq between 2003 and 2005. I ask
    unanimous consent that my letter to Secretary Harvey and his
    response be included in the record.
        Chairman Warner. Without objection.
        [The information referred to follows:]

        Senator Clinton. In your response you stated that the Army
    began development of new side plates based on enhanced small
    arms protective inserts last September after Army commanders in
    Iraq and Afghanistan identified the need for additional body
    armor protection. When did commanders in the two areas of
    responsibility first learn of the need for additional body
    armor? Was that also in September?
        Secretary Harvey. Senator, I do not think I really have
    firsthand knowledge of when they discovered that. I can just
    tell you that these, we call them Operational Needs Statements
    (ONS), come from theater, and the request for a side plate came
    in September. Our materiel people went immediately to work on
    that, designed the side plate and how to attach it to the
    Interceptor body armor, tested it in ballistic tests and other
    tests, and certainly tried to minimize the weight, and then put
    it into production in a matter of less than 4 months.
        So it is in production and the first 5,000 will be
    delivered this month and we want to get to a rate of 20,000.
        I think I also mentioned in the letter that this is up to
    the commander in theater whether to use it. We really cannot
    order him to use it. It is up to circumstances and missions and
    so forth. Our job is to make it available. So we will quickly,
    I think, be able to make those side plates available. It is an
    additional 5 pounds, Chief, I think? So they now, with the side
    plates, have 31 pounds of armor on, which, as you may have read
    in the paper, is not universally accepted by our soldiers.
        Senator Clinton. I am well aware of that. I think that the
    challenge is to provide it and, where appropriate and
    commanders feel that it should be worn that is part of the
    command decision. Where it is optional, at least it is
    available so that soldiers can make a decision based on their
    own assessment.
        But what concerns me--and this is a point that I would like
    to zero in on--according to the Marine Corps, the Marines
    identified the body armor requirement in June 2005. One of our
    hopes through the emphasis on jointness, going back to
    Goldwater-Nichols, is that information will be shared among the
    Services, that decisions about procurement can be expedited,
    because clearly if marines are finding from their commanders
    that this might be necessary, then a few months later we hear
    that the Army is doing the same--and I just hope we can get a
    little more coordination on some of these issues going forward
    in the future that pertain to the protection of our force.
        Secretary Harvey. We were aware of that Marine Corps study.
    It was performed by the Army.
        Senator Clinton. That is what I thought. But here is why I
    raise it. According to an article on February 12 in the L.A.
    Times, there is a similar disparity existing between the Army
    and the Marine Corps on plans to employ the Joint Improvised
    Explosive Device Neutralizer (JIN). According to this article,
    the Marines have decided to deploy the JIN prototypes while the
    Army claims the device needs further study.
        Perhaps you and the General could just explain to me, why
    do we see this disparity in the way that our commanders, Army
    and Marines, in the field are reacting to the need to
    neutralize IEDs, and is there a process where we can better
    coordinate this? It is the same young American body out there
    doing the job we sent that young man or woman to do. Is there
    some reason why the Army would be delaying a decision on that
    while the Marines felt satisfied that they could go ahead with
    it?
        Secretary Harvey. I think, Senator, there is some confusion
    on this issue. I am familiar with the JIN. We developed it at
    the request of theater. Multi-National Corps-Iraq (MNC-I)
    disapproved deployment for operational assessment pending the
    development of what we call tactics, techniques, and
    procedures. I cannot speak for the Marines, but we provided, at
    their request, a prototype, actually 12 prototypes, and MNC-I
    ruled that until these tactics, techniques, and procedures are
    developed that they believed it was not ready for deployment
    yet.
        The next step is to do this operational assessment in
    theater. I do not really know the details of why, but it is
    again up to the theater and it is up to the theater commanders
    to say that they believe that this device is safe and it is
    effective. I cannot speak for the Marines, but it is my
    understanding that until MNC-I says you can do it, it is not
    the Army's decision. We provide it and they have to develop its
    use, train the soldiers how to use it, and ensure that, for
    example, it does not result in an accident--it defeats an IED,
    but a soldier rolls over and there is an accident or there is a
    death involved.
        So I do not think it is as straightforward as it seems and
    my understanding is until the MNC-I signs off it will not be
    deployed either by the Army or the Marines.
        Senator Clinton. Obviously one of our great concerns on
    this committee has been the enemy's capacity to innovate with
    respect to explosive devices, and I would hope that we are
    putting any effort on our part on a fast track, that we are not
    in any way getting bogged down in bureaucracy about procedures,
    that we are out there in appropriate circumstances, with
    appropriate supervision, trying to test these devices that we
    think can neutralize it.
        General, did you want to add to that?
        General Schoomaker. If you would permit me, I think I might
    be able to add something to it as well. First of all, over 2
    years ago the Army on our own initiative started the Joint IED
    Task Force, and we were doing that within our own resources.
    More than a year ago, we went forward and I personally talked
    to Secretary Wolfowitz and asked that OSD help us provide some
    top cover and expand the resources that we would have, not just
    money, but access into places, industry, and into the
    scientific laboratories, et cetera, that would help us with
    this.
        Now we have this thing with General-retired Monty Meigs at
    the head of it and it is quite expansive. This Joint IED Defeat
    Organization is in fact a joint clearinghouse for these kinds
    of issues. It does not mean that the Services have to comply
    with the recommendations that come out of there, but it
    certainly is a way to bring things together.
        Going back to the Army and Marine Corps, we are working
    closely together. In fact, we are probably working more jointly
    together than any other Services are with the Army, although we
    have improved considerably across the board. The Marine Corps
    is fighting in different places. They fight with different
    tactics, techniques, and procedures than we do and they are on
    a totally different scale. They are also not as heavily armored
    as the Army is. So they make decisions based upon how they
    operate that may be different than the way we would go about
    doing it. Certainly the scale at which they would field things
    makes it a little bit different than when we talk about
    fielding them on the scale that we are.
        So that is not to say that this was the right decision, and
    I do not know all the ins and outs of the particular issue that
    you have, but I do know where the clearinghouse is and where we
    are having these conversations and this is certainly something
    we should look into and find out what the circumstances. I hope
    that helps clarify.
        Secretary Harvey. Senator, I might also add that in round
    numbers Congress has been very generous in support of the Joint
    IED Task Force. This year there is $3.5 billion devoted to
    this. We are about to field the next generation countermeasure
    IED, which is another advance in technology. We continue to
    improve the armor of our vehicles. So we have a holistic
    approach. We continue to develop tactics, techniques, and
    procedures. We continue to look up the food chain, so to speak.
    There is a wholesale part to these IEDs, the wholesale and the
    distribution. We have a whole spectrum of initiatives, both
    technology and tactics, that we are fielding and, as the chief
    said, a very able four-star retired General Monty Meigs came
    back and felt so strongly about it he volunteered to head the
    organization.
        So I think in terms of fundamentals we have everything in
    place, and I can tell you from my personal experience that our
    institutional Army takes this very seriously. We are soldier-
    focused and bureaucracy is set aside because we have to get it
    to the theater as quickly as possible, but it has to be
    reliable. It cannot be a false sense of security.
        Senator Clinton. Thank you. My time is up.
        Chairman Warner. Thank you. Senator, if I might observe,
    through many years that I have been privileged to be associated
    with the military, I have observed, particularly as a former
    marine myself, where the commandant and other senior officers
    felt that certain equipment which was available to both the
    Army and the Marine Corps would be more desirable for the
    Marines. I remember specifically in Korea there was a boot
    that, fortunately, the Marines selected which protected from
    frostbite and it is documented to be far superior to the Army
    boot, and they had to play catch-up.
        But I do not think it is mismanagement. It is to give some
    discretion, some measure of discretion, to the two most
    valuable ground combat units in the world, the Army and the
    Marine Corps, to select for themselves.
        I am glad, Secretary Harvey, you brought in a recitation
    for this record about General Meigs coming back on Active-Duty
    and the elevation and the increase of that joint organization.
    I think it has quadrupled almost.
        Secretary Harvey. It has, at least.
        Chairman Warner. In terms of budget.
        Secretary Harvey. Yes.
        Chairman Warner. So every possible attention is being given
    to this IED problem. But I thank the Senator from New York
    because body armor and the protection of our troops has been
    one of your hallmarks and specialties.
        Senator Kennedy.
        Senator Kennedy. Thank you. Thank you very much, Mr.
    Chairman.
        Just to continue along on this line, I will tell you why
    many of us are concerned about the sense of urgency on these
    issues, because we remember, General Schoomaker, that 3 years
    ago when we talked about up-armoring the Humvees you said you
    would look into it, and 2 years ago before the committee you
    said that, I am confident we are doing everything we can to
    move more up-armored Humvees and other armored vehicles into
    theater. Yet, nearly a year later soldiers were still digging
    through dumpsters to find armor for their vehicles.
        The Pentagon now in the time that I have been--since we
    have been in Iraq, has changed their estimate and the
    requirement for up-armored Humvees nine times, nine times. So
    do you expect them to go up again?
        General Schoomaker. First of all, sir, the demand is placed
    upon us from the theater, not in the Pentagon. We now--
        Senator Kennedy. Wait. The theater, not the Pentagon. Well,
    who makes the judgment out in the theater? Who is responsible,
    then?
        General Schoomaker. The commanders, and General Casey at
    this particular time is the commander that levies the
    requirement about what they want. This is not to denigrate them
    at all. This has been a learning process. So they have upped
    several times, maybe nine times--maybe you are correct--the----
        Senator Kennedy. Nine times, it is nine times.
        General Schoomaker.--numbers of Humvees that are required
    and, by the way, all of the other armored wheeled vehicles that
    we have provided, which now is over 20,000, maybe more.
    Additionally, we have added additional tanks and Bradleys,
    Strykers, and other kinds of vehicles over there to also be
    part of the equation.
        So it is a dynamic situation, one in which we continually
    work to fill, and I agree with you it is frustrating because we
    seem to be shooting behind the ducks all the time. We are
    trying to get----
        Senator Kennedy. I am not sure that is a good analogy
    today, but in any event, moving on. [Laughter.]
        General Schoomaker. I think you are referring to quail
    hunting, not ducks.
        Senator Kennedy. That is all right.
        It is difficult for us, particularly when we have heard
    from those who have served over there where they have not had
    the Humvees. We have lost 42 brave men and women in my own
    State of Massachusetts. Up to probably the last three or four
    deaths, we were having about a third that had been killed
    because they did not have the up-armored Humvees. Now that has
    moved, the up-armoring has moved along, but it has taken a long
    time, a long time.
        I think the idea that the responsibility is from the local
    commanders that we have not had the up-armored Humvees and it
    has taken this long a period of time should not be terribly
    satisfactory. It should not be terribly satisfactory, I would
    not think, to you or to the others, since we have changed that
    number nine times. As I understand it, you are going to change
    it again. Am I correct?
        General Schoomaker. It could be. There is no excuse in
    this. The reality is this. We started the war with less than
    500 up-armored Humvees. The Army and the Marine Corps and
    everybody else never had a plan nor an idea that we would ever
    up-armor this many wheeled vehicles.
        We also started the war manufacturing only about 1,200 sets
    of body armor a month, as opposed to the 25,000. It goes back
    to the level of resourcing that we have had over the last
    decade or more, $100 billion worth of shortfall, and those are
    some of the areas where risk was taken. Now all of a sudden, we
    have a requirement to up-armor everything and for everybody to
    wear this stuff and it is chasing a requirement that in my view
    will continue to migrate, and we are going to continue to have
    to either anticipate it and overproduce, which I believe we
    have in body armor, or come up with other solutions to this
    situation that we have.
        Senator Kennedy. The point is now, are you changing your
    estimate in terms of the up-armoring the Humvees now? Are you
    going to request additional numbers?
        Secretary Harvey. Senator, our plan is to continue to
    produce the level 1 Humvees. We now have 11,000 in theater.
        Senator Kennedy. Are you increasing the production rate?
        Secretary Harvey. Yes, we are. In 2003, it was at 30. Now
    it is at 700 and it is on its way to 1,100 a month. So we are
    increasing it over the next 6 months to 1,100.
        Senator Kennedy. The reason we make it is because the
    Government Accountability Office (GAO)--this is not just--this
    is the GAO last year criticized for not having a strategy to
    end the equipment shortfalls. I mean, this is not just a member
    of the committee. This is the GAO. I do not want to take the
    time, but this is a part of the reason that many of us are
    concerned, whether we are going to miss the opportunity again
    with this new vehicle that Senator Clinton--the JIN vehicle,
    whether we are going to be back here now, hopefully not, in
    another year, 2 years, and 3 years and have someone that is
    going to say, look, I am going to take a look at it, I am
    confident we are doing everything we can to move it forward.
        But does General Votel agree that this should not be
    deployed, I would ask Secretary Harvey or General Schoomaker,
    who has been involved in this program?
        Secretary Harvey. I do not think that is General Votel's
    decision. That is a theater decision, whether the training
    materials are there, whether the tactics have been developed.
    General Votel would, say, provide it from a technical point of
    view.
        Senator Kennedy. Well, what would he say, since he was in
    charge, as I understand----
        Secretary Harvey. I think you would have to--I would not
    know.
        Senator Kennedy. Well, do you think it would be worthwhile
    finding out?
        General Schoomaker. We can provide it for the record.
        Senator Kennedy. Yes.
        [The information referred to follows:]
    Joint Improvised Explosive Device Defeat Organization (JIEDDO) Fielding
                                     of JIN
        Senator Kennedy, we have asked the Director, JIEDDO, to respond to
    your concerns.

        General Schoomaker. But I believe we are mixed here,
    because I believe what Senator Clinton was talking about was a
    robot, a robotic vehicle that is not manned.
        Senator Kennedy. That is right. It is called JIN, the Joint
    IED Neutralizer.
        General Schoomaker. It is not in the same category as up-
    armored Humvees.
        Senator Kennedy. No, I am moving. What I was pointing out
    is that we were awfully slow in getting the up-armor and we do
    not want that to happen in this case here. We have, as I
    understand--this has been tested, supported by Secretary
    Wolfowitz and General Votel, who believe that this can provide
    a very dramatic and important additional security against IEDs
    for the men and women in the field. Since he was, as I
    understand, the program manager out there and been very
    positive, I would have thought it would be useful for someone
    to talk to him whether he thinks it should be deployed as well.
        General Schoomaker. Sir, we certainly should if that is his
    opinion. That is not what I understand and we will have to
    check.
        Senator Kennedy. Well, Secretary----
        Secretary Harvey. We can do it, but again the final
    decision is not from the acquisition community; it is from the
    operational community.
        Senator Kennedy. My time is up. Do you have the resources
    available if they ask for it?
        Secretary Harvey. Absolutely. If it pans out to be as
    effective as it is intended to be, we have the resources. We
    can reprogram resources. As I said before, I think the total
    budget is $3.5 billion for IED-related technologies and systems
    development and production.
        Senator Kennedy. Thank you, Mr. Chairman.
        Chairman Warner. Thank you very much, Senator Kennedy.
        Senator Lieberman.
        Senator Lieberman. Thank you very much, Mr. Chairman.
        Mr. Secretary, General, thank you very much for your
    testimony, for your service every day and, through you, to the
    men and women of the United States Army, for the extraordinary
    job they are doing for us everywhere that we ask them to
    protect our security in a very wide range of missions. I
    cannot--I agree with every superlative that has been used this
    afternoon to describe the Army today. I have seen it myself as
    I have had the honor to go around the world and see them,
    particularly in war zones.
        The quality of our soldiers I think is extremely high and
    is not at all a problem. The problem that I want to talk about
    and a concern that I have is whether we have enough soldiers,
    whether we are giving you and them enough personnel support to
    carry out the multiple missions that we have given to the Army.
        The Army is not broken in my opinion. I appreciate actually
    your term, General Schoomaker, because I think it says it more
    accurately. It is stretched. We are asking you to do an awful
    lot. My fear is that if we do not give you more Army end
    strength and fill it, it is never going to break, but the
    stretching is going to develop some cracks that we do not want
    to see in this great Army of ours, particularly because we are
    asking you in a modern context to do a lot more than just
    engage the enemy in combat. You are performing an extraordinary
    range of peacekeeping, humanitarian, civil, political, in the
    best sense of interacting with the local population, missions.
        So here are the facts. The QDR recommends that the Army
    decrease its size. Right now there are approximately 500,000
    Active soldiers in the Army, which incidentally is down from
    about, as you well know, 800,000 at the end of the Cold War. So
    the Army has taken some hits and, to put it another way, given
    back during the so-called peace dividend years.
        The QDR suggests that this number now should decrease by
    about another 20,000, to about 482,000, by fiscal year 2011. We
    are in a war. By everybody's description, it is going to be a
    long war. I myself can find no instance in our Nation's history
    where we reduced the size of our Army in the middle of a war,
    and we may well be just at the beginning of this war.
        My question is--and I want to straight-out express my
    concern, my own concern about what happened here, that you are
    operating in a budget-limited environment and you have an
    understandable commitment to the development of the FCS, which
    I support, have as long as I have been on this committee and
    been chair or ranking on the Airland Subcommittee, and once you
    do that you are just not left with enough resources. Something
    has to give, so the number of personnel has given.
        I think that is an unfair position to put the Army in, not
    only you as the leaders of it, but all of the soldiers who are
    in it because it puts more stress on each of them.
        So my question really is a general one: What is the
    rationale for decreasing Army end strength at this point in
    time, which is wartime?
        Secretary Harvey. Let me respond to that and then General
    Schoomaker can chime in. Just by way of background, Senator,
    the Army is really--let us talk about the Active Army. It
    really consists of three parts. It consists of the operational
    Army, which provides the warfighting mission; it is the
    institutional Army that generates the force--the Army Materiel
    Command, Training and Doctrine Command, commands like that--and
    then this overhead account that we call the TTHS account.
        If you look at those together, in fiscal year 2004 we had
    482,400 and the operational Army was 315,000. Our plan is to
    grow that operational Army by 40,000 over the--actually by
    fiscal year 2008, so that we go from 315 to 355. In parallel
    with that, we start to decrease the size of the institutional
    Army through military to civilian conversion, which is
    looking--and we have identified 22,000 positions thus far where
    we think that we could put a civilian in and then that position
    could be filled and transferred over to the operational Army.
        But the timing of all that does not work out. So in the
    interim we want to build to about 512,000 as the operational
    Army goes from 315, and I might note today it is at 330, so we
    have added 15,000 people to the operational Army. We have also
    brought the institutional Army down by about 5,000. So we are
    starting to have one grow and one come down, with the net
    result in fiscal year 2011 to hold it at 482.4.
        But we are really growing that part of the Army that fights
    the war in terms of its end strength, which we think is most
    important.
        Senator Lieberman. I must say that is the first time I have
    heard that explanation.
        Secretary Harvey. I can come over and give you more detail
    on it.
        Senator Lieberman. I would like to go over it in more
    detail. So if I hear you right, based on the changes you are
    making, you are actually saying that you are going to increase
    the so-called boots on the ground.
        Secretary Harvey. That is exactly right. We are going to
    more efficiently manage through this military to civilian
    conversion the institutional side.
        Let me also say that operational capability is a function
    clearly of end strength, but it is also a function of the
    quality of the soldier, it is also a function of the quality,
    quantity, and technology of the weapons and information system.
    It is also a function of the caliber of the leadership, the
    degree of training, the efficiency and effectiveness of the
    tactics, techniques, and procedures. All those elements go into
    the operational capability, also the number of units. So if you
    look at what I just described as really the operational
    capability of a unit and then the number of units we are
    growing from 33 to 42.
        So besides the end strength, we are increasing the overall
    operational capability from other dimensions and, as you
    mentioned--and we appreciate your support of the FCS--that is
    going to make, as the chief--I do not know if you were in the
    room when the chief talked about that two people in the future
    are going to do the job of 40 people because of the technology
    of the weapons system, and this is the NLOS-C.
        So all those factors come into play.
        Senator Lieberman. But you agree that at some point,
    notwithstanding the force multiplier effect that technology can
    have, that at some point----
        Secretary Harvey. You need a minimum of boots on the
    ground, absolutely.
        Senator Lieberman. If I could just go back to that. The
    FCS. You need boots on the ground.
        Secretary Harvey. Absolutely.
        General Schoomaker. The brigade will be 900 people smaller
    because of technology, but it will in fact have twice as many
    infantrymen in squads than the current brigade has. That is how
    powerful the deal is.
        Here is the other piece, why what Secretary Harvey is
    talking about here is so important. Growing the operational
    Army is what is important and we have to do it within the
    resources that we have, because you have given us the authority
    to grow the Army by another 30,000 to 40,000 soldiers and you
    have given us the money to do it, and we have been doing it for
    2 years, but we have only grown a little over 10,000 soldiers.
        You could authorize us to have another 2 million in the
    Army and it will not make it any bigger because of the
    challenge of recruiting. We are recruiting 170,000-plus
    soldiers every year, Active, Guard, and Reserve. That is the
    size of the entire United States Marine Corps. That is what we
    are recruiting every year. So it is academic about what you
    authorize because we are already recruiting the end strength--
    --
        Senator Lieberman. You have touched on a real problem. My
    time is up, but obviously one of my concerns is that because
    the Army is stretched and we are asking a lot of those on
    Active-Duty now, it becomes a less attractive alternative for
    people in terms of signing up.
        General Schoomaker. I have a different problem than that.
    Only 3 out of 10 males between the age of 17 and 24 can qualify
    to be in the United States Army today.
        Senator Lieberman. Right.
        General Schoomaker. That is a serious problem. About 15
    percent of that population that qualifies is providing about 49
    percent of our recruits right now to the United States Army. So
    this is the business side of this that really makes this a very
    tough kind of conversation. That is why the way we are
    approaching this, by growing the boots on the ground piece of
    the Army inside of our resources, is so important. That is why
    our modernization is so important, so that we can leverage that
    in a way.
        This is the first time this Nation has been in a protracted
    war with an All-Volunteer Force and the fundamental problem we
    have in restructuring our Guard, Reserve, and Active Forces is
    that in many respects the force structure was still structured
    for the Cold War and was expected to be filled out by what we
    used to have, which is draftees, which we do not have any more.
    So we have to fundamentally change the equation here. That is
    why this program is so important.
        Senator Lieberman. My time is really up, but I would like
    to continue this discussion, because I think there are a lot of
    people on this committee in both parties who want to make sure
    that, for resource reasons, you are not--of course we are not
    going to add two million, but you are not being limited in
    personnel in a way that is going to compromise the
    effectiveness of the Army.
        Secretary Harvey. Let me say on the good news side that for
    the last 8 months we have met our recruiting goals, and
    February looks good, and the Guard has done very well. They
    have recruited their goals for the last 4 months. So it is a
    challenge every day, but we are doing much better and we are
    gaining confidence.
        Senator Lieberman. Bless you.
        Thank you.
        Chairman Warner. Thank you, Senator.
        I will now begin the second round. You do mention the
    recruiting goals, but I was aware of the fact that you are
    falling short in some of your officer requirements, captains
    and majors; am I not correct in that?
        Secretary Harvey. No. I will tell you, Senator, if I could
    talk to that, in terms of company-grade officers, our attrition
    rate of company-grade officers is around 8.3 percent and if you
    look at historically back over the last 5 years you will find
    that we have averaged--the average attrition rate is just about
    8 percent, maybe it is a little higher, 8.5 percent. It dipped
    after 2001 and then went back to its historic levels.
        But the attrition is only one component, of course, because
    coming in is the accession or the recruitment or the graduation
    in this case of officers out of our various and sundry schools.
    If you look at over the last 5 years the number of company
    grade officers has actually increased by about 10 percent.
        Chairman Warner. Let me just interrupt. Members of this
    committee and other members of Congress are very careful in
    analyzing the media and so forth. This question was prompted by
    an article in yesterday's Washington Post. Have you read it?
        Secretary Harvey. Yes.
        Chairman Warner. Do you say that it is inaccurate, then?
        Secretary Harvey. Yes, because--I can submit numbers for
    the record, but let me roughly say that----
        Chairman Warner. We must press on. Would you kindly provide
    for the record----
        Secretary Harvey. I will, I will.
        Chairman Warner.--your recitation of fact which you feel
    has an accuracy that is lacking.
        Secretary Harvey. In terms of company-grade officers.
        [The information referred to follows:]
                        Number of Company Grade Officers
        The Active Army is not short company grade officers in the
    aggregate. There is, however, a shortage of some of the more senior
    captains needed to fill positions where more experience is desired. The
    current authorizations and operating strength is as follows:

    ------------------------------------------------------------------------
                                                                   Operating
                                                      Authorized   Strength
    ------------------------------------------------------------------------
    Lieutenants 01/02...............................      10,019      11,843
    Captain/03......................................      20,482      21,375
    ------------------------------------------------------------------------

        The operating strength does not include officers assigned to the
    Trainee, Transient, Holdee, and Student account.

        Chairman Warner. I thank you.
        I would now go to the next question, which bears on this
    same issue, and that is the women, its importance and ever-
    growing importance in the military Services. What is the Army's
    current practice with regard to the assignment of women as it
    relates to their assignments bringing them into areas where
    there is combat? We, I think all of us, recognize today it is
    almost a 360-degree zone of combat certainly in Iraq, maybe to
    a lesser extent in Afghanistan.
        Secretary Harvey. Let me just comment on----
        Chairman Warner. So what is your policy today and how do
    you handle that?
        Secretary Harvey. The policy, of course, is a well-
    established policy that goes back to 1992.
        Chairman Warner. I think it is 1994, section 5.401.
        Secretary Harvey. Actually the co-location component I
    think went even earlier than that. But there are two components
    to the policy for the Army and that is assigning women to units
    below the brigade that perform direct combat, direct ground
    combat; we exclude women from those units in our design of the
    Army modular force. Those units, those skills that perform
    direct ground combat, are infantry, armor, combat engineers,
    special forces, et cetera. They are excluded from that.
        Now, in terms of co-location, we have designed the BCT that
    we have talked about and we code positions in forward support
    companies and other companies so that no women will co-locate
    with a unit performing direct ground combat. So from an
    organizational point of view, our designs--and I am confident
    in this--are totally, totally consistent and compliant with DOD
    policy and they have been since I have been involved in it over
    the last several years.
        Chairman Warner. I just want to make sure that women are
    given opportunities----
        Secretary Harvey. They are.
        Chairman Warner.--at no cost to their careers.
        Secretary Harvey. They are.
        Chairman Warner. But we recognize there are certain
    limitations.
        Secretary Harvey. We comply totally to the policies of the
    DOD.
        Chairman Warner. That is fine.
        General, do you have anything further to add on that? Do
    you see any pushback from the women? They are at risk, we
    recognize that. Even though these statutory and code
    provisions, we must recognize they are at risk.
        General Schoomaker. Sir, the policy is as stated and that
    is what we are organizing, training, and equipping to do. But
    as you pointed out, the battlefield is a 360 battlefield. We
    have to train every soldier to be able to survive and not be a
    liability on the battlefield and we are.
        Chairman Warner. That is understood.
        General Schoomaker. Should a female soldier become engaged
    in direct ground combat as a result of a 360 battlefield, we
    want them to be well-trained and equipped to do so, and that is
    what we are doing.
        Chairman Warner. Understood. Now, what about the aviation
    units, gentlemen--either of you can take that--which are often
    in direct support of those combat units? We have a number of
    women in aviation billets.
        General Schoomaker. The same policy applies, sir. They do
    not have a direct ground combat role, nor do they co-locate
    during the point of direct ground combat.
        Chairman Warner. So the helo support going in for a ground
    unit is then restricted to males flying those?
        General Schoomaker. There are females flying----
        Chairman Warner. That is right. In other words, I think
    your doctrine recognizes that females can fly in on those
    missions with direct support of those who are engaged in
    combat; would that be correct?
        Secretary Harvey. Yes, and that is not considered by the
    policy to be direct ground combat.
        Chairman Warner. All right. It is plenty dangerous for
    sure.
        Secretary Harvey. Yes.
        Chairman Warner. They have performed magnificently.
        Secretary Harvey. Absolutely.
        Chairman Warner. We are receiving here in Congress from our
    constituents some concern about the next of kin receiving
    timely information about their family members in the Armed
    Forces, and indeed about the cause and circumstances of death
    and injury. You have directed, Mr. Secretary, my understanding,
    a review of Army procedures in this regard. What have been your
    findings on that and how can we ensure that families get
    accurate information as soon as is possible with regard to
    their loved ones?
        Secretary Harvey. It is a very important issue to me,
    Senator. As you say, I was made aware of, going back to last
    summer, some incidents where we did not meet the expectations
    of the families. It is a handful of incidents and in my
    estimation it is too many. The objective here is 100 percent
    execution. So I started and asked the inspector general to
    conduct an end-to-end review of our casualty reporting,
    notification, and assistance process.
        Chairman Warner. So you are really moving out on this
    situation----
        Secretary Harvey. Yes.
        Chairman Warner.--to improve it as best you can?
        Secretary Harvey. Right.
        Chairman Warner. My last question then would be to General
    Blum. Now, I provided you a letter written with 77 Senators
    having signed that letter, regarding the Guard and Reserve,
    with Senator Leahy and Senator Bond, neither on this committee,
    but nevertheless with this committee participated to some
    extent in signing that letter. Do you have any comments on that
    letter at this time, General Blum?
        General Blum. Yes, sir, I do.
        Chairman Warner. Would you take the microphone, please.
    What I would ask is just give us a quick summary of your views
    and then provide me and the ranking member with your response
    in detail to that letter.
        General Blum. Yes, sir, I would. Mr. Chairman, first let me
    say I welcome the strong and unswerving support of this body--
    --
        Chairman Warner. You have it, you bet.
        General Blum.--for our citizen soldiers. The two issues of
    concern here, for the interest of time, were reconciling the
    Army's message of 350,000 end strength, if we can grow to that
    and resourcing it, with a force structure allowance of 348,000,
    which they have reaffirmed and reassured all of us again today
    they are committed to. I told you the faith and confidence I
    have in the Army leadership and the degree that I am willing to
    trust them. They have admitted openly today that we could have
    done this better and we have fixed that and moved on. I cannot
    change what happened, but we are moving forward in a
    collaborative manner. The adjutants general are absolutely
    helping cobble together the solution for the force structure,
    and that is the conversion of six combat brigades to six
    brigades that are even more relevant for future warfare and
    even more useful to the Guard.
        Chairman Warner. If you would provide an answer then for
    the record going into some detail.
        General Blum. Yes, sir.
        [The information referred to follows:]

        Chairman Warner. Lastly, it is not included in that letter,
    but as you well know the Guard has a responsibility to their
    governors and the State adjutants general. In this
    reorganization, is that carefully protected, that mission of
    every State Guard?
        General Blum. I think it is not only carefully protected,
    but it is actually enhanced. That is as clear as I can make it.
    I truly believe in the rebalancing effort and I believe in
    doing it collaboratively with the adjutants general the States
    will actually build State plans that will be aggregated at my
    level, and I will work with the Army to ensure that what those
    formations used to be become something even more useful to this
    Nation.
        Sir, the last piece to this letter is the most significant
    and that is the understanding of the cost of doing what we are
    talking about approximates about $800 million in 2007, and I
    have the assurance and commitment of the Army leadership that
    even while the current budget submission does not reflect
    exactly that and it shows a shortfall or a taking away of that
    money for an earlier plan, that will be restored, and the two
    gentlemen at this table have committed to me and I am sure
    would commit to you to do that.
        Chairman Warner. Thank you very much, General.
        Do you have any further comment on that letter?
        Secretary Harvey. No, I do not.
        Chairman Warner. Thank you.
        General Schoomaker?
        General Schoomaker. No.
        Chairman Warner. If not, Senator Levin.
        Senator Levin. First let me commend all of you in terms of
    addressing this Guard issue in a way that is understandable to
    the members of the military, the members of the Guard. They
    perform an extraordinarily important service. We want to make
    sure that their needs are met. We also want to make sure that
    some of the reforms which the leadership of the Army are
    talking about to fully man those units and to restructure those
    units so that they can meet the newer threats, that those
    leadership efforts are also supported, and I think you have
    done a good job of coming together here to try to work this
    out, and I commend you for it.
        Secretary Harvey. Thank you, Senator.
        Senator Levin. General Schoomaker, a couple of respected
    organizations, RAND and the Center for Strategic and Budgetary
    Assessment, two respected organizations, have sounded the alarm
    that the Army is what RAND called ``stretched thin'' or what
    the Center for Strategic and Budgetary Assessment called ``the
    thin green line.'' Both analyses question whether the Army is
    large enough and organized in a way to sustain such high levels
    of deployments, to sustain high levels of deployments, while
    maintaining ready units for other possible contingencies.
        The Army has stated that its Active-Duty units have had
    less than 2 years and in some cases less than 1 year between
    Iraq and Afghanistan rotations.
        Can you comment on those two organizations' reports that
    the Army is stretched thin, as RAND and as the Center for
    Strategic and Budgetary Assessments have reported?
        General Schoomaker. Sir, I have not read either of those
    reports in detail, but I can comment to what you just
    characterized. I would tell you that our Army is as busy as it
    has ever been. But I think we are performing, our Army is
    performing, in an extraordinary way, and I think the fact that
    our reenlistment is as it is and the fact that all of the
    things we are doing are happening to the standards that they
    are happening is a good testament.
        Put that rope chart up if you could real quick.
        You have seen this before, but I want to show it to you one
    more time.
        Do it as quick as you can, please. [Chart.]
        [The information referred to follows:]

        This is not just Iraq and Afghanistan that are at issue
    here. You have seen this chart as we do it. These are all of
    the things that we are doing in 2006 and 2007 in the Army. We
    are balancing the Active Component/Reserve Component (AC/RC),
    as we have been talking about here. We are modularizing the
    Army. We are restructuring ourself globally. We are going
    through BRAC. There is the war. We are growing. We are
    resetting and modernizing, and we have major business
    transformation going on.
        So when people talk about the Army being stretched, all of
    this stuff is going on, and the reason it is going on is
    because we want to make this Army capable and have the capacity
    that is resident within its potential to deal with the future
    at this level of operation without the kind of stress we have.
    We have to go through these labor pains to get there. We just
    have to do it. I have testified before this committee, now this
    is the third year. I said we dumped the toy box out on the
    floor and it is ugly, and we are getting the puzzle pieces back
    together.
        So I cannot deny that the Army is busy, but I do not know a
    better solution than what we are doing to get through it.
        Senator Levin. General, I think it would be useful if you
    would take the time when you have a moment, which is not often,
    I know, to take a look at those studies and give us any
    additional comments that you might have.
        General Schoomaker. We have people doing that, sir.
        Secretary Harvey. Senator, if I might add something here.
    What I use as a barometer about the health of the Army or the
    reaction to stress on the Army is the retention rate, and the
    retention rate last year was at an all-time high. We retained
    69,500, which was 10 percent over goal, which then that goal
    was 15 percent over the prior year. We are ahead so far this
    year of last year.
        I think the real telling statistic was the retention rate
    in the 3rd Infantry Division that was just completing, has just
    completed its second deployment to Iraq. They are now back, and
    they exceeded their retention goal by 36 percent. So I think
    that says that the Army, the operational Army, although very
    busy and very active, is reacting favorably to it.
        I think that is the best indicator of whether we are
    stretched, strained, or whatever term you want to use.
        Senator Levin. It is something I think we all want to keep
    our eye on and to have you keep your eyes on.
        Secretary Harvey. Absolutely.
        Senator Levin. The retention rate is extraordinary. It is a
    real positive statement about the feelings, the morale, inside
    of the military. We are having some problems, I gather, with
    acquisition rates, at least from time to time. So it may be--
    the stress factor may be having an impact there rather than on
    retention. But it is something we obviously are concerned about
    and we are hopeful it does not create a problem down the road.
        Readiness reports seem to show some problems in training
    and readiness. It may be affected by equipment being deployed
    or being refurbished and thus unavailable for training. Can you
    comment on that, either one of you?
        General Schoomaker. Where you will find no readiness
    problems is in the soldiers that are in harm's way and in the
    next group of soldiers, the units that are going forward to be
    in harm's way. Where you will find where we have taken risk is
    in the units that have returned and are resetting. That is how
    we have to manage it. There is no way of getting around it.
        But as we build because of the resources that you are
    providing us, we will rectify that and we will have a fully
    populated force generation model that will be historically high
    in its ability to provide ready units.
        Senator Levin. Going back to recruiting just for one
    moment, Secretary, is it true that we are accepting more
    category 4 recruits now and non-high school graduates? We have
    raised the enlistment age, I believe, recently from age 34 to
    age 39, and I believe that that is accurate. But we also have
    these reports that the Army is accepting a greater number of
    recruits without high school diplomas.
        Can you comment on that?
        Secretary Harvey. The rules are or the standards are a high
    school diploma or equivalent, and we have not changed that
    rule.
        In regards to the category 4s, last summer we discussed and
    I requested the rationale behind the following, which is why is
    the DOD standard 4 percent and the Army's 2 percent? Why are we
    not complying to the same standards as the rest of the DOD was
    given? Quite frankly, I did not get a very good answer. The
    only answer I got was that 12 percent of the command sergeants
    major in the Army today scored in category 4. So our top
    Noncommissioned Officers (NCOs), we like to say our leaders,
    our NCO leaders, the envy of the armies of the world, 12
    percent of them scored category 4 on this test.
        General Schoomaker. That is when they entered the Army.
        Secretary Harvey. When they entered the Army.
        General Schoomaker. Not now.
        Secretary Harvey. So I concluded that, one, that we should
    use the DOD standard and, as I say, I am quite honored and
    proud to be head of an Army with such high quality NCOs. So
    there was no reason for us to do that. Let us keep in mind as
    you read some of these reports that our goals, our annual
    goals, it is like a sales or profit. We can take the people in
    during the course of the year as long as we end up at 4 percent
    of the, in this case, 71,000. So we know exactly the number. It
    is 2,873 category 4s. We now have accessed about 1,900 or so.
    At the end of the year it will be less, it will be 4 percent or
    less, and that is the DOD standard. Again, high school degree
    or high school equivalent GED.
        That, by the way, is one of the reasons that only 30
    percent of eligible males in this age group qualify for the
    Army, because it is kind of disconcerting, but there is a lot
    of young men today that do not have high school degrees.
        Senator Levin. Thank you.
        Chairman Warner. Thank you, Senator. That is a very
    important point you raised, Senator, and I am glad you that you
    cleared up the record on that.
        Senator Levin. It means also the Army is one hell of a
    great school.
        Secretary Harvey. A builder of character, too.
        Chairman Warner. It makes available, as you point out, for
    those who entered the Army with some minimal types of
    qualifications, category 4, and took it upon themselves to
    educate--avail themselves of all the opportunities for
    education such that they rose through the ranks, and they would
    not have risen had they not acquired that. Is that correct,
    chief?
        General Schoomaker. Yes, sir, and almost 100 percent of
    them have at least a bachelor's degree.
        Chairman Warner. Very interesting.
        Secretary Harvey. We have some Ph.D.s, E-9 Ph.D.s and
    master's degrees. They are quite a group of young men and
    women.
        Chairman Warner. Thank you.
        Senator Lieberman.
        Senator Lieberman. Thanks. Thanks very much, Mr. Chairman.
        I will just come back briefly to our discussion, and I do
    want to continue it as we go on because I think this is so
    important. I am going to quote from an article, ``Inside the
    Pentagon,'' January 26, 2006, and it cites a study done by the
    Institute for Defense Analyses (IDA), which is one of the
    federally supported research centers, which, as it says here,
    ``has found an Army plan to reorganize its forces into BCTs
    will reduce net fighting capability rather than strengthen it,
    contrary to the Service's vision.''
        It says: ``To increase brigades without boosting overall
    manpower of the Service, officials say they must strip each
    brigade of one maneuver battalion, composed of infantry troops
    or heavy arms. Army leaders say they can field just two such
    battalions per brigade rather than the traditional three. The
    move results in a net loss of 40 maneuver battalions,''
    according to this analysis.
        It also goes on to say--I am going to ask you to respond to
    this--``The current Army plan for fielding 43 Active-Duty, two-
    BCTs does not provide the optimum allocation of scarce Army
    manpower resources. Yet the Army plan reduces the number of
    maneuver battalions,'' it says, ``by 20 percent below the
    number available in 2003.'' The organization describes maneuver
    capability as ``fundamental to the Army mission of controlling
    terrain,'' so the cut in maneuver forces, IDA says,
    ``translates to a 20 percent decrease in the Service's ability
    to control terrain.''
        I presume you are familiar with this study?
        Secretary Harvey. I am, Senator.
        Chairman Warner. It is part of what alarmed me. Just to
    state, this was requested, again, by the Defense Department.
        Secretary Harvey. I will comment. Let me just give you some
    numbers and I will ask General Schoomaker because he can tell
    you about the capabilities. I think that the study missed the
    mark because you have to go to the company level and not to the
    battalion level, and we are actually increasing the number of
    companies in the modular force from three to four.
        So when you do all the arithmetic--and then I will turn it
    over to General Schoomaker--before, what we call the pre-
    modular force, had 323 companies. The modular force has 532
    companies. So, with all due respect, this study is not accurate
    and it is companies that really perform the maneuver, and to
    get into the maneuver battalions and the Reconnaissance,
    Surveillance, and Target Acquisition (RSTA) battalions I am
    going to ask General Schoomaker, who knows this subject
    extremely well.
        Senator Lieberman. General?
        General Schoomaker. I would characterize it this way. The
    BCTs are not brigades. In the past, what we had were brigades
    which needed augmentation to become task organized. So the
    Secretary is exactly right, the place that you fight and where
    you hold ground is at the company level, platoon level, and we
    have increased the numbers there.
        But what we have done is take the brigade and we have
    enhanced its headquarters so that it now can operate in a joint
    environment. It has tremendous bandwidth, it has all kinds of
    capability of bringing intelligence down all the way down to
    the battalion and company level, national level intelligence.
    We have put inside of that BCT its own artillery battalion,
    which it never had before. We have put inside of it its own
    forward support battalion, which it never had before. We put
    inside that brigade MPs, we put a RSTA brigade in there, the
    military intelligence, the analysts, the civil affairs,
    engineers. All of this is now inside of these brigades that are
    very capable, because that is the world we are now in. We are
    not in lining up against the Soviets.
        Now, the other thing we put in there is four companies per
    battalion, whereas before we had three. We have also added a
    RSTA squadron of three company-size elements. So the reality is
    if you want to count maneuver elements there is actually 11 now
    inside of a brigade instead of 9 in the old way.
        But the real power is not just in that. So what I would say
    is this. If somebody told me that a three-battalion brigade is
    better than a two, I would agree with them. If they said four
    was better than three, I would agree with them. But the modular
    force allows us to build those. It allows us to put more
    battalions, and our span of control will allow us to do that.
    If you go to Iraq today, you will find divisions and brigades
    commanding far more units than what they typically would have
    in our organization.
        So I will not say that the report is inaccurate. I will
    tell you they are measuring things in a context that is not
    relevant, as relevant today as it used to be. What we are doing
    today is giving us the kinds of capabilities and the capacity
    to meet the future challenge. If we want to argue past, we
    would have different answers. But that is where I stand on it.
    I just disagree with that type of analysis.
        Senator Lieberman. You have made that very clear.
        General Schoomaker. Yes, sir.
        Senator Lieberman. Thank you, General.
        Let me go to one last question, which is I liked the term
    in the QDR that the military needs a new breed of warrior, who
    can display proficiency in both irregular and traditional
    combat. These new warriors will be--and I quote again--
    ``largely self-sustaining because they will understand foreign
    cultures and societies.'' This is a whole new range. Talk about
    skill levels and training.
        I want to ask you about the Army's educational plans that
    are related to the force transformation. I was pleased to see
    in the budget that there is a significant additional emphasis,
    increased emphasis, on linguistic training and that is
    excellent. It looks to me--and you correct me if I am reading
    it wrong--that the 2007 budget request for educational benefits
    is lower than this current year's level. I want to ask you, if
    that is true, whether you can meet the education goals that the
    QDR sets out for the new breed of warrior?
        General Schoomaker. I do not know how it could be lower. I
    would have to look at that. First of all, we have increased
    education at our major level, captains and majors, to 100
    percent now of our majors must attend intermediate level
    education, which is command general staff college level, 100
    percent.
        We are increasing by 200 a year the advanced civil degree
    program opportunities for company-grade officers, where we will
    build to about 1,000 degree completion or advanced civil degree
    program issues where we are encouraging cultural studies,
    language, and these kinds of things for what we are doing.
        We are also now increasing the amount of these studies at
    both the military academy for those cadets as well as Reserve
    Officers Training Corps (ROTC) for scholarship cadets on that.
    We are building out at Leavenworth and elsewhere things like,
    with General Petraeus, where we are coordinating with the
    Counterinsurgency (COIN) Academy that they have in theater and
    capturing all these lessons learned, so that we are now
    training across all of our NCO and officer education systems
    the lessons learned that we have had and inculcating them in
    designated blocks of instruction in every military school we
    have, to include our basic NCO schools.
        So some of that may be called training, but the majority of
    that in my view is education, and it is a major move that we
    are making in the right direction.
        Secretary Harvey. Can I just add something, because the
    chief and I did something last year that I think we are both
    proud of, and that is we spent a lot of time defining the
    leader, the military and civilian leader we need for the 21st
    century. We call that leader a pentathlete, a multi-skilled
    individual, has the skills that you talked about, among others,
    and has five major attributes. That is why we called it the
    pentathlete.
        So we have a template for leadership and we also have
    chartered a task force to tell us--to review the combination of
    education, training, and assignment that gives us that leader.
    So we are looking forward to the output of that, chief, later
    in the spring.
        Senator Lieberman. Thank you both. I am over in my time. I
    think what I would like to do is send you a written question
    just with a comparison of the budget levels and ask you if you
    are sure you have enough in there to meet the educational goals
    that you have for the Army.
        Secretary Harvey. Sure, we will do that, Senator.
        Senator Lieberman. Thank you.
        Secretary Harvey. Thank you.
        Senator Lieberman. Thank you, Mr. Chairman.
        Chairman Warner. Thank you very much, Senator.
        Senator Clinton.
        Senator Clinton. Thank you, Mr. Chairman.
        Secretary Harvey, when you testified last year before this
    committee I asked you about reports of payroll problems for
    wounded soldiers, a problem that came to my attention because
    of the pay problems of Specialist Robert Loria, a wounded
    soldier from New York, who was billed for travel and expenses
    that he should not have owed.
        After I had written you a letter last year inquiring as to
    the extent of the pay problems of wounded soldiers, Vice Chief
    of Staff Cody sent me a letter saying that the Army had
    identified 129 wounded soldiers with payment and debt issues
    and that the Army was conducting follow-up audits. In your
    testimony last year you said, ``I hope that I am up here next
    year and you are going to say, I have not heard of anything for
    the last 3 or 4 months.'' Unfortunately, that is not exactly
    the case.
        In response to an ABC News Nightline investigation last
    month, an Army spokesman, using Army figures, said that more
    than 5,500 soldiers withdrawn from combat on the basis of
    medical issues have later experienced payroll problems. I am
    deeply concerned about this. The information that has come to
    me includes a recent report about the soldier who had received
    serious shrapnel wounds in Iraq being billed $700 to cover the
    cost of his body armor that had been removed as he was
    medically evacuated, which comes on top of a news report in
    October that the Army had found more than 330 soldiers who were
    wounded and then faced with military debt and the Army had
    begun the process of forgiving debts claimed from 99 of these,
    and a press report revealed that the Army has granted more than
    600 requests by soldiers for debt forgiveness totaling more
    than $600,000.
        Now, after last year's hearing I did ask that I be kept
    apprised of the status of the audits of wounded soldiers and I
    was given a commitment that you made to give me a comprehensive
    response and to keep me informed. My staff and I followed up on
    this issue several times, asking for answers to questions that
    I posed last year. Yet I have to confess I learned about the
    number of wounded soldiers with pay problems through the press.
        Now, after these latest reports, earlier this month on
    February 9, I sent you another letter about the treatment of
    pay and debt issues, and I ask unanimous consent that my letter
    to Secretary Harvey be included in the record.
        Chairman Warner. Without objection.
        [The information referred to follows:]

        Senator Clinton. I know that the Army has arranged a
    briefing with my office on this issue. However, Mr. Secretary,
    I would like this year a detailed response in writing from you
    regarding each of the issues raised in my letter of February 9
    and during last year's hearing. Now, these include how many
    wounded soldiers have been affected by the pay problems, what
    safeguards are now in place to prevent the Army from mistakenly
    overpaying wounded soldiers and then trying to claim debts, and
    also asking for other payments that are not well founded, what
    oversight is being conducted of the debt forgiveness process
    and what assistance is being provided to soldiers making the
    requests, and finally what benchmarks have been established to
    measure progress in correcting these pay problems.
        Obviously, I know you share my concern that this is
    something that we should have zero tolerance for, that there
    should be every effort made to prevent these problems. If they
    do occur, they should be rare and they should be handled
    expeditiously.
        So I look forward to your prompt response to these
    questions that concern me this year, as they did last year.
        Secretary Harvey. I share your concerns and we took your
    request seriously. I apologize for not getting back to you. It
    was an oversight. But we have made progress since you brought
    that up at your hearing in terms of auditing. There is
    something like 10,000-plus wounded in action and another 48,000
    which we call disease, non-battle injury. The Army has
    audited--I am looking here--24,000 of these accounts, of which
    21,000 were termed to be correct, 11,000 are now in further
    research, and 2 percent were found in error.
        I think we have made progress. We are not quite there yet.
    We have also arranged for the Defense Finance and Accounting
    Service (DFAS) to develop a database which links medical and
    finance records, and also we have deployed to the Army medical
    centers these support teams to have face to face, instead of
    calling a number that you have a person there that you can
    resolve this with.
        So I think, Senator, we have made progress on this issue.
    It is important that this be solved 100 percent. I also see
    that there has been $1.2 million in debt cancellation and
    waivers for 1,200, 1,300 soldiers. So progress has been made.
    We will get you a detailed report in response to your letter.
        Let me also add, in regard to that soldier, Lieutenant
    Rebrook, from West Virginia. Actually, when we heard of that we
    looked into it in detail and it ended up that he actually
    volunteered to give the money back, and then it was discovered
    that he had actually lost his Interceptor body armor in battle
    but did not tell anybody.
        So I think what happened was he got a little frustrated
    with the time it takes to reconcile. He had a number of pieces
    of equipment missing. Some he lost because of his injury. He
    said: Oh, the hell with it, I will just pay it. Then when we
    discovered it we gave him the money back for those things. So
    it was kind of a mess-up, but we did not charge him. He
    actually volunteered to pay it in order not to go through this
    reconciliation process. He is getting out of the Army. So I
    think we made him whole.
        [The information referred to follows:]

        This is an issue that is also of great concern to us. The Army and
    the Defense Finance and Accounting Service (DFAS) have implemented a
    number of short-term corrective actions, while continuing to move
    toward longer-term improvements. The ultimate solution is to integrate
    fully personnel and pay systems to ensure that changes in a soldier's
    status which impact pay, such as evacuation from theater or
    hospitalization, are simultaneously updated in personnel accountability
    and pay records. The Department is developing the Defense Integrated
    Military Human Resources System to meet this need.
        The Army and the DFAS are making progress on addressing the causes
    of pay and debt problems for our wounded soldiers. DFAS has developed a
    database that links information from various medical systems to help
    ensure the medical status of soldiers is considered when pay
    entitlements are initiated, stopped, or adjusted. Additionally, we are
    stationing dedicated personnel at Army medical centers to audit pay
    accounts of wounded soldiers and to take appropriate action as pay
    problems occur. The Army and DFAS continue to seek out adverse pay
    problems and work together to develop initiatives that will ensure our
    wounded soldiers are not negatively impacted by pay problems.
        The support of your committee and Congress has been essential to
    our ability to provide wounded soldiers with the financial support they
    need. In particular, the new Traumatic Soldier Group Life Insurance
    program established by Congress helps soldiers transition into new
    careers, either in the Army or in the public or private sectors. This
    program, in conjunction with several key provisions contained in the
    National Defense Authorization Act (NDAA) for Fiscal Year 2006, will
    provide more assistance to soldiers during periods of hospitalization,
    reduce the possibility of overpayment on entitlements, and give the
    Army greater capability to provide fair and timely relief of debts when
    appropriate.
        As of February 10, 2006, DFAS identified 59,463 soldiers who, since
    October 2001, received medical treatment above the battalion aid
    station level while deployed (10,810 wounded in action (WIA) and 48,653
    disease/non-battle injury). Audits have been initiated for 25,152 of
    these pay accounts, of which 21,743 (86 percent) were determined to be
    correct. The remaining soldiers' pay problems required further research
    (12 percent) or were determined to be in error (2 percent). The Army
    has provided debt cancellations and waivers totaling $1,320,166 for
    1,309 soldiers.
        We also reviewed 331 debts for wounded soldiers who subsequently
    separated between 2001 and 2005. Of these debts, 204 have been waived.
    Of the remaining cases, 3 were denied in full or part (i.e. AWOL time),
    27 were previously waived or cleared without waiver, and 97 were not
    eligible for waiver (i.e. unearned bonus). This last group was turned
    over to the Army Wounded Warrior (AW2) program for possible submission
    to the Army Board of Correction of Military Records. Of the 97 not
    eligible for waiver; eight were seriously WIA soldiers being assisted
    by AW2.
        The report of 5,500 soldiers withdrawn from combat for medical
    problems who later experienced payroll problems is incorrect. As ABC
    Nightline was told at the time, this represented the total population
    of soldiers in our audits whose automated payroll records required
    additional research to ensure that they were paid correctly (i.e. newly
    wounded or further verification of supporting information).
        During 2005, DFAS developed a database to receive information from
    multiple medical systems, compare that information to the pay system,
    and initiate actions to correct or adjust entitlements. This enables
    finance units to identify wounded soldiers and provide them face-to-
    face finance support. Immediate collection of debts is suspended, and
    assistance is provided to the soldier to cancel or waive the debt as
    appropriate. We are auditing the pay accounts of all 59,463 wounded
    soldiers to ensure that they have been paid correctly and that, as
    applicable, debts are submitted for waiver or cancellation. DFAS has
    organized six tiger teams and deployed them to the major medical
    treatment facilities to assist local finance offices in supporting the
    current patient population, as well as in auditing accounts of previous
    patients. DFAS also has a central WIA team working audits.
        The major challenge to fair application of debt forgiveness has
    legislative restrictions. Congress corrected this problem in the NDAA
    for Fiscal Year 2006 by broadening the scope of the existing debt
    remission law. The two primary mechanisms under the law to forgive debt
    are waiver or remission. Waivers are restricted to erroneous payments
    and are adjudicated under the auspices of the DOD General Counsel.
    Appeal procedures are included in the waiver process. Remissions were
    previously restricted to uncollected debts of enlisted soldiers while
    on Active-Duty and are adjudicated by the Army Human Resources Command
    (HRC) and can be granted for virtually any type of debt based on
    fairness or hardship. The 2006 NDAA broadened remission to include
    officers, soldiers no longer on Active-Duty and previously collected
    debts. As a general rule, remission requests for WIA soldiers, which
    fell within the scope of the existing law, have been processed in one
    business day by HRC. As part of the overall program for assisting WIA
    soldiers, finance offices supporting medical treatment facilities are
    currently required to assist these soldiers in applying for any pay due
    (i.e. dependent travel voucher) or for waiver/remission of bona fide
    debts. In many cases, we have initiated debt waiver processing on the
    soldier's behalf without the soldier being aware of the action.
        The Army and DFAS are tracking the total population of soldiers who
    received medical treatment in the theater above the battalion aid
    station level since October 2001. Responsibility for each soldier's pay
    account is assigned to a specific finance office and the progress of
    auditing each account is tracked for each entity. Weekly reports of the
    number of accounts reviewed and their status are compiled and provided
    to the senior leadership in the Army finance and medical communities as
    well as to DFAS. Updates are given to both Army and DOD personnel/pay
    councils at the assistant secretary and deputy under secretary level.
    In addition, the Army is tracking the timeliness and accuracy of pay
    for all soldiers. Our goal is to audit all 59,463 wounded-soldier
    accounts no later than October 1, 2006.

        Senator Clinton. Thank you, Mr. Secretary.
        Finally, I want to add my voice to the previous comments by
    my colleagues about the Army's budget proposal regarding the
    National Guard. But I have a slightly different concern to add
    to theirs. Aside from the question of end strength, there is a
    question of funding the force structure that the Guard needs.
    As you may know, the 42nd Infantry National Guard Division, the
    so-called Rainbow Division, headquartered in New York, recently
    returned from Iraq. I thank you very much, Secretary, for
    noting on January 18 that the 42nd Infantry Division completed
    the first deployment of a Guard divisional headquarters since
    the Korean War.
        Secretary Harvey. I did fly to Fort Drum to meet them.
        Senator Clinton. I thank you for that, because we were very
    proud. I saw some of them when I was in Iraq last year and we
    are just extraordinarily proud. As you put it very well, the
    Army could not perform full spectrum operations without the
    Guard and Reserve's tremendous contribution.
        I am now concerned about the potential impact of force
    structure changes on the Guard, and in particular on the
    survival of this very 42nd Infantry National Guard Division
    that we are not only proud of but want to see stay intact. The
    idea that you could send a National Guard division to battle in
    its entirety, that it would fulfill its responsibilities with
    great distinction, is one that I think says a lot about what
    the force structure of the Guard can be.
        So could you just tell us briefly what the Army's plans are
    regarding the Guard's force structure?
        Secretary Harvey. In terms of force structure, I think
    General Blum said it correctly. Our plan is 350,000 end
    strength and 348,000 in force structure. So that is the current
    plan which we are operating to. Again, I cannot agree with you
    more that the 42nd I.D. under the command of Major General
    Joseph J. Taluto, who is now TAG in New York, he is an
    outstanding soldier and leader, they did a great job. We again
    cannot do it without them.
        General Schoomaker. Senator Clinton, if I could. You have
    all kinds of reasons to be proud of the 42nd and Joe Taluto was
    a hell of a leader. But I think that inside that story lies the
    essence of our dilemma, and that is how many States did it take
    to make that division headquarters whole and that division
    whole?
        Secretary Harvey. Is it 20?
        General Schoomaker. 18 States.
        Secretary Harvey. 18 States contributed to the 42nd.
        General Schoomaker. So we have to have more whole structure
    than that, and we want the 42nd and every other division and
    every brigade in our entire Army to be whole when we call them
    up and to be fully resourced, et cetera. So the fact that we
    had to infuse that many States, plus we put Active and Reserve
    officers and NCOs inside of that structure to make it whole,
    and that we trained it to the level that they performed at such
    an extraordinary level over there, is a testament to the Army,
    but it is also a little story in itself about what we have to
    fix, and that is the path that we are on. We are committed to
    make it right.
        That does not detract anything from the 42nd because we are
    proud of them, but it does talk about what the problem is that
    we are trying to solve here.
        Senator Clinton. Thank you.
        Thank you, Mr. Chairman.
        Chairman Warner. Thank you very much, Senator.
        Just one comment. Senator Clinton is always discussing the
    plight of people who have problems and I am glad you do that,
    Senator. But I was particularly struck by the young man who had
    been wounded and in the course of taking care of him medically
    his body armor got separated from him and then he had to be
    charged for it.
        General, at the last hearing you said that you would look
    into that. Perhaps this is the appropriate time to make the
    statements into the record. I will say that I saw a television
    broadcast and the young man involved got up and expressed pride
    in the Army and the fact that he felt it was a
    misunderstanding. He did not have any recrimination at all
    against the Army.
        General Schoomaker. Sir, I think that is fair to say. First
    of all, we are very proud of that young lieutenant and he was
    wounded in the line of duty. It was not his body armor at risk
    at all. It was the vest that holds his armor and it was
    approximately 20 other items that he was short.
        So he got, as the Secretary said, involved in the
    reconciliation process, the bureaucracy frustrated him, and so
    he decided to pay for it. So what we have now done is gone back
    and reconstructed. We are accounting for those things that were
    battle losses. For those things that were not battle losses
    that he lost, he may end up paying for them. But the fact of
    the matter is it was just frustration with the bureaucracy. I
    believe it is reconciled, and he has been very--we are proud of
    him and he has spoken about the Army very well.
        Chairman Warner. I share that pride and I do hope that--
    because families were struggling to get cash. Apparently they
    only required cash. All those little details. You are on top of
    that, General, and let us just make sure it does not happen
    again.
        Senator Levin, do you have any concluding comments?
        Senator Levin. Just other than Senator Clinton's
    sensitivity to the individual cases, again, maybe there ought
    to be a little box on these reconciliation forms that says: If
    this form frustrates you and you are giving up filling it out,
    check this box, send it in, and then we will work with you, or
    something. I mean, of all the people who should not be
    frustrated in filling out a form, it is these folks, it seems
    to me.
        General Schoomaker. Sir, I agree. There are 21 other cases
    in that same division and all of them are being worked with
    now.
        Senator Levin. Put a little box there.
        Chairman Warner. All right.
        General Schoomaker. Does that count for the chief of staff
    of the Army when he has to fill out forms too? [Laughter.]
        Secretary Harvey. Wait until you have to turn your stuff
    in, General. [Laughter.]
        Chairman Warner. General, we thank you for bringing these
    three outstanding noncommissioned officers up here to
    participate in these hearings. I thank each of you and commend
    again each of you for your service to country. You are
    exemplary and you are an inspiration to all of your colleagues,
    wherever they are throughout the world.
        Secretary Harvey, let me give you a pretty good rating, for
    this is your first full hearing; is that correct?
        Secretary Harvey. No, you remember last year----
        Chairman Warner. I remember we had a little----
        Secretary Harvey. I was an intern in training then.
        Chairman Warner. Well, you have the con now, and I can tell
    by the tenor of your voice and the manner in which you
    delivered your responses that you are enjoying the work.
        Secretary Harvey. I am.
        Chairman Warner. In full swing.
        Secretary Harvey. It is an honor to serve and it is an
    honor to be with my partner over there and have the opportunity
    to have for the first time in a long time a fully equipped,
    fully manned, fully trained, fully resourced Army. That is what
    we are all about, the chief and I.
        Chairman Warner. Wait a minute. Are we fully equipped? Just
    a minute here.
        Secretary Harvey. Not yet.
        Chairman Warner. It seems to me you just sent some bills up
    to me.
        Secretary Harvey. I am talking about the end state.
        Chairman Warner. All right, well, the end state is a number
    of years out there.
        Secretary Harvey. You have it.
        Chairman Warner. As an old lawyer, I would like to cross-
    examine you on that answer.
        General, we thank you for your willingness to come back
    from civilian life and forego some of the other pay and
    pleasures of that civilian life to once again proudly wear the
    Army green. People really look up to you.
        General Schoomaker. Thank you, sir. It is a pleasure to be
    here.
        Chairman Warner. Thank you very much. That will conclude
    this hearing. It was a very splendid hearing. I commend you
    all. We are adjourned.
        [Questions for the record with answers supplied follow:]
                   Questions Submitted by Senator John Warner
                             army force generation
        1. Senator Warner. General Schoomaker, last year, the Army asserted
    that 43 Active component combat brigades and the 34 Army National Guard
    (ARNG) combat brigades would ensure the Army could maintain a 17
    brigade force deployed with Active component brigades having 2 years
    between rotations and the ARNG combat brigades having 5 years between
    rotations. Now, we understand the Army intends to employ a force
    structure that includes 42 Active component combat brigades and 28 ARNG
    combat brigades. How will fewer combat brigades impact the anticipated
    ``dwell'' time in-between Army rotations?
        General Schoomaker. Prior to the Quadrennial Defense Review (QDR)
    2006, the Army had developed a plan for 34 combat brigades and 72
    support brigades in the ARNG and 43 combat brigades and 75 support
    brigades in the Active component. This provided up to 20 combat
    brigades for steady state operations. Based on analysis associated with
    the QDR 2006, the Army determined the need to be able to supply 18 to
    19 combat brigades in steady state operations and surge another 18 to
    19 combat brigades to respond to major combat operations. As a result,
    the Army is restructuring to form a rotational pool of 70 Brigade
    Combat Teams (BCTs) and 211 supporting brigades of various types among
    the three components. This rebalancing is necessary to reduce stress on
    the Active and Reserve components, achieve the Army goal of structuring
    the Active component to execute the first 30 days of expeditionary
    operational requirements, improve the responsiveness of the overall
    force to achieve national security strategy goals, improve the
    readiness and deployability of units, and initiate the process of
    building predictable deployment cycles for Army forces of one rotation
    every 3 years for the Active component and one rotation every 6 years
    for the Reserve component. Through these efforts, the Army will provide
    a sustained deployment posture of modular, trained, ready, cohesive,
    and rapidly deployable and employable Army forces in predictable
    patterns to meet requirements for continuous full-spectrum operations
    while retaining the capability to surge combat power for major combat
    operations.

                           quadrennial defense review
        2. Senator Warner. Secretary Harvey and General Schoomaker, some
    would say that the QDR process, from 1993 until now, has utterly failed
    to do what it was intended to do: provide a link among strategy, force-
    planning, and defense budgeting. It appears that the QDR process itself
    has become another bureaucratic exercise diverting valuable resources
    to produce studies that defend the status quo. Do you believe it's time
    to scrap the QDR process? If so, what would you replace the QDR process
    with? If not, what can be done to improve the QDR process?
        Secretary Harvey and General Schoomaker. The QDR is a valuable
    process that provides the opportunity for the Secretary of Defense to
    periodically realign strategy, plans, programs, policies, priorities,
    and resources. While the Department has only conducted three such
    comprehensive reviews since 1997, our experience suggests that the QDR
    process is most relevant during the first term of a new administration
    when major change is most likely. That said, the quadrennial
    requirement seems about right. Even in the second term of an
    administration, the QDR provides an opportunity for the Department's
    leadership to reconsider previous decisions in light of a rapidly
    changing strategic landscape.
        A QDR in the first year of a new administration is critically
    important, but cannot develop momentum until the Secretary of Defense
    has the bulk of his leadership team in place, which typically does not
    occur until several months after the President's inauguration. For that
    reason, it makes sense to extend the QDR period until the President's
    next budget is submitted to Congress. Second term QDRs can typically be
    completed in a shorter period of time or a more comprehensive
    assessment can be conducted. The Secretary of Defense makes this
    decision based on relooking the strategy or realigning resources. The
    external, parallel review conducted by the 1997 National Defense Panel
    proved its worth. However, such an independent review should probably
    be conducted in the year prior to the QDR so that the panel's findings
    and recommendations can inform the Secretary of Defense. Finally, we
    have probably reached the point where Defense-centric reviews are less
    relevant than those that more fully encompass all agencies involved in
    the national security process. A quadrennial security review may be
    more helpful in the long run, but it will certainly be more complex as
    the number of players and issues expand. It warrants our consideration.

                               acquisition reform
        3. Senator Warner. Secretary Harvey and General Schoomaker,
    according to the QDR report issued on February 3, the Department of
    Defense (DOD) is focusing on bringing the needed capabilities to the
    joint force more rapidly, by fashioning a more effective acquisition
    system and associated set of processes. One of the recommendations is
    to integrate the combatant commanders (COCOMs) more fully into the
    acquisition process. What are your thoughts regarding the increased
    role of COCOMs in the acquisition process?
        Secretary Harvey and General Schoomaker. We recognize and value the
    importance of COCOM participation and influence in the Department's
    requirements and budgeting processes, and we are taking steps to
    strengthen existing means available for that participation and creating
    new ones as well. Central to this is a COCOM's Integrated Priority List
    (IPL). The IPL details a COCOM's highest priority requirements across
    functional lines and defines shortfalls in key programs. In the past,
    the IPL was a fiscally unconstrained list but now includes detailed
    capability trade-off recommendations to inform funding choices.
    Moreover, the Joint Forces Command (JFCOM) has assumed a more prominent
    and proactive role in rationalizing and integrating capabilities across
    all unified and specified commands.
        The Joint Staff also sponsors periodic visits to the COCOMs to
    engage in direct discussions on requirements and budget issues. They
    have begun to expand the participation in these discussions to a much
    broader set of participants from OSD as well. Now, representatives from
    OSD PA&E, Comptroller, Policy and AT&L, among others, are there to
    discuss COCOMs' specific issues relating to programming, budgeting and
    acquisition. Also, senior leadership conferences are held throughout
    the year at junctures aligned with the budget process and provide
    COCOMs similar opportunities to participate directly in formulating
    programs and budgets.

        4. Senator Warner. Secretary Harvey and General Schoomaker, what
    are your recommendations of how the Department should develop and
    address joint requirements?
        Secretary Harvey and General Schoomaker. The Army is fully
    committed to implementation of the Department's Joint Capabilities
    Integration and Development System (JCIDS) to identify and address the
    capabilities the joint warfighter will need for the future. The JCIDS
    process is constantly being improved to strengthen the linkage between
    Service force modernization efforts and a central vision for future
    military operations captured in the family of joint operational
    concepts. We support the Chairman's efforts, through the JROC, to
    incorporate the operational needs of the COCOMs' into the joint force
    development dialog. This collaboration is essential for the generation
    of DOD's land warfare capabilities. The Army continues parallel efforts
    to improve the integration of the doctrinal, training, organizational,
    and materiel components of military capability in order to optimize the
    warfighting capabilities delivered by the Army to the Joint Force
    Commanders.

                              major general miller
        5. Senator Warner. Secretary Harvey and General Schoomaker, the
    prisoner abuse issue has burdened our Nation and our military for a few
    years now. The impact of this scandal tarnished the otherwise sterling
    performance of our military. Congress and the President took important
    steps to make a clear statement on the way ahead by prohibiting torture
    and abuse. The DOD and the Army have initiated many corrective actions.
    However, last month Major General Geoffrey D. Miller, a central figure
    in the U.S. detainee abuse scandal, invoked his right not to
    incriminate himself in court-martial proceedings against two soldiers
    accused of using dogs to intimidate prisoners at the Abu Ghraib prison
    in Iraq. In my years of association with the U.S. military, I cannot
    recall a similar situation. Nonetheless, this is clearly a right he has
    under the Uniformed Code of Military Justice (UCMJ). Still, he
    testified under oath before this committee (May 2004) and, as I
    indicated to Secretary Rumsfeld and General Pace last week, I want this
    committee to have appropriate time to review this matter at a time that
    is right. Do I have assurances from both of you that this committee
    will be afforded the opportunity to review this matter fully at the
    right time and to call Major General Miller before the committee and
    give him the opportunity to testify?
        Secretary Harvey and General Schoomaker. Yes.

                       interceptor body armor side armor
        6. Senator Warner. General Schoomaker, since combat operations
    began in Afghanistan in 2001, there has been a need to improve
    individual protection for our troops on the battlefield. As
    requirements emerged, the Army has responded in several ways, for
    example, by accelerating production of the new Interceptor Body Armor
    (IBA) to replace the older, less capable, Kevlar body armor for
    military and civilian personnel in the combat zone. The Army is
    currently in the process of buying side plates to improve the overall
    effectiveness of the IBA. Do you believe the Army's programs to protect
    its soldiers adequately address the requirements for its personnel in
    combat zones?
        General Schoomaker. Yes, the Army's programs more than adequately
    address the requirements for providing individual protection in combat
    zones. IBA remains the best military body armor in the world, and every
    soldier in harm's way has a set. Each enhancement in individual soldier
    protection is closely coordinated with COCOMs and rapidly produced by
    the U.S. industrial base.
        For example in February 2005, as a result of commanders' feedback
    from the field, the Army discontinued procurement of Small Arms
    Protective Inserts (SAPI) and began procuring Enhanced SAPI (ESAPI).
    ESAPI provides even more ballistic protection. The industrial base
    immediately retooled to begin manufacturing the more capable ESAPI.
    Production ramped-up from a cold start in March 2005 to over 25,000
    sets of ESAPI per month by October 2005 using six vendors. This
    accelerated procurement fulfilled the theater requirement on February
    1, 2006, just 10 months after the decision was made to begin
    production.
        Another enhancement to the IBA ensemble was the Deltoid Auxiliary
    Protector (DAP). The DAP protects the shoulder and armpit regions of
    the soldier with the same level of ballistic protection as the outer
    tactical vest, a component of IBA. The DAP prototype was initially
    developed by soldiers in Iraq in June 2004. The Army expeditiously
    designed and placed DAP into production by September 2004. In 12
    months, the Army fielded over 172,000 sets of DAP, enough for every
    soldier and DOD civilian deployed in Iraq and Afghanistan.
        The latest improvement to IBA is the Enhanced Side Ballistic
    Inserts (ESBI) or side plates. On September 27, 2005, the Army approved
    an Operational Needs Statement for 230,000 sets of ESBI. The Army
    immediately initiated a rapid development process to establish a
    specification, design a prototype, test and provide an ESAPI level side
    plate that will fully integrate into the current IBA ensemble. The
    first deliveries to theater began in January 2006, 4 months after
    inception of the concept. The total theater requirement will be met by
    December 2006.

        7. Senator Warner. General Schoomaker, is there any way you can
    accelerate the program?
        General Schoomaker. We constantly examine means to accelerate
    production. The Army has accelerated every component or enhancement to
    the IBA ensemble. For example, the Army awarded the ESBIs, or side
    plates, contract in January 2006 to meet the theater requirement.
    Deliveries to theater began January 31, 2006. Critical needs for
    committed forces will be satisfied no later than April 2006, or sooner,
    through all available means. The total theater side plate requirement
    will be met by December 2006.

                              equipping the iraqis
        8. Senator Warner. Secretary Harvey and General Schoomaker, as the
    President has indicated, our capacity to transfer security
    responsibilities to the Iraqis will rely on the ability of Iraqi forces
    to stand up and assume control over their nation's security and law
    enforcement. I have been concerned that the Iraqi security forces (ISF)
    and policemen are not adequately equipped to perform their missions
    effectively. The quality of the weapons and equipment we provide to the
    Iraqis must be of the caliber that contributes to the discipline,
    confidence, and morale of the Iraqis we are training. Will you provide
    an update on the Department's plans and progress towards improving the
    quality of the equipment we provide to the ISF?
        Secretary Harvey and General Schoomaker. The Army is aware of the
    necessity to fully enable ISF to conduct their security missions. The
    Multi-National Security Transition Command--Iraq (MNSTC-I) has the
    mission to train and equip ISF. Funding was provided to MNSTC-I that
    facilitates that mission, to include the procurement of required
    equipment. Although MNSTC-I does not report through the Army on the
    status of this effort, many of their equipment requirements and
    resourcing solutions have involved, or have been visible to, the Army.
    As an example, MNSTC-I has approached the Army's Tank-automotive and
    Armaments Command (TACOM) and requested procurement of equipment for
    the ISF, and TACOM has awarded contracts in support of that effort.
    MNSTC-I is also exploring the possibility of obtaining individual
    soldier equipment from the Defense Reutilization Marketing Offices
    (DRMO), and the Army staff has been advising them on current and
    projected availability of equipment, such as older versions of the
    Army's Kevlar helmet that are no longer being used but are still fully
    functional. The Army has also provided MNSTC-I with information
    regarding older sets of body armor that exist in depot or in DRMO
    facilities.
        Most recently, MNSTC-I provided the Joint Staff with a list of
    required equipment that they believe may be excess to Service
    requirements, thereby allowing MNSTC-I to obtain it for relatively
    minor costs (i.e., refurbishment, transportation). The list mainly
    consists of light trucks, container handling equipment, and generator
    sets. The Army is still working through this request but believes some
    of the equipment may become available as a result of operating base
    consolidation which would free up selected government-owned,
    contractor-operated equipment.

        9. Senator Warner. Secretary Harvey and General Schoomaker, will
    this be addressed in the Iraq supplemental?
        Secretary Harvey and General Schoomaker. No, not at this time. The
    Army does not plan to request supplemental monies for equipment
    transfers to the ISF because as of this date, we have not been directed
    to transfer any equipment to them. We cannot speak to whether or not
    you will see a request for funding for the Iraqi Army from another U.S.
    Government organization.

        10. Senator Warner. Secretary Harvey and General Schoomaker, will
    you be requiring any additional authorities from Congress to facilitate
    this important requirement?
        Secretary Harvey and General Schoomaker. The Army believes
    sufficient authorities are in place.

                      army national guard force structure
        11. Senator Warner. Secretary Harvey and General Schoomaker, the
    Army, supported by the QDR, has modified its plan to increase the
    number of combat brigades in the Active and Reserve component. The Army
    will increase the Active component force structure to 42 combat
    brigades and will increase the ARNG force structure to 28 combat
    brigades. This action represents a reduction of one Active component
    combat brigade and six ARNG brigades from previous plans. Do you
    believe that the QDR has taken into consideration the ARNG's State
    mission, especially homeland defense and disaster relief?
        Secretary Harvey and General Schoomaker. The Army is increasing its
    capacity to ensure that the right capabilities are available to support
    current global operations, prevail in the war on terrorism, and conduct
    expanded homeland defense requirements while broadening the options
    available to civil authorities. This effort is essential to having the
    kinds of current and future capabilities and forces needed across the
    Army for sustaining the long war. Based on analysis associated with the
    2006 QDR, the Army determined the need to be able to supply 18 to 19
    combat brigades in steady state operations. As a result, the Army is
    rebalancing and restructuring to form a rotational pool of 70 BCTs and
    211 supporting brigades of various types among the three components.
    The collaborative efforts of the Army staff, the Chief of the National
    Guard Bureau, the Director of the ARNG, the Chief of the Army Reserve,
    and The Adjutants General Association of the United States Force
    Structure Committee will determine the appropriate force structure for
    the ARNG that can best support the Army's efforts to win the global war
    on terrorism while meeting the demands of our ongoing defense support
    to civil authorities.

                joint improvised explosive device defeat office
        12. Senator Warner. General Schoomaker, in October 2003, the Army
    created the Improvised Explosive Device (IED) Task Force in recognition
    of the growing IED threat. The task force has gone through numerous
    reorganizations and is now the Joint Improvised Explosive Device Defeat
    Office (JIEDDO). I am concerned that the Department is growing another
    bureaucracy that will not quickly meet Army and Marine Corps
    requirements to counter the IED problem. How do you ensure that the
    JIEDDO can respond quickly to the needs of our deployed soldiers and
    marines?
        General Schoomaker. I have asked the Director, JIEDDO to respond to
    your concerns.

        13. Senator Warner. General Schoomaker, what are you doing to
    ensure that the office is looking at all solutions, both technical and
    nontechnical, to address the IED issue?
        General Schoomaker. I have asked the Director, JIEDDO to respond to
    your concerns.

                        aircraft survivability equipment
        14. Senator Warner. General Schoomaker, helicopters are
    particularly vulnerable to surface fire and manportable missiles. In
    fact, the Army had three helicopters shot down in a 10-day period in
    January 2006. The Army has made aircraft survivability equipment (ASE)
    a high priority and has taken actions to have modern ASE delivered to
    the Central Command (CENTCOM) area of operations for installation on
    Army helicopters. What is the status of the installation of this ASE
    equipment?
        General Schoomaker. Installation of the Common Missile Warning
    System (CMWS), a component of the Advanced Threat Infrared
    Countermeasure System (ATIRCM), has been underway since a Chinook
    helicopter was shot down in November 2003. As of the end of this
    February, over 540 Army aircraft had been modified with the ``A-kits''
    needed to prepare the aircraft to accept the CMWS equipment (B-kits),
    and over 273 of those aircraft had CMWS B-kits installed. These numbers
    are constantly increasing as installations continue and the prime
    contractor (BAE Systems, Nashua, NH) continues to ramp up CMWS B-kit
    production. By the end of March 2006, all Army aircraft deploying to
    Operation Iraqi Freedom (OIF)/Operation Enduring Freedom (OEF) 05/07
    will have been modified to accept CMWS. Current projections are for all
    deployed aircraft to be CMWS-equipped and operational by the end of
    September 2006.

        15. Senator Warner. General Schoomaker, are these upgrades fully
    funded for both Active and Reserve component aircraft?
        General Schoomaker. CMWS is fully funded for all deploying Active
    and Reserve component aircraft.

        16. Senator Warner. General Schoomaker, are you satisfied with the
    Army's and Marine Corps' initiative in providing ASE for aircraft in
    the CENTCOM area of operations?
        General Schoomaker. I am confident that both the Army and the
    Marine Corps are working diligently to provide our soldiers and marines
    with the best ASE available for our respective aircraft. Upgrading ASE
    equipment for our operating aviation fleet remains a top priority for
    the Army.

                             rebalancing the force
        17. Senator Warner. General Schoomaker, to sustain the operating
    forces required for the long war against terrorism, the Services are
    rebalancing some of their force structure--for example, retraining
    artillerymen for military police duties. How important is this effort?
        General Schoomaker. The Army is involved in the most dramatic
    restructuring of forces since World War II. The centerpiece is modular
    transformation and an increase in the Army's operational force with the
    building of BCTs and associated multi-functional and functional support
    brigades. As part of that effort, the Army has addressed rebalance
    across all three components (Active, ARNG, and Reserve) in a concerted
    effort to create the right mix of units in high demand and to develop
    soldiers with critical and high demand skills. To assure timely access
    to force capabilities, we continuously review our force structure to
    determine the types of units and skills that are in greatest demand in
    today's environment--including infantry, engineer, military police
    (MP), military intelligence, Special Forces, chemical, civil affairs,
    and psychological operations units. Between fiscal years 2004-2011 we
    have programmed rebalance of over 100,000 positions to address early
    deployer requirements in the Active component, manning shortfalls
    across all three components, and the elimination of overstructure in
    the Reserve components to establish personnel training accounts in both
    the ARNG and the Army Reserve. We also rely on temporary in-lieu-of
    sourcing as well, within all three components to meet current
    operational demands. The Army requires forces for major combat
    operations, field artillery for example, that are not in as high of
    demand in stability, security, transition, and reconstruction
    operations. As such, the Army uses innovative techniques, such as
    deploying artillery units to execute security tasks doctrinally
    performed by MP units, to support the COCOM's current operational
    demands. These rebalancing and in-lieu of sourcing efforts are critical
    in increasing our capabilities to support the long war, while reducing
    stress on soldiers and their families.

        18. Senator Warner. General Schoomaker, what can you tell us about
    how that program is progressing?
        General Schoomaker. We have accomplished over half of this effort
    and project completion by 2011. Transformation to the Army Modular
    Force is a journey that is addressing our capabilities of today without
    forsaking tomorrow's fight. This continuous reevaluation of the demands
    of today's long war also reflects the agility of the Army's institution
    to adapt its units, personnel, and systems to produce trained and ready
    units. Until the Army fully achieves modular transformation across the
    Service, the Army will continue to use innovative techniques, such as
    in-lieu-of sourcing, to fill the gaps between available force structure
    and COCOM's needs. Units selected to perform these unique in-theater
    missions are identified as early as feasible in their operational
    readiness cycle in order to allow commanders to task organize and train
    to the theater specific mission essential tasks. As the Army continues
    the modularity effort, these sorts of missions will become less and
    less frequent.

                              light cargo aircraft
        19. Senator Warner. Secretary Harvey and General Schoomaker, we are
    aware that the Army is prepared to release a request for proposals
    (RFP) for acquiring a fixed-wing light cargo aircraft (LCA) as a
    replacement for its aging fleet of C-23 Sherpa aircraft. We are also
    aware that the Air Force may be interested in pursuing a joint
    procurement of an aircraft that would meet the requirements of both
    Services. Would you please share with us the current status of this
    joint effort to procure a LCA, including the number of aircraft to be
    procured, and any concerns that you might have regarding the Services'
    roles and missions for this aircraft?
        Secretary Harvey and General Schoomaker. The Office of the
    Secretary of Defense (OSD), Defense Acquisition Executive approved the
    joint Future Cargo Aircraft (FCA)/LCA Acquisition Strategy Report on
    March 17, 2006. The RFP was released later the same day. The Services
    will now move forward towards a Milestone C decision by the end of the
    year. The Army plans to replace its aging C-23, C-26, and a portion of
    the C-12 fleet commensurate with fielding the FCA.
        There is no argument or ``turf war'' going on between the Army and
    the Air Force over roles and missions. When it comes to intratheater
    airlift, specifically at the strategic and operational levels, no one
    in the world can match the U.S. Air Force's ability to move large
    volumes of personnel, supplies, and equipment around the globe.
        The FCA is a complementary system that fills a gap at the tactical
    (as opposed to operational or strategic) level. That gap is
    intratheater airlift--movement of time sensitive, mission critical
    resupply and key personnel transport from the initial staging base or
    port of debarkation (POD) to the BCT; what we like to describe as the
    last tactical mile in the end-to-end distribution system. These BCTs
    are often deployed to austere locations across the noncontiguous
    battlefield. Today we are mitigating the risk associated with this gap
    through employment of a combination of tactical wheeled vehicle
    convoys, CH-47 helicopters and through the use of our smaller, less
    capable, cargo and utility aircraft such as the C-23, C-12, and C-26.
    The FCA will enable the Army to lighten the heavy burden placed on our
    CH-47 (Chinook) helicopter fleet so they can focus on supporting
    division level and modular brigade force structure warfighting
    requirements. Furthermore, the FCA will reduce the risk to soldiers'
    lives associated with convoy operations and forward arming and
    refueling points required to support extended CH-47 long-haul cargo
    operations.
        Regarding the topic of intratheater lift, you are correct we have
    been working with the Air Force for the past couple years on the FCA
    program. In fact, the Air Force recently recognized the value a LCA
    could provide to the modern asymmetrical battlefield and in support of
    natural disasters. As a result, on 17 November 2005 the Air Force
    published a Stage 1, Initial Capabilities Document (ICD) for
    Intratheater Light Aircraft which began their initial development of
    the Air Force LCA requirements.
        The Army's Analysis of Alternatives (AoA), dated 18 July 2005
    identified the Army's low risk requirement for 145 FCA. On 8 February
    2006, the Army and Air Force agreed that the quantity identified in the
    Army AoA would be referred to as the ``Initial Joint Requirement'' and
    that the Army would procure 75 FCA and the Air Force will procure the
    remainder of the initial joint requirement. The Army and Air Force, in
    coordination with the Joint Staff, plan to conduct a follow-on Joint
    AoA over the next year or two to define the broader, full-joint force
    requirement or FCA/LCA fleet end-state for the two Services.
        We are currently in the process of establishing a FCA/LCA Joint
    Program Office (JPO) that will become effective 1 October 2006, with
    the Army in the lead agency. The Services anticipate a JPO charter will
    be approved by the Services' Acquisition Executives prior to the Army
    reaching Milestone C on the FCA program. The Army still plans to begin
    fielding FCA to its aviation force in fiscal year 2008. The USAF will
    follow with the fielding of the LCA approximately 2 years later.
        Over the past 90 days, the Services have crafted a Joint Memorandum
    of Agreement (MOA), which articulates the way ahead for the convergence
    of the Army FCA and Air Force LCA programs into a single Joint Cargo
    Aircraft (JCA) program. We anticipate that agreement will be approved
    by 1 May 2006. The draft MOA outlines the roles, missions, command and
    control relationships, and the path forward for merging testing,
    training, sustainment, and maintenance requirements of the JCA. We also
    know that the JCA will be a common airframe.

                                women in combat
        20. Senator Warner. Secretary Harvey and General Schoomaker,
    section 541 of the National Defense Authorization Act for Fiscal Year
    2006 codified the DOD policy that has been in effect since October 1,
    1994, which excludes women from assignment to units or positions--below
    the brigade level--whose primary mission is to engage in direct ground
    combat. That provision also required the Secretary of Defense to review
    current and future implementation of the women in combat policy, and to
    closely examine personnel policies associated with creating the Army's
    new modular combat units to ensure compliance with the ground combat
    exclusion rule. Are the Army's current policies for assignment of women
    consistent with the DOD rules that have been in effect since 1994 and
    which are now codified in section 541?
        Secretary Harvey and General Schoomaker. The Army's movement to
    modular units poses no conflict with the assignment of women set in
    current policy. Women have and will continue to be an integral part of
    our Army team as they perform exceptionally well in specialties and
    positions open to them in accordance with the DOD Direct Ground Combat
    Assignment Rule.

        21. Senator Warner. Secretary Harvey and General Schoomaker, will
    the full report reviewing the Army's current and future assignment
    policies be provided to Congress by the deadline of March 31, 2006?
        Secretary Harvey and General Schoomaker. Our understanding is that
    the DOD plans to provide an initial reply to Congress by the end of
    this month; a final report that provides a comprehensive report which
    thoroughly examines the current policies on the assignment of women and
    analyzes implications of these policies for the future will be provided
    at a later date.

        22. Senator Warner. Secretary Harvey and General Schoomaker, does
    the Army intend to seek changes to the current policy excluding women
    from assignment to units whose primary mission is to engage in direct
    ground combat?
        Secretary Harvey and General Schoomaker. No, after a careful review
    of the policy in 2005, we decided not to change the Army's policy that
    dictates the assignment of women soldiers. If, in the future, the Army
    determines that there is a need to seek a change to the policy, the
    Army will comply with all notification requirements in title 10, USC
    652.

        23. Senator Warner. Secretary Harvey and General Schoomaker, what
    is the Army's policy on assignment of women to forward support
    companies, whose mission is to support units engaged in ground combat?
        Secretary Harvey and General Schoomaker. Currently, women are
    assigned to units called Forward Support Companies, which are organic
    to the Brigade Support Battalions subordinate to the new BCT Unit of
    Action. These companies do not have a mission of direct ground combat
    but provide logistics support to maneuver units that are in direct
    ground combat.

        24. Senator Warner. Secretary Harvey and General Schoomaker, if
    women are assigned for forward support companies that are collocated
    with, or attached to, units that have a ground combat mission, how is
    such assignment consistent with current law and the 1994 policy?
        Secretary Harvey and General Schoomaker. Forward support companies
    are not required to routinely collocate with units that have a direct
    ground combat mission. Accordingly, the assignment of women to forward
    support companies does not violate the DOD policy.
                                     ______

                   Questions Submitted by Senator John McCain
                             future combat systems
        25. Senator McCain. Secretary Harvey, in the 2006 Defense
    Authorization Law, Congress instructed the Pentagon to report on every
    program that costs at least 50 percent more than initial projections.
    The provision was designed to tie programs to their original cost
    estimates, rather than updated cost and schedule baselines. The
    Pentagon has been allowed to change its baseline without invoking the
    penalty. For example, the Army's Boeing-led Future Combat Systems (FCS)
    program hasn't triggered an official breach despite a $161 billion cost
    estimate that is more than double its original baseline estimate. What
    plans do you have in place to ensure programs are held to their
    original baseline figures instead of allowing the current practice of
    rebaselining?
        Secretary Harvey. While the Army's implementation plans for this
    new amendment depend partly on the guidance from the Office of the
    Secretary of Defense, the Army's intent is to be in full, timely
    compliance with the law. Oversight of the program baselines will
    continue through milestone decision reviews and program executive
    officer (PEO) updates to the Army Acquisition Executive. Deviation
    reports using the new criteria outlined in the amendment will be
    reported using current processes and procedures.
        While this amendment does not prohibit the rebaselining of
    programs, it does hold program managers accountable to the original
    baseline estimate. By keeping the original estimate as a data point in
    Selected Acquisition Reports (SAR), the entire DOD acquisition chain is
    sensitive to the cost growth of the entire program. This is an
    improvement of the current practice of rebaselining which does not
    retain the original baseline estimate in official reports.
        With respect to the FCS program, the $161 billion figure cited in
    the question represents the total acquisition cost in then-year
    dollars, and was reported in the November 2005 SAR. The comparable
    original baseline figure is $92.2 billion, a 75-percent increase. When
    calculated using base-year dollars so that the rate of inflation (which
    is beyond a program manager's control) does not influence the result,
    the overall increase is 54 percent (from November 2005 SAR: SAR
    development baseline of $77.8 billion; acquisition program baseline
    objective of $120.15 billion).

        26. Senator McCain. Secretary Harvey, please fully describe why the
    FCS program has increased $600 million in this year's budget request
    and why the overall projected cost has nearly doubled while slipping in
    schedule.
        Secretary Harvey. There are multiple ways of interpreting the first
    portion of this question and it is not readily apparent to the Program
    Management Office how the $600 million figure was computed. The Army
    respectfully requests clarification of the $600 million to ensure that
    we provide an accurate response.
        When comparing program costs, it is necessary to do so in constant
    base year dollars so that the impact of inflation does not skew the
    results. According to the November 2005 SAR and using program base year
    (2003) constant dollars, FCS research, development, test, and
    evaluation (RDT&E) costs have increased by approximately 48 percent and
    procurement costs by approximately 57 percent. While these are
    significant increases, it represents approximately half of the stated
    increase. RDT&E costs increased 18 percent due to the addition of
    previously deferred systems, 6 percent due to additional
    experimentation and technology/reliability maturation, 4 percent due to
    the additional efforts to spin out FCS capabilities to the current
    force, 17 percent due to the 4-year RDT&E schedule extension, and 3
    percent due to updates in program cost estimates. The procurement costs
    increased 19 percent due to the addition of previously deferred
    systems, 18 percent due to changes in the FCS BCT organization (i.e.,
    platform quantities), 11 percent due to platform capability
    enhancements, 2 percent due to the lengthened procurement schedule
    (i.e., procuring one and one half vs. two BCTs per year), and 7 percent
    due to updates in program cost estimates.

        27. Senator McCain. Secretary Harvey, what safeguards are in place
    to ensure taxpayer dollars are spent wisely?
        Secretary Harvey. The FCS System Development and Demonstration
    (SDD) Federal Acquisition Regulation (FAR)-based letter contract
    awarded in September 2005 (the letter contract is on schedule to be
    definitized on March 28, 2006), imposes more control and oversight over
    the LSI and its subcontractors than the Other Transaction Agreement.
    The FCS SDD FAR-based letter contract includes clauses that require
    compliance with the Procurement Integrity Act (PIA), Truth in
    Negotiations Act (TINA), and Cost Accounting Standards (CAS)
    requirements. The contract also allow government auditors access to
    contractor accounting records and requires that the contractor has an
    Earned Value Management System in place with regular reporting to the
    government. Moreover, the FAR-based letter contract and the resultant
    definitized contract restructure the fee arrangement to afford the Army
    greater control in controlling costs, performance, and schedule. These
    clauses reinforce the fiscal integrity of the contract negotiation and
    management process. Additionally, the Defense Contract Management
    Agency has the authority to administer certain contractor functions
    such as billing oversight, approving contractor management and
    management information systems, and quality control. The Program
    Management Office for FCS will utilize all available contract and
    program management tools to closely monitor the technical, cost, and
    schedule achievements of the program and make program adjustments as
    necessary to ensure the taxpayer's dollars are safeguarded.

                               acquisition reform
        28. Senator McCain. Secretary Harvey and General Schoomaker, one of
    the recommendations of the recently released Defense Acquisition
    Program Assessment (DAPA) report, is to establish a dedicated four-star
    acquisition systems command at the Service level, which would report to
    the Service Chief and Senior Acquisition Executive of the military
    department. I would like to hear your thoughts regarding the
    recommendations of the DAPA panel, especially on the recommendation to
    create Service acquisition commands.
        Secretary Harvey and General Schoomaker. The DAPA panel made the
    overall important finding that government-induced instability in the
    overall acquisition process (``Big A'') creates a situation where
    senior leaders in the DOD and Congress cannot anticipate the outcome of
    programs measured by cost, schedule, and performance. The report
    correctly attributes the majority of this instability to the
    capabilities determination and resourcing processes.
        The DAPA report made a series of recommendations most of which are
    worth further investigation and perhaps implementation. The
    recommendation to create a Service Acquisition Command is not unlike
    what the Army had prior to 2001 where a number of program managers were
    under the Army Materiel Command. We moved to the current structure of
    all PEOs) and Program/Product/Project Managers (PMs) directly under the
    Army Acquisition Executive (AAE) to ensure that there was one focal
    point for Army acquisition and ensure that PMs were responsible and
    accountable as life cycle managers of their assigned programs. The
    current structure is in full compliance with the ``two-level rule'' as
    outlined in National Security Directive 219 dated April 1, 1986, and
    also ensures that the acquisition chain of command (i.e.
    accountability) is not diluted through a four-star acquisition command,
    but rather flows directly from the AAE to the PEOs and PMs.

        29. Senator McCain. Secretary Harvey and General Schoomaker, the
    Service Chiefs already have control of the budgets and requirements
    generation process. How will adding the Service Chiefs into the
    acquisition process improve the process?
        Secretary Harvey and General Schoomaker. Under well-established
    public law, responsibility for the Headquarters, Department of the Army
    acquisition function resides solely in the Assistant Secretary of the
    Army for Acquisition, Logistics, and Technology, and the Department's
    acquisition process is ably executed by the dedicated Acquisition Corps
    professionals who work under his supervision. The Chief of Staff, Army
    and other Army Staff principals have a crucial lead role with respect
    to certain closely related activities such as requirements generation
    and validation, resource allocation, testing, and determination of
    fielding priorities. While always being receptive to exploring ways in
    which the Department can improve and streamline its processes, the
    Department is well-served by the current delineation of
    responsibilities.

        30. Senator McCain. Secretary Harvey and General Schoomaker, the
    report of the QDR stated that the DOD is focusing on bringing the
    needed capabilities to the joint force more rapidly, by fashioning a
    more effective acquisition system and associated set of processes. One
    of the recommendations is to integrate the COCOMs more fully into the
    acquisition process. What are your thoughts regarding the increased
    role of COCOMs in the acquisition process?
        Secretary Harvey and General Schoomaker. We recognize and value the
    importance of COCOM participation and influence in the Department's
    requirements and budgeting processes and are taking steps to strengthen
    existing means available for that participation, and creating new ones
    as well. Central to this is a COCOM's IPL. The IPL details a COCOM's
    highest priority requirements across functional lines and defines
    shortfalls in key programs. In the past, the IPL was a fiscally
    unconstrained list but now includes detailed capability trade-off
    recommendations to inform funding choices. Moreover, the JFCOM has
    assumed a more prominent and proactive role in rationalizing and
    integrating capabilities across all unified and specified commands.
        The Joint Staff also sponsors periodic visits to the COCOMs to
    engage in direct discussions on requirements and budget issues. They
    have begun to expand the participation in these discussions to a much
    broader set of participants from OSD as well. Now, representatives from
    OSD PA&E, Comptroller, Policy, and AT&L, among others, are there to
    discuss COCOM-specific issues relating to programming, budgeting, and
    acquisition. Also, senior leadership conferences are held throughout
    the year at junctures aligned with the budget process and provide the
    COCOMs similar opportunities to participate directly in formulating
    programs and budgets.

        31. Senator McCain. Secretary Harvey and General Schoomaker, what
    are your recommendations of how the Department should develop and
    address joint requirements?
        Secretary Harvey and General Schoomaker. See response to question
    number 4.

                        emergency supplemental spending
        32. Senator McCain. Secretary Harvey, a major issue in the
    congressional debate on funding continuing military operations and
    reconstruction in Iraq and Afghanistan is whether military and
    peacekeeping operations should be funded with supplemental requests or
    via the regular authorization and appropriation process. Last year, I
    urged the DOD and my colleagues on the Senate Armed Services Committee
    (SASC) to include the costs of current and future operations in Iraq
    and Afghanistan in the DOD's regular appropriations, arguing that these
    are now ongoing operations that should be planned for and funded in the
    annual defense budget.
        It is a responsibility, not a privilege, that the SASC exercises
    oversight in the normal authorization process at the beginning of the
    budget debate. During the last 2 years the SASC has provided for
    limited authorization in bridge supplemental requests in the National
    Defense Authorization Bill. The DOD assesses the incremental cost of
    OIF at approximately $4.4 billion a month and OEF in Afghanistan at
    $800 million a month. As General Pace has appropriately stated in his
    testimony, ``[w]e are in a long war.'' Do you think supplemental
    appropriations are the best vehicle for the Army for funding this long
    war?
        Secretary Harvey. Yes, as long as the theater of war remains a
    volatile environment and requirements are not predictable over the long
    term. With a stable environment and predictable costs, the Army would
    support funding in the base program.

                                  end strength
        33. Senator McCain. Secretary Harvey, please rate the current
    levels of retention and recruitment for the total force. Have the
    Active and Reserve components met their goals for the year, and what is
    the outlook with regard to achieving future levels specified in the
    QDR?
        Secretary Harvey. The current recruiting and retention environment
    remains challenging. The Army is working to achieve all three
    components' fiscal year 2006 recruiting and retention goals. All three
    components have achieved their recruiting missions to date and are
    confident they will also meet their retention missions. Worldwide
    deployments and an improving economy directly affect recruiting and
    potentially affect retention. All components closely monitor leading
    indicators including historic recruiting and reenlistment rates,
    retirement trends, first-term attrition, and DOD and Army attitudinal
    surveys across both areas to ensure we achieve total success. Moreover,
    all components are employing positive levers including increased
    enlistment bonuses, force stabilization policy initiatives, updates to
    the reenlistment bonus program, targeted specialty pays, and policy
    updates to positively influence the Army's recruiting and retention
    programs. These efforts will continue to be a challenge and the Army
    continues to reshape its resourcing priorities to meet that challenge.

        34. Senator McCain. Secretary Harvey, what are your greatest
    recruitment and retention problems and how do you intend to resolve
    them?
        Secretary Harvey. The current recruiting environment remains a
    challenge. The global war on terror and a strengthening economy
    continue to impact military recruiting. Increased private-sector
    competition, an upward trend in those pursuing higher education, and
    negative trends in centers of influence recommending military service
    are contributing to an erosion of recruiter productivity and could
    create significant challenges in the fiscal year 2006 and beyond. With
    congressional help the Army is aggressively adjusting its resources to
    meet these challenges. The key issue remains to attract high quality
    men and women to serve as soldiers and meet future manning
    requirements. We are working to overcome the market effects of
    increased alternatives to youth and a decreasing propensity to enlist
    by increasing incentives, developing new programs, and reducing
    attrition. We must remember that this is not an Army issue alone but a
    national issue. While the Army retention mission is challenging, all
    components are confident they will meet their annual retention mission.
    Worldwide deployments and an improving economy potentially affect
    retention. All components closely monitor leading indicators including
    historic reenlistment rates, retirement trends, first-term attrition,
    Army Research Institute surveys, and mobilization/demobilization
    surveys to ensure we achieve total success. Moreover, all components
    are employing positive levers including force stabilization policy
    initiatives, updates to the reenlistment bonus program, targeted
    specialty pays, and policy updates to positively influence the
    retention program. Ultimately, we expect to achieve the Active Army,
    ARNG, and United States Army Reserve fiscal year 2006 retention
    missions.

        35. Senator McCain. General Schoomaker, the QDR reduces the
    authorized level of Army Guard and Reserve from 350,000 to 333,000--a
    17,000 man reduction. Why would we reduce this authorization while we
    are engaged in operations in Afghanistan and Iraq, both of which
    require significant levels of Army and Reserve personnel?
        General Schoomaker.Prior to QDR 2006, the Army had developed a plan
    for 43 combat brigades and 75 support brigades in the Active component,
    34 combat brigades and 72 support brigades in the ARNG, and 58 support
    brigades in the USAR. This provided up to 20 combat brigades with
    associated multi-functional and functional support brigades for steady
    state operations around the world. Additionally, the Army was
    rebalancing structure in the ARNG and USAR to establish transient,
    trainee, holdee, and student (TTHS) accounts of 8,000 and 20,500,
    respectively. QDR 2006 showed a lower requirement for combat brigades,
    but a greater requirement for brigades able to respond more immediately
    to meet defense support to civil authorities. Although consideration
    was made to reduce the ARNG Force Structure Allowance (FSA) to 324,000
    with an additional 9,000 in the TTHS account during the QDR 2006, the
    decision at the end of the TAA 08-13 Force Program Review was to
    implement the Army End Strength Plan for the ARNG that builds toward an
    FSA of 342,000 with a TTHS of 8,000 by fiscal year 2011. This includes
    a total of 106 brigades within the ARNG whose mix of capabilities are
    being reworked collaboratively between the Army staff, the Chief of the
    National Guard Bureau, the Director of the ARNG, the Chief of the Army
    Reserve, and The Adjutants General Association of the United States
    Force Structure Committee. The right mix of capabilities within the 106
    ARNG brigades will help the Army meet global war on terrorism demands
    while providing enhanced options to our civil authorities. Our goal is
    to build ARNG brigades that are fully manned, equipped, and trained to
    meet the full spectrum of operations, both in the United States and
    overseas.

        36. Senator McCain. General Schoomaker, should we not be seeking to
    increase these authorizations, as well as taking other steps that would
    increase Army end strength?
        General Schoomaker. No, we have not determined a need to increase
    Army end strength at this time. To sustain increased global commitments
    we are building the Active component (AC) force structure under a
    30,000 temporary end strength increase above the 482,400 program. At
    the same time, we are restructuring our Reserve component forces within
    their authorized end strengths of 350,000 for the ARNG and 205,000 for
    the U.S. Army Reserve (USAR). Our goal is to grow the operational Army
    to 790,000 (to 355,000 soldiers within the AC, 306,500 soldiers within
    the ARNG, and 128,500 within the USAR). This growth reflects a 40,000
    increase in the AC over the fiscal year 2004 baseline of 315,000 based
    on restructuring of its institutional force with planned military-to-
    civilian conversions and changes in the management of the individuals
    account. This growth in the Army's operational force also reflects the
    restructuring in the ARNG to build a Force Structure Allowance (FSA) of
    342,000 with an individuals' account of 8,000 and the restructuring in
    the USAR to build an FSA of 184,500 with an individuals' account of
    20,500. The combined effect of rebalancing skills to reduce stress in
    high demand capabilities within all of our three components,
    redistributing soldiers to create the right mix between our operational
    forces and our institutional structures, and growing our operational
    Army will increase our overall effectiveness.

        37. Senator McCain. Secretary Harvey, in today's Baltimore Sun it
    is reported that the Army is lowering its standards in order to make
    its recruiting goals. The report states that the Army is granting
    special recruiting waivers in order to admit individuals with past
    criminal misconduct or alcohol and illegal drug problems. Please tell
    me we are not allowing criminals into our ranks at the same time we are
    planning to cut our Reserve Forces and telling our honorable citizen-
    soldiers we no longer need them. What long-term problems do you foresee
    due to this course of action?
        Secretary Harvey. The Army is not granting special waivers or
    allowing criminals into its ranks. The Army has a sound process for
    conducting waivers that allows our citizens who have overcome mistakes,
    made earlier in their lives, to serve their country. The Army continues
    to use a strict waivers review process in which requests must be
    reviewed and a disposition rendered by the Recruiting Battalion
    Commander (a Lieutenant Colonel) or the Commanding General, U.S. Army
    Recruiting Command, depending on the level of the offense. After a
    thorough review, waivers are approved or disapproved based on their
    merits and the whole person concept. No consideration is given to
    percentages of waivers, constraints, or recruiting goals during this
    process. Drug dependence and alcoholism are permanent disqualifications
    from entry in the United States Army. The Army realizes the military
    service is not an alternative to the criminal justice system and should
    not be viewed as an alternative source of rehabilitation. The Army
    established a waivers process to ensure potential soldiers who are
    qualified for entry are provided an opportunity to serve.

        38. Senator McCain. Secretary Harvey, I have long said that
    American forces are undermanned in Iraq. Other worldwide deployments
    and disaster relief missions here at home continue to tax the Service.
    Yet the Army seeks to reduce its authorized end strength. Please
    explain your rationale.
        Secretary Harvey. First, the force requirements in Iraq are
    established by the COCOM. The Army has been evaluating force
    requirements within the End Strength Plan approved in August 2005.
    Under this plan, Army end strength will be 482,400 in the Active
    component, 350,000 in the ARNG and 205,000 in the USAR. Within this
    total end strength of 1,037,400, the Army has an Operational Force of
    790,000 across all three components. The Active component operational
    force will grow 40,000 to 355,000, due primarily to a plan to rebalance
    the Institutional Force (down from 104,000 to 75,000) and the TTHS
    account (down from 63,000 to 52,400). Within the ARNG, elimination of
    33,500 of overstructure provides an operational force of 306,500 and
    establishes, for the first time, a TTHS account of 8,000. The USAR
    eliminated overstructure of 31,500 to provide an operational force of
    128,500 and establish, also for the first time, a 20,500 TTHS account.
    The Army optimized this operational force by rebalancing capabilities
    across all three components, eliminating overstructure, and improving
    training readiness with the establishment of TTHS accounts in the
    Reserve components to ensure ready and predictable access to the right
    force at the right time to meet all worldwide requirements.

        39. Senator McCain. General Schoomaker, please explain why the Army
    has utilized stop-loss on more than 50,000 soldiers while
    simultaneously planning to draw down the Reserve component by 17,000
    soldiers.
        General Schoomaker. Stop-loss policy is not about numbers but is a
    temporary measure that does not permanently affect the Army end
    strength and has not been a planning element in determining any
    potential cuts in authorized troop strength for the Active Army or the
    Reserve components. We have consistently stated since the onset of the
    global war on terrorism that the Army focus, indeed the charge, of Army
    deployments is to deliver to the COCOM trained and ready units, not
    individuals. RANDom and continuing unit losses caused by individually
    oriented separation, retirement, and replacement policies have the
    potential to adversely impact training, cohesion, stability, and
    readiness in the deploying units. Stop-loss is a means that effectively
    sustains a force, which has trained together, to remain a cohesive
    element throughout the unit's deployment. Our commitment to pursue the
    global war on terror and provide our warfighters with the cohesive,
    trained, and ready forces necessary to decisively defeat the enemy
    requires us to continue the Army's stop-loss program to attain the
    above goals. Consequently, any proposal to reduce Reserve component end
    strength or reduce the Reserve component participation in Operations
    Iraqi and Enduring Freedom will not in and of itself determine the
    level of stop-loss we will need to honor our contract with the American
    people to fight and win our Nation's wars.
        The size of future troop rotations will in large measure determine
    the levels of stop-loss needed. The Army leadership fully understands
    that by executing stop-loss, the policy has to some degree disrupted
    the lives of soldiers and their families. To minimize the impact of
    stop-loss on our soldiers, the program only affects soldiers assigned
    at the unit's mobilization/deployment date minus 90 days, continues
    through the demobilization/redeployment date, plus a maximum of 90
    days. Consequently, since reaching large scale application, the average
    monthly number of soldiers affected by stop-loss is approximately
    13,000. It is also noted that many of the soldiers who were initially
    retained beyond their obligation by stop-loss have voluntarily elected
    to remain in the military and have reenlisted or extended. While it is
    not palatable to some, our ability to retain these fine soldiers and
    their expertise is contributing immeasurably to our continued success
    in the war on terrorism.

        40. Senator McCain. Secretary Harvey, there have been lengthy
    discussions about force reductions to the National Guard bringing them
    to an end strength of 333,000. I understand the Army Reserve is also
    facing a reduction from 205,000 to 188,000. Over 60 percent of the
    total Army's medical assets and 98 percent of its civil affairs assets
    are in the Army Reserve--both critical to stabilizing and nation-
    building; will the Army Reserve be funded to a level supporting an end
    strength of 205,000 or 188,000?
        Secretary Harvey. The Army is not reducing the size of the Army
    Reserve. The Army plans to program the Army Reserve to an end strength
    of 205,000 with a force structure of about 184,500 and a TTHS account
    of 20,500. The Army plans to fund the Army Reserve up to 205,000,
    offset for historical participation, projected mobilization levels, and
    projected strength shortfalls.

                                  army posture
        41. Senator McCain. General Schoomaker, the QDR stresses the need
    for ``stabilization operations,'' which we used to call ``nation
    building.'' To conduct such operations, our soldiers need considerable
    culture, mediation, and language skills. What specific steps has the
    Army taken to improve the individual soldier's abilities in these
    areas?
        General Schoomaker. Army training has been redesigned to provide
    soldiers and units with increased capabilities and skills relevant to
    current and future operations. The Army focuses individual training on
    39 Warrior Tasks, grouped into Shoot, Move, Communicate, Fight, and
    Joint Urban Operations, and nine Battle Drills (39/9). To be combat
    ready every soldier, regardless of specialty, experience, or component,
    must be proficient in these skills. The Warrior Leader Course for
    junior Noncommissioned Officers (NCO) has expanded its situational
    awareness training exercise to 96 hours, giving soldiers more field
    time to practice troop-leading procedures, work on mission planning,
    and execute the mission to standard, followed by a thorough after-
    action review. Basic and Advanced NCO training in all of its
    progressive phases also builds on the 39/9 to teach leadership as it
    applies to Current Operating Environments (COE), including replicating
    Forward Operating Bases, live-fire convoy exercises, and reaction to
    IEDs. The Sergeants Major Academy provides a common core built around
    the 39/9 with emphasis on convoy operations, detainee operations,
    cultural awareness, and Joint Operations.
        The Officer Education System (OES) also focuses on the 39/9 and now
    includes a 6-week field leadership course attended by lieutenants from
    all branches and components followed by their functional courses.
    Another change is resident Intermediate Level Education for all Active-
    Duty majors that prepares them for full spectrum operations in a Joint,
    Interagency, Intergovernmental, and Multinational environment. Advanced
    civil schooling opportunities have expanded by 200 per year in
    disciplines such as cultural awareness, regional knowledge, foreign
    language, governance, diplomacy, national security, and social
    sciences. This program will develop critical intellectual skills while
    providing long-term retention of quality officers. Cultural awareness
    has been incorporated into every phase of the Army's professional
    military educational system. Formal language training has also been
    increased and modified to include languages relevant to current and
    potential operations. Online language training (26 languages) is
    available to all Army personnel.
        Our premier training facilities, two dirt Combat Training Centers
    that replicate the realistic operational environments of Iraq and
    Afghanistan, are where we blend our 39/9 and OES/NCOES changes together
    with unit/collective training at the Brigade/Battalion/Company level
    with real-time challenges.
        Simulators and other training devices such as the Engagement Skills
    Trainer, Laser Marksmanship Training System, and Visual Combat Convoy
    Trainer address soldier skills under situations and conditions relevant
    to today's combat. In addition, upgraded ranges help to improve soldier
    skills with advanced technologies (that help in evaluating and
    promoting soldier and unit weapons proficiency) and actual urban
    terrain that also reflects the COE.

                        evolving threats in afghanistan
        42. Senator McCain. General Schoomaker, yesterday, February 13,
    four soldiers died in an IED attack in Afghanistan. There has been a
    spike in violence in Afghanistan in recent months, with insurgents
    there applying lessons learned from Iraq. What new steps are we taking
    to combat this threat?
        Secretary Harvey and General Schoomaker. I have asked the Director,
    JIEDDO to respond to your concerns.

                          modularity and reset funding
        43. Senator McCain. Secretary Harvey and General Schoomaker, I
    understand the DOD has allocated $5 billion per year for modularity
    beginning with the fiscal year 2007 budget request. I think it's about
    time DOD funded modularity in the base budget rather than through
    supplementals. I understand that the Army will be requesting additional
    modularity funding in the upcoming supplemental request. Can you tell
    us the amount of the request and will the requests include funding for
    National Guard equipment?
        Secretary Harvey and General Schoomaker. The Army requested a total
    of $5.0 billion in fiscal year 2006 supplemental funds to support the
    transition to the modular force. This request is broken into two
    components. The fiscal year 2006 supplemental currently being
    considered by Congress contains $4.1 billion for our modular forces.
    Additionally, the Army received $900 million in supplemental funding
    with the fiscal year 2006 Title IX Bridge to support the modular force.
    The $900 million we received in Title IX and the $4.1 billion Congress
    is currently considering totals to $5 billion. Fiscal year 2006
    supplemental funds contain a total of $2.2 billion for National Guard
    equipment. Of this amount, $1.5 billion supports the conversion of
    National Guard units to the modular force. The National Guard received
    $200 million in the fiscal year 2006 Title IX Bridge in support of
    modularity with $1.3 billion remaining in the current submission.

        44. Senator McCain. Secretary Harvey and General Schoomaker, how
    much of the $5 billion added to the Army by the Department for
    modularity is funded from within the Department of the Army?
        Secretary Harvey and General Schoomaker. The Army programmed $6.6
    billion for the Army modular force in fiscal year 2007. This amount
    includes the $5 billion the Department provided and an additional $1.6
    billion the Army internally programmed to transform to a modular force.
    The funding the Department provided in fiscal year 2007 is programmed
    for equipment in support of the Army modular force. The remaining $1.6
    billion programmed is primarily for equipment procurement but also
    provides funding for operations and maintenance.

        45. Senator McCain. Secretary Harvey and General Schoomaker, is the
    Army reset fully funded?
        Secretary Harvey and General Schoomaker. The fiscal year 2006
    supplemental request will be released by the President shortly, and
    will include over $8.5 billion for reset of Army equipment across all
    three components: Active, Guard, and Reserve. This will meet our
    highest priority needs to repair or replace damaged and worn equipment.
    If additional funds should be made available, we would be able to
    accelerate our reset efforts.
        Reset costs for future years will be dependent on the level of
    commitment in theater, the activity level in theater, and the amount of
    equipment required each year because it is damaged or excessively worn.
    Unless one of these factors significantly changes, the Army expects the
    requirement to be $10-$13 billion per year through the period of
    conflict and 2 years beyond.

                                army acquisition
        46. Senator McCain. Secretary Harvey, the Government Accountability
    Office (GAO) reports that, since the Joint Tactical Radio System
    program entered systems development in 2002, the contractor has overrun
    cost estimates by $93 million--nearly 28 percent above what was
    planned. Although the program attempted to stabilize costs by adding
    approximately $200 million to the contract in January 2004, costs
    continued to grow steadily thereafter. In addition, the contractor has
    increasingly fallen behind schedule and has had to devote more
    resources than originally planned. In January 2005, the prime
    contractor estimated that the total costs for the ``cluster'' one
    development would be $531 million more than what was originally
    budgeted, reaching about $898 million at completion. However, according
    to program officials, since contract award, the prime contractor has
    not demonstrated strong cost estimating and cost management techniques,
    and it is difficult to estimate with any confidence what the overall
    program is likely to cost. What specific steps are you taking to ensure
    that future Army acquisition programs are both realistic in scope and
    affordable?
        Secretary Harvey. Implementation of Section 801 of the National
    Defense Authorization Act for Fiscal Year 2006, Public Law 109-163,
    will assist in ensuring that future Army acquisition programs are both
    realistic in scope and affordable. This requires certain certifications
    by the milestone decision authority (MDA) before program initiation at
    Milestone B. With this certification, the MDA attests that the:

              1. technology is ready;
              2. program is highly likely to accomplish its intended
            mission;
              3. program is affordable and an analysis of alternatives has
            been completed;
              4. JROC has accomplished its statutory duties; and
              5. program complies with all relevant policies, regulations,
            and directives.

                              major general miller
        47. Senator McCain. General Schoomaker, Major General Geoffrey
    Miller, who ran Guantanamo from October 2002 to March 2004 and helped
    set up operations at Abu Ghraib, has asserted his Fifth Amendment,
    Article 31 right against self-incrimination in two court-martial cases
    involving the use of dogs during interrogations. I do not contest
    General Miller's right under the Constitution, but would you agree that
    he also has a duty as an officer, especially a general officer, to take
    responsibility for his actions and orders?
        General Schoomaker. The evidentiary portion of one of the two
    courts-martial in which General Miller declined a defense interview has
    concluded. While available to testify, General Miller was not called as
    a witness by either the defense or the government. The second court-
    martial is scheduled to convene on May 22, 2006. On March 28, 2006,
    General Miller met with the defense counsel in the second court-martial
    and answered all questions posed to him. If General Miller's testimony
    is determined to be relevant at that trial, as with any soldier,
    General Miller will be required to appear.
        The Department of the Army Inspector General (DAIG) independently
    investigated the allegations made against General Miller concerning
    detainee operations. After a thorough and impartial evaluation of the
    evidence, the DAIG determined the allegations to be unsubstantiated.
    After multiple reviews, the DAIG report of investigation has been
    approved by the Army leadership. Most recently, on March 28, 2006,
    General Miller again met with the DAIG and answered their questions
    under oath.

        48. Senator McCain. Secretary Harvey and General Schoomaker, do you
    believe, given everything we know now, only low-level personnel were
    responsible for detainee abuse at Abu Ghraib, Guantanamo Bay, in
    Afghanistan, and elsewhere?
        Secretary Harvey and General Schoomaker. The Army investigates
    allegations of detainee abuse without regard to the rank or position of
    those alleged to be involved. Our professional investigators go where
    the evidence leads. When the evidence indicates wrongdoing, commanders
    take appropriate action under the Uniform Code of Military Justice and
    established policy and regulations.
        The U.S. Army Criminal Investigation Command has conducted over 600
    investigations into allegations regarding detainee operations. The
    investigations include allegations reported both inside and outside
    detention facilities. Thus far, allegations have resulted in adverse
    actions (including courts-martial, non-judicial punishment, and adverse
    administrative actions) against over 250 soldiers. Approximately 17
    percent of the adverse actions have been brought against commissioned
    officers, who, as a category, make up about 13 percent of the force in
    theater.
        The Army has conducted numerous separate investigations,
    inspections, and reviews concerning detainee operations. Each report
    has established that abuses did not result from promulgated
    interrogation policies and procedures and were not directed,
    sanctioned, or encouraged by senior leadership. The Army will continue
    to investigate aggressively all allegations of detainee abuse and
    continue to hold those who commit misconduct accountable for their
    actions.

              specific guidance for implementing mccain amendment
        49. Senator McCain. Secretary Harvey and General Schoomaker, Deputy
    Secretary England has issued a high-level memo directing the
    implementation of the detainee legislation that became law this winter.
    This memo is less than a page in length, and merely restates the
    provisions--that the Army Field Manual shall become the uniform
    standard for interrogation, and that cruel, inhumane, and degrading
    treatment is barred. What specific guidance has been given to soldiers,
    military police, interrogators, translators, intelligence officers,
    medical personnel, etc., at Guantanamo and throughout Iraq and
    Afghanistan?
        Secretary Harvey and General Schoomaker. DOD Directive 3115.09, DOD
    Intelligence Interrogations, Detainee Debriefings, and Tactical
    Questioning, was issued on November 3, 2005. It consolidates and
    codifies existing departmental policies, including the requirement for
    humane treatment during all intelligence interrogations, detainee
    debriefings, or tactical questioning to gain intelligence from captured
    or detained personnel. It further assigns responsibilities for
    intelligence interrogations, detainee debriefings, tactical
    questioning, and supporting activities conducted by DOD personnel.
        The U.S. Army Training and Doctrine Command added additional blocks
    of instructions on the Geneva Convention and Law of War to all programs
    of instruction.
        The U.S. Army Intelligence Center and School (USAICS) has updated
    their interrogation training program of instruction to ensure all
    training is in full compliance with the Army Field Manual (FM 34-52)
    and emphasized legal, policy, and regulatory requirements for humane
    treatment of all detainees, as well as prohibitions against cruel,
    inhumane, and degrading treatment in the conduct of interrogation
    operations. USAICS' mobile training teams have deployed to provide
    reinforcement training to both deployed forces and ``next deploying''
    units throughout the United States.

        50. Senator McCain. Secretary Harvey and General Schoomaker, have
    these individuals received directives with instructions?
        Secretary Harvey and General Schoomaker. The Under Secretary of
    Defense issued DODD 3115.09, DOD Intelligence Interrogation, Detainee
    Debriefings, and Tactical Questioning on November 3, 2005. It
    consolidates and codifies existing departmental policies, including the
    requirement for humane treatment during all intelligence
    interrogations, detainee debriefings, or tactical questioning to gain
    intelligence from captured or detained personnel. It further assigns
    responsibilities for intelligence interrogations, detainee debriefings,
    tactical questioning, and supporting activities conducted by DOD
    personnel. USD(I) is also updating DODD 2310, the DOD Detainee Program.
    This directive revises policy and responsibilities within the DOD for a
    Detainee Program to ensure compliance with the laws and policies of the
    United States, the law of war, including the Geneva Convention of 1949.
    A memorandum on Medical Program Principles and Procedures for the
    Protection and Treatment of Detainees in the Custody of the Armed
    Forces of the United States was also issued. The memorandum reaffirmed
    the historic responsibility of all health care personnel of the Armed
    Forces (to include physicians, nurses, and all other medical personnel
    including contractor personnel) to protect and treat, in the context of
    a professional treatment relationship and established principles of
    medical practice, all detainees in the custody of the Armed Forces
    during armed conflict.

        51. Senator McCain. Secretary Harvey and General Schoomaker, has
    the Department developed regulations to implement the legislation?
        Secretary Harvey and General Schoomaker. Army Regulation 350-1,
    Army Training and Leader Development, February 13, 2006, provides
    specific regulatory guidance concerning Law of War training and
    integration of detainee operations training into other appropriate
    training events.

        52. Senator McCain. Secretary Harvey and General Schoomaker, how
    are the new rules being communicated down the chain of command?
        Secretary Harvey and General Schoomaker. The new rules are being
    communicated through the directives, Army regulations, and field
    manuals. The U.S. Army Intelligence Center and School is also training
    commanders and leaders, plus soldiers, airmen, sailors, and marines on
    the new rules through mobile training teams. U.S. Army Training and
    Doctrine Command has added additional blocks of instructions on the
    Geneva Convention and Law of War to all programs of instruction. All
    interrogators conducting interrogation operations receive Geneva
    Convention training every 90 days.

         justice department analysis of cruel, inhumane, and degrading
                                  prohibition
        53. Senator McCain. Secretary Harvey and General Schoomaker, in the
    Senate Judiciary Committee last week, Attorney General Alberto Gonzales
    was asked whether the newly-passed prohibition on cruel, inhumane, and
    degrading treatment unconstitutionally interferes with the President's
    power as Commander in Chief. The Attorney General responded that he
    could not answer that question, because ``we have not done that
    analysis.'' What is your current, operative understanding of the law we
    passed?
        Secretary Harvey and General Schoomaker. That part of the Detainee
    Treatment Act of 2005 relating to cruel, inhuman, or degrading
    treatment or punishment provides that ``no individual in the custody or
    under the physical control of the United States Government, regardless
    of nationality or physical location, shall be subject to cruel,
    inhuman, or degrading treatment or punishment.'' The Act defines the
    term cruel, inhuman, or degrading treatment or punishment as the
    ``cruel, unusual, and inhumane treatment or punishment prohibited by
    the Fifth, Eighth, and Fourteenth Amendments to the Constitution of the
    United States, as defined in the United States Reservations,
    Declarations and Understandings to the United Nations Convention
    Against Torture and Other Forms of Cruel, Inhuman or Degrading
    Treatment or Punishment done at New York, December 10, 1984.''

        54. Senator McCain. Secretary Harvey and General Schoomaker, are
    DOD employees prohibited from engaging in cruel, inhumane, and
    degrading treatment in all cases, even if ordered otherwise--even if
    ordered otherwise by the President?
        Secretary Harvey and General Schoomaker. Questions regarding the
    impact of such hypothetical action are more appropriate for response by
    DOD. However, I note that current DOD policy which was published by the
    Deputy Secretary of Defense following passage of the Detainee Treatment
    Act of 2005 and which applies to soldiers and Army civilian employees,
    requires that they ``ensure that no person in the custody or under the
    physical control of the DOD, regardless of nationality or physical
    location, shall be subject to cruel, inhuman, or degrading treatment or
    punishment.''

                         president's signing statement
        55. Senator McCain. Secretary Harvey and General Schoomaker, when
    the President signed the defense bill, he issued a statement indicating
    that he would construe it ``in a manner consistent with the
    constitutional authority of the President to supervise the unitary
    executive branch and as Commander in Chief and consistent with the
    constitutional limitations on the judicial power. . .'' In your
    understanding, does this mean that the President could authorize an
    exemption to the legislative prohibitions?
        Secretary Harvey and General Schoomaker. Questions regarding the
    impact of such hypothetical action are more appropriate for response by
    DOD.

        56. Senator McCain. Secretary Harvey and General Schoomaker, is
    there any circumstance in which a Department employee could legally
    engage in cruel, inhumane, or degrading treatment?
        Secretary Harvey and General Schoomaker. Current DOD policy and the
    Detainee Treatment Act of 2005 prohibit cruel, inhuman, or degrading
    treatment, as that term is defined in the statute. Questions regarding
    the impact of such hypothetical action are more appropriate for
    response by DOD.

                                officer training
        57. Senator McCain. Secretary Harvey, I understand the Army Reserve
    is the executive agent of the Reserve component's Officer Basic Course
    (OBC). With the National Guard currently authorized to recruit to the
    350,000 end strength, I anticipate there will be an increase in the
    number of OBC seats required for these new officers. Has this program
    been sufficiently funded to accommodate the influx of new officers
    needing initial military education? If not, what plan do you have to
    ensure that new officers brought into the system are provided seats or
    funding to get them into OBC rapidly?
        Secretary Harvey. There are 2,285 Reserve component (RC) soldiers
    scheduled to attend the OBC in fiscal year 2007 (1,125 soldier mission
    for ARNG and 1,160 soldier mission for Army Reserve). Fiscal year 2007
    OBC resources currently support 847 seats for the RC with $23.1 million
    in Reserve Personnel, Army (RPA) appropriation funding. Additional
    seats are required to support the current shortage of company grade
    officers and the influx of new officers for the RC. Fiscal year 2007
    current estimated shortfall for OBC is $39.2 million. Both the ARNG and
    the Army Reserve have shortages in Company Grade officers which impact
    deploying units.
        Any additional increase in OBC seats supporting an ARNG officer
    influx above the projected 1,125 ARNG mission would increase the
    estimated shortfall.
                                     ______

                  Questions Submitted by Senator Jeff Sessions
                     operation and maintenance account cuts
        58. Senator Sessions. Secretary Harvey, the various cuts to the
    Army's operation and maintenance accounts (OMA) are, if you haven't
    been briefed, about to have a significant impact at installation and
    depot level across any number of programs. While I appreciate the
    rationale behind the recently announced 1 percent Government-wide cut
    (which impacted Army operation and maintenance by -$238.98 million), I
    also realize that if equally distributed this particular cut will have
    a minor impact on most installations/depots. What concerns me, however,
    is the cumulative impact OMA cuts are having on Army Materiel Command
    and the Assistant Secretary of the Army for Acquisition, Logistics, and
    Technology (ASALT) accounts and programs at this time. Hence, I would
    like an explanation to the following: What is the base OMA requirement
    and the current level of Army wide OMA installation funding
    particularly at my three Alabama Army installations?
        Secretary Harvey. The OMA requirements for installation base
    support is $12.4 billion. The current level of funding is $8.8 billion,
    or 71 percent of requirements. For Fort Rucker, Anniston Army Depot,
    and Redstone Arsenal, the requirement is $256.1 million. The current
    level of funding for these installations is $180.7 million or 71
    percent of requirements.

        59. Senator Sessions. Secretary Harvey, what is the cumulative
    impact of current and projected OMA cuts directed at ASALT PMs and your
    PEOs? Has anyone analyzed the cuts across the various mission areas to
    see the cumulative damage?
        Secretary Harvey. Over the past few years the Army has encountered
    many challenging issues regarding funding requirements for our PEOs and
    PMs. We have been forced to make tough tradeoffs to maintain support
    for the war, while concurrently trying to modernize our weapon systems.
    The Army has realigned funding to meet operational priorities and has
    undertaken Lean Six Sigma, implemented other efficiencies initiatives,
    and I deferred or suspended low priority requirements to garner
    resources to offset some of our shortfalls. Although there is no
    cumulative assessment of the OMA cuts, we carefully monitor key
    readiness indicators in area such as sustainment, operational tempo,
    and force protection to identify emerging issues requiring fiscal
    adjustments. Balancing our worldwide commitments has not been easy and
    the Army appreciates the assistance it has received from Congress
    through base and supplemental funding.

        60. Senator Sessions. Secretary Harvey, what is the managerial
    rationale behind these cuts to ASALT ground and aviation programs when
    the Army is at war and Congress continues to fund the Army at
    extraordinarily high levels?
        Secretary Harvey. The Army has made a careful assessment of its
    capabilities prior to recommending program cuts. As the Army transforms
    to a modular force, the resulting force structure changes have
    precipitated adjustments to some key programs. The Army has assumed
    some risk with the ground systems but has realized slight growth in
    aviation as part of the aviation modernization strategy. The Army has
    realigned funding to meet operational priorities and has implemented
    other efficiencies initiatives and deferred or suspended low priority
    requirements to garner resources to offset some of our shortfalls.
    However, the leadership focus remains on fielding and sustaining full
    spectrum capabilities that are self-contained to provide increased
    flexibility and force availability.

        61. Senator Sessions. Secretary Harvey, what is the current
    shortfall in Installation Management Agency (IMA) funding to
    installations in Alabama?
        Secretary Harvey. The current fiscal year 2006 OMA shortfall for
    Alabama installations is $75.4 million. However, fiscal year 2006
    funding levels are preliminary. Installations may receive additional
    funding during the year of execution.

        62. Senator Sessions. Secretary Harvey, most importantly, what is
    your strategy to restore the required level of OMA funding to our
    installations since we discussed little today at the posture hearing
    suggesting that the senior Army leadership is unaware that many Army
    and specifically Alabama installation and depot employees face
    termination in the near-term as a result of the shortages which exist
    in the aforementioned OMA installation and depot accounts?
        Secretary Harvey. The Army leadership is committed to its program
    of Installations as Flagships of Readiness. To that end, the Army is
    working to increase base support funding to ensure quality of life for
    soldiers, while maintaining a high rate of readiness for our power
    projection platforms. The Army has recently undertaken an ambitious
    effort to realign funds on the order of $1.3 billion to support our
    installations. Additionally, $400 million of supplemental reset dollars
    was recently released to the Army Materiel Command of which the
    Anniston Army Depot (ANAD) received $50 million The ANAD funds will
    support several programs to include the M88 Recovery Vehicles, Ml13
    Family of Vehicles, M992 Field Artillery Ammunition Supply Vehicles
    (FAASV), M9 Armored Combat Earthmover (ACE) Vehicles, and various small
    arms programs. Additionally, funds continue to be provided to ANAD in
    support of the Abrams M1A1 AIM XXI Program on a month-to-month basis to
    prevent production breaks at General Dynamics Land Systems (GDLS) and
    the potential lay-off of over 100 GDLS employees. Actions continue
    within the Army to identify required resources to fund these
    requirements in the coming months. Because of potential funding/
    workload fluctuations part of the Army's strategy has been to hire
    term, temporary, and contractor personnel when appropriate along with
    the judicious use of overtime to allow the depot workforce to be
    responsive to these types of adjustments. To date, all reductions
    associated with OMA decrements have been against contractor positions.
    One hundred forty-seven contractor personnel at Redstone Arsenal,
    Alabama have or will be released by March 31, 2006. There have been no
    reductions in force taken against Department of the Army civilians
    either at ANAD or Redstone as a result of insufficient funding or
    workload, and none are currently planned.

                            disabled soldier support
        63. Senator Sessions. Secretary Harvey, last year Army Vice Chief
    of Staff General Dick Cody appeared before our committee and discussed
    a program called Disabled Soldier Support System (DS3) which was to
    provide severely wounded soldiers and their families with an advocacy
    system and followup personal support as they return to civilian life or
    Active-Duty.
        Since that time the Army has changed the name to the Army Wounded
    Warrior Program (AW2), providing the same support system as DS3. Though
    I would tell you I neither think we are going as fast as we should to
    capture all eligible soldiers into AW2 nor are we being as
    comprehensive in our outreach to them.
        In addition to AW2, I note with pleasure that the Army has also
    created a mentorship program--Army Knowledge Online (AKO) Mentorship
    Community and the Freedom Team Salute (FTS). In fact, I witnessed your
    acknowledgment of our colleagues--Senators Akaka and Inhofe last week
    at our caucus breakfast.
        These are good additions to AW2, but I think the Army needs to
    better link our local communities in this effort. Would you support a
    grassroots mentorship and job creation program like that proposed by a
    group of citizens in Huntsville, Alabama which was directly linked to
    your AW2 program with the expressed mission of committing to the long
    term career development for veterans and their spouses?
        Secretary Harvey. As you mentioned, the Huntsville/Redstone Arsenal
    (Alabama) ``Still Serving Veterans'' organization is an excellent
    example of a specific community's desire to stand with and support our
    Nation's most severely wounded warriors and their families. AW2 has had
    the great honor to assist in similar grassroots efforts in both the
    private and Federal sectors.
        We applaud the efforts of each of these communities and employers
    across the Nation and their deep desire to help the Nation's severely
    wounded veterans and look forward to working with them in this
    honorable task in the future.
        AW2 is committed to fulfilling that portion of the Warrior Ethos
    which states ``Never leave a fallen comrade'' and ensuring that our
    severely wounded soldiers and their families receive the care, support,
    and assistance they rightly deserve. We understand and advocate that a
    soldier's successful reintegration into their community cannot be
    complete without the involvement of that community.
        AW2 is prepared to support initiatives at any level, the caveat
    being that any effort needs to be appropriately vetted and clearly
    demonstrate to be in the best interests of soldiers and families.
    Organizations closely linked to AUSA or VA approved Veterans Service
    Organizations are such examples. Obviously, AW2 would not support
    organizations who demonstrate questionable practices or are prohibited
    from doing business with the Army or DOD, or organizations that give
    the perception that they take advantage of soldiers.
        AW2 has requested in its fiscal year 2006 budget $375,000 for
    transition and employment assistance specialists who are assisting
    soldiers that are leaving the Army through the Walter Reed Army Medical
    Center (WRAMC) transition center. These specialists provide
    outplacement services (connecting AW2 soldiers with employers and
    working to get them hired). Additionally, soldiers receive hands on
    support and work closely with the WRAMC Army Career and Alumni Program.
        AW2 continues to work closely with the community of San Ramon,
    California, and their Sentinels of Freedom program. This program
    provides an AW2 soldier with a 4-year scholarship, an apartment,
    vehicle, employment training, and most importantly the involvement of
    the community. The Sentinels of Freedom are preparing to offer this
    package to a second AW2 soldier within the coming months.
        Numerous Federal agencies have used specific hiring authorities to
    extend Federal employment opportunities to AW2 soldiers. Within the
    Department of the Army, AW2 has supported the efforts of the Army
    Materiel Command, TRADOC, and the Missile Defense Command in either
    retaining soldiers on Active Duty or proving Federal employment to
    medically retired AW2 soldiers. The Veteran's Administration has hired
    medically retired AW2 soldiers into full time Federal civilian
    employment. AW2 continues to work closely with the Department of
    Transportation's ``American Hero Support Program'' to provide
    employment to AW2 soldiers primarily at State departments of
    transportation.
        AW2 is currently working with the Disney Corporation to develop an
    internship program titled ``Casting for Heroes''. This program is
    working closely with AW2 to place former soldiers in numerous positions
    within the Walt Disney parks and resorts.

        64. Senator Sessions. Secretary Harvey, one such organization has
    emerged called Still Serving Veterans (SSV). I hope you will embrace
    what they offer and tie their efforts to AW2 as an extension of your
    vision. Together we can and will help our young veterans and their
    families with a quality of life they deserve. Will you visit with them
    when you visit Redstone Arsenal the next time?
        Secretary Harvey. I met with the SSV organization during a recent
    trip to Redstone Arsenal in March 2005. As you have mentioned, the SSV
    organization is an excellent example of a specific community's desire
    to stand with and support our Nation's most severely wounded warriors
    and their families. I was impressed by their dedication and commitment
    to helping these soldiers, and commended them for their work. As a
    result, during the annual Civilian Aide to the Secretary of the Army
    (CASA) Conference in April, I directed the CASAs to establish similar
    programs around the country in their States.
                                     ______

                   Questions Submitted by Senator John Thune
                             future cargo aircraft
        65. Senator Thune. Secretary Harvey, it is clear from the Army's
    2006 posture statement that the Army is undergoing a transformation
    which will make it a more flexible and more powerful force. Part of
    being flexible is having the ability to move men and supplies in
    theater. What role does the Army wish to play in the development of the
    new FCA?
        Secretary Harvey. As part of the Comanche reinvestment strategy the
    Army chose to pursue a replacement FCA to replace its aging C-23, C-
    26s, and C-12 aircraft. The FCA program was briefed to Congress on 7
    April 2005.
        For more than 2 years the Army has been in the process of pursuing
    a FCA. The FCA has been vetted through the Joint Capabilities
    Integration and Development System (JCIDS) process and the Army has a
    Joint Requirements Oversight Council (JROC) approved Initial
    Capabilities Document (ICD) JROCM 061-05, dated 21 March 2005, and a
    Capabilities Development Document (CDD) JROCM 303-05. All of these
    requirements were vetted with the other Services, specifically the Air
    Force. Since the Key West accords, DOD policy has consistently
    authorized the Army to procure and provide aircraft to meet its
    tactical intratheater lift requirements within Army organic force
    structure/lift assets. The Army is not trying to replace the Air Force
    or compete with their roles and missions; but the Air Force does not
    perform missions in the tactical spectrum down to what we call ``the
    last tactical mile''. Historically, tactical wheeled vehicles and
    helicopters have performed that role. Based on the modularity of BCTs,
    the distributed non-linear battlefield, combined with the logistics
    concept of support changing to a push system, the Army needs additional
    intratheater tactical lift capability. The Air Force agrees with this
    Army identified gap. This gap is the movement of ``time sensitive,
    mission critical resupply and key personnel transport'' from the
    initial staging base or port of debarkation to the BCT.
        The Army anticipates being the lead agency in a FCA/LCA Joint
    Program Office (JPO) that will become effective 1 October 2006. The
    Services anticipate a JPO Charter will be approved by the Service's
    Acquisition Executives prior to the Army reaching Milestone C on the
    FCA program. The Army still plans to begin fielding FCA/LCA to its
    aviation force in fiscal year 2008. The USAF will follow with the
    fielding of the FCA/LCA approximately 2 years later.

        66. Senator Thune. Secretary Harvey, how many do you need at your
    disposal?
        Secretary Harvey. The Army's Analysis of Alternatives (AoA) defined
    a low risk requirement of 145 FCA. On 8 February 2006, the Army and Air
    Force agreed that the quantity identified in the Army AoA of 145 would
    be referred to as the ``Initial Joint Requirement'' and that the Army
    would procure 75 FCA and the Air Force will procure the remainder of
    the initial joint requirement. The Army and Air Force in coordination
    with the Joint Staff plan to conduct a follow-on joint AoA over the
    next year or two to define the broader, full joint force requirement or
    fleet end-state for the Services.

        67. Senator Thune. Secretary Harvey, does the Army want to train
    pilots to fly these aircraft and if so, will this mission remain in the
    National Guard like the current C-23 and C-12 missions?
        Secretary Harvey. The current strategy calls for the manufacturer
    to initially conduct aircrew training. As the system enters full rate
    production, further evaluation will be given to the training strategy
    in light of the program's joint nature. The Services have also agreed
    to conduct a business case analysis as part of the joint training
    strategy determination that will identify the most feasible,
    affordable, and effective strategy for training aircrew members.
    Currently, the Army plans to field the FCA exclusively to the Reserve
    component (ARNG and Army Reserve).

                                   recruiting
        68. Senator Thune. General Schoomaker, first quarter recruiting
    numbers for the Army in fiscal year 2006 were good news. In the first
    quarter, the Army recruited 11,511 for the Active-Duty; 5,740 for the
    Reserve; and 13,466 for the Army Guard. What steps is the Army taking
    to ensure it can continue meeting its recruiting requirements through
    fiscal year 2006 and what do you believe is the reason for this initial
    success after missing the recruiting goal in fiscal year 2005?
        General Schoomaker. The current recruiting environment remains very
    challenging. The global war on terror and a strengthening economy
    continue to impact military recruiting. Increased private sector
    competition, an upward trend in those pursuing higher education, and
    negative trends in centers of influence recommending military service
    are contributing to an erosion of recruiter productivity.
        The Army has been successful in its year-to-date recruiting efforts
    due to resources committed in fiscal year 2005 and the Army's
    continuing efforts to shape its fiscal year 2006 Recruiting Action Plan
    early. Future recruiting success has also been made possible with the
    aid of Congress and its passage of the National Defense Authorization
    Act (NDAA) for Fiscal Year 2006, authorizing several critical
    initiatives. These include increasing the maximum enlistment bonus from
    $20,000 to $40,000 for the Regular Army and from $10,000 to $20,000 for
    the Reserve components, authorizing a pilot $1,000 referral bonus
    program for all three Army components, increasing the maximum
    enlistment age to 42 (current Army policy is limited at 40 for all
    three components), increasing the maximum term of service from 6 to 8
    years, and providing temporary recruiting incentives authority for new
    programs for all three Army components.
        To provide early success in fiscal year 2006, the Army has
    increased the number of recruiters and adopted the DOD standards for
    the trainability indicators (ASVAB Test Score Categories). The key
    issue remains to attract high quality men and women to serve as
    soldiers and meet future manning requirements. We are working to
    overcome the market effects by increasing incentives, developing new
    programs, and reducing attrition. We must remember that this is not
    just an Army issue, but a national issue.
                                     ______

                Questions Submitted by Senator Edward M. Kennedy
                      tactics, techniques, and procedures
        69. Senator Kennedy. General Schoomaker, during the hearing you
    indicated that the Multi National Coalition--Iraq Commander had
    requested the Joint IED Neutralizer (JIN) not be deployed to Iraq
    pending development of tactics, techniques, and procedures. What is the
    status of the Army's development of these tactics, techniques, and
    procedures (TTPs)? When do you anticipate having these TTPs
    sufficiently developed to allow deployment of the JIN?
        General Schoomaker. I have asked the Director, JIEDDO, to respond
    to your concerns.

        70. Senator Kennedy. General Schoomaker, how can the process be
    improved so we can more rapidly deploy equipment that has been
    developed and procured on an accelerated timeline?
        General Schoomaker. I have asked the Director, JIEDDO, to respond
    to your concerns.

        71. Senator Kennedy. General Schoomaker, for urgently needed
    capabilities to save the lives of servicemembers, shouldn't we develop
    the TTPs in parallel with fielding the capability?
        General Schoomaker. I have asked the Director, JIEDDO, to respond
    to your concerns.

        72. Senator Kennedy. General Schoomaker, will you provide the
    military utility statement for the JIN system to the committee?
        General Schoomaker. I have asked the Director, JIEDDO, to respond
    to your concerns.

                repair, replacement, and recapitalization costs
        73-75. Senator Kennedy. Secretary Harvey and General Schoomaker,
    during the hearing we discussed an Army handout that showed a bill of
    $36 billion to repair, replace, and recapitalize the force.
    Notwithstanding the assumptions of this handout on when the drawdown
    would begin, or how long it would last, this is a sizable sum of money.
    To put this in perspective, can you provide the committee information
    on how many tracked and wheeled vehicles have been placed out of
    service due to battle damage in Iraq?
        What is the Army's plan to repair or replace these vehicles?
        How long do you anticipate this to take and how much do you expect
    it to cost?
        Secretary Harvey and General Schoomaker. Regarding ``repair,'' the
    Army uses battlefield damage assessment and repair (BDAR) procedures to
    return disabled equipment rapidly to combat or to enable the equipment
    to self-recover. BDAR is the commander's responsibility and is
    accomplished by the operator and crew. Equipment that is damaged beyond
    the commander's capability to repair becomes a battle loss to the
    commander and must be evacuated out of the tactical engagement area for
    repair. Depending on the extent of damage, the equipment may be
    repaired at a field maintenance unit or at a sustainment maintenance
    activity such as a forward repair activity, an installation maintenance
    activity or a depot. A commander's losses are immediately replaced with
    other assets. We do not track battle losses repaired at the operational
    level.
        A piece of equipment that cannot be repaired or is uneconomical to
    repair at any level becomes a battle loss to the Army and is dropped
    from the Army's inventory. These items are replaced through
    procurement. As a result of OIF and OEF, Army losses of tracked and
    wheeled vehicles include: 18 Abrams tanks, 74 Bradleys, 22 Strykers,
    and 915 High Mobility Multipurpose Wheeled Vehicles (HMMWVs). Replacing
    the 18 Abrams tanks costs approximately $90 million; replacing 74
    Bradleys costs approximately $176 million; and replacing 22 Stryker
    vehicles costs about $44 million. Replacement time for these systems is
    approximately 18-24 months, since they require long-lead items for
    production. Replacements for HMMWV losses are projected at $198
    million. Since replacing battle losses is our first priority for
    distribution of the ongoing HMMWV production, these systems are
    generally replaced immediately.

                              equipment shortfalls
        76. Senator Kennedy. Secretary Harvey and General Schoomaker, GAO
    criticized the Pentagon last year for not having a strategy to end
    equipment shortfalls. Do you have a strategy for identifying force
    protection requirements and developing solutions to fill the gaps?
        Secretary Harvey and General Schoomaker. Our overarching strategy
    is to foster an adaptive culture and maintain the agility in our
    systems/processes necessary to keep pace with a thinking enemy. We must
    recognize that when our forces are successful in achieving superiority
    against an enemy's preferred tactics and weapons, we will be confronted
    with new combinations. Army organizations have partnered to rapidly
    develop, assess, and field solutions to capability gaps identified by
    force commanders.
        Army organizations such as the Rapid Equipping Force and Asymmetric
    Warfare Group work directly with the deployed forces to collect
    intelligence on threat capabilities and begin the development of either
    doctrinal or materiel countermeasures. Collaboration with the JIEDDO
    provides focused support to warfighting commanders for this critical
    component of force protection. The U.S. Army Armament Research,
    Development and Engineering Center and the U.S. Army Test and
    Evaluation Command have streamlined technical development and
    operational assessment processes to ensure rapid integration of
    solutions into the forces in contact. The U.S. Army Training and
    Doctrine Command (TRADOC) leads Army-wide integration of these force
    protection solutions by incorporating successful tactics and materiel
    into the training base as well as ongoing assessments focused on
    development of protection capabilities for the future force.

        77. Senator Kennedy. Secretary Harvey and General Schoomaker, what
    actions have you taken to anticipate threats and force protection needs
    more effectively?
        Secretary Harvey and General Schoomaker. The Army is striving to
    foster an adaptive culture and maintain the agility in our systems/
    processes necessary to keep pace with a thinking enemy. We recognize
    that it is impossible to anticipate, or resource to, all possible
    contingencies. We also know that when our troops are successful in
    achieving superiority against an enemy's preferred tactics and weapons,
    we will be confronted with new combinations. Our goal is to be able to
    react to the changing threats quickly and thus force the enemy into
    increasingly less effective modes of operation.
        Increased communication between deployed forces and the
    institutional Army is critical to improving our ability to react to the
    changing threat environment. We have instituted regular video-
    teleconferences and key leader visits forward to ensure that field
    commanders have access to air concerns and share insights with the
    senior decisionmakers. Additionally, TRADOC, the U.S. Army Materiel
    Command, Corps of Engineers, the U.S. Army Intelligence Support
    Command, and other support organizations have established liaison
    elements in theater with reachback capability to pull information
    forward and focus home station analysis and mission support planning.

        78. Senator Kennedy. Secretary Harvey and General Schoomaker, what
    is the Army process for evaluating battle damaged vehicles to determine
    design weaknesses or opportunities for improvement to prevent future
    losses?
        Secretary Harvey and General Schoomaker. [Deleted.]

        79. Senator Kennedy. Secretary Harvey and General Schoomaker, how
    many of these vehicles were damaged or destroyed by IEDs?
        Secretary Harvey and General Schoomaker. [Deleted.]

        80. Senator Kennedy. Secretary Harvey and General Schoomaker, what
    should we do to improve their survivability?
        Secretary Harvey and General Schoomaker. [Deleted.]

                                soldier benefits
        81. Senator Kennedy. Secretary Harvey and General Schoomaker,
    during the hearing there was considerable discussion about strain on
    the Army and the potential need for increased end strength. At one
    point you responded that even if the Army increased end strength, it
    would be difficult to achieve in view of recruiting challenges. If this
    is the case, then isn't it in our interest to make our best efforts to
    retain the force, particularly the mid-grade NCOs and officers so
    critical to leading the soldiers?
        Secretary Harvey and General Schoomaker. The Army is retaining
    soldiers at exceptionally high levels. Since 2002, we have exceeded our
    total Army retention goals every year, culminating with 106 percent of
    our combined (AC, USAR, and ARNG) overall Army goal in 2005. In a time
    of war, and with the pace of current operations, this is a significant
    indicator of the quality of leadership within our ranks, the fact that
    soldiers believe in what they are doing and value the traditions of
    service to the Nation. Moreover, all components are employing positive
    levers including force stabilization policy initiatives, updates to the
    reenlistment bonus program, targeted specialty pays, and policy updates
    to positively influence the retention of our soldiers, especially the
    midgrade noncommissioned officers.
        Active component officer retention has taken on renewed interest
    not because of an increase in officer loss rates, but because of a
    significant force structure growth. As a result of the new structure,
    the Army is short roughly 3,500 Active component officers, primarily
    senior captains and majors. Since it takes 10-years to promote an
    officer to major, we are confronted with the challenge of retaining
    more officers than we've done in the past.
        The Reserve component is also experiencing shortage of officers. To
    date, we are experiencing a shortage of roughly 11,000 captains. This
    isn't because of force structure changes, but instead is a result of
    many years where our officers haven't been completing the necessary
    civilian (e.g. baccalaureate degree) or military education (completion
    of their basic course).
        The Army is being proactive and we are working several initiatives
    to retain more of our best and brightest officers. These initiatives
    include higher promotion rates, earlier promotion pin-on points,
    expanded graduate school opportunities, branch and posting for Active
    service, and establishment of an officer critical skills retention
    bonus. In addition, we are implementing better management programs for
    encouraging officers to complete their civilian and military education.

        82. Senator Kennedy. Secretary Harvey and General Schoomaker, in
    that case, it would seem that we would want to maintain the benefits
    that Congress has worked, in a bipartisan manner, to establish. If we
    want to retain these leaders, why isn't it appropriate to increase the
    TRICARE cost-share for some retirees?
        Secretary Harvey and General Schoomaker. Congress' and the DOD's
    decision to make no upward adjustments in beneficiary out-of-pocket
    costs for over 11 years was very helpful to military families. We
    believe now is the time to begin to act in order to preserve the
    comprehensiveness of the military health benefit for all categories of
    beneficiaries into the future. The DOD designed the proposed cost-
    shares to ensure no out-of-pocket increases for soldiers, minimal
    changes in pharmacy copayments for Active-Duty family members, and to
    renorm retiree cost-shares to 1995 levels. Further, the DOD agreed that
    we should tier retiree cost-shares so junior enlisted retirees do not
    have to pay the same cost-shares as officers. Delaying these
    adjustments will only force more extreme increases in the future and
    have the potential to consume a larger portion of the budget that is
    needed for modernization and readiness programs.

        83. Senator Kennedy. Secretary Harvey and General Schoomaker, don't
    you think the soldiers who are making career decisions will see a
    change in their retirement benefits as breaking the faith with them?
        Secretary Harvey and General Schoomaker. A recent survey by the
    U.S. Army Research Institute (ARI) suggests that retirement benefits
    and the continuation of benefits may affect retention. Of the top six
    reasons for enlisted soldiers thinking of, or planning on, leaving the
    Army before retirement, number six was retirement benefits. While the
    report indicates retirement benefits as a factor that may affect
    retention, we have no detailed data that quantifies the impact of
    changes in TRICARE costshares on retention. The conclusion seems
    logical based upon this and anecdotal evidence that suggests retirement
    benefits are important to retention and any perceived erosion in
    benefits could, in fact, negatively impact retention. To mitigate the
    negative impacts these changes may have on retention, we have to do a
    good job of educating soldiers and retirees on the need for these
    changes. We believe we can overcome the negative impacts of these
    proposals by demonstrating that TRICARE will remain a superb health
    benefit for all soldiers, Active and retired, and their families. Even
    after these changes, TRICARE will remain a very affordable healthcare
    option for retirees. Without these changes we risk an erosion of the
    Department's ability to invest in readiness, modernization, and
    training due to increased healthcare costs.

                             recruit qualification
        84. Senator Kennedy. General Schoomaker, in your testimony, you
    mentioned that only 30 percent of the age cohort for recruiting is
    eligible to join the Army. The Army has a variety of qualifications for
    new enlistees. Which qualifications are most commonly lacking in the
    other 70 percent?
        General Schoomaker. It is estimated that the 17-24 year old
    recruiting market is 32.1 million of which 30 percent are fully
    eligible and 15 percent are eligible with waiver. Of the remaining 55
    percent, 11.2 million (35 percent) are disqualified for moral,
    dependent, and/or overweight reasons and 6.4 million (20 percent) are
    disqualified for medical reasons.

                           army laboratory personnel
        85. Senator Kennedy. Secretary Harvey, Army research labs (like the
    Natick Soldier Center) are making great contributions to the
    development of new technologies and capabilities that we are currently
    fielding in Iraq and Afghanistan. Systems like new body armor, up-
    armored vehicles, robots, and sensors are all growing from research
    done by government scientists in defense labs.
        Congress has tried to support the laboratories by granting them the
    authority to develop unique, flexible personnel systems that allow them
    to successfully compete with high tech industries for talented
    scientists and engineers. These are known as laboratory personnel
    demonstration programs and have been considered highly successful.
        I am concerned that the implementation of the National Security
    Personnel System (NSPS) on these laboratories may adversely affect the
    labs' ability to keep the best possible workforce.
        Have you asked your lab directors for their views on the possible
    implementation of NSPS on the laboratories and how it will affect their
    ability to perform their critical missions?
        Secretary Harvey. Yes, we have held two meetings with our
    laboratory directors to obtain their views and to consider their
    comments/questions on the NSPS. The NSPS PEOs participated in these
    sessions and they were well received by Army laboratory directors.
    There has been an open dialogue with Army laboratory directors and
    their representatives and the Office of the Assistant Secretary for
    Acquisition, Logistics, and Technology regarding their views of the
    impact of NSPS implementation. While the details of NSPS implementation
    are not yet finalized, we are hopeful that the NSPS will incorporate
    many of the flexibilities and authorities currently enjoyed by our
    laboratory demonstrations. Section 9902(c) of title 5, U.S.C. provides
    that the NSPS will apply to the designated DOD STRLs on or after
    October 1, 2008, only to the extent that the Secretary of Defense
    determines that the flexibilities provided by NSPS are greater than
    those under the STRL demonstration project authority. The Natick
    Soldier Center, although not currently designated as a demonstration
    laboratory, has recently made application for that status. In the end,
    we want all of our laboratories to continue to be able to recruit and
    retain the best possible scientific and technical workforce possible,
    whether as a continuing laboratory demonstration or as a part of the
    NSPS.

        86. Senator Kennedy. Secretary Harvey, have you done a comparative
    analysis for the Army on whether the NSPS system or the current lab
    personnel demonstration program systems provides the labs with more
    flexibility in attracting and retaining the finest possible workforce?
        Secretary Harvey. The Army has not completed a separate, formal
    comparative analysis between NSPS and laboratory demonstration systems.
    Rather, the Army has participated in the Secretary of Defense's effort
    in response to Section 1107 of the Ronald W. Reagan National Defense
    Authorization Act for Fiscal Year 2005 (Public Law 108-375), that
    required the development of a plan for a comparative evaluation of the
    flexibilities of the authorities provided to the Secretary of Defense
    for STRLs and for NSPS. The section 1107 report has been coordinated
    with the Army and jointly developed by the Under Secretary of Defense
    (Acquisition, Technology, and Logistics) and the Under Secretary of
    Defense (Personnel and Readiness). The report is in coordination within
    the DOD and it is expected to be released shortly.
        As background, the Army, along with the Office of the Secretary of
    Defense (OSD) and the other components, has worked closely with NSPS
    authorities since 2003. The Army ensured STRLs and acquisition
    demonstration participation in the NSPS planning and design. For
    example, OSD led cross-component workgroups in 2003 to identify ``best
    practices'' from the demonstration experiences. The results of this
    effort were also used to help frame the OSD NSPS legislative language
    that was approved in the National Defense Authorization Act for Fiscal
    Year 2004. Since that time, Army has worked closely with the STRLs,
    acquisition communities, and NSPS program office in developing the DOD
    NSPS regulations, implementing issuances, and supplementing Army
    policies. Every authority (e.g. pay for performance, pay banding,
    staffing, and compensation considerations) that the demonstration
    projects include has been thoroughly analyzed, discussed, and
    considered in the design of NSPS.

        87. Senator Kennedy. Secretary Harvey, when you complete that
    analysis, will you share the results with Congress?
        Secretary Harvey. Yes. The section 1107 report will be given to
    Congress after the coordination within the DOD is complete. The
    comparative analysis and evaluation described in the pending section
    1107 plan to support the Secretary of Defense determination is
    currently planned for 2008, but it is an event-driven process. Once the
    Secretary's determination is made, Congress will be provided a copy of
    the results of the evaluation.
                                     ______

               Questions Submitted by Senator Joseph I. Lieberman
                                   recruiting
        88. Senator Lieberman. Secretary Harvey and General Schoomaker, by
    my count, 2005 was the Army's worst year for recruiting since 1999.
    Last year, the Army fell short of its goal by about 6,600 new recruits.
    You have stated that the Army is not having a recruiting crisis, since
    it has met its goals for the last 7 months. However, the Army has
    backloaded its recruiting targets to rely heavily upon the third and
    fourth quarters of the year. Although it makes sense to focus
    recruiting in the summer months, this shift also adds high risks if
    recruiting in the summer months does not materialize. I am concerned
    because in the past, higher retention rates have made up the recruiting
    shortfalls, but reenlistment rates have sagged recently as well.
    Concerning this issue, I have several questions about recruitment and
    retention I would like to ask: Can you give me exact numbers of monthly
    recruiting targets and tell me how the Army is progressing towards its
    full-year goal of recruiting 80,000 new soldiers? How does the number
    of recruits enlisted so far compare to this time last year?
        Secretary Harvey and General Schoomaker. Monthly recruiting targets
    for fiscal year 2006 are as follows: October is 4,700, November is
    5,600, December is 700, January is 8,100, February is 6,000, March is
    5,200, April is 5,400, May is 5,400, June is 8,600, July is 10,450,
    August is 10,050, and September is 9,800. The total mission is 80,000.
        As of the end of January 2006, the Army was at 104 percent of its
    year-to-date recruiting target. At the same time in fiscal year 2005,
    the Army had recruited 22,305 new recruits as compared to 19,859 in
    fiscal year 2006. However, the increased production is most evident in
    the number of contracts written, which includes soldiers who have
    reported for duty and those who are still waiting to ship later in the
    year. As of the end of January 2006, the Army had written 5,500 more
    contracts than at the same time in fiscal year 2005. This is a 28
    percent increase due to the increased number of recruiters, higher
    incentives, new initiatives, and improved marketing/advertising.
    Therefore, even though the number of accessions is fewer than at this
    time last year, the Army is better postured to achieve its mission of
    80,000 new recruits than we were at this time last year.

        89. Senator Lieberman. Secretary Harvey and General Schoomaker, is
    the Army experiencing an erosion of the percentage of soldiers
    reenlisting?
        Secretary Harvey and General Schoomaker. The Army is retaining
    soldiers at exceptionally high levels. Since 2002, we have exceeded our
    total Army retention goals every year, culminating with 106 percent of
    our combined (AC, USAR, and ARNG) overall Army goal in 2005. In a time
    of war and with the pace of current operations, this is a significant
    indicator of the quality of leadership within our ranks, the fact that
    soldiers believe in what they are doing and value the traditions of
    service to the Nation. The Active Army retained 69,512 soldiers in
    fiscal year 2005, finishing the year at 108 percent of mission, up from
    107 percent in fiscal year 2004. The Army Reserve finished fiscal year
    2005 at 102 percent, up from 99 percent in fiscal year 2004, and the
    ARNG finished fiscal year 2005 at 104 percent, up from 99 percent in
    fiscal year 2004. All components are employing positive levers
    including force stabilization policy initiatives, updates to
    reenlistment bonus programs, targeted specialty pays, and policy
    updates to positively influence the retention program. Ultimately, we
    expect to achieve fiscal year 2006 retention success in the Active
    Army, the ARNG, and the United States Army Reserve. Thus far, the
    Active Army has achieved 109 percent of the year-to-date mission, while
    the Army Reserve has achieved 91 percent of the year-to-date mission
    and the ARNG has achieved 106 percent of their year-to-date mission.

        90. Senator Lieberman. Secretary Harvey and General Schoomaker, do
    you agree with the conclusions of a RAND Corporation study, released in
    December 2005, which found that personnel shortages have led to an
    unwieldy ``operations tempo'' and job burnout?
        Secretary Harvey and General Schoomaker. While the Army is
    deploying thousands of soldiers every year, there are certain
    specialties that are experiencing a higher personnel deployment tempo
    than others based on increased demands for those specialties in theater
    combined with shortages in the inventory. The Army monitors soldiers
    through the use of surveys and has concluded the number and frequency
    of deployments and time away from family, to include long garrison work
    hours, is the number one factor impacting retention. Although many
    soldiers choose not to reenlist for the reasons cited above, the Army's
    overall retention rate remains high. Since 2002, we have exceeded our
    total Army retention goals every year, culminating with 106 percent of
    our combined (AC, USAR, and ARNG) overall Army goal in 2005. The Active
    Army retained 69,512 soldiers in fiscal year 2005, finishing the year
    108 percent of mission. The Army Reserve finished the year 102 percent
    of mission and the ARNG finished at 104 percent of mission. All three
    components are on track for fiscal year 2006 mission accomplishment.

                        promotion/retention correlation
        91. Senator Lieberman. Secretary Harvey and General Schoomaker, in
    2005, the Army promoted 97 percent of all eligible captains to the rank
    of major. This percentage is up from the historical average of 70
    percent to 80 percent. The Army also promoted 86 percent of eligible
    majors to the rank of lieutenant colonel last year, in comparison to
    the historical average of 65 percent to 75 percent. I know that the
    Army has taken great pride in the competitiveness of its promotions.
    Although our servicemen and women are the best and brightest in the
    history of the Army, I am concerned that the higher rates of promotion
    are partially a response to the higher numbers of officers who are
    resigning from the Army and the need to create more combat units
    without an overall expansion. For example, lieutenants and captains
    left the Army in 2005 at a rate of 8.6 percent, up from 6.3 percent in
    2004. The rate of exit in 2005 for lieutenant colonels was 13.7
    percent, the highest in a decade. Is the increased promotion rate a
    reflection of the fact that many of our officers, when faced with a
    third year-long combat tour in Iraq, are deciding not to stay?
        Secretary Harvey and General Schoomaker. Company grade loss rates
    (lieutenant and captain) for fiscal year 2005 was 8.55 percent,
    slightly below the Army average of 8.64 percent (fiscal years 1996-
    2004). First quarter, fiscal year 2006 company grade loss rates were
    8.4 percent. Immediately following September 11, 2001, company grade
    loss rates were at historical lows: 7.08 percent and 6.29 percent
    respectively. The 3 years prior to September 11, 2001, company grade
    loss rates averaged 9.8 percent.
        The average loss rate for the past 10 years for colonel, lieutenant
    colonel, and major was 16.93 percent, 11.67 percent, and 7.4 percent
    respectively. The fiscal year 2005 loss rates for colonel, lieutenant
    colonel, and major were 17.9 percent, 13.7 percent, and 7.0 percent,
    respectively. Like the company grade loss rates following September 11,
    2001, the loss rates for field grade officers dropped significantly.
    Current loss rates for these grades are back in line with pre-September
    11, 2001, rates.
        The overall authorizations for the Active component category have
    increased by over 3,500 officers. This has increased requirements for
    promotion. While current promotion rates are higher than the historical
    average, officers who are not deemed fully qualified by the board
    members are not selected for promotion.

                   recruiting practices targeted at hispanics
        92. Senator Lieberman. Secretary Harvey and General Schoomaker, as
    the co-chair of the Senate Democratic Hispanic Task Force, I'd like to
    ask a few questions about the Army's efforts to increase the
    recruitment of Latinos. I believe that the Army's dedication to
    increasing the numbers of Hispanics in the Army's Active-Duty Force is
    important, since Hispanics historically have been underrepresented in
    our military. To achieve the goal of recruiting more Hispanics into our
    Armed Forces, I am concerned about press reports which call into
    question the tactics recruiters are using with Hispanics. Although
    recruiters do not lie to potential recruits and their families, there
    are complaints that they may not tell the entire story or avoid
    explaining the intricacies of the process. Furthermore, there is
    concern that Hispanics in the military do not ascend into leadership
    positions. Currently, Hispanics only comprise 4.7 percent of the
    military's officer corps, although they make up 10.8 percent of the
    Army's Active-Duty Force. Can you comment on your recruiting practices
    targeted at Hispanics?
        Secretary Harvey and General Schoomaker. As America becomes more
    diverse, the Army is working hard to keep pace and offer opportunities
    for everyone. The Army is working hard to increase the number of
    Hispanic recruits. The Army, during this fiscal year, added more than
    $10 million to its recruiting budget this year for advertising aimed at
    Hispanic audiences. The Army is running ads in Spanish and English in
    publications with high Hispanic readership, as well as running ads on
    several major Spanish-speaking television networks in the United States
    and Puerto Rico.
        The Army also participates in conferences of major Hispanic
    professional and cultural organizations. We give presentations and set
    up booths so interested individuals can meet with Hispanic
    servicemembers and learn about opportunities in the Army. Additionally,
    the Army participates in the annual conferences of such organizations
    as the League of United Latin American Citizens, the Hispanic
    Engineering National Achievement Awards Convention, the United Council
    of LaRaza, and the Mexican American Engineers Society.

        93. Senator Lieberman. Secretary Harvey and General Schoomaker, to
    what extent has the Army investigated allegations of misconduct in the
    recruiting process?
        Secretary Harvey and General Schoomaker. We take all allegations of
    recruiter impropriety seriously, and despite violations from time to
    time, recruiters continue to uphold Army values and understand the
    importance of recruiting with integrity. The United States Army
    Recruiting Command (USAREC) conducts these investigations in order to
    maintain a force of recruiters who recruit with honesty and integrity
    every day. USAREC investigates each allegation, and takes appropriate
    actions based on the result of the investigation. Historically, data
    shows that USAREC identifies and reports over 80 percent of allegations
    through its checks and balances.
        It is unfortunate that some recruiters occasionally take shortcuts
    in order to help some young people answer the call to duty. The USAREC
    philosophy is to achieve our recruiting mission by recruiting everyday
    with honesty and integrity.
        There are 6,484 Active Army recruiters, 1,863 Army Reserve
    recruiters, and 5,047 ARNG recruiters in cities and towns across
    America. The vast majority of them embody the Army values of loyalty,
    duty, respect, selfless service, honor, integrity, and personal
    courage.

        94. Senator Lieberman. Secretary Harvey and General Schoomaker,
    what were the findings of such investigations?
        Secretary Harvey and General Schoomaker. At the conclusion of a
    thorough investigation into each allegation by an investigating officer
    and a legal review by a judge advocate or civilian attorney advisor, a
    commander makes the factual decision to substantiate or unsubstantiate
    the allegation. The commander reviews each investigative file
    individually and decides if a particular allegation is proven by a
    preponderance of the evidence. The commander takes into consideration
    rebuttal statements submitted by the respondent, the investigating
    officer's recommendation, and the recommendation of the reviewing judge
    advocate or civilian attorney-advisor. Either a brigade commander or
    the commanding general makes the decision to substantiate or
    unsubstantiate an allegation. Once this decision is made, the deciding
    commander determines an appropriate disposition on a case-by-case
    basis. USAREC regulations and policies differentiate cases requiring
    commanding general action from those the brigade commanders can act
    upon.
        In fiscal year 2005, there were 835 allegations received. Of these,
    825 are closed with 123 (14.9 percent) closed as substantiated. There
    were 364 recruiting personnel who received some form of admonishment
    and 42 recruiters relieved based upon these allegations. To put this in
    perspective, 0.20 percent of the recruiting force was relieved for
    allegations of recruiting impropriety.

        95. Senator Lieberman. Secretary Harvey and General Schoomaker,
    what is being done in the Army to encourage Hispanics to move into
    leadership roles within the Army?
        Secretary Harvey and General Schoomaker. The Army's Equal
    Opportunity (EO) policy does not target one ethnicity over any other.
    Conversely, the Army seeks the best and most qualified personnel for
    each and every position.
                                     ______

                    Questions Submitted by Senator Jack Reed
                      army science and technology programs
        96. Senator Reed. Secretary Harvey, the Army's request for science
    and technology (S&T) programs is actually down by $16 million with
    respect to last year's request, as well as down over $1.3 billion with
    respect to the 2006 enacted level. How is this reduction consistent
    with the need to continue the Army's transformation?
        Secretary Harvey. With the Army fully engaged in the global war on
    terror, we are consistently challenged to satisfy the resource demands
    to sustain current operations while simultaneously maintaining our S&T
    investments in the most important technologies to enable capabilities
    for the future modular force. While the fiscal year 2007 request is
    very slightly below last year's request (less than 1 percent), we
    believe that our request for $1.7 billion in S&T funding represents a
    significant investment that is focused on satisfying priority needs of
    the future modular force while presenting opportunities to spiral new
    technologies into the current force.

        97. Senator Reed. Secretary Harvey, what areas of S&T are
    underfunded as a result of this request?
        Secretary Harvey. The Army S&T program is adequately funded
    consistent with ability to mature technologies synchronized with
    acquisition program funding to accept new technology into current
    programs in development or sustainment.

        98. Senator Reed. Secretary Harvey, what areas of S&T have been
    reduced in investment with respect to the 2006 request and why were
    these areas reduced?
        Secretary Harvey. The appearance of reduced investment in S&T
    funding for selected programs often reflects accomplishing desired
    maturation and transition of technology. Examples from 2006 include the
    successful completion of a major S&T program, compact kinetic energy
    missile and the successful transition of non line-of-sight launch
    system (NLOS-LS) technologies to the NLOS-LS SDD phase of this
    acquisition program.

        99. Senator Reed. Secretary Harvey, please provide a prioritized
    list of unfunded S&T opportunities that can be used as the committee
    considers the fiscal year 2007 budget request.
        Secretary Harvey. Although the Army S&T program is adequately
    funded, if Congress were to provide additional S&T funds, we would
    pursue additional research in the areas of: 1) alternatives to current
    approaches for increased tactical wheeled vehicle survivability; 2)
    advanced tracking and fire control for mobile counter rockets and
    mortar systems; 3) additional novel warhead interceptor concepts for
    active protection against kinetic energy munitions; and 4) alternative
    battery chemistries to increase the energy density and reduce weight.

                                promotion rates
        100. Senator Reed. Secretary Harvey, I am concerned with reports of
    junior officer attrition with simultaneous officer promotion rates
    significantly greater than historical averages. Last year 97 percent of
    eligible captains were promoted to major. With promotion rates there is
    no process of ensuring only the best officers are promoted. How is the
    Army ensuring only qualified officers are being promoted?
        Secretary Harvey. The Secretary of the Army, in his instructions to
    the promotion board, directs that the board select officers who will
    make the greatest contribution to our Army in the years ahead. In all
    cases the board satisfies itself that an officer is qualified
    professionally and morally, has demonstrated integrity, is physically
    fit, and is capable of performing the duties expected of an officer
    with his or her career field and skill qualifications in the next
    higher grade. While current promotion rates are higher than the
    historical average, officers who are not deemed fully qualified by the
    board members are not selected for promotion.

                                   biometrics
        101. Senator Reed. General Schoomaker, I understand that you are
    the Executive Agent for DOD biometrics with responsibility delegated to
    the Army Chief Information Officer. Biometrics technologies will play a
    key role in developing new tools to defeat terrorists. What are you
    requesting in the fiscal year 2007 budget for research, development,
    procurement, and operation of biometric technologies?
        General Schoomaker. The Secretary of the Army is the Executive
    Agent for DOD biometrics, with responsibility delegated to the Army
    Chief Information Officer (G-6). The total Army funding request in
    fiscal year 2007 for biometrics and intelligence analysis support to
    biometrics is $132.7 million. The total Executive Agent investment for
    biometrics technology development request in fiscal year 2007 is $14.5
    million (research, development, test, and evaluation appropriation),
    procurement $1.4 million (other procurement, Army appropriation) and
    operations $11.8 million (operations and maintenance Army
    appropriation). The Army G-2 investment for intelligence related
    research and development is $4 million, $13 million for operations
    maintenance Army and $8 million for other procurement, Army. The U.S.
    Army Intelligence and Security Command requested $80 million:
    operations and maintenance Army appropriation for contractor analysis
    $50 million; contractor forensics $10 million; and software and
    equipment $20 million.

                    special operations forces--civil affairs
        102. Senator Reed. General Schoomaker, it is my understanding that
    one element of the QDR-based plan for the Army is to move Reserve Civil
    Affairs (CA) components from Special Operations Command (SOCOM) and put
    them under the command of regular Army units.
        However, I understand that some special operators are concerned
    that conventional Army officers commanding these CA components may not
    understand their special capabilities. This could have a negative
    impact on Reserve CA professional advancement and readiness, as
    conventional officers would write their fitness reports, and might
    assign them conventional duties instead of taking advantage of their
    unique skills. There is also concern about whether they would be
    equipped to the same standard as Active-Duty CA.
        Can you confirm that Reserve CA units will be placed under
    conventional Army commands? If so, how would you prevent this from
    having the negative impacts I mentioned that are feared by some special
    operators?
        General Schoomaker. One of the recommendations identified in the
    QDR is for the Army to rebalance the CA and psychological operations
    (PSYOP) forces. To accomplish this, the Army is growing the size of the
    CA and PSYOP forces by more than 3,700 positions in order to provide a
    greater depth of capability for both Special Operations Forces (SOF)
    and conventional forces. We are also realigning the USAR CA and PSYOP
    forces from U.S. Army Special Operations Command to the U.S. Army
    Reserve Command to better support the modular conventional force
    organizations at all levels. Based on the level of support required,
    the Army Force Generation model will be used to identify and align the
    appropriate USAR unit with a conventional force organization prior to
    operational deployment. This allows the CA and PSYOP units to train
    with and fully integrate into the supported unit. By integrating CA and
    PSYOP into the supported unit early, those soldiers will also become
    adept at including the civil-military aspect into all of their
    operations from mission planning through execution. The Active
    component CA and PSYOP units will primarily support SOF units and
    missions. This realignment provides the correct force mix and enhances
    CA and PSYOP support to the full spectrum of Army missions.

        103. Senator Reed. General Schoomaker, would SOCOM continue to
    equip Reserve CA units or would these units have to compete with all
    the other Army specialties or units for equipment? If so, would they be
    equipped to the same standard as Active-Duty CA under SOCOM?
        General Schoomaker. The Army will continue equipping Reserve CA
    units in accordance with Army resourcing priorities in support of the
    Army Campaign Plan and Army force generation requirements. We will
    transfer the funding stream for equipping Reserve CA units from the
    U.S. Army Special Operations Command to the U.S. Forces Command. The
    Army will transform CA units into two types that are designed and
    equipped to fully integrate, communicate, and operate with the forces
    they support. Active CA units will be designed to support
    unconventional forces, and Reserve CA units will be designed to support
    conventional forces. Reserve and Active CA units will receive the same
    level of modernization for common equipment. Reserve CA units will not
    receive equipment that is unique to supporting unconventional forces
    because their mission design will not require it.
                                     ______

                 Questions Submitted by Senator Daniel K. Akaka
                               corrosion control
        104. Senator Akaka. Secretary Harvey, I am concerned that the
    expenditures necessary to develop the Army's FCS is diverting funds
    necessary to adequately maintain equipment currently in use,
    particularly with regard to corrosion control. Many of these advanced
    technologies will not be available for several years but the Army needs
    reliable equipment, today, in order to properly conduct its current
    operations. Will you commit to providing all necessary funding for the
    Army's current corrosion control program?
        Secretary Harvey. The Army will use corrosion prevention
    technologies (CPTs) in fiscal year 2007 and beyond, to protect tactical
    vehicles, aircraft and missile and armaments systems and support
    equipment. Promising technology categories include clear water rinse
    systems, cable connector covers to extend the life of wiring harnesses,
    nondestructive testing to identify hidden corrosion while it is
    inexpensive to repair, and preventive maintenance treatments to
    increase corrosion resistance of tactical vehicles and support
    equipment. Approximately 11,000 tactical vehicles were completed in
    fiscal year 2005 and approximately 800 aircraft (one-third of Army's
    fleet) have undergone corrosion prevention during reset.
        The Army's largest investment is in standardized processes to
    control corrosion at the Corrosion Control Centers. These centers are
    installed at a cost of approximately $2 million. Baseline operations
    costs are projected at $1.5 million per site ($0.5 million for
    facilities and $1.0 million for equipment applications) per year. Fixed
    facilities currently exist at Schofield Barracks, Hawaii; Fort Hood,
    Texas; Fort Polk, Louisiana; and Fort Bragg, North Carolina. Mobile
    application facilities exist at eight additional sites. Corrosion
    prevention treatments are also applied during reset and depot
    maintenance at Army depots and contractor sites. Discussions have been
    held to establish more Corrosion Control Centers.
        GAO reports have shown that the return on investment/cost avoidance
    for corrosion prevention efforts is at least 4 to 1. The Army's CPT
    efforts will ensure that the Army efficiently meets the equipment
    readiness goals needed to sustain current and future contingency
    operations.

                                waste prevention
        105. Senator Akaka. Secretary Harvey, the Army is requesting
    funding and authorities for Army business transformation initiatives
    which, you argue, will free human and financial resources for more
    compelling operation needs. Can you tell me specifically how these
    initiatives will address the issue of award and incentive fees being
    paid out to contractors who have not met their performance goals?
        Secretary Harvey. In light of the recent GAO report addressing the
    payment of award and incentive fees, the Department has issued a new
    policy memorandum dated March 29, 2006, Award Fee Contracts (FAR 16,
    DFARS 215, and DFARS 216). The recently issued guidance was a direct
    result of several of the recommendations from the GAO. Specifically, 1)
    award fees should be linked to identifiable interim outcomes, discrete
    events or milestones; 2) award fees must be commensurate with
    contractor performance; and 3) rollover of award fees should be used on
    an exception basis and adherence to strict guidance govern their usage.
    This new policy will apply to all contracts incorporating award and/or
    incentive fees clauses including any contracts supporting the various
    business transformation initiatives pursued by the Army.

        106. Senator Akaka. Secretary Harvey, what can you commit to doing
    right now in order to prevent further waste of taxpayer dollars?
        Secretary Harvey. As an immediate step, I have ordered the largest
    deployment of Lean Six Sigma ever attempted. This effort is underway
    with training, education, and process selection. Projects will be both
    centrally sponsored for crosscutting initiatives as well as command
    specific; a combined top-down and bottom-up approach to accelerate the
    transformational effect. The result will be reduced cost and cycle time
    while increasing quality, production, and reliability.
        On a more systemic basis, our business transformation initiatives
    include Continuous Process Improvement using the Lean Six Sigma
    methodology, Business Situational Awareness, Organizational Analysis
    and Design, and Professional Development.
        Business Situational Awareness is the product of timely and
    accurate information to support policy and resource allocation systems.
    These enterprise information solutions will provide Army leaders
    clarity on systems and processes where today it is difficult to
    observe.
        Organizational Analysis and Design examines functions and structure
    of organizations, then redesigns and realigns organizational elements
    as necessary to accomplish the mission/work assigned. This analysis,
    design, and alignment will reduce redundancies and ensure organizations
    can effectively and efficiently fulfill the needs of our warfighters.
        Professional Development of Army leaders is critical to successful
    business transformation and the Army is examining ways to broaden the
    education, training, and experience of our officers and civilians to
    meet the complex challenges of leading the Army business enterprise.
    This initiative area will help educate and develop leaders of Army
    enterprises so that they are fully prepared for the challenges of
    leading the Army's complex business organizations.
        To ensure these efforts are successful and to highlight their
    importance, I have appointed Michael Kirby to lead this endeavor as the
    Deputy Under Secretary of the Army for Business Transformation.

                              reserve deployments
        107. Senator Akaka. Secretary Harvey, according to the Army's 2006
    posture statement one of your goals is to implement a strategy of one
    operational deployment in 6 years for the Reserve component. Do you
    anticipate that these deployments will extend beyond the 24 consecutive
    months currently authorized by law for the involuntary activation of
    members under partial mobilization?
        Secretary Harvey. No, deployments under the Army Force Generation
    model would not exceed the limits of existing law. The Army Force
    Generation is a training and readiness model that would generate a
    continuous output of trained and ready forces that will support one
    operational deployment in 6 years for the Reserve component. The model
    does not change the length of operational tours.

        108. Senator Akaka. Secretary Harvey, what support services will be
    available to the family members of reservists who are on extended
    employment keeping in mind that they may not live within close
    proximity to any military facilities?
        Secretary Harvey. The Army Reserve is constantly evaluating the
    programs that support our soldiers' families. Several initiatives and
    partnering ventures reflect Army Reserve leadership and family
    programs.
        The Army Reserve has 141 family programs employees providing
    services to Reserve component soldiers and their families. They are
    responsible for monthly contact with unit leaders and our family
    readiness groups (FRO). Some of the family programs are:

             Army Family Team Building (AFTB) is designed to
            provide skills and knowledge for living within the unique
            framework of Army life. This training improves personal and
            family preparedness; which in turn, enhances overall Army
            readiness.
             Operation READY (Resources for Educating About
            Deployment and You) curriculum is a series of training modules,
            videotapes, and resource books published for the Army as a
            resource for staff in training Army families who are affected
            by deployments.
             Army Reserve Family Programs web portal provides
            service and vital information around the clock from anywhere in
            the world. It is a one-stop site for information and referral
            to military and community resources. The portal contains up-to-
            date information on benefits and entitlements, news and new
            programs. There are links to information from free financial
            planning, nearest locations for identification card issuance/
            renewal, DOD healthcare, the Red Cross, and Military OneSource.
            Military OneSource is available 24-hours a day, 7-days a week,
            toll-free 1-800-464-8107.

        We continue to capitalize on technology that's readily available in
    the soldier's home, or from the local library, a family member's work,
    or Internet cafes located in the neighborhood. A new Army-wide
    initiative, known as the virtual FRO, designed to support and improve
    how information is passed to families when soldiers are deployed, was
    launched October 1, 2005, on the Internet. The virtual FRO is designed
    to replicate the major components of an FRO but in a virtual context.
        There are several initiatives underway in the Army Reserve to
    provide premium support our Children and Youth Services. Some of the
    projects they are participating in are as follows:

             Community-based child care enables families to access
            an array of child care options regardless of physical location.
            Child care fees are reduced up to 25 percent of the
            participating family's local rate.
             Operation Military Kids focuses children of mobilized
            parents. It will include building community networks of support
            and creating broader understanding of the challenges of
            military life and separation throughout the communities and
            States. Operation Military Kids teams in various States will be
            trained in understanding military culture.
             Operation Proud Parents raises the quality standards
            at selected Boys and Girls Clubs of America (B&GCA).
             Operation Child Care is a nation-wide initiative to
            provide short-term ``respite and reunion child care'' for
            children of servicemembers returning from OIF and OEF during
            R&R leave. Care is coordinated through the National Child Care
            Resource and Referral Association.
             Families who live near a military installation can
            participate in Operation: Military Child Care. This initiative
            provides installation based child care available during
            soldiers' R&R leave. This allows families a ``night out'' and
            day-time opportunities to attend to personal business.

        The National Military Family Association's Operation Purple offers
    summer camps around the country. The camps were made possible by a
    grant from Sears as part of the Sears American Dream Campaign. The
    program allowed youth from all branches of service to interact and
    learn from each other in an effort to help deal with deployment-related
    stress.
        The Military Child Education Coalition has designed training for
    educators of military children. The training focuses on the issues that
    Army Reserve and National Guard youth face when a parent is mobilized
    and deployed. The training will be piloted in Texas starting in
    October. Additionally, several States have requested information and
    are developing their own training modules.
        I cannot talk about family readiness without mentioning our Army
    Reserve Strong Bonds workshops (marriage enrichment weekends) for
    soldiers and their spouses after deployment. All Regional Readiness
    Commands and Direct Reporting Commands receive funding through the
    office of the command chaplain to host their own events. Additionally,
    chaplains are available to soldiers and their families for counseling
    and support.
        We continue to look for ways to maintain a broad based approach to
    ensure our family members are cared for with a variety of opportunities
    while their soldiers are deployed.

        109. Senator Akaka. Secretary Harvey, what impact do you believe
    these extended deployments of members of the ARNG, in particular, will
    have on a State's ability to respond to natural disasters or civil
    disorders?
        Secretary Harvey. The main mission of the National Guard is
    homeland defense. The President, Governors, Congress, and the Secretary
    of Defense have clearly insisted that the Guard be fully prepared to
    engage in homeland defense and to support homeland security missions
    while simultaneously engaged in combat overseas; in fact, they insist
    that the National Guard be more accessible than they have ever been in
    the past. Congress further enhanced the Guard's domestic homeland
    defense and security mission capability in the National Defense
    Authorization Act for Fiscal Year 2005, by amending title 32 of the
    U.S. Code to authorize the funding of homeland defense activities by
    the National Guard, upon approval of the Secretary of Defense. The
    National Guard is committed to the Governors--the State Commanders in
    Chief--that each State will have sufficient capabilities under their
    control to meet their needs to respond to natural disasters or civil
    disorders. Those capabilities include key assets for command, control,
    and immediate response--the Joint Force Headquarters, Civil Support
    Teams, rapid reaction forces, medical, aviation, decontamination, and
    engineering units.

                 budget reduction impact on army national guard
        110. Senator Akaka. Secretary Harvey, it is my understanding that
    the Army was asked to reduce its budget by $11 billion. Is this
    correct, and how much of the reduction can be associated to the
    National Guard?
        Secretary Harvey. That is correct. Up to 48 percent of the
    reduction or $5.4 billion of the total Army reduction of $11 billion is
    associated with the ARNG. This reduction cuts both ARNG end strength
    and force structure. Force structure is reduced by six BCTs (four heavy
    and two light), one combat aviation brigade, and two division
    headquarters. It reduces end strength by 17,100, down to 332,900. This
    end strength reduction includes 906 Army Guard and Reserve (AGR) full-
    time personnel and 1,777 military technicians. The fiscal years 2008-
    2011 funding reductions exceed the end strength cut of 17,100, which
    equates to a reduction of 23,000 soldiers, reducing the funded end
    strength to 324,000 in fiscal years 2008-2011. The Army is reexamining
    these reductions and has committed to full funding of the ARNG up to an
    end strength of 350,000. To do this, the Army is evaluating options to
    restore funding in fiscal years 2007-2011 through the ongoing budget
    and program objective memorandum cycles.

        111. Senator Akaka. General Schoomaker, you assert that one of the
    significant contributions of the Army's FCS is that it will immediately
    place advanced technologies into use through the use of ``spin outs''
    in roughly 2-year increments. How does the Army plan to minimize the
    risks of this sort of spiral development such as development cost over-
    runs and schedule push-backs due to unknowns in latter stage
    requirements?
        General Schoomaker. The management structure for the spin out
    activities significantly mitigates the risks in that it incorporates a
    disciplined systems engineering process to ensure that spin out
    technologies are managed according to an approved acquisition strategy
    and baseline. These technologies are being brought to maturity in
    conjunction with the FCS program and are subject to the FCS program
    risk management process. FCS has established a robust and intensively
    managed risk program that proactively and aggressively identifies,
    assesses, and monitors risks. Mitigation plans for addressing and
    controlling identified risks are developed as part of this process.
    Risks are closely monitored through a variety of program management
    tools such as regular risk reviews, program status reviews, EVMS
    reports, ``graybeard'' panels, experiments, demonstrations, etc. In
    order to provide an appropriate level of management visibility for spin
    outs, two Project Management Offices have been established, one within
    PM FCS to manage the integration readiness of spin out technologies and
    another within PEO Ground Combat Systems to manage the introduction of
    these capabilities into existing vehicle fleets. These two
    organizations are already working very closely to facilitate a seamless
    process of technology maturation, interface development, production,
    and fielding.
        One of the primary issues to be addressed in this process is to
    determine whether the identified spin out technologies are mature and
    suitable for insertion into the current force. We may very well
    determine that some technologies are not mature to the point where they
    can be fielded to the force in the established 2-year increments.
    Immature technologies would continue to be developed within the core
    FCS program and readied either for a later current force insertion or a
    later spin out increment. Systems are developed, tested, designed,
    evaluated, and integrated through a series of bench, field and
    simulated experiments and tests. As an additional risk mitigation
    measure, we will use the Evaluation BCT to train, test, and learn how
    to use the candidate spin out technologies in an operational
    environment. This coordinated and comprehensive management approach
    inherently mitigates the cost and schedule risk to the Army.
                                     ______

               Questions Submitted by Senator E. Benjamin Nelson
                                   body armor
        112. Senator Ben Nelson. General Schoomaker, in the Army posture
    statement on page 16, there is a chart that shows where the Army stands
    on properly equipping soldiers with body armor. As of January 2006, the
    posture statement reads that ``all soldiers and DOD civilians in
    theater are equipped; total of 693,000 body armor sets are fielded;
    plus 173,000 Deltoid Axillary Protector sets issued''. Can the Army
    state then that every soldier in Iraq and Afghanistan is properly
    equipped with the right body armor?
        General Schoomaker. Yes, the Army can state that every soldier in
    Iraq and Afghanistan is properly equipped with the right body armor.
    The posture statement was correct at the time and the Army has
    continued to field enhancements to the body armor ensemble. As of
    February 14, 2006, the Army has fielded a total 754,345 sets of body
    armor and 172,860 sets of the Deltoid Axillary Protector. The Army also
    began fielding side plates on January 31, 2006. The Army expects to
    field 230,000 sets of side plates in theater by December 2006.

        113. Senator Ben Nelson. General Schoomaker, is it also true that
    every soldier who is scheduled to leave for Iraq or Afghanistan is
    properly equipped with body armor?
        General Schoomaker. All deploying soldiers are properly equipped
    with a set of body armor prior to deployment.

        114. Senator Ben Nelson. General Schoomaker, do you hear from any
    commanders or soldiers in Iraq or Afghanistan that there are still
    soldiers who are not properly equipped with body armor? After all, it
    was just over a year ago that the phrase ``hillbilly armor'' was used
    to describe the scavenging of parts for supplemental body armor.
        General Schoomaker. No, we do not hear from commanders or soldiers
    in Iraq or Afghanistan that there are still soldiers not properly
    equipped with body armor. Every commander at every level knows that we
    do not deploy soldiers into harm's way without a complete set of body
    armor. This has been a success story for the Army, and as new
    technology becomes available, the Army is rapidly testing, developing,
    and fielding IBA enhancements to our soldiers.

        115. Senator Ben Nelson. General Schoomaker, have all parents,
    family members, and others who may have purchased additional body armor
    for their loved ones who are serving in Iraq or Afghanistan been
    reimbursed by the Army? Section 332 of the National Defense
    Authorization Bill for Fiscal Year 2006 states that this authority
    expires on April 1, 2006.
        General Schoomaker. Since November 2005, soldiers have been filing
    claims seeking reimbursement for qualifying items that they purchased
    themselves or that were purchased on their behalf. As these claims are
    received and processed, the Department of the Army has been making
    prompt reimbursement payments to these soldiers to the fullest extent
    permitted under the National Defense Authorization Act and the DOD's
    implementing guidance. All soldiers who have filed, and in the future
    file qualifying reimbursement claims, will be reimbursed by the Army.
        Under the DOD guidance, soldiers may file their claims for
    reimbursement anytime up until October 3, 2006. The April 1, 2006, date
    referenced in the question is the purchase deadline date for which
    private purchases may qualify for reimbursement, not the date on which
    the authority to provide reimbursement expires, as suggested by the
    question. The authority to make reimbursement payments will continue
    until all claims filed by October 3, 2006, are finally processed.

        116. Senator Ben Nelson. General Schoomaker, is there anything
    else, in terms of personal protection, which our soldiers are lacking
    that this committee could provide? For instance, are any soldiers
    lacking the best helmets to protect against high concussion head
    injuries from bomb blasts to vehicles?
        General Schoomaker. No, the Army's programs more than adequately
    address the requirements for providing individual protection in combat
    zones. Force protection is the Army's number 1 priority. We are
    currently pure fleeting operational forces with Enhanced Small Arms
    Protective Inserts, Deltoid Axillary Protectors, and side plates to
    complete every IDA ensemble. Force protection items are also fielded to
    deploying forces under the Rapid Fielding Initiative (RFI) program, to
    include the Advanced Combat Helmet.
        From a philosophical standpoint, the equipment we have today is
    better than what we had yesterday, and what we will have tomorrow will
    be better than what we are fielding to today's soldiers. We face an
    evolving enemy who is absolutely committed to taking us on at any
    vulnerability that he can identify. We will continue to improve force
    protection relentlessly. I am convinced that what we have today is the
    state-of-the-art. This continuous evolution of the force protection
    that we provide our soldiers is absolutely essential.
                                     ______

                   Questions Submitted by Senator Mark Dayton
                          impact of brigade reductions
        117. Senator Dayton. General Schoomaker, how is the reduction of
    ARNG combat brigades from 34 to 28 going to affect operational tempo or
    rate of deployment, for the remaining combat brigades?
        General Schoomaker. The rebalancing the Army is undertaking is
    aimed at reducing stress on both Active and Reserve components,
    improving the responsiveness of the overall force to achieve National
    Security Strategy goals, and improving the readiness and deployability
    of units. These efforts will ultimately ensure predictable deployment
    cycles for Army forces of one rotation every 3 years for the Active
    component and one rotation every 6 years for the Reserve component.

                       funding for potential end strength
        118. Senator Dayton. Secretary Harvey, the administration has
    pledged to fund an end strength of up to 350,000 in the ARNG. If the
    National Guard fulfills its recruitment and retention goals and
    achieves an end strength of 350,000, up from its current 333,000, how
    much money, on an annual basis, will be required to fund this
    difference in personnel?
        Secretary Harvey. The table below outlines funding necessary to
    resource the ARNG at an end strength of 350,000 provided mobilizations
    continue as anticipated, approximately 40,000 mobilized annually. The
    National Guard Personnel, Army and Medicare-Retired contribution, Army
    is specifically needed to pay the additional 17,100 ARNG soldiers and
    provide the required Defense Health Program funding. Additional funding
    is needed in operations and maintenance and military construction to
    continue providing the necessary support to the soldiers. Current
    negotiations are ongoing regarding equipment/investment (procurement)
    restoral, and the total dollar amount depends on the final outcome of
    force structure adjustments.
        It is important to note that current funding levels in fiscal years
    2008-2011 will only support an ARNG end strength of 324,000 not
    333,000.

                                                [In millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                            Fiscal Year
                                              ----------------------------------------------------------------------
                                                  2007       2008       2009       2010       2011       2007-2011
    ----------------------------------------------------------------------------------------------------------------
    NGPA.....................................     $188.8     $536.1     $554.7     $567.1     $579.9        $2,426.6
    Medicare--ret. HFC (NGPM)................       62.4       66.4       70.7       75.3       80.1           354.9
    OMNG.....................................      219.6      252.1      292.8      323.8      332.1         1,420.4
    MCNG.....................................        0.0       80.3       30.6       88.7       42.6           242.1
    ARNG specific Procurement................      318.0      111.5        0.0      106.6      413.2           949.3
                                              ----------------------------------------------------------------------
      Total..................................     $788.8   $1,046.4     $948.9   $1,161.5   $1,447.8        $5,393.3
    ----------------------------------------------------------------------------------------------------------------
    ARNG funded end strength: fiscal year 2006-350,000, fiscal year 2007-333,000, fiscal year 2008-324,000.

        [Whereupon, at 4:58 p.m., the committee adjourned.]

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                      2007

                                  ----------

                          THURSDAY, FEBRUARY 16, 2006

                                           U.S. Senate,
                                   Committee on Armed Services,
                                                        Washington, DC.

     PRIORITIES AND PLANS FOR THE ATOMIC ENERGY DEFENSE ACTIVITIES OF THE
      DEPARTMENT OF ENERGY AND TO REVIEW THE FISCAL YEAR 2007 PRESIDENT'S
     BUDGET REQUEST FOR ATOMIC ENERGY DEFENSE ACTIVITIES OF THE DEPARTMENT
           OF ENERGY AND THE NATIONAL NUCLEAR SECURITY ADMINISTRATION

        The committee met, pursuant to notice, at 9:34 a.m., in
    room SD-106, Dirksen Senate Office Building, Senator John
    Warner (chairman) presiding.
        Committee members present: Senators Warner, Sessions,
    Talent, Graham, Cornyn, Thune, Levin, Reed, and Clinton.
        Committee staff members present: Charles S. Abell, staff
    director; Leah C. Brewer, nominations and hearings clerk; and
    John H. Quirk V, security clerk.
        Majority staff members present: Lynn F. Rusten,
    professional staff member; Kristine L. Svinicki, professional
    staff member; and Richard F. Walsh, counsel.
        Minority staff members present: Richard D. DeBobes,
    Democratic staff director; Madelyn R. Creedon, minority
    counsel; Bridget W. Higgins, research assistant, and Gerald J.
    Leeling, minority counsel.
        Staff assistants present: Jessica L. Kingston, Benjamin L.
    Rubin, and Jill L. Simodejka.
        Committee members' assistants present: Jeremy Shull,
    assistant to Senator Inhofe; Arch Galloway II, assistant to
    Senator Sessions; Russell J. Thomasson, assistant to Senator
    Cornyn; Stuart C. Mallory, assistant to Senator Thune;
    Elizabeth King, assistant to Senator Reed; and William K.
    Sutey, assistant to Senator Bill Nelson.

           OPENING STATEMENT OF SENATOR JOHN WARNER, CHAIRMAN

        Chairman Warner. Good morning, Mr. Secretary. We understand
    that you have a commitment with the President down at the White
    House so we are going to make it possible for you to make those
    commitments, and I will ask unanimous consent myself to include
    my statement in the record as stated in full. But, we are
    pleased to see you this morning, and I do recollect the last
    time you were here, a year ago, or thereabouts, you had been in
    the office 2 weeks, so this morning we expect you to be fully
    up to speed.
        Secretary Bodman. I was here a year ago, sir. I think your
    recollection is accurate. Two weeks is about right, and I hope
    you'll find me up to speed, sir.
        Chairman Warner. I'll cover some of the points in my
    opening statement.
        [The prepared statement of Chairman Warner follows:]

                   Prepared Statement by Senator John Warner

        The committee meets this morning to receive testimony from
    Secretary of Energy Samuel Bodman on his plans and priorities for the
    Department of Energy's (DOE) national security programs. The committee
    will also receive testimony on the President's budget request for the
    atomic energy defense activities of the DOE and the National Nuclear
    Security Administration for fiscal year 2007.
        I welcome our distinguished witness, the Secretary of Energy. Last
    year at this time, when you appeared before the committee, you had been
    ``on the job'' as Secretary less than 2 weeks. As you now realize, the
    challenges of the job you hold are formidable. I would like to take a
    few minutes to highlight some of these challenges that are of
    particular concern to me.
        One of the most solemn responsibilities you have as Secretary of
    Energy, in conjunction with the Secretary of Defense, is to certify to
    the President of the United States on an annual basis that the nuclear
    weapons stockpile of this Nation is reliable, safe, and secure.
    Currently, the DOE relies on the science-based Stockpile Stewardship
    program to maintain the credibility of our nuclear weapons stockpile,
    without underground nuclear testing.
        Congress looks to you to ensure that this program remains on track,
    and to request the funds you need to get the job done. We also look to
    you to tell us if any significant problems arise with respect to the
    safety and reliability of the stockpile that would require a resumption
    of live testing. Your assurance, along with that of the Secretary of
    Defense, that the stockpile remains safe, secure, and reliable is
    critical to the national security interests of our country.
        To further support the goal of a reliable stockpile, DOE has
    undertaken a feasibility study of what has been termed the ``Reliable
    Replacement Warhead.'' This study--being conducted at the direction of
    Congress and in consultation with the Department of Defense will, when
    completed, represent this Nation's foremost thinking on how to sustain
    our nuclear deterrent into the future with a high level of technical
    confidence and at an affordable cost. I encourage you, Mr. Secretary,
    to address your objectives for this study during your testimony this
    morning.
        Another significant challenge for the DOE is the Environmental
    Management program, which is tasked with the cleanup of our defense
    nuclear sites. Although DOE expects to have completed cleanup at 87 of
    the 114 sites under the program by the end of fiscal year 2006, many of
    the most complex and costly sites remain. I encourage you, Mr.
    Secretary, to address how DOE is working to complete the remaining
    environmental cleanup work on schedule and on budget.
        Finally, I look forward to hearing from you about DOE's current
    programs and future plans to advance the President's nuclear
    nonproliferation agenda. I note that the DOE's fiscal year 2007 request
    of $1.7 billion for defense nuclear nonproliferation represents a 7-
    percent increase over last year's request. This clearly reflects the
    high priority the President places on countering the threat of
    proliferation of weapons of mass destruction, as well as the DOE's
    growing role in that effort.
        In particular, I hope you will update us on the status and plans
    for the mixed oxide (MOX) plutonium disposition program in Russia and
    in the United States--a program which has experienced significant
    schedule delays and rising costs; on implementation of the Global
    Threat Reduction Initiative; and on the other major programs focused on
    eliminating excess nuclear materials in the former Soviet Union and
    around the globe, and reducing the potential that such material could
    get into the hands of terrorists.
        Mr. Bodman, we thank you for your continued service to the Nation
    as the Secretary of Energy. We look forward to your testimony.

        Chairman Warner. Senator Levin.

                    STATEMENT OF SENATOR CARL LEVIN

        Senator Levin. Mr. Chairman, I'll also reserve most of my
    points for questions as well and put my statement in the
    record. I just want to welcome Secretary Bodman. I do wish,
    however, that you would, Mr. Secretary, in your opening
    comments, address at least a couple of issues. One is the
    recommendations that were made I think 8 months ago by the
    Department of Energy (DOE) Advisory Board that did a
    comprehensive study conducted at the request of Congress to
    make recommendations to improve and consolidate the nuclear
    weapons complex. If you could comment on the status of those
    recommendations.
        Also, if you would address the issue of the DOE Advisory
    Board, which is now being disbanded apparently by you and
    abolished. Something similar happened to an advisory board at
    the National Nuclear Security Administration (NNSA) a few years
    back, so we have this pattern which is troubling where we have
    these controversial, technically complex issues without these
    outside balanced advisory boards, in both cases involving the
    DOE.
        If you could address that in your opening statement, and
    I'll save the rest of my opening statement comments and weave
    those into my questions.
        [The prepared statement of Senator Levin follows:]

                    Prepared Statement by Senator Carl Levin

        Good morning Mr. Secretary. It is a pleasure to welcome you to the
    Senate Armed Services Committee this morning. We look forward to
    discussing with you the many complex and controversial issues that fall
    within the purview of the Department of Energy (DOE).
        Approximately two thirds of the Department's budget is funded in
    the defense accounts and thus falls within the oversight and
    authorization jurisdiction of this committee.
        You have been Secretary of Energy for just a year and this is the
    first budget request for the Department that you have developed. This
    morning I look forward to hearing your views on the DOE, its budget
    proposals, and the problems and successes that you have identified in
    the Department over the past year.
        Key defense-funded programs in the Department are the Environmental
    Cleanup, Restoration, and Waste Management programs; the Nuclear
    Weapons programs; and the Nonproliferation programs.
        As part of the Department's fiscal year 2007 budget request, you
    introduced a new proposal that cuts across all of the DOE programs.
    This new proposal, the Global Nuclear Energy Partnership, is described
    in the budget material as ``a comprehensive strategy to increase U.S.
    and global energy security, encourage clean development around the
    world, reduce the risk of nuclear proliferation, and improve the
    environment.'' Three key elements of this proposal are: (1) increased
    use of nuclear power reactors; (2) reprocessing of spent nuclear fuel;
    and (3) establishment of a global nuclear fuel services program that
    would provide nuclear reactor fuel and take back spent nuclear fuel.
    This is a controversial and complex proposal, with significant nuclear
    proliferation ramifications, which we need to understand fully.
        The Quadrennial Defense Review and the 2001 Nuclear Posture Review
    both discuss the notion of ``responsive infrastructures.'' I hope you
    will discuss what is a responsive nuclear weapons infrastructure, and
    is the Department moving to put this infrastructure in place.
        A series of recommendations for improving and consolidating the
    nuclear weapons complex, thus presumably making it more responsive,
    were included in a comprehensive study, conducted at the request of
    Congress, by the DOE Advisory Board. Apparently there has been no
    action to implement the study, even though it was completed more than 8
    months ago. I hope you will address that study's recommendations so we
    can understand any reviews that you are conducting or participating in,
    in response to or to implement the Advisory Board study.
        Also, I hope you will explain to this committee why you have
    disbanded and abolished the Department of Energy Advisory Board.
    Several years ago the National Nuclear Security Administration also
    disbanded its advisory board. This is a troubling trend for an agency
    that deals with so many controversial and technically complex issues. I
    am interested in the rationale for your action and why the DOE doesn't
    need advisory boards.
        I also look forward to your discussion of the nuclear weapons
    stockpile stewardship program, the environmental programs and the
    nonproliferation programs of the Department.
        Again, thank you Mr. Secretary for appearing before the committee
    today.

        Chairman Warner. Senator Sessions, do you have a comment or
    two you'd like to make?
        Senator Sessions. I have a statement, but if you prefer
    I'll just hold that off as you have. I'm concerned about where
    we are in some of these matters. A good portion of this
    budgetary item will require the Strategic Forces Subcommittee.
        Chairman Warner. Senator Reed, would you likewise withhold
    opening remarks?
        Senator Reed. Yes, sir.
        Chairman Warner. Secretary, please begin. We have a vote. I
    think it is at 10:30. Thank you.

        STATEMENT OF HON. SAMUEL W. BODMAN, SECRETARY OF ENERGY

        Secretary Bodman. Thank you, Mr. Chairman, Senator Levin,
    I'm very pleased to be here this morning to talk to you about
    the administration's priorities for nuclear weapons, threat
    reduction programs, and the DOE's environmental cleanup
    program. All this is spelled out in detail in my written
    testimony.
        I want to just take a couple of minutes to share some of
    the highlights. First, our budget request supports the NNSA's
    three fundamental national security missions. These are first
    to assure the safety and reliability of the U.S. nuclear
    weapons stockpile while at the same time transforming that
    stockpile and the infrastructure that supports it.
        Second, to reduce the threat posed by nuclear proliferation
    and third, to provide reliable and safe nuclear reactor
    propulsion systems for the United States Navy. To pursue these
    missions the budget proposals total $9.3 billion in fiscal year
    2007. This supports the requirements of the Stockpile
    Stewardship Program consistent with the administration's
    Nuclear Posture Review (NPR) and the revised stockpile plan
    submitted to Congress in June 2004.
        Approximately $1.4 billion in fiscal year 2007 is requested
    for the directed stockpile work with regard to the integrity of
    our facilities, information systems, and infrastructure. The
    budget also requests $665 million to fund the requirements of
    the design basis threat.
        To support the Department's effort to contain and roll back
    the proliferation of dangerous materials, as well as technology
    and know-how, the budget proposal is $1.7 million for nuclear
    nonproliferation and threat reduction programs.
        In addition to funding the national security missions of
    the NNSA, our budget seeks to fulfill our environmental
    commitments with a request of $5.8 billion to clean up legacy
    waste sites that were involved in the development of nuclear
    chemistry and physics.
        We recently announced the completion of cleanup at Rocky
    Flats in Colorado with the reform of our nuclear weapons plant
    located just outside of Denver. In fiscal year 2006, DOE will
    also complete the environmental cleanup of the Fernald and
    Columbus sites in Ohio, the Sandia National Laboratory in New
    Mexico, and several smaller sites as well. There is a lot more,
    Mr. Chairman, that I could go into, but I'm sure we will get
    into the details that are of interest to the Senators.
        Before I close, I would like to mention a couple of things
    about the balance of the Energy Department program. In the
    President's State of the Union address, he announced two
    initiatives, the American Competitive Initiative and the
    Advanced Energy Initiative, which aimed to ensure that America
    remains at the forefront of an increasingly competitive world
    by pursuing transformational new technologies, and by
    increasing investment in clean energy sources that will
    transform our transportation sector. In fact, this should have
    an impact on our whole society.
        As part of the Advanced Energy Initiative our budget
    request includes $250 million to begin investments in the
    Global Nuclear Energy Partnership, which may be of interest to
    this committee. This is a groundbreaking new international
    effort to expand safe, emissions-free nuclear power while
    enhancing our ability to keep nuclear technology and material
    out of the hands of those who would seek to misuse it.
        If I may, sir, before concluding, address Senator Levin's
    questions. The Secretary of Energy Advisory Board (SEAB) report
    to improve the nuclear weapons complex is something that we
    take very seriously. It's the so-called Overskei report, I
    believe you're referring to, named after the Chairman, or at
    least that's what we have come to call it. The NNSA is working
    on a very comprehensive response to it. Many of the things
    recommended in there are efforts that are already ongoing; for
    example, the new type of warhead that we are trying to design,
    the so-called reliable replacement warhead, is one of those
    items.
        There are other issues where we will see very large
    expenses in terms of trying to consolidate all of our highly
    enriched uranium and other special nuclear materials in one
    site, so that I think will be a problem. We will have a
    complete report, comprehensive report for you, I would think
    within the next couple of months.
        Second, the SEAB, the decision regarding SEAB, that's more
    a reflection of me, frankly. I tend to operate with fewer
    specific advisors and more people who were there on the payroll
    doing the work. I have talked to the Chairman of SEAB and I
    have explained to him that I don't have a regular series of
    things that I would like them to do, but I feel quite confident
    that the Chairman, the Vice Chairman, and other members of the
    committee will be very happy to be responsive if we have
    specific matters that we need to take up, and we can simply
    reform it. I just do not want to feel, frankly, the pressure
    that I was feeling to identify areas to put them to work.
        It's a very diverse group, and something that I felt was in
    the best interest of the Department, so that's a decision that
    I made. Mr. Chairman, I'd be happy to take questions.
        [The prepared statement of Secretary Bodman follows:]

                  Prepared Statement by Hon. Samuel W. Bodman

        Chairman Warner, Senator Levin, and members of the committee, thank
    you for the opportunity to appear before you today to discuss the
    administration's priorities for nuclear weapons, threat reduction
    programs, and Department of Energy's (DOE) environmental cleanup
    program.

                     advancing america's national security

        Let me first address national security programs under the National
    Nuclear Security Administration (NNSA). NNSA's fiscal year 2007 budget
    request supports three fundamental national security missions:

             assure that the U.S. has a safe, secure, reliable and
            effective nuclear weapons stockpile while at the same time
            transforming that stockpile and the infrastructure that
            supports it;
             reduce the threat posed by nuclear proliferation; and
             provide reliable and safe nuclear reactor propulsion
            systems for the U.S. Navy.
                            nuclear weapons programs
        The Department is committed to ensuring the long-term reliability,
    safety, and security of the Nation's nuclear deterrent. Stockpile
    stewardship is working; the stockpile remains safe and reliable. This
    assessment is based not on nuclear tests, but on cutting-edge
    scientific and engineering experiments and analysis, including
    extensive laboratory and flight tests of warhead components and
    subsystems. Each year, we are gaining a more complete understanding of
    the complex physical processes underlying the performance of our aging
    nuclear stockpile.
        To assure our ability to maintain essential military capabilities
    over the long term, however, and to enable deeper cuts in the stockpile
    through reduction of Reserve warheads, we must make progress towards a
    truly responsive nuclear weapons infrastructure, as called for in the
    Nuclear Posture Review (NPR). The Department is moving down the path
    towards realizing its vision for a transformed nuclear weapon stockpile
    and infrastructure which are enabled by its Reliable Replacement
    Warhead Program and its initiative for a responsive infrastructure.
        Success in realizing this vision for transformation will enable us
    to achieve over the long term a smaller stockpile, one that is safer
    and more secure, one that offers a reduced likelihood that we will ever
    again need to conduct an underground nuclear test, one that reduces
    NNSA and Department of Defense (DOD) ownership costs for nuclear
    forces, and one that enables a much more responsive nuclear
    infrastructure. Most importantly, this effort can go far to ensure a
    credible deterrent for the 21st century that will reduce the likelihood
    we will ever have to employ our nuclear capabilities in defense of the
    Nation.
        The NPR, and follow-on assessments, have resulted in a number of
    conceptual breakthroughs in our thinking about nuclear forces,
    breakthroughs that have enabled concrete first steps in the
    transformation of those forces and associated capabilities. Very
    importantly, the NPR articulated the critical role of the defense
    research and development (R&D) and manufacturing base, of which a
    responsive nuclear weapons infrastructure is a key element, in the New
    Triad of strategic capabilities. We have worked closely with DOD to
    identify initial steps on the path to a responsive nuclear weapons
    infrastructure.
        What do we mean by ``responsive nuclear weapons infrastructure''
    and what is it that we want it to do? By ``responsive'' we refer to the
    resilience of the nuclear enterprise to unanticipated events or
    emerging threats, and the ability to anticipate innovations by an
    adversary and to counter them before our deterrent is degraded.
    Unanticipated events could include complete failure of a deployed
    warhead type or the need to respond to new and emerging geopolitical
    threats. The elements of a responsive infrastructure include the
    people, the science and technology base, and the facilities and
    equipment to support a right-sized nuclear weapons enterprise. But,
    more than that, it involves a transformation in engineering and
    production practices that will enable us to respond rapidly and
    flexibly to emerging needs. Specifically, a responsive infrastructure
    must provide capabilities, on appropriate timescales and in support of
    DOD requirements, to:

             Dismantle warheads;
             Ensure needed warheads are available to augment the
            operationally deployed force;
             Identify, understand, and fix stockpile problems;
             Design, develop, certify, and begin production of
            refurbished or replacement warheads;
             Maintain capability to design, develop, and begin
            production of new or adapted warheads, if required;
             Produce required quantities of warheads; and
             Sustain underground nuclear test readiness.

        The combination of the Reliable Replacement Warhead (RRW) and a
    responsive infrastructure--each enabled by the other--may genuinely be
    transformational. The reduced stockpile the President approved in 2004
    still retains a significant number of non-deployed weapons as a hedge
    against technical problems or geopolitical changes. As we began to
    implement the concepts of the NPR, however, we and DOD recognized that
    if we could devise a truly responsive infrastructure, we could
    eliminate many of these hedge weapons. Once we demonstrate that we can
    produce warheads on a timescale in which geopolitical threats could
    emerge, we would no longer need to retain extra warheads to hedge
    against unexpected geopolitical changes. Once we can respond in a
    timely way to technical problems in the stockpile, we may no longer
    need to retain extra warheads as a hedge against such problems.
        As we and the DOD take the first steps down this path, we clearly
    recognize that the ``enabler'' for transformation is our concept for
    RRW. The RRW would relax Cold War design constraints that maximized
    yield to weight ratios and, thereby, allow us to design replacement
    components that are easier to manufacture, are safer and more secure,
    eliminate environmentally dangerous materials, and increase design
    margins, thus ensuring long-term confidence in reliability and a
    correspondingly reduced chance we will ever need to resort to nuclear
    testing. This provides enormous leverage for a more efficient and
    responsive infrastructure.
        Transformation will, of course, take time. We are starting now with
    improving business and operating practices, both in the Federal
    workforce and across the nuclear weapons complex, and through restoring
    and modernizing key production capabilities. Full infrastructure
    changes, however, may take a couple of decades.
        But let me take you forward 20 or 25 years when the
    administration's emerging vision for the nuclear weapons enterprise of
    the future has come to fruition. The deployed stockpile--almost
    certainly considerably smaller than today's plans call for--has largely
    been transformed. RRWs have relaxed warhead design constraints imposed
    on Cold War systems. As a result, they are more easily manufactured at
    fewer facilities with safer and more environmentally benign materials.
    These replacement warheads have the same military characteristics, are
    carried on the same types of delivery systems, and hold at risk the
    same targets as the warheads they replaced, but they have been re-
    designed for reliability, security, and ease of maintenance. Confidence
    in the stockpile remains high, without nuclear testing, because the RRW
    design offers substantially increased performance margins and because
    of our deeper understanding of nuclear phenomena enabled by the
    stockpile stewardship program and the R&D tools that come with it.
        By 2030, according to our vision, the deployed stockpile will be
    backed up by a much smaller non-deployed stockpile than today. The
    United States has met the responsive infrastructure objective that for
    a relatively minor problem, we are able to repair warheads and begin to
    redeploy them within 1 year. The elimination of dangerous and toxic
    materials like conventional high explosives and beryllium has made this
    possible and obviated the need for large numbers of spare warheads to
    hedge against reliability problems.
        The world in 2030 will not have gotten more predictable than it is
    today. We still will worry about a hedge against geopolitical changes
    and attempts by others to instigate an arms race. But that hedge is no
    longer in aging and obsolete spare warheads but in the responsive
    infrastructure. Once again we have met the goal established in 2004 of
    being able to produce sufficient additional warheads well within the
    time of plausible geopolitical change.
        The 2030 responsive infrastructure will provide capabilities, if
    required, to produce weapons with different or modified military
    capabilities if required. The weapons design community that was
    revitalized by the RRW program will be able to adapt an existing weapon
    within 18 months and design, develop, and begin production of a new
    design within 3-4 years of a decision to enter engineering
    development--goals that were established in 2004. Thus, if Congress and
    the President direct, we will be able to respond quickly to changing
    military requirements.
        Security remains important in our future world. But the transformed
    infrastructure has been designed with security in mind. More
    importantly, new, intrinsic features built into the growing number of
    RRWs have improved both safety and security. In short, the vision I am
    setting forth is of a world where a smaller, safer, more secure and
    more reliable stockpile is backed up by a robust industrial and design
    capability to respond to changing technical, geopolitical or military
    requirements.
        This isn't the only plausible future of course. But it is one we
    should strive for. It offers the best hope of achieving the President's
    vision of the smallest stockpile consistent with our Nation's security.
    It provides a hedge against an inherently uncertain future. That's why
    we are embracing this vision of transformation. We should not
    underestimate the challenge of transforming the enterprise, but it is
    clearly the right path for us to take.
    Progress on Stockpile and Infrastructure Transformation
        Let me return to today and describe recent progress on
    transformation:

             Last year, the DOD and DOE jointly initiated an RRW
            competition in which two independent design teams from our
            nuclear weapons laboratories--Lawrence Livermore National
            Laboratory (LLNL) and Los Alamos National Laboratory (LANL)
            both in partnership with Sandia--are exploring RRW options. A
            competition of this sort has not taken place in over 20 years,
            and the process is providing a unique opportunity to train the
            next generation of nuclear weapons designers and engineers.
            Both teams are confident that their designs will meet
            established requirements and be certifiable and producible
            without nuclear testing. The program is on schedule--
            preliminary designs will be provided this March. After that, an
            intensive, in-depth peer process will lead to selection of a
            preferred option that will be considered for engineering
            development.
             An intensive effort is also underway to establish our
            detailed vision for the future nuclear weapons complex, and to
            identify pathways leading to that vision. As part of this
            effort, we have reviewed the recommendations from the Secretary
            of Energy Advisory Board (SEAB) Nuclear Weapons Complex
            Infrastructure Task Force (NWCITF) report, and the
            recommendations of other advisory bodies including the Defense
            Science Board. The major challenge is to find a transition path
            to the future that is both affordable and feasible while
            continuing to meet the near-term needs of the current
            stockpile. We will report in more detail on this effort later
            this spring.
             Transformation does not apply only to people,
            scientific tools and facilities. Today's business practices--
            for example, the paper work and procedures by which we
            authorize potentially hazardous activities at our labs and
            plants--are unwieldy and have had a major impact on our ability
            to carry out certain programmatic work at our sites. We must
            improve the way we manage risk including rigorous analysis of
            the costs and benefits associated with the methods and means of
            ensuring safe and secure nuclear operations.

        Other accomplishments that will facilitate near term support to the
    nuclear stockpile include:

             We have restored tritium production with the
            irradiation of special fuel rods in a Tennessee Valley
            Authority (TVA) reactor, and anticipate that we will have a
            tritium extraction facility online in fiscal year 2007 in time
            to meet the tritium needs of our stockpile.
             We have restored uranium purification capabilities at
            our Y-12 plant, and are modernizing other capabilities, so that
            we can meet demanding schedules of warhead refurbishment
            programs, including, significantly, the B61 and W76 life
            extension programs which are scheduled to begin production in
            2006 and 2007 respectively.
             We are on track to deliver a certified W88 pit to the
            stockpile in 2007. We were disappointed, however, that Congress
            declined to fund planning for a modern pit production facility
            in fiscal year 2006. As a result, we did not seek funding for
            this facility in fiscal year 2007, although we remain convinced
            that increased pit production capacity is essential to our
            long-term evolution to a more responsive nuclear weapons
            infrastructure. In coming months, we will work with Congress to
            identify an agreed approach to fund long-term pit production
            capacity. In the meantime, we plan to increase the Los Alamos
            pit manufacturing capacity to 30-40 pits per year by the end of
            fiscal year 2012. This production rate, however, will be
            insufficient to meet our assessed long-term pit production
            needs.
             We have taken steps to recruit and retain a strong
            workforce with the right skills for the focused mission.
             We are devoting substantial resources to restoring
            facilities that have suffered from years of deferred
            maintenance.
    Nuclear Weapons Program Budget Breakdown
        The fiscal year 2007 request supports the requirements of the
    Stockpile Stewardship Program consistent with the administration's NPR
    and the revised stockpile plan submitted to Congress in June 2004. Our
    request places a high priority on accomplishing the near-term workload
    and supporting technologies for the stockpile along with the long-term
    science and technology investments to ensure the capability and
    capacity to support ongoing missions.
        Over $1.4 billion in fiscal year 2007 is requested for the Directed
    Stockpile Work that will ensure that the Nation's nuclear weapons
    stockpile is safe, secure and reliable.
        The NNSA is accelerating efforts for warhead dismantlement and
    consolidation of special nuclear materials across the nuclear weapons
    complex. Both of these efforts will contribute to increasing the
    overall security at NNSA sites.
        In our fiscal year 2007 budget, $1.9 billion is requested for
    campaigns, which focus on scientific and technical efforts and
    capabilities essential for assessment, certification, maintenance, and
    life extension of the stockpile and have allowed NNSA to move to
    ``science-based'' stewardship.
        Specifically, $424.7 million for the Science and Engineering
    Campaigns provides the basic scientific understanding and the
    technologies required to support the workload and the completion of new
    scientific and experimental facilities. We will maintain the ability to
    conduct underground nuclear tests at the Nevada Test Site.
        The Readiness Campaign, with a request of $206.0 million, develops
    and delivers design-to-manufacture capabilities to meet the evolving
    and urgent needs of the stockpile and support the transformation of the
    nuclear weapons complex into an agile and more responsive enterprise.
        With a request of $618.0 million for the Advanced Simulation and
    Computing Campaign, we will be able to remain on schedule to develop
    computational tools and technologies necessary to support continued
    assessment and certification of the refurbished weapons, aging weapons
    components, and a Reliable Replacement Warhead program without
    underground nuclear tests. As we enhance our computational tools to
    link the historical test base of more than 1,000 nuclear tests to
    computer simulations, we can continue to assess whether the stockpile
    is safe, secure, reliable and performs as required while reducing the
    need for underground nuclear testing.
        The $451.2 million request for the Inertial Confinement Fusion
    Ignition and High Yield Campaign is focused on the execution of the
    first ignition experiment at the National Ignition Facility (NIF) in
    2010 and provides facilities and capabilities for high-energy-density
    physics experiments in support of the Stockpile Stewardship Program. To
    achieve the ignition milestone, $254.9 million will support
    construction of NIF (includes the NIF Demonstration Program) and $168.7
    million will support the National Ignition Campaign. The ability of NIF
    to assess the thermonuclear burn regime in nuclear weapons via ignition
    experiments is of particular importance. NIF is the only facility
    capable of probing in the laboratory the extreme conditions of density
    and temperature found in exploding nuclear weapons.
        The Pit Manufacturing and Certification Campaign request of $237.6
    million continues work to manufacture and certify the W88 pit in 2007
    and to address issues associated with manufacturing future pit types
    including the Reliable Replacement Warhead and increasing pit
    production capacity at Los Alamos National Laboratory.
        In fiscal year 2007 we are requesting $2 billion to provide for the
    maintenance and operation of existing facilities, remediation and
    disposition of excess facilities, and construction of new facilities to
    enable NNSA to move toward a more supportable and responsive
    infrastructure. Of this amount, $291 million is for Facilities and
    Infrastructure Recapitalization, $1.4 billion is for Readiness in
    Technical Base and Facilities (RTBF) Operations and Maintenance, and
    $281 million is for RTBF Construction.
        The Secure Transportation Asset, with a request of $209.3 million,
    safely and securely transports nuclear weapons, weapons components, and
    special nuclear materials.
    Security and the Design Basis Threat
        Securing our people, our nuclear weapons and weapons-usable
    materials, our information, and our infrastructure from harm, theft or
    compromise is my highest priority. The job has become more difficult
    and costly as a result of two factors: the increased post-September 11
    threat to nuclear warheads and associated fissile materials coupled
    with the primacy of ``denying access'' to these key assets--a much more
    rigorous security standard than establishing ``containment'' of the
    asset. The Department will meet the requirements of the 2003 Design
    Basis Threat (DBT) by the end of this fiscal year. NNSA's budget
    request of $665.7 million for security will ensure continued
    implementation of these DBT requirements and position the Department to
    respond to emerging 2005 DBT requirements. The current DBT, approved in
    November 2005, revised the high-level security requirements from which
    site-specific implementation plans are being finalized. Funds in fiscal
    year 2007 will be used, among other things, to upgrade protective
    forces weapons, training and equipment; harden storage structures;
    improve earlier detection and assessment of intrusion; consolidate
    nuclear material; and install additional delay mechanisms and barriers
    around critical facilities in order to protect them from evolving
    threats. Funding for NNSA security programs has increased by almost 400
    percent during this administration, which is a strong indicator of the
    priority Congress and the administration place on our security mission.
                 nonproliferation and threat reduction programs
        Let me now turn to our nuclear non-proliferation and threat
    reduction programs. Acquisition of nuclear weapons, Weapons of Mass
    Destruction (WMD) capabilities, technologies, and expertise by rogue
    states or terrorists pose a grave threat to the United States and
    international security. Our nonproliferation and threat reduction
    programs designed to combat this threat, implemented by the NNSA, are
    structured around a comprehensive and multi-layered approach. The
    administration's request of $1.726 billion to support NNSA activities
    to reduce the global weapons of mass destruction proliferation threat
    represents a 6.9 percent increase over the budget for comparable fiscal
    year 2006 activities.
        This increase demonstrates the President's commitment to prevent,
    contain, and roll back the proliferation of nuclear weapons-usable
    materials, technology, and know-how. The Department works with more
    than 70 countries to secure dangerous nuclear and radioactive
    materials, halt the production of new fissile material, detect the
    illegal trafficking or diversion of nuclear material, and ultimately
    dispose of surplus weapons-usable materials. We are also working with
    multilateral organizations such as the International Atomic Energy
    Agency (IAEA) and the Nuclear Suppliers Group (NSG) to further
    strengthen nuclear safeguards and improve the nuclear export control
    regulatory infrastructure in other countries. This multi-layered
    approach is intended to identify and address potential vulnerabilities
    within the nonproliferation regime, reduce the incentive for terrorists
    and rogue states to obtain WMD, and limit terrorists' access to deadly
    weapons and materials. The following is a status update on a number of
    the Department's key nonproliferation programs.
    Plutonium Disposition
        The administration's fiscal year 2007 Fissile Material Disposition
    budget request is $638 million. $551 million of this total will be
    allocated toward disposing of surplus U.S. and Russian plutonium, and
    $87 million will be allocated toward the disposition of surplus U.S.
    highly enriched uranium. The plutonium disposition program, the
    Department's largest nonproliferation program, plans to dispose of 68
    metric tons (MT) of surplus Russian and U.S. weapons-grade plutonium by
    fabricating it into mixed oxide (MOX) fuel for use in civilian nuclear
    power-generating reactors. DOE has made significant progress in
    implementing the plutonium disposition program in the past year. The
    U.S. and Russia successfully completed negotiations of a liability
    protocol for the program, and senior Russian government officials have
    assured the United States that this protocol will be signed in the near
    future. DOE has been also been working to validate the U.S. MOX project
    cost and schedule baseline as part of our project management process,
    and we will have a validated baseline in place before construction
    begins. DOE received authorization to begin construction of the MOX
    facility from the Nuclear Regulatory Commission, began site preparation
    work for the MOX facility at the Savannah River Site, and implemented a
    number of improvements to strengthen the management of the MOX project.
    Current plans call for construction of the U.S. MOX facility to start
    in 2006, with operations to start in 2015. The administration's budget
    request supports continuing this work in fiscal year 2007, which will
    be a peak construction year. Russia has also made progress by beginning
    site preparation activities for its MOX facility. Now that the
    liability issue is nearing resolution, high-level U.S.-Russian
    discussions are taking place to confirm the technical and financial
    details for the Russian program.
    Global Threat Reduction Initiative (GTRI)
        The GTRI represents the Department's latest effort to identify,
    secure, recover, and/or facilitate the disposition of vulnerable
    nuclear and radioactive materials worldwide that pose a threat to the
    United States and the international community. Since the creation of
    GTRI in May 2004, there have been a number of successes. Under our
    radiological threat reduction program, we have completed security
    upgrades at more than 340 facilities around the world. As a result of
    the agreement reached in Bratislava between Presidents Bush and Putin
    on enhanced nuclear security cooperation, we have established a
    prioritized schedule for the repatriation of U.S.-origin and Russian-
    origin research reactor nuclear fuel located in third countries. As
    part of our nuclear materials threat reduction efforts under GTRI, we
    conducted four successful shipments in 2005 to repatriate Russian-
    origin highly enriched uranium (HEU) from the Czech Republic (two
    shipments), Latvia, and Uzbekistan, in addition to several successful
    shipments to repatriate U.S.-origin spent nuclear fuel from Japan, the
    Netherlands, Sweden, Greece, and Austria. In fiscal year 2006, GTRI
    converted research reactors in the Netherlands, Libya, and the Czech
    Republic from the use of HEU to the use of low-enriched uranium (LEU)
    fuel, and also in fiscal year 2006 completed physical security upgrades
    at priority sites housing dangerous materials in Ukraine and
    Kazakhstan. The administration's fiscal year 2007 budget request of
    $107 million for GTRI supports major objectives, examples including;
    the acceleration of the recovery and/or disposal of eligible Russian
    origin materials in the Russian Research Reactor Fuel Return Program
    and the conversion of domestic research reactors under the Reduced
    Enrichment for Research and Test Reactors Program, with a total of
    seven conversions in fiscal year 2007.
    Materials Protection, Control, and Accounting (MPC&A)
        For more than a decade, the United States has worked cooperatively
    with the Russian Federation and other former Soviet republics to secure
    nuclear weapons and weapons material that may be at risk of theft or
    diversion. As a result of the agreement reached at Bratislava, we
    agreed to accelerate security upgrades at Russian sites holding
    weapons-usable materials and warheads. The Bratislava agreement
    provided for a comprehensive joint action plan for cooperation on
    security upgrades of Russian nuclear facilities at Rosatom and Ministry
    of Defense sites and cooperation in the areas of nuclear regulatory
    development, sustainability, secure transportation, MPC&A expertise
    training, and protective force equipment. A number of milestones for
    this cooperative program are on the horizon, and the fiscal year 2007
    budget ensures that sufficient funding will be available to meet these
    milestones. Security upgrades for Russian Rosatom facilities will be
    completed by the end of 2008--2 years ahead of schedule. Cooperation
    with the nuclear warhead storage sites of the Russian Strategic Rocket
    Forces and the Russian Ministry of Defense sites will also be completed
    by the end of 2008. By the end of fiscal year 2007, we will have
    provided security upgrades at more than 80 percent of all the nuclear
    sites in Russia at which we now plan cooperative work.
        The administration's budget request will enable us to expand and
    accelerate the deployment of radiation detection systems at key transit
    points within Russia and accelerate installations of such equipment in
    five other priority countries to prevent attempts to smuggle nuclear or
    radiological materials across state borders. Through our Megaports
    initiative, we are deploying radiation detection capabilities at three
    additional major seaports in fiscal year 2007 to pre-screen cargo
    containers destined for the United States for nuclear and radiological
    materials, thereby increasing the number of completed ports to 13. The
    International Material Protection and Cooperation fiscal year 2007
    budget request of $413.2 million supports meeting all of the
    accelerated completion dates and objectives.
    Elimination of Weapons Grade Plutonium Production (EWGPP)
        The EWGPP program is working toward complete shut down of the three
    remaining plutonium production reactors in Russia at Seversk and
    Zheleznogorsk. These reactors currently produce enough material for
    several nuclear weapons per week. The overall EWGPP plan is to
    permanently shutdown and replace the heat and electricity these
    reactors supply to local communities with energy generated by fossil
    fuel plants by December 2008 in Seversk and December 2010 in
    Zheleznogorsk. The first validated estimate of total program cost--$1.2
    billion--was determined in January 2004. After extensive negotiations
    with Russia, we achieved $200 million in cost savings. Also, pursuant
    to the authority provided in the Ronald W. Reagan Defense Authorization
    Act for Fiscal Year 2005 to accept international funding, we have
    received pledges of $30 million from six Global Partnership
    participants. Construction of the fossil fuel plant at Seversk started
    in late 2004, and the start of construction of the fossil fuel plant at
    Zheleznogorsk was recently approved. The fiscal year 2007 budget
    request of $207 million keeps both construction projects on schedule.
    Nonproliferation and Verification Research and Development
        This effort includes a number of programs totaling a budget request
    of $269 million in fiscal year 2007 that make unique contributions to
    national security by researching the technological advancements
    necessary to detect and prevent the illicit diversion of nuclear
    materials. The Proliferation Detection program advances basic and
    applied technologies for the nonproliferation community with dual-use
    benefit to national counterproliferation and counterterrorism missions.
    Specifically, this program develops the tools, technologies,
    techniques, and expertise for the identification, location, and
    analysis of the facilities, materials, and processes of undeclared and
    proliferant WMD programs. The Proliferation Detection program conducts
    fundamental research in fields such as radiation detection, providing
    support to the Department of Homeland Security (DHS) and the
    Intelligence Community. The Nuclear Explosion Monitoring program builds
    the Nation's operational sensors that monitor the entire planet from
    space to detect and report surface, atmospheric, or space nuclear
    detonations. This program also produces and updates the regional
    geophysical datasets enabling operation of the Nation's ground based
    seismic monitoring networks to detect and report underground
    detonations.
    Nonproliferation and International Security
        Through this program the Department provides technical and policy
    expertise in support of U.S. efforts to strengthen international
    nonproliferation institutions and arrangements, foster implementation
    of nonproliferation requirements through engagement with foreign
    partners, and provide for transparent and verifiable nuclear
    reductions. Key policy challenges that will be addressed in fiscal year
    2007 include efforts to strengthen the IAEA safeguards system, block
    and reverse proliferation in Iran and North Korea, and augment
    cooperation with China, India, and Russia. The fiscal year 2007 budget
    request for Nonproliferation and International Security is $127.4
    million.
        We need to remain cognizant of the linkage between a future that
    encourages broader use of nuclear energy in meeting rising energy
    demands around the world, and one that places a premium on
    nonproliferation and counterterrorism performance. No one nation can
    address these future challenges alone. No one nation has a monopoly on
    nuclear technology or on the ideas or proposals that will mitigate the
    threats posed by proliferation and terrorism. We will therefore
    continue to welcome the contributions and proactive cooperation of
    others who share our vision of a better future, one that enjoys the
    benefits of nuclear energy and one that is better protected from the
    dangers of theft or diversion of sensitive nuclear materials and
    technologies.
                             naval reactors program
        Also contributing to the Department's national security mission is
    the Department's Naval Reactors program, whose mission is to provide
    the U.S. Navy with safe, militarily effective nuclear propulsion plants
    and ensure their continued safe, reliable and long-lived operation.
    Nuclear propulsion plays an essential role in ensuring the ``forward
    presence'' of the Navy around world to respond anywhere America's
    interests are threatened. The program has a broad mandate, maintaining
    responsibility for nuclear propulsion from cradle to grave. Over 40
    percent of the Navy's major combatants are nuclear-powered, including
    aircraft carriers, attack submarines, and strategic submarines, which
    provide the Nation's most survivable deterrent. The administration is
    requesting $795 million to support the program's ongoing work on power
    plant technology, reactor safety, materials development and servicing
    and evaluation.
                         environmental management (em)
        The Department's mission of remedying the environmental legacy of
    the Cold War is inherently challenging and innately beneficial to our
    country. The Office of EM is striving to regain momentum in the cleanup
    program, after encountering significant project management, regulatory,
    and legal challenges.
        The program has made significant progress in the last 4 years in
    shifting focus from risk management to risk reduction and cleanup
    completion, an achievement not possible without the strong leadership
    and support of this committee. In fact, this last year we physically
    completed the cleanup of the Rocky Flats site in Colorado, produced 250
    canisters of vitrified high level waste in South Carolina, and began
    the decontamination and decommissioning of the last remaining
    centrifuge facilities in Tennessee. This year alone, we expect to
    complete cleanup at up to nine sites. But over the last year, despite
    our commitment, EM performance has met with long-term mixed results for
    longer term cleanup.
        Overly optimistic assumptions and unrealized technology
    advancements have led us to the slower progress we are experiencing.
    One of the most visible projects on which our progress has slowed is
    the Waste Treatment Plant at Hanford. The Waste Treatment Plant project
    is the largest, most complex construction project in the Nation and has
    encountered design and construction setbacks. We remain committed to
    fix the problems correctly, complete the project, and begin operations
    to treat the radioactive waste at the site. Other examples of slowing
    cleanup progress include delays in start of construction in South
    Carolina and delays in sludge cleanup from spent nuclear fuel basins in
    Washington.
        We have not lost sight of the mission, nor the will to complete the
    EM mission in a manner that is protective of the environment and public
    while demonstrating fiscal responsibility. The fiscal year 2007 budget
    request reflects a balance of risk reduction and cleanup completion
    with other Departmental and national priorities. Overall, our request
    puts a high priority on tank waste treatment and radioactive waste
    disposition.
        The fiscal year 2007 EM budget request is $5,828 million, a
    decrease of $762 million from the fiscal year 2006 appropriation, an
    indicator of the success we have demonstrated with the completion and
    closure of Rocky Flats in Colorado and several other sites.
        At the Savannah River Site, this request will support ongoing
    stabilization of the site's stored nuclear materials, including funding
    for a container surveillance capability and consolidating the site's
    own plutonium into a single location. The request also provides for
    management and disposition of tank waste, including funding for design
    and construction of the Salt Waste Processing Facility.
        This budget request will make possible a ramp up in construction of
    key components of the Waste Treatment Plant, and continues safe
    management of the underground tanks and waste retrievals from single
    shell tanks at Hanford. This request increases funding for the Advanced
    Mixed Waste Treatment Project in Idaho to support shipments of
    transuranic waste to the Waste Isolation Pilot Plant and the
    construction of the Sodium Bearing Waste Facility to treat tank waste.
    This request reflects an increase to support the critical path to
    closure for the East Tennessee Technology Park in Oak Ridge.
        In addition, the request supports ongoing cleanup at NNSA sites
    like Nevada Test Site, Pantex Plant, and Lawrence Livermore-Site 300.
    It also supports transuranic waste disposal operations and complex-wide
    integration, including the first full year of remote-handled waste
    disposal at the Waste Isolation Pilot Plant in New Mexico.
        This budget request also will continue to focus on our risk
    reduction and cleanup completion mission, with our goal to complete
    cleanup of eight more sites by 2009.
                               legacy management
        The Legacy Management (LM) program was established to provide a
    long term solution to the environmental legacy created by the Cold War.
    As the Office of EM completes its cleanup activities, certain aspects
    of the Department's responsibilities at those sites remain. These
    include remedy surveillance and maintenance, long-term groundwater pump
    and treat operations, records management, and the oversight of pensions
    and post-retirement benefits for contractor personnel. A long-term
    commitment to manage the resources and activities beyond the completion
    of active remediation is required. The activities of the LM program
    ensure that these Departmental responsibilities are addressed and EM is
    able to concentrate its efforts on cleanup and risk reduction.
        Over the past year, LM and EM have been working in close
    cooperation to ensure the timely and effective transition of the three
    major EM closure sites: Rocky Flats, Colorado; Mound, Ohio; and
    Fernald, Ohio. EM and LM have established transition teams for each
    site consisting of subject-matter experts from different fields, such
    as environmental and regulatory compliance, community outreach, records
    management, and worker benefits. The goal of the teams is to have a
    seamless transition of sites from EM to LM.
        Legacy Management's fiscal year 2007 budget request is just over
    $200 million. In fiscal year 2007, EM will transfer post closure
    management responsibility, work scope and budget target to LM for Rocky
    Flats, Fernald, and the Nevada Offsites. Due to additional cleanup of
    Operable Unit-1 at the Mound site, transfer of Mound from EM to LM will
    occur at a later date.
        The significant increase in the LM budget in fiscal year 2007 is
    for pension contributions and the payment of post-retirement benefits
    for contractor retirees at Rocky Flats and Fernald. This request,
    previously included in the EM budget, constitutes just over $100
    million of LM's total budget request. LM has also included $10 million
    associated with the ongoing management and administration of those
    pension and post-retirement benefits.
        Long-term surveillance and maintenance will ensure protection of
    human health and the environment at legacy management sites. The fiscal
    year 2007 request for the long term surveillance and maintenance
    program is $45 million. The funding requested for fiscal year 2007 will
    allow LM to monitor and conduct long-term treatment of 94 sites in
    accordance with legal, contractual, and regulatory agreements. The $18
    million increase reflects the added responsibility of the sites
    transferred from EM to LM--Rocky Flats, Fernald and the Nevada
    Offsites, as well as additional sites transferred to LM from private
    uranium mining and milling operations under the Uranium Mill Tailings
    Radiation Control Act and sites from the U.S. Army Corps of Engineers
    associated with the Formerly Utilized Sites Remedial Action Program.
        Finally, in an effort to communicate the significant costs
    associated with managing records and information associated with these
    sites, LM has chosen to separate the roughly $9 million for this
    purpose from the long-term surveillance and maintenance cost to make it
    more visible in this year's budget.
                        environment, safety, and health
        The Office of Environment, Safety, and Health (EH) is committed to
    protecting the safety and health of DOE workers, the public, and the
    environment by integrating safety and health awareness into all
    departmental activities. The office is also responsible for Price-
    Anderson enforcement and funding radiation health studies.
        The budget request for fiscal year 2007 is $109.9 million,
    approximately 6 percent above the fiscal year 2006 appropriation. The
    budget is broken into Other Defense Program Activities ($80.8 million)
    and Energy Supply and Conservation Activities ($29.1 million).
        In fiscal year 2007, EH will continue its commitment to protecting
    our environment by: continuing to ensure DOE compliance with the
    National Environmental Policy Act; guide and assist DOE programs and
    sites as they shift from development and documentation to
    implementation of the Environmental Management Systems; assist DOE
    sites in implementing the Department's Environmental Compliance
    Management Improvement Plan; and, continuing to guide and assist the
    implementation of DOE's requirements for public and environmental
    radiation protection.
        The Department, and I personally, consider protecting worker safety
    to be of paramount importance.
        On February 2, 2006, I announced a new safety rule which will
    require all non-nuclear DOE contractors to comply with applicable OSHA
    safety and health standards. Also, as applicable on a site-by-site
    basis, contractors will also be responsible for meeting additional
    health and safety consensus standards such as the American Conference
    of Governmental Industrial Hygienists; the National Fire Protection
    Association; the American National Standards Institute; and, the
    American Society for Mechanical Engineers. The new rule also
    establishes investigative procedures and fines for contractors who fail
    to meet safety and health requirements, with a potential fine of up to
    $70,000 per violation, per day. DOE nuclear workers are already
    protected under the Atomic Energy Act, which allows the Department to
    take enforcement actions against contractors who violate nuclear safety
    rules.
        Environment, Safety, and Health Programs in fiscal year 2007 will
    continue to promote the health and safety of DOE's workforce and the
    communities surrounding DOE sites. The Former Worker Medical
    Surveillance Program provides medical evaluations to former DOE workers
    who may be subject to health risks as a result of exposures during
    their work at DOE. EH will also continue its ongoing health activities
    such as: the Radiation Effects Research Foundation's program, which
    conducts epidemiologic studies and medical surveillance of the
    survivors of the atomic bombings in Hiroshima and Nagasaki; and,
    provide special medical care for a small cohort of radiation exposed
    individuals in the Marshall Islands.
                advancing america's economic and energy security
        Finally, I would also like to mention some exciting new
    Presidential initiatives announced in the State of the Union that
    involve the rest of the Department of Energy. The Department's budget
    for fiscal year 2007 follows the blueprint laid out by the President's
    new initiatives, the American Competitiveness Initiative and the
    Advanced Energy Initiative. The $23.5 billion budget request seeks to
    address America's short-term energy needs while positioning our country
    for the future. The budget request makes bold investments to improve
    America's energy security while protecting our environment, puts
    policies in place that foster continued economic growth, spurs
    scientific innovation and discovery, and addresses and reduces the
    threat of nuclear proliferation.
        The Department's fiscal year 2007 budget features $250 million to
    begin investments in the Global Nuclear Energy Partnership (GNEP). GNEP
    is a comprehensive strategy to enable an expansion of nuclear power in
    the U.S. and around the world, to promote non-proliferation goals; and
    to help resolve nuclear waste disposal issues.
        The Energy Information Administration projects that over the next
    25 years, demand for electricity in the United States alone will grow
    by over 40 percent. Nuclear power is an abundant, safe, reliable, and
    emissions-free way to help meet this growing demand for energy
    throughout the world. As part of the GNEP strategy, the United States
    will work with key international partners to develop and demonstrate
    new proliferation resistant technologies to recycle spent nuclear fuel
    to reduce waste. To help bring safe, clean nuclear power to countries
    around the world, the international GNEP partners will also develop a
    fuel services program to supply developing nations with reliable access
    to nuclear fuel in exchange for their commitment to forgo developing
    enrichment and recycling technologies.
        Thank you. This concludes my formal statement. I would be pleased
    to answer any questions you may have at this time.

        Chairman Warner. Thank you, Mr. Secretary. We'll proceed
    with a 6-minute round for the members present and I'm going to
    yield my position to the chairman of the subcommittee.
        Senator Sessions. Thank you, Mr. Chairman. You're very
    gracious. Mr. Secretary, I have great admiration for you, and
    I've enjoyed talking with you, and I know you've had now a year
    under your belt and are beginning to grasp some of the
    magnitude of the programs that we are dealing with. You also
    are charged with a lot of leadership responsibilities in
    reducing our addiction to foreign oil, to use the President's
    word, and I appreciate that.
        But, I serve as chairman of the Strategic Forces
    Subcommittee, which amazingly has jurisdiction over 60 percent
    of the entire Department of Energy budget. This full Armed
    Services Committee has jurisdiction over 66 percent of the DOE
    budget.
        Now, I've started to take a very serious look at the DOE
    programs authorized by the committee. The largest of these
    programs clearly are the weapons activities and the
    environmental management programs. In the Strategic Forces
    Subcommittee this year, Senator Bill Nelson, my ranking member,
    and I will be holding a hearing on March 7, where we will hear
    very detailed testimony from two DOE program officials about
    the fiscal year 2007 budget in these areas: weapons activities
    and environmental management.
        Today, rather than address those details, I'd like to
    describe in broad terms my concerns about these programs and
    the DOE budget overall.
        In my view, the amount of funding provided by Congress for
    DOE ``atomic energy defense activities,'' that's what the
    budget account is called, is very large. Last year, Congress
    provided $16.2 billion for DOE defense activities. For fiscal
    year 2007, DOE has requested $15.8 billion. That is a small
    reduction. The $16 billion per year this committee authorizes
    for the DOE, though, represents a very large investment.
        I've asked my staff to find the total budget for the last
    20 years that has been spent on DOE atomic energy defense
    activities. The number is approximately $230 billion. We are in
    a situation, Mr. Secretary, where we have not added new
    warheads to the nuclear stockpile in over a decade.
        We are not producing new warheads. We do not have the
    capability to manufacture many of the essential components of
    warheads such as plutonium pits. We have a decaying production
    complex, much of which has already been closed down, the rest
    of which is so old and contaminated that workers have to wear
    anti-contamination suits to go in them for routine matters.
        We have treaties which require to us dismantle warheads at
    a faster and faster rate, yet we do not have enough space at
    facilities that we have left to do the work or to store the
    dismantled parts, nuclear and non-nuclear.
        We have national laboratories that do a lot of gee-whiz
    science, but I'm not convinced this is all related to national
    security defense issues. But, it is paid for out of defense
    accounts. We have an environmental management (EM) program that
    doesn't seem to be managing very well, frankly.
        We have projects such as the waste treatment project at
    Hanford, and the years when this project was running, it had a
    cost overrun of approximately $5 billion to $6 billion. That's
    the overrun. This project had essentially zero oversight from
    DOE headquarters personnel. That was before your time. In fact,
    DOE personnel apparently routinely accepted weekly status
    reports from the contractor claiming the contractor was
    perfectly on target for schedule and cost, something we now
    know to be untrue. DOE environmental cleanup budgets and
    commitments appear to be driven oftentimes by the most vocal
    outside groups. They seem to be setting standards and directing
    the investment.
        Compliance agreements, many of which were made years ago,
    may have seemed like a good idea at the time, but technology
    and reality tend to intervene over the years. It has not been,
    in my opinion, based on careful analysis of real environmental
    situations, which ones pose the greatest risk and how much
    cleanup could be on each side and what priority.
        So, Mr. Secretary, I think your challenge is a pot of
    billions of dollars there. If we could save just a billion or
    so a year, that would be real helpful. My question is exactly:
    Are the American people getting their money's worth from these
    programs? Is it time for Congress to call for a review of the
    entire DOE expenditure for those programs for both efficiency
    and value to the Government?
        Secretary Bodman. Senator, you have just accurately
    described the challenges that I confronted when I arrived, as
    the chairman said, 1 year ago. I wouldn't say, sir, that I
    agree with every one of your specific comments, but your
    general comments I think are well taken. This Department has
    not been known for its managerial expertise in my view.
        There were certainly lapses, the most noted of which you've
    already mentioned, namely the vitrification plant at Hanford
    where it was clear that there were problems with respect to the
    contractor and the kind of reporting that the contractor was
    doing. There were problems with respect to the Department and
    the way the Department was overseeing and providing guidance to
    the contractor. To answer your question directly, if I look
    backward and ask were the American taxpayers getting their
    money's worth in some of these programs? I would say no, sir.
    The American taxpayer was not.
        My job, as I see it, is to rectify that situation, and I am
    in the midst of attempting to do that, and I have shut down the
    activities with respect to the two most important parts of the
    vitrification plant at Hanford. We have had a complete review.
    I have met three times with the chief executive of the
    contractor. We now have quarterly, personal, face-to-face
    meetings scheduled. The next one will be in April. I am very
    satisfied with the changes that we have made in the leadership
    of the environmental management activities at the Department to
    take a much more hands-on attitude, apparently.
        I do not know what went on before. I can't comment on that,
    but apparently a much more hands-on attitude. I do believe we
    have the, if one had to make a judgment, do you retain the
    contract or do you try to find a new one, I have made the
    judgment that we should retain the contract. At least that's my
    preliminary judgment depending on their response. They seem to
    be responding very well. So I feel that we are well on our way
    to improving the situation. We have an estimate to complete
    this. You're quite right that it's $5 to $6 billion more. It
    was $5 billion plus before, it's $10.9 billion today as an
    estimate to complete, and I will tell you that I think there
    are reasons, specific reasons to believe that it may be higher
    than that.
        This is a very significant source of environmental problems
    that's been inflicted on the environment in Hanford, in and
    around the river there, and I need to fix it. That's been the
    job I believe that I've been given by the President and by the
    Senate committee who confirmed me. I am comfortable that we are
    making progress. I am not comfortable that we are at this point
    in time on top of everything.
        Senator Sessions. Thank you. I appreciate your bringing to
    bear all your vast managerial skills to bring these matters
    under control, and we'll be continuing to follow up in our
    subcommittee.
        Secretary Bodman. I'm sure you will, sir.
        Chairman Warner. Thank you very much, Senator.
        Senator Levin.
        Senator Levin. Thank you very much, Mr. Chairman.
        Chairman Warner. You're welcome again.
        Senator Levin. Secretary Bodman, 5 years ago Howard Baker
    and Lloyd Cutler, serving on the task force on Russia, issued a
    report on the DOE's nonproliferation programs with Russia. One
    of the key findings of their report was the most urgent unmet
    national security threat to the United States today was the
    danger that weapons of mass destruction in Russia could be
    stolen and sold to terrorists or hostile nation states and used
    against American troops abroad or citizens at home.
        Now here we are 5 years later. They recommended that we
    spend $3 billion each year to secure the Russian weapons grade
    materials. We are not spending anywhere near that. The DOE has
    increased its spending to broaden the scope of nonproliferation
    programs in the last 5 years, but not relative to that most
    significant challenge, which is the Russian nuclear material
    challenge.
        I am wondering if you could give us your brief view on the
    state of the play of our program with Russia, is it just a
    financial limitation? Is that why we have not carried out the
    Baker-Cutler recommendation? Also, what is the G-8 doing to
    support its commitment to provide $10 billion over 10 years to
    address nonproliferation issues?
        Secretary Bodman. I'm not familiar specifically with the
    report to which you refer. I am, of course, familiar with our
    efforts with respect to Russia. We have a number of programs,
    and are doing everything that I could imagine that we should be
    doing to ameliorate the situation. I do not believe that we
    have any major problems with respect to the amount of funding
    that has been made available. By and large, this Congress has
    been quite responsive to requests.
        We do have a program that calls for the return of nuclear
    materials that have been shipped out of Russia to other
    countries and are now located in laboratories all over the
    world, to return those materials and replace them with low
    enriched uranium at the sites that are referred to. We have a
    similar program in the United States, and the idea is that we
    have sought to work with the Russians in parallel. The
    Russians, of course, are a sovereign nation, and we do not
    dictate to them what they do and what they do not do.
        Senator Levin. Are we spending all the money that we really
    need to be spending to address that challenge?
        Secretary Bodman. Would I do it faster if I had the power
    to spend money? I probably would, but I'm not dealing with a
    country that I control. I'm dealing with a country that Mr.
    Putin has responsibility for.
        Senator Levin. Is that where limits come from, or financial
    resources here at home?
        Secretary Bodman. I think it's much more, sir, in the
    responsiveness and receptivity in Russia. They have been
    responsive and they are, I don't want to say that they have
    not. They have been. But, it's measured and it takes time. Sir,
    even despite Senator Sessions' comments about how poorly we
    have operated, and I don't dispute his comments, the Russian
    bureaucracy makes us look pretty speedy. There are issues with
    respect to getting decisions made there.
        But I feel that we are doing everything that I can see.
    These are the professional nonproliferation people.
        I have intervened to come to know Mr. Khristenko, who is
    the new head, Mr. Putin's newly designated person to manage
    their nuclear affairs. I'll be meeting him personally next
    month. I have spoken with him on the phone and will talk to him
    hopefully tomorrow. That's also scheduled. So I think we are
    making progress, but we have, for example, had the so-called
    Mixed Oxide (MOX) program which I know Senator Lindsey Graham
    is very interested in. This is the use of plutonium in Russia,
    and the creation of a metal oxide fuel that can be used in
    commercial reactors both in the U.S. and in Russia. We have had
    2 years delay on that while we have argued over the terms of
    liability, and we finally have resolved that matter last
    summer. We then negotiated final terms, and it is working its
    way.
        As of now as I sit before you, Senator Levin, I do not have
    a signed piece of paper that says the Russians have signed off
    on this, but I'm hopeful. Our interlocutors on the other side
    indicate that everything is fine and that this is how long it
    takes to get things done.
        Senator Levin. Mr. Secretary, you made reference to the
    Global Threat Reduction Initiative (GTRI) which is a series of
    programs that secure U.S.-origin highly enriched uranium fuel
    at research reactors around the world, take back the spent fuel
    and then try to convert that fuel into low enriched uranium.
        Secretary Bodman. That's both Russian and U.S. reactors. So
    it's both.
        Senator Levin. Right. That's an excellent program, but the
    funding for that program is restricted quite severely. It's my
    understanding it is about $100 million in your request, and my
    question is this. Is that program injured by a lack of money
    specifically? Are there countries with research reactors that
    use U.S. origin highly enriched uranium fuel that want to
    return that fuel and close down and convert their reactors to
    low enriched uranium fuel that can't do so because of lack of
    funds in that program?
        Secretary Bodman. I do not know. I'd be happy to get you an
    answer to that specific question.
        Senator Levin. Thank you. Senator Collins and I proposed in
    the energy bill passed by Congress last August a provision
    which was adopted to develop procedures for acquiring oil for
    the Strategic Petroleum Reserve in order to minimize the cost
    to the taxpayers of filling that reserve and minimizing the
    effect on oil prices.
        Has the DOE implemented that provision?
        Secretary Bodman. I do not know the answer to that either.
        Senator Levin. My time is up.
        Secretary Bodman. I would be happy to get that answer.
        Senator Levin. I appreciate that, for the record.
        [The information referred to follows:]

        The Global Threat Reduction Initiative (GTRI) program is not
    injured by a lack of money. The administration's fiscal year 2007
    request of $106.8 million fully funds the operational priorities of the
    GTRI. We have developed comprehensive metrics and a prioritization
    model that identifies the highest threats, considers our ability to
    address those threats over time, and, thus, allows us to align our
    priorities over the fiscal years accordingly. The administration's
    fiscal year 2007 budget request fully addresses those priorities.
        The Reduced Enrichment for Research and Test Reactors (RERTR)
    program has sufficient funding to convert all targeted civil research
    reactors that use U.S. origin fuel that have also demonstrated a long-
    term mission and the ability to fund their day-to-day operating costs.
    The goal of the RERTR program is to support the conversion of civil
    research reactors to the use of low enriched uranium (LEU). The RERTR
    program works to ensure that conversion does not exact a financial or
    scientific penalty on a facility and uses its incentive funding to
    defray the additional cost that may result from conversion activities.
    The RERTR program funding is not used, however, to cover the cost of
    continued operation of the facility. In other words, the facility needs
    to demonstrate that it has a long term mission and it must be
    responsible for funding the day-to-day costs of operating the facility.
        The Foreign Research Reactor (FRR) Spent Nuclear Fuel (SNF)
    Acceptance program works with the research reactor operator after its
    decision to shutdown or convert. A reactor is eligible to participate
    in the program on the condition that it agrees to convert its core and
    return the highly enriched uranium (HEU) SNF. The FRR SNF Acceptance
    program is considered an incentive for the RERTR program. In accordance
    with GTRI's prioritization models, the program has initiated
    communication with several research reactors to assist in reactor
    conversion and/or repatriation of HEU fuel, such as South Africa,
    Turkey, Austria, Jamaica, and Mexico.
        The Notice of Proposed Rulemaking for acquisition of crude oil for
    the Strategic Petroleum Reserve will be published in the Federal
    Register on April 24, 2006. The procedures include provisions for
    acquisition through several means, including direct purchase, by
    transfer of royalty oil from the Department of the Interior, and by
    receipt of premium barrels resulting from deferral of scheduled
    deliveries of petroleum for the reserve.
        In accordance with the direction provided in the Energy Policy Act
    of 2005, the Department developed the procedures with consideration to
    maximize the overall domestic supply of crude oil; avoid incurring
    excessive cost or appreciably affecting the price of petroleum products
    to consumers; minimize costs in acquiring the oil; protect national
    security; and avoid adversely affecting market forces and supply
    levels.
        The public will have 30 days after publication to submit comments
    to the Department. After consideration of all of the comments received,
    the Department will publish a final rulemaking.

        Chairman Warner. Mr. Secretary, I would observe--I
    appreciate your acknowledgment of what you know and what you
    don't know. We are all in that boat. Sometimes some of us maybe
    lack the courage to admit it. I appreciate your wanting to look
    into it.
        Senator Levin. Can I just comment on that? I agree with
    your comment, by the way, Mr. Chairman. The Secretary of
    Defense sometimes says, ``You don't know what you don't know.''
    You do know what you don't know, and we appreciate that.
        Chairman Warner. I want to return to Senator Levin's first
    question about the Cutler-Baker report. That has to be a
    priority that I urge you to put at the very, very top. Because
    in this exceedingly troubled world, and the desire for
    countries to access some knowledge and indeed the materials to
    foster their own goals to join the nuclear club or have
    possession of dirty bombs and the like, we really have to put a
    lot of emphasis on that. I'm going to ask you to go back and
    look at that Howard Baker report, study it and provide for the
    record your own assessment of the validity of the goals as they
    are compared to the facts facing us today. Maybe some of those
    goals would be changed. What the Department did in compliance
    thus far with the recommendations, and what in your judgment
    remains to be done to fulfill the objectives of that report.
        I remember it quite well. It was an exceedingly valuable
    contribution at that time when the level of concern was great,
    but I'm personally speaking for myself and I think my
    colleagues know this. We think it's a high priority.
        Secretary Bodman. Sir, I did not want to suggest that this
    matter is not a high priority. It is a very high priority in
    the Department. It has been. It seems to me that the greatest
    threat to our country is the potential for proliferation of
    material and I assure you I believe and we allocate our time
    and effort----
        Chairman Warner. Your point is well taken.
        Secretary Bodman. I have not read that specific report and
    I would be happy to do that and respond to your request, sir.
        Chairman Warner. For the record we are making this morning.
        Secretary Bodman. Happy to do it.
        [The information referred to follows:]

        The 2001 Baker-Cutler Report reviewed the Department of Energy's
    nonproliferation programs in Russia and made a series of
    recommendations including acceleration of programs, increases in
    funding, improved access to sensitive Russian sites and the creation of
    a high-level position to oversee all nonproliferation programs
    government-wide.
        Since the Report, the NNSA has made significant progress in
    securing sites with weapons usable material and nuclear warheads in
    Russia. The Bush-Putin Joint Statement on Nuclear Security at
    Bratislava in February 2005 elevated our dialogue to a national level
    and has moved our cooperation to one of a shared partnership. This
    Statement includes for the first time a comprehensive joint action plan
    for the cooperation on security upgrades of Russian nuclear facilities
    at Rosatom and Ministry of Defense sites and cooperation in the areas
    of nuclear regulatory development, sustainability, secure
    transportation, Materials Protection Control and Accounting (MPC&A)
    expertise training and protective force equipment.
        As a result, cooperation on physical protection of sensitive
    nuclear sites in Russia was accelerated and all upgrades are expected
    to be completed by the end of 2008. Hence, we have increased efforts to
    transition sites at which upgrades are completed into a sustainability
    phase that will eventually be taken over completely by the Russian
    Federation. In support of the sustainability of physical protection
    upgrades, we are also working consistent with the Bratislava statement
    to promote a strong nuclear security culture in Russia and share best
    practices in handling nuclear materials.
        Additionally, since the report, the DOE has requested substantial
    budget increases for DOE nonproliferation programs. The fiscal year
    2001 appropriation was approximately $914 million and the request in
    the fiscal year 2007 President's budget request is $1.7 billion.
    However, we must keep in mind that just throwing money at the threat
    will not always be the solution. There is still no agreement to
    cooperate at the two serial production enterprises despite numerous
    overtures by the United States. The Russian side maintains that those
    sites are too sensitive to receive foreign assistance for security and
    that they themselves will address any security needs at those sites.
    However, we have made access gains at other sensitive facilities in the
    Rosatom weapons complex, and have had a major access breakthrough
    regarding warhead storage sites. Progress in this area has been
    facilitated by reciprocal visits by Russian officials to the most
    sensitive facilities in the DOE complex.
        Furthermore, the dangers associated with nuclear proliferation are
    a constantly evolving and dynamic threat. We have remained vigilant in
    our efforts and continue to focus on material protection, control and
    accounting (or MPC&A) measures in order to adequately secure previously
    at risk material. Notably, since 2001, DOE has dramatically expanded
    its radiation detection program at land crossings in Russia and
    countries of the former Soviet Union and at major seaports.
        Moreover, the Bush-Putin Joint Statement on Nuclear Security at
    Bratislava requires periodic reports to the Presidents on progress--
    providing sustained high level oversight of these important programs.

        Chairman Warner. The Stockpile Stewardship Program is
    subject to this committee. It's our job to monitor the safety
    and validity and potential that these weapons still maintain
    for fulfilling those strategic objectives that we have
    established. An awful lot of money is being put in that
    program. My understanding is it's up to $6 billion in the
    budget before you today.
        In your assessment of the status of that program, do you
    feel that it is fully operational today? If not, when do you
    hope to have it fully operational? As our stockpile continues
    to age, and as noted by my colleague from Alabama, we are not
    acquiring new weapons, what recommendations do you have for the
    future?
        Secretary Bodman. First, I believe, sir, that the Stockpile
    Stewardship Program is satisfactorily managed today. This is a
    matter that I have spent a lot of my personal time
    investigating, and I've also had Dr. Orbach, who is the head of
    the Department of Energy's Science Office, who will manage the
    increase in scientific research that I mentioned, that I
    alluded to in my preliminary remarks.
        Ray is a physicist, former chancellor of the University of
    California at Riverside, a great business professor. He too was
    an outsider, looked at the Stewardship Program, and has been
    involved with me side-by-side in looking at things like the
    National Ignition Program out at Livermore, where the
    commitment there, or the intention there is to, in a
    laboratory, create an environment that comes very close to
    simulating the innermost workings of a nuclear weapon at
    ignition.
        The Stewardship Program has led this Department to create
    and then develop some of the most remarkable science that I
    have ever seen. I am trained in this field and perhaps you
    know, I'm a little out of date, as I would hasten to add. But,
    I do have training in engineering and chemistry and physics,
    but the work that has been done is quite exceptional. I have
    looked in detail at whether we should come as a part of this
    budget to fund the new ignition facility or continue funding
    that very elaborate process that goes on.
        I believe we should continue it. Each laboratory, they
    divide up the weapons among them and they look very hard at
    issues that might be created by the aging of these materials.
    These are materials, forgive my lecturing you, which by their
    definition, they're radioactive, they change with time by
    definition, and therefore, understanding the metallurgy and the
    details of that is very important. They do that. They do it
    very well.
        I have sat with them and probably spent 6 or 8 hours with
    all of the directors of those laboratories in preparation for
    receipt from them of letters which are scheduled to arrive
    within a month, certifying the efficacy of the stockpile. I am
    then required to cosign----
        Chairman Warner. I'm fully aware of all that. Your
    assessment is that program is fully up and running as designed?
        Secretary Bodman. Yes, sir.
        Chairman Warner. It is effectively giving you the data on
    which you as Secretary can make the reports to Congress and to
    the President and to the Nation regarding the safety of these
    weapons and the viabilities of these weapons to fulfill our
    future requirements?
        Secretary Bodman. Yes, sir.
        Chairman Warner. Thank you very much. Let's talk about the
    Reliable Replacement Warhead (RRW). You were doing a study on
    that, to analyze the approach to warhead design and maintenance
    which could potentially eliminate many of the most costly and
    hazardous materials that are used in the current stockpile.
    What role do you believe such a RRW might play in shaping the
    nuclear stockpile in the future? How can it complement the
    Stockpile Stewardship Program?
        Secretary Bodman. I think, sir, that the RRW is crucial to
    the Stewardship Program. Inherent in what I said before related
    to the efficacy or viability of the stockpile, the materials in
    there change with time. They were designed at a time when no
    one expected a cessation of testing, and therefore, they were
    not designed to be devices that would have a lot of tolerance
    and flexibility. They were designed such that they would be put
    into place and that they would work, which they did. They were
    tested. It wasn't a problem.
        Here we have a situation where we are not allowed, as you
    are well aware, to test the devices. Therefore having a design
    that essentially would replicate the same military effect of
    the weapon on the one hand, yet create a device that would be
    much more easily certified by future secretaries of Energy and
    Defense, is the goal. There is a competition now related to a
    single weapon. I think it's the W76 where Lawrence Livermore
    and Los Alamos are developing competing approaches to the
    design of a RRW, a strategy if you will. That would be pulled
    together, a judgment will be made, and I'm sure will be made
    known to your committee as to what the results are. But that's
    ongoing, and will be forthcoming soon.
        Chairman Warner. Now, in your discourse with allies, namely
    France and Great Britain, and given that these programs are
    designed primarily for the safety of the storage of these
    weapons and the safety of the people of Los Alamos, and the
    safety of the community in proximity where these weapons are
    stored, is there any commonality, misfortune of a weapon to be
    somehow accidentally in other nations that would impact our own
    census back here in the United States very heavily?
        Secretary Bodman. Yes, there is. There is definite
    exchange. There is a community of people who exist around the
    world.
        Chairman Warner. That's what I want to know.
        Secretary Bodman. I have met members of the British
    community who have come through. I'm certainly engaged with
    members of the Russian community who are engaged in these
    matters. I have not personally met with the French, but I do
    believe that there is a good exchange of information. It is not
    to say that there is a commonality.
        These devices were developed in different times with
    different assumptions, but if you will, the nuclear culture
    that must exist in terms of the safety and the reliability of
    these devices, I think that is something that we believe exists
    in common and there certainly is, there are conversations and
    meetings that go on with the professionals who deal with these
    matters.
        Chairman Warner. That's reassuring. Senator Clinton.
        Senator Clinton. Thank you, Mr. Chairman. Welcome,
    Secretary Bodman, and thank you for the partnership and work
    that you've done with my office on a number of issues that are
    of importance to New York. I want to focus on the nuclear waste
    reprocessing proposal that is in your budget and that you
    mentioned at the end of your testimony, the Global Nuclear
    Energy Partnership (GNEP)?
        Secretary Bodman. That's correct. GNEP. That's our term of
    art.
        Senator Clinton. Now, this is a proposal to create a global
    system of nuclear reactors and reprocessing plants over the
    course of decades that could cost tens if not hundreds of
    billions of dollars. I believe that this may be a well
    intentioned proposal, but one which has serious problems, and I
    don't think it holds up to the claims that the administration
    has made about it.
        If you look at the independent research that has been done
    about this issue, the 1996 National Academy of Sciences report,
    a 2003 Massachusetts Institute of Technology (MIT) study, and
    even by DOE research, we know that we are taking enormous risks
    going down this path. I want to ask you just a couple of
    discrete questions, and if we could get through them, I'd
    appreciate it.
        One of the big concerns about reprocessing obviously is
    that it creates plutonium, which can be used, as we know, to
    make nuclear weapons. This is a problem associated with the
    reprocessing technologies used in France and elsewhere and it
    is a reason why we have consistently opposed reprocessing. The
    administration as I understand it is claiming that GNEP
    reprocessing technology would not separate the plutonium from
    other elements and therefore that the reprocessed material
    would be proliferation resistant. But that's only in comparison
    to other reprocessing methods. The MIT and other studies I
    cited concluded that conventional spent fuel is far more
    proliferation resistant, the reason being it's too radioactive
    to be handled safely by terrorists.
        So my first question is this. Isn't it true that any
    reprocessed fuel would be more easily held by terrorists than
    conventional spent fuel, and therefore doesn't processing under
    GNEP increase proliferation risks rather than decrease them?
        Secretary Bodman. I don't know the answer to that
    specifically, Senator. I would say that the goal is to recover
    plutonium and other actinide materials that are in a form that
    would not be useful to terrorists. Whether they would be more
    useful than the spent fuel that we now have, I don't know. My
    best guess is there wouldn't be a great difference, but that's
    just a guess.
        I would be happy to get you a more thoughtful answer on
    that than I am able to provide you real time. I just would tell
    you that we have run this in the batch, on a batch scale out at
    Argonne and, not on a batch scale, it's been a continuous
    reaction but it's been on a bench scale, small scale and it
    seems to work, so it's something that I believe is worthy of
    examination.
        The problem with the spent fuel that we now have scattered
    all over this country, including your State, is that those
    materials, we have only extracted about 10 percent of the
    energy out of it, and the uranium has been transformed into
    plutonium and other actinide materials and this is merely an
    effort to recover that energy in a fashion that would be
    proliferation resistant. I can't comment more than that, but
    I'd be happy to give you an answer on it.
        [The information referred to follows:]

        It is important to emphasize that Uranium Extraction Plus (UREX+)
    is not an end in itself. It is part of a technology pathway proposed as
    part of the Global Nuclear Energy Partnership (GNEP) initiative to
    allow the plutonium and other transuranic elements from light water
    reactor spent fuel to be consumed in electricity producing advanced
    burner reactors. If this technology is successful, it will allow a
    complete transformation of the nuclear waste management challenge and
    of the international nuclear fuel cycle. In today's world, a static
    focus simply comparing spent fuel assemblies in storage in the U.S. and
    UREX+ from the point of view of technical ``proliferation-resistance''
    is too narrow, particularly since several of the advanced nuclear
    economies are currently separating plutonium and separated civil stocks
    are nearly 250 metric tons today, a figure that is more than double the
    total amount of plutonium that was produced for the U.S. nuclear
    weapons program since 1944. Doing nothing is not a success strategy for
    nuclear energy growth to meet pressing domestic and international,
    energy, environmental, and nonproliferation challenges.
        The real issue is whether we build domestic and international
    consensus on a sustainable approach whereby a few advanced fuel cycle
    nations build systems that can eliminate the plutonium and other
    transuranics separated from the world's vast and growing stocks of
    light water reactor spent fuel, recycle it back through advanced burner
    reactors, and fully consume it, both reducing proliferation risks by
    providing reliable fuel services and resolving the growing nuclear
    waste problem.
        It provides the opportunity to reshape the management of spent fuel
    at home and abroad, in support of new arrangements that constrain
    proliferation. Proliferation and the buildup of plutonium in the world
    have not stopped over the past three decades. The GNEP initiative seeks
    to address the global buildup of civil plutonium stocks and looks to
    move beyond the spent fuel standard by defining a path to reduce and
    eliminate those materials.
        Within the U.S., a UREX+ facility on U.S. Government property would
    be secured to meet all requirements posed by the material stream, up to
    the stored weapon standard if necessary. UREX+ would not separate or
    accumulate plutonium, and would be used only in proportion to making
    fuel for advanced burner reactors.

        Senator Clinton. Mr. Secretary, I really appreciate that,
    because I think our oversight duty requires us to really
    understand what it is the administration is proposing and
    attempting to accomplish.
        I think we have two competing goals here. One is to find
    cost effective, safe ways to increase the role of nuclear power
    in our energy sector, and the other is to be as vigilant as
    possible against the potential spread of nuclear materiel and
    proliferation. I think we can.
        Secretary Bodman. I agree with both of those.
        Senator Clinton. I think we can pursue the first goal,
    which I'm open to, which I'm sure many people are because of
    our energy challenges, but at least in my review of the
    information available through the National Academy of Sciences,
    MIT, etc., DOE reprocessing as it is currently available seems
    to raise more dangers and questions than answers, and there are
    other ways to pursue the potential for greater use of nuclear
    power within our energy and electricity production.
        Part of the reason I'm so concerned about this is that the
    West Valley Demonstration Project in Western New York is the
    site of the only U.S. commercial reprocessing effort to date,
    and the reprocessing occurred in the 1960s. The cleanup has
    lasted until now. We are still not done with that cleanup. It's
    cost billions. So the idea that somehow reprocessing is going
    to solve our waste problem at least insofar as I'm aware of it
    seems a little optimistic, to say the least.
        I'm also concerned about costs. Discretionary spending
    dollars are very scarce and in the fiscal year 2007 budget the
    administration spends $250 million on GNEP. That's a project
    with uncertain and very distant benefits in my opinion.
        I think the money would be much better spent in looking at
    some of the DOE research that is on the brink of being
    commercially applicable on conservation and alternative, smart
    energy production, because we are cutting a lot of DOE programs
    that we know have a direct positive impact on our energy usage.
    Based on DOE documents, the fiscal year 2008 and fiscal year
    2009 costs would total $1.5 billion, forcing further cuts in
    other programs, and then it ramps up to $1.3 billion for a 10-
    year demonstration phase. I see no DOE estimates beyond that
    point, but the best studies that I can find suggest that the
    reprocessing and transmutation of existing fuel would cost
    upwards or $100 billion.
        So there are a number of very serious issues around this
    proposal about GNEP and Mr. Chairman, I would like to submit a
    series of questions in writing, because I think this is going
    to be one of the areas we really need to zero in on as we move
    through the authorization process.
        Chairman Warner. I thank the Senator from New York. I
    concur in that, and all members will be given that option,
    given the brevity of this hearing, we are going to have to
    resort to submitting questions. The Chair has a number that I
    would submit.
        Secretary Bodman. May I comment to the Senator?
        Chairman Warner. Yes. Excuse me.
        Secretary Bodman. There may be some confusion over the
    French and other related processing producers, they do in fact
    separate plutonium. GNEP is intended not to separate plutonium,
    but to leave it with a mixture that is not, we believe, based
    on what I know of proliferation, it is intended to prevent and
    to intercept the potential for proliferation.
        It will also require the development of a reactor to burn
    that separated plutonium and actinide material which is a so-
    called fast reactor, so you are quite right. This is a very
    expensive, long-term project. I think the number $100 billion
    would be higher than I would give. My number is sort of in the
    $20 or $40 billion range. I don't know what it will be once we
    work it out, and the goal here is to spend money over the next
    2 or 3 years such that we would be in a position to narrow
    those bands and to make a more intelligent and thoughtful
    analysis of this problem.
        It is a way of trying to simultaneously do both things that
    you mentioned, expand the availability of nuclear energy on the
    one hand, and to beat terrorism and proliferation on the other
    hand. So we have the same objective. It's a question of how to
    go about it.
        Senator Clinton. Thank you.
        Chairman Warner. Senator Thune.
        Senator Thune. Thank you, Mr. Chairman. Secretary Bodman,
    welcome to the committee and thank you for your leadership on
    energy issues for this country. I appreciate the work that your
    Department has done supporting the use of renewable energies,
    which is something that's important in my area in the midwest.
        I have a question for you and I'd ask that you be frank
    with your answer, and I preface it by saying that I am
    concerned by the recent pattern that Congress has taken to zero
    out funds for programs that are aimed at ensuring America keeps
    one of its greatest weapons, and that is deterrence. While we
    need a leader in international efforts to curb proliferation, I
    believe that we cannot, nor should we, make ourselves a target
    by compromising our nuclear arsenal in the process.
        So my question is, do you believe Congress is asking you to
    maintain a high standard of performance, but not providing you
    with the resources that are necessary to complete your mission?
        Secretary Bodman. This is with respect to the stewardship
    of the current nuclear stockpile, sir?
        Senator Thune. Correct.
        Secretary Bodman. No. I believe that we have had adequate
    resources and that I can certify as to the efficacy or the
    viability of the stockpile with the resources that we now have.
    It would get increasingly difficult, Senator, to do that as
    time moves on because we have the inevitable change in the
    materials that are inside these weapons. I alluded to that
    before in answering the chairman's question, and it's a problem
    that I think we need to resolve by the RRW approach, that is to
    say, to redesign the weapons such that they accomplish the same
    military objective, but do so in a fashion that is much more
    reliable and manageable so that future Secretaries of Energy do
    not have to come and make the same statement 20 years from now
    to you or your successor.
        Senator Thune. Following up on the chairman's line of
    questioning with you, I think he exhausted or at least got on
    the record many of the questions that I had with respect to the
    age. But my understanding is that of course, we have not had
    new warheads in the arsenal built since 1989, which makes the
    current arsenal 15-plus years old. It's also my understanding
    that during the Cold War, nuclear weapons were retired and
    replaced every 15 to 20 years.
        Given that average age, and I know you covered this to some
    degree already with the chairman, would you be comfortable
    going to war with our current nuclear stockpile in its current
    aging condition?
        Secretary Bodman. I would. I so attest, this will be my
    second time to do it, and this year, I will tell you that I do
    it with more knowledge than I had a year ago, and that's why I
    spent as much time with the laboratory directors from the three
    weapons laboratories. I have looked into this really up to the
    limit of my technical ability to evaluate what we know, how
    they go about their work, and I am very impressed. These are
    great Americans. The men who run these laboratories--men and
    women run the laboratories generally, but the three directors
    are men and they do a great job, and I've been very impressed
    with their work.
        Chairman Warner. If I can intervene for a minute, I must go
    to the floor to make arrangements for a very important vote of
    this committee to be taken at the conclusion of the full Senate
    vote with regard to our nominees that hopefully we can get to
    the floor tonight.
        We are anxious to, if we can, conclude questions. I see
    colleagues on the right. I do not see further colleagues on the
    left side of the aisle. I'll entrust the hearing to you, if one
    of you will elect to be chairman and finish it up. Or you have
    the authority to keep this hearing open, recess it, and then
    we'll resume at the conclusion of the votes on the floor.
        Senator Talent. Mr. Chairman, I have an Energy Committee
    hearing ongoing and so in the interest of time, I'm willing to
    submit my questions for the record if that will help expedite
    the hearing.
        Chairman Warner. Mr. Graham.
        Senator Graham. Can I ask questions now? You want me to
    chair?
        Chairman Warner. Senator Thune has a minute or 2. Senator
    Graham, you have the chair and if you would be kind enough to
    make the decision whether to resume or not and to inform me.
    I'll come back right after the floor vote is concluded.
        Senator Graham [presiding]. I really love that
    responsibility. Thank you.
        Senator Thune. One final question. I do have a question I'd
    like to submit for the record that has to do with dealing with
    the question we all had discussed here at the committee on the
    floor, about whether or not we had adequate numbers of
    scientists and engineers to keep up with the demands that are
    out there. Whether or not that's a problem. But, one time
    question. That is----
        Secretary Bodman. It is a problem, Senator.
        Senator Thune. Good. I'd like to hear you elaborate on
    that, too. In the interest of time, I'll submit that one for
    the record.
        The final question I have has to do with coal liquefaction
    which is something--we have abundant resources of coal, limited
    resources of oil. We import most of our oil and we fuel
    airplanes with that oil. There is increasing discussion that
    I've had with folks at the Department of Defense about the
    possibility of being able to convert to liquified coal as an
    energy source, and I'm just interested to hear what thoughts
    you might have, how familiar you are with efforts that are
    ongoing out there, whether you believe that is viable in the
    near term?
        Secretary Bodman. I think it's viable. I think the issue
    that the Department of Energy has had, we are in this area, we
    are researching this, Senator, and we do work on processes and
    on approaches that are new and novel. This is pretty well known
    technology. It's been around for some time. You convert it into
    liquid, the coal. A company in South Africa has done this.
        So the issue is, is there a role for things like loan
    guarantees and that sort of thing. There is a loan guarantee
    program that was created by the Energy Policy Act of 2005 that
    you all passed last year and the President signed into law. We
    are working hard to try to get that created. I will tell you
    that creating a loan guarantee program where you are
    guaranteeing the construction of a new chemically based process
    is a formidable task.
        I used to do that for a living and it's very, very hard and
    how we create that inside the government, I simply am unsure of
    right now. But nevertheless, the program does exist and that
    might be an area that would be useful in stimulating further
    use of this technology. But, there is relatively little
    research. This is more a funding and a commercialization of
    already known technology.
        Senator Thune. I'd like to explore that with you some more
    but I'll yield back, Mr. Chairman.
        Senator Graham. Thank you, sir.
        Senator Cornyn.
        Senator Cornyn. Secretary Bodman, thank you for being here
    today and for your service to our Nation. I know several
    Senators have raised the issue of nonproliferation, and it
    remains a huge concern given the times we are living in and the
    threats that exist. Just for the information of my colleagues,
    we are going to be having a hearing before the Emerging Threats
    and Capabilities Subcommittee on that subject later this spring
    and hopefully shed some additional light on that critical
    subject. We all agree that our nuclear weapons complex is
    critical to our national defense and equally important is that
    we provide the resources to carry out this critical mission to
    be good stewards of the taxpayers' money.
        I have a particular interest in this issue, not just
    because of my interest in the national security but also
    because in Amarillo, Texas, we have an important facility
    called Pantex that plays a key role in the Stockpile
    Stewardship Program. Although the good work they do there and
    at similar sites around the Nation is not often in the news,
    and that's fine with me, I want to pay special recognition to
    the good work that they do.
        Specifically, I want to ask you, Mr. Secretary, last year I
    expressed my concerns to you regarding the condition that we
    found the nuclear weapons complex in 5 years ago, specifically
    the nuclear weapons production plants such as Pantex and the Y-
    12 National Security Complex in Tennessee.
        Fortunately, we have seen increases in the budget over the
    last 5 years to fund repairs and demolition of old buildings,
    putting up new ones, replacing aging equipment. Unfortunately,
    we still see a downward trend in the Facility Infrastructure
    and Recapitalization Program (FIRP), the program that funds
    deferred maintenance and equipment replacement backlogs.
        In fiscal year 2005, $313 million was appropriated, in
    2006, it was $149 million, and in 2007, $291 million is
    requested, but fiscal year 2007 remains below 2005 levels. FIRP
    is supposed to sunset at the end of fiscal year 2011, and I'm
    concerned that the funding levels this year and next would
    leave an excessive deferred maintenance backlog at the nuclear
    weapons plants after 2011, the very problem that FIRP was
    supposed to fix. So my question is simply this. Do you have
    sufficient funds for this program?
        Secretary Bodman. Senator, I can't answer that definitively
    at this point in time. I can tell you that based on my
    experience in other departments, there are issues with respect
    to maintaining the quality of the facility as a general matter
    throughout the government. For reasons that I think are fairly
    clear, it is much easier to generate support in Congress for
    the creation of a new program than to fix an old program, so it
    is a challenge.
        Having said that, I have been to Oak Ridge and I have
    looked at what is going on there. I can speak about that. I
    will be going to Pantex soon, but I have not yet been to
    Pantex. At Oak Ridge, we have made a lot of progress, for
    example, in developing and funding a very expensive new
    facility for storing highly enriched uranium and materials,
    which is a very important part of what we are doing there.
        But, there are other buildings that are at Oak Ridge that
    eventually will need to be destroyed and cleaned out, and that
    will take years. What we did in this country during the Second
    World War was to, and it affected not just Pantex, it affected
    not just Oak Ridge, not just Savannah River, all of the
    different storage facilities, storied in the scientific history
    sense, we unfortunately were hellbent on getting the material
    and the chemistry physics right, so that we could build a bomb
    and bring the war to an end, and there was less attention being
    paid to the matters that you describe.
        So that we face this throughout this complex, and the goal
    here is to try to develop the report which we have been asked
    about already, the EM report that looks at the entire complex
    and makes recommendations to the Department as to how we can
    succeed. We need to make some decisions about that, what we are
    going to do about consolidation of spent nuclear materials, and
    then go forward to deal with some of these matters.
        I can't give you a good answer. I will try to give you a
    better answer if I may.
        [The information referred to follows:]

        The administration's budget request and legislative proposal
    regarding the end date of the program would, if enacted, provide
    sufficient funding to complete this important mission.
        The Facilities and Infrastructure Recapitalization Program's (FIRP)
    mission is to restore, rebuild, and revitalize the physical
    infrastructure of the nuclear weapons complex. The program's long term
    goals are: 1) eliminate $1.2 billion of the National Nuclear Security
    Administration's deferred maintenance backlog and, 2) eliminate three
    million gross square feet of excess facility space.
        The impact of significant previous reductions to the out year
    funding profile of the FIRP in support of deficit reduction, as well as
    congressional reductions to the fiscal year 2006 request, have
    adversely impacted the program's ability to complete its mission. The
    Department currently has a legislative proposal before Congress to
    extend the program's 2011 end date by 2 years to enable the program to
    complete its mission.

        Senator Cornyn. That would be very helpful. Thank you. Mr.
    Secretary, in 2004, the DOE launched an initiative to provide
    employment opportunities to Iraqi scientists, technicians, and
    engineers who may have been involved in WMD programs. This
    initiative was intended to support reconstruction efforts in
    Iraq and keep WMDs from terrorists and proliferant states. Can
    you update the committee on this program?
        Have Iraqi scientists been able to take advantage of this
    opportunity to take advantage of productive and nonresearch
    activities? Roughly how many Iraqi scientists do you believe
    might be eligible to participate in this program, and is the
    program of a sufficient size to meet this anticipated demand?
        Secretary Bodman. There are two areas, if I may, if I could
    broaden your question. There are two countries in which we have
    had these kinds of programs. One in Libya. The Libyan program
    has gone forward and effectively, I believe, has been able to
    redirect some of the technical people into matters related to
    the oil field and matters related to environmental stewardship.
    On matters related to a single nation, I don't have numbers.
        Now, I don't know about Iraq. I'll try to get that. The
    whole Iraqi situation is one that has continued to be a
    challenge because of the insurgency, and getting people to work
    in more productive parts of the economy has been a challenge.
    So exactly what our contributions have been, I can talk to you
    about in general, it's the same general areas, environmental
    stewardship, these things that would be required in Iraq. They
    have major needs in the energy infrastructure. Just how many of
    them, what the numbers are, I don't know exactly.
        Senator Cornyn. I would appreciate that. I understand you
    may not have all those facts and figures at the tip of your
    tongue, but I do think it's important that we get at least the
    facts before us, good, bad, or ugly. Then we could determine
    whether we are making progress or going backwards.
        Secretary Bodman. Senator, I would be happy to look into
    it.
        [The information referred to follows:]

        The projects Department of Energy (DOE) supports all contribute to
    civilian scientific capacity building. DOE has funded to date 6
    civilian scientific projects that employ 29 scientists, including 12
    with a WMD background. They include:

             water purification techniques,
             the development of new composite material for use in
            artificial limbs,
             improving the indigenous capability of the Iraqi
            pharmaceutical industry,
             the improvement of corrosion resistance in steel,
             an analysis of the level of radionuclides in water and
            sediments in the Tigris and Euphrates rivers, and
             measuring natural radiation levels in Western Iraq.

        Material science and radiation safety projects specifically suit
    scientists with weapons of mass destruction skills and expertise in
    nuclear weapons, nuclear energy, operational engineering, and
    explosives. These areas for research were chosen specifically for that
    reason.

        Senator Graham. Mr. Secretary, I promise you we'll get you
    out of here just in a few minutes. The vote is on so I'll take
    about no more than 10 minutes and we'll let you get on your
    way. One, I'll make a comment about the President's budget
    about the idea of recycling or reprocessing spent nuclear fuel,
    which I think is visionary. I support the concept that the
    President and Department of Energy are advocating for us to
    look at the fuel cycle differently and try to adopt some
    reprocessing recycling technology, that's new and exciting,
    being employed at other places in the world. I want to be a
    partner with you there.
        Secretary Bodman. Great.
        Senator Graham. See if we can expand the nuclear footprint
    to make our country and the world less dependent on fossil
    fuels. Savannah River Site, you know how much of my time I've
    spent on it and I appreciate your time and attention. There are
    three programs, the MOX program when you talk about
    nonproliferation as you did with Senator Cornyn, we have had 34
    metric tons of weapons grade plutonium, material that was in a
    nuclear weapon formerly, that will be converted into commercial
    grade fuel at Savannah River Site as well as in Russia. This is
    bomb material taken off the market to be used for peaceful
    purposes.
        I was instrumental, along with Senator Thurmond, in getting
    the Governor of South Carolina to accept this plutonium. The
    MOX program, according to the Inspector General (IG) report,
    has been poorly handled financially. It was originally a
    billion dollar program, now it's $3.5 billion. It's years
    behind schedule. We have had liability and management problems
    with the Russians and the funding line, Mr. Secretary, it puts
    us behind, not forward. Honest assessment, what do you see
    happening with MOX here?
        Secretary Bodman. We are informed, Senator, by our
    interlocutors in Russia, that all is well with respect to
    getting the liability matter resolved. I hope that is true. My
    colleagues tell me that they believe it is true. I'm a little
    bit of a, probably like you----
        Senator Graham. We have heard this before, haven't we?
        Secretary Bodman. I understand. Until we get that done, I'm
    a little bit of a Doubting Thomas on it. We continue to work
    with them. I will be visiting with Mr. Khristenko next month
    when I travel to Moscow for the G-8 energy ministers gathering,
    and I will, this is, I have spoken with him by the telephone
    but I have never met him personally, so this will be my first
    meeting. He has just been in office a few months. So I will, I
    think, sir, I understand your conviction and your interest in
    this, and the vital nature of it.
        Believe me, sir, it has my attention and it will be one of
    the first items I take up when I see him. It's just hard to
    gauge exactly what is going on in Russia, even when I talk to
    experts.
        Senator Graham. That's fair. My hope is that once we get
    the liability issue off the table that we can assure people in
    South Carolina that the money will be there and that we will
    get the program up and running.
        Secretary Bodman. We are committed to making it happen as
    soon as I'm satisfied that it's there. We have had a huge
    delay, huge run ups in steel, concrete, and other things.
    That's been significant, not in total, but as a reason for the
    uptick in costs. Each time we delay one of these projects, it's
    a billion-dollar decision.
        Senator Graham. I will talk to you about the IG report. We
    just need to make sure that people take this job more
    seriously. We have 5 more minutes and I'm going to let you go.
        South Carolina entered into an agreement with DOE that was
    historic about tank cleanup. It was a very close vote in the
    Senate, 48-48. I thought we made a rational decision by coming
    up with a cleanup standard that made sense. Our tanks are
    leaking, tanks with high level waste, and the deal was we would
    leave a small footprint in the bottom that would take years to
    get out, saving $16 billion that we can spend elsewhere.
        Now that program is behind. We are 14 months behind; the
    Salt Waste Processing Facility is behind. We have funding
    problems. Could you just give me a few minutes about where you
    see this going and how we can get back on track?
        Secretary Bodman. I think we are there. Section 3116 I
    think is the section of the law that you were instrumental in
    getting passed. I made the first determination of that within
    the next couple of months. We have a similar finding that will
    go forth with respect to the Idaho facility. There were
    suggestions that we should pay more attention to the potential
    seismic impact on the new plant that will be built and that
    decision was deemed to be correct by my colleagues and I
    subscribe to it. It will delay the startup of the facility by a
    year and a half and add a billion dollars or so to the costs,
    and I'm convinced that it's the right thing to do and we will
    proceed with it.
        Senator Graham. Thank you, Mr. Secretary. As you can tell,
    South Carolina is certainly a very friendly State when it comes
    to making good decisions for our national security and high
    level waste. I want it cleaned up. I don't want the tanks to
    leak, but I don't want to set standards that are unnecessary.
    Some things would be sent to Yucca Mountain that really don't
    need to go.
        I have a problem at home. Everything is behind schedule and
    underfunded, and I appreciate any efforts that you can make and
    that you have made to get us back on track, because these are
    very important programs to the Nation at stake. Thank you for
    your service. You came up from the private sector. This is a
    tough job.
        There are some exciting opportunities that present
    themselves, the reprocessing, recycling of spent fuel in
    abundance. This country is deciding, it's a good time to make
    rational decisions about energy and power. I want to
    congratulate you and the President in that regard. With that,
    the hearing will be adjourned and have a good day.
        [Questions for the record with answers supplied follow:]
                   Questions Submitted by Senator John Warner
                          reliable replacement warhead
        1. Senator Warner. Secretary Bodman, at the direction of Congress,
    the Department of Energy (DOE) is currently conducting a joint
    feasibility study--with the Department of Defense (DOD)--on a Reliable
    Replacement Warhead (RRW). This study will analyze a technical approach
    to warhead design and maintenance which could potentially eliminate
    many of the most costly and hazardous materials which are used in the
    current nuclear stockpile. What role do you believe such a RRW might
    play in shaping the nuclear stockpile of the future?
        Secretary Bodman. We are exploring RRW options in order to ensure
    the long-term sustainability of the military capabilities provided by
    warheads in the existing stockpile. With the support of Congress, we
    are undertaking the RRW study to understand whether, if we relaxed
    warhead design constraints imposed on Cold War systems (e.g., high
    yield to weight ratios that have typically driven ``tight'' performance
    margins in nuclear design), we could provide replacements for an aging
    stockpile. These replacement weapons could be more easily manufactured,
    use more environmentally benign materials, and their safety and
    reliability could be assured with high confidence for the long-term
    without nuclear testing. We intend that such an effort will also result
    in future reduced infrastructure costs for supporting the stockpile.
    Indeed, we see the RRW program as the ``enabler'' for both long-term
    stockpile transformation and transformation to a responsive
    infrastructure to support national defense capabilities while adding no
    new military capabilities.

        2. Senator Warner. Secretary Bodman, how could it complement the
    Stockpile Stewardship Program (SSP)?
        Secretary Bodman. Our decision to embark on the path to a RRW is a
    reflection of the success of our ability to apply the scientific tools
    of the SSP. Using these tools will enable us to certify a RRW without
    underground testing. It will also demonstrate our ability to meet
    responsive infrastructure goals. We must make continued progress to
    fully utilize and further develop the modern scientific tools of the
    SSP; these tools serve as an enabler to guide the transition from a
    warhead refurbishment program to a warhead replacement program.

              developing a new warhead without underground testing
        3. Senator Warner. Secretary Bodman, the nuclear weapons experts at
    the national laboratories believe that it will be possible to design
    and field a new warhead--such as the RRW now under study--without
    needing to conduct an underground nuclear weapons test, such as was
    conducted in this country up until 1992. Can you explain, in broad
    terms, why these weapons scientists believe it is possible to field a
    warhead without underground testing?
        Secretary Bodman. The intent of the RRW program is to identify
    nuclear and non-nuclear replacement components that could be fielded
    without nuclear testing. Feasible RRW options will be based on our
    robust database of historical nuclear tests as well as from the
    experience of the remaining designers and engineers who have
    successfully fielded our current stockpile. The advances of our SSP
    enable us to better understand nuclear explosive performance through
    modeling, simulation, and experiments. That combination of historical
    test information, modern SSP tools (e.g., high energy density physics
    and the Advanced Simulation and Computing program), and experienced
    designers and engineers, along with relaxed military requirements for
    yield-to-weight ratios, will enable us to design and certify nuclear
    components with high confidence. As a result, fielding RRW systems will
    likely reduce the possibility that the U.S. will need to conduct a
    nuclear test for certification or to diagnose or remedy a stockpile
    reliability problem.

        4. Senator Warner. Secretary Bodman, are you personally confident
    it is possible to field a warhead without underground testing?
        Secretary Bodman. While I am not a nuclear weapon designer, I trust
    the judgment of expert nuclear weapon designers who inform me that it
    is possible to field a warhead without underground testing, especially
    if that warhead has ties to a previously tested configuration. Experts
    at our national laboratories believe that by relaxing some of the
    requirements imposed on Cold War systems (e.g., maximum yield in
    minimum size and weight) and employing the modern scientific tools
    developed in the SSP, there is a strong technical consensus that we can
    achieve this goal.

         test readiness for the potential resumption of nuclear testing
        5. Senator Warner. Secretary Bodman, the National Defense
    Authorization Act for Fiscal Year 2004 requires DOE to achieve a level
    of ``test readiness'' which would allow DOE to resume underground
    nuclear testing within 18 months of a Presidential decision to conduct
    a test. Under the law, DOE is to achieve this level of readiness no
    later than October 1, 2006. I understand, however, that Congress has
    not appropriated sufficient funds to allow DOE to meet this deadline.
    Is it correct that DOE forecasts it cannot meet the statutory deadline?
        Secretary Bodman. Due to a reduced appropriation in the 2006 Energy
    and Water Development Appropriations Act, we cannot meet the statutory
    deadline of 18-month test readiness by October 1, 2006. If Congress
    funds the President's request for test readiness in fiscal year 2007,
    the Department will maintain test readiness at 24 months. To maintain
    the 24-month readiness beyond fiscal year 2007, the current outyear
    profile will have to be revisited. At this time, there are no
    requirements for a nuclear test and there are no plans to do a test.
    The National Nuclear Security Administration (NNSA) maintains the
    capability to resume testing if that is needed in the future and is
    directed by the President.

        6. Senator Warner. Secretary Bodman, do you believe the current
    readiness of 24 months is sufficient readiness, within which to conduct
    a test if a problem with the stockpile is discovered, and if so, on
    what do you base that judgment?
        Secretary Bodman. NNSA achieved 24-month test readiness at the end
    of fiscal year 2005. Before the administration embarked on its plan to
    improve test readiness, NNSA's readiness posture stood at about 36
    months, and possibly greater. We believe that this significant
    improvement (24 months) is adequate for meeting our national security
    needs.

                  safeguards and security--design basis threat
        7. Senator Warner. Secretary Bodman, after the attacks of September
    11, 2001, the Secretary of Energy increased the security requirements
    across the nuclear weapons complex. The security requirements for the
    DOE are known as the Design Basis Threat. Could you describe the
    progress DOE has made towards hardening its nuclear facilities against
    the threats we now face?
        Secretary Bodman. NNSA has been very aggressive in pursuing
    immediate and long-lasting security upgrades within the nuclear weapons
    complex. Over the past 3 years, based on the results of detailed
    vulnerability analyses, we have invested hundreds of millions of
    dollars in enhanced detection systems, anti-vehicle protections,
    increased protective force capabilities, and facility/target hardening
    improvements. The net impact of these upgrades is that our facilities
    rank among the most highly secured operations anywhere in the Nation.
    We will continue to pursue additional upgrades and refinements, with an
    eye on new and emerging technologies, as we work to implement the
    changes necessary to meet the requirements of the 2005 Design Basis
    Threat.

        8. Senator Warner. Secretary Bodman, another strategy for
    increasing the security of DOE nuclear materials, is simply to store
    those materials in fewer locations--in other words, consolidation of
    these materials in fewer, more hardened locations. Is DOE evaluating
    opportunities to consolidate its nuclear materials and making progress
    towards that goal?
        Secretary Bodman. The Department has made considerable progress in
    the area of nuclear materials consolidation and disposition. There are
    a number of examples of progress in this area, including the movement
    of nuclear material from Los Alamos National Laboratory (LANL) to a
    more secure location at the Nevada Test Site, accelerated
    dismantlements of warhead secondaries, consolidation of highly enriched
    uranium material, and construction of the Highly Enriched Uranium
    Materials Facility at the Y-12 National Security Complex. I have
    established a Department-wide Coordination Committee to review
    opportunities for additional consolidation activities and to develop an
    overarching plan for materials consolidation and disposition.

                       pit production and plutonium aging
        9. Senator Warner. Secretary Bodman, the United States no longer
    has the capability to manufacture an essential component of nuclear
    weapons--the plutonium pits which power the nuclear reaction. The U.S.
    ceased production of pits when Rocky Flats was closed in 1989 and is
    now trying to reconstitute a modest production capability for pits at
    LANL. What challenges is DOE encountering in trying to increase the
    rate of production of pits at Los Alamos?
        Secretary Bodman. There are many challenges confronting the DOE and
    the LANL in increasing the rate of production of pits at the plutonium
    facility at TA-55/PF-4. The PF-4 facility was designed over 30 years
    ago to support plutonium research and development and the facility
    infrastructure and layout supports that mission. Major challenges to
    improve the pit production capacity of PF-4 include the physical
    limitations of the facility, equipment configuration and installation,
    personnel qualification and retention, and continued support of
    multiple plutonium missions. The TA-55/PF-4 facility supports a number
    of important national missions in addition to pit production. For
    example, continuing Pu-238 missions supporting the National Aeronautics
    and Space Administration, both conventional and enhanced surveillance
    activities for pits, special recovery activities, non-proliferation
    activities, and small-scale physics testing. All of these activities
    use TA-55/PF-4 space that limits the ability to expand the pit
    manufacturing mission. NNSA and LANL are working to resolve these
    challenges, and are committed to establishing a pit production capacity
    of 10 W88 pits per year in fiscal year 2007 and 30-40 pits per year by
    fiscal year 2012.

        10. Senator Warner. Secretary Bodman, will the production at Los
    Alamos be sufficient to sustain the stockpile over the long-term?
        Secretary Bodman. NNSA plans to increase the LANL pit manufacturing
    capacity to at least 30-40 pits per year by the end of fiscal year
    2012. This production rate, however, is insufficient to meet DOD
    projected requirements. The NNSA submitted a report to Congress in
    January 2005 that confirmed the need for at least a 125-pit-per-year
    capacity starting in 2021. This is based on a 60-year pit lifetime and
    a stockpile based on the planned 2012 stockpile approved by the
    President and provided to Congress in a June 2004 report. Although we
    expect more refined pit lifetime estimates by the end of fiscal year
    2006, future pit production capacity requirements are likely to be
    driven more by stockpile transformation than legacy pit lifetimes. In
    this connection, our ongoing work with the DOD to develop long-term
    stockpile quantities and transformation rates also suggests that a
    long-term pit production capacity of about 125 pits per year is about
    right. This is being validated through the Nuclear Weapons Council. In
    the meantime, we will work with Congress to gain authorization to
    reestablish planning activities for an infrastructure that can support
    the longer-term pit production needs.

        11. Senator Warner. Secretary Bodman, in 2005, Congress directed
    DOE to initiate more detailed study of the aging of plutonium pits used
    in nuclear weapons to determine how long we might expect the current
    pits to last. What is the status of this investigation?
        Secretary Bodman. By the end of fiscal year 2006, we will have
    system-specific pit lifetime estimates that have been subject to peer
    review between the weapons physics laboratories (Lawrence Livermore
    National Laboratory and Los Alamos National Laboratory) and extensive
    external review by a panel of scientific experts known as JASON.

        12. Senator Warner. Secretary Bodman, what is DOE's current
    estimate (stated as a range) of pit lifetime?
        Secretary Bodman. The DOE's current estimate of minimum pit
    lifetime is 45 to 60 years. This range accounts for the differences in
    design margins among the weapon types, the current uncertainties in the
    sensitivity of performance to aging degradation, and the lack of aging
    data beyond the oldest available plutonium used in weapon systems.

                       responsive nuclear infrastructure
        13. Senator Warner. Secretary Bodman, the Nuclear Posture Review
    (NPR) issued in 2001 called for the development of a responsive nuclear
    infrastructure which would allow this Nation to have the agility to
    respond to any problems which might be discovered in the nuclear
    weapons stockpile, as well as the capability to respond to emerging
    threats. Much of the work in support of the stockpile, however, is
    still carried out in facilities from the Cold War era, some of which
    have not been well-maintained or sufficiently recapitalized over time.
    Is timely progress being made in developing a responsive nuclear
    infrastructure and what additional steps could be taken to accelerate
    this progress?
        Secretary Bodman. Within the NNSA, Defense Programs has been taking
    actions to develop a more responsive infrastructure. These actions
    include establishing, in consultation with the DOD, a strategic
    implementation plan to guide future actions and measure improvements,
    studying a RRW to facilitate transformation to a more responsive
    infrastructure, and starting pilot projects (e.g., Multi-Unit
    Processing at Pantex) to enhance infrastructure responsiveness. NNSA
    has also been reviewing alternatives for the nuclear weapons complex of
    the future. These reviews will result in a preferred long-term
    infrastructure planning scenario to serve as the basis for future
    actions. Timely progress is being made but more needs to be done,
    including reaching agreement with Congress (hopefully this spring) on
    the path forward, particularly on stockpile and infrastructure
    transformation.

        14. Senator Warner. Secretary Bodman, do you believe that the
    communication between the DOD and DOE--regarding what is needed and
    what will be provided --is clear?
        Secretary Bodman. Yes, communications are clear between the DOE and
    DOD. The DOE and DOD are working as partners to define requirements for
    the future nuclear weapons stockpile and supporting infrastructure. A
    Transformation Coordinating Committee was recently established to
    accelerate these efforts and to ensure we are addressing issues related
    to transformation in a comprehensive manner. The RRW study is a prime
    and current example of how DOE and DOD can and do work together.

        15. Senator Warner. Secretary Bodman, has a set of parameters by
    which to measure ``responsiveness'' been agreed upon between the DOD
    and DOE and if not, when will this be done?
        Secretary Bodman. Following the 2001 Nuclear Posture Review and the
    2003 Stockpile Stewardship Conference, an initial set of responsiveness
    criteria were negotiated between the DOE and DOD. These are frequently
    referred to within the NNSA as the ``2012 goals.'' These goals are
    ``quantified'' targets, e.g., resolving a new stockpile issue within 18
    months, for seven responsiveness objectives. We have since updated and
    now formally monitor these responsiveness objectives to judge success.
    The Nuclear Weapons Council is expected to consider the updated set of
    responsiveness objectives for approval by June 2006.

                           national ignition facility
        16. Senator Warner. Secretary Bodman, the National Ignition
    Facility (NIF) is a key facility in the science-based SSP. When fully
    constructed, it will allow weapons scientists to aim 192 lasers at a
    ``BB'' sized target, simulating the temperatures and conditions of a
    nuclear explosion, but at a much smaller scale. DOE's current goal is
    to achieve this ignition by 2010. What is the current status of NIF?
        Secretary Bodman. The NIF project is on schedule and expected to be
    completed according to its approved baseline in the second quarter of
    fiscal year 2009. As of the end of February 2006, the Project is
    approximately 84 percent complete and is on track to conduct an
    ignition experiment at the NIF in 2010.

        17. Senator Warner. Secretary Bodman, is DOE's current progress in
    the development of the NIF on target to meet its goal of achieving
    fusion ignition by 2010?
        Secretary Bodman. The goal of ignition is a top priority of the
    DOE. The fiscal year 2006 appropriation and fiscal year 2007 budget
    request are sufficient to enable DOE to conduct an ignition experiment
    at the NIF in 2010. The fielding of the first ignition experiment is in
    itself a highly complex task, and ignition in a laboratory setting has
    never before been attempted. While it is difficult to predict whether
    the first experiment will achieve ignition, we are confident that the
    experiments will ultimately succeed.

                             naval reactors program
        18. Senator Warner. Secretary Bodman, for fiscal year 2007, the DOE
    has requested $795.1 million for the Naval Reactors program to support
    its part of this joint DOE--Navy program. This tremendously successful
    program has as its number-one priority ensuring the safety and
    reliability of the 104 operating naval reactor plants, which power
    approximately 40 percent of the Navy's major combatants. Funding for
    Naval Reactors has been essentially flat for a number of years now. Do
    you believe we are making the appropriate investments in this area?
        Secretary Bodman. The requested funding level for fiscal year 2007
    is adequate to meet the needs of the Naval Reactors program. However,
    as the program reinvests in its 50-year-old infrastructure, and tries
    to expedite cleanup and disposal of facilities no longer needed, other
    areas, such as fleet support and investment in future designs, will
    likely feel pressure. The program also needs to continue investing
    substantial resources (people, money, and academic capital) in
    addressing management of spent fuel--that is, preparing naval spent
    fuel for storage, shipment, and emplacement in a repository.

                      fissile material disposition program
        19. Senator Warner. Secretary Bodman, in 2000, the United States
    and Russia signed an agreement that committed each country to dispose
    of 34 metric tons of surplus weapons-grade plutonium. Both countries
    agreed to dispose of the plutonium in mixed oxide fuel (MOX)
    fabrication facilities that would dispose of the plutonium by using it
    as nuclear reactor fuel. This program, while laudable in intent, has
    been plagued by numerous problems: There was a 2-year delay in the
    Russian program due to an inability to agree on liability issues for
    U.S. contractors. That delay caused the United States to postpone
    construction of the U.S. MOX fabrication facility in South Carolina in
    order to maintain parallelism in the program. Finally, the costs of the
    program have risen significantly. A December 2005 DOE Inspector General
    report concluded that the cost of the U.S. MOX facility will be $3.5
    billion--$2.5 billion more than the DOE estimate in 2002. The fiscal
    year 2007 budget request for the MOX program is $638.0 million. Why
    hasn't Russia signed the liability agreement it reached with the United
    States last year?
        Secretary Bodman. The United States and Russia successfully
    completed negotiations of a protocol covering liability protection for
    the plutonium disposition program in July 2005. The protocol is
    currently under final review within the Russian Government, and is
    expected to be signed in the near future. We have been reassured
    repeatedly by officials from the Russian Ministry of Foreign Affairs
    and the Russian Federal Atomic Energy Agency (Rosatom) that there are
    no substantive problems with the agreed language, but rather it is a
    question of the protocol undergoing a complete interagency review that
    has been moving more slowly than I had hoped. While we are disappointed
    with the delay in signing, it is important to note that critical U.S.-
    Russian cooperation to move forward with implementation continues.

        20. Senator Warner. Secretary Bodman, since Russia has indicated
    this agreement must be ratified by the Russian Duma, are there risks in
    spending additional U.S. taxpayer dollars on the Russian program before
    the Duma has approved the liability agreement?
        Secretary Bodman. I believe the risks are minimal. We believe the
    Duma will not oppose an agreement the Russian Government has endorsed.

        21. Senator Warner. Secretary Bodman, do you believe Russia is
    still committed to disposing of excess plutonium through the MOX
    program?
        Secretary Bodman. Yes, I believe Russia remains committed to
    disposing of 34 metric tons of its excess plutonium. Recent high-level
    meetings at Rosatom indicate that Russia continues to support the goals
    of the 2000 agreement and would proceed with the MOX program using
    primarily light water reactors if full funding is provided by the
    international community.

        22. Senator Warner. Secretary Bodman, do you believe the U.S. and
    Russian programs should continue to proceed at a parallel pace?
        Secretary Bodman. The United States and Russia remain committed to
    proceeding with plutonium disposition in parallel, to the extent
    practicable, as called for in the 2000 agreement. As a result, the two
    sides will continue to work together to ensure that significant
    progress is made in both countries. The United States and Russia are
    working together to translate this requirement into a detailed schedule
    and corresponding list of milestones on how best to proceed. We will
    need to agree on a flexible approach to parallelism that allows the
    parties to meet the overall intent of the 2000 agreement while
    permitting each side flexibility to take into account differences in
    each country, such as infrastructure and regulatory requirements.

        23. Senator Warner. Secretary Bodman, if we were to delink the U.S.
    and Russian MOX programs, what would be the likely impact on the
    Russian program and on the U.S. program?
        Secretary Bodman. The 2000 agreement commits the United States and
    Russia to dispose of 34 metric tons each of excess weapons plutonium in
    parallel to the extent practicable. Linkage with the U.S. disposition
    program is not the only driving force motivating the Russians to
    dispose of their excess plutonium. The type of reactor used (the more
    efficient fast reactors vice the light water reactors) and significant
    international funding for the disposition program are much more
    important to the Russians. Impediments to either of these factors would
    likely result in Russia storing its plutonium for the foreseeable
    future, which in turn would become a long-term proliferation concern to
    the U.S. Along with the obvious nonproliferation benefits resulting
    from a parallel plutonium disposition program with Russia, the U.S. MOX
    program is a key part of the Department's plan to reduce recurring U.S.
    costs for security and storage of surplus plutonium throughout the
    weapons complex, and meet design basis threat requirements.

                doe nonproliferation programs in iraq and libya
        24. Senator Warner. Secretary Bodman, in 2004 DOE launched an
    initiative to provide employment opportunities for Iraqi scientists,
    technicians, and engineers who may have been involved in Iraqi weapons
    of mass destruction (WMD) programs. This initiative was intended to
    support reconstruction efforts in Iraq and to prevent the proliferation
    of WMD expertise to terrorists or proliferant states. Can you update
    the committee regarding the status and progress of this program?
        Secretary Bodman. Pre-war Iraq had an extensive scientific
    community of technical experts, many of whom had specialized WMD
    expertise and knowledge. Iraq developed a workable nuclear weapons
    design and centrifuge enrichment technology. Scientists and technical
    experts also helped produce large stockpiles of chemical weapons
    agents, and undertook advanced research on biological weapons.
        Since 2003, DOE has funded projects intended to increase our
    understanding of the Iraqi scientific establishment and to ensure those
    experts with WMD-related knowledge do not again become a proliferation
    threat. DOE's first project was multi-phased, beginning with a baseline
    survey on the state of Iraq's scientific infrastructure, to identify
    areas where WMD scientists could be employed. This survey, based on the
    accounts of over 200 scientists, revealed Iraqi needs in key areas:
    public health, water, the environment, and engineering. Using this
    assessment, DOE next funded pilot projects in public health and water
    in 2004. Currently, DOE is funding six civilian technical projects that
    employ WMD scientists and make use of their unique skills. This ongoing
    effort reduces the risk of future proliferation from their expertise,
    while also supporting broader U.S. and Iraqi government reconstruction
    efforts.

        25. Senator Warner. Secretary Bodman, have Iraqi scientists been
    able to take advantage of this opportunity to put their talents to work
    on productive, non-military research activities?
        Secretary Bodman. Yes. The projects DOE supports all contribute to
    civilian scientific capacity building. DOE has funded to date six
    civilian scientific projects that employ 29 scientists, including 12
    with a WMD background. They include:

             water purification techniques,
             the development of new composite material for use in
            artificial limbs,
             improving the indigenous capability of the Iraqi
            pharmaceutical industry,
             improving corrosion resistance in steel,
             an analysis of the level of radionuclides in water and
            sediments in the Tigris and Euphrates rivers, and
             measuring natural radiation levels in Western Iraq.

        Material science and radiation safety projects specifically suit
    scientists with WMD skills and expertise in nuclear weapons, nuclear
    energy, operational engineering, and explosives. These areas for
    research were chosen specifically for that reason.

        26. Senator Warner. Secretary Bodman, roughly how many Iraqi
    scientists do you think might be eligible to participate in this
    program, and is the program able to expand to meet the demand?
        Secretary Bodman. The Department of State and the Iraqi National
    Monitoring Directorate have assessed that there are approximately 500
    scientists, senior technicians, and engineers of potential
    proliferation risk. The 6 projects mentioned employ 29 scientists,
    including 12 with a WMD background. Currently, our Iraq work operates
    on a relatively small budget--$1.5 million in fiscal year 2006. As the
    program evolves, and the situation in Iraq stabilizes, we expect to
    engage a greater number of Iraq experts.

        27. Senator Warner. Secretary Bodman, I understand DOE had plans to
    establish a similar program in Libya. What is the status of that
    effort?
        Secretary Bodman. In recognition of Libya's decision to eliminate
    its WMD program, the DOE has been working with the Department of State
    and the United Kingdom to engage and redirect WMD scientists and
    facilities in Libya. The Department plans to apply $2-3 million
    annually to these activities. To date, the Department has developed
    five scientist engagement projects in Libya in the areas of water
    desalination and purification, groundwater management, and machine tool
    use. Target institutes are: the Center for Mechanical Industries (CMI),
    the Tajura Renewable Energies and Water Desalination Research Center
    (REWDRC), and the National Bureau of Research and Development (NBRD).
    Project implementation in 2006 would engage 25-50 former weapons
    scientists, engineers, and technicians.
        In addition, last August we signed a sister laboratory arrangement
    for technical cooperation with Libyan National Bureau of Research and
    Development to promote peaceful nuclear collaboration in the areas of
    radioisotope production; health physics; neutron activation analysis;
    environment, safety, and health; and radioactive waste disposal.

                    nuclear security cooperation with russia
        28. Senator Warner. Secretary Bodman, at the Bratislava Summit in
    February 2005, Presidents Bush and Putin agreed on a comprehensive
    joint action plan for cooperation in nuclear security, including a plan
    for security upgrades of Russian nuclear facilities and warhead sites.
    What progress has been made on implementing the agreements reached at
    Bratislava?
        Secretary Bodman. According to the terms of the joint action plan,
    security upgrades at all of the Rosatom nuclear sites will be completed
    no later than the end of 2008. We are presently on track to meet that
    deadline. With regard to the warhead sites identified for upgrades
    within the Bratislava discussions, we perceive no major impediments
    that might prevent us from securing these sites by the end of 2008.
        In addition, NNSA and Rosatom developed an accelerated schedule for
    removal of Russian-origin highly enriched uranium (HEU) fresh and spent
    fuel from Russian-designed research reactors in third countries. The
    pilot operation of shipping Russian-origin spent HEU fuel from the WWR-
    SM research reactor in Uzbekistan is in progress and all of the spent
    fuel will be removed from Uzbekistan by June 2006. Under the
    accelerated schedule, all eligible HEU fresh fuel shipments are to be
    completed by the end of 2006, and shipments of spent nuclear fuel
    currently stored outside of research reactors will be completed by
    2010.
        Furthermore, NNSA also has produced a prioritized schedule through
    2011 for the repatriation of U.S.-origin HEU spent fuel from research
    reactors in third countries under the Foreign Research Reactor Spent
    Nuclear Fuel (FRR SNF) Acceptance program. This effort, in close
    cooperation with NNSA's Reduced Enrichment for Research and Test
    Reactors (RERTR) program, works to reduce and, to the extent possible,
    eliminate the use of HEU in civil nuclear applications and promote the
    conversion of research reactors to low enriched uranium fuel. The
    deadline for the FRR SNF Acceptance program was extended by 10 years to
    2019. Efforts currently are underway to accelerate program
    participation.
        Finally, NNSA and Russian institutes are collaborating to develop
    new, higher density low enriched uranium fuels to replace HEU fuels
    used in U.S.-designed and Russian-designed research reactors in third
    countries.

        29. Senator Warner. Secretary Bodman, does the fiscal year 2007
    budget request for defense nuclear nonproliferation provide all the
    resources required to fulfill the commitments President Bush made at
    Bratislava?
        Secretary Bodman. Yes, the administration's fiscal year 2007 budget
    request fully supports the efforts to complete the security upgrades at
    the Russian Strategic Rocket Forces (SRF) and 12th Main Directorate
    warheads sites and all of the Rosatom sites by the end of 2008.
        The fiscal year 2007 budget request also supports an accelerated
    schedule for removal of Russian-origin HEU spent fuel from Russian-
    designed research reactors in third countries, the return of U.S.-
    origin HEU spent fuel from research reactors in third countries, and
    the development of new, higher-density low enriched uranium fuel to
    enable the conversion of U.S.-designed and Russian-designed research
    reactors in third countries. In particular, it is important to
    highlight that the administration's fiscal year 2007 budget request for
    the Global Threat Reduction Initiative's Russian Research Reactor Fuel
    Return program reflects a doubling of the budget in order to meet the
    prioritized schedule in accordance with the Bratislava Joint Statement
    on Nuclear Security Cooperation.

                       global threat reduction initiative
        30. Senator Warner. Secretary Bodman, in March 2005, DOE launched
    the Global Threat Reduction Initiative, which aims to identify and
    secure radiological materials around the world against diversion for
    use in radiological dispersion devices. What is the status of this
    important anti-terrorism initiative?
        Secretary Bodman. With the establishment of the Global Threat
    Reduction Initiative (GTRI) in May 2004, the DOE consolidated and
    accelerated several programs that reduce the threat posed by high-risk,
    vulnerable civil nuclear materials and other radioactive materials that
    could be used in an improvised nuclear device or radiological dispersal
    device. GTRI is working in cooperation with the International Atomic
    Energy Agency (IAEA), the International Criminal Police Organization
    (Interpol), and with other partner organizations in over 40 countries
    around the world to secure or recover high-risk materials, and minimize
    and, to the extent possible, eliminate the use of highly enriched
    uranium in civil nuclear applications.
        GTRI secured 373 foreign sites internationally that contain high-
    risk, vulnerable radiological materials and recovered 12,175 excess and
    unwanted sealed radiological sources in the United States. In addition,
    we assist several countries in establishing effective regulatory
    authority and implementing accounting procedures that will assist
    national authorities in controlling nuclear and other radioactive
    materials within their national borders. We are also working
    bilaterally and through the IAEA to secure and recover unused and
    orphaned nuclear and other radioactive materials that pose a terrorist
    risk. Considering that sustainability is key in any security system,
    GTRI is also striving to ensure that security enhancements can and will
    be maintained over the long term.

        31. Senator Warner. Secretary Bodman, has the DOE developed a
    strategy for prioritizing its activities under this initiative so that
    the material that poses the highest risk is identified and addressed
    first?
        Secretary Bodman. Yes, the NNSA has developed a risk-based analysis
    of the countries and facilities where vulnerable, high-risk nuclear and
    other radioactive materials pose potential risks to U.S. national
    security. This analysis provides the Office of Global Threat Reduction
    with an important tool to allocate its resources.
        The risk-based process prioritizes countries and facilities where
    the combination of dangerous material, terrorist activity, and country
    or facility vulnerabilities present the greatest potential risks to
    U.S. national security. The process is derived from the accepted
    principle of risk as a product of consequence, threat, and
    vulnerability. The risk-based approach takes into account several
    criteria, including the type and quantity of material, security
    conditions at the site, and the location of the material.

      department of homeland security's domestic nuclear detection office
        32. Senator Warner. Secretary Bodman, last year, a new Domestic
    Nuclear Detection Office was established within the Department of
    Homeland Security (DHS). This office was to be a national-level,
    jointly staffed office within DHS to strengthen the Nation's ability to
    detect and prevent attempts to import or use nuclear or radiological
    materials. The office was tasked with coordinating domestic research
    and development for detection, identification, and reporting of
    radiological and nuclear materials. The office was also tasked with
    coordinating the activities of agencies--including DOE, DOD, and
    State--that play a role in the development of nuclear detectors or in
    their use in domestic or overseas programs.
        Given that the DOE has historically led U.S. efforts in research
    and development of nuclear detection technologies, how have DOE's
    mission and programs been affected by the establishment of this new
    office?
        Secretary Bodman. While DOE/NNSA's Office of Nonproliferation
    Research and Development maintains responsibility for the policy
    direction and implementation of its programs, we are sharing
    information and coordinating closely on strategy for research and
    development with the Domestic Nuclear Detection Office (DNDO). DOE/
    NNSA's Office of Nonproliferation Research and Development and DNDO are
    responsible for developing technologies for complementary but different
    missions. NNSA's responsibility includes research and development for
    international nonproliferation efforts, including support to the
    defense and intelligence communities. The DNDO is responsible for
    protecting the U.S. through development of the nuclear detection
    architecture to prevent radiological and nuclear materials from
    illicitly entering the United States. Coordination between NNSA and
    DNDO is beneficial for fulfilling this mission. The benefits of this
    coordination are evident in DNDO's inclusion of DOE/NNSA in reviewing
    its R&D program and its efforts to test and evaluate advancements in
    detection capabilities at the test bed DNDO established at the Nevada
    Test Site. In addition, our Second Line of Defense program is
    participating in, and expects to benefit from, DNDO's operational
    testing and evaluation of advancements in nuclear detection equipment.

        33. Senator Warner. Secretary Bodman, how would you describe DOE's
    relationship with this new entity in DHS?
        Secretary Bodman. Our interactions with DNDO have been positive and
    we are optimistic that our relationship will continue to be
    constructive. DOE frequently exchanges data with DNDO to support the
    global architectural analysis and to collaboratively explore
    advancements in detection capabilities. Furthermore, DOE has a detailed
    assignment stationed within the DNDO to support their efforts on a day
    to day basis. DOE frequently attends and coordinates briefings with
    DNDO to other agencies and to Congress.

                        environmental management funding
        34. Senator Warner. Secretary Bodman, the fiscal year 2007 budget
    request proposes a reduction in funding for the defense Environmental
    Management (EM) program of approximately $740 million. This reduction
    is principally a reflection of the completion of the cleanup of the
    Rocky Flats site during fiscal year 2006. The committee receives only a
    1-year budget request for this program. What do you predict as the out-
    year funding trend for the DOE cleanup activities?
        Secretary Bodman. The administration determines the details of its
    appropriations request 1 year at a time. As reflected in the 5-year
    plan the DOE recently delivered to Congress, the out-year funding for
    cleanup activities is expected to decline over the next several years.

        35. Senator Warner. Secretary Bodman, some of the most technically
    challenging cleanup work remains--such as the nuclear waste tanks at
    Hanford. Given that fact, do you believe the EM program budget can
    continue to decline in the coming years?
        Secretary Bodman. The DOE believes that there are major
    uncertainties regarding its ability to comply with current requirements
    in its environmental cleanup agreements and with other requirements,
    and address the technical challenges of the remaining cleanup work. The
    EM out-year target funding levels are based on the previously planned
    accelerated site closure strategy. The DOE is currently updating these
    assumptions to reflect known changes in the regulatory and statutory
    requirements, incorporate changes based on actual program performance,
    and to incorporate technological and acquisition strategies to meet the
    DOE's long-term environmental commitments.

         waste incidental to reprocessing--using the authority granted
        36. Senator Warner. Secretary Bodman, 2 years ago, Congress
    conducted substantial debate on the issue of residues or ``heels'' left
    in nuclear waste storage tanks. Congress ultimately granted DOE the
    authority to leave some small amount of this residue in place, after
    DOE had physically emptied as much nuclear waste from each tank as
    possible. How has DOE used this new authority?
        Secretary Bodman. The authority you cite is section 3116(a) of the
    Ronald W. Reagan National Defense Authorization Act for Fiscal Year
    2005. We are implementing section 3116 at the Savannah River Site (SRS)
    and the Idaho National Laboratory (INL), the two sites covered by the
    legislation.
        On January 17, 2006, after the statutorily required consultation
    with the U.S. Nuclear Regulatory Commission (NRC), the DOE made the
    first section 3116 determination for the Salt Waste Processing Facility
    (SWPF) at SRS. The DOE is now pursuing the necessary permits from the
    State of South Carolina. The facility is currently under design and DOE
    is planning to begin SWPF operations in fiscal year 2011.
        We are currently consulting with the NRC, in accordance with
    section 3116, on two other draft waste determinations. The first would
    enable us to close two specific SRS tanks containing stabilized
    residual waste. The second would enable us to close Idaho tanks and
    associated components containing stabilized residual wastes. We expect
    to complete our NRC consultations on both of these draft waste
    determinations this summer.

        37. Senator Warner. Secretary Bodman, the new authority requires
    DOE to consult with the NRC in these matters. Is that relationship in
    place and functioning well?
        Secretary Bodman. Section 3116(a) of the Ronald W. Reagan National
    Defense Authorization Act for Fiscal Year 2005 provided additional
    authority for me to determine, in consultation with the NRC, that
    certain wastes from reprocessing are not high-level waste.
        On January 17, 2006, I made the first determination for disposal of
    tank salt waste at the SRS, after working an approximately 10-month
    long statutorily required consultation with the NRC.

                          health and pension benefits
        38. Senator Warner. Secretary Bodman, in the Senate debate on last
    year's defense bill, a number of amendments were filed, related to
    benefits for cleanup workers at various DOE sites. As the manager of
    the bill, I was able to work with Senator Levin and the sponsors of
    these amendments with the result that we did not adopt any provisions
    related to DOE pension policy. DOE opposed most of the proposed
    amendments, or at least had strong reservations about them. What was
    the basis of these reservations?
        Secretary Bodman. The Department believes its approach to
    contractor benefit requirements is fair and reflects current best
    commercial practices that will enable the Department to continue to
    attract the best contractors and the Department's contractors to
    attract the best employees.
        We opposed the proposed pension amendments because they would have
    required specific changes to private pension plans--changes that would
    have significantly increased the liabilities of those plans, would have
    undermined the agreed-upon resolution of those matters in collective-
    bargaining agreements, constrained the ability of DOE contractors to
    manage their workforces, and made future negotiations with labor
    organizations representing their workforces more difficult. The
    legislation would have singled out DOE contractors for different
    treatment from other government contractors and made it more difficult
    to manage retirement benefit costs. Certain of the proposed amendments
    were intended to require the contractors to maintain employees' vested
    accrued benefits in a manner that overlapped with the existing
    protection of such benefits under the Employee Retirement Income
    Security Act (ERISA).

        39. Senator Warner. Secretary Bodman, are there any legislative
    provisions you feel are needed in this area?
        Secretary Bodman. At this time the Department does not believe that
    additional legal authorities are necessary to address contractor
    employee benefits issues.

        40. Senator Warner. Secretary Bodman, could you share your view on
    the general theme of worker benefits under DOE contracts?
        Secretary Bodman. Generally, the Department intends to use an
    approach to worker benefits under DOE contracts that is fair, reflects
    current best commercial practices, and will enable the Department to
    continue to attract the best contractors and the Department's
    contractors to attract the best employees. In so doing the Department
    needs to improve the predictability of its contractor cost
    reimbursement obligations and moderate benefit cost and liability
    growth in contractor benefit programs.

        41. Senator Warner. Secretary Bodman, what do you believe should be
    the overarching principles by which DOE guides the development of
    requirements related to contractor benefits?
        Secretary Bodman. The overarching principles with respect to
    employee benefits and DOE contract requirements are fairness and a
    reflection of current best commercial practices that will enable the
    Department to continue to attract the best contractors and Department's
    contractors to attract the best employees.

                  nuclear waste cleanup at hanford, washington
        42. Senator Warner. Secretary Bodman, in your statement, you have
    called out the environmental cleanup project at Hanford, Washington as
    being uniquely plagued with management and regulatory challenges.
    Specifically, you have identified ``overly optimistic assumptions'' and
    ``unrealized technology advancements'' as the source of the
    approximately $5 billion cost escalation on this project. While it is
    important that this project regain its momentum, it is critical that it
    first be placed on the right path. Could you describe for the committee
    the action plan you are now implementing to find and correct the
    deficiencies associated with the execution of this project?
        Secretary Bodman. The DOE, along with the U.S. Army Corps of
    Engineers (USACE) and Bechtel National, Inc. (the Waste Treatment and
    Immobilization Plant contractor), is currently undertaking several
    major activities to ensure that we fully understand what is required to
    successfully complete the project and begin plant operations. Below are
    key activities that have been initiated in the areas of project
    management, technology, and the project cost and schedule:
    Strengthen Project Management
        An independent firm has completed an After Action Factfinding
    Review which identified the root causes for the project management
    issues and was published in January 2006. In response, several
    initiatives have been put into place to strengthen the project
    management process:

             I have met several times with senior principals of
            Bechtel National, Inc., to discuss directly DOE concerns and
            expectations about project performance;
             The Assistant Secretary for Environmental Management
            has established a Headquarters' senior-level Waste Treatment
            and Immobilization Plant (WTP) Oversight Team;
             The DOE has recruited qualified personnel and is in
            the process of hiring several others in the areas of
            contracting, procurement, contract law administration, and
            project management;
             A Headquarters Team has been commissioned to assess
            the Office of River Protection compliance with DOE Order 413.3,
            Program and Project Management for the Acquisition of Capital
            Assets;
             The WTP contractor is implementing an Earned Value
            Management System (EVMS) that fully complies with American
            National Standards Institute/Environmental Industry Association
            (ANSI/EIA) 748-A-1998;
             A structured weekly and monthly reporting system is in
            place, plus a Quarterly Performance Headquarters review is
            being conducted by the Assistant Secretary for Environmental
            Management; and,
             Senior DOE management is receiving project status
            updates on a regular basis.
    Verify WTP Design-Engineering
             The DOE has commissioned a broad group of
            distinguished independent senior professionals from private
            industry and academia to thoroughly review all technology
            aspects of the WTP process flow sheet. The flow sheet report
            was finalized in March 2006 and indicates that other than one
            correctable flaw dealing with line plugging, the WTP should
            operate. There are several other solvable issues regarding
            waste throughput. DOE is formulating a path forward that
            addresses and remedies these issues. We will share this with
            the committee.
             The DOE has separately commissioned the USACE to
            independently review the establishment, validation, and
            implementation of the revised seismic design criteria, a
            technology related issue already identified as having a
            significant cost and schedule impact. Also, the Defense Nuclear
            Facilities Safety Board has been actively engaged in this issue
            and will continue to be included in discussions regarding the
            final seismic criteria.
             In addition, the DOE is proceeding with the drilling
            of at least one deep borehole to confirm the ground motion
            data, which should be completed by the summer of 2007. However,
            the assumption is the final design criteria have acceptable
            margin of design. The DOE expects the reviews and discussions
            of seismic criteria to be completed by late summer 2006 to
            permit proceeding with construction of the facilities affected
            by the concern for seismic criteria.
    Establish a Credible Project Cost and Schedule
             The DOE has commissioned ``best and brightest''
            independent senior professionals from private industry,
            academia, and Bechtel corporate management with years of
            experience to review the WTP resource-loaded project cost,
            schedule, estimating methodology, contingency management, and
            overall project management system. This report is due to be
            completed by early spring 2006.
             The DOE has also engaged the USACE to perform an
            independent expert review of the Estimate At Completion, and,
            if acceptable, to validate the project baseline scope, cost,
            and schedule. The USACE has retained a number of recognized
            industry experts working alongside their own senior staff. The
            USACE's report is scheduled to be completed by late summer
            2006.

        Based on the results from the reviews, the DOE expects to establish
    a sound project cost and schedule to complete the Hanford WTP. The
    objective is to ensure this project will be well managed. We owe it to
    Congress, regional stakeholders, and the U.S. taxpayers that the
    substantial investment in the WTP is receiving the highest level of
    talent and attention the DOE can provide.
                                     ______

                   Questions Submitted by Senator John Ensign
                      management and operations contracts
        43. Senator Ensign. Secretary Bodman, on the issue of management
    and operations (M&O) contracts for DOE facilities, DOE has indicated
    that it wants to move toward dispersing these contracts among different
    contractors, in essence, bringing ``new blood'' into the management of
    DOE facilities. Is that still the DOE's intention and what are some
    examples of where you are doing that?
        Secretary Bodman. I fully support competition as a tool to ensure
    that the DOE's facilities and sites are managed and operated by the
    best contractors. DOE is committed to conducting its M&O contract
    competitions fairly and in a manner that fosters competitive interest.
    We believe that where competition is employed, regardless of the
    winner, DOE receives benefits. The competitive pressure, coupled with
    the stronger contract requirements such as the use of performance-based
    incentives required by the Department's solicitation, should drive the
    program and management improvements that the Department is seeking as
    well as continue to provide the American taxpayer with optimum
    management teams for our M&O contracts. A phenomenon that we are seeing
    is that potential offerors are assembling ``teams'' in order to be more
    competitive and provide the best possible combination of management and
    science expertise. This teaming phenomenon was observed under the
    procurements for the Idaho National Laboratory, the Oak Ridge National
    Laboratory, the Los Alamos National Laboratory, and the Portsmouth and
    Paducah remediation requirements. A number of competitions are ongoing
    or are planned in the near future including the Argonne National
    Laboratory, the Fermi National Accelerator Laboratory, and the Lawrence
    Livermore National Laboratory. We anticipate similar industry responses
    under these competitions.

        44. Senator Ensign. Secretary Bodman, in that same light, is the
    fact that a potential contractor might be a first-time M&O contractor
    for a DOE facility a disadvantage, even if that contractor has
    experience managing other large-scale Federal Government facilities?
        Secretary Bodman. As a general matter, we strive to develop
    competitive solicitations that promote competition (1) by open and
    early communication with industry and (2) by structuring evaluation
    criteria that induce potential offerors to craft proposals that best
    meet the Department's requirements. In order to ensure the selection of
    the optimum management team to manage our M&O contracts, DOE uses a
    combination of tools to engage the marketplace early in the competitive
    process by providing meaningful and timely information on the
    requirement, the contractor's performance, the physical site and
    facilities, and agreements with regulatory agencies. DOE often uses
    ``one-on-one'' meetings where industry officials meet with senior DOE
    program officials prior to development of the draft solicitation. DOE
    then considers the information obtained in light of the type of work to
    be performed at the site in developing the acquisition approach, and
    evaluation criteria that will be used in the solicitation. With respect
    to a contractor's experience, during the competitive process, the DOE
    evaluates offerors' past performance and experience in managing large
    scale facilities similar in size, scope, and complexity to that of the
    specific site or facility in order to ensure potential contractors can
    successfully perform the required effort.

                                nevada test site
        45. Senator Ensign. Secretary Bodman, I obviously have a particular
    interest in the Nevada Test Site (NTS). Since the cessation of nuclear
    testing, Nevada's congressional delegation has consistently supported
    the use of that facility for the testing of new technologies, as well
    as the utilization of potential subcontractors or tenants who can
    assist with that objective. Is DOE giving any weight to the capability
    of potential contractors to achieve those aims?
        Secretary Bodman. Yes, as evidenced by this statement that is one
    of the minimum expectations required by the Acquisition Plan:

              The Contractor is expected to maintain or exceed the
            performance of the incumbent with respect to applied research,
            development, and engineering. The Contractor will be expected
            to sustain and improve the culture of technology application
            that has contributed to the success of the NTS over the years.

        Furthermore, ``Section M, Evaluation Criteria for Award'' of the
    Request for Proposals identifies ``Other DOE and non-DOE Support'', the
    area under which such work by non NNSA/Defense Programs would be done,
    as part of ``Criterion 1 Applied Science, Engineering, and
    Technology.'' Criterion 1 received by far the highest weighting in the
    evaluation. The NTS has long been used to support the NNSA's mission to
    ``Support the United States leadership in science and technology.'' The
    NNSA expects the selection of the M&O contractor for the new contract
    to be capable of achieving that objective.

        46. Senator Ensign. Secretary Bodman, as a result of unforeseen
    circumstances, I understand that the timeline for the selection of a
    contractor for the NTS has slipped. Can you give me any idea how close
    DOE is to making a selection?
        Secretary Bodman. The Source Selection Official accepted the Source
    Evaluation Board's Final Report, and is expected to make a decision in
    time for the transition to the new contract to begin by April 1, as
    identified in ``Amendment 003 of the Solicitation'' that resides on the
    DOE Web site at http://www.doeal.gov/nevadacontractrecompete/.

                            doe laboratory pensions
        47. Senator Ensign. Secretary Bodman, how far along is DOE towards
    moving to defined contribution pension plans at the DOE national
    laboratories, in line with the private sector?
        Secretary Bodman. Consistent with the goal to mitigate cost
    volatility and liability growth in contractor pension plans, the
    Department is taking steps to ensure that as contracts are recompeted,
    solicitations require (unless otherwise required by law) the provision
    of market-based pension plans competitive for the industry to new, non
    incumbent employees hired after the date of contract award. The
    solicitations also provide that incumbent employees will remain in
    their existing pension plans pursuant to plan eligibility requirements
    and applicable law; that is, ``if you're in, you're in.'' Since January
    1, 2005, we have awarded nine contracts containing the requirement that
    DOE facility contractors establish market based pension plans for all
    new employees hired after contract award. DOE believes this is an
    approach that is fair, reflects current best commercial practices, and
    will enable the Department to continue to attract contractors and
    contractors to attract the best employees.
                                     ______

                Questions Submitted by Senator Lindsay O. Graham
                            fiscal year 2007 budget
        48. Senator Graham. Secretary Bodman, the overall decrease in the
    budget for the SRS is approximately $60 million. However, the EM budget
    for SRS reflects a $94 million decrease from fiscal year 2006. If
    funding for the SWPF is not included, the total reduction in EM funding
    for SRS is around $120 million. With this significant reduction in
    funding, what work will be stopped or eliminated at SRS in fiscal year
    2007?
        Secretary Bodman. Savannah River's (SR) EM overall budget is $60
    million less than last year. The $94 million difference between fiscal
    year 2006 and fiscal year 2007 excludes funding for Program Direction
    and Safeguards and Security, as does the $120 million. There are a
    number of increases and decreases within the following amounts that
    make it difficult to reconcile the figures without line-by-line budget
    examination, but overall, the explanations for the net $60 million
    decrease for EM are as follows:

            - $33.8 million decrease is associated with completion of
            deactivation of the cooling tower for 235-F and completion of
            the FB-Line deactivation (PBS SR-0011B).
            - $33.2 million decrease is associated with the completion of
            operations in the F-Area plutonium storage facility and the new
            strategy to consolidate plutonium storage into one facility in
            K-Area (PBS SR-0011C).
            - $40.4 million decrease is associated with the decontamination
            and decommission (D&D) project (PBS SR-0040C). This reduction
            was necessary to realign dollars to meet critical mission needs
            and higher priority projects in order to meet regulatory
            compliance issues (e.g. SWPF and the soil and groundwater
            program).

        These decreases were partially offset by an increase in the
    Radioactive Liquid Tank Waste Stabilization and Disposition project
    (PBS SR-0014C) of $32.6 million (primarily to support design and
    construction of the SWPF), an increase in the Soil and Water
    Remediation Project (SR-0030) of $9.7 million in order to meet
    regulatory compliance milestones, and an increase in Safeguards and
    Security (SR-0020) of $21.3 million for implementation of the 2005
    Design Basis Threat requirements.
        As demonstrated above, the most significant impact of this overall
    EM reduction of $60 million is associated with the D&D program ($40.4
    million) which supports activities that are not required by compliance
    agreements. This reduction will result in a re-pacing of the D&D
    program.

        49. Senator Graham. Secretary Bodman, the D&D has the most
    significant cuts. The President's budget reduces funding in this area
    from approximately $60 million in fiscal year 2006 to $12.5 million for
    fiscal year 2007. How will this effect worker safety and community
    concerns?
        Secretary Bodman. The reduced funding for the D&D project means
    less D&D scope will be accomplished. The D&D scope that is accomplished
    will be performed with full implementation of safety and worker
    protection measures and controls. There will be no reduction in safety
    for the work performed. There will be no impact to the local
    communities from deferral of this work until a later date. These
    activities are not required by compliance agreements.

        50. Senator Graham. Secretary Bodman, how will the DOE prioritize
    demolition work at SRS?
        Secretary Bodman. EM's overall priorities are:

              1. Conduct compliant and safe operations;
              2. Fully establish the disposition capability for radioactive
            liquid tank waste, special nuclear materials, and spent nuclear
            fuel;
              3. Dispose of contact-handled and remote-handled transuranic
            waste and low level radioactive waste;
              4. Continue to remediate contaminated soil and groundwater;
              5. Decontaminate, decommission, and demolish contaminated
            facilities no longer needed; and,
              6. Support post-closure benefits and liability requirements.

        The demolition work at the SRS will be prioritized in a manner
    reflective of these overall priorities.

        51. Senator Graham. Secretary Bodman, since there are people
    assigned to perform the existing cleanup work at SRS, what is the
    anticipated labor impact associated with the planned reductions?
        Secretary Bodman. Prior to identified reductions in the budget, the
    SRS planned a workforce restructuring and reduction using a phased
    approach beginning in fiscal year 2005. The restructuring program was
    needed as a result of progress made in site cleanup, reprioritization
    of work scope, and subsequent changes in skills mix requirements. The
    DOE continues to evaluate workforce requirements to determine whether
    additional changes will be required.

        52. Senator Graham. Secretary Bodman, when SRS took plutonium and
    other materials from sites such as Rocky Flats and Fernald, DOE was
    enabled to accomplish cleanup missions ahead of schedule and at cost
    savings. At the time, DOE stated its intention to use the money saved
    to reinvest in cleanup of other sites, such as SRS. However, this has
    not been the case. Can you explain why this has not happened?
        Secretary Bodman. Prior to fiscal year 2001, the DOE's funding
    strategy for the EM program was that as sites such as Rocky Flats
    completed cleanup and funding requirements at those sites decreased,
    that funding would be shifted to other sites. However, as part of the
    administration's ``Accelerated Cleanup Initiative,'' increased funding
    was provided beginning in fiscal year 2003 to most sites including
    Savannah River, Oak Ridge, and Idaho to accelerate cleanup rather than
    waiting until some sites such as Rocky Flats were completed. This
    allowed the DOE to address its urgent risks sooner and to accelerate
    cleanup. Fiscal year 2005 was the peak year of funding for this
    initiative.

                                mixed oxide fuel
        53. Senator Graham. Secretary Bodman, when the SRS was selected as
    the site for the MOX program, the DOE and NNSA made important
    commitments to the State of South Carolina. If the MOX plant was not
    constructed and fully operational according to a schedule codified in
    the National Defense Authorization Act for Fiscal Year 2003, the
    Federal Government would be required to pay the State of South Carolina
    up to $100 million per year beginning in 2011. It is South Carolina's
    intention to follow through on the project and not receive penalty
    payments, however, the residents of the State simply seek reassurances
    that weapons grade plutonium would not remain at SRS indefinitely.
        The program is approximately 3 years behind schedule. This is due
    to a number of factors including delays in negotiating a liability
    agreement with Russia. In the fiscal year 2006 Energy and Water
    Appropriations Act, the penalty payment time table was to be adjusted
    by 3 years in order to reflect these delays. However, we must
    accelerate the program in order to bring it closer to the original
    construction and operations schedule.
        In your opening statement before the committee, you mentioned that
    the MOX plant will begin operations in 2015. However, current law
    states that if the MOX production goals are not met by January 1, 2014,
    the DOE will be required to pay the penalty payments. Even if the new
    schedule for MOX plant can be met, is it the intention of the Federal
    Government to honor its commitments to South Carolina and make the
    penalty payments?
        Secretary Bodman. The Department is committed to begin operation of
    the MOX facility as soon as practical. The fiscal year 2006 Energy and
    Water Appropriations Act directed the Department to prepare and submit
    to Congress a new baseline schedule for the MOX facility by the end of
    this year. This new baseline will take into account all relevant
    factors, including the fiscal year 2007 funding level approved by
    Congress. This baseline will permit Congress and the administration to
    consider what, if any, changes should be made to the statutory
    framework for the MOX facility. The administration will comply with
    what Congress legislates on payments to the State.

        54. Senator Graham. Secretary Bodman, this past fall, we discussed
    the status of the MOX project. At that time, you told me that the
    program was approximately 3 years behind schedule. However, according
    to your testimony, it appears as if your fall schedule was incorrect.
    What has changed since the fall that has caused an additional delay in
    the program?
        Secretary Bodman. DOE received approximately $180 million less than
    the budget request for fissile materials disposition in fiscal year
    2006. This has caused an additional delay in the schedule for operation
    of the U.S. MOX facility, as well as DOE's ability to meet the MOX
    production objective.

        55. Senator Graham. Secretary Bodman, what assurances can you give
    me that in December, the timetable will not show further postponement
    of the MOX facility?
        Secretary Bodman. A detailed revised cost estimate and schedule for
    construction and operation of the MOX facility is currently being
    developed and will be submitted to Congress by December 2006. Our
    intent is to establish an aggressive and realistic schedule that
    reflects all relevant factors including the likely funding level in the
    Fiscal Year 2007 Energy and Water Development Appropriations Act and
    the anticipated funding levels for future years.

        56. Senator Graham. Secretary Bodman, attempts to alter the
    agreement the Federal Government entered into with South Carolina send
    a negative message to all communities that work with DOE. Can I get
    your assurances that the administration will work to prevent any
    attempts to further alter the penalty language?
        Secretary Bodman. The MOX facility is a key component of U.S.-
    Russian efforts to dispose of stockpiles of surplus weapons plutonium.
    The Department is committed to begin operation of the MOX facility as
    soon as practicable and to continue working with the State of South
    Carolina and local communities in achieving that objective. The
    Department will provide Congress with a revised baseline for the MOX
    facility by December 31, 2006. This baseline will reflect the fiscal
    year 2007 funding levels approved by Congress and other relevant
    factors. We will work with Congress to determine what is the proper
    path forward in light of this baseline.

        57. Senator Graham. Secretary Bodman, the President has requested
    $383 million for the MOX program for fiscal year 2007. On a cost basis,
    the MOX program represents our Nation's largest single non-
    proliferation program. After the MOX plants in South Carolina and
    Russia are constructed and operational, they will lead to the ultimate
    elimination of 34 metric tons of defense plutonium. This represents
    approximately 4,000 nuclear warheads.
        Does the fiscal year 2007 budget request aim to accelerate
    construction to make up for time lost in negotiating with the Russians?
    How do you plan to make up for the delays?
        Secretary Bodman. DOE has undertaken a number of actions to
    strengthen the management of the MOX project and will insist on a
    multi-tier performance incentive in future contract negotiations for
    the construction of the MOX facility to meet critical project
    milestones. Our intention is to adhere to the schedule in the report I
    submitted to Congress on February 15, 2006, although we will continue
    to explore ways to accelerate its schedule.

        58. Senator Graham. Secretary Bodman, how much money would be
    required to bring the project back on schedule?
        Secretary Bodman. A detailed revised cost estimate and schedule for
    construction and operation of the MOX facility are currently being
    developed and will be validated as part of the Department's Critical
    Decision process. DOE will submit to Congress by December 2006 a report
    on the revised cost and schedule for construction and operation of the
    MOX facility. Until these estimates have been developed and validated,
    it is premature to speculate on additional funding.

        59. Senator Graham. Secretary Bodman, while site preparations have
    begun, will construction begin this fall as planned?
        Secretary Bodman. DOE began site preparation activities for the
    U.S. MOX facility at the SRS in October 2005. We fully intend to begin
    construction this year.

        60. Senator Graham. Secretary Bodman, how important is the MOX
    program in achieving our nonproliferation goals?
        Secretary Bodman. The Russian plutonium disposition program is very
    important to achieving U.S. nonproliferation goals. This is the only
    program that will permanently dispose of Russian plutonium so that it
    can never again be used for weapons.

        61. Senator Graham. Secretary Bodman, what message does the delay
    in our largest nonproliferation program send the international
    community, including the Russians, North Koreans, and Iranians?
        Secretary Bodman. The international community strongly supports the
    Russian plutonium disposition program. Our Group of Eight (G-8)
    partners have committed significant funds to the program and, despite
    delays between the U.S. and Russia over liability protection, they
    continue to support the program. The United States demonstrated its
    commitment to this important nonproliferation program by continuing to
    pursue the negotiations and continued preparatory work as much as
    possible. This indicates that we, along with our international
    partners, will aggressively pursue initiatives to prevent proliferation
    despite hurdles along the way, and it sends a strong message to
    potential proliferants that proliferation will not be tolerated.

        62. Senator Graham. Secretary Bodman, in 2002, Vice President
    Cheney was in South Carolina when he said, ``this administration is
    totally committed to work with Congressman Graham and your
    congressional delegation to pass legislation that will guarantee that
    South Carolina will not become a permanent storage site for
    plutonium.'' We passed that legislation in the National Defense
    Authorization Act for Fiscal Year 2003.
        Can you assure me that the SRS will not become the Nation's
    repository for defense plutonium and you will work to resist all
    efforts to make this happen?
        Secretary Bodman. In accordance with applicable law, no surplus,
    weapons-usable fissile plutonium will be shipped to the SRS without a
    plan for the disposition of such plutonium. The DOE will continue to be
    guided by all applicable laws in this regard, including the National
    Defense Authorization Act for Fiscal Year 2003, as amended. The DOE
    agrees that the SRS should not become a permanent repository for such
    plutonium and is committed to dispositioning such plutonium in a proper
    manner.

        63. Senator Graham. Secretary Bodman, I notice there is no funding
    in the fiscal year 2007 budget request for SRS plutonium disposition.
    What is your strategy for the disposition of plutonium that is not
    scheduled to be sent through the MOX process?
        Secretary Bodman. Deputy Secretary Clay Sell approved on September
    6, 2005, the mission need (Critical Decision-0) for a new plutonium
    disposition capability to be established at the SRS to deal with such
    plutonium not suitable for use in MOX fuel. The DOE's fiscal year 2006
    budget request and appropriation includes $10 million for conceptual
    design for this project. Work on the conceptual design has begun and
    will continue into fiscal year 2007. Based on the results of the
    conceptual design and alternatives analysis, after appropriate analysis
    pursuant to the National Environmental Policy Act, a decision on the
    selected process will be made.

        64. Senator Graham. Secretary Bodman, if the MOX program should
    fail, DOE would have to remove the plutonium from SRS. Does DOE have
    the capability to move the plutonium out of South Carolina to an
    alternative site?
        Secretary Bodman. Yes, we do have the capability to move the
    material. The amount of time it would take to move the material would
    depend upon many variables including the priority of the movement with
    respect to the other commitments of the Secure Transportation Asset,
    the amount of material to be moved and its configuration, and the
    location of the alternative site. The material moved to the SRS from
    Rocky Flats took approximately 11 months of concentrated effort to
    transport.

                                    hydrogen
        65. Senator Graham. Secretary Bodman, DOE is to be commended for
    strengthening its commitment to science research, especially in the
    advancement of hydrogen research. However, I am deeply disturbed by the
    lack of funding at DOE's only EM national laboratory.
        Despite over 50 years of experience in storing hydrogen, Savannah
    River National Laboratory (SRNL) does not appear to be a focal point
    for the DOE's efforts to realize the President's hydrogen initiative.
    Other labs such as Sandia and Oak Ridge, which have less expertise in
    hydrogen research than SRNL, are targeted to receive a substantial
    increase in their funding, as compared to the amount dedicated to
    funding hydrogen research at the SRNL. Why is the potential of SRNL not
    being realized by DOE?
        Secretary Bodman. DOE recognizes SRNL's extensive past experience
    in nuclear applications for hydrogen. As a result of that experience,
    SRNL was successful in competing for three hydrogen research projects
    supported by the DOE Hydrogen Program: (1) nuclear-based hydrogen
    production, (2) metal hydride research as part of a Hydrogen Storage
    Center of Excellence, and (3) basic research in carbon-based storage
    materials. SRNL's success has led to an increase in Hydrogen Program
    funding from $950,000 in fiscal year 2005 to $1,700,000 in 2006. Other
    national laboratories such as Sandia are also clearly recognized as
    experts in hydrogen technologies and have been awarded DOE projects
    based on competitive review. Many hydrogen projects were hit hard by
    the $25 million appropriations shortfall in fiscal year 2006 and the
    approximately $40 million in congressionally directed projects. The
    combined effect was that funding for 66 projects was eliminated and
    funding for 48 projects was reduced. It is difficult to increase
    funding for any projects under these circumstances.
        In addition to planned DOE investments, SRNL will have the
    opportunity to participate in future competitive solicitations to
    contribute new research ideas for the President's Hydrogen Fuel
    Initiative.

        66. Senator Graham. Secretary Bodman, on February 13, 2006, the
    Center for Hydrogen Research was opened in Aiken, South Carolina. This
    facility will be a magnet for investment and innovation in hydrogen.
    Already General Motors and Toyota are working to support hydrogen
    research at the SRNL. How is DOE planning to capitalize on this
    investment and increase the resources allocated to SRNL to develop
    hydrogen research?
        Secretary Bodman. The DOE Hydrogen Program currently supports three
    projects at the SRNL: (1) nuclear-based hydrogen production, (2) metal
    hydride research as part of the Metal Hydride Center of Excellence, and
    (3) basic research in carbon-based storage materials. Hydrogen Program
    funding at SRNL increased from $950,000 in fiscal year 2005 to
    $1,700,000 in 2006. In addition to planned DOE investments, SRNL will
    have the opportunity to participate in future competitive solicitations
    to contribute new research ideas for the President's Hydrogen Fuel
    Initiative.

                                  liquid waste
        67. Senator Graham. Secretary Bodman, the storage of 37 million
    gallons of highly radioactive liquid waste in aging tanks at SRS is the
    single largest threat to human health and the environment in South
    Carolina. Recently discovered additional leaks highlight the need to
    move quickly in closing the tanks. SRS has indicated that they will
    fail to meet the closure schedules established in the Federal Facility
    Agreement for High Level Waste (HLW) Tanks 18 and 19 (10/31/06 for Tank
    19, 02/28/07 for Tank 18). How does DOE intend to ensure that the HLW
    tank closure commitments in the Federal Facility Agreement are upheld?
        Secretary Bodman. The DOE, in coordination with the South Carolina
    Department of Health and Environmental Control representatives, is
    evaluating actions necessary to ensure future tank closure activities
    meet the existing Federal Facility Agreement schedule.
        On January 17, 2006, I made the first determination for disposal of
    tank salt waste at the SRS, after working an approximately 10-month
    long statutorily required consultation with the U.S. Nuclear Regulatory
    Commission.

        68. Senator Graham. Secretary Bodman, as any delays in implementing
    section 3116 of the National Defense Authorization Act for Fiscal Year
    2005 will have a significant impact on the surrounding community, what
    is DOE doing to ensure that community stakeholders, such as the South
    Carolina Department of Health and Environmental Control (SCDHEC) are
    part of the process moving forward?
        Secretary Bodman. The DOE has published each draft waste
    determination for public comment and has received comments from the
    State regulatory agencies. In particular, the SCDHEC has provided
    comments on the draft determination concerning the SRS. DOE routinely
    (monthly) briefs the SRS Citizens Advisory Board on the status of waste
    determinations. Furthermore, representatives from DOE-SR and the SCDHEC
    recently met on February 24, 2006, to reinitiate technical discussions
    associated with closing Tanks 18 and 19, and reached agreement to hold
    regularly scheduled meetings.

        69. Senator Graham. Secretary Bodman, I authored and worked to pass
    section 3116, which was intended to facilitate timely closure of the
    HLW tanks at SRS. However, the first section 3116 waste determination
    took over 14 months to complete after passage of section 3116. It
    appears that DOE's implementation time line is adding about a year to
    the closure process. How will DOE manage the implementation time line
    to facilitate the closure commitment dates?
        Secretary Bodman. Section 3116(a) of the Ronald W. Reagan National
    Defense Authorization Act for Fiscal Year 2005 provided additional
    authority for me to determine, in consultation with the NRC, that
    certain wastes from reprocessing are not high-level waste. The DOE and
    the NRC recently held a lessons learned meeting with State
    representatives to identify opportunities to reduce the implementation
    time line for future waste determinations and facilitate meeting tank
    closure commitment dates. Additionally, DOE and NRC staff and senior
    management continue to have dialogue to resolve specific implementation
    issues associated with implementing the legislation.

        70. Senator Graham. Secretary Bodman, I am concerned DOE has
    relinquished control of the waste determination to the NRC. What is DOE
    doing to ensure that goals of section 3116 are being realized and not
    being slowed down by unnecessary bureaucracy?
        Secretary Bodman. Section 3116(a) of the Ronald W. Reagan National
    Defense Authorization Act for Fiscal Year 2005 provided additional
    authority for me to determine, in consultation with the NRC, that
    certain wastes from reprocessing are not high-level waste. The DOE and
    the NRC recently held a lessons learned meeting with State
    representatives to identify opportunities to reduce the implementation
    time line for future waste determinations and to ensure the goals of
    section 3116 are being realized. Additionally, DOE and NRC staff and
    senior management continue to have dialogue to resolve specific
    implementation issues associated with implementing the legislation.

                         salt waste processing facility
        71. Senator Graham. Secretary Bodman, due to recent decisions by
    DOE concerning design standards for the SWPF, the schedule for
    construction and operation has been extended by over 2 years. This has
    necessitated the need for various interim activities to ensure safe and
    appropriate operation of the high level radioactive waste tank system.
    Can you explain DOE's process in determining the proper seismic
    criteria?
        Secretary Bodman. The DOE has established design and performance
    standards associated with natural phenomena hazards (including seismic)
    in DOE Guide 420.1-2, Guide for the Mitigation of Natural Phenomena
    Hazards for DOE Nuclear Facilities and Non-Nuclear Facilities, and DOE-
    STD-1021-93, Natural Phenomenon Hazards Performance Categorization
    Guidelines for Structures, Systems, and Components, that are tailored
    and graded to the hazards associated with our nuclear facilities.
    Performance Category 3 (PC-3), representing the most stringent
    earthquake design requirements, is invoked where the highest hazards
    exist in these types of facilities. This level of design rigor is
    typically applied to conditions where facility hazards pose a risk
    sufficient to warrant safety related functions that protect the public.
    PC-2 defines a less robust set of earthquake design requirements
    applied to facility conditions where hazards require a safety-related
    function to protect workers.
        In accordance with the DOE standards early in the design of
    facilities, the performance categorization is determined and analysis
    refined as the safety documentation matures. In some cases where the
    potential consequence to the onsite population and facility workers is
    high, the PC-3 design is considered for providing a reliable
    confinement safety function for seismic events.
        The SWPF preliminary safety analysis and the original facility
    design were based on PC-2 categorization. However, questions were
    raised whether PC-2 systems would provide assurance that confinement of
    radioactive materials was sufficient to protect workers following a
    large earthquake at the SRS. As the PC-3 analysis provides more
    detailed stress information which allows the designer to minimize any
    permanent structural deformation to ensure that the confinement
    boundaries remain intact, DOE decided that the SWPF will be designed to
    meet PC-3 standards in order to provide adequate assurance of
    radioactive material confinement.

        72. Senator Graham. Secretary Bodman, how will DOE meet the
    technical and funding challenges of achieving these activities without
    impacting other SRS cleanup and waste management actions?
        Secretary Bodman. At the SRS in South Carolina, the SWPF project
    design has been revised to meet more stringent confinement design
    requirements. These proposed changes form the basis for the budget
    profile and funding scenarios presented in the fiscal year 2007 project
    data sheets. The DOE believes that there are major uncertainties
    regarding its ability to comply with current requirements in its
    environmental cleanup agreements and with other requirements, and
    address the technical challenges of the remaining cleanup work. The EM
    activities estimated at target funding levels are based on the
    previously planned accelerated site closure strategy. Several of these
    assumptions have not materialized. In addition, new work scope from
    emerging cleanup requirements has now been identified and execution of
    some key projects has not been adequate. The DOE is currently updating
    these assumptions to reflect known changes in the regulatory and
    statutory requirements, incorporate changes based on actual program
    performance, and to incorporate technological and acquisition
    strategies to meet the DOE's long-term environmental commitments.

        73. Senator Graham. Secretary Bodman, efficient treatment of the
    salt portion of HLW is needed as soon as possible to minimize the
    radioactive residuals at SRS. In addition, treatment of the salt waste
    is needed to provide proper management of the high level radioactive
    waste tank system to support new mission activities proposed for SRS.
    Is DOE planning to commit resources to operate the SWPF as early as
    possible without detriment to other SRS cleanup activities?
        Secretary Bodman. The DOE recognizes the importance of the SWPF to
    the treatment and disposition of radioactive tank waste at the SRS. DOE
    is planning to request funding to begin SWPF operations in fiscal year
    2011. The facility is currently under design.

        74. Senator Graham. Secretary Bodman, can you comment on DOE's
    commitment to operate the SWPF and DOE's associated funding plans?
        Secretary Bodman. The DOE recognizes the importance of the SWPF to
    the treatment and disposition of radioactive tank waste at the SRS. DOE
    is planning to request funding to begin SWPF operations in 2011. The
    facility is currently under design.

        75. Senator Graham. Secretary Bodman, if a large earthquake hits
    SRS, the largest risk to the workers and the community will be found in
    the tank farms. As such, shouldn't it be the highest priority of DOE to
    close the tanks?
        Secretary Bodman. The DOE considers treatment and safe disposition
    of the tank farms waste at the SRS to be among the highest priorities
    of all Office of Environmental Management missions. To this end, the
    Defense Waste Processing Facility (DWPF) has been stabilizing SRS
    sludge waste since 1996. The SWPF, currently under design, is critical
    to the treatment and disposition of salt waste (comprising over 90
    percent of the volume of waste in the SRS tank farms and approximately
    half of the radioactivity). We plan to use our best efforts to begin
    SWPF operations in 2011.

        76. Senator Graham. Secretary Bodman, I understand that SRS
    stakeholders were not part of the decisionmaking process to change the
    building standards. Why weren't SCDHEC, the State of South Carolina, or
    any officials in the legislative branch consulted prior to the
    announcement of the new standard?
        Secretary Bodman. The DOE should have done a better job of keeping
    the stakeholders and the regulators fully informed of the status of
    this issue and the potential impacts of making these decisions. This
    has been identified as a critical lesson learned.
        A management-level team, consisting of representatives from the
    SCDHEC, the South Carolina Governor's Nuclear Advisory Council, DOE,
    and the Defense Nuclear Facilities Safety Board, has been established
    to improve communications among the parties.

        77. Senator Graham. Secretary Bodman, as potential new missions for
    the site such as spent fuel recycling may result in an increase of high
    level waste at the site, I am concerned that if the SWPF is not opened
    on schedule it could hinder SRS's ability to compete for future
    missions. Further, if the process is further delayed, it could result
    in the shutdown of the DWPF and the reduction of mission. How will you
    ensure that DWPF remains operational?
        Secretary Bodman. The DOE plans to manage the SWPF project
    aggressively and to use its best efforts to begin SWPF operations in
    2011. Doing so will help ensure that the DWPF processing at the SRS is
    managed in a manner that supports the current missions.

                       contract rebid/community concerns
        78. Senator Graham. Secretary Bodman, community support for the SRS
    has always been strong. However, the workforce reductions and
    uncertainty over programs such as MOX and the MPF have begun to
    fracture support for SRS. What is DOE doing to revitalize community
    support?
        Secretary Bodman. The DOE values its longstanding community support
    for the SRS and its current missions. DOE is committed to community
    support through numerous proactive measures.

             The Savannah River Operations Office (DOE-SR) Manager
            meets regularly with the Savannah River Regional
            Diversification Initiative, the SRS Retirees Association, the
            Citizens for Nuclear Technology Awareness, and other local
            economic development and civic groups to expand existing lines
            of communication. DOE-SR is also increasing the availability of
            senior staff members to speak at local civic organization
            events about the SRS current and any future missions.
             DOE is working closely with the SCDHEC and the South
            Carolina Governor's Nuclear Advisory Board on salt waste
            disposition and nuclear waste tank closure.
             The SRS Citizens Advisory Board (CAB) provides
            recommendations to DOE on environmental remediation, waste
            management and other related SRS issues. In fiscal year 2005,
            the CAB held six full board meetings in conjunction with
            combined committee meetings in Georgia and South Carolina and
            hosted 28 additional committee meetings primarily in the Aiken-
            Augusta area.
             The Medical University of South Carolina, in
            partnership with SRS and other civic organizations, sponsored
            Community Leaders Institutes (CLI) in rural counties in South
            Carolina and Georgia. While the outreach program has been
            active for 5 years, in the past year, there have been five CLI
            events attended by about 900 citizens. These institutes provide
            citizens with information on grant opportunities in the areas
            of housing, economic development, health issues, and
            environmental justice, among other topics. SRS senior managers
            participate in these institutes to answer questions about SRS.
             In fiscal year 2005, the SRS Tours Program hosted
            1,636 people on 148 tours. Those touring the site ranged from
            congressional staff members and chambers of commerce to nuclear
            activists groups.
             The SRS Education Outreach Program provides a variety
            of science and literacy outreach programs at SRS, including
            DOE, the Savannah River National Laboratory, the Savannah River
            Ecology Laboratory, Natural Resources Management and Research
            Institute, and the Washington Savannah River Company. These
            outreach programs enhance interest in science, mathematics,
            engineering, and technology and support improvements in
            education by using the unique resources available at the site.
            Last year, the site reached more than 62,000 students and
            helped about 700 teachers with classroom presentations. One
            example is the SRS-sponsored annual Central Savannah River Area
            College Night event, the largest college fair in the southeast.
            Over 6,000 participants and 150 colleges and universities
            attend the annual event.
             In other areas, SRS employees are noted for their
            outstanding community support. SRS is the largest area
            contributor to charity efforts like the Golden Harvest Food
            Bank, Marine Corps Toys for Tots, the United Way, Habitat for
            Humanity, and a host of other charities and goodwill causes.
            The DOE-SR Federal employees annually rate among the highest
            Combined Federal Campaign contributors per employee in the
            Nation.

        79. Senator Graham. Secretary Bodman, what steps is DOE taking to
    improve coordination with the local community?
        Secretary Bodman. In addition to valuing community support, the DOE
    is also committed to continuing its longstanding positive working
    relationships with local organizations and agencies via interagency
    agreements, open communication channels, and sharing of vital
    resources. To that end, DOE closely coordinates with local and State
    government agencies for annual emergency exercises as well as making
    SRS resources readily available in the event of actual life-threatening
    emergencies. Working with the DOE Headquarters Office of Congressional
    and Intergovernmental Affairs, DOE-SR seeks to strengthen lines of
    communication with local congressional delegations, the Office of the
    Governor, and local elected officials through open, accurate, and
    timely notifications of notable SRS activities and challenges. DOE-SR
    respects the views and concerns of all of its stakeholders and is
    committed to proactively coordinating ongoing site activities.

        80. Senator Graham. Secretary Bodman, will DOE be issuing a draft
    Request for Proposals (RFP) for the SRS Management and Operations (M&O)
    contract?
        Secretary Bodman. The DOE intends to award two contracts to replace
    the current site contract with Washington Savannah River Company, LLC
    (WSRC): one for the site operations currently under contract to WSRC
    (referred to as the site M&O acquisition), and the second for the
    liquid waste program. Planning is underway for both of these
    acquisitions. Typically, DOE issues a draft RFP in order to receive
    input from industry for complex scopes of work. The decision to issue
    draft RFPs has not yet been made regarding the upcoming SRS
    acquisitions.

        81. Senator Graham. Secretary Bodman, when will the RFP come out?
        Secretary Bodman. Planning is underway for the site M&O and the
    liquid waste acquisitions. We are assessing our schedules as part of
    the current development of the RFPs.

        82. Senator Graham. Secretary Bodman, what is the schedule for bid
    deadlines and decisions to be made?
        Secretary Bodman. Planning is underway for the site M&O and the
    liquid waste acquisitions. We are assessing our schedules as part of
    the current development of the RFPs.

        83. Senator Graham. Secretary Bodman, as DOE continues to draft an
    RFP for the upcoming SRS rebid, I encourage you to treat the SRS
    retiree benefit package in a manner that is fair and consistent with
    the DOE's previous practice at other sites such as the Los Alamos
    National Laboratory. This point of view is shared by the entire South
    Carolina and Georgia Senate delegations, as well as Governor Mark
    Sanford of South Carolina. Will SRS be treated in the same manner as
    Los Alamos National Laboratory?
        Secretary Bodman. The anticipated SRS RFPs will provide benefits
    packages for incumbent employees and new hires consistent with recent
    solicitations for management of major DOE facilities. Pursuant to this
    approach, the Department will continue to reimburse the allowable costs
    for incumbent employees hired by a new contractor to remain in their
    existing defined benefit pension plans subject to plan eligibility
    requirements and applicable law; that is, ``if you're in, you're in.''
    However, to the extent permitted by law, the RFPs would also require
    the contractors selected for award to provide market-based pension
    plans for new, non-incumbent employees hired after award. With respect
    to medical benefits for contractor employees, the DOE is currently
    assessing its approach and the anticipated RFPs will reflect the
    outcome of this process.

        84. Senator Graham. Secretary Bodman, last year, money was diverted
    from projects at SRS to meet obligations of the pension fund. I
    understand the funding shortfall was not a result of mismanagement of
    pension assets, but due to a penalty payment that was assessed on the
    fund as a result of lower-than-expected returns on fund assets. While
    the budgetary pressures caused by the increased pension liabilities did
    not directly impact critical work at SRS, work was delayed nonetheless.
    I understand pension shortfalls are not unique to the SRS and are
    symptomatic of a DOE-wide problem. How does DOE intend to meet pension
    obligations without negatively impacting work at DOE sites?
        Secretary Bodman. When the DOE encounters a shortfall in the
    pension fund, we carefully evaluate and allocate resources based on
    factors that support primary mission objectives, and attempt to
    identify as areas for deferral of work only those projects not critical
    to safety, health, or environmental protection and which do not impact
    regulatory compliance.
                                     ______

                   Questions Submitted by Senator John Cornyn
                       information security and assurance
        85. Senator Cornyn. Secretary Bodman, I continue to be concerned
    with securing Federal information systems. The Federal Government
    collects and manages a vast amount of information and much of it is
    sensitive or personal in nature. In addition, the systems that maintain
    that information are increasingly interconnected. Therefore, there is a
    growing risk of unauthorized access to these systems and information.
        The Federal Information Security Management Act (FISMA) of 2002
    requires Federal agencies to annually report on their information
    security efforts to OMB. The subsequent ``Federal Computer Security
    Report Card'' that GAO developed based on the information from the
    reported information gave the DOE a grade of ``F'' in 2002, 2003, and
    2004. Generally, what efforts has DOE undertaken to improve its FISMA
    performance?
        Secretary Bodman. I have directed that the Department's entire
    cyber security program be revitalized. Under the leadership of our new
    DOE Chief Information Officer and a Department-wide team, we have
    developed a plan for this revitalization and we are moving aggressively
    to implement that plan. The revitalized cyber security plan guides
    systematic improvement of every aspect of cyber security. The plan
    mitigates the cyber security weaknesses that have been identified,
    based on the following principles:

             Managing cyber security risk in a dynamic threat
            environment requires sharing threat information, managing risk,
            and effective use of resources in such a manner as to be
            ``sufficient but not overdone''.
             Cyber security is everyone's business. The cyber
            security program's responsibilities are distributed among
            senior Department leaders to ensure a strong cyber-security
            posture, while preserving mission capability.
             Systematic improvement now as well as continuous
            improvement over the long term in the DOE cyber security
            posture is essential to strengthen the protection of DOE's
            information and information systems.

        DOE has begun work under the new cyber security plan, and is
    leveraging existing expertise within DOE and best practices drawn from
    both within and outside the Department.

        86. Senator Cornyn. Secretary Bodman, what is the status of the
    DOE's efforts to inventory information systems?
        Secretary Bodman. We have developed a comprehensive plan to improve
    the way we manage our large inventory of information systems and
    networks, including tracking all of our major hardware and software. We
    have invested in an automated capability to bring our inventory of
    systems up to date and to help ensure that our network boundaries are
    secure. This capability will help us ensure that our software is up to
    date, with the latest security software patches. We have already begun
    implementing this inventory control plan as part of our revitalized
    cyber security program.

        87. Senator Cornyn. Secretary Bodman, what is your guidance to
    management personnel on the importance of protecting information and
    networks?
        Secretary Bodman. I have personally made it very clear to all DOE
    senior management that cyber security is a high priority, and that we
    must ensure adequate protection of all DOE information and information
    systems and networks. I have established cyber security as a personal
    priority for each Under Secretary and other top managers. I have
    ensured that these managers are directly involved in top-level planning
    for revitalizing the Department's cyber security by establishing a
    Cyber Security Steering Committee led by the Chief Information Officer;
    and having as members the Under Secretary/Administrator of the National
    Nuclear Security Administration, the Under Secretary for Energy,
    Science, and Environment, the Director of the Office of Science, the
    Director of the Office of Safety and Security Performance Assurance,
    the Administrator of the Energy Information Administration, and a
    representative of our power marketing administrations. This Executive
    Steering Committee has provided overall direction in the formation of
    the revitalized DOE Cyber Security Program, recently approved by the
    Deputy Secretary and currently being implemented.

        88. Senator Cornyn. Secretary Bodman, what ongoing activities are
    you pursuing to ensure that information security practices are followed
    throughout the agency?
        Secretary Bodman. I am holding everyone in the Department
    responsible for information security, and this accountability begins
    with senior departmental management. Accountability at all levels is
    critical to the success of cyber security throughout DOE. The line
    organization managers are crucial to the success of the cyber security
    program, ensuring long-term, continued emphasis on cyber security and
    the commitment of required resources needed to support the
    implementation of the Department's revitalized cyber security program
    within their organizations. Information system users are also
    responsible for doing their part to protect our information and
    information systems.
                                     ______

                   Questions Submitted by Senator John Thune
                 education to produce scientists and engineers
        89. Senator Thune. Secretary Bodman, one of the things I have heard
    several times this year both in this committee and on the floor of the
    Senate is America's struggle to educate and produce scientists and
    engineers. What threat do you think this problem poses to the
    maintenance of our current nuclear arsenal, our ability to create new
    weapons systems, and is the DOE taking any steps to recruit and train a
    new generation of scientists and engineers who will lead the DOE in the
    future?
        Secretary Bodman. The NNSA and its laboratories and plants have
    evolved from the singularly focused Manhattan Project into a national
    reservoir of technical expertise and capabilities in the numerous
    technologies that support the design and manufacture of the most
    complex and precise machines produced, nuclear weapons. Our primary
    customer, the DOD, relies on the scientists and engineers who design
    and build nuclear weapons to do their part to maintain U.S. strategic
    strike capabilities and also draws on them for innovative solutions to
    a wide range of military and intelligence problems. The Intelligence
    Community is another long-time customer that has drawn on the
    laboratories for exceptional, interdisciplinary innovation. The DHS
    turns to the laboratories often for analysis and technology for
    applications that range from biological weapons to port security. The
    Federal Bureau of Investigation and other law enforcement organizations
    use forensic technologies developed by the laboratories to analyze
    evidence. Of course, the DOE's Nuclear Nonproliferation effort
    absolutely depends on scientific and technical expertise available only
    at the laboratories and plants.
        For these and many other reasons, we must maintain this talent
    pool, and I share your concerns about the challenges of recruiting the
    next generation of scientists and engineers to maintain and design
    nuclear weapons. For the Federal Government's homeland and national
    security enterprises, the potential of overall shortages in the
    sciences and engineering are even more worrisome because of the
    requirement for security clearances, which limits hiring to U.S.
    citizens. With an aging workforce where about 40 percent of nuclear
    weapons program technical staff members are retirement eligible, NNSA
    laboratories and plants have already had some difficulty hiring
    appropriately educated and trained persons into their highly skilled
    workforces. That experience, plus emerging data on the needs of the
    broader national security community for the same skills and a
    constricted education pipeline of U.S. citizens, especially those with
    advanced degrees, have raised concerns about NNSA's ability to maintain
    a highly skilled and appropriately trained workforce to carry out the
    nuclear weapons mission.
        In 2004, the National Science and Technology Council (NSTC)
    Interagency Working Group on Critical Workforce Needs, led by NNSA,
    collected data across the defense, homeland security, and intelligence
    communities on hundreds of critical skills and the expected difficulty
    in finding U.S. citizens with those skills over the next 5-10 years.
    NNSA plants identified 256 critical skills, 32 percent ``expected to be
    difficult to hire'' in the 5-10 year time frame. With the addition of
    those skills that ``may be difficult to hire,'' the percentage rises to
    73 percent. For the laboratories there are 300 identified critical
    skills, half of them expected by the laboratories to be ``difficult to
    hire.'' This percentage rises to 84 percent with the addition of skills
    identified as ``may be difficult to hire''. Of particular concern is
    filling positions at NNSA laboratories that require PhDs, as the total
    number of graduates in fields of interest has been declining since
    1997, and less than half these graduates from U.S. universities are
    U.S. citizens. Moreover, the 7-10 years it takes to earn a Ph.D., post
    baccalaureate, makes it imperative that we identify potential
    shortfalls and take steps now to develop skilled individuals.
        To stay on top of the situation, we are committed to re-energizing
    the NSTC effort and continuing our support and participation in the
    interagency working group. We will seek annual data updates, added
    focus on high consequence skills, and continued data mining and
    analysis to share with all participants even as we use this data to
    target specific critical skills for attention.
        Through headquarters selected programs, NNSA provides highly
    competitive fellowships and competitively awarded grants to develop
    needed science and engineering techniques, develop needed skills, and
    advance scholarship at the high school and undergraduate levels. These
    grants are awarded to major universities and minority institutions
    including Historically Black Colleges and Universities and the Massey
    Chairs of Excellence. We look to the laboratories and plants to both
    leverage our Federal programs and improve their intern programs to
    attract and develop diverse U.S. citizens with specific at-risk skills.
    We are reviewing on a continuing basis the efficiency and cost
    effectiveness of different investments to be certain that we have the
    necessary student and university programs. We need them to feed our
    laboratory and plant internship programs as they actively develop U.S.
    citizens with specific, at-risk skills.
        I have challenged my NNSA managers not to rely on business-as-usual
    approaches to meet anticipated nuclear weapon critical skill hiring
    needs. NNSA and its laboratories and plants will work with
    universities, including minority educational institutions so that
    students will seamlessly transition from coursework and internships to
    employment. There are three substantial benefits from feeding the
    pipeline in this way: 1) there is mutual culling by the students and
    NNSA, because students return as interns each year by invitation and
    according to their own interest, 2) there is full benefit to the
    organization, because returning interns contribute to the mission
    effort, and 3) the critically skilled interns who are hired when they
    graduate do not require years of costly on-the-job training.

                           pit manufacturing facility
        90. Senator Thune. Secretary Bodman, in your testimony you state
    ``We were disappointed, however, that Congress declined to fund
    planning for a modern pit production facility in fiscal year 2006. As a
    result, we did not seek funding for this facility in fiscal year 2007,
    although we remain convinced that increased pit production capacity is
    essential to our long-term evolution to a more responsive nuclear
    weapons infrastructure. In coming months, we will work with Congress to
    identify an agreed approach to fund long-term pit production capacity.
    In the meantime, we plan to increase the Los Alamos pit manufacturing
    capacity to 30-40 pits per year by the end of fiscal year 2012. This
    production rate, however, will be insufficient to meet our assessed
    long-term pit production needs.''
        Do you believe that Congress is asking you to maintain a high
    standard of performance but not providing you with the resources to
    complete your mission?
        Secretary Bodman. The lack of funding for a higher pit production
    capacity is a concern. The NNSA submitted a report to Congress in
    January 2005 that identified the need for at least a 125-pit-per-year
    capacity starting in 2021. Our work with the DOD to develop long-term
    stockpile quantities and transformation rates suggests that this pit
    production capacity is about right. This spring, the DOE will provide
    Congress the results of its review of the Secretary of Energy Advisory
    Board Nuclear Weapons Complex Infrastructure Task Force. The NNSA is
    committed to work with Congress to establish the appropriate funding
    and schedule to establish a more responsive infrastructure that will
    support the nuclear weapons stockpile into the future.

        91. Senator Thune. Secretary Bodman, with the age of our warheads,
    pit production must be responsive. We must have the capacity to produce
    what we need. We do not have the luxury of time on our side. The
    arsenal is decaying. Safety and reliability are in jeopardy because we
    cannot certify that these aging warheads will operate as they were
    designed. What is your level of confidence on the safety and
    reliability of our arsenal?
        Secretary Bodman. I am highly confident in the current safety and
    assessed reliability of the U.S. nuclear weapons stockpile, and
    recently joined the Secretary of Defense in providing the President our
    assessment of this very issue. I have personally met with the Directors
    of Los Alamos, Lawrence Livermore, and Sandia National Laboratories to
    discuss the status of the nuclear weapons stockpile at length, and I
    have reviewed their assessments of each system in the stockpile.
    However, we have concluded that the path we are currently on--
    successive refurbishments of warheads in the Cold War legacy stockpile
    which have tight design margins due to the yield-to-weight
    requirements--presents increased risk in our being able to assure high
    confidence in the continued safety and reliability of that stockpile
    over the very long term (many decades) without nuclear testing. The
    evolution away from tested designs, resulting from the inevitable
    accumulations of small changes over the extended lifetimes of these
    highly optimized systems with low performance margins, is what gives
    rise to this concern. Nor will successive refurbishments support
    transition to a truly ``responsive'' and cost effective nuclear weapons
    infrastructure as called for in the NPR. These concerns reflect the
    judgment of the directors at the three national weapons laboratories--
    Los Alamos, Livermore, and Sandia--and that of the Commander of U.S.
    Strategic Command, who is advised by his group of experts. We are
    exploring RRW options in order to ensure the long-term sustainability
    of the current military capabilities provided by warheads in the
    existing stockpile.

        92. Senator Thune. Secretary Bodman, how do we speed up the
    transformation to assure we have a safe and reliable nuclear weapons
    stockpile?
        Secretary Bodman. The RRW concept and responsive infrastructure--
    each enabled by the other--may genuinely be transformational. RRW
    allows the promise for sustaining, with long-term confidence and
    without underground nuclear testing, military characteristics existing
    in the stockpile today. At the same time, RRW will enable us to enhance
    safety and security and simplify the manufacturing and certification
    processes, which helps enable a responsive infrastructure. A responsive
    infrastructure, in turn, would enable further reductions in stockpile
    size. We are currently conducting a Nuclear Weapons Council-approved
    RRW feasibility study. Once that study is completed, the Nuclear
    Weapons Council will select a preferred option and the administration
    will agree on a path forward for stockpile transformation.

                           funding for cleanup sites
        93. Senator Thune. Secretary Bodman, over the last year you
    completed the cleanup of the Rocky Flats site in Colorado while working
    cleanup of several other sites. Yet, the EM budget only dropped by 2.5
    percent. You mentioned that overly optimistic assumptions and
    unrealized technology advancements have led you to the slower progress
    you are experiencing. I'm concerned about the management cost overruns
    and what I consider a lack of oversight. Congress is investing a
    significant amount of funds each year and your execution of the cleanup
    has been sub par. What actions have you taken to rectify this problem?
        Secretary Bodman. While EM has had a number of successes, it is
    true that EM has also had less successful projects, as well. The
    actions we have taken to address these latter projects include
    maintaining focus on safe, cost-effective risk reduction and cleanup.
    Safety is our highest priority. To improve project oversight, we are
    increasing our concentration on project management. We are training the
    EM leaders, project managers, and staff to become certified in
    accordance with industry standards. We are independently validating
    project baselines, schedules, and assumptions about effective
    identification and management of risks. We are working to ensure that
    our cleanup contracts are designed to drive outstanding performance. We
    are striving for constant, real time feedback of lessons learned to
    improve project planning and execution. We believe these steps will
    enable EM to continue making progress and improve project performance:

             Monthly project reviews by site managers and
            headquarters staff;
             Quarterly project reviews by the Assistant Secretary
            and senior headquarters managers; and,
             Full implementation of DOE orders on all EM projects,
            both capital construction and operating.
                                     ______

                   Questions Submitted by Senator Carl Levin
                       global nuclear energy partnership
        94. Senator Levin. Secretary Bodman, a key element of the Global
    Nuclear Energy Partnership (GNEP) plan is that other countries would
    supply new nuclear fuel and take back spent nuclear fuel. Have any
    other countries expressed an interest in being fuel supplier countries,
    and would these countries also agree to take back and reprocess the
    spent fuel?
        Secretary Bodman. The preliminary responses from major fuel supply
    nations and the IAEA have been very encouraging. We look forward to
    expanding our discussions with both fuel supply nations and potential
    fuel user nations as this important initiative moves forward. These
    countries do not necessarily have to agree to take back and recycle
    used fuel; however, the intent would be that at least one GNEP supplier
    nation would do so.

        95. Senator Levin. Secretary Bodman, part of the GNEP program is
    the development of proliferation resistant nuclear fuel cycle
    technologies. Are any funds included in the DOE fiscal year 2007 budget
    request for research and development to support proliferation resistant
    nuclear fuel cycle technologies?
        Secretary Bodman. The fiscal year 2007 budget request for the GNEP
    initiative is $250 million to accelerate the development of
    proliferation-resistant fuel technologies. The Department has proposed
    to continue research and development and engineering and environmental
    studies needed to develop a baseline cost and schedule for three
    possible engineering scale demonstrations of more proliferation
    resistant fuel technologies that would fit together as an integrated
    fuel recycle system.

        96. Senator Levin. Secretary Bodman, in the press packet and budget
    materials describing GNEP, DOE claims that it has developed a new
    proliferation resistant fuel reprocessing technology. Would other
    member countries of the GNEP be required to use the DOE technology?
        Secretary Bodman. Supplier nations would continue to operate
    current generation fuel cycle facilities and would work with the U.S.
    and partner nations to develop and demonstrate new, more proliferation
    resistant fuel recycling technologies that could be deployed in the
    future.

        97. Senator Levin. Secretary Bodman, under GNEP some countries
    would be nuclear fuel suppliers and others would receive the fuel. Who
    would determine which countries would have nuclear power reactor fuel
    supplied to them?
        Secretary Bodman. Key supplier states would agree on the framework
    for safe and secure expansion of nuclear energy, agreeing to
    arrangements that permit the use of reactors and provide fuel services,
    while discouraging further spread of enrichment and reprocessing.

        98. Senator Levin. Secretary Bodman, would the fuel recipients all
    have to be signatories to the Nonproliferation Treaty (NPT)?
        Secretary Bodman. We envision that all recipients of fuel under the
    GNEP reliable fuel services regime would have to meet certain
    nonproliferation commitments, for example, refraining from the
    development of enrichment and reprocessing capabilities, implementing
    the IAEA Additional Protocol and complying with NPT and IAEA safeguards
    and Additional Protocol obligations, and maintaining the latest
    international standards for the physical protection of nuclear
    materials.

        99. Senator Levin. Secretary Bodman, currently, nuclear fuel or
    other nuclear technology assistance cannot be provided to countries who
    are not signatories to the NPT. What happens to the NPT under the GNEP
    proposal?
        Secretary Bodman. GNEP will be implemented in conformity with the
    NPT and will strengthen the NPT by offering reliable fuel services as
    an alternative to the further spread of enrichment and reprocessing
    capabilities, which can be used as a cover for developing a nuclear
    weapons capability.

        100. Senator Levin. Secretary Bodman, under the GNEP does DOE see a
    centralized nuclear fuel pricing arrangement, similar to OPEC? How and
    who decide the price of nuclear fuel?
        Secretary Bodman. No. GNEP does not contemplate centralized nuclear
    fuel pricing. GNEP seeks agreement on the shared goals of the
    partnership and market competition among diverse suppliers within that
    framework. We seek, among supplier states in the partnership, agreement
    on goals that will improve security, operation and waste management
    characteristics of the fuel cycle over time. Currently, commercial
    marketing of fuel services and reactors is concentrated among the
    United States, the European Union, Japan, Canada, Russia, and China.
    These countries account for about 80 percent of world nuclear energy
    capacity. In addition to seeking to expand nuclear energy within these
    states, GNEP seeks to expand the market for fuel services responsibly
    to developing countries interested in bringing the benefits of nuclear
    power to their economy. These countries, under the GNEP initiative,
    would be able to purchase a reactor and then lease fuel and not have to
    make their own investments in enrichment or reprocessing.
        To back up market mechanisms, the United States supports and is
    committed to supply low-enriched uranium to a fuel reserve to that
    would provide supply assurances to countries foregoing enrichment and
    reprocessing. In the event of a short-term supply disruption that the
    market cannot correct, fuel from this reserve could be sold at market
    prices for distribution, thus increasing the confidence of reactor-only
    states that they could meet their energy needs. Market competition
    would nevertheless be the primary factor in determining the prices for
    nuclear fuel services.

        101. Senator Levin. Secretary Bodman, would spent fuel reprocessing
    reduce the volume of high level waste generated that would be required
    to be stored at a geologic repository?
        Secretary Bodman. Volume reduction is a factor in determining the
    loading of the geologic repository, especially to the extent that it
    reduces the number of disposal containers that are required. However, a
    more important consideration in the loading of the repository is the
    heat generated by radioactive decay of certain constituents of the
    spent fuel. Decay heat drops rapidly as a function of time after
    discharge from the reactor. Decay heat shortly after discharge is
    dominated by several short-lived fission products such as isotopes of
    tellurium, ruthenium, cerium, xenon, and zirconium; that heat is
    dissipated during water pool cooling. After the initial cooling period,
    the decay heat is dominated for the next 60-70 years primarily by the
    decay of cesium and strontium. Beyond that period, the decay heat is
    dominated by isotopes of the transuranic elements--plutonium,
    neptunium, americium, and curium--due to their relatively long half-
    lives. As a result, by separating the cesium and strontium and the
    transuranic elements from the spent fuel, and consuming the transuranic
    elements in a fast spectrum reactor, the Department estimates that the
    capacity of the Yucca Mountain repository would be significantly
    increased, by a factor of 50-100. The actual increase in capacity will
    depend on how successful we are with the demonstration projects; that
    is, to what level of efficiency we can recover and destroy the heat-
    generating radionuclides.

        102. Senator Levin. Secretary Bodman, in the past, millions of
    gallons of high level radioactive waste were generated through
    reprocessing that must now be vitrified and sent to a geologic waste
    repository. What is the disposition path for the high level waste that
    would be generated as part of the GNEP spent fuel reprocessing
    proposal?
        Secretary Bodman. While the PUREX process used today in the world
    and DOE's advanced recycle technology, Uranium Extraction Plus (UREX+),
    both involve chemical separations processes, the detailed ``flow
    sheets'' or processes for the technologies are significantly different.
    For example, PUREX is a batch processing process and UREX+ is a much
    more efficient and less waste intensive continuous process.
        An important design objective of the UREX+ technology, as well as
    an objective in demonstrating the technology at an engineering scale,
    is to validate that UREX+ can successfully partition spent fuel into
    its component parts to produce a transuranic product that can be
    consumed in a fast reactor rather than disposed of in a geologic
    repository. Also, the UREX+ group separations process precludes
    separation of a pure plutonium product, a significant advantage from a
    proliferation perspective. Finally, UREX+ represents significantly
    improved means of handling the separated fission products from spent
    fuel and improved processing which would not result in the accumulation
    of any high-level liquid waste.

                         nuclear weapons complex issues
        103. Senator Levin. Secretary Bodman, has the DOE prepared a
    response to the July 2005 recommendations of the Energy Advisory Board
    on reconfiguring the nuclear weapons complex?
        Secretary Bodman. The Secretary of Energy Advisory Board (SEAB)
    Nuclear Weapons Complex Infrastructure Task Force Report on the Nuclear
    Weapons Complex was issued as a draft in July 2005 and submitted by the
    Board to me in October 2005. We have been analyzing these
    recommendations and other recent inputs (e.g., QDR) to a long-term
    planning scenario for the nuclear weapons complex. DOE is preparing a
    comprehensive response defining what we are going to do. We will be
    sharing the planning scenario with stakeholders, including Congress,
    early this spring.

        104. Senator Levin. Secretary Bodman, what studies, reviews, or
    other actions has the DOE taken or are currently ongoing in response to
    the Advisory Board report?
        Secretary Bodman. Within the NNSA, Defense Programs has been
    actively reviewing the recommendations of the SEAB Nuclear Weapons
    Complex Infrastructure Task Force to prepare a comprehensive path
    forward. Of note, many SEAB recommendations are consistent with
    initiatives that NNSA already has planned or is currently implementing
    (e.g., immediate design of a RRW, consolidation of special nuclear
    materials, accelerating dismantlement of retired weapons, and managing
    the evolving complex to enhance responsiveness and sustainability).
    However, a major SEAB recommendation dealing with planning for a
    Consolidated Nuclear Production Center requires further review before a
    path forward is selected. These reviews are underway and anticipated to
    be completed in time to share the results with Members of Congress this
    spring.

                        robust nuclear earth penetrator
        105. Senator Levin. Secretary Bodman, what is the DOD planning to
    do with the $4.0 million that was transferred to it from DOE in fiscal
    year 2006?
        Secretary Bodman. We believe the DOD should address its plans for
    the $4.0 million appropriated to DOD in fiscal year 2006 for earth
    penetrator studies.

        106. Senator Levin. Secretary Bodman, will this money be used to
    conduct the robust nuclear earth penetrator sled test?
        Secretary Bodman. We believe the DOD should address its plans for
    the $4.0 million appropriated to DOD in fiscal year 2006 for earth
    penetrator studies.

        107. Senator Levin. Secretary Bodman, will DOE/NNSA participate in
    any way in the sled test?
        Secretary Bodman. The Fiscal Year 2006 Energy and Water Development
    Appropriations Act eliminated all funds requested for the RNEP program,
    including funds to conduct a sled test previously under preparation at
    Sandia National Laboratories. No sled test for a nuclear earth
    penetrator study will be funded by or conducted at any DOE site. If the
    DOD conducts an earth penetrator test at a DOD facility and requests
    DOE support, the Department will, through its national laboratories,
    provide equipment and technical expertise as necessary.

                             nuclear test readiness
        108. Senator Levin. Secretary Bodman, will the DOE be submitting a
    legislative proposal to repeal section 3113 of the National Defense
    Authorization Act for Fiscal Year 2004, requiring an 18-month test
    readiness posture by October 2006?
        Secretary Bodman. Not at this time. While the NNSA has made
    considerable progress in improving its test readiness posture over the
    last 4 years cutting the readiness time from 36 months to 24, Congress
    did not fully provide the funding requested by the President to achieve
    an 18-month test readiness posture by the end of fiscal year 2006, as
    required by section 3113 of the National Defense Authorization Act for
    Fiscal Year 2004. I would be happy to work with Congress to address
    this issue.

                      nuclear weapons stockpile reductions
        109. Senator Levin. Secretary Bodman, does the DOE/NNSA budget
    request for fiscal year 2007 begin substantial reductions in the
    nuclear weapons stockpile?
        Secretary Bodman. The President's request for the fiscal year 2007
    weapons budget is fully consistent with the June 2004 report to
    Congress on the nuclear weapons stockpile that explains the plan to
    reduce the size of the U.S. nuclear stockpile. This reduction includes
    both active and inactive strategic warheads, as well as nonstrategic
    nuclear warheads. These reductions have already begun and will continue
    in fiscal year 2007. By 2012, the U.S. nuclear stockpile will be
    reduced by nearly one-half from fiscal year 2001 levels, resulting in
    the smallest nuclear stockpile since the Eisenhower administration.

        110. Senator Levin. Secretary Bodman, how many warheads from the
    current stockpile will be retired and how many will be dismantled in
    fiscal year 2007?
        Secretary Bodman. [Deleted.]

                           national ignition facility
        111. Senator Levin. Secretary Bodman, will you commit to providing
    adequate funding to the National Ignition Facility (NIF) to support
    ignition by 2010 and support a robust series of high density physics
    experiments?
        Secretary Bodman. The fiscal year 2006 appropriation and fiscal
    year 2007 budget request are sufficient to enable DOE to conduct an
    ignition experiment at the NIF in 2010. The goal of ignition is a top
    priority of DOE. In order to maintain the commitment to an ignition
    experiment in 2010, it has been necessary to reduce somewhat other high
    energy density physics experiments.

                  materials protection control and accounting
        112. Senator Levin. Secretary Bodman, is the DOE/NNSA on track to
    complete all permanent upgrades at nuclear materials sites in Russia
    and the former Soviet Union by 2010?
        Secretary Bodman. Yes. In response to the September 11, 2001,
    attacks, NNSA took aggressive steps to accelerate the original 2010
    schedule so that the security upgrade activities will be completed by
    the end of 2008, after which facilities will be transitioned into a
    sustainability phase. In addition, the Bratislava agreement provided
    for a comprehensive joint action plan for cooperation on security
    upgrades of Russian nuclear facilities within the Rosatom complex. This
    plan ensures that security upgrades for Russian Rosatom facilities will
    be completed by the target date of 2008.

        113. Senator Levin. Secretary Bodman, is the DOE/NNSA on track to
    complete all permanent upgrades at nuclear weapons storage areas in
    Russia by 2008?
        Secretary Bodman. Yes. Cooperation to secure the nuclear warhead
    storage sites of the Russian Strategic Rocket Forces will be completed
    by the end of 2008. Under the Bratislava Initiative, the Russian
    Ministry of Defense nominated a number of new nuclear warhead storage
    sites operated by the 12th Main Directorate for cooperative work. We
    are confident that we will also conclude these efforts by the end of
    2008.

        114. Senator Levin. Secretary Bodman, could either effort be
    accelerated?
        Secretary Bodman. Yes. Both efforts have already been accelerated.
    In response to the September 11, 2001, attacks, NNSA took aggressive
    steps to accelerate the completion of security upgrades by 2008, 2 full
    years ahead of schedule. The nomination of all the 12th Main
    Directorate sites under the Bratislava Initiative has increased our
    work scope, but we believe we will complete these by 2008 as well.

                         hanford waste treatment plant
        115. Senator Levin. Secretary Bodman, what is the process for
    agreeing to final seismic criteria for the Hanford WTP, when will the
    process be complete, and will the criteria be validated?
        Secretary Bodman. The WTP prime contractor, Bechtel National Inc.,
    has prepared and submitted the latest seismic design criteria. These
    incorporate the DOE's current best understanding of the seismic hazard
    at Hanford and the WTP. The DOE is currently reviewing these criteria.
    The U.S. Army Corps of Engineers, engaged by the DOE, has independently
    reviewed and concurred with the final design criteria. The DOE will
    discuss the final seismic criteria with the Defense Nuclear Facilities
    Safety Board and will carefully consider the Board's recommendation
    regarding the criteria, if any. The DOE expects the reviews and
    discussions to be completed by late summer 2006 to permit proceeding
    with construction of the facilities affected by the seismic criteria.
        In addition, the DOE is proceeding with the drilling of at least
    one deep borehole to confirm the ground motion data, which should be
    completed in summer 2007. The assumption is the latest design criteria
    have an acceptable margin of design. Also, the DOE intends to update
    the probabilistic seismic hazard analysis in the next 2 years to
    reflect modest changes in methodology that will have occurred.

        116. Senator Levin. Secretary Bodman, what is the process for
    determining the realistic cost and schedule to complete the Hanford WTP
    and when will this process be complete?
        Secretary Bodman. The WTP prime contractor, Bechtel National Inc.,
    was directed and provided to the DOE an updated detailed Estimate-at-
    Completion (EAC) for the project in December 2005. Several actions have
    occurred or are occurring to develop a realistic estimate. DOE has
    implemented two independent ``best and brightest'' expert reviews: 1)
    an evaluation of the technical adequacy of the design to meet the
    contract performance specifications, which is to be completed by spring
    2006, and 2) an assessment of the confidence in the EAC and management
    approach, which is to be completed by spring 2006. The EAC is being
    revised based on the impacts and results of these actions and the
    revision provided to the DOE in late spring 2006. Since the hearing,
    the two ``best and brightest'' reports have been completed and
    delivered to the committees.
        The DOE has also engaged the USACE to perform an independent expert
    review of the EAC, and, if acceptable, to validate the EAC. The USACE
    has retained a number of recognized industry experts working alongside
    its own senior staff. The USACE's report is scheduled to be completed
    by late summer 2006. DOE delivered an interim report produced by USACE
    in March 2006.
        Based on the results from the reviews, the DOE expects to establish
    a sound cost and schedule to complete the Hanford WTP. The objective is
    to ensure this project will be well managed. We owe it to Congress,
    regional stakeholders, and the U.S. taxpayers that the substantial
    investment in the WTP is receiving the highest level of talent and
    attention the DOE can provide.

        117. Senator Levin. Secretary Bodman, will this process be
    completed using the final validated seismic criteria?
        Secretary Bodman. Since March 2005, the interim seismic criteria
    have been the basis for the design for the Hanford Waste Treatment and
    Immobilization Plant. The DOE expects the reviews and discussions for
    the final seismic criteria to be completed by late summer 2006. This
    will include reviews by the U.S. Army Corps of Engineers and the
    Defense Nuclear Facilities Safety Board. The basis for design will
    transition to the final seismic design criteria and permit proceeding
    with construction of the facilities affected by the concern for seismic
    issues.

        118. Senator Levin. Secretary Bodman, when the cost and schedule
    are finally revised, what level of confidence will the DOE have in
    completing the project within the revised cost and schedule baseline?
        Secretary Bodman. The DOE is assessing the confidence in the
    design, cost, and schedule for each of the five major facilities which
    make up the Hanford WTP. The WTP prime contractor, Bechtel National
    Inc., submitted to the DOE an updated detailed Estimate-at-Completion
    for the project in December 2005. The submittal includes an analysis of
    the necessary contingency to provide for an 80 percent confidence in
    the estimate, considering the complexity of the project, the cost and
    schedule uncertainties, and the maturity of the design. There are also
    risks which are beyond the contractor's control, such as potential
    future changes in existing regulatory requirements and funding, which
    have been estimated by the contractor. These estimates are being
    reviewed by the DOE and independent external experts as well as a
    validation review by the U.S. Army Corps of Engineers.
        The DOE is also conducting extensive evaluations and enhancing the
    project management systems, risks management, technical support,
    business infrastructure, and oversight procedures required for
    successful execution of the project. The implementation of
    recommendations from these evaluations will increase the confidence in
    the management of the project and sets up the tools and the framework
    to anticipate and resolve new problems that may arise during project
    execution.

                            worker health and safety
        119. Senator Levin. Secretary Bodman, in early February the DOE
    published the Worker Health and Safety Rule. Is funding requested in
    the fiscal year 2007 DOE budget request to implement the rule?
        Secretary Bodman. Yes, funding is requested within the fiscal year
    2007 budget request to implement the rule.

        120. Senator Levin. Secretary Bodman, if there is funding requested
    what is the amount requested and in what accounts is the requested
    amount contained?
        Secretary Bodman. The funding falls under the Energy Supply and
    Conservation Appropriation--in Policy, Standards and Guidance and DOE-
    Wide Environment, Safety, and Health Programs. The Office of Health
    requested $410,000 and the Office of Price Anderson Enforcement (which
    conducts all EH enforcement activities) requested $450,000 in fiscal
    year 2007. In addition to this funding, the fiscal year 2007 budget
    also includes funding in Program Direction for three Federal FTEs to
    conduct worker safety and health enforcement.
                                     ______

                Questions Submitted by Senator Edward M. Kennedy
                                 chapman valve
        121. Senator Kennedy. Secretary Bodman, Chapman Valve in
    Springfield, Massachusetts, is listed by the DOE as an atomic weapons
    employer facility covered under the Energy Employees Occupational
    Illness Compensation Program (EEOICP) for the years 1948-1949. Chapman
    Valve performed uranium processing work for Brookhaven Labs for their
    reactor programs and Brookhaven is reported to have records concerning
    Chapman Valve. According to minutes of a National Institute for
    Occupational Safety and Health (NIOSH) meeting held in Springfield,
    Massachusetts, and according to government officials present at this
    meeting, their records had not been recovered. Would you be able to
    have the Office of Worker Advocacy within the Office of Environment,
    Safety, and Health provide a copy of the contract(s) or purchase orders
    between the Manhattan Engineer District (MED)/Atomic Energy Commission
    and Chapman Valve?
        Secretary Bodman. The Office of Environment, Safety, and Health
    (EH) does not have custody of contracts or purchase orders between DOE
    or its predecessor agencies and Chapman Valve Company. Contracts from
    this era have been transferred to the National Archives and Records
    Administration in Atlanta, Georgia. I have instructed EH to attempt to
    locate the information you requested and provide it to you if found.

        122. Senator Kennedy. Secretary Bodman, can you please provide
    copies of documents held in the archives of the Brookhaven Labs (or
    entities which have Brookhaven's historical records) pertaining to
    Chapman Valve, including but not limited to purchase orders, shipments,
    receipts, specifications, and memorandum?
        Secretary Bodman. Yes. The EH will make this specific request to
    Brookhaven Labs and report back to you if the records can be located.
        EH regularly works with DOE sites and records centers to ensure
    that any information and/or records are available for the purposes of
    EEOICP.

        123. Senator Kennedy. Secretary Bodman, the DOE appears to be
    cutting its former worker medical screening program. This program was
    authorized under the National Defense Authorization Act for Fiscal Year
    1993. In fiscal year 2006, $16.5 million was appropriated, yet the DOE
    has requested only $12.3 million in fiscal year 2007. Why has the DOE
    cut the budget for this program which screens beryllium and nuclear
    workers for occupational diseases?
        Secretary Bodman. The Department's fiscal year 2007 request for
    $12.4 million for the Former Worker Medical Surveillance Program (FWP)
    is essentially level with the Department's fiscal year 2006 request of
    $12.5 million for the FWP.
        The $16.5 million Congress appropriated for fiscal year 2006
    includes approximately $4 million in earmarks for targeted program
    components including a new CT scanning initiative that screens DOE's
    Oak Ridge National Laboratory and Y-12 plant workers for lung cancer.
                                     ______

                    Questions Submitted by Senator Jack Reed
                          energy efficiency investment
        124. Senator Reed. Secretary Bodman, during the President's State
    of the Union address, he said America is addicted to oil. Yet, 1 week
    later, the administration submits a budget to Congress that cuts
    funding to key energy efficiency initiatives such as building codes and
    weatherization programs, EnergyStar, and industrial energy efficiency
    that are proven to reduce our dependence on fossil fuel. In December,
    Senator Snowe and I led a bipartisan letter signed by 30 Senators
    asking the President to fully fund energy efficiency and renewable
    energy programs authorized in the Energy Policy Act of 2005. I am sorry
    that the administration did not support our request. Today's
    investments in these programs create energy savings for decades. Could
    you please explain to me how the administration can ask the American
    public and businesses to reduce their energy consumption but the
    administration is not willing to do the same by making meaningful
    investments in energy efficiency?
        Secretary Bodman. The Advanced Energy Initiative aims to reduce
    America's dependence on imported energy sources. The fiscal year 2007
    DOE budget requests $2.1 billion to meet these goals, an increase of
    $381 million over fiscal year 2006. Funding will help develop clean,
    affordable sources of energy that will lead to changes in the way we
    power our homes, businesses, and cars.
        The Advanced Energy Initiative includes a broad mix of oil
    displacement and clean energy R&D initiatives, including nuclear (up 56
    percent to $392 million), solar (up 78 percent to $148 million), and
    biomass (up 65 percent to $150 million). Specific goals include
    reducing the cost of cellulosic ethanol to $1.07/gallon by 2012, and
    reducing the cost of solar photovoltaics to less than 10 cents/kilowatt
    hour by 2015. The Energy Policy Act contains authorizations for a
    variety of initiatives. As the administration noted in the July 15,
    2005, letter to the conference committee on H.R. 6, the House and
    Senate versions included authorizations levels that set unrealistic
    targets and expectations for future program-funding decisions. The
    President's fiscal year 2007 budget proposal reflects the
    administration's programmatic and fiscal priorities. Those priorities
    took into account the spending opportunities presented by the Energy
    Policy Act.

                       energy information administration
        125. Senator Reed. Secretary Bodman, recently 57 prominent energy
    economists, analysts, and members of the investment community wrote you
    urging sustained increases in funding for the Energy Information
    Administration (EIA) to improve energy data analysis. I personally know
    the importance of EIA data for tracking energy prices, particularly
    heating oil in New England, and supply and demand in the marketplace.
    What is DOE doing to comprehensively assess the budget and staffing
    requirements necessary to improve EIA's data collection, analysis, and
    reporting capacity?
        Secretary Bodman. DOE recognizes the importance of EIA's
    information and analyses and has taken steps to strengthen its data
    quality, timeliness, and reliability. The Department's fiscal year 2007
    budget formulation process assessed budget and staffing requirements
    across programs. As a result of this review, EIA's fiscal year 2007
    request of $89.8 million is 5.2 percent ($4.5 million) above the fiscal
    year 2006 appropriation. The additional resources, if provided, would
    be directed toward redesigning key petroleum and natural gas surveys to
    improve data reliability and statistical accuracy, and toward
    increasing global oil and gas data and modeling capabilities to address
    data issues which can contribute to oil market volatility. Also funded
    would be initial scoping activities on a next-generation U.S. energy
    model to replace the current National Energy Model System, which would
    improve EIA's ability to assess and forecast supply, demand, and
    technology trends impacting U.S. and world energy markets.

        126. Senator Reed. Secretary Bodman, how do you plan to address the
    staff shortages, modernize statistical software, upgrade information
    technology, and improve data quality? I would appreciate it if you
    please provide a detailed analysis of the resources in terms of both
    funding and staffing to address these issues.
        Secretary Bodman. As with much of the Federal Government, over 30
    percent of EIA's staff is, or soon will be, eligible to retire. EIA is
    addressing its staffing situation on multiple levels. It continues to
    reduce skill gaps in mission-critical occupations through aggressive
    recruiting of mathematical and survey statisticians, operations
    research analysts, and economists. Its hiring process has been
    streamlined for entry-level and journeyman-level positions. Rotational
    opportunities are provided for existing staff to expand their breadth
    of knowledge and skill level. Formal training and certification in
    project, contract, and financial management is being pursued for its
    project managers, engineers, information technology specialists, and
    contract technical monitors.
        Just as retirements are driving human resource challenges, the
    increasingly more complex and interdependent domestic and global energy
    markets are driving EIA to focus limited resources on maintaining the
    quality, timeliness, and relevance of its products. In fiscal year
    2007, about half of the requested $4.5 million funding increase,
    supplemented by resources redirected from lower priority surveys and
    deferred maintenance activities, will support EIA's critical priorities
    of improving data quality and upgrading its modeling and forecasting
    capabilities.
        EIA will redirect resources to review and maintain selected, high
    priority petroleum and natural gas survey frames that have reached the
    end of their useful life. This effort, which will yield both cost
    reductions and quality improvements, is essential to produce accurate
    statistics, resolve data discrepancies, and keep abreast of changes in
    the energy industry. EIA will identify new respondents required to
    report on the petroleum and natural gas surveys, and will make needed
    modifications to the supply and marketing information database system
    and the natural gas information processing systems. EIA will continue
    data quality activities such as reducing large unaccounted-for crude
    oil statistics, missing motor gasoline production, and missing crude
    and petroleum product imports. Updating and improving other survey
    frames, such as petroleum and natural gas reserves and coal and
    alternative fuels, will be deferred.
        During fiscal year 2007, EIA will begin scoping the requirements of
    a next-generation National Energy Model System. The current system was
    developed in the early 1990s and has exceeded its expected lifecycle. A
    reliable and maintainable mid-term energy model is needed for EIA to
    develop baseline energy projections and execute policy analyses
    requested by Congress and the administration. We have allocated six
    full time equivalents and approximately $1.2 million on this effort in
    fiscal year 2007. EIA will work with its stakeholders to assess their
    requirements. The redesign will likely improve the representation of
    energy markets with added flexibility to address new policies and
    technologies; change the mathematical representation methods resulting
    in improved accuracy, stable solutions, and reduced time for model
    simulations; use modern programming tools that are more flexible and
    powerful; and add the representation of hydrogen production and
    distribution to enable the analysis of additional options to reduce
    dependence on foreign oil and to decrease emissions of greenhouse
    gases.
        In fiscal year 2007, EIA also will focus on improving the modeling,
    forecasting, and analysis of international energy markets which are
    increasingly influencing U.S. markets for natural gas. EIA plans to
    enhance its analysis of global liquefied natural gas (LNG) markets,
    since U.S. dependence on LNG is forecasted to grow from 3 percent of
    natural gas supplies in 2004 to 20 percent in 2030. Our expanded
    analysis would reflect fundamental changes in technologies and world
    energy market conditions, as well as global competition for stranded
    natural gas resources.
                                     ______

             Questions Submitted by Senator Hillary Rodham Clinton
                       global nuclear energy partnership
        127. Senator Clinton. Secretary Bodman, one of the biggest concerns
    about reprocessing is that it creates plutonium, which can be used to
    make nuclear weapons. This is a problem associated with reprocessing
    technologies used in France and elsewhere, and is the reason that the
    U.S. has consistently opposed reprocessing. The administration is
    claiming that the GNEP reprocessing technology would not separate the
    plutonium from other elements, and therefore, that the reprocessed
    material would be proliferation-resistant.
        But this is only by comparison to other reprocessing methods. In
    fact, a 2003 MIT study and other studies have concluded that
    conventional spent fuel is far more proliferation resistant--the reason
    being that it is far too radioactive to be handled by terrorists or
    others who lack the necessary safety equipment.
        Isn't it true that any conceivable reprocessed fuel, regardless of
    the reprocessing technology used, would be more easily handled by
    terrorists than conventional spent fuel?
        Secretary Bodman. It is important to emphasize that UREX+
    technology is not an end in itself. It is part of a GNEP technology
    pathway to allow the plutonium and other transuranic elements from
    light water reactor spent fuel to be consumed in electricity producing
    advanced burner reactors. If this approach is successful, it will allow
    a complete transformation of the nuclear waste management challenge and
    of the international nuclear fuel cycle. Therefore, a static focus
    simply comparing spent fuel assemblies in storage in the U.S. and UREX+
    from the point of view of technical ``proliferation-resistance'' is
    much too narrow, particularly as several of the advanced nuclear
    economies are currently separating plutonium and separated civil stocks
    are nearly 250 metric tons today--a figure that is more than double the
    total amount of plutonium that was produced for the U.S. nuclear
    weapons program since 1944.
        The real issue is whether we can build domestic and international
    consensus on a sustainable approach whereby a few advanced fuel cycle
    nations build systems that can eliminate the plutonium and other
    transuranics separated from the world's vast and growing stocks of
    light water reactor spent fuel, recycle it back through advanced burner
    reactors, and fully consume it, both reducing proliferation risks by
    providing reliable fuel services and resolving the growing nuclear
    waste problem.
        It provides the opportunity to reshape the management of spent fuel
    at home and abroad, in support of new arrangements that constrain
    proliferation. Proliferation and the buildup of plutonium in the world
    have not stopped over the past three decades. GNEP seeks to address the
    global buildup of civil plutonium stocks and looks to move beyond the
    spent fuel standard by defining a path to reduce and eliminate those
    materials.
        Within the U.S., a UREX+ facility on U.S. Government property would
    be secured to meet all requirements posed by the material stream, up to
    the stored weapon standard if necessary. UREX+ would not separate or
    accumulate plutonium and would be used only in proportion to making
    fuel for advanced burner reactors. Doing nothing is not a success
    strategy for nuclear energy growth to meet pressing domestic and
    international energy, environmental, and nonproliferation challenges.

        128. Senator Clinton. Secretary Bodman, doesn't reprocessing under
    GNEP thus actually increase proliferation risks rather than decrease
    them?
        Secretary Bodman. No, GNEP is a comprehensive strategy to increase
    U.S. and global energy security, encourage clean development around the
    world, improve the environment, and reduce the risk of nuclear
    proliferation. In this context, GNEP aims to develop and demonstrate
    technologies that are more proliferation-resistant, but this concept
    needs to be viewed broadly. The GNEP model works because only the
    supplier states will be engaged in the recycling of spent fuel. These
    are states with strong non-proliferation records. One of the principal
    objectives of GNEP is to develop successor technologies to those in
    commercial use today. These technologies would be more proliferation
    resistant and more robust, by design, from a physical protection
    standpoint, and would employ advanced international safeguards. These
    processes will be under IAEA verification auspices. GNEP will consider
    a variety of advanced recycling approaches, beginning with the one that
    is most mature, UREX+. We also plan to consider other recycling
    technologies, including pyroprocessing.
        More broadly, GNEP will enable the United States to regain the lead
    internationally in charting the future of the nuclear fuel cycle. By
    developing a credible alternative to both the once-through cycle and
    current mixed oxide programs, we will help to transform spent fuel
    management in a way that advances our own energy, economic,
    environmental, and security interests, and those of the international
    community. We will work to build a consensus around the principle that
    production of separated plutonium should come to an end and separated
    plutonium should be eliminated from civil use. Over time, GNEP should
    result in the reduction of existing stocks of separated plutonium and
    an end to the accumulation of spent fuel around the world. Sensitive
    facilities and materials would be limited to a small number of advanced
    and responsible states. Cradle-to-grave fuel cycle services would offer
    an attractive alternative to current fuel supply arrangements and help
    to prevent the spread of sensitive fuel cycle capabilities. In sum, we
    believe GNEP is a net plus for the nonproliferation regime and will
    decrease proliferation risks.

        129. Senator Clinton. Secretary Bodman, in the fiscal year 2007
    budget, the administration spends $250 million on GNEP--a project with
    uncertain and very distant benefits--but cuts other important programs
    with significant and near-term payoffs. But the $250 million in fiscal
    year 2007 is just the first GNEP installment. Based on DOE documents,
    the fiscal year 2008 and fiscal year 2009 costs would total $1.55
    billion. Then funding would increase further, totaling $13 billion for
    a 10-year demonstration phase of the program.
        A 1996 NAS study concluded that reprocessing and transmutation of
    existing fuel from U.S. reactors could cost upwards of $100 billion.
    During the hearing, you said that you thought the total life-cycle cost
    of the program would be from $20-40 billion. What was this estimate
    based on, and what is the estimated life cycle cost for GNEP? Please
    provide a detailed cost estimate.
        Secretary Bodman. A preliminary, order-of-magnitude cost estimate
    for the GNEP initiative ranges from $20 billion to $40 billion. This
    includes the cost of Nuclear Power 2010 and Yucca Mountain over the
    next 10 years as well as the cost of demonstrating integrated recycling
    technologies. Previously reported estimates for the cost of bringing
    the three technology demonstration facilities to initial operation
    range from $3 billion to $6 billion over the next 10 years. In 2008,
    the Department will have more refined estimates of the cost and
    schedule to complete the full 20-year demonstration effort. One of the
    primary purposes of the engineering scale technology demonstrations is
    to produce reliable estimates of the total life cycle cost of GNEP.

        130. Senator Clinton. Secretary Bodman, based on our experience at
    West Valley, New York, and elsewhere, we know that decontaminating and
    decommissioning nuclear facilities is inevitable and extremely
    expensive. Please include an estimate of these costs in your response.
        Secretary Bodman. GNEP is a phased program. Each phase will begin
    after a well defined decision based on the results of the previous
    phase and an assessment of risks associated with proceeding to the next
    phase. Over the next 2 years, the Department will complete pre-
    conceptual design studies, environmental analyses, and other economic
    and technical feasibility studies that will be needed to inform a
    decision in 2008 on whether to proceed with detailed engineering design
    and construction of the engineering scale demonstration of advanced
    recycling technologies. As such, as part of the future development of
    detailed engineering designs, the Department would prepare detailed and
    more accurate estimates of the costs associated with decontamination
    and decommissioning the facilities. Those estimates would consider not
    only the specifics of the design and operation of the proposed
    facilities but state-of-the-art techniques and experience in
    decontamination and decommissioning nuclear facilities. Additionally,
    as a design objective, the Department seeks to incorporate ease of
    decontamination and decommissioning into the facilities.

        131. Senator Clinton. Secretary Bodman, in the GNEP system that you
    envision, what are the respective roles of the public and private
    sectors?
        Secretary Bodman. The Department is open to the participation of
    the public and private sectors in the GNEP technology demonstration
    program. We anticipate that international partners will seek to
    cooperate with the Department in developing and demonstrating these
    more proliferation resistant fuel recycling technologies. For example,
    the U.S., Japan, and France recently signed a systems arrangement that
    provides the foundation for cooperation on investigating sodium cooled
    fast reactor technology, an advanced reactor technology that could be
    suitable for consuming actinide-bearing fuel.
        On March 17, 2006, the Department issued a Request for Expressions
    of Interest seeking expressions of interest from entities seeking to
    compete for award of site evaluation study contracts in hosting
    engineering scale demonstrations of the advanced recycling facilities.
    After consideration of the input received and following the development
    of a Request for Proposals, the Department anticipates issuing a
    Request for Proposals to conduct site evaluation studies for
    engineering scale demonstrations for selected sites. The information
    gained from the site evaluation studies will be important to the
    Department's decision process for selecting locations for the
    technology demonstration facilities.
        We envision additional public and private sector participation in
    every aspect of this program where it makes sense to develop partnering
    relationships.

        132. Senator Clinton. Secretary Bodman, would the reprocessing
    plants be Government-owned and operated?
        Secretary Bodman. Currently, we anticipate that the engineering
    scale demonstration of the advanced separations technology would likely
    be Government-owned and operated in a fashion similar to that under
    which other such Government facilities are operated.

        133. Senator Clinton. Secretary Bodman, would the fast reactors be
    privately owned and operated?
        Secretary Bodman. Currently, we anticipate that the demonstration
    Advanced Burner Test Reactor would likely be Government-owned and
    operated in a fashion similar to that under which other such Government
    facilities are operated.

        134. Senator Clinton. Secretary Bodman, GNEP envisions nuclear
    waste shipments coming from around the world into ports like New York.
    How would these shipments be secured?
        Secretary Bodman. The U.S. does not anticipate receiving spent fuel
    from other countries until sufficient recycling capacity is available
    in the United States. Ports of entry for recycling spent fuel have not
    been identified, nor can they be in the absence of specific details of
    the fuel-leasing program's participants, the location of recycling
    facilities, and the shipments themselves. However, every year hundreds
    of international shipments of fresh and spent fuel are routinely made
    in accordance with safety and safeguards precautions. During the last
    30 years, more than 60,000 metric tons of used nuclear fuel have been
    transported around the world without incident or loss. Under GNEP,
    future shipments would be made under appropriate domestic and
    international laws and regulations governing the packaging, handling,
    security, and transport of radioactive material.

        135. Senator Clinton. Secretary Bodman, wouldn't increased
    shipments of these materials into the United States create new
    opportunities for terrorists to create dirty bombs or other weapons
    that utilize radioactive materials?
        Secretary Bodman. The international framework under which the
    United States, or any other nation, would receive returned fuel under
    GNEP has yet to be worked out. Over the next few years, we would
    anticipate working with existing nuclear fuel supplier nations and the
    IAEA to develop a framework for fuel return. However, fundamental to
    any U.S. decision is the development and deployment of new domestic
    recycling technologies and facilities that would not separate plutonium
    and would minimize wastes requiring geologic disposal.
        It should be noted that every year, hundreds of international
    shipments of fresh and spent fuel are routinely made with all safety
    and safeguards precautions. During the last 30 years, over 60,000
    metric tons of spent nuclear fuel has been transported around the world
    without incident or loss. Any transportation of spent nuclear fuel
    under GNEP would utilize the latest technologies and packages that
    provide a high level of protection against terrorist attack or
    unauthorized access to the fuel, as well as against a wide range of
    possible accidents. We do not believe there would be a significant
    increase in the risk of a dirty bomb or other terrorist dispersion of
    radioactive materials as a result of the transportation of spent
    nuclear fuel.

                    process of developing the gnep proposal
        136. Senator Clinton. Secretary Bodman, did any non-governmental
    persons give substantive and technical advice to the DOE during
    formulating and vetting of the GNEP proposal that is included in the
    fiscal year 2007 budget? If so, please provide their names.
        Secretary Bodman. In the spring of 2005, I charged the Deputy
    Secretary with the responsibility of developing a plan to safely and
    effectively expand the use of nuclear energy. Proposed elements of the
    plan were developed by Federal employees and reviewed by program
    secretarial officers.
        After interagency discussions on a range of proposals in the summer
    of 2005, the Department worked on developing additional analyses and
    plans. These efforts were conducted in consultation with other Federal
    agencies and were aided by relevant experts from the Department's
    national laboratories. These analyses and plans were reviewed again by
    the Department's program secretarial officers, the Deputy Secretary,
    and me, before further interagency review.
        The Department hosted an ad-hoc meeting in August and another in
    September of 2005 of former officials from prior administrations and
    academicians, to subject some of the DOE ideas to critical scrutiny,
    with a particular focus on the international and program management
    challenges of an ambitious initiative to expand the peaceful worldwide
    use of nuclear energy. The purpose was to test some of the proposals
    with individuals who could exercise seasoned, independent, expert
    judgment. Other than Federal employees and employees of the
    Department's laboratories, the following people attended those
    meetings:

              Mr. Charles B. Curtis, former Deputy Secretary of Energy
            (President, Nuclear Threat Initiative)
              Dr. William R. Graham, former Science Adviser to the
            President (President, National Securities Research, Inc.)
              Dr. John Hamre, former Deputy Secretary of Defense
            (President, Center for Strategic and International Studies)
              Dr. Arnold Kantor, former Under Secretary of Defense
            (Scowcroft Group)
              Dr. Ernest Moniz, former Under Secretary of Energy (Professor
            of Physics, Massachusetts Institute of Technology)
              Ambassador Thomas Pickering, former Ambassador to the United
            Nations (Vice President, Boeing)
              Mr. Daniel Poneman, former Special Assistant to the President
            (Scowcroft Group)
              Dr. Burton Richter, Professor of Physics (Nobel Laureate,
            1976), (Stanford University)
              General Larry D. Welch (Ret.), former Chief of Staff, Air
            Force (former President, Institute for Defense Analyses)

        137. Senator Clinton. Secretary Bodman, if non-governmental persons
    were involved, were applicable procedures followed under the Federal
    Advisory Committee Act?
        Secretary Bodman. Yes. First, with respect to involving our
    employees from the national laboratories who took part in analyses or
    discussions relevant to GNEP, they are treated as Federal employees for
    Federal Advisory Committee Act purposes pursuant to section 3112 of the
    National Defense Authorization Act for Fiscal Year 2004. The GNEP
    proposal involved analyses on many technical fronts--nuclear science,
    separations, reactors, safeguards, repository analysis, simulations,
    and basic R&D--that benefited by drawing on these resources.
        Second, academicians and former senior officials of prior
    administrations were involved in ad-hoc meetings in August and
    September with Federal officials to react to the GNEP vision. At these
    meetings, these individuals were advised to offer only their individual
    reactions, and in fact no group dynamic or consensus occurred. General
    advice concerning the provisions of the Federal Advisory Committee Act
    was given at the start of both meetings to ensure that no violation of
    the act occurred. No view in support of or opposition to GNEP should be
    attributed to individuals simply by virtue of their participation in
    evaluating ideas that the President announced in the following year.

        138. Senator Clinton. Secretary Bodman, can all records be made
    available to the committee of advice rendered to the DOE?
        Secretary Bodman. The Department would consider such a request made
    by the chairman of the Senate Armed Services Committee.

        139. Senator Clinton. Secretary Bodman, it is my understanding that
    the GNEP program was developed in confidence with the DOE. Is this
    true?
        Secretary Bodman. No. DOE, in early 2005, was already thinking
    about how to revitalize and accelerate the peaceful use of nuclear
    energy, consistent with the President's 2001 National Energy Policy
    that outlines a range of technological objectives for the nuclear fuel
    cycle and the Advanced Fuel Cycle Initiative for which Congress has
    appropriated funds for the last 5 years. Consultations with the
    administration in the spring of 2005 led to a sustained exchange of
    ideas concerning how to expand nuclear energy in the context of the
    President's nonproliferation policy to meet a range of national energy,
    environment, and development goals. The subsequent development of
    proposals and initiatives conformed to the normal interagency process
    associated with any large scale initiative, including repeated
    interagency meetings throughout 2005 and early 2006. Other agencies,
    including the Department of State and members of the Intelligence
    Community, were involved throughout. In short, there was a standard
    deliberative process within the government, and a standard effort to
    preserve decision options for the President for a potential initiative
    with global impacts.

        140. Senator Clinton. Secretary Bodman, what procedures did the DOE
    use to ensure non-disclosure? Were any written forms or express
    statements provided by the DOE to participants? Can you please provide
    any form used to protect such confidences. What legal authorities were
    used in developing such non-disclosure arrangements?
        Secretary Bodman. The GNEP proposal was formulated through the
    normal type of deliberative process associated with major initiatives
    announced by the President's budget request. As is normally the case,
    circumspection is expected of participants in the deliberative process
    while it is ongoing. I am not aware of any resort to ``forms.''

                                  west valley
        141. Senator Clinton. Secretary Bodman, the West Valley site in
    western New York is the only place in the United States where
    reprocessing has been tried before, and cleanup still has a long way to
    go. I understand that during staff briefings on GNEP, DOE staff
    indicated that all sites are being looked at as possibilities for the
    demonstration phase of GNEP. Please clarify. Has the DOE identified any
    specific sites for reprocessing or other activities that would be
    conducted as part of GNEP?
        Secretary Bodman. The Department has made no decisions regarding
    specific sites for locating the engineering scale demonstrations. The
    Department is seeking Expressions of Interest from entities interested
    in evaluating and hosting the demonstration facilities. DOE expects to
    issue a Request for Proposals later this year for the award of
    contracts for site evaluation studies. In addition, the Department will
    initiate an Environmental Impact Statement (EIS) this year to examine
    potential demonstration technologies and locations where they could be
    located. The input the Department receives from the public and private
    sectors will be important information for the EIS. A decision on
    whether to proceed with the design and construction phase of the
    technology demonstration program and where to locate the facilities
    will be made in 2008.

        142. Senator Clinton. Secretary Bodman, is the West Valley site
    being considered? Has it been ruled out?
        Secretary Bodman. The Department has made no decisions on locations
    that should be examined for the GNEP technology demonstration program.
    The Department is seeking public and private sector interest in hosting
    the demonstration facilities and plans to issue a Request for Proposals
    later this year for the award of contracts for site evaluation studies.

                                     waste
        143. Senator Clinton. Secretary Bodman, please explain the DOE's
    claims that the GNEP program will significantly reduce the volume of
    waste. What waste is specifically being described?
        Secretary Bodman. Volume reduction of high-level waste is a factor
    in determining the loading of the geologic repository, especially to
    the extent that it reduces the number of disposal containers that are
    required. However, a more important consideration in the loading of the
    repository is the heat generated by radioactive decay of certain
    constituents of the spent fuel. Decay heat drops rapidly as a function
    of time after discharge from the reactor. Decay heat shortly after
    discharge is dominated by several short lived fission products such as
    isotopes of tellurium, ruthenium, cerium, xenon, and zirconium; that
    heat is dissipated during water pool cooling. After the initial cooling
    period, the decay heat is dominated for the next 60-70 years primarily
    by the decay of cesium and strontium. Beyond that period, the decay
    heat is dominated by isotopes of the transuranic elements--plutonium,
    neptunium, americium, and curium--due to their relatively long half-
    lives. As a result, by separating the cesium and strontium and the
    transuranic elements from the spent fuel, and consuming the transuranic
    elements in a fast spectrum reactor, the Department estimates that the
    capacity of the Yucca Mountain repository would be significantly
    increased, by a factor of 50-100. The actual increase in capacity will
    depend on how successful we are with the demonstration projects; that
    is, to what level of efficiency we can recover and destroy the heat-
    generating radionuclides.

        144. Senator Clinton. Secretary Bodman, won't reprocessing increase
    the total volume of waste generated, by some estimates 20-fold or more?
        Secretary Bodman. The Department does not believe that an
    integrated recycling program would increase the total volume of waste
    generated. The reduction in the volume of the waste from the recycle
    strategy cannot yet be confidently predicted. The reduction in the
    total volume of waste depends on details associated with the
    engineering-scale demonstration of the integrated recycling facilities
    and selection of specific waste forms. Clearly, the objective of this
    approach to the fuel cycle is to reduce the volume and toxicity of
    waste requiring a geologic repository and to design processes that do
    not result in separated streams of pure plutonium or large volumes of
    liquid radioactive wastes. The Department will design the advanced
    separations technology to minimize generation of additional waste. More
    information on anticipated waste generation will be developed as pre-
    conceptual design studies, feasibility studies, and environmental
    reviews are completed over the next 2 years.

        145. Senator Clinton. Secretary Bodman, will the volume of low-
    level and intermediate-level waste be increased and, if so, by how
    much?
        Secretary Bodman. The Department has set a design objective of
    reducing the generation of waste to as low as possible. The Department
    does not currently have specific information on volumes of low level
    waste generation. More information on waste generation from these
    technologies should be available over the next two years as the
    Department completes pre-conceptual design studies, feasibility
    studies, and environmental analyses related to the technologies.

        146. Senator Clinton. Secretary Bodman, how developed is the
    technology that the DOE claims will reduce the volume of waste and how
    soon will it be available on a commercial scale?
        Secretary Bodman. The Department's goal for operation of the
    Uranium Extraction Plus engineering scale demonstration would be to
    begin operation in 2011. The Department's goal for the Advanced Burner
    Test Reactor (ABTR) would be to begin initial operation in 2014. The
    Department would complete the first module of an Advanced Fuel Cycle
    Facility by 2016 to begin producing an actinide-based fuel that could
    be tested in the ABTR. Initial operations of the ABTR would use
    conventional fuels with the actinide-based fuels beginning to be tested
    in the reactor in the 2016 timeframe. The Department would need several
    years of experience operating the facilities in parallel with the
    design of commercial scale facilities. It is currently anticipated that
    commercial scale operations could begin over the next 20 years.

        147. Senator Clinton. Secretary Bodman, do the DOE's estimates for
    waste reduction include the decommissioning and decontamination of the
    facilities themselves that must be built for this proposal?
        Secretary Bodman. At this time the Department has initiated
    conceptual design of the proposed integrated recycling facilities.
    Given the state of the facility designs, the Department cannot estimate
    the volume of waste from the decommissioning and decontamination of the
    recycling demonstration facilities.

        148. Senator Clinton. Secretary Bodman, does the waste volume
    estimate include liquid and gaseous waste? Please provide a detailed
    estimate of types and volumes of wastes that would be generated during
    the GNEP life cycle, the types of facilities that would be required to
    dispose of those wastes, and an estimate of disposal costs.
        Secretary Bodman. The volume of the waste or the cost of disposing
    of waste generated from the GNEP demonstration facilities cannot be
    confidently predicted until the designs of the facilities advances, as
    the volumes and costs depend on details of several processes and
    selection of specific waste forms. Initial estimates based on pre-
    conceptual design studies should be available over the next 2 years.

        [Whereupon, at 10:43 a.m., the committee adjourned.]

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                      2007

                                  ----------

                            THURSDAY, MARCH 2, 2006

                                           U.S. Senate,
                                   Committee on Armed Services,
                                                        Washington, DC.

                               AIR FORCE POSTURE

        The committee met, pursuant to notice, at 9:30 a.m. in room
    SH-216, Hart Senate Office Building, Senator John Warner
    (chairman) presiding.
        Committee members present: Senators Warner, McCain, Inhofe,
    Roberts, Talent, Chambliss, Thune, and Levin.
        Committee staff members present: Charles S. Abell, staff
    director; Leah C. Brewer, nominations and hearings clerk; and
    John H. Quirk V, security clerk.
        Majority staff members present: Gregory T. Kiley,
    professional staff member; Derek J. Maurer, professional staff
    member; David M. Morriss, counsel; Lucian L. Niemeyer,
    professional staff member; Stanley R. O'Connor, Jr.,
    professional staff member; Sean G. Stackley, professional staff
    member; Scott W. Stucky, general counsel; and Richard F. Walsh,
    counsel.
        Minority staff members present: Richard D. DeBobes,
    Democratic staff director; Jonathan D. Clark, minority counsel;
    Madelyn R. Creedon, minority counsel; Gabriella Eisen, research
    assistant; Creighton Greene, professional staff member; Bridget
    W. Higgins, research assistant; Gerald J. Leeling, minority
    counsel; and Peter K. Levine, minority counsel.
        Staff assistants present: Micah H. Harris and Jessica L.
    Kingston.
        Committee members' assistants present: Christopher J. Paul
    and Paul C. Hutton IV, assistants to Senator McCain; John A.
    Bonsell and Jeremy Shull, assistants to Senator Inhofe; Chris
    Arnold, assistant to Senator Roberts; Arch Galloway II,
    assistant to Senator Sessions; Lindsey R. Neas, assistant to
    Senator Talent; Clyde A. Taylor IV, assistant to Senator
    Chambliss; Bob Taylor and Stuart C. Mallory, assistants to
    Senator Thune; Mieke Y. Eoyang, assistant to Senator Kennedy;
    Frederick M. Downey, assistant to Senator Lieberman; Matthew
    Benham, assistant to Senator Bill Nelson; and Andrew Shapiro,
    assistant to Senator Clinton.

           OPENING STATEMENT OF SENATOR JOHN WARNER, CHAIRMAN

        Chairman Warner. When I came to the Senate 28 years ago, I
    listened to my elders, and one of them used to say, ``There are
    times when the Senate does very little, but there are other
    times where they try to do it all, to make up.'' This is one of
    those days. Senator Levin and I are members of another
    committee that has a very important markup this morning on
    legislation relating to lobbying and so forth. Consequently,
    we'll be in and out, but we're going to give you a very
    thorough hearing, Secretary Wynne and General Moseley. I
    welcome both of you here.
        This is a day in which we're going to look at the
    President's budget request. It comes at a critical time of
    change in the global war on terrorism, but here at home also.
    The first Quadrennial Defense Review (QDR) fully focused on the
    September 11 threats has been delivered to Congress, and we
    have taken care of that and looked at it very carefully.
        We commend the President for his continuing commitment to
    strengthen our defense capabilities, really across the board.
    We have a very strong budget request this year.
        Budget priorities supporting the global war on terror,
    restructuring our forces and our global posture, building joint
    capabilities for future threats, and taking care of our troops
    and their families, certainly are the correct points of
    emphasis in this budget.
        One of the committee's most important duties is to provide
    oversight over the management of the hundreds of billions of
    dollars that the Department spends each year on the acquisition
    of supplies, services, and equipment. We have become aware,
    over the past several years, of emerging problems in the
    acquisition area, and this is an area in which you have really
    distinguished yourself, Secretary Wynne, and we're so pleased
    that you're in this position.
        Consequently, the Department has initiated numerous
    legislative provisions in an effort to direct the Department
    toward more sound acquisition practices. We'll continue to work
    with you to explore and ensure the Services act to carefully
    spend our taxpayers' dollars.
        This committee is committed to doing all we can to ensure
    the safety of our airmen, soldiers, sailors, marines, and their
    families, wherever they are in the world. Taking the lessons
    from recent operations in the war on terrorism, two specific
    areas bear mentioning. The area of countering improvised
    explosive devices (IEDs) will continue to be our top priority
    in this committee; second, we recognize the invaluable
    contributions that unmanned aircraft systems have made to the
    warfighter. We need to explore the greater use of this
    technology. Putting aside any sense of humility, this committee
    has spearheaded that effort for many years, and I thank so many
    of my colleagues for the strong support they've given, and,
    indeed, the staff itself, in working out innovative ways to
    explore this. I saw one yesterday--the Army has it, it's that
    instrument they're going to use to take over some of the duties
    of the helicopters, and it carries that whole suite of weapons
    that a helicopter can carry. I expect you're watching that one,
    are you not?
        General Moseley. You bet, sir.
        Chairman Warner. I'll lay a bet you buy a few of those
    before the day is over.
        General Moseley. The Navy has some good systems, too----
        Chairman Warner. Oh, yes.
        General Moseley.--with the rotary wing unmanned aerial
    vehicle (UAV).
        Chairman Warner. Extraordinary model.
        I applaud the Air Force Battlefield Airman Initiative that
    has improved combat training to increase joint air-to-ground
    integration for directing air strikes in support of ground
    forces. Since 2001, Air Force joint tactical attack controllers
    (JTACs), many attached to Special Operations Force (SOF) units,
    have directed over 85 percent of the air strikes in
    Afghanistan. Also, the Air Force is optimizing Reserve
    component personnel for new missions that can be performed from
    the United States, including unmanned aircraft systems
    operations and intelligence, surveillance, and reconnaissance
    (ISR), and reachback, leveraging the core competencies of the
    Reserves, while reducing stress on the force.
        We do have some concerns here among us in the committee
    about several things, about the Air Force proposal to establish
    a third and fourth operational basing strategy for the F-22A
    that would reduce the number of aircraft within the squadron,
    and possibly reduce squadron combat effectiveness. We are also
    concerned about the Department of Defense (DOD) proposal to
    terminate the F-136 Joint Strike Fighter (JSF) engine program,
    effectively leaving the United States and our allies with one
    single supplier for large fighter engines for the most popular
    strike fighter aircraft in current history. We anticipate maybe
    3,000 of those airplanes and to have that entire program
    dependent on one engine seems to me--the decision was correct
    to go to two engines in the beginning, but we're going to
    review the current budget proposal to drop back to one.
        I was very pleased to see that Secretary England responded
    to the letter that Senator Levin and I forwarded, and that the
    dual programs will continue until such time as Congress,
    working with the administration, reconciles this issue. I'll
    now put in today's record the letter that Senator Levin and I
    wrote and the response that the Secretary returned to us.
        [The information referred to follows:]

        Chairman Warner. So, I thank you, gentleman. These are
    exciting times to be in your positions. I envy both of you and
    the country is fortunate to have two extremely competent
    individuals, well-trained, to take on this responsibility.
        Senator Levin, I've proceeded, given we have our heavy
    schedule this morning. I finished my opening statement.
        [The prepared statement of Senator Warner follows:]

                   Prepared Statement by Senator John Warner

        The committee meets today to receive the testimony of the Secretary
    of the Air Force and the Chief of Staff of the Air Force on the posture
    of the U.S. Armed Forces and President Bush's defense budget request
    for the Air Force for fiscal year 2007.
        We welcome Secretary Wynne and General Moseley back and commend our
    witnesses for the outstanding leadership they provide our Nation and
    our men and women serving in the United States Air Force. Our thoughts
    and prayers are with them and their families, particularly those
    families with loved ones that are away from home defending our freedom.
        The President's budget request arrives this year at a critical time
    of change not just in the global war on terrorism, but here at home, as
    well. The first Quadrennial Defense Review (QDR) fully focused on post-
    September 11 threats has just been delivered to Congress. We will need
    to carefully analyze and evaluate this document.
        I commend the President for his continuing commitment to strengthen
    our defense capabilities and providing our forces with the resources
    and capabilities they need to successfully fulfill their missions. The
    budget priorities of supporting the global war on terror, restructuring
    our forces and our global posture, building joint capabilities for
    future threats, and taking care of our troops and their families are
    clearly the right emphasis.
        One of the committee's most important duties is to provide
    oversight over the management of the hundreds of billions of dollars
    that the Department spends each year on the acquisition of supplies,
    services, and equipment--everything from office supplies to weapon
    systems. We have become aware over the last several years of emerging
    problems in the acquisition arena and have initiated numerous
    legislative provisions in an effort to direct the Department towards
    more sound acquisition practices. We will continue to work with you to
    explore ways to ensure the Services act as good stewards of taxpayer
    dollars.
        This committee is committed to doing all we can to ensure the
    safety of our airmen, soldiers, sailors, and marines. Taking lessons
    from recent operations in the war on terrorism, two specific areas bear
    mentioning. The area of countering improvised explosive devices (IEDs)
    has and will continue to be our top priority. Second, recognizing the
    invaluable contributions that unmanned aircraft systems have made to
    the warfighter. We need to explore the greater use of this technology.
        I applaud the Air Force Battlefield Airman initiative that has
    improved combat training to increase joint air-ground integration for
    directing air strikes in support of ground forces. Since 2001, Air
    Force Joint Tactical Attack Controllers (JTACs), many attached to
    Special Operations Force units, have directed over 85 percent of the
    air strikes in Afghanistan. Also, the Air Force is optimizing Reserve
    component personnel for new missions that can be performed from the
    United States, including unmanned aircraft systems operations, and
    intelligence, surveillance, and reconnaissance reach-back, leveraging
    the core competencies of the Reserves while reducing stress on the
    force.
        I do have concerns, however, about the Air Force proposal to
    establish a third and fourth operational basing strategy for the F-22A
    that would reduce the number of aircraft within a squadron and possibly
    reduce squadron combat effectiveness. I am also concerned about the
    Department of Defense proposal to terminate the F136 Joint Strike
    Fighter engine program, effectively leaving the United States and our
    allies with a single supplier of large fighter engines for the most
    popular strike-fighter aircraft in our inventories for the next 30
    years. The short-term savings achieved by this proposal may result in
    excessive long-term cost to the taxpayer and less than optimum engine
    improvements over the service life of the Joint Strike Fighter.
        I thank you all for your distinguished service and look forward to
    your testimony.

                    STATEMENT OF SENATOR CARL LEVIN

        Senator Levin. Mr. Chairman, thank you. Let me join you in
    welcoming our witnesses to the committee. I'm sorry that I'm a
    few minutes late. Late or not, I'm glad to be able to be here
    because of the importance of this hearing.
        Hundreds of thousands of our military members are currently
    deployed far away from their homes and families in service to
    our Nation. Many of those who are serving in very dangerous
    places like Iraq and Afghanistan depend on our leadership. Many
    of those who are serving in very dangerous places are also
    specifically and very much dependent upon the leadership of the
    witnesses that are in front of us today.
        We can't overstate the sacrifice that our military people,
    who are all volunteers, are making to ensure the security of
    their fellow Americans. We salute them. We pledge that we will
    do our part to ensure that they and their families are fully
    supported as they face these hardships and these dangers.
        The Air Force Secretary and General Moseley have
    responsibility to organize, train, and equip the Air Force. It
    is they who we turn to, to provide the support, and
    particularly the best training and equipment that this Nation
    can provide, so that members of the Air Force have all that
    they need to successfully perform their crucial duties.
        It is important that Secretary Wynne and General Moseley
    tell us today of any changes that may have taken place since
    their budget was prepared, and any requirement for funding
    which did not appear in the 2006 supplemental or in the fiscal
    year 2007 defense authorization request.
        Responsible budgeting means making choices and setting
    priorities. I am afraid the budget request before us
    understates the true cost of our defense program, because it
    does not fully recognize or pay for the cost of ongoing
    operations in Iraq and Afghanistan.
        Funds for those will apparently be requested later this
    year, on an emergency, non-paid-for basis. That's not
    responsible budgeting. Those costs should be planned on and
    paid for now. Honest budgeting requires no less.
        Although the exact cost for the operations in fiscal year
    2007 are not presently known, we have been spending significant
    sums, about $5 billion per month, in Iraq and Afghanistan for
    some time now. We know that these costs are going to continue
    past September 30 into fiscal year 2007. We also know that
    equipment that has been destroyed needs to be replaced, and
    equipment that has been used far more than anticipated needs to
    be repaired in the near-term, and modernized in the long-term.
    Those costs should be planned on now. Taken together, those
    omissions mean this budget understates known defense costs for
    fiscal year 2007, and the true size of the future deficits, by
    billions of dollars.
        While it is true that no one can predict with precision
    what these fiscal year 2007 costs will be, we should provide
    funds to cover known requirements. I have suggested increasing
    the budget to pay for ongoing operations in Iraq and
    Afghanistan, as well as resetting the force. It is the
    responsible thing to do for our troops and for budget accuracy.
        Additionally, I know that there are a number of other more
    programmatic issues that we will be discussing at this hearing,
    including incremental funding of the F-22, canceling the
    development of an alternate engine for the JSF, whether to
    continue C-17 production beyond the current plan of 180
    aircraft, and starting a new program for a strategic tanker
    acquisition.
        So, Mr. Chairman, I join you in welcoming our witnesses,
    and in thanking them for their service. I look forward to their
    testimony.
        Chairman Warner. Thank you very much.
        Does any other member feel they want a minute or two for
    opening-statement purposes?
        Senator Chambliss?
        Senator Chambliss. I'll defer.
        Chairman Warner. Thank you very much.
        We'll proceed, then, Mr. Secretary. Your entire statement,
    and that with the distinguished chief, will be put into the
    record.

     STATEMENT OF HON. MICHAEL W. WYNNE, SECRETARY OF THE AIR FORCE

        Secretary Wynne. Thank you very much, Mr. Chairman. Thank
    you, Senator Levin, and thank you, members of the committee.
    Thank you for having General Moseley and me here today to
    testify on behalf of America's Air Force. We are grateful for
    this committee's steadfast support of our Nation's airmen and
    their families.
        I have seen our innovative and adaptive airmen--Active,
    Guard, and Reserve--firsthand, and am inspired by their
    commitment and their patriotism. Nonetheless, as I told you
    back in October, our Air Force is challenged with trying to get
    6 pounds into a 5-pound sack. I have broken these challenges
    down into three critical components.
        First, personnel costs of an All-Volunteer Force are
    accelerating because of expanding benefits and rising health
    care costs.
        Next, operations and maintenance (O&M) costs continue to
    rise. We are experiencing unyielding second-order effects that
    continue to drain our top line. Simply stated, we are
    exhausting all of our assets at a much higher rate than we had
    forecast, and absorbing costs to organize, train, and equip for
    evolving new missions.
        Lastly, the acquisition, research and development (R&D),
    and investment accounts face severe pressure as a result of the
    foregoing must-pay bills. Nevertheless, we continue to mobilize
    fast and creative responses to achieve the technology and
    interdependence required to dominate in the global war on
    terror and the threats beyond.
        So, where does our solution lie? With your assistance, we
    will responsibly attack all three of these challenges. To rein
    in personnel costs, we are using Total Force Integration,
    formerly future total force, started in the mid-1990s. It has
    exposed redundancies to capitalize on as we continue to
    operationalize the Guard and the Reserves. ``Mission first''
    continues to be our beacon while partnering with both the Guard
    and the Reserve. In fact, we are in the process of releasing
    the post-base realignment and closure (BRAC) Phase 2 mission
    laydown, which has been cosigned by Active, Guard, and Reserve
    commanders.
        In addition to using our people more efficiently through
    the Total Force Integration, we instituted Air Force Smart
    Operations-21 (AFSO-21)--smarter and leaner operations. No
    process or organizational construct is immune from this Air
    Force-wide critical review. Efficiencies from AFSO-21, Total
    Force Integration, and lessons learned from 15 years under fire
    permit us to forecast an end-strength reduction of 40,000 full-
    time equivalents across the Future Years Defense Plan (FYDP).
    Using our manpower smarter has been found to be the key to
    retention and the key to force management.
        AFSO-21 will also help us with our second challenge, O&M
    increases. But smarter operations cannot overcome the elephant
    in the room, fuel and upkeep for aircraft with decreasing
    military utility. Aircraft with 1950s-era engines and design
    expose us to soaring fuel prices, increased maintenance, and
    obsolete spare suppliers. Many planes are simply not deployable
    due to their declining military utility. We can harvest savings
    from cutting requirements, redundancies, and excess capacities
    in our aircraft and missile fleets. This lets me keep the force
    robust, while shifting resources to new missions, like
    Predator, Global Hawk, and long range strike. I need this type
    of flexibility, and this is where I ask for your help.
        I need your help in lifting the legislative restrictions on
    retirements that prevent me from being the air-fleet manager
    that you expect me to be. Right now, these restrictions apply
    to nearly 15 percent of our fleet. Continued restrictive
    language will not only impede the shift to new missions now,
    but will lead to exhausting resources on aircraft with
    declining military utility in our future, and ultimately impact
    our technological edge for the future.
        The final part of this 6-pound problem is the investment
    accounts: acquisition, and R&D. I reiterate to you my
    commitment to restore the Air Force to its premier status in
    acquisition and governance, and we continue to concentrate in
    this area, access intellectual capabilities, and make sure that
    we are not in a deficient status.
        We must solidify our R&D investment stream, even while we
    are at war. Along with air dominance, space and cyberspace are
    keys to the future interdependent warfight. Investment today
    provides the gateway to tomorrow's dominance.
        In summary, personnel, O&M, the investment accounts,
    acquisition, and R&D are our targets. Despite 15 years of
    continuous combat since Operation Desert Storm, we have
    transformed our force like no other. With Total Force
    Integration, AFSO-21, and your help, we intend to keep the
    title of the world's most agile and lethal Air Force. Our
    commitment is to increase the aggregate military utility across
    the entire spectrum of operations for the Joint Force
    Commander. This means modernizing, recapitalizing, and
    recognizing efficiencies as we manage this total force.
        Thank you for your strong commitment to our Air Force and
    to the common defense. I look forward to your questions.
        [The joint prepared statement of Secretary Wynne and
    General Moseley follows:]

     Joint Prepared Statement by Hon. Michael W. Wynne and Gen. T. Michael
                                 Moseley, USAF

                            secaf/csaf--welcome memo

        We are America's airmen. Our mission is to deliver sovereign
    options for the defense of the United States of America and its global
    interests--we fly and we fight--in air, space, and cyberspace. For the
    past 15 years, our Air Force team has proven its mettle and skill every
    day. Since the days of Operation Desert Storm, we have been globally
    and continuously engaged in combat. We will continue to show the same
    ingenuity, courage, and resolve and achieve success in our three most
    important challenges: winning the global war on terror; developing and
    caring for our airmen; and maintaining, modernizing, and recapitalizing
    our aircraft and equipment.
        In the global war on terror we face vile enemies--enemies devoid of
    any positive vision of the future, who seek only to destroy the United
    States and the ideals and freedoms upon which America is built. We will
    win this fight. We will maintain our focus on winning this fight. While
    maintaining focus on winning the global war on terror we will also
    maintain vigilance--vigilance in defense of our homeland and vigilance
    against emerging threats in an uncertain world.
        Our expeditionary fighting forces and culture, centered on the Air
    and Space Expeditionary Force, provide the foundation for our
    operations. We will more closely align our Regular Air Force, Air
    National Guard, and Air Force Reserve units with total force
    initiatives to enhance our overall capability. We will continue
    transforming to meet the challenges of a dynamic world.
        We will remain focused on caring for and developing our airmen--our
    most valuable resource. We will continue to look for ways to maintain
    and improve their training, their personal and professional
    development, and their quality of life, so they will continue to meet
    the commitments of today while preparing for the challenges of
    tomorrow.
        We are operating the oldest inventory of aircraft in our history,
    while maintaining the intense operations tempo required by the global
    war on terror, humanitarian crises, and routine requirements.
    Meanwhile, competitor states are developing air and air defense systems
    that could threaten our ability to maintain air and space dominance.
    These factors drive the urgent need to modernize and recapitalize our
    aircraft. We must act now to preserve our Nation's freedom of action in
    the future. The Secretary of Defense described future threats in terms
    of four quadrants--traditional, irregular, catastrophic, and
    disruptive. We must develop, acquire, and maintain systems that can
    counter threats in any of these quadrants. We will do so by
    incorporating lean principles that eliminate waste while providing
    transparency in our processes.
        Our 2006 posture statement outlines our plan to accomplish these
    goals regarding global war on terror, our airmen, and our aircraft and
    equipment. It reflects our commitment to good stewardship of the
    resources entrusted to us, and our dedication to protecting our Nation
    in air, space, and cyberspace.
                       introduction--heritage to horizon
        Over a century ago, America crossed the threshold of powered flight
    and gave wings to the world. Soon military leaders realized the
    implications of this development, and warfare was changed forever.
    America was fortunate to have ``great captains'' with the vision to
    imagine the possibilities of air and space power--airmen like Billy
    Mitchell, Frank Andrews, Hap Arnold, Ira Eaker, Jimmy Doolittle, and
    Bennie Schriever. They have given us a proud heritage of courage,
    excellence, and innovation. In so doing, they also give us a sense of
    perspective and a way to understand the Air Force's future.
        They have shown us an unlimited horizon. Each of them lived in
    dangerous times and faced many demanding challenges. Today, we also
    find ourselves as a Nation and an Air Force facing similarly dangerous
    and demanding challenges. Some are global or national in scope; others
    are specific to the Air Force.
        During the last decade the United States Air Force transformed to a
    modular expeditionary force of 10 Air and Space Expeditionary Force
    (AEF) packages providing agile air and space power. Our airmen have
    proven tremendously successful across the spectrum of operations from
    humanitarian efforts to homeland defense operations and the global war
    on terrorism. We will continue transforming to meet the challenges of a
    dynamic world by rebalancing the force and realigning our structure
    into a total force that meets increased demands for persistent
    intelligence, rapid mobility, and precision strike capabilities. The
    AEF construct provides the ideal toolbox from which we can provide
    tailored, efficient, and lethal air and space forces to deal with
    future challenges.
        The Air Force faces the broadest set of mission requirements across
    the entire spectrum of warfare. We will bolster our Nation's ability to
    respond swiftly, flexibly, and decisively to asymmetric, irregular, and
    emerging threats. We have embarked on a bold, new initiative known as
    Air Force Smart Operations for the 21st century (AFSO-21) as a means to
    best allocate our resources to meet this increasing set of challenges.
    All of these challenges will require the very best efforts of our
    airmen throughout the total force.
    Winning the Global War on Terror
        Our first priority is to maintain focus on winning the global war
    on terror. We will continue to operate as part of a true joint and
    coalition team, multiplying the effectiveness of our partners to win
    this war. We fly and we fight--whether we're flying A-10s over
    Afghanistan; flying F-16s over Iraq; operating and maneuvering
    communications satellites in geosynchronous orbit; remotely piloting
    unmanned aerial vehicles (UAVs) patrolling over Baghdad; or maintaining
    vigilance over our Nation's homeland in an E-3 airborne warning and
    control system (AWACS) aircraft. All airmen, no matter what their
    specialty, contribute to this mission.
        We must keep in mind that the global war on terror is not defined
    by today's headlines or locations. It will be a long war, with shifting
    venues and constantly evolving threats. The character and capabilities
    of potential U.S. adversaries are increasingly uncertain, veiled,
    growing, and changing, as both state and non-state actors acquire
    advanced technology and the means to either acquire or develop weapons
    of mass destruction (WMDs).
        We can foresee serious threats posed by increasing numbers and
    sophistication of ballistic and cruise missiles; chemical, biological,
    radiological, and nuclear weapons; advanced surface-to-air missiles
    (SAMs); and sophisticated combat aircraft. We also anticipate the real
    threat of potentially crippling attacks on our Nation's critical
    infrastructure, including space networks. Not only must we be prepared
    to confront known threats, but we also must be ready for unexpected,
    disruptive breakthroughs in technology that may undercut traditional
    U.S. advantages.
        Maintaining a strong defense able to overcome and defeat these
    threats remains an imperative for our Nation. Currently, the Air Force
    can command the global commons of air and space and significantly
    influence the global commons of the sea and cyberspace; however, we
    cannot indefinitely maintain this advantage using the current
    technology of the air and space systems and equipment comprising our
    existing force structure.
    Developing and Caring for Our Airmen
        Our Regular Air Force airmen, Air National guardsmen, Air Force
    reservists, and civilians, who together form our total force, are
    building on their inheritance of courage, excellence, and innovation.
    They are highly educated and resourceful, and have created the most
    lethal Air Force that has ever existed. We must continue to look for
    ways to maintain and improve their training, their personal and
    professional development, and their quality of life, so that they may
    continue to meet the commitments of today while preparing for the
    challenges of tomorrow.
        Airmen today are contributing to combat operations in ways never
    before envisioned--as convoy drivers and escorts, detainee guards, and
    translators to give a few examples. Other airmen routinely serve
    ``outside the wire'' as special tactics operators, joint terminal
    attack controllers and special operations weather personnel. All of
    these airmen must receive the proper training to survive, fight, and
    win. We are working within the Air Force, as well as with our joint
    warfighting partners, to ensure that all airmen are fully prepared when
    they arrive in the combat zone.
        Developing airmen involves more than combat skills. It is a career-
    long process that maximizes the potential of each member of the total
    force team. We will look at every airman as an individual and provide
    them with specialized training, relevant educational opportunities, and
    appropriate assignments in order to capitalize on the talent these
    brave airmen offer for this country's defense.
        Every airman is a vital national resource and must be cared for as
    such. In addition to providing professional opportunities for our
    airmen and fostering an environment of mutual respect, the Air Force is
    committed to investing in health and fitness programs and facilities,
    world class medical access and care, and housing and morale programs
    for our airmen. Our airmen have proven themselves to be the best
    America has to offer--they deserve the best support available.
        By ensuring that our airmen are prepared for combat, effectively
    developed and properly supported, we will continue to provide our
    Nation with the best Air Force in the world.
    Maintenance, Modernization, and Recapitalization
        One of our most daunting challenges is maintaining the military
    utility of our aircraft as reflected in mission readiness, maintenance
    costs, and other factors. We have been actively engaged in combat for
    the past 15 years. We currently maintain an air bridge to southwest
    Asia. Our state of alert for global war on terror requires us to
    operate at an elevated and sustained tempo of operations (OPTEMPO).
    Increased investment and increased maintenance tempo can keep our older
    aircraft flying and slow their decaying military utility, but equipment
    age and use are unrelenting factors.
        Presently, we have the oldest aircraft inventory in our history.
    Our aircraft are an average of over 23 years old--older in many cases
    than those who fly and maintain them. In particular, our inventory of
    tanker aircraft averages over 41 years old, and our C-130 tactical
    airlifters average over 25 years old. As our equipment ages, it
    requires more frequent maintenance and replacement of parts; meanwhile,
    increased OPTEMPO accelerates wear and tear on our equipment and
    operational infrastructure, exposes our equipment to extreme
    conditions, and, in some cases, delays routine maintenance.
        We must recapitalize our aircraft and operational infrastructure,
    as well as modernize our processes for services, support, and
    information delivery in order to maintain the grueling pace required
    into the foreseeable future. We must do so in a fiscally prudent
    manner. This means retiring and replacing our oldest, least capable,
    and most expensive aircraft and equipment, as well as accepting a
    manageable level of risk in order to selectively maintain some older
    systems until newer systems are on the ramp.
        These newer systems will cost far less to operate and maintain and
    are designed to defeat emerging threats. The U.S. no longer enjoys a
    monopoly on advanced technology, and we are already witnessing the
    emergence of highly sophisticated systems that threaten our capability
    to achieve joint air and space dominance. Along with ongoing robust
    science and technology (S&T) programs, transformational systems such as
    the F-22A Raptor, F-35 Joint Strike Fighter (JSF), Space Radar (SR),
    and Transformational Communications Satellite (TSAT) will ensure that
    we maintain the ability to provide overwhelming air and space power for
    our combatant commanders.
        Concurrently, the Air Force is also focusing on reforming,
    modernizing, and improving processes for acquisition of new systems and
    equipment. We will achieve greater efficiencies and higher productivity
    by reforming our business practices. By incorporating lean processes
    and transparent accounting, and reinforcing a culture of continuous
    improvement, the Air Force will maintain the high standards of our
    heritage. We will continue our tradition of transformation, realize
    both lethality and efficiency in our capabilities in this new century,
    and stand ready for the challenges of the future.
        The future is what you bring with you when tomorrow comes. Our 2006
    Air Force posture statement outlines our flight plan into the future.
    By focusing on winning the global war on terror, maintaining the
    excellence and maximizing the potential of the America's airmen, and
    maintaining, modernizing, and recapitalizing our aircraft and
    equipment, we will provide air and space dominance for U.S. forces well
    into the future.
              air and space power today--building on our heritage
    Current Security Environment
        The current security environment is marked by seemingly constant
    change and uncertainty. Our security environment is also marked by the
    threats posed by terrorist organizations and rogue states around the
    world bearing ill will toward our Nation. In times of uncertainty and
    heightened threat, our citizens turn to the military to defend this
    great Nation at home and abroad. Our airmen stand alongside soldiers,
    sailors, marines and coast-guardsmen--a joint team poised and ready to
    defend the Nation.
        Throughout the history of American air and space power, airmen have
    often faced complex challenges during times of change and uncertainty--
    times when our Nation's survival was at stake. In early 1945, General
    ``Hap'' Arnold reported to the Secretary of War, ``. . . our Air Force
    must be flexible in its basic structure and capable of successfully
    adapting itself to the vast changes which are bound to come in the
    future. Whatever its numerical size may be, it must be second to none
    in range and striking power.'' In retrospect, Hap Arnold's words were
    amazingly prescient.
        Today our force is still second to none in range and striking
    power. Potential adversaries, well aware of the strength of our Air
    Force, seek to limit our range and striking power through development
    of new and emerging threat systems. These systems, coupled with the
    proliferation of weapons of mass destruction, form a formidable threat
    to the joint force and to our Nation.
        In order to achieve victory in the global war on terror and meet
    the challenges of emerging threats, the Air Force looks to build on the
    great heritage established by decades of airmen--airmen who have
    confronted daunting challenges and succeeded as vital members of the
    joint warfighting team.
        Global War on Terror
        Several key elements--ideologies of hatred, vast resources, mutual
    support structures, as well as veiled state and private sponsorship--
    provide linkages across the array of enemies confronting us in the
    global war on terror. The general terrorist threat also spans several
    regions of the world, often acting on a global scale. While the
    strategy to prosecute and win the global war on terror is an enterprise
    necessarily involving many agencies and actions in addition to military
    forces, the Air Force, in particular, serves a vital role in our
    Nation's battle against terrorist networks.
        America's airmen have become seasoned veterans of Post-Cold War
    conflicts and are postured to answer any contingency or challenge on a
    moments' notice. The Air Force has been taking the war to America's
    enemies for 15 consecutive years. Our constant presence in Southwest
    Asia since Operations Desert Shield and Desert Storm kept regional
    instability in check. Airpower effectively controlled two-thirds of
    Iraq for over a decade, setting the conditions for Iraq's stunning
    military collapse in Operation Iraqi Freedom.
        Recognizing the new reality of rapidly emerging global threats in
    the Post-Cold War environment, the Air Force has significantly reduced
    its force structure and transitioned from a Cold War legacy paradigm to
    a vastly more agile, responsive, and scalable force structure built
    around the AEF concept. The AEF construct provides the combatant
    commanders and the joint force with the agility and lethality required
    to engage U.S. adversaries anywhere in the world with correctly
    tailored forces--all in a matter of hours to single-digit days. The AEF
    construct presents air and space forces in a continuous rotation
    cycle--currently a 20-month cycle with nominal 4-month deployments--and
    provides the combatant commands with greater capability and stability
    of forces in theater while providing more predictability for our
    airmen.
        As defined by our national leadership, the global war on terror
    strategy seeks to reduce both the scope and capability of terrorist
    networks globally, regionally, and locally. This strategy requires
    global perspective and regional focus. It also demands an ability to
    simultaneously conduct long-range strikes and humanitarian relief on
    opposite sides of the world. In order to execute effectively, the
    strategy requires unparalleled command, control, communications,
    computers, intelligence, surveillance, and reconnaissance (C\4\ISR).
    These are all activities our Air Force conducts for the joint force on
    a daily basis--activities critical to successfully prosecuting the
    global war on terror.
        As an essential part of the joint team, the Air Force contributed
    to defeating the Taliban and eliminating Afghanistan as a safe haven
    for al Qaeda. While the Air Force remains actively engaged in
    operations in Afghanistan, our national strategy is simultaneously
    focused on Iraq as the central front for the war on terror. While the
    United States and its partners have defeated Saddam Hussein's regime of
    terror, the enemies of freedom--both members of the old regime and
    foreign terrorists who have come to Iraq--are making a desperate
    attempt in the name of tyranny and fascism to terrorize, destabilize,
    and reclaim this newly-liberated nation and aspiring democracy.
        The Air Force continues to lead the fight in defending the home
    front as well. The Air Force recently conducted an Air Force-Navy
    strategy conference addressing the global war on terror and
    counterinsurgencies. The conference report forms the basis for an
    ongoing Air Force study to further improve the Air Force's posture for
    homeland defense. The Air Force has also taken a leadership role in
    developing a concept of operations for joint maritime interdiction to
    defend our shores and those of our allies. In addition, Air Force
    aircraft maintain a 24/7 alert status in defense of the United States
    and its approaches, against both airborne and maritime threats.
        From a global perspective, we are continually bolstering airman-to-
    airman relationships with our allies and partners to build
    interoperable and complementary capabilities as well as to ensure
    access to foreign airspace and support infrastructure. We are using
    training, exercises, personnel exchanges, cooperative armaments
    development, and foreign military sales to expand and cement these
    vital coalitions that are essential to prosecuting the global war on
    terror and to our future joint air operations.
        In addition, from local, regional, and global perspectives, foreign
    internal defense is an indispensable component of successful
    counterinsurgency strategies. The Air Force is partnering with Special
    Operations Command to rapidly expand Air Force foreign internal defense
    forces to bolster partner nations on the front lines of the global war
    on terror.
        From direct support of special forces, to maritime interdiction, to
    global strike, the Air Force remains prepared to engage those who would
    threaten our friends, our interests, or our way of life.
        Emerging Threats
        The threats airmen will encounter in the coming years are changing
    dramatically. Adversaries are developing and fielding new ground-based
    air defenses, improved sensor capabilities and advanced fighter
    aircraft. These capabilities will increasingly challenge our legacy
    aircraft, sensors, and weapons systems.
        Advances in integrated air defense systems, to include advanced
    sensors, data processing, and SAMs continue trends noted in the 1990s.
    SAM systems are incorporating faster, more accurate missiles, with
    multi-target capability, greater mobility, and increased immunity to
    electronic jamming. Currently possessing ranges of over 100 nautical
    miles (NM), these anti-access weapons will likely achieve ranges of
    over 200 NM by the end of the decade. These advanced SAMs can and will
    compel non-stealthy platforms to standoff beyond useful sensor and
    weapons ranges. Proliferation of these long-range SAMs is on the rise,
    with projections for 2004-2007 indicating a twofold increase over the
    number of advanced SAM system exports during the mid to late 1990s.
        Another trend is the development and proliferation of upgrades to
    older, 1960/70's-era SAMs. At a fraction of the cost of a new advanced,
    long-range SAM, many African, Asian, and Mid-East nations are looking
    to upgrade older SAMs to revitalize their aging air defense forces. By
    bringing in modern technologies, improved missile propellants, and
    increased mobility, older SAM systems are becoming more reliable and
    more credible threats.
        Finally, the threat from manportable air defense systems (MANPADS)
    continues to grow. Large, poorly secured stockpiles of these weapons
    increase the chances of highly capable MANPADS ending up in the hands
    of an insurgent or terrorist group.
        The threats from advanced fighter aircraft also continue to grow.
    Currently there exist 31 nations already fielding 2,500 or more
    airframes. Increased use of state-of-the-art radar jammers, avionics,
    weapons, and reduced-signature airframes/engines are becoming the norm
    in fighter design. Additionally, countries like India and China are now
    able to produce their own advanced fighters, thereby increasing the
    quantity and quality of adversary aircraft the Air Force may face in
    the future. By 2012, China will more than double its advanced fighter
    inventory to over 500 airframes, most with advanced precision-guided
    munitions and air-to-air weapons. Similarly, self-protection jamming
    suites are growing in complexity and proliferation, potentially eroding
    our ability to target adversary aircraft.
        The threat from the development, fielding, and proliferation of
    standoff weapons such as long-range cruise missiles will also provide
    potential adversaries with offensive capabilities of ever-increasing
    accuracy and range which, when combined with their relatively small
    size, presents an increasing challenge to detection and tracking.
        Many nations are enhancing the utility of advanced fighters by
    pursuing, procuring, and integrating support aircraft as force
    multipliers. They acquire aerial refueling tankers to extend the range
    of strike operations and increase on-station time for fighters.
    Furthermore, airborne early warning aircraft are extending the reach of
    many nations through datalink capabilities that provide control of
    fighter operations well beyond the reach of land-based radars. Several
    nations are also purchasing standoff jamming assets in both manned and
    unmanned platforms to attempt to deny our traditional sensor
    advantages. UAVs of all varieties are in high demand and are becoming
    increasingly available on today's market, providing low-cost, but
    highly effective reconnaissance capabilities. This situation represents
    a new and increasingly prolific and complex challenge on the
    battlefield.
        Additionally, the combination of improved C\4\ISR with improved
    ballistic and cruise missile capabilities will increasingly threaten
    regional and expeditionary Air Force basing. China, in particular, has
    a growing over-the-horizon intelligence, surveillance, and
    reconnaissance capability from a combination of ground, air, and space-
    based systems. Coupled with its large and growing inventory of
    conventionally-armed theater ballistic missiles, China's increasing
    capabilities and reach collectively present a serious potential to
    adversely impact allied and joint air and space operations across the
    Asian theater.
        Worldwide advancements in the development, deployment, and
    employment of foreign space and counterspace systems are challenges to
    U.S. space superiority. Adversaries, including terrorists, are more and
    more easily obtaining a number of increasingly sophisticated space
    services. Furthermore, they are developing the means to degrade U.S.
    space capabilities, freedom of action, and access. The intent of U.S.
    adversaries combined with the capabilities of foreign space and
    counterspace systems will increasingly threaten U.S. military forces
    and interests worldwide.
        Threat of WMD Proliferation
        The threat of proliferation of WMD to countries with advanced
    military capabilities has changed dramatically since the end of the
    Cold War. India and Pakistan became overt nuclear powers in 1998,
    adding to their formidable conventional capabilities. North Korea
    claims and is assessed to have built nuclear weapons, while Iran is
    suspected of pursuing them; both countries face intense international
    pressure to halt their efforts.
        Less catastrophic, but of equal concern, are chemical and
    biological weapons (CBW). Chem-bio WMDs can range in sophistication
    from World War I-vintage gases or traditional agents like anthrax, to
    highly advanced ``fourth-generation'' chemical agents or genetically
    modified bacterial or viral weapons that challenge state-of-the-art
    defenses and countermeasures. It is much less expensive and more
    technologically feasible to produce CBW than it is to obtain nuclear
    weapons or fissile materials. Furthermore, CBW can be concealed very
    effectively and inexpensively, veiled under a veneer of legitimate
    civilian industry or ``dual-use'' activities.
        Future adversaries, deterred from challenging the U.S. openly, may
    seek to offset U.S. warfighting advantages by developing, using, or
    threatening to use these weapons. As such, the acquisition of WMD
    capabilities by terrorists/non-state actors is a grave concern. Many
    groups have declared their desire to pursue such a goal, and evidence
    is growing they are attempting to obtain the necessary financial means,
    weapons knowledge, and necessary materials.
    Air Force Contributions to Operation Iraqi Freedom (OIF), Operation
            Enduring Freedom (OEF), and Operation Noble Eagle (ONE)
        Air and Space Operations in OIF and OEF
        Over 26,000 airmen are currently forward deployed in support of
    combatant commanders throughout the world. These airmen continue to
    deliver key Air Force capabilities of precision engagement, rapid
    global mobility, and information superiority to OEF and OIF missions.
        Pulling from 89,000 tailored deployment teams built around specific
    capabilities, the Air Force has flown the preponderance of coalition
    sorties in support of OIF and OEF. In Iraq, the Air Force has flown
    over 188,000 sorties, while in Afghanistan, airmen have flown over
    130,000. Overall, the Air Force has flown a total of over 318,000
    sorties, or approximately 78 percent of the total coalition air effort.
    Counted among these sorties are missions ranging from airlift and
    aeromedical evacuation, to close air support (CAS) missions to protect
    ground troops as well as provide them with precise fire support and
    sensor capabilities.
        In 2005, Air Force fighters and bombers supporting OIF and OEF
    expended over 294 munitions (bombs), 90 percent of which were
    precision-guided, including the Joint Direct Attack Munition (JDAM).
    These trends represent a 10 percent increase over 2004 totals in the
    use of precision-guided munitions (PGMs). Our airmen have also provided
    nearly all of the in-flight refueling for joint and coalition forces.
        Leading the way in reconnaissance and imagery, the Air Force is
    currently flying Predator UAV missions 24 hours a day, 7 days a week.
    This capability will grow from 8 to 12 total orbits in 2006 to meet
    increased demand. Predator aircraft are able to transmit live video
    pictures to ground-based targeting teams equipped with the Remote
    Operations Video Enhanced Receiver (ROVER) system. Linking precision
    engagement and persistent C\4\ISR capabilities to forces on the ground,
    ROVER has been used repeatedly to detect, target, and destroy
    improvised explosive devices (IEDs) and disrupt insurgent activities
    across the region. Bolstering these capabilities are Tactical Airborne
    Reconnaissance System (TARS) equipped F-16s flown by Air National Guard
    units. In recent testing, TARS has demonstrated the ability to aid in
    the location and destruction of IEDs.
        Air Force operations in Iraq and Afghanistan also highlight the
    importance of space-based C\4\ISR capabilities to U.S. and coalition
    forces. These capabilities have become integral to effective
    warfighting operations and include secure communications, global
    weather, persistent worldwide missile warning, and intelligence
    gathering. Commanders continue to rely extensively on the all-weather
    precise position, navigation, and timing capability provided by the Air
    Force's Global Positioning System (GPS) constellation, satellite
    communications (SATCOM) and timely observations of weather and enemy
    activity to conduct operations in Iraq and Afghanistan. In strikes
    against time-sensitive targets, nearly 40 percent of all munitions used
    in OIF were GPS-guided, which made them unaffected by sand storms and
    inclement weather. Additionally, at the senior leadership level of
    warfighting, the Joint Force Air and Space Component Commander's duties
    as the Space Coordination Authority have become critical to successful
    joint planning and execution of space capabilities for joint forces.
    Holding the ultimate high ground, Air Force space professionals keep a
    constant vigil over a global battle space--planning, acquiring,
    maintaining, and operating the systems that sustain our Nation's
    advantages in space.
        Sister Services and U.S. Government agencies continue to heavily
    rely on Air Force capabilities. Running the spectrum from logistics
    expertise to medical care, the Air Force is fully partnered with the
    Army and Marine Corps units running convoys throughout Iraq with more
    than 1,000 transportation, security forces, and medical airmen trained
    to support convoy missions.
        Moreover, Air Force capabilities are saving soldiers' lives and
    simultaneously reducing our required footprint in southwest Asia.
    Increased use of Air Force airlift capabilities--notably the
    unconventional yet highly effective use of workhorse C-17s as well as
    C-5 aircraft to increase our intra-theater airlift capabilities in
    Iraq--has dramatically reduced the need, number, and frequency of
    ground convoys along the most dangerous roads and routes in Iraq. These
    capabilities and optimized theater airlift mission planning methods
    have also contributed to a planned reduction of the number C-130s
    required for OIF support.
        Additionally, Air Force support personnel are taking a more active
    role in the direct protection of personnel and resources. In early
    2005, Air Force security forces at Balad Air Base, Iraq, in conjunction
    with the Army, were assigned a sector outside the base to patrol and
    clear of insurgent operations. This aspect of the air base defense
    mission has not been seen since the Vietnam War, yet Task Force 1041
    was successful in reducing attacks on Balad Air Base by 95 percent.
        Airmen also worked to strengthen relationships, develop
    capabilities, and enhance the self-reliance of Afghanistan, Iraq, and
    other regional global war on terror partners. For example, Air Force
    air traffic controllers helped return safety and commercial viability
    to Afghan airspace. At Ali Airbase, Iraq, a cadre of Air Force
    instructors taught Iraqi airmen how to fly and maintain their newly
    acquired C-130 aircraft. In Kyrgyzstan, Air Force C-130s air-dropped
    U.S. Army and Kyrgyz National Guard troops over a drop zone in the
    capital of Bishkek during a joint training exercise. Additionally,
    United Arab Emirates (UAE) recently acquired American-made F-16 Block-
    60 aircraft. This acquisition provides them with cutting edge aviation
    technology and a capability complementary to the UAE's new Gulf Air
    Warfare Center, which has become a tremendously successful training
    venue for our regional and global coalition partners.
        Finally, Air Force innovations in command and control (C2)
    technologies have allowed airmen to seamlessly automate and integrate
    efforts of critical air assets. The systems baseline in use in the
    Falconer Air and Space Operations Center (AOC) at Al Udeid has improved
    automated support for the daily air tasking orders, while the
    capabilities of the battle control system-mobile communications module
    reduces the number of airmen needed at forward locations in Iraq,
    resulting in fewer airmen exposed to hostile fire.
        Air and Space Operations in ONE
        While engaged in OEF and OIF, the Air Force simultaneously
    contributes to Operation Noble Eagle--the defense of the homeland.
    Through a variety of efforts, the Air Force continues to guard the
    skies of our Nation from coast to coast. The Air Force's principal
    homeland defense mission is air defense and preserving the air
    sovereignty of the United States and its territories.
        Since September 11, 2001, over 41,000 fighter, aerial refueling,
    and airborne early warning sorties have been flown in defense of the
    U.S., while over 2,000 air patrols have responded to actual incidents
    and suspicious flight operations. This is a true Total Force mission,
    leveraging the combined capabilities of the Air Force Reserve, Air
    National Guard and Regular Air Force components to provide seamlessly
    orchestrated C2 and refueling support for fighter aircraft operating
    from alert sites throughout the U.S.
        The range, flexibility, persistence, and precision inherent in U.S.
    air and space power provide joint warfighters with a unique tool set
    for creating war-winning results with a relatively small footprint. Air
    and space operations stand ready to continue providing these important
    resources to OIF, OEF, and ONE, as well as exploring new ways to lead
    the way in the global war on terror.
        Air and Space Power--An Essential Element of the Joint Fight
        Innovation is a central theme in Air Force heritage. It is a
    strength the Air Force lends to the overall effort to transform joint
    operations into a more seamless, integrated, and interdependent team
    effort. U.S. military performance during ongoing operations in Iraq and
    Afghanistan demonstrates unprecedented joint interdependence. We've
    gone from struggling with C2 and coordination of air and ground forces
    on the battlefields of Operation Desert Storm to demonstrating a high
    degree of integration among joint and coalition forces engaged in OIF.
        Overall success of future interdependent joint force efforts will
    place greater demands on Air Force capabilities. As ground forces seek
    to increase their agility and speed, they will rely increasingly on air
    and space power to move them throughout the battlespace; provide the
    information needed to outmaneuver numerically superior or elusive
    adversaries; and deliver precise, rapid strikes across multiple,
    distributed operations areas. The future joint force concept of
    seabasing, as yet another means to project power and support ground
    forces, further underscores the requirements for land-based air and
    space power. Clearly, the need for rapid mobility, persistent C\4\ISR
    and precision engagement will only increase in the future.
        Concurrently, as we reduce prepared, garrisoned overseas bases in
    the out-years, the Air Force will increasingly operate from
    expeditionary air bases. The Air Force, having transformed over the
    past 15 years to an AEF construct and culture, continues to innovate
    and evolve with new expeditionary concepts. AEF contingency response
    groups (CRGs) are organized, trained, and equipped to provide an
    initial ``open the base'' capability to combatant commanders. The
    theater CRG provides a rapid response team to assess operating location
    suitability and defines combat support capabilities needed to AEF
    operating locations. In addition, basic expeditionary airfield
    resources (BEAR) will provide the scalable capability necessary to open
    and operate any austere airbase across the spectrum of AEF contingency
    or humanitarian operations. BEAR will provide vital equipment,
    facilities, and supplies necessary to beddown, support, and operate AEF
    assets at expeditionary airbases with limited infrastructure and
    support facilities.
        Battlefield Airmen
        Airmen are increasingly engaged beyond the airbase and ``outside
    the wire,'' bringing ingenuity and technology to joint warfighting on
    the ground by using advanced systems to designate targets, control
    aircraft, rescue personnel, and gather vital meteorological data. The
    Air Force is optimizing this family of specialties, known as
    battlefield airmen. So far, we have identified program management,
    acquisition and sustainment synergies across the combat rescue, combat
    control, terminal attack control, and special operations weather
    functional areas. Air Force personnel are an integral part of the
    battlespace, and we are continuously identifying and updating common
    training requirements for these airmen.
        We are organizing battlefield airmen for maximum effectiveness in
    the modern battlespace. In addition, we will train battlefield airmen
    in the skills required to maximize airpower and standardize that
    training across those battlefield airmen. Finally, we must equip our
    battlefield airmen with improved, standardized equipment for missions
    in the forward and deep battlespace. This will expand the commander's
    ability to employ battlefield airpower professionals able to integrate
    unequaled accuracy, responsiveness, flexibility, and persistence into
    air operations supporting joint ground forces.
        From forward positions, joint terminal attack controllers (JTACs),
    a subset of Battlefield airmen, direct the action of combat aircraft
    engaged in CAS and other offensive air operations. Recently JTACs have
    become recognized across the Department of Defense (DOD) as fully
    qualified and authorized to perform terminal attack control in
    accordance with a joint standard.
        In addition to night vision equipment, JTACs carry a hardened
    laptop computer and multi-channel radio. We've significantly reduced
    the weight these battlefield airmen must carry while simultaneously
    providing them with greater ability to perform critical tasks such as
    designate targets ranging up to several kilometers away. We are
    striving to further decrease the weight of their gear while increasing
    the capabilities and interoperability of their equipment with other
    air, space and ground assets. This combination of technology
    facilitates the direct transfer of information to combat aircraft,
    minimizing errors in data transfer. This equipment will increase
    situational awareness, assist in combat identification, maximize first-
    attack success, shorten the kill-chain, and provide better support to
    ground forces.
        Innovative Uses of Technology
        Innovation--our Air Force heritage and strength--is critical to
    success in defeating enemies on the battlefield as well as in defending
    our homeland. Each day, airmen across the world produce military
    effects for the joint team through ingenuity or with advancements in
    technology.
        To meet U.S. Central Command's (CENTCOM) urgent operational needs,
    the Air Force is accelerating the modification of our Sniper and
    LITENING advanced targeting pods (ATPs) with video datalink
    transmitters to share information more rapidly. The high resolution
    images from our targeting pod TV and infrared video is generations
    better than the low altitude navigation and targeting infrared for
    night (LANTIRN) pods used during previous conflicts, and they provide
    tactical information in greater volume and relevance than ever before.
        The Air Force is quickly adapting new tactics, techniques, and
    procedures for integrating the ROVER III and ATPs into nontraditional
    intelligence surveillance and reconnaissance (NTISR) missions. These
    include convoy escort, raid support, and infrastructure protection
    missions in addition to traditional CAS missions. Equipped with air-
    ground weapons, our ATP-equipped aircraft have the flexibility to
    provide responsive firepower and unprecedented tactical reconnaissance,
    making our fighters and bombers more effective and versatile than ever.
        Furthermore, some ROVER IIIs were diverted to support disaster
    relief and humanitarian assistance in the aftermath of Hurricanes
    Katrina and Rita. Instead of flying ATPs on fighter or bomber aircraft,
    we located video transmitters on rooftops or attached them to
    helicopters to provide overhead video streams to the recovery teams
    equipped with ROVER III.
        Predator UAV systems continue to demonstrate the Air Force penchant
    for innovative application of technology for fighting the global war on
    terror. Current operations allow airmen in Nevada to pilot and control
    Predators operating in the Iraq and Afghanistan theaters of operations.
    Increasing experience in these novel approaches to flight and mission
    control operations have led to revolutionary advances in the execution
    of military capability.
        Equipped with an electro-optical, infrared, and laser designator
    sensor, and armed with Hellfire missiles, Predator has not only
    shortened the sensor-to-shooter timeline--it has allowed the sensor to
    become the shooter. Since 1995 Predator has amassed over 120,000 total
    flying hours. From January through September of 2005, Predators logged
    more than 30,000 flight hours, over 80 percent of which were in direct
    support of combat operations. In August 2005, the Predator program flew
    four aircraft controlled by a single pilot and ground control station,
    successfully demonstrating the multiple aircraft control concept.
    Complementing the Predator's capabilities, the Global Hawk is a high
    altitude, long endurance, remotely piloted aircraft (RPA). Through the
    innovative use of synthetic aperture radar as well as electro-optical
    and infrared sensors, Global Hawk provides the joint warfighter
    persistent observation of targets through night, day, and adverse
    weather. Global Hawk collects against spot targets and surveys large
    geographic areas with pinpoint accuracy, providing combatant commanders
    with the most current information about enemy location, resources, and
    personnel. The Global Hawk program is delivering production systems to
    the warfighter now and is in constant demand by combatant commanders.
        Since its first flight in 1998, Global Hawk has flown over 8,000
    hours--including over 4,900 combat hours and over 230 combat missions
    with prototype systems deployed in support of global war on terror. In
    OIF and OEF the prototype systems have produced over 57,000 images.
        The long-established ISR stalwart, the RC-135 Rivet Joint continues
    to demonstrate its adaptability to a changing and evolving threat
    environment with the application of progressive technologies and
    upgrade programs.
        The RC-135 Rivet Joint continues to field improvements in tactical
    signals intelligence (SIGINT) capabilities and platform performance,
    including re-engining and avionics modernization, to support the full
    spectrum of combat operations and national information needs.
    Additionally, Rivet Joint has become the cornerstone for airborne, net-
    centric development. Rivet Joint plays a key role in the network-
    centric collaborative targeting advanced concept technology
    demonstration and serves as the platform of choice for implementation
    of new reachback technologies to enhance national and tactical
    integration. Adding yet another chapter to Rivet Joint's continuous
    record of support to CENTCOM since 1990, the platform flew over 550
    airborne reconnaissance missions in support of OEF and OIF.
        Aeromedical Evacuations
        As early as 1918, the military has used aircraft to move the
    wounded. The Air Force continued this proud tradition with the
    aeromedical evacuation of over 11,000 wounded personnel from
    Afghanistan and Iraq. The aeromedical evacuation system has transformed
    to ensure the Air Force can conduct rapid and precise operations in an
    expeditionary environment. The placement of aeromedical crews in
    forward locations continues the chain of survival that starts on the
    battlefield with self-aid and buddy care. The chain continues through
    expeditionary medical support hospitals, to aeromedical in-flight care
    and finally to stateside medical centers within as little as 72 hours.
    Expeditionary aeromedical operations reduce the necessity and large
    footprint of theater medical assets and conserve valuable health care
    resources.
        The force mix of aeromedical evacuation crewmembers consists of 12
    percent Regular Air Force and 88 percent Air Reserve component. This
    use of the total force was best demonstrated in the fall of 2005 during
    the swift aeromedical evacuation of over 3,800 sick and elderly people
    threatened by Hurricanes Katrina and Rita.
        As modern medicine evolves, the aeromedical system continues to
    adapt to meet future challenges. The Air Force continues to lean
    forward by looking at future threats such as biological warfare. We are
    leading the way in the development of a litter transportable patient
    isolation unit for the movement of contaminated patients. The
    aeromedical evacuation system demonstrates the Air Force's commitment
    to providing the best capabilities to the joint team and our coalition
    partners.
        Adaptive Airmen: Airmen Filling Nontraditional Roles
        Presently, airmen are meeting the challenges of filling CENTCOM
    shortfalls in several critical roles which are nontraditional for
    airmen, including convoy support, detainee operations, protective
    service details, law and order detachments, military transition teams,
    and provincial reconstitution teams.
        Detainee operations and convoy support are our most heavily
    supported missions. Airmen attend training at Fort Lewis, WA or Fort
    Dix, NJ where they learn the fundamentals of detainee security,
    handling, and interaction. At the conclusion of this training, airmen
    move forward to a detainee facility in theater and receive additional
    on site training. Airmen provide convoy support in the form of heavy
    weapons teams supporting long haul convoy operations. These airmen
    attend heavy weapons training followed by a convoy-training course.
    From that training platform, airmen deploy forward to support theater
    operations.
        Air Force intelligence personnel are also fulfilling non-standard,
    unconventional roles as members of the joint team. Air Force
    intelligence analysts attend the Enhanced Analyst and Interrogation
    Training Course at Fort Huachuca, AZ, where they learn to provide
    analytical support for interrogations. At the conclusion of this
    training, intelligence personnel deploy forward as part of the
    interrogator teams to joint interrogation detention centers in
    Southwest Asia.
        Law-and-order detachments provide vital joint support missions
    throughout the area-of-operations. In this capacity, Air Force security
    forces personnel provide garrison law enforcement and security. Never
    routine, these missions occasionally support operations outside the
    confines of an installation.
        Military transition teams are comprised of specially trained
    personnel who work within the organizations of indigenous forces. They
    are responsible for training these forces to support and sustain
    themselves without the assistance of advisors. Provincial
    reconstruction teams are organizations that move into a different
    region within the area-of-operations and provide additional support,
    training, and sustainment.
        With the exception of the law-and-order detachments, none of these
    missions fall within the traditional skill mix of Air Force security
    forces. Additional training varies from 1 to 5 months, and deployments
    are normally longer than the standard 120-day deployment. We are
    understandably proud of the outstanding adaptability and
    professionalism with which our airmen have filled the shortfalls in
    required skillsets on the joint roster and accomplished these
    nontraditional yet critical missions on behalf of the joint team.
    Other Operations
        In addition to our major contingencies and defense of the homeland,
    the Air Force remains engaged in numerous other operations around the
    world ranging from humanitarian relief and disaster response to
    maintaining our strategic nuclear forces and space assets. The presence
    of forward deployed forces is just the leading edge of a greater effort
    representing the totality of Air Force daily support to the combatant
    commanders.
        Humanitarian and Disaster Relief Operations
        In December 2004, nearly 60 years after the great Berlin Airlift of
    1948-1949, the Air Force, while fully engaged in operations in
    Afghanistan and Iraq, once again answered the call for help in the wake
    of the tsunami that devastated Indonesia and South Asia--one of the
    worst natural disasters in history. Our airmen responded immediately,
    and in the course of the first 47 days following the disaster led an
    allied effort that airlifted over 24 million pounds of relief supplies
    and over 8,000 people. The entire world witnessed the absolute best of
    America at work--agility, strength, resolve, and compassion--just as it
    had witnessed nearly 60 years before.
        At home, the Air Force leveraged the agility, scalability, and
    responsiveness inherent in our AEF structure and culture to speed
    support to civil authorities for Hurricanes Katrina and Rita. Hurricane
    Katrina devastated an entire region of the southern U.S. While
    destruction of infrastructure stifled ground transportation, airmen
    continued to reach flooded areas and bring relief. The Air Force flew
    over 5,000 sorties, airlifting more than 30,000 passengers and 16,000
    tons of cargo and accomplishing 5,500 search and rescue saves.
    Additionally, Air Force operations were a Total Force effort,
    incorporating Guard and Reserve capabilities into airlift and rescue
    operations as well as into the establishment of state-of-the-art
    medical facilities that treated over 17,000 patients.
        Air Force support during Hurricane Katrina and Rita recovery
    operations illustrated how persistent C\4\ISR can integrate with other
    agencies and proved critical to supporting U.S. Northern Command
    (NORTHCOM) and the Department of Homeland Security during civil support
    operations. Our airborne reconnaissance platforms, ranging from C-130s
    to U-2s, combined with military satellite communications (MILSATCOM)
    capabilities like the Global Broadcast Service (GBS), provided detailed
    imagery critical for decision makers and aided in directing relief
    efforts to the worst hit areas.
        Additionally, our civilian auxiliary, the Civil Air Patrol (CAP)
    provided capability to NORTHCOM, Federal agencies, and State and local
    governments during all phases of the hurricane rescue and relief
    efforts. The CAP provided nearly 2,000 hours of air and ground search
    and rescue, airborne reconnaissance, and air transport of key
    personnel. The CAP leveraged the skills and vigilance of 60,000 non-
    paid volunteers in over 1,700 units to bolster the Nation's defense
    during these national crises.
        Future natural disasters and relief operations will likely be
    similar to those faced by the U.S. over the past year. Major
    populations requiring immense support are often isolated from the
    infrastructure that is their lifeline. Airpower provides the capability
    to overcome terrestrial obstacles and deliver aid directly to those in
    need. Always seeking new ways to innovate and improve, the Air Force
    will continue its ongoing transition to a force with unprecedented
    capability for civil support and homeland defense.
        Maintaining Our Nuclear Deterrent
        The DOD's new strategy of employing a capability-based approach vs.
    threat-based approach to planning led to the ongoing transformation of
    the existing triad of U.S. strategic nuclear forces, consisting of
    intercontinental and sea-launched ballistic missiles and bomber
    aircraft armed with cruise missiles and gravity weapons, into a new
    triad composed of a diverse portfolio of systems. Elements of the new
    triad will include nuclear and non-nuclear strike capabilities; active
    and passive defenses; and robust research and development programs; and
    industrial infrastructure for developing, building, and maintaining
    offensive and defensive weapon systems. Maintaining our traditional
    nuclear strategic forces is a key capability in an effective new triad.
        National security presidential directives outline the future force
    structure and requirements for U.S. nuclear forces. To meet National
    Military Strategy, Nuclear Posture Review and the Moscow Treaty
    requirements, near-term capability and sustainment improvements must be
    made to the legacy forces while development and procurement of follow-
    on systems proceed. These efforts will enable Air Force nuclear forces
    to continue to provide critical capabilities to policymakers. The
    nuclear forces will dissuade current and potential adversaries from
    pursuing policies or military initiatives that are unfavorable to our
    interests or those of our allies.
        Our intercontinental ballistic missiles (ICBMs) and cruise missiles
    are poised to decisively defeat an adversary if deterrence fails. The
    cruise missile inventory, both air launched cruise missile and advanced
    cruise missile, is being upgraded through a service life extension
    program (SLEP) to maintain a viable and flexible bomber-delivered
    weapon. Additionally, the Department of Energy is conducting a SLEP on
    the cruise missile warhead.
        The Air Force is committed to the new triad and the associated
    nuclear C2 systems. To provide survivable strategic communications, the
    Air Force fielded and currently operates the Milstar SATCOM system. We
    are preparing to field the next generation advanced extremely high
    frequency (EHF) SATCOM system to replace it, as well as a single
    terminal to provide reliable, redundant, and secure radio and satellite
    communication links with Minuteman ICBM forces. The Air Force
    recognizes the importance of the Nation's nuclear C2 resources and will
    continue to pursue the new triad strategy for our strategic systems to
    ensure they are always ready to respond to the direction of our
    national leaders.
        Space Support for Operations
        The U.S. depends upon the Air Force to supply critical space
    capabilities to meet the needs of joint operations worldwide, and also
    the needs of national missions across the instruments of diplomatic,
    informational, military, and economic power. The National Security
    Strategy commits us to assuring allies, dissuading military
    competition, deterring threats, and decisively defeating adversaries.
    The robust space capabilities our airmen provide and maintain will
    continue to ensure our Nation's goals are met.
        As the DOD Executive Agent for Space, and the Under Secretary of
    the Air Force released a coordinated national protection framework in
    2005. This framework will aid senior decision makers by stating how
    space systems will be expected to operate during and following an
    intentional attack. The framework supports senior leaders in creating a
    total force solution across the national security space community. Air
    Force satellite communications will ensure our Nation's leaders can
    communicate globally through times of crisis while providing
    warfighters instant access to information. As evidenced by the
    hurricanes in the Gulf of Mexico, space environmental monitoring has
    become essential in saving lives and property as well as ensuring
    ground, sea, and air forces prepare effectively for weather impacts.
        In support of worldwide military operations, the Air Force launched
    eight DOD and national satellite systems in 2005 from Air Force-managed
    and maintained launch ranges at Cape Canaveral Air Force Station,
    Florida and Vandenberg Air Force Base, California. That number is
    expected to increase to 13 in 2006 as the evolved expendable launch
    vehicle (EELV) program takes over as the foundation for U.S. assured
    access to space.
        We have seen the first challenges to U.S. advantages gained from
    space assets. During OIF, the Iraqis employed GPS jammers in an attempt
    to reduce the precision of U.S. and allied strikes. We defeated this
    threat through a variety of methods including space system design,
    munitions design, and tactics development to operate in a GPS-hostile
    environment. As technology develops and becomes available to more
    countries, organizations, and individuals, new types of threats to
    space capabilities will emerge. Preparation now using non-materiel and
    materiel solutions to address the variety of potential realistic
    threats will lead to continued success in the battlespace.
        Comprehensive space situation awareness (SSA) and defensive and
    offensive counterspace capabilities are the foundational elements of
    our space superiority efforts. Enhanced, ground-based, and new space-
    based SSA assets will provide the necessary information to gain and
    maintain space superiority. With respect to defensive counterspace, we
    maintain a diversified ground-based C2 network, and we are developing
    increased protection for our satellites and space-based services to
    ensure that the vital capabilities they provide are available when
    needed. We also recently fielded the counter-communications system to
    deny these same services to our adversaries. A well-balanced, multi-
    tiered architecture enables execution of a robust, effective space
    superiority strategy.
        Even as the first challenges to our space superiority have arisen,
    the Air Force is already working toward responses to the next set of
    potential challenges. First, the U.S. would like to deter potential
    adversaries from attacking or exploiting our space capabilities. To
    accomplish this objective, worldwide space operations must be
    monitored, assessed, and understood. SSA involves those capabilities
    that allow the interagency and joint communities to find, fix, track,
    characterize and assess space operations on orbit and inside the
    various combatant commanders' areas of responsibility. SSA capabilities
    will allow the Air Force or other members of the Joint community to
    target, if necessary, our adversaries' space capabilities. As part of
    the C2 process, we will evaluate options ranging from diplomatic to
    economic to military actions to determine the best flexible option to
    achieve the desired outcome. By understanding how friendly and hostile
    actors are leveraging these space capabilities in their operations,
    senior decisionmakers can deter potential adversaries while preventing
    unnecessary escalation and allowing for a range of response options to
    meet national objectives.
        The Air Force will protect space capabilities vital to the success
    of the Joint Force and the defense and prosperity of our great Nation.
    Some defensive measures will be integrated into new satellite designs.
    Other space systems, such as the Rapid Attack Identification Detection
    and Reporting System (RAIDRS) will be specifically designed to conduct
    defensive operations. We are also leaning forward on the development of
    new tactics, techniques, and procedures to mitigate potential threats
    to Air Force space systems. Furthermore, experimentation has aided us
    immensely by facilitating risk reduction and providing interim
    defensive capabilities today--RAIDRS is an excellent example. The Air
    Force developed a prototype RAIDRS and demonstrated the capabilities of
    the system during Joint Expeditionary Force Experiment 2004 (JEFX 04).
    The inclusion of this prototype laid the groundwork for both tactics
    development and for design improvements for future development
    programs. As a result of JEFX 04, CENTCOM requested this prototype to
    support real-time joint operations in theater. The results and lessons
    of this operational employment will certainly shape future capabilities
    by improving our understanding and providing further opportunities for
    innovation.
       air and space power for tomorrow--aiming for the unlimited horizon
    Priorities
        Developing and Caring for Our Airmen
            Force Shaping
        For the past 18 months, the Air Force has reduced our Active-Duty
    end strength to congressionally authorized levels taking action to
    relieve some of our most stressed career fields. The 2004-2005 force
    shaping program allowed officers and enlisted personnel to separate
    from Active-Duty service earlier than they would otherwise have been
    eligible. In addition to voluntary force shaping measures, the Air
    Force significantly reduced enlisted accessions in 2005 to help meet
    our congressional mandate.
        While the Air Force met our 2005 end strength requirement, we began
    2006 with a force imbalance: a shortage of enlisted personnel and an
    excess of officer personnel, principally among those officers
    commissioned from 2000 to 2004. This imbalance created several
    unacceptable operational and budgetary impacts. Consequently, the Air
    Force took several actions to ensure our force is correctly sized and
    shaped to meet future challenges and to reduce unprogrammed military
    pay costs. First, we increased our enlisted accession target for 2006
    to address the enlisted imbalance. Second, we continued to encourage
    qualified officers, especially those commissioned in 2000 and later, to
    consider voluntary options to accept service in the Air National Guard,
    Air Force Reserve, civil service, or as an interservice transfer to the
    Army.
        Additionally, we are institutionalizing the force shaping authority
    granted in the National Defense Authorization Act for Fiscal Year 2005
    to restructure our junior officer force. Only after exhausting all
    efforts to reduce officer end strength by voluntary means, the Air
    Force will convene a force shaping board in 2006 to consider the
    performance and potential of all eligible officers commissioned in 2002
    and 2003. This board will be held annually thereafter, as required, to
    properly shape and manage the officer corps to meet the emerging needs
    of the Air Force. Essentially, the force shaping board will select
    officers for continued service in our Air Force. Current projections
    indicate that we need about 7,800 of these eligible officers (2002 and
    2003 year groups) to continue on Active-Duty. Approximately 1,900
    officers will be subject to the force reduction. Exercising this
    authority is difficult, but our guiding principle is simple--we must
    manage our force to ensure the Air Force is properly sized, shaped, and
    organized to meet the global challenges of today and tomorrow.
            Balancing the Total Force
        In addition to maintaining and shaping the Active-Duty Force, we
    must continue to focus on the balance of forces and specialties between
    Regular, Air National Guard, and Reserve components--the total force.
    We are diligently examining the capabilities we need to provide to the
    warfighter and to operate and train at home. We continue to realign
    manpower to our most stressed areas and are watchful for any new areas
    that show signs of strain.
        As we look to the future in implementing Base Realignment and
    Closure (BRAC) and Quadrennial Defense Review (QDR) decisions, we must
    ensure a seamless transition to new structures and missions while
    preserving the unique capabilities resident in our Regular Air Force,
    Air National Guard, and Reserve communities. Examining functions for
    competitive sourcing opportunities or conversion to civilian
    performance will continue to be one of our many tools for striking the
    correct balance of missions across the total force.
            Force Development
        The Air Force's force development construct is a total force
    initiative that develops officers, enlisted, and civilians from the
    Regular Air Force, the Air National Guard, and the Air Force Reserve.
    The fundamental purpose of force development is to produce leaders at
    all levels with the right capabilities to meet the Air Force's
    operational needs by leveraging deliberate training, education, and
    experience opportunities.
        The Air Force Personnel Center created a division dedicated to
    supporting corporate and career field development team needs.
    Development teams have now been incorporated into the officer
    assignment process and they now guide assignment of all officer career
    fields. Additionally, development teams recommend officers for special
    selection boards and developmental education opportunities.
        The Air Force is also deliberately developing our enlisted airmen
    through a combined series of educational and training opportunities. We
    are exploring new and exciting avenues to expand our process beyond the
    current system in place today. Each tier of the enlisted force will see
    changes to enlisted development. Airmen (E-1 to E-4) will be introduced
    to the enlisted development plan, increasing their knowledge and
    solidifying future tactical leadership roles. The noncommissioned
    officer (NCO) tier will be encouraged and identified to explore career-
    broadening experiences and continuing with developmental education. Our
    senior NCO tier will see the most dramatic changes as we explore the
    use of development teams in conjunction with assignment teams to give
    career vectoring and strategic level assignments. Institutionalizing
    the practice of development as a part of enlisted Air Force culture is
    paramount for supervisors, commanders and senior leaders.
        On the civilian side, the Air Force is making significant progress
    in civilian force development as we align policy, processes and systems
    to deliberately develop and manage our civilian workforce. We have
    identified and mapped over 97 percent of all Air Force civilian
    positions to career fields and have 15 career field management teams in
    place with three additional management teams forming this year.
    Additionally, we manage various civilian developmental opportunities
    and programs, with our career-broadening program providing several
    centrally funded positions, specifically tailored to provide career-
    broadening opportunities and professionally enriching experiences.
            Recruiting/Retention
        After intentionally reducing total accessions in 2005, the Air
    Force is working to get the right mix of officer and enlisted airmen as
    we move to a leaner, more lethal, and more agile force. We will align
    the respective ranks to get the right person in the right job at the
    right time to meet the Air Force mission requirements in support of the
    global war on terror, the Joint Force, and the Air Force's
    expeditionary posture.
        A key element for success is our ability to continue to offer
    bonuses and incentives where we have traditionally experienced
    shortfalls. Congressional support for these programs, along with
    increases in pay and benefits and quality-of-life initiatives, has
    greatly helped us retain the skilled airmen we need to defend our
    Nation.
            Personnel Services Delivery
        To achieve the Secretary of Defense's objective to shift resources
    ``from bureaucracy to battlefield,'' we are overhauling Air Force
    personnel services. Our personnel services delivery initiative
    dramatically modernizes the processes, organizations and technologies
    through which the Air Force supports our airmen and their commanders.
        Our goal is to deliver higher-quality personnel services with
    greater access, speed, accuracy, reliability, and efficiency. The Air
    Force has been able to program the resulting manpower savings to other
    compelling needs over the next 6 years. This initiative enhances our
    ability to acquire, train, educate, deliver, employ, and empower airmen
    with the needed skills, knowledge, and experience to accomplish Air
    Force missions.
            National Security Personnel System (NSPS)
        Our civilian workforce will undergo a significant transformation
    with implementation of the DOD NSPS. NSPS is a simplified and more
    flexible civilian personnel management system that will improve the way
    we hire, assign, compensate, and reward our civilian employees. This
    modern and agile management system will be responsive to the national
    security environment, preserve employee protections and benefits, and
    maintain the core values of the civil service.
        NSPS design and development has been a broadbased, participative
    process to include employees, supervisors and managers, unions,
    employee advocacy groups, and various public interest groups. We plan
    to implement these human resource and performance management provisions
    in three phases called ``spirals.'' The first spiral will include
    approximately 89,000 general schedule and acquisition demonstration
    project civilian employees in the Air Force. NSPS is the most
    comprehensive new Federal personnel management system in more than 50
    years, and it's a key component in the DOD's achievement of a
    performance-based, results-oriented total force.
            Caring for Airmen
        Combat capability begins and ends with healthy, motivated, trained,
    and equipped airmen. We must remain committed to providing our entire
    Air Force team with world class programs, facilities, and morale-
    enhancing activities. Our ``Fit to Fight'' program ensures airmen
    remain ready to execute our expeditionary mission at a moment's notice,
    and our food service operations further complement an Air Force healthy
    lifestyle.
        Through various investment strategies in both dormitories and
    military family housing, we are providing superior living spaces for
    our single airmen and quality, affordable homes for our airmen who
    support families. Our focus on providing quality childcare facilities
    and programs, on and off installations, enables our people to stay
    focused on the mission, confident that their children are receiving
    affordable, quality care. The Air Force is a family, and our clubs and
    recreation programs foster and strengthen those community bonds,
    promoting high morale and an esprit de corps vital to all our
    endeavors.
        Additionally, we are equally committed to ensuring that all airmen
    in every mission area operate with infrastructure that is modern, safe,
    and efficient, no matter what the mission entails--from depot
    recapitalization to the bed down of new weapon systems. Moreover, we
    must ensure airmen worldwide have the world class training, tools, and
    developmental opportunities that best posture them to perform with
    excellence. We also continually strive to provide opportunities and
    support services that further enable them to serve their Nation in a
    way that leaves them personally fulfilled, contributes to family
    health, and provides America with a more stable, retained, and capable
    fighting force.
            Housing and Military Construction (MILCON)
        One of the highlights in our emphasis on developing airmen is our
    focus on housing investment. Through MILCON and housing privatization,
    we are providing quality homes faster than ever before. Over the next 2
    years, the Air Force will renovate or replace more than 49,000 homes
    through privatization. At the same time, we will renovate or replace an
    additional 10,000 homes through military construction.
        Investment in dormitories continues to accelerate in order to
    provide superior housing to our unaccompanied members--evidenced by
    nearly 8,600 dormitory rooms programmed for funding over the next 6
    years. Approximately 75 percent of these initiatives will rectify
    currently inadequate dormitory conditions for permanent party members.
    Our new ``Dorms-4-airmen'' standard is a concept designed to increase
    camaraderie, social interaction, and accountability by providing four
    single occupancy bedroom/bathrooms with a common kitchen and living
    area in each module. Finally, the remaining dormitory program initiates
    modernization of inadequate ``pipeline'' dormitories--those dormitories
    that house young enlisted students during their initial technical
    training.
        The Air Force has taken risk in facility and MILCON funding in
    order to support modernization and transformation. However, we continue
    to fund our most critical requirements to include new mission projects,
    depot transformation, dormitories, fitness centers, and child care
    centers. The Air Force is committed to improving its infrastructure
    investment by meeting the DOD's recapitalization goal through the
    Future Years Defense Plan (FYDP).
            Common Airman Culture
        An airman culture manifests the totality of our commonly
    transmitted behaviors, patterns and beliefs. Our Air Force clearly
    recognizes the relationship between mission capabilities and our Air
    Force Core Values. Integrity, Excellence and Service, remain critical
    guideposts to every airman's personal and professional flight path.
    Principles of dignity, self-worth, respect, and diversity are firmly
    embedded elements of these values. Together, our core values are
    reflected in every airman's pride, dedication to mission, subordination
    of their own needs for those of their wingman, and devotion to duty and
    this great Nation. In this past year, we have made significant strides
    in our efforts to promote, reinforce, and inculcate our core values
    across the Air Force and throughout the total force team--including our
    regular, Guard, Reserve, civilian, and contractor teammates. We expect
    and accept no less from everyone on the Air Force team.
        Certain behaviors are absolutely incongruous with the common airman
    culture and our core values. Among these is sexual assault. The Air
    Force has created the Sexual Assault Prevention and Response Program to
    ensure that every airman is provided the respect and dignity they
    deserve as their Nation's air and space warfighters. We have trained
    and fielded sexual assault response coordinators and victim advocates
    to ensure every airman has access to immediate assistance, should it be
    required. We are rewriting our education and training curricula at
    every level to ensure airmen understand how these crimes occur, how
    they are often unwittingly facilitated by bystanders and third-party
    witnesses and how we can better take care of our people by preventing
    sexual assault crimes from occurring to them, their wingmen, friends,
    and family members.
        Reflecting our belief that diversity adds strength to our
    organization, the Air Force has accepted the challenge to ``create a
    diverse and an inclusive total force which reflects and leverages the
    talents of the American people to maximize the Air Force's combat
    capabilities.'' We created the Office of Air Force Strategic Diversity
    Integration in the summer of 2005 to lead the Air Force's diversity
    efforts. This office provides leadership guidance and strategic support
    for the understanding, furtherance, and advantage of diversity within
    the ranks of the Air Force.
        Inherent in our common airman culture is a belief in professional
    and personal dignity and a deep respect for individual religious
    beliefs. The protection of every airman's freedom of religion, while
    also defending the constitutional prohibition on official establishment
    of religion, is an area of significant emphasis. As airmen, we take an
    oath to support and defend the Constitution. In that endeavor, we are
    striving to assist Air Force personnel, in the course of their official
    duties, to meet and balance their multiple constitutional obligations
    and personal freedoms, regarding the free exercise of religion,
    avoidance of Government establishment of religion, and defense of the
    Nation. This is an area of national debate. Balancing these
    foundational American principles demands common sense, good judgment,
    and respect for each airman's right to hold to their own individual
    personal beliefs.
        We also recognize our airmen must have the ability to interact with
    coalition partners and local communities at home and abroad, and the
    Air Force is transforming how it engages friends and partners in the
    expeditionary environment. Operations in this dynamic setting
    necessitate extensive international insight to work effectively with
    existing and emerging coalition partners in a wide variety of
    activities. Through the Air Force International Affairs Specialist
    program, we are developing leaders who are regional experts with
    foreign language proficiency. Our focus is on building a cadre of
    officers with the skills needed to foster effective relationships with
    global partners in support of the combatant commanders and U.S. global
    interests.
        Over the next year, the Air Force will continue to vigorously
    reinforce our common airmen culture, our belief in professional and
    personal dignity and most importantly our enduring core values of
    Integrity First, Service Before Self and Excellence in All We Do.
            Training at Keesler Air Force Base Following Hurricane Katrina
        In August 2005, Hurricane Katrina struck the Gulf Coast of the
    United States. Keesler Air Force Base (AFB), Mississippi lay in its
    direct path. The Air Force is attempting to rapidly reestablish
    Keesler's critical training missions. Of 56 enlisted initial skills
    training ``pipelines,'' 90 percent have already resumed operation.
    Additional pipelines have been temporarily reestablished at other
    locations. Significant challenges remain ahead, but training and
    developing our expeditionary airmen remains one of our highest
    priorities. We take exceptional pride in the work our airmen have done,
    and continue to do, in restoring Keesler AFB's training capability.
        Maintenance, Modernization, and Recapitalization
        Our airmen are the best in the world. However, they can only be as
    effective as the tools we give them. Within today's fiscal constraints,
    we must fight the global war on terror and protect the homeland while
    transforming the force and maintaining an appropriate level of risk.
    The Air Force is committed to the modernization and recapitalization
    necessary to maintain the health of the force and bridge our current
    capabilities to systems and capabilities required in the future.
            Aircraft
        Our primary fighter modernization and recapitalization program is
    the F-22A Raptor. The F-22A is a fifth generation fighter aircraft that
    delivers joint air dominance to counter persistent and emerging
    national security challenges. Given its vast improvements in every
    aspect--air-to-air, air-to-ground, all-aspect stealth, and an open,
    adaptable architecture--the F-22A is an insurance policy against future
    threats to Joint Air Dominance and represents the absolute best value
    for the American taxpayer. The F-22A is the only fighter currently
    produced that will defeat conceivable threats to joint air dominance in
    anti-access environments over the next 20-30 years.
        The F-22A is flying today and is in full rate production. Its
    performance continues to meet or exceed key performance parameters and
    spiral modernization will enhance its air-to-air and air-to-ground
    target engagement capability.
        The F-35 Joint Strike Fighter (JSF), also a fifth generation
    fighter, will complement the tremendous capabilities of the F-22A. The
    JSF will recapitalize combat capabilities currently provided by the F-
    16 and A-10. Optimized for all-weather performance, JSF will
    specifically provide affordable precision engagement and global attack
    capabilities. In 2005, the JSF program continued to address design
    challenges to develop three aircraft variants and coordinate the
    requirements of the Air Force, Navy, and Marines, along with our
    international partners.
        The C-17 continues to be a success story for the joint warfighter,
    deploying troops and cargo to Iraq and Afghanistan, as well as numerous
    locations around the world. The Air Force is on schedule for delivery
    of the next 40 aircraft through 2008--for a total of 180. During the
    past year, C-17s flew over 63,000 sorties, bringing the total number of
    OEF and OIF missions to over 109,000. Additionally, the C-17 flew over
    100 humanitarian and disaster relief missions following Hurricanes
    Katrina and Rita, as well as the October 2005 earthquake in Pakistan.
    The C-17, in concert with C-5 modernization programs, is critical to
    meeting our U.S. inter-theater airlift requirements.
        To meet continuing intratheater airlift demands, we have a two-
    pronged approach to modernize our C-130s. First, but most problematic,
    we are striving to replace our oldest aircraft with new C-130Js.
    Second, the remaining C-130s are being standardized and modernized via
    the C-130 avionics modernization program and center-wing box
    replacement programs. C-130s have been the workhorse for intra-theater
    airlift during numerous contingencies. C-130Js have supported global
    war on terror and humanitarian operations since December 2004 and have
    proven to be a force enhancer as they deliver more cargo in a shorter
    time than older C-130s. C-130 modernization, coupled with the wing-box
    modification, reduces operation and sustainment costs and improves
    combat capability.
        The Air Force is developing the next generation combat search and
    rescue (CSAR) recovery vehicle, called CSAR-X. We are planning to
    replace the current and aging CSAR inventory of ``low-density, high-
    demand'' (LD/HD) HH-60G Pave Hawk helicopters with 141 CSAR-X aircraft.
    The CSAR-X will address deficiencies of the current HH-60G by providing
    increased capabilities in speed, range, survivability, cabin size, and
    high altitude hover operations. The CSAR-X will provide personnel
    recovery forces with a medium-lift, vertical take-off and landing
    aircraft that is quickly deployable and capable of main base and
    austere location operations for worldwide recovery missions. The CSAR-X
    will be capable of operating day or night, during adverse weather
    conditions, and in all environments including nuclear, biological, and
    chemical conditions. Onboard defensive capabilities will permit the
    CSAR-X to operate in an increased threat environment, and in-flight
    refueling capability will provide an airborne alert capability and
    extend its combat mission range.
            UAVs
        UAVs are demonstrating their combat value in the global war on
    terror. The Air Force rapidly delivered operational UAV capabilities to
    the joint warfighter and is continuing to mature and enhance those
    capabilities.
        Predator is transforming the way we fight, providing a persistent
    ISR, target acquisition, and strike capability against critical time
    sensitive targets (TSTs) in direct response to warfighters' needs.
    Today, by controlling combat operations remotely from the U.S.,
    Predator provides a truly revolutionary leap in how we provide
    persistent military capability to the warfighter.
        The Air Force will continue to enhance Predator's ability to
    support the joint warfighter. We are developing the ability to operate
    multiple aircraft by a single pilot, which will increase our overall
    combat effectiveness. We demonstrated this capability in August 2005.
    We are also developing and deploying the Predator B, a larger, more
    capable, more lethal variant. In its role as a ``hunter-killer,''
    Predator B will be capable of automatically finding, fixing, tracking,
    and rapidly prosecuting critical emerging TSTs.
        Global Hawk is a high-altitude, long endurance RPA providing robust
    surveillance and reconnaissance capabilities. Despite being a
    developmental prototype system, Global Hawk has flown over 4900 combat
    hours. This year the Air Force moved beyond the proven capability of
    the Global Hawk prototypes by deploying two production aircraft to
    support global war on terror operations.
            Airborne ISR
        E-8C Joint Surveillance Target Attack Radar System (J-STARS)
    continues to be a high-demand asset. J-STARS aircraft provide wide
    theater surveillance of ground moving targets. Crews from the 116th Air
    Control Wing at Robins AFB, Georgia, the first-ever ``blended wing'' of
    Regular Air Force, Air National Guard and Army, operate these aircraft.
    Modernizing these aircraft while maintaining the current high OPTEMPO
    in combat theaters will be ongoing challenges. The recent installation
    of the Force XXI Battle Command Brigade and Below module, the reduced
    vertical separation minima module, and the Airborne Battlefield Command
    and Control Center are some of the latest capability upgrades. The most
    urgent modernization needs for J-STARS include re-engining, radar
    upgrades, installation of the traffic alert collision avoidance system
    and integration of a self-protection suite.
        The E-10A program will highlight the advanced capabilities of the
    Multi-Platform Radar Technology Insertion Program (MP-RTIP) sensor by
    demonstrating advanced cruise missile defense, interleaved ground
    tracking, and ground imaging capabilities in 2010 and 2011. A smaller
    variant of the MP-RTIP sensor, developed within the E-10A program, will
    be integrated into the Global Hawk in 2008 to begin developmental and
    operational testing. These demonstrations will advance critical sensor
    technology and provide vital warfighting capabilities.
            Space and Nuclear Forces
        Air Force modernization and recapitalization efforts also continue
    for space systems. The Air Force is modernizing critical capabilities
    across the spectrum of global strike, navigation, weather,
    communication, missile warning, launch, surveillance, counterspace, and
    ground-based space systems.
        The Minuteman intercontinental ballistic missile (ICBM) was
    originally designed in the late 1950s and deployed operationally in
    October 1962. Modernization programs have been crucial to this system
    originally designed to last just 10 years. Service life extension
    programs are underway to ensure the Minuteman III remains mission
    capable through 2020. These programs, nine in all, will replace
    obsolete, failing, and environmentally unsound materials while
    maintaining missile reliability, survivability, security, and
    sustainability. These efforts are critical in sustaining the ICBM force
    until a follow-on system can be fielded.
        The Air Force is also addressing the need for a follow-on ICBM
    system. This system will address future warfighter needs, reduce
    ownership costs, and continue to provide policymakers the critical
    capabilities provided by the ICBM. The effort to modernize the ICBM
    force is vital to the U.S. for the foreseeable future.
        Continued, unhindered access to space is vital to U.S. interests.
    As the Air Force continues programs to upgrade and modernize America's
    launch ranges, the EELV program will continue to provide the U.S. with
    assured access to space for both DOD and national space assets. The
    EELV program includes two launch vehicle designs--Delta-IV and Atlas-
    V--with each design comprising a family of scalable, tailorable launch
    vehicle variants.
        The TSAT program will employ Internet Protocol networks, onboard
    routing, and high-bandwidth laser communications relays in space to
    dramatically increase warfighter communications connectivity. TSAT
    capability enables the realization and success of all DOD and Joint
    visions of future network-centric operations, such as the Army's
    Communications-on-the-Move (COTM) and Future Combat System (FCS)
    concepts and the Navy's Sea Power 21 vision and Fleet FORCEnet/
    FORCEview concepts.
        GPS modernization and development of the next-generation GPS-III
    will enhance navigation capability and improve resistance to jamming.
        In partnership with the National Aeronautics and Space
    Administration and the Department of Commerce, the National Polar-
    orbiting Operational Environmental Satellite System (NPOESS) will
    accurately calculate surface winds over the oceans and gather
    meteorological data for our forces deployed overseas.
        The Space Based Infrared System (SBIRS) will provide a
    transformational leap in capability over our aging Defense Support
    Program satellites. Complementing the space-based system are ground-
    based missile warning radars, being upgraded to support the missile
    defense mission.
        Another future transformational space-based ISR program is the
    Space Radar (SR) system. SR's day-night and all-weather capabilities
    will include Synthetic Aperture Radar (SAR) imagery, high-resolution
    terrain information (HRTI), surface moving target indication (SMTI),
    geospatial intelligence (GEOINT) and open ocean surveillance (OOS), and
    rapid revisit. It will support a broad range of missions for the joint
    warfighter, the Intelligence Community, and domestic users. SR will be
    integrated with other surface, air, and space ISR capabilities to
    improve overall collection persistence and architecture effectiveness.
        Modernization of our ground-based space systems will provide new
    capabilities to keep pace with the satellites they support and will
    continue to provide assured C2 for our satellites and space-based
    capabilities. This effort includes the modernization of ground-based
    radars, some of which are over 25 years old. Through programs like the
    Family of Advanced Beyond Line of Sight Terminals (FAB-T) and the
    Ground Multi-band Terminal, the Air Force is modernizing its ground-
    based space capabilities with satellite communications terminals that
    consolidate logistics support, provide increased satellite throughput
    and laser communications, and ensure seamless C2. Additionally,
    enhanced ground-based and new space-based SSA assets will provide the
    necessary information to gain and maintain space superiority.
        As part of the broader space control mission, the ground-based,
    theater-deployable Counter Communications System (CCS) has achieved
    initial operational capability (IOC) and provides the combatant
    commander with a non-destructive, reversible capability to deny space-
    based communication services to our adversaries. Incremental upgrades
    to the CCS will continue to enhance our offensive counterspace
    capabilities. Overall counterspace enhancements also include ongoing
    RAIDRS development, which is a defensive counterspace system designed
    to assist in the protection of our space assets. RAIDRS will provide a
    capability to detect and geolocate satellite communications
    interference via fixed and deployable ground systems. Future
    developments will automate data access analysis and data fusion and
    provide decision support tools.
            Operational Infrastructure and Support Modernization
        Finally, the Air force is pursuing to modernize its operational
    infrastructure and the tools we use to manage operational support to
    our airmen and joint warfighters. The Air Force's ongoing Operational
    Support Modernization (OSM) program will improve operational support
    processes; consolidate personnel and financial service centers; and
    eliminate inefficiencies in the delivery of services, support, and
    information to our airmen and the combatant commanders. Realizing these
    economies, OSM will improve Air Force-wide enterprise efficiency and
    provide a resources shift from business and combat support systems,
    thereby returning resources to Air Force operations, equipment
    modernization, and long-term investments.
        Air Force efforts also continue in the development of an effective,
    holistic asset management strategy for the restoration and
    modernization of operational infrastructure--facilities, utilities, and
    natural resource assets--throughout their useful life cycles.
    Operational infrastructure is critical to the development and testing
    of new weapon systems, the training and development of our airmen, and
    the conduct of joint military exercises.
            Acquisition Reform
        The Air Force will meet the challenges of the 21st century,
    including asymmetric threats, through continued exploitation of our
    technological leadership and with our ability to respond quickly to the
    demands of a rapidly changing world. Effective leadership in research
    and development, procurement, and sustainment of current and future
    weapons systems depends upon the integrated actions of professionals in
    the acquisition, as well as the requirements generation, resource, and
    oversight processes. Everything we do in Air Force acquisition drives
    toward the goal of getting an operationally safe, suitable, and
    effective product of best value to the warfighter in the least amount
    of time.
        Program cost and schedule growth have drawn widespread criticism
    and undermined confidence in the defense acquisition process. A recent
    Government Accountability Office (GAO) study of 26 DOD weapon systems
    reports average unit costs have grown by 50 percent and schedules have
    stretched an average of 20 percent, to nearly 15 years, despite
    numerous attempts at reform.
        In an effort to address these concerns, the Air Force formed the
    Acquisition Transformation Action Council in December 2004. This group
    is comprised of general officer and senior executive service
    representatives from the Air Force product centers, labs, air logistics
    centers, and headquarters. The group continues to lead the
    transformation of Air Force acquisition from its present state into
    that of an agile acquisition enterprise. The goals of agile acquisition
    include shortened acquisition process time and improved credibility
    with both internal and external stakeholders. Achieving these goals
    will be critical to making the delivery of war-winning capabilities
    faster, more efficient, and more responsive.
        The Acquisition Transformation Action Council's short-term focus is
    on incremental improvements and eliminating non-value-added processes
    in areas such as conducting acquisition strategy panels, meeting
    immediate warfighter needs, and effectively incentivizing contractors.
    A more comprehensive strategic plan for acquisition transformation, due
    later this year, will detail not only where the near-term changes fit
    into the big picture of acquisition reform, but also the longer-term
    actions needed to achieve the goals of agile acquisition.
        The Air Force is also pursuing initiatives aimed at improving the
    Air Force's cost analysis capability. Among these initiatives are
    efforts to strengthen the Air Force cost analyst career field, improve
    the quality, quantity, and utilization of program cost and technical
    data and estimating methods, and establish new policy requiring robust
    independent cost estimates for programs--earlier and more often. These
    improvements will promote realistic program cost and technical
    baselines as well as strengthen the Air Force's capacity to produce
    accurate, unbiased cost information for Air Force, DOD, and
    congressional decisionmakers.
        The Air Force is on a bold, ambitious, yet necessary journey to
    provide our commanders and decisionsmakers with accurate, reliable
    real-time business and financial management information that is
    validated by a ``clean audit'' opinion. Basic building blocks for this
    effort include a revitalized emphasis on transparency in our business
    processes and an enterprise-wide financial management capability that
    is modern, comprehensive, and responsive to the warfighter. Sound
    financial management and improved accountability are at the core of our
    financial management transformation.
        Initiatives in Air Force contracting include development and
    implementation of the Enterprise Architecture for Procurement,
    consolidation of Major Command (MAJCOM) Federal Acquisition Regulation
    Supplements, standardization of the strategic sourcing process, and
    assessment of current contracting organizational alignments.
        The Air Force will continue to promote small business participation
    in our acquisitions. Partnering with small businesses--including
    historically underutilized business zones; women-owned small
    businesses; service disabled veteran-owned small businesses; small
    disadvantaged businesses; and historically black colleges,
    universities, and minority institutions--helps ensure we maintain a
    strong defense industrial base and have the widest range of products
    and services available to support the joint warfighter.
        The Air Force is also working with the Office of the Secretary of
    Defense (OSD) to understand the demand on our acquisition personnel and
    to appropriately size our workforce. Our objective is to have the right
    mix of military and civil service acquisition professionals with the
    appropriate education, experience, and training.
        Focus Areas
            Total Force Integration
        The Chairman of the Joint Chiefs of Staff, General Pace, stated,
    ``We must transform if we are to meet future challenges.'' One of the
    Air Force's more significant commitments to long-term transformation is
    the creation of the Total Force Integration Directorate. This new
    directorate is responsible for future force structure, emerging-mission
    beddown, and development of total force organizational constructs.
    Working with our partners in the Air National Guard and Air Force
    Reserve, the Air Force is maximizing our overall joint combat
    capability. Our efforts will enable the Air Force to meet the
    challenges of a shrinking budget, an aging aircraft inventory, and new
    and emerging missions.
        The Air Force plans to shift investment from ``traditional'' combat
    forces, with single-mission capabilities, to multi-role forces by
    aggressively divesting itself of older systems. The result will be a
    force structure with expanded capability to combat conventional threats
    while continuing to wage the global war on terror. Simply stated, the
    Air Force will become a smaller, yet more capable force through
    modernization and recapitalization of selected weapon systems with a
    commitment to networked and integrated joint systems.
        Our total force initiatives will maximize efficiencies and enhance
    combat capability through innovative organizational constructs. We have
    developed an organizational construct based on the success of an
    associate model in use by the Regular Air Force and Air Force Reserve
    since 1968. Associate units are comprised of two or more components
    operationally integrated, but whose chains of command remain separate.
    This model capitalizes on inherent strengths of the Air Force's three
    components, ensuring partnership in virtually every facet of Air Force
    operations, while preserving each component's unique heraldry and
    history. Increased integration allows Regular Air Force personnel to
    capitalize on experience levels inherent in the Guard and Reserve,
    while building vital relationships necessary to sustain successful
    combat operations.
        Air National Guard and Air Force Reserve members will continue to
    support the Air Force's global commitments and conduct vital homeland
    defense and security missions. Total force initiatives will integrate
    Air Force components into missions critical to future warfighting: ISR,
    UAV operations, and space operations. These missions are ideally suited
    for the Guard and Reserve since many provide direct support to the
    joint warfighter from U.S. locations. Using this approach will improve
    our operational effectiveness, reduce our overseas footprint, reduce
    reliance on involuntary mobilization, and provide more stability for
    our airmen and their civilian employers.
        Ongoing total force transformation benefits from a robust, dynamic,
    cross-functional coordination process, involving the headquarters, all
    regular component MAJCOMs, the National Guard Bureau and Air Force
    Reserve Command.
        The Air Force continues to make significant progress on total force
    initiatives such as the Richmond-Langley F-22A integration in Virginia;
    community basing in Vermont; F-16 Integration at Hill AFB, Utah; new
    Predator missions in Texas, Arizona, New York, North Dakota,
    California, and at the Air Force Warfare Center in Nevada; and C-17
    associate units in Alaska and Hawaii. We are also working additional
    initiatives such as C-130 Active Associate units in Colorado and
    Wyoming; a C-5 Flight Training Unit in Texas; C-40 Integration in
    Illinois; and Centralized Intermediate Repair Facilities in Illinois,
    Connecticut, Louisiana, Utah, South Carolina, Georgia, North Carolina,
    and Florida.
        The Air Force, through its Total Force Integration Directorate, is
    continuing a broad effort to ensure that new total force concepts are
    embedded in our doctrine, policy directives, instructions, and
    training. We are creating procedures to ensure resource and other
    decisions related to total force initiatives become routine parts of
    the planning and programming processes. The goal is clear, albeit
    ambitious: take greater advantage of total force elements and
    capabilities in the way the Air Force does business.
        The Air Force is transforming from a Cold War force posture to a
    structure that supports expeditionary warfare and leverages total force
    capabilities. More efficient use of our Regular Air Force, Air National
    Guard and Air Force Reserve assets increases our flexibility and
    capacity to be a more agile and lethal combat force and a more vigilant
    homeland defender.
        Science and Technology
        The Air Force develops and exploits new technologies to meet a wide
    range of conventional and asymmetric threats. To achieve required
    future capabilities, we continue to support science and technology
    (S&T) investments for the major tasks the Air Force must accomplish to
    support the combatant commanders.
        Air Force S&T is focused on high payoff technologies that could
    provide current and future warfighting capabilities to address not only
    conventional threats, but also those threats encountered in the global
    war on terror. The Air Force has embraced a new technology vision to
    guide our S&T program--``anticipate, find, fix, track, target, engage,
    assess . . . anytime, anywhere.'' We are integrating this vision into
    our annual planning activities to ensure we develop and transition
    relevant technology to the joint warfighter.
        Air Force technological advantages and superior warfighting
    capabilities are the direct result of decades of Air Force investment
    in S&T. Similarly, today's investment in S&T will produce future
    warfighting capabilities as we adapt to continually changing threats.
    The Air Force continues to seek ways to create a significantly greater
    advantage over these threats. Investment in technologies such as
    nanotechnology could provide stronger and lighter air vehicle
    structures, while investment in hypersonic research could provide on-
    demand access to space and reduced time-to-target for conventional
    weapons. New information assurance technologies should allow real-time
    automatic detection and reaction to network attacks, enabling us to
    automatically isolate the attack and collect forensic evidence, all
    while continuing uninterrupted network operations. Research in sensor
    and information technologies should provide increased battlefield
    situational awareness, which will provide unprecedented insight and
    understanding of events in the battlespace. These are but a few
    examples of developing technologies that could lead to operational
    systems that are smaller, lighter, smarter, faster, stronger, and more
    effective, affordable, and maintainable than they are today.
        The Air Force directed energy (DE) master plan is on track and some
    DE applications are already being fielded, especially for defensive
    purposes. For example, the Large Aircraft Infrared Counter Measures has
    now been used extensively and successfully in OIF and OEF on C-17s.
    Also, the airborne laser program continues to move DE technology
    forward. The capabilities possible through DE hold the potential to
    profoundly transform how we fly, fight, and defend ourselves.
        Impressive as our technological advances have been, maintaining an
    advantage relies, in part, on our commitment to future S&T investments.
    These investments also clearly highlight that air and space power is an
    asymmetric advantage for the joint warfighter and the Nation.
        Air Force Smart Operations for the 21st Century (AFSO-21)
        To meet the challenges of the road ahead, we have embarked on an
    Air Force-wide journey embracing continuous process improvement, lean
    thinking and six sigma quality. This major initiative is called AFSO-
    21. Achieving excellence in all that we do requires us to
    institutionalize the precepts of AFSO-21 throughout all of our
    operations, across the Total Force, and in our daily lives as airmen.
    The Air Force is stepping up to the challenge and making the commitment
    necessary to achieve true process excellence. AFSO-21 focuses on the
    identification and elimination of activities, actions, and policies
    that do not contribute to the efficient and effective operation of the
    Air Force. We will seek out and discontinue any activity not ultimately
    contributing to creating military utility and mission capability.
    Continuous identification and systematic elimination of so-called
    ``non-value added'' activities are the keys to improving service,
    reducing costs, and enriching the lives of our airmen.
        We are seeking three outcomes from this approach. First, we want
    airmen who are fully aware of the importance of their work and how it
    contributes to the mission; airmen must look to improve what they do
    every day. We want airmen to see their role in a fundamentally
    different way: by focusing on increasing value and eliminating waste.
    Second, we want to make the most of our existing budgets and free
    resources for future modernization by systematically identifying and
    eliminating the waste in our day-to-day processes. Finally, we want to
    enhance our ability to accomplish our mission and provide greater
    agility in response to rapidly changing demands.
        Institutionalizing this new way of thinking and operating will
    allow the Air Force to meet the enormous challenges of the next decade
    and ultimately to sustain and modernize the world's best air and space
    force.
        Fuel Conservation and Efficiency
        The Air Force is the largest renewable energy power purchaser in
    the U.S. and is set to continue making large buys that will not only
    greatly reduce reliance on petroleum-based fuels but, over time, will
    reduce utility costs.
        The Air Force is pursuing an aggressive energy conservation
    strategy and is committed to meeting and surpassing the energy goals
    mandated by the Energy Policy Act of 2005 and other overarching
    policies and mandates. We have been successful at reducing our energy
    consumption in accordance with past legislation and will continue to
    use a variety of programs aimed at reducing our use of petroleum-based
    fuels.
        Our overall ground fuel conservation efforts in accordance with
    mandates and guidance have yielded some notable reductions.
    Specifically, Air Force motor vehicle gas and diesel consumption has
    fallen significantly alongside a corresponding increase in Air Force
    use of alternative fuels. Air Force progress in these areas will be
    driven largely by commercial research and funding since we do not
    substantially drive alternative fuels technology and infrastructure
    changes. The Air Force is partnering with the Army to develop and use a
    hybrid electric-diesel engine for the High Mobility Multi-purpose
    Wheeled Vehicle (HMMWV) with a planned delivery starting in 2008. Other
    alternative fuel-technology is still in the development stage.
        Michigan's Selfridge Air National Guard Base (ANGB) will become the
    demonstration center for the latest fuel-efficient and environmentally
    compliant technologies for use in Air Force support equipment to
    include basic expeditionary airfield resources (BEAR) and ground
    vehicle inventories. Tests at Selfridge ANGB, Michigan will look at
    fuel cell powered vehicles and hydrogen fuel infrastructure
    requirements and will ultimately provide models for future Air Force/
    DOD procurement.
        Our use of energy from renewable sources and construction and
    infrastructure improvement programs are designed to create cost
    effective energy efficiencies in new and existing facilities. In
    addition, our aggressive pursuit of on-base renewable power generation
    is rapidly increasing. We have bases where power is being produced from
    wind, solar, geothermal, and biomass resources, and we have projects
    planned, in design, or under construction to greatly expand this
    capability. Some of our bases are already using 100 percent renewable
    power from purchases and onsite production. With our combined purchase/
    production strategy, the Air Force is poised to surpass the renewable
    goals set by the Energy Policy Act.
        We realize our reliance on petroleum-based fuels must be curtailed
    and it will take a concerted and coordinated effort to meet the energy
    reduction needs of the Air Force. We use the tools available to improve
    infrastructure while we continue to strive to instill an energy
    conservation mindset in our airmen.
        C\4\ISR
        Future transformational C\4\ISR capabilities will provide all-
    weather, persistent surveillance to the joint warfighter and the
    Intelligence Community, and they will be tightly integrated with space,
    air, and land assets to deliver even more precise and responsive
    situational awareness in support of national security objectives.
        The Air Force's biggest challenge with its world-class C\4\ISR
    systems remains the proper integration of these systems. The goal of
    our technology improvements is to integrate intelligence and operations
    capabilities. An integrated enterprise solution will enhance joint,
    multi-agency, and multi-national C\4\ISR collection and dissemination
    capabilities and will eliminate information seams among air, ground,
    and space based assets. It will also expand information superiority and
    accelerate decision-making. This integration allows us to achieve
    decision dominance, leading to knowledge-enabled operations and
    supporting the development and execution of sovereign options using
    air, space, and cyberspace capabilities.
        Knowledge-based operations are critical to closing the seams
    between joint forces. We anticipate a future in which each force
    element, no matter how small, is constantly collecting data and
    ``publishing'' it to a joint warfighter network. Information will flow
    from every corner and element of the joint force, from ISR collectors
    to the warfighters. A key aspect of future C\4\ISR capabilities will
    involve replacing time-consuming human interfaces with machine-to-
    machine digital integration to ensure commanders have ready access to
    the information they need to execute their missions.
        The concepts of intelligence fusion and streamlined sensor-to-
    shooter processes imply a high level of system interoperability at many
    levels. Information technology increases the ability to send ISR
    information to any point on the globe in near-real time. The Air Force
    is adapting doctrine, tactics, techniques, and procedures to manage
    this ever-changing growth in C\4\ISR capabilities.
        To maximize our C\4\ISR capabilities, the Air Force is eliminating
    organizational restrictions that inhibit the flow of information
    between these systems. Advances in information technology are removing
    historical limitations inherent in legacy systems, such as line-of-
    sight data links, incompatible C2 systems and manual collection-
    management processes. Our goal is to increasingly ``share'' rather than
    ``own'' information.
        Overcoming past shortfalls through improvements in the timeliness,
    accuracy, and completeness of battlespace knowledge will also bring
    tactical-level information to command functions that previously had
    access to only the operational or strategic levels of war. The AOC is
    the focal point for operational C2 of air and space assets delivering
    combat effects to the warfighter. To make this capability more
    effective, we made it a weapon system--the Air Force provides manpower
    and training as it does for every other weapons system--standardized,
    certified and lethal. We injected the technology necessary to increase
    machine-to-machine connectivity. Through both technical and procedural
    improvements, we have increased the system's capacity for information
    fusion and accelerated the decision-to-shooter loop. All five of our
    full-function AOC weapon systems (Falconers) should be fully
    operational in 2006.
        In support of DOD and the joint community's broader efforts to
    adopt and transition to network centric warfare, the Air Force is
    aggressively integrating existing C\4\ISR platforms across a
    distributed processing environment. The Network Centric Collaborative
    Targeting Program (NCCTP) will initially integrate capabilities that
    include airborne C2, ground surveillance, signals intelligence, and
    operational C2 at the AOC. The Air Force will expand NCCTP into a
    broader airborne networking capability that will support the full and
    expanding range of future joint air and space operations.
        The Air Force is actively pursuing the extension of global
    information grid (GIG) networked capabilities out to the extreme edge
    of tactical air operations. Programs like Family of Advanced Beyond-
    Line-of-Sight Terminals (FAB-T), the Joint Tactical Radio System
    (JTRS), tactical targeting network technology (TTNT), the Battlefield
    Airborne Communications Node (BACN), and, eventually, the TSAT
    constellation will provide rich connectivity and interoperability for
    joint air operations as well as tactical users and warfighters.
        The Air Force is working closely with the other Services and
    agencies to define new doctrine and organizational structures to
    optimize joint warfighting operations. Consequently, we are developing
    the necessary technical capabilities, refined processes, and trained
    personnel to achieve desired effects.
        Warfighting Headquarters (WFHQs)
        The Air Force is transforming our C2 structure by establishing new
    WFHQs. These will be positioned globally, replacing our old Cold War
    structures and providing the Joint Force Commander (JFC) with the most
    effective means to lead air and space forces in support of national
    security objectives. These forces will be organized and resourced to
    plan and deliver air and space power in support of combatant
    commanders, enabling a seamless transition from peacetime to wartime
    operations. WFHQs will maximize usage of C\4\ISR technology and
    reachback to minimize required manpower. The WFHQs are also designed to
    act as the combined/joint force air component commander headquarters,
    or joint task force headquarters.
        Joint Warfighting Space (JWS)
        The JWS concept is an outgrowth of Air Force efforts to develop
    operationally responsive space (ORS) capabilities. JWS and ORS will
    enable rapid deployment and employment of communication, ISR, and other
    vital space capabilities and services. JWS will emphasize agility,
    decisiveness, and integration to provide dedicated, responsive space
    and near-space capabilities and effects to the JFC.
        In 2005, the Air Force successfully conducted the first JWS
    demonstration. By capitalizing on an existing commercial communications
    capability using free-floating platforms, the Air Force was able to
    extend line-of-sight communications for ground forces from 5-7 miles to
    over 300 miles. This demonstration was the initial step in exploiting
    existing off-the-shelf technologies in a long loiter environment.
        In 2006, the Air Force will team with our sister Services to
    conduct the first in a series of small (1,000 pounds or less) satellite
    experiments. These demonstrations are designed to enhance and
    incorporate space capabilities in joint training and exercises,
    increase space integration, and allow the joint force to take advantage
    of the many synergies multi-service space professionals provide.
    Lessons learned from these activities have the potential to further
    evolve and improve space doctrine and help the joint community in
    developing innovative space-derived effects.
        JWS and ORS demonstrations will continue to explore ways of
    achieving new, more effective ways of providing space capabilities to
    the joint warfighter. As technologies mature, JWS will bring the joint
    force more persistent, responsive, and dedicated capabilities.
        Long-Range Strike
        To further refine its rapid strike capabilities, the Air Force is
    transitioning its long-range strike strategy to focus on effects
    instead of platforms. We view long-range strike as the capability to
    achieve desired effects rapidly and persistently on any target set in
    any operational environment.
        Our forces must be simultaneously responsive to multiple combatant
    commanders and be able to strike any point on the planet. Today, we
    provide deep strike capabilities through a variety of platforms and
    weapons. Future capabilities must continue to enhance the effectiveness
    of the system. Responsive capabilities will combine speed, stealth, and
    payload to strike hardened, deeply buried, or mobile targets, deep in
    enemy territory, in adverse weather and with survivable persistence.
        Improving CAS
        Detailed integration of each air mission with the fire and movement
    of supported joint forces is the trademark of CAS. In the past,
    aircrews and ground forces shared information through lengthy voice
    descriptions. When providing CAS or time-critical-targeting, this
    dialogue often took several minutes and occasionally resulted in missed
    opportunities. To increase integration and lethality, the Air Force has
    developed new equipment and training to increase situational awareness
    in CAS operations. We also continue to sustain and modernize the A-10,
    the only Air Force aircraft dedicated to the CAS mission.
        With video downlinks, battlefield airmen can share time-sensitive
    information instantaneously and complete target coordination in mere
    seconds. Most JTACs are already equipped with ROVER III receivers to
    display video feeds from most UAVs and ATPs.
        In 2006, the Air Force will begin operational fielding of the
    precision engagement modification that integrates ATPs and data links
    and enhances employment of GPS-aided munitions. This modification will
    greatly enhance the pilot's situational awareness and improve both the
    responsiveness and accuracy of A-10 targeting. This will increase the
    A-10's lethality while reducing the probability of fratricide
    incidents. The Air Force will also improve the sustainability of its A-
    10s by continuing a SLEP that doubles the flight hour life of the A-10,
    helping to ensure the A-10 can remain in service for as long as the
    warfighter requires.
        In 2006, the A-10 Propulsion Upgrade Program will enter the system
    design and demonstration phase. This program will upgrade the A-10's
    current TF34-100A engines to provide approximately 30 percent more
    thrust. This will help overcome some limitations that the A-10 faces
    when operating from expeditionary airfields at high field elevations
    and temperatures. It will also improve the A-10 performance at medium
    altitudes and increase its weapon load, thus improving survivability
    and more fully leveraging the capabilities of the precision engagement
    modification and ATPs.
        Special Operations Forces (SOF)
        Air Force Special Operations Command offers combatant commanders
    specialized airpower and ground forces to conduct and support special
    operations and personnel recovery missions. These forces offer a unique
    combination of capabilities and personnel that the U.S. can call upon
    for the global war on terror, homeland defense, and disaster response
    missions.
        To meet operational requirements, we will add 4 AC-130U gunships to
    the force structure in 2006, followed by 10 MC-130H Combat Talon IIs by
    2010. The first CV-22 Osprey combat unit anticipates IOC in 2009. The
    Osprey will add a long-range, self-deployable, vertical lift mobility
    aircraft to sustain SOF in remote environments.
        We will support expanding our SOF combat aviation advisory forces
    so they can assess, train, advise, assist, and integrate more nations'
    Air Forces into the global war on terror and other combined operations
    and contingencies. We have begun the CSAR-X program in an effort to
    provide a fast, long-range, all-weather aircraft to achieve IOC in 2010
    and replace the HH-60 CSAR aircraft.
        The Air Force is also developing the persistent surface attack
    system of systems as the follow-on to the current AC-130 gunship. This
    gunship follow-on will provide responsive, survivable, persistent, and
    precise fire support in the low-threat to selected high-threat
    engagements in the 2015 timeframe.
        BRAC
        BRAC 2005 will transform the Air Force for the next 20 years to
    meet new challenges as a total force. The BRAC results improve Air
    Force warfighting effectiveness, realign Cold War era infrastructure to
    meet future defense strategy, maximize operational capability by
    eliminating excess physical infrastructure, and capitalize on
    opportunities for joint teaming with our sister Services. We will
    continue the excellent record established in prior BRAC rounds by
    closing bases as quickly as possible so savings are realized and
    properties expeditiously turned over for viable reuse, in concert with
    community plans for development and economic revitalization.
                          summary--heritage to horizon
        We have received a proud heritage forged through the ingenuity,
    courage, and strength of the airmen who preceded us. Our duty today is
    to deliver their Air Force to the limitless horizon ahead of us. The
    mission of the Air Force remains to fly, fight, and win whether we are
    delivering lethal effects against insurgents in Iraq, protecting the
    skies of the U.S. against terrorist attacks, providing a global
    positioning system that is essential to our modern military and the
    global economy, or providing relief to victims of natural disasters
    both at home and abroad.
        The Air Force of today and of the future will strengthen the entire
    joint and coalition team. Dominance of air, space, and cyberspace paves
    the way to overall success. In keeping with the current emphasis on
    innovation and transformation, our future Air Force will be a more
    capable yet smaller force. As such, the future Air Force will increase
    the capability and flexibility of the joint force and, subsequently,
    will increase the depth and breadth of options available to the
    President and the Secretary of Defense. These military options will be
    crucial to the defense of the Nation as the U.S. continues to wage the
    global war on terror while transforming and strengthening the joint
    force for any future contingency.
        The Air Force offers an unparalleled set of combat capabilities to
    directly influence any joint, coalition, or interagency operation, as
    well as the enabling capabilities to improve joint warfighting in
    conjunction with our partners on the ground, on or under the sea, and
    through space and cyberspace. Recognizing that no Service, or even the
    DOD, can achieve success by itself, the Air Force has focused on
    increasing the integration and effectiveness of the joint force and
    interagency team.
        To achieve new levels of integration and effectiveness, the Air
    Force will take advantage of our Nation's long-held command of the
    global commons--air, space, sea, and cyberspace. The Air Force will
    extend its current air and space power advantage. As part of the joint
    force, the Air Force is positioned to leverage its persistent C\4\ISR,
    global mobility, and rapid strike capabilities to help win the global
    war on terror, strengthen joint warfighting capabilities, and transform
    the joint force--while maintaining good stewardship of public
    resources.
        The Air Force faces the broadest set of mission requirements across
    the entire spectrum of warfare. We will bolster our Nation's ability to
    respond swiftly, flexibly, and decisively to asymmetric, irregular, and
    emerging threats. We have embarked on AFSO-21 as a means to best
    allocate our resources to meet this increasing set of challenges.
        To accomplish this requires continued, focused investment in our
    people, science and technology, and the maintenance, sustainment,
    modernization, and recapitalization, and, where it makes sense,
    retirement of our aging aircraft and weapon systems.
        We are America's airmen. Our heritage is innovation. Our culture is
    expeditionary. Our attitude is joint. Our mission is clear. As threats
    change and America's interests evolve, we will continue to adapt,
    evolve and remain the world's premier air and space force. Together
    with our fellow Services, we stand resolute, committed to defending the
    United States, and defeating our enemies.

        Chairman Warner. Thank you, Mr. Secretary. A very fine
    statement.
        General Moseley.

      STATEMENT OF GEN. T. MICHAEL MOSELEY, USAF, CHIEF OF STAFF,
                        UNITED STATES AIR FORCE

        General Moseley. Mr. Chairman, Senator Levin, members of
    the committee, thank you so much for watching over this great
    joint team in this Air Force, which is so special to the
    defense of this country.
        Mr. Chairman, thank you for including my remarks in the
    record. If you would humor me, I'd like to take my time and
    introduce four American heroes, four great airmen, to the
    committee.
        Chairman Warner. Yes, but you can do the introductions, as
    well as comment on your statement. We'll provide you that
    flexibility.
        General Moseley. Sir, I'd rather just use my time to
    introduce these great Americans.
        Chairman Warner. We'll accept that. Go right ahead.
        General Moseley. Yes, sir.
        First--and as you would please stand up when I introduce
    you--first is Senior Airman Polly Ann Bobseine. She has three
    combat deployments under her belt. She's a fire-team member in
    a security forces group. She's participated in allied and
    coalition offensive ground combat operations in Iraq over those
    three combat tours. These include over 100 combat patrols, 45
    offensive missions. She's been engaged in 30 ambushes, 5
    direct-action missions against Iraqi insurgents. She's just
    earned U.S. Army jump wings, and has been given, by the Army,
    the combat patch for the big red one, the 1st Infantry
    Division. Sir, you can see why we're proud of these folks.
        Chairman Warner. Not only that, but it underscores the
    risks associated with today's modern warfare, that it's a 360-
    degree perimeter, and men and women are equally engaged in
    those actions and taking the risks. We thank you, airman, for
    your service to the country.
        Senator Inhofe. Mr. Chairman, it also means that they're
    getting this training. A lot of people don't realize what the
    airmen are getting right now in the field. We're aware of this,
    of course, from Altus and other places. So, they are performing
    well. But they also have to be trained for that, and they are
    getting proper training.
        General Moseley. You bet, sir.
        Chairman Warner. That also underscores--if I might
    interrupt, Chief--we, understandably, focus the attention on
    the Army and the Marines valiantly carrying out those ground
    operations, but there are literally thousands of your people
    integrated, in one way or another, in those ground ops, as well
    as the Navy, and it's truly a joint-force operation.
        General Moseley. Sir, we have close to 5,000 airmen
    involved in this business today.
        Chairman Warner. In country?
        General Moseley. Either in prep or in country, actually in
    combat, just like Senior Airman Bobseine.
        Chairman Warner. Thank you.
        General Moseley. Sir, next is Tech Sergeant Bradley Reilly.
    He is one of those joint tactical air commands (JTACs) that
    you're talking about. He's had four combat deployments. He's
    just earned the Silver Star, which we're going to award to him
    down at Tampa when he's with his family, and he wears a Purple
    Heart. This particular action, he was part of a quick-reaction
    force moving to reinforce ambushed Afghan security forces. Upon
    arrival, his helicopter drew heavy fire. His detachment overran
    the enemy position, but then came under reinforcing fire from
    three positions, three sides. Tech Sergeant Reilly was wounded,
    as were other members of his team. While caring for his team
    members, he provided lifesaving medical skills for others,
    controlled close air support (CAS) and aircraft fire into the
    fight, and provided suppressive fire himself against the
    numerous hostiles for approximately 2 hours, while wounded. So,
    sir, here's that JTAC that you were talking about, in person.
        Next, Lieutenant Colonel Ann Konmath. Mr. Chairman, she has
    spent a lifetime in the world of space in maintaining America's
    high frontier. She is now the squadron commander of the Weapons
    School Squadron at Nellis. She is the expert, teaching experts
    about space and space operations and the orchestration of space
    effects through strategic and operational and tactical levels.
    She not only commands the squadron, but she teaches the courses
    out there, and she teaches the courses not just to space
    professionals, but to fighter pilots, bomber pilots, combat
    rescue pilots, et cetera. She started life as a distinguished
    Reserve Officers Training Corps (ROTC) graduate. She is a
    graduate of the Air Force Weapons School. She has been an
    orbital analyst in Cheyenne Mountain. She's operated several
    space control systems, and she served as a space weapons
    officer at 8th Air Force Operations Center, and also in Pacific
    Command.
        So, sir, here is one of those people that you almost never
    see, because they live in a world that's incredibly complicated
    and technical, and she is the expert of all experts teaching
    those new folks.
        Last, we have Lieutenant Colonel Luther, or ``Trey,''
    Turner. He is the commander of our 17th Reconnaissance
    Squadron, which is our UAVs that are doing special missions. He
    was a naval officer in a previous life, Top Gun graduate, 1992,
    interservice transfer to the Air Force in 2003. He's a command
    pilot with 4,000 hours, F-18, F-14, A-4, 376 carrier landings,
    and proficient in all missions of the current and the future
    UAV world. He is the expert that's taken us there. He has
    deployed to Iraq, flown Predator missions in support of
    Operation Iraqi Freedom (OIF) and Operation Enduring Freedom
    (OEF), and he's had three combat deployments.
        So, sir, thank you for the time to introduce four American
    heroes and four great airmen in lieu of an oral statement.
    Thank you for the opportunity to bring them here today, also.
    [Applause.]
        Chairman Warner. What a marvelous way to start a hearing.
    But if you would allow me, as I understand it, one of our
    senior staff members was your squadron commander, and I want to
    know how you let him go. Would you stand, please, and give the
    answer to that question?
        Mr. O'Connor. He is a great credit to this Nation, and I'm
    so glad to see that he's continuing to serve this Nation.
        Chairman Warner. Why did you let him leave the Navy?
    [Laughter.]
        Mr. O'Connor. That was his decision, sir. [Laughter.]
        Chairman Warner. Thank you very much.
        We'll now proceed with a 6-minute round of questions.
        Mr. Secretary, your Department is presenting the defense
    committees with a nontraditional funding strategy for the F-22A
    that would result in a multiyear procurement of the aircraft
    from fiscal years 2008 through 2010, at 20 aircraft per year,
    with no aircraft procurement in fiscal year 2007. However, to
    do this, the Air Force would require an economic order quantity
    (EOQ)--that's an EOQ authorization under a firm, fixed-price
    contract in fiscal year 2006, and a waiver to carry the
    cancellation ceiling as an unfunded contingent liability. This
    appears to be an incremental funding plan procuring 3 years of
    aircraft over 4, for the F-22. Please provide the committee
    with your understanding of how this would work and whether it's
    in compliance with current regulation and law.
        Secretary Wynne. The intent of this stretch-out, which it
    is a stretch-out, is to hedge the bet, if you will, because
    this is our only fifth-generation fighter that is in warm
    production today. I was able to work with the Office of the
    Secretary of Defense (OSD) to convince them that it was not in
    our Nation's interest to terminate this fifth-generation
    fighter before we got access to another fifth-generation
    fighter. The second fifth-generation fighter is the JSF, which
    comes alive in the 2011-2012 timeframe. To do this, they have
    stretched the F-22 program out, added four aircraft to it, and
    allowed us to do a 3-year multiyear at 20 a year to try to
    salvage some of the foregone cost savings that were requisite
    with the volume, I think, at 27 and 28 airplanes a year.
        The zero that is currently there is a reflection of the
    desire on the part of the Department to buy subsystems in this
    period of time, and to comply with the law. It does make it a
    little bit more difficult to contract for those, but you
    basically write in the items that you're going to get on an
    economic order quantity, such that there is no impact to the
    production line in Fort Worth or Marietta.
        These means and methods have been vetted, apparently, with
    senior acquisition officials in the Department and the legal--
    necessary legal--to bound it, and they required a waiver, as
    you properly indicated to make this happen.
        We were, frankly, thrilled with the opportunity to extend
    this program, because I don't think that anyone here would
    rejoice in seeing the only fifth-generation fighter line taken
    away as an option should we get into a hot engagement. That
    having been said, we did not object to the funding that went
    down to allow us to do that.
        Chairman Warner. General Moseley, your perspective on this?
        General Moseley. Sir, as we looked at the portfolio and the
    choices made in the QDR of long-range strike and global strike,
    and of balancing the funding sources that we had, we were very
    happy to be able to extend the line 2 more years and to have
    the authorities to begin to work with the committees on a
    multiyear to be able to get the cost down even further. Out of
    that, we were able to buy four more aircraft from the PBD-753
    decision of two Decembers ago. So, we came out with four more
    airplanes, plus the line extended 2 years at Marietta, plus an
    opportunity to work a multiyear to get the cost down even
    further.
        So, sir, that's the endstate of this and the ability to
    work this. We're now working hard with the OSD staff and with
    Lockheed Martin on Lot 6 negotiations, which will be the lead
    item, then, for working with the committee and with OSD and
    Lockheed on the multiyear.
        Secretary Wynne. I have advised the OSD staff that it would
    probably be prudent, just because of the mechanics of, ``How do
    I get a follow-on, should this hedge not be sufficient?''--and
    there may be a need for a follow-on 20 airplanes, that maybe we
    should price an unfunded fourth-year option so that I can find
    out when I need permission to go forward, because I am somewhat
    concerned that I may have boxed in our ability, if you will, to
    buy number 184, should that become an option for the Nation.
        Chairman Warner. Thank you.
        I'd like to bring up the subject of this engine problem
    with the JSF. I recounted here, earlier, the correspondence
    that Senator Levin and I forwarded, and the indication by the
    Deputy Secretary, in a very courteous manner, that he'll adhere
    to our recommendations. I will soon be advising the committee
    of my intentions, in consultation with Senator Levin, to hold a
    special full committee hearing on this subject, because I think
    it's so important--important from two standpoints. One, this is
    the fighter aircraft, which holds the future for the free world
    to deter such aggression as might be involved in the missions
    that this plane is designed for. We have eight nations
    participating in the program, estimated at between 2,000 and
    3,000 aircraft. Clearly, it seems to me that it's prudent that
    we continue to go forward with the decision of two engines--I
    must express to you forthrightly my own present inclination--
    because of any number of reasons. I respect, here this morning,
    that you're here to defend the President's budget and I shall
    not elicit from you your views as to where you think this
    program should go. It's obvious that you have that obligation.
        But it is important, as we in the committee prepare for
    these hearings, to have a better understanding of the decision
    to drop the second engine--referred to as the General Electric
    (GE)/Rolls engine. Did it originate, Mr. Secretary as an option
    in your Department? If so, what consultation among your peer
    group--namely, the Chief of Staff and others--took place? What
    consultation did you take with the other nations and their
    corresponding Secretaries of Air or whatever the political
    situation is in those countries? Would you kindly put that on
    the record?
        Secretary Wynne. Yes, sir. Thank you.
        [The information referred to follows:]

        During fiscal year 2007 budget deliberations, the Department
    considered maturity of the F135 primary engine, the investment cost of
    developing a second engine, and findings of past engine assessments.
    The Department has reasonable confidence in the reliability of the F135
    engine due to its initial test results. However, given the
    approximately $2.4 billion investment cost for developing a second
    engine, the Department's analysis concluded that a second source would
    not yield program cost savings. Therefore, the Department concluded
    that a single engine supplier provides the best balance of risk and
    cost.
        The Services did not discuss the budget proposal to cancel the
    engine with our international partners since it was considered a
    Department of Defense internal issue until official submission of the
    President's budget request. We have, however, had discussions with
    several partners following the submission that I am aware of.

        Secretary Wynne. This is a question of reliability, because
    you want to have two engines as this is going to be a
    relatively large program. I think it's going to be more than
    3,000 airplanes but I appreciate that we are talking now about
    3,000 airplanes.
        The Navy had a bigger play in this, if you will, because
    they are buying a smaller fleet than the Air Force. So, we can
    amortize the cost of a second engine over it. Frankly, we would
    benefit from having a second engine because of our larger fleet
    size.
        The impact on other nations is problematic, in that the
    British Rolls-Royce company is partnered with GE, I agree, and
    they formed a partnership, but they supply many of the same
    components to Pratt & Whitney. They're just not partnered with
    Pratt & Whitney and are treated on a little bit different
    scale.
        So, the issue really is reliability of the core engine.
    During the early stages of the F-16 program, we did have
    problems with the F-101 and the F-100 engine. But those
    problems have long been resolved, and we have not had a history
    of unreliable engines. The 119 engine has been very good.
        So, when it was brought forward, there were cost savings
    tabled up by a lot of folks, and the senior leadership of the
    Department gathered around relatively quickly and tried to sort
    through this thing by doing some analysis and trying to make
    sure that the savings that they would expect for this--two
    engines versus one engine would be----
        Chairman Warner. Do I infer that your Department, then, put
    that into the----
        Secretary Wynne. I would say that the Navy brought it
    forward, and we did not object.
        Chairman Warner. So, the Navy originated it, and Department
    of Air Force did not object, and, therefore, it was elevated to
    the Deputy Secretary/Secretary level for selection among the
    various options as to where to save some money?
        Secretary Wynne. That is correct.
        Chairman Warner. General Moseley?
        General Moseley. Sir, I wouldn't have anything to add,
    other than that it is $1.8 billion.
        Chairman Warner. I am fully aware of that.
        General Moseley. Yes, sir.
        Chairman Warner. From an operator's standpoint, clearly,
    throughout history, and, I'm sure, into the future, there will
    be problems associated with these highly complex engines, and
    particularly when this particular engine is designed to perform
    three different functions. I don't know that it's ever been
    done before in aviation history.
        Now, if you had to have a standdown of aircraft while your
    technical people and other people had to ascertain what the
    problem is, that's a big fleet of aircraft worldwide to stand
    down. It seems to me there's some advantage in having the two
    engines so that presumably a substantial portion of the fleet
    could continue to operate rather than standing down. Isn't that
    an advantage?
        General Moseley. Yes, sir, it is. We've had histories of
    fleet stand-downs in the Air Force and the Navy has, as well--
    with our F-100 engines and also with our GE engines, on
    occasion, with bearings and with oil seals that have shut us
    down for a while until we could fix them. The Navy had historic
    problems with their TF-30 engines on their F-14s. So, the
    redundancy and the depth of the engine technology and the
    availability of an additional engine is an attractive option,
    operationally.
        Chairman Warner. Mr. Secretary, I would say to you, because
    you're an acknowledged expert on procurement, hasn't history
    taught us that competition can generate savings?
        Secretary Wynne. There's no doubt it has. I think that was
    one of General Abrahamson's principal arguments. He actually
    created the second engine for the F-16 program, after it had
    gone into production, primarily to drive competition. I think
    his realization was on the 20 to 30 percent range. At least
    that was his expectation, as I recall, when I left the program.
        The realization is--I don't know, I just don't recall. What
    I think is here is that this is a program that--first of all,
    everything costs more these days. So, it takes longer to
    amortize any savings.
        Chairman Warner. I'm just talking about historically,
    throughout military procurement history, competition has
    generally brought about savings, correct?
        Secretary Wynne. Yes, sir, it has.
        Chairman Warner. General, on the technical side of the
    second engine, it's roughly 3 to 4 years following the initial
    engine, isn't that correct, in R&D?
        General Moseley. Yes, sir. That's my understanding.
        Chairman Warner. I've been informed that that engine
    probably will have some advantages over the Pratt engine,
    simply because 3 or 4 more years of technology is being
    incorporated, perhaps additional thrust. Is that correct?
        General Moseley. Perhaps so, sir. That's my understanding
    also.
        Chairman Warner. So there is the potential for the second
    engine--and I'm not critical of the Pratt engine--but it is
    possible that that engine could have certain attributes that
    would make it, say, better suited for the vertical-thrust
    missions. Is that correct?
        General Moseley. Perhaps, sir.
        Chairman Warner. Talking like a lawyer, I think. We'll see.
        To a different subject, this committee has focused
    tremendous attention, and will continue to do so, on the IEDs.
    Has the Air Force, General Moseley, increased the number of C-
    130s in Central Command (CENTCOM) area ops to transport
    supplies in Iraq in order to reduce the Army and Marine Corps
    dependence on convoys? What capabilities does the Air Force
    provide in CENTCOM's area of operation that support the
    defeating of these IEDs?
        General Moseley. Sir, we've been involved, alongside the
    Army and the Marines and the Navy explosive ordinance disposal
    (EOD) efforts, from the very beginning, when we stood up the
    IED Task Force, about a year and a half or so ago. We now have
    a general officer who's a part of that. That's his full-time
    job. We have several bodies of effort, to include a battle lab
    that's looking at applications of anti-IED work from an air
    perspective, and we are sharing everything that we have, as
    well as the other Services, on electronic warfare applications,
    surveillance and reconnaissance applications, et cetera.
        Sir, we have everything deployed forward that plays into
    this war for John Abizaid and for George Casey, to include the
    EC-130s, which we will like to have to shut the schoolhouse
    down here within the next few weeks, if not a month or so,
    because we have all of the assets forward. We have 31 of 31
    combat-coded Predators forward. We have all of our EOD effort
    forward, alongside the Navy's EOD effort, plus Tactical Air
    Reconnaissance System (TARS) pods that Selfridge and Richmond
    bring to the fight in the Guard units--it is a wonderful pod--
    as well as our sniper and LITENING pods aboard our F-15s and F-
    16s.
        Chairman Warner. I thank you, General. I think that shows
    the full support.
        General Moseley. Yes, sir. This is a frustrating effort,
    because I'm not sure any of us have an answer for this that's
    satisfying to John Abizaid and George Casey, but we're trying.
        Chairman Warner. We'll keep working.
        Secretary Wynne, I omitted one question on the engine. To
    what extent was there consultation with our allies that are a
    part of this program with the JSF?
        Secretary Wynne. I don't know exactly the extent of the
    consultation, sir.
        Chairman Warner. That wasn't incumbent upon your
    Department? Aren't you the primary manager of it?
        Secretary Wynne. At this point, I would tell you that the
    acquisition, technology, and logistics (AT&L) group is the
    primary manager, but I am the designated service acquisition
    executive, yes, sir. I do know that the British were advised.
    Also, the Italians were advised.
        Chairman Warner. Is that after the fact, or were they
    advised, and, ``Look, this is before us''?
        Secretary Wynne. I would say that it was during the final
    stages of the deliberation, if not after the fact.
        Chairman Warner. All right. Where could I go to check into
    the----
        Secretary Wynne. I would say probably the Defense
    Acquisition Executive, and ultimately the program office.
        Chairman Warner. I'd like to have you fully answer that
    question for the record.
        Secretary Wynne. I will do that for you, sir. Absolutely.
        [The information referred to follows:]

        Chairman Warner. Thank you.
        Senator Levin.
        Senator Levin. Thank you, Mr. Chairman. Thank you, General
    Moseley, for introducing the four airmen sitting behind you.
    More importantly, thanks to each of them for standing up for us
    and for all the support that you provide this Nation and all
    the people you represent.
        General Moseley, at a briefing last week the Air Force told
    our staff that Air Force readiness had dropped to historic
    lows. Can you describe what that situation is and what steps
    are being taken to remedy it?
        General Moseley. Sir, we struggle with readiness across the
    board with a fleet of aging systems, with cost per flying hour
    going up, and maintenance issues going up. Our readiness is
    sustainable now, given our deployments, but it's always a
    concern. I don't know that I would agree that it's at an all-
    time low. I would say that we're maintaining this deployment
    schedule, but we're maintaining it with an aging fleet, and
    it's costing us more at every increment to do that.
        We have spent a lot of money, with the help of this
    committee, on readiness and on spares and on streamlining
    depots, to try to keep this equipment operating. So, sir, I
    don't know that I would say an all-time low, but I would say
    this is a challenge.
        Chairman Warner. Is it unacceptably low?
        General Moseley. Sir, we're getting to a margin where it's
    going to be unacceptable in our low-density, high-demand
    deployable assets of airborne warning and control systems
    (AWACs) and our combat rescue helicopters, our U2s, and some of
    our aging systems, yes, sir.
        Senator Levin. Secretary Wynne, your posture statement
    reflects that the Air Force began 2006 with a force imbalance
    consisting of a shortage of enlisted personnel and an excess of
    officers, primarily junior officers commissioned between 2000
    and 2004. This imbalance creates some unacceptable operational
    and budgetary impacts. Apparently, you are going to remedy the
    imbalance by proposing to cut almost 20 percent of the 2002 and
    2003 commissioning class, which is 1,900 of the 9,700 total
    officers that were commissioned in 2002 and 2003. Is that
    accurate? If so, by what process will those cuts be made?
        Secretary Wynne. Yes, sir, I believe that is an accurate
    reflection. We are very respectful, and value every member of
    our Service. We have advised those classes on their options.
    One of their options, of course, is to resign, the other option
    is to go from blue to green. There is an option to take a Civil
    Service position, and we are trying to be respectful of the
    fact that they joined the United States Air Force to bring
    value to our Air Force. We value and respect every one of our
    Active volunteers.
        Senator Levin. What is the budgetary implication of that
    imbalance for fiscal year 2007 and for subsequent years?
        Secretary Wynne. Sir, I analyzed it as a total impact,
    across the board, and, frankly, took advantage of it, in the
    sense of the 40,000 cut that we had proposed, which ended up, I
    think, with about $22 to $23 billion in savings across the
    breadth of the FYDP. I will have to get, for the record, the
    2007 impact.
        [The information referred to follows:]

        There is no impact due to an imbalance of forces. We ended fiscal
    year 2006 slightly under authorized end strength levels and plan to
    meet 2007 authorized levels through increased numbers of separations
    using the Voluntary Separation Incentives Program, Selective Early
    Retirement Board, and Force Shaping Board for officers and the Career
    Job Reservation, Date of Separation rollback and the Limited Active-
    Duty Service Commitment Waivers for enlisted personnel.

        Senator Levin. Mr. Secretary, last year you told the
    committee what the out-year funding wedge for the Missile
    Defense Agency (MDA) that the military departments would be
    budgeting for missile defense, starting in fiscal year 2008
    was. Is the Air Force currently planning to budget for missile
    defense activities of the MDA in fiscal year 2008?
        Secretary Wynne. Sir, right now I cannot respond to that
    specifically. I know that we are partnering with General Trey
    Obering, and trying to pick up our share of the load. But I'm
    going to have to take that one, also, for the record.
        [The information referred to follows:]

        DOD guidance directs fielding of elements of the ballistic missile
    defense system (BMDS) as soon as practicable. Additionally, the BMDS
    will be managed in three phases: development, transition, and
    procurement/operations. The Missile Defense Agency is responsible to
    develop missile defense capabilities and then transition those
    capabilities to the Services to procure and operate. The Air Force
    funds base operating support for the ground based interceptors at
    Vandenberg Air Force Base in California and missile defense operations
    at Schriever Air Force base in Colorado. Beginning in fiscal year 2008,
    the Air Force will assume responsibility for the missile defense
    capability of the Cobra Dane radar at Eareckson Air Station in Shemya,
    Alaska. As additional missile defense capabilities are developed and
    transitioned, we will program funds to support those capabilities such
    as the Airborne Laser and Space Tracking and Surveillance System that
    will eventually transition to the Air Force.

        Senator Levin. All right, that would be appreciated.
        Mr. Secretary, the Air Force is intending to use
    incremental funding within the proposed multiyear procurement
    program for the F-22 aircraft. In essence, the Air Force wants
    to spread the funding for 3 years' worth of production over 4
    years. Congress has sometimes resorted to incremental funding
    in the shipbuilding account, but, to my knowledge, has not used
    incremental funding when we buy aircraft. Are we, indeed, using
    incremental funding to buy F-22 aircraft in 2007? If so, why
    should we make the exception to our usual, full-funding policy
    when we buy aircraft?
        Secretary Wynne. We were extremely pleased that we were
    convincing to the OSD that we should not terminate a fifth-
    generation fighter line before we get another fifth-generation
    fighter line. Part of the agreement in doing that was to extend
    the line to 183, and lower the rate of acquisition by 7 or 9
    airplanes to make it 20-20-20 across the 3-year multiyear.
        An additional element of that was to understand that in
    this 2007 budget we would list a zero, and we would list all of
    the subsystems which we would be purchasing, to make sure that
    we were not, if you will, subject to the incremental funding,
    in specifics.
        On the other hand, we did ask for a waiver on contingent
    liability, termination liability, so that we could proceed on
    with this multiyear. It is a bit tortuous for me to see my way
    to number 184. I would like to make sure I continue to offer
    the Nation a hedge, but, on the other hand, we were very
    pleased with the total outcome, and accepted it.
        Senator Levin. General, the decision was made, apparently,
    to significantly reduce the B-52 fleet. My question is this:
    was a cost-benefit or other analysis conducted that discussed
    various issues that may have played a part in that decision?
    For instance, number of flying hours, flying hours per
    airframe, cost and maintenance issues? If so, would you provide
    a copy of that analysis to the committee?
        General Moseley. Absolutely, sir.
        [The information referred to follows:]

        The Air Force performed an operational and programmatic risk
    assessment of the impact of a reduced B-52 force structure informed by
    the Air Force 2005 Capability Review and Risk Assessment and of
    planned/programmed modernizations and improvements across the entire
    Global Strike portfolio. This assessment concluded the proposed B-52
    force structure/Global Strike portfolio met any single Combatant
    Commander's Operational War Plan or Major Contingency Operation's
    requirements.
        The money gained from the B-52 drawdown will be used to
    aggressively recapitalize and modernize the remaining bomber fleet. The
    modernized bomber fleet will be more lethal, responsive, and survivable
    as a result of planned investments in advanced weapons, increased
    accuracy, integrated data links, improved connectivity, improved threat
    awareness systems, low observability upgrades, and improved electronic
    countermeasures.
        Additionally, the impact of this reduction is currently being
    assessed as part of the PDM-directed U.S. Strategic Command B-52 Bomber
    Force Structure study.

        Senator Levin. Can you just briefly, since my time is up,
    tell us why that decision was made?
        General Moseley. Sir, we have a long range strike portfolio
    that we're looking at in three phases. The first phase is to
    bring the existing bomber fleet up to as high of a mission
    capability rate as we can, the B-1, the B-2, and the B-52. We
    have, I believe, close to $3 billion in that, in data links,
    pods, sensors, and electronic warfare capabilities, to bring
    those airplanes up, like we did with the B-1, to bring the
    fleet size down to 60, with 7 additional ones, so we could
    spend the money on the existing combat-coded airplanes.
        Phase two of that is to look at a new program, which we are
    in the process of doing. The QDR validated that with an initial
    operational capability (IOC) of a new platform, at 2018, which
    may be unmanned, or it may be manned, or it may be both. We're
    beginning to work our way through that.
        Then, phase three is out in the distance, relative to
    technologies on exoatmospheric or hypersonic propulsion.
        The first step is the phase one, to get the existing bomber
    fleet the right size where we can spend the amount of money we
    have, and keep the combat-coded airplanes viable.
        Senator Levin. Thank you.
        Thank you, Mr. Chairman.
        Chairman Warner. Thank you.
        Senator Inhofe.
        Senator Inhofe. Thank you, Mr. Chairman.
        This morning I talked to the Guard Association. I shared
    with them my thoughts that I shared with each one of you
    individually in my office. I just wanted to get it on the
    record and keep talking about this.
        These hearings bother me. We sit around and try to say,
    what is our need going to be 10 years from now? We're never
    right. I served 8 years in the House, and 11 years in the
    Senate. In the House Armed Services Committee, in 1994, we had
    someone testify that in 10 years we would no longer need ground
    troops. [Laughter.]
        We're sitting here right now, recognizing how wrong we were
    at that time, and I don't care how smart we say we are now,
    we're not going to guess this right. I think the only answer
    is, something I brought up 6 years ago during the first
    Rumsfeld confirmation hearing, and that is, if you looked back
    historically for the last century, the defense budget has
    equaled about 5.7 percent of the gross domestic product (GDP).
    It went down during the Clinton years, down to 2.9 percent.
    We're at about 3.8 percent right now. I think we're going to
    have to look at the overall picture, because if we sit here
    right now and try to do something with our lift capacity,
    anticipating where our needs are going to be 10 years from now,
    or with the F-22 or the JSFs, or with the non-line-of-sight
    (NLOS) cannon, we're going to guess it wrong. So, what we need
    to be doing is getting everything so that, no matter what
    situation we're facing at that time, we're going to be there.
        I'm going to be striving for this, Mr. Chairman.
        On the C-17s, last year we went through this thing, and we
    talked about going up to 220. Then, we find out that even right
    now--and I talked to General Schwartz--he said that today we're
    flying the C-17 at 160 percent of our planned utilization rate.
    I think you all would agree that General Schwartz is correct.
    Yet, we come up with the QDR in--which coincidentally happens
    to be the same as the Mobility Capability Study--saying no, we
    just need 180. I know this is wrong.
        Now, I'd like to have your thoughts about this. You know,
    do you think that they took into consideration the utilization
    rate when they came up with the recommendation that, ``No, we
    think the 180 is going to be adequate''? Or is it just that our
    top line is too low, and we just can't do all the things we're
    supposed to be doing? What are your thoughts on that?
        Secretary Wynne. I think that they took into account the
    total mobility assets in a portfolio analysis, and they
    presumed that it would maintain the mission capability rate
    because of increased maintenance activities along. So, they
    essentially took a capability analysis and broached it with a
    capacity analysis.
        We have some of our aircraft that are on legislation
    restriction. We cannot retire them and we are working our way
    through some of that. That impinges upon where the capacity
    comes from that would factor into this C-17 decision.
        That having been said, we're also looking for a way to get
    light cargo aircraft into the game. So, this whole C-17, and,
    oh, by the way, as the C-17 decision looms, we're finding
    interest overseas in the airplane, not only from the United
    Kingdom (U.K.) for additional airplanes.
        Senator Inhofe. But you're making my case, Mr. Secretary. I
    mean, yes, I understand, with the light cargo aircraft and the
    Army's version of that, also, it's going to be necessary. Their
    needs for this are very obvious and I agree with that. But the
    point is, not at the expense of the C-17 program.
        My first year in the House was when they started the C-17
    program. Kind of like the B-1 and the B-2, we really went
    through it, and we ended up with this thing that far exceeded
    our expectations.
        Secretary Wynne. Right.
        Senator Inhofe. Do you have any comments about that, real
    brief, General Moseley?
        General Moseley. No, sir. The Mobility Capability Study did
    include some surge scenarios, but what it did not include was
    the Army Stryker system and the modularity that's out beyond
    the window of the study. So, there's another piece of this that
    will be in play.
        Senator Inhofe. Okay, I appreciate that.
        General Moseley. But, Senator, with the fixing of 112 C-5s,
    without the ability to retire them or do anything to the C-5
    fleet, out of the Mobility Capability Study came a range of
    strategic airlifters that gave us about 300. That's the 180
    program of record for the C-17 and 112 C-5s.
        Senator Inhofe. I understand that. Last weekend, several of
    us--Senators from Utah, Georgia, and myself--went to the three
    air logistics centers (ALCs) in Georgia, Utah, and Oklahoma. We
    saw the results of this setting aside the $150 million. This
    leads me into the next question and the results are just
    incredible. I would invite both of you, either personally to go
    and see this for yourselves, or make sure your staff adequately
    briefs you on the success rates. Just issue by issue, the
    grounding due to parts has decreased by 37 percent, bettered
    our flying goal hours by 922,000 hours, the rate of aircraft
    incidents has dropped. Then the most important thing is your
    flow days. The flow days at all three--now, it was true with
    KC-135s in Tinker, but also with A-10s and C-5s in Warner
    Robins and Hill--we just about cut those flow days down in half
    right now. That means we have 50 percent more of those in the
    air right now, saving lives and performing their functions.
        So, I would say to you that I would like to reconsider this
    whole notion of putting the $150 million back in the working
    capital fund. Now, you can all say, ``Yes, it's going to be
    there, and the successes in the three ALCs are due to that.''
    But, in fact, that's not the case, because your money is in
    jeopardy if it's in the working capital account. I can point
    out cases. I don't need to, both of you know that.
        Now, what do you think about getting this back in its own
    separate bucket and out of the working capital account?
        Secretary Wynne. Sir, this is a very detailed subject. I
    can tell you this, that we are so proud of our depot personnel
    for the efforts that they have done. I have personally gone to
    Warner Robins and seen what they have done, and gotten briefed
    by the other two while I was there. They have been the genesis
    of AFSO-21, and springing it on the entirety of the Air Force.
        This is one of those cases where they have used the
    invested capital in the very best way to focus their attention
    on how to do it better, and actually gave a lot of strength, if
    you will, to the Mobility Capability Study about the goodness
    of the maintenance activity to maintain the capacity.
        All of this is working around to your question. I think, no
    matter where the $150 million lies, we will use it right.
        Senator Inhofe. I would agree with you, if we know for a
    fact that the $150 million is going to be there, as it was set
    up to be there, all the way from 2004 to 2009, then I would
    agree wholeheartedly with you. I'm not saying this in a
    critical way of you. I'm just saying that that's a success
    story.
        Secretary Wynne. Oh, yes.
        Senator Inhofe. The very thing that you saw at Warner
    Robins, you would see the same percentages, in terms of flow
    days, both in Utah, as well as Oklahoma.
        General Moseley, any comments?
        General Moseley. Yes, sir. I would agree. Sir, there is
    another initiative that we're getting close to being able to
    talk to your staff and you about, which is a different scheme,
    through Air Force Materiel Command (AFMC), to fund the depots
    upfront and provide the money to General Carlson at Wright-
    Patterson, so industrial enhancements or growth at the depots
    would not be dependent on the major command (MAJCOM) end of
    your money, but we would fund it upfront. That's to the tune of
    $2 or $3 billion over the FYDP that we hand to AFMC to be able
    to manage the real property better than we have in the past. We
    have some information technology opportunities here for
    visibility on movement of the money that's going to make this
    possible.
        So, this is exciting to me, because it lets us get at these
    things upfront, instead of waiting until the end of the year.
        Senator Inhofe. Yes. My time's expired, but I would hope
    that you really take a good look at what is happening at those
    three locations. It's pretty miraculous.
        Chairman Warner. Thank you very much, Senator.
        At this time, I must depart, as did Senator Levin, to go to
    our markup, but I shall be back. Senators McCain and Inhofe,
    it's in your able hands with these two gentlemen.
        Secretary Wynne. Thank you, sir.
        Chairman Warner. Senator Roberts, you're next.
        Senator Roberts. I note, Mr. Chairman, you indicated it was
    just Senator McCain and Senator Inhofe, not myself, which I
    certainly appreciate. [Laughter.]
        I have my hands full? Yes, okay. All right, thank you. Mr.
    Chairman, thank you very much.
        I have a rambling-rose question that Senator McCain will be
    interested in. It's about tankers. General Moseley, I want to
    thank you for coming out to McConnell last August. We were
    talking about the three studies that were going to be held at
    that particular time, the analysis of alternatives (AoA), the
    Mobility Capability Study, and the fleet viability study. Let
    me toss a bouquet to Senator McCain. I don't think any of you
    said--perhaps maybe one or two of them may have been done--
    without his insistence that we do this right in regard to
    tankers. I don't think that would have happened and I think
    we're in a better position to at least take a look at the
    challenges that we have.
        I don't need to be telling you about the importance of
    tankers in regard to our global reach. I understand that. We
    want to be of help to you. My question to you, which is the
    last thing that I'll say, is, is there anything we can do to
    help you in this endeavor?
        But General Kelly went over to the House, on Tuesday, and
    he testified before the House Armed Services Projection Forces
    Subcommittee, that to buy 12 next-generation tankers next year,
    at costs ranging between $150 million to $200 million per
    aircraft, it's going to take 38 years to replace the KC-135
    fleet capability. Now, that's about $1.9 billion to $3.2
    billion a year. I don't know how we do that. He indicated that
    38 years--and if your average aircraft today, or tanker, is 46
    years old, that's an 85-year-old airplane. I can't imagine
    anyone, other than maybe Jim Inhofe, flying a plane like that.
    He flies planes, and the propeller drops off, and he still
    lands. It's an amazing feat. But I don't think even Jim Inhofe
    would do that.
        These planes were started back in the Ike era. I still like
    Ike, you know, being from Kansas, but I just don't really think
    that that is the answer. So, we need, really, to answer this
    challenge, if we possibly can.
        By the way, the Mobility Capability Study indicated that
    there are four domestic aircraft that would qualify, and three
    that are nondomestic like Airbus. I just want you to know that
    the Airbus issue, with the EU subsidy, to me, is like the Dubai
    Port Authority issue to many others in Congress. So, just
    consider that for the record.
        There is a Defense Science Board that met a couple of years
    ago that said, ``No problem with the tankers.'' I doubt if any
    of the scientists have ever been in the tanker. There is the
    AoA that was put on hold for a year, for obvious reasons--and I
    understand that was conducted by RAND and the Air Force. I
    don't know if they ever got on a tanker. But I do know somebody
    that did and it's the husband of a young lady that works in the
    pharmacy at Bellehaven--close to where I live--and her husband
    is age 32, and the tanker that he was flying is 52. Every time
    I would get my prescription for my various maladies, she would
    look at me and say, ``I know you. I've seen you on
    television,'' mainly because we both had the same haircut and
    we can--you know, people understand who we are. So,
    consequently, she said, ``My husband's going to get out of this
    business. He doesn't think that aircraft is safe, and he's the
    pilot.''
        So, I guess what I'm asking is, how on Earth do we match
    this tremendous cost challenge that we have and still maintain
    the global lift? We have the three studies that are completed,
    and we're going to do it the right way this time. So, how can
    we be of help to you so we can get there from here and we don't
    have an 85-year-old aircraft sitting somewhere that can't fly?
        There's a rambling rose for you. I'm talking to General
    Moseley and thank you for all you've done on this issue.
        General Moseley. Sir, thank you. The AoA and the other
    studies are done, and they're in the DOD. I've not been privy
    to read the entire thing. I've read the executive summary. But
    they're in the DOD.
        The program is on hold now by the Deputy Secretary of
    Defense. When he releases that, then there will be an
    opportunity for release of a request for information (RFI)
    which will then begin the upfront, visible, competitive process
    to see what's possible out there with a set of options.
        We asked, this morning, to refresh us, or confirm to us,
    that there are no options that are off the table, that now, as
    we go through the RFI, and the way the RFI should be written,
    and the request for proposal (RFP) that comes after that, that
    OSD will help us with, that nothing is precluded or off the
    table or any set of options.
        Senator, we're anxious to be able to move on this program,
    but we're also anxious to be able to move on this program in a
    way that the committee's comfortable with and with full
    transparency and competitive notions of what's next.
        Senator Roberts. How many tankers on a given day are
    nonmission capable because of maintenance repairs? Can you give
    me an idea on how many of these maintenance repairs you would
    characterize as unscheduled?
        General Moseley. Sir, let me take that for the record and
    get you the accurate number.
        Senator Roberts. All right. I'll be happy to.
        [The information referred to follows:]

        Since January 2006, an average total of 168 tankers (KC-10s and KC-
    135s) per month were nonmission capable for maintenance repairs. These
    repairs include scheduled maintenance inspections and programmed depot
    maintenance. Of the 168 nonmission capable aircraft, approximately 57
    were nonmission capable for unscheduled maintenance repairs.

        General Moseley. Sir, I'll tell you, the depots have done a
    great job. I used to be able to say that a third of our tankers
    were in depot, broke, and it took 400-plus days to get them
    out. That's not the case. Senator Inhofe is right, we're down
    to less than 200 days' flow through the depots. So, the guys
    out there maintaining these things have done a great job.
        Senator Roberts. I'm going to yield back the remainder of
    my time.
        Senator McCain [presiding]. Senator Chambliss.
        I apologize. Senator Thune is next. I apologize, Senators.
        Senator Thune. Thank you, Mr. Chairman.
        I, too, want to thank our witnesses, Secretary Wynne and
    General Moseley, and echo what has already been said, and
    express my enormous appreciation to the men and women that you
    introduced today for their extraordinary service to our
    country, as well as all the folks who are serving under your
    command.
        Secretary Wynne and General Moseley, I have a question that
    I'd like to direct to both of you. I would like to have you
    explain to me your policy on how the Department plans to deal
    with the rising problem of aviation congestion and airspace
    capacity. As airspace capacity in many regions of the country
    becomes more congested, and unfettered, open airspace become
    more scarce, what actions is the Department taking to work with
    the Federal Aviation Administration (FAA) to establish
    additional military operations areas (MOAs) in restricted
    airspace so that we preserve the valuable training areas for
    the future?
        Secretary Wynne. Senator Thune, I know that we have been
    constantly in touch with the FAA to make sure that we have open
    airspace where we need it. This occasionally, as you point out,
    causes reroute of commercial flights, and adds to their clock,
    if you will. But I will have to take, for the record, the
    specifics of the interaction, because it usually goes on at the
    local level, when a training thing--there's a notice to airmen,
    just like when we fire a missile downrange, that we have a
    restricted airspace. The commercial people have been very
    cooperative with us and the FAA is very cooperative with us in
    taking care of that.
        So far, it has not impacted the training, that anybody has
    advised me of. But I must tell you, I must get an answer for
    the record for you on that.
        [The information referred to follows:]

        Air Force use of the National Airspace System (NAS) is determined
    by its operational requirements. These requirements necessitate certain
    volumes of airspace within close proximity of our installations that
    possess the appropriate characteristics (chaff, flares, supersonic) and
    associated ground assets. This airspace is to be used for the exact
    amount of time required to perform the training activities. With the
    support of the Federal Aviation Administration (FAA), the Air Force is
    continually developing and refining this dynamic training space in
    order to accomplish our fundamental mission to train and equip our
    forces. At this time, we have over 30 actions pending in collaboration
    with the FAA that delineate new or modified airspace requirements.
        The DOD is actively engaged with the FAA through the Policy Board
    on Federal Aviation in advocating our needs while balancing the
    increasing demands of the commercial and general aviation community.
    The unique nature of Air Force activities in the NAS will be planned
    for as a vital component of the Next Generation Air Transportation
    System Concept of Operations, which is currently in development. The
    Air Force will be an active participant in developing a dynamic
    paradigm for the future designed to meet our evolving mission needs.

        Senator Thune. General Moseley, we are already encountering
    problems with the FAA when it comes to permitting, for example,
    UAVs to fly in anything but unrestricted airspace, for safety
    reasons. I guess my question is, is it not in the best interest
    of the Air Force to begin to identify and establish additional
    military aerial training areas sooner rather than later?
        General Moseley. Senator, let me go back and answer. I
    think I can help with part of your first question. We have
    ongoing dialogue with the FAA, because we fly most of the
    military things inside the continental United States. We deal
    with them as a partner. They have some unique challenges in the
    contemporary civil aviation world, because now people don't
    necessarily fly on established jet routes. Because of GPS
    navigation, they can fly point to point off of established jet
    routes. So, it makes their airway traffic control system
    incredibly more complicated, which then complicates our
    training ranges and space.
        Sir, we have multiple bogeys. One of my first activities
    was to get a range view and a range concept of operations put
    together, in partnership with the Navy and the Army, on
    possible opportunities for joint enhanced composite force
    training. What does that mean for us in the future with
    aircraft that need bigger footprints, not less footprint?
        Also, the UAV thing has been a bit of a challenge, but we
    have been able to work memoranda of agreement with the FAA to
    cross corridors. But that will always be a challenge. It would
    make it easier if we were operating inside military airspace
    with the airplane, which is what makes the big ranges very
    attractive to us in Utah, Arizona, and Nevada, but it also
    allows us, with the MOAs, to begin to look at these new
    locations of the UAVs to do exactly what you've said, to be
    able to partner with local entities and local air traffic
    centers to be able to work with the FAA as a combined team.
        So, sir, this is on the top of our list every day: ranges
    and access to ranges, supersonic airspace, bombable ranges, and
    ranges to conduct joint activities.
        Senator Thune. I would just add, because I think that the
    FAA study of the issue reveals that aviation congestion, as you
    have noted, around major airports and busy airspace around and
    between metropolitan areas, is reducing the amount of available
    airspace capacity. It would certainly seem to me that it ought
    to be a matter of policy now to begin funding and claiming
    available airspace for training before the airspace is gone,
    because clearly some of the demands and the needs that we have
    are exceeding the supply of available airspace and creating
    these types of problems between the FAA and the military.
        Just one other question. I would like to come back to
    something that Senator Inhofe was talking about, and associate
    myself with some of his remarks with respect to the funding
    challenges that we face. I will preface it by saying that I
    just believe that the defense of our Nation in providing the
    troops with the equipment and resources they need to execute
    their mission has absolutely got to be our top priority. It's
    been referenced to some degree already that the number of C-17s
    and F-22s place them in the low-density, high-demand category.
    Secretary Rumsfeld was once quoted as saying that ``low-
    density, high-demand asset is just a euphemism meaning we
    didn't buy enough of what we need.''
        I guess my question is, is this situation any different, or
    are we going down that same road again?
        I would also associate myself with the comments that were
    made with respect to the need for adding to, or increasing,
    that top-line number, the amount that we're spending as a
    percentage of our GDP on our military, because I think that is
    a very serious challenge, as you look around the planet, in
    what our future needs are going to be.
        But could you speak to that particular comment, the low-
    density, high-demand asset, and it just being a euphemism,
    meaning we didn't buy enough of what we need, and whether or
    not this is a situation that's any different from what we've
    encountered in the past?
        Secretary Wynne. Senator Thune, I know that he made that
    comment. I think that the Mobility Capability Study tried to
    figure out what was going to be the acceptable risk within the
    context of the whole mobility portfolio.
        As to the F-22s, we've tried to do a comprehensive tactical
    fighter look. I would postulate that there are extremes in
    which you could find yourself with quantity having a quality
    all its own. But the studies done to date demonstrate that your
    Air Force, in accepting the FYDP that we have here has no
    desire to cede its dominant position in the world.
        Senator Thune. I thank you very much for your testimony and
    for your response.
        Mr. Chairman, I yield back.
        Senator McCain. Senator Chambliss.
        Senator Chambliss. Thank you.
        General Moseley, thanks for introducing these four great
    men and women over there. I know they're representative of all
    the thousands and thousands of folks that serve under the two
    of you. We, needless to say, are very proud of not just these
    four, but all those great men and women.
        I was just talking outside. I had to step out for a minute
    to visit with a long-time family friend, who is the father and
    stepfather of two Air Force special operations folks. He was
    telling me that his son and daughter-in-law are deployed
    somewhere in the world today. He doesn't know where, but they
    have a pretty good idea. He, just like all of us, is very proud
    of those folks, as well as these folks.
        I want to associate myself also with the remarks of Senator
    Inhofe, relative particularly to what's going on at our ALCs.
    This $150 million in the President's budget that is earmarked--
    and I hate to use that term--but that's set aside, let me say
    that, for depot maintenance, and has been for the last couple
    of budgets, that somehow it gets transferred into working
    capital, and all of a sudden those of us who visit our depots
    on a regular basis understand that we're not always getting the
    amount of funding that we need to maintain and in the case of
    Robins Air Force Base, F-15s, C-130s, C-5s and other items. But
    I would urge you, as Senator Inhofe said, let's see if we can't
    make sure that we maintain that $150 million going to the
    depots.
        General Moseley, I'd like to talk to you about our
    strategic airlift capability. I see that the number one request
    in the Air Force's unfunded priority list is the national
    defense airlift fund, which includes funding for 7 new C-17s, 4
    new C-130Js, and 16 C-130 center wingbox replacements. I am a
    strong advocate for buying new aircraft. Secretary Wynne, you
    and I have had this conversation many times. I know we need to.
    The C-17 and the C-130J are great weapons systems. All you have
    to do is ask the men and women that are flying them, and look
    at the missions that they're carrying out today in theater, and
    you know what great systems they are.
        However, I also believe that in order to make good use of
    the taxpayers' resources, we must also look at modernizing the
    equipment that we have. It's my understanding that the two
    studies recently completed by DOD, the QDR, as well as the
    Mobility Capability Study, both affirm that the Nation's
    airlift requirements could be met with 180 C-17s and 112
    modernized C-5s. My sense is that that may be technically true,
    although those numbers, on the C-17, particularly, don't leave
    much margin for error. I would like the assessment, General
    Moseley, from you on what you think about those particular
    numbers put forth in those studies.
        General Moseley. Sir, we're restricted from language doing
    any divestiture of the C-5. So, we have the 112 C-5s, which are
    the 50 C-5Bs, the 60 C-5As, and the 2 C-5Cs. We have the
    program now for a complete Avionics Modernization Program (AMP)
    of the entire fleet, and we have the Reliability Enhancement
    and Re-engineering Program (RERP) that were conducting the
    tests on a couple of these, and an A model, which will take us
    2 or 3 years to get the data on that. That money is laid in
    with the program to completely upgrade all of the C-5s, As, Bs,
    and the two Cs.
        Senator, what I don't know is at what point does even an
    AMP'd and RERP'd C-5A become so expensive to fly, or the
    readiness rates or the in-commission rates or the availability
    on the aircraft, become troublesome for us in the future? So,
    I've asked the staff to take a look at a program so that we can
    discuss with the committees, and with others on the third
    floor, about a full AMP on all of the airplanes, and perhaps
    look at only pylons and new engines for the B models and the
    two C models, and see what that would do. Sir, I don't know
    what that would do yet.
        But if you have 112 full-up C-5s, and you live with the
    conditions and the assumptions of the Mobility Capability
    Study, the program of record for the C-17 is 180. The challenge
    with that is, we are using these aircraft at a rate that we
    didn't program, no different than the Navy's F-18s or the
    Army's vehicles. We're flying the C-17 like a C-130 now. We're
    using it for intertheater lift, as well as intratheater lift.
    We're using it as flying hospitals. We're using it to do things
    we never envisioned prior to this conflict that a strategic
    airlifter would do. The airplane is proving itself to be gold
    in doing that.
        The downside is, we're burning the airplanes up at a much
    higher consumption rate. That's why we put those aircraft into
    a general mobility fund, on an unfunded priority list, to see
    if there's not some assistance that we could get.
        Senator Chambliss. It's my understanding that the Air
    Force's fleet viability board found no major structural or
    corrosion issues for the C-5A. Is that correct?
        General Moseley. At the time of the study, no known. Yes,
    sir.
        Senator Chambliss. Okay. It seems to me that, given that
    the Air Force's own studies have validated that C-5s have 70
    percent of their usable service life left in them, and that
    modernization of the entire C-5 fleet produces double the
    return on investment, that that should support modernizing C-
    5s. Would you not agree with that?
        General Moseley. Sir, for sure the avionics modernization
    program, which will get us a much more reliable A, B, or C is a
    good thing and, as I said, I've asked to have some more data
    and to take a look at the re-engining piece, because I'm not
    sure.
        Senator Chambliss. Okay. Is it your intention now to move
    ahead with the modernization of the C-5?
        General Moseley. Yes, sir.
        Senator Chambliss. On the C-130, I know that our mix in the
    multiyear procurement on the C-130J is nine and four, Air Force
    and Marine Corps. Last year, we had some changes in that. We
    went to eight and five, and also advanced procurement on eight
    and five for this year. Would you give me your thoughts on what
    that proper mix might be? I'm sure, when we have General Hagee
    here, we'll talk about this with him, also.
        General Moseley. Sir, we're partnered closely with the
    Marine Corps on the recapitalization of their airplanes also.
    There's not been any of this that we haven't done together.
    Whether it's nine and four, or eight and five, our partnership
    with him is solid and I have no issues with going from eight or
    nine to four or five, because we're still operating the same
    airplane in a joint sense, and we're still in this together.
        Senator Chambliss. Thank you, General and Mr. Secretary.
        Senator McCain. Thank you very much, Senator Chambliss.
        Mr. Secretary, I'm looking at a chart here that shows,
    historically, what I know you're familiar with, and that is the
    cyclical aspect of defense spending. It seems, about every 10
    years, we go through an increase and then a decrease. It's
    obvious that the deficit, even including information we
    received today, is going to be extremely large and, if history
    means anything, we are going to see a decrease in defense
    spending, or at least a leveling off and that's not counting
    the continued cost of the war in Iraq and the global war on
    terror, et cetera.
        Have you thought about how you're going to procure the F-
    22A, JSF, new tankers, new cargo aircraft, new combat search-
    and-rescue helicopters, UAVs, and other programs? Have you
    thought about how you're going to pay for all of this? Do you
    think that we may, at some point, run into a brick wall here?
        [The information referred to follows:]

        Secretary Wynne. Senator, first of all, I think your
    cyclical chart is dead-on and I've told my colleagues, about 6
    years of growth followed by a topping off. My fear is that we
    are going to have to really look hard at all of our follow-on
    procurements, and perhaps department-wide, to take a look at
    exactly how you prioritize and, what you really need, to fight
    the war. Of course, as the war drags on, as we've talked about,
    the secondary effects of wear and tear will really begin to
    show. I share your concern, and right now I can tell you, from
    my opening comments about trying to get 6 pounds into a 5-pound
    sack, I fear the day when I have to get 6 pounds into a 3-pound
    sack.
        Senator McCain. Let me suggest that you embark on a study
    looking at the cost of all of these new acquisitions, which I
    certainly don't argue are very necessary. I also think you
    ought to crank in a little historical data, particularly recent
    years, over the escalation in costs that's been associated with
    every new weapon system. I don't mean just Air Force. We had a
    hearing yesterday about the Future Combat Systems, which has
    increased more than 50 percent in cost, although there have
    been some changes in the kinds of equipment they're procuring.
    But, still, we are seeing escalating costs throughout. JSF cost
    has gone up 14 times, and we're now spending--what? At one time
    the Air Force was going to purchase 750 F-22s, now it's $320
    million a copy. We're down to 180. I think that Congress and
    the American people should be warned, sooner than later, that
    we're going to have to make some tough choices.
        I look at all of these new requirements, and it's not only
    the new requirements, it's replacement for existing equipment.
    Small example--every time I go to Iraq, I'm flown around by
    Guard C-130 personnel. Those C-130s, as we all know, are
    wearing out at a far higher rate than we had ever anticipated,
    particularly Guard assets.
        So, particularly where the Air Force is concerned, I'd like
    you to embark on some kind of study, using historical data, on
    increases in cost. There's not been one system that's come in
    under cost. We all know that. Cranking in some kind of
    inflationary aspect of it.
        Secretary Wynne. In fact, sir, I would offer that we even
    went to a buy-to-budget. What tends to occur is, yes, it's
    great to talk about buy-to-budget, but what happens is, the
    costs go up, your quantity comes down. As your quantity comes
    down, you end up in a program death spiral. So, your point is
    extremely well taken, that these things are just not forecasts,
    because, you know, we're hesitant to forecast that. But I think
    that's a prudent thing to do, sir.
        Senator McCain. Maybe you could bring in some of our
    friends at RAND and other organizations that could provide you
    with some estimates. Because if we're going to have to make a
    decision between F-22 and JSF, I'd like to make that decision
    sooner rather than later. I'm not saying we are. But I just
    don't see how we're going to afford replacement of existing
    equipment, plus all of the new systems that obviously, there is
    a need for. I don't question the need for them. I'm a little
    cynical about the F-22 now being just an air-to-air fighter.
        I'm very worried about it. I'd like for you to embark on
    some kind of study and drop me a letter saying what you intend
    to do. It really should be done DOD-wide, but I think a lot of
    the new programs, understandably, are in the United States Air
    Force.
        Secretary Wynne. You're right. Our focus is
    recapitalization, so we are, understandably, underway here. The
    F-22 has dropped a joint direct attack munition (JDAM), by the
    way. I think some of the precision aspects are there. But what
    General Moseley and I wanted to do was to make sure we set a
    baseline that we did not have the technologists simply piling
    on. We could really wring out the costs of that air fleet. So,
    you're correct in that assessment.
        Senator McCain. There is just one other issue I want to
    raise with you. In the 1980s, we had fixed-price contracts. Now
    we have cost-plus contracts, with incentives. These incentive
    payments have been over 90 percent awarded, even though both
    scheduling delays and cost escalation have occurred. We need to
    stop that. People should be able to enter into contracts for
    the product, whether it be of a widget or an F-22, and if they
    don't meet the scheduling--and I know what the answer is,
    ``Well, the Air Force demanded changes.'' Well, stop demanding
    changes. If you haven't--if you can't figure out what you need
    when you enter into the contract, then don't give them the out.
    I think this whole issue of incentive fees, certainly according
    to--90 percent of the available award fees are almost--$850
    million has been spent. These are on programs that are behind
    schedule and over cost.
        Just one other thing I want to mention to you. I still
    don't think we're giving enough priority to the UAVs. When we
    lose a pilot that's captured, it has a huge effect. We can
    remember when one pilot was captured in Lebanon, how that
    skewed things. We have a border that, despite the desires of
    some of my colleagues, we're not going to be able to build a
    wall all the way across, nor is there a need to. But a UAV can
    loiter, as you know, for 12 hours, can surveil, and provide
    information so that we can counter either good people or bad
    people trying to come across our border illegally.
        I just don't see enough on the UAV front. I sometimes
    think--I'm sorry to--I'm not a conspiracist, maybe they don't
    have a strong enough lobby here--that the uses of UAVs are
    phenomenal, both in combat and as far as border security. One
    of the big issues that we're debating right now is, how do we
    secure our borders? I don't know a cheaper way than UAVs. Now,
    that's not the only answer. But it seems to me that a big part
    of the solution is to be able to detect individuals or goods or
    whatever is coming across our borders.
        So, I'd like you to go back and look and see whether we're
    doing enough in the UAV area. They're still relatively
    inexpensive. The uses of them--not according to me, I'm not
    that smart--but everybody I talk to says that this is an arrow
    in our quiver that can be of tremendous utility in a broad
    variety of areas.
        So, we seem to be moving much more slowly in both the
    development, procurement, and especially deployment of UAVs.
        Secretary Wynne. Sir, we have the premier UAV commander, a
    former Navy pilot, here today. I think he would jump up--and
    I'm surprised he hasn't jumped up in applause. These
    Predators--and other UAVs, lighter ones--have proven
    themselves. Our inventive soldiers and airmen, the tactical air
    control posts (TACPs) have learned how to use them in concert
    with other assets. So, you are right, we are getting tremendous
    coverage on the battlefield. I don't know how that would be
    translated to a border situation, but I suspect, as you
    probably suspect, that we are using it in some border
    situations right now--not necessarily in this country, but in
    other countries, trying to maintain some control over who comes
    in and who comes out of our battlefront.
        That having been said----
        Senator McCain. I'm told that they have been effective in
    Iraq on the Syrian/Iraq border.
        Secretary Wynne. Yes, sir.
        I would tell you that we have been wanting to--and I know
    the Special Operations Command has been wanting to--expand the
    Predator fleet, at least. We also have tried to put some money
    in for expansion of UAVs. In total we have, I think, $2
    billion----
        General Moseley. A little over $2 billion.
        Secretary Wynne.--over the course of the FYDP. I mean, we
    are onsides, if you will, on that one, in the sense that we
    believe they are a future for us.
        Senator McCain. General Moseley?
        General Moseley. Sir, I agree. We have a desire for 189 of
    the Predator A models, which is the MQ-1. We've taken delivery
    of a number of them. We've lost 58 of them, for a variety of
    reasons, shot down or training incidents with them. So, we're
    looking to recap that entire fleet back out to 189 of the
    Predator As, the MQ-1s.
        The MQ-1, which is what our squadron commander's squadron
    flies, is a good little airplane. When you hang missiles on it,
    you lose station time, you lose 4 hours per pylon per missile
    but that's not the real issue. It offers some incredible
    capability with the infrared, the electro-optical imaging,
    which is the application that you're talking about, perhaps, at
    looking at a border. We have 60 of the bigger ones, the MQ-9s.
    We have one in combat now in one place, and one about to be in
    combat in another place and we're beginning to take deliveries
    of the operational ones now.
        The Global Hawks are a different issue, I believe, than
    what you're addressing, but we'll have a program of 50 of
    those. We have two of the operational birds in combat now, and
    we've brought the test birds back to be able to get back into
    that program.
        Sir, we've begun to partner, in a more robust manner, with
    the Air National Guard on this to look at building out to 21
    orbits. Because one of the fascinating things about this that
    we've learned since the beginning--well, since the spring of
    1996--is that we can fly them in combat in Afghanistan or Iraq.
    His squadron is at Nellis, in Las Vegas, and he flies every day
    and every night in combat in Afghanistan.
        So, the reachback to this thing provides incredible
    opportunities in combat, but also in perhaps a homeland defense
    or homeland security role, which is why we had talked to
    General Rataczak about an Arizona application and a Texas
    application first, because we can get additional orbits. We're
    continuing to engage with him on opportunities to do that. We
    have six of his Arizona Guard guys now trained, three pilots,
    three sensor operators, and we're working our way through the
    Guard Bureau and with him to see if we can't incentivize more
    manpower moves to be able to stand that up. Those were the
    reasons those two States were picked first.
        Senator McCain. Again, I'm not putting in a plug for
    Arizona, but there are hundreds of miles of literally trackless
    desert--New Mexico, Texas, California, all across our border--
    and we're never going to have enough people to patrol it. It
    seems to me that, with all the emphasis that all of our
    colleagues, understandably, and America, are placing on the
    fact that we don't control our borders, that this is a tool
    that we need to use more of. I'm sure I've made my point.
        Secretary Wynne. Yes, sir.
        Senator McCain. I thank the witnesses.
        General Moseley. Sir, could I dogpile, just 1 minute? The
    other reason that I believe that Arizona and Texas--not because
    you're the Senator from Arizona--matters is because Fort
    Huachuca is there, and we can partner with the Army, with
    additional applications. Also, the Goldwater Rangers are there
    that we can train with folks out of Luke and out of Yuma and
    out of Davis-Monthan, which has the other assets that we need.
    Texas is the same, with Fort Hood and close to Fort Sill. So,
    we have applications not just from San Diego to El Paso, and El
    Paso to Brownsville, but we have co-located joint capabilities
    and ranges that we can get into and take this to a completely
    different level. They're live ranges that we can fire on, which
    make a big difference for us.
        Senator McCain. Thank you very much.
        Senator Talent.
        Senator Talent. Thank you, Mr. Chairman. I really want to
    associate myself with your comments, really pretty much across
    the board.
        Secretary, when you say you're trying to cram a 6-pound
    sack of potatoes into a 3-pound sack--and, by the way, I don't
    know what supermarket you're buying potatoes in. I haven't seen
    any 6-pound sacks. But you can certainly buy 10-pound sacks
    that you try and cram into a 5-pound sack and the pressures you
    get--at a certain point, when the pressure gets to be too
    high--it ends up actually costing you money. I was thinking,
    during Senator McCain's questioning, that if you have to
    reduce, for example, the number of platforms that you buy
    beyond a certain point, then, of course, the per-copy cost goes
    up. So, in order to save money, you reduce the number you buy,
    and then the per-copy cost goes up even more. So it's
    tremendously inefficient. The urgent can crowd out the
    important.
        You mentioned UAVs. We all believe in UAVs, but we have to
    have a new-generation strike fighter. So, in other words, if
    you don't have enough money, or you're putting it all into F-
    22, which I think, given what's happened with the Chinese, I
    mean, it's validated the requirement that you all think you
    need it, and then it's hard to find the money to fund
    important, but not as urgent, programs, like the UAV.
        So, all this argues, to me, in favor of a mixed approach
    where we really search hard and make the tough decisions, try
    and do better, in terms of reducing build cycles and the rest
    of it, but also get the top line up. I know Senator Inhofe was
    talking about that, as well.
        Senator Inhofe, I think, asked you all about the rate of
    usage of C-17. I just want to make certain you have a chance to
    address that specifically. My sense of it is that we're flying
    C-17 at a rate well above what we had anticipated; and,
    therefore, using the aircraft up faster, just to put it in
    layperson's terms. Would you agree with that? What implications
    would that have on your ability to have the necessary lift in
    the future?
        General Moseley. Sir, that's correct. Some numbers are 160
    percent above program rates, some numbers are 168 percent above
    program rates. But if General Duncan McNabb were standing here
    as the commander of Air Mobility Command, he would tell you
    that we're using the airplanes up a lot faster than we thought
    we would. The success of the airplane is a direct result of the
    design, because the airplane offers so much more capability and
    so many more options, because you can operate it as if it's a
    C-130, you can operate it tactically or strategically, you can
    convert it to a hospital, or you can fly it to do medevac
    missions. Therefore, it has become the gold standard of being
    able to move things in a theater, or to a theater, which is the
    direct result of the success of the airplanes and the crews
    that fly them, as we're burning them up.
        Senator Talent. I'm sure that bore on your decision to put
    attrition aircraft high up on the unfunded priorities list.
        General Moseley. Sir, just exactly as if Pete Schoomaker
    were standing here to talk about vehicles and tanks and up-
    armored Humvees, or if Mike Mullen were here to talk about F-
    18s or other assets, or Mike Hagee, to talk about other ground
    equipment, we're burning these things up, just like everything
    else.
        Secretary Wynne. One thing, sir, is that, from a
    reliability and structural analysis, once a crack appears, you
    can fix that crack, but it is highly likely that another crack
    will appear somewhere in that airframe. This is really the
    essence of wear and tear, and why you might, after you discover
    a crack, put it on flight restriction so it does lighter duty.
    If we're going to do that, we need those extra airplanes, then,
    to retain our capacity.
        Senator Talent. Yes, and I just don't think anybody
    anticipated that you would need C-17s so much for intratheater
    lift. We know how much it's being used within CENTCOM, and I
    just think everybody always thought of C-17 in terms of
    intertheater lift. But General Schwartz has told me that you're
    using it much more for intratheater lift, and that really
    wasn't a factor in the Mobility Capability Study. Do you want
    to comment on that at all?
        General Moseley. Senator, one of the other factors that is
    not a Mobility Capability Study issue, but it is our desire to
    get as many vehicles off the roads as we possibly can to
    prevent exposure to IEDs or hostile fire. So, our desire to get
    350 to 400 to 450 vehicles off the road, we can fly as much of
    that in C-130s or C-17s as we can. So, young airmen and young
    soldiers, like our senior airman back here, who has 100 or so
    convoys in combat, we can reduce that exposure by flying these
    assets. So, the C-17, again, is the gold standard for large
    amounts of that, and we never foresaw that.
        Senator Talent. Yes, and just because it's war, things are
    messy, and you don't foresee everything. I mean, the Mobility
    Capability Study was a snapshot, and a fair snapshot, based on
    assumptions that you have to make. But you don't always know
    what's going to happen in war, and you may have additional
    needs. Is that a fair statement?
        General Moseley. Sir, the other part is just the inherent
    flexibility of air power, that you can take the vehicles off
    the roads by putting it in a C-17 or a C-130, and preclude
    exposure to young soldiers along those convoy routes.
        Senator Talent. Yes. We've mentioned the top line before.
    This is one of a number of areas where resetting the force is a
    reality that we're just going to have to confront at some
    point. We all talk about the pressure of the budget. I think
    it's important to keep you all under some pressure, because we
    want you to be looking for reforms and making the tough
    decisions. But, at the same time, I don't think people should
    view this as something that's not within our capabilities or
    our economic abilities as a Nation. I know Senator Inhofe has
    talked about, and I talked about, you know, if we move the
    percentage of GDP that we're spending on defense up two-tenths
    of a percent, I think it would make it much easier to get the
    new platforms we need, as well as resetting the force.
        You talk about flexibility, but if the C-17 line should
    close, then that really does cut off our flexibility, does it
    not, in terms of additional purchases? So, it's a priority,
    would you agree, to keep that option available for the future?
        General Moseley. Sir, we have money laid into the program
    to keep the line and the tooling hot so that if we have to come
    back to that, it's $245-$265 million, I think. But that is a
    downstream issue and you don't know what you don't know, so I
    don't know how hard it would be to reopen a line.
        Senator Talent [presiding]. Okay. I'm not going to push
    you, probably, as far as I should, in terms of the budget
    submission. I do recall that in the early 1980s a decision was
    made to buy C-5Bs in lieu of developing C-17, and then, in the
    late 1980s, we had to reverse that decision, and reconstituting
    that pool of expertise, even though we had not actually started
    the program and produced the aircraft--was very expensive. So,
    I think this is just another situation of what I referred to
    before, that sometimes if the pressure becomes too great and
    the urgent crowds out the important in the long-term, it ends
    up actually costing you more money because we do have to meet
    these needs at a certain point.
        I'm now stating, I think, what we all probably agree with.
        That's all I have. I've just been handed a note asking me
    to put the hearing into recess rather than adjourning. I'm
    assuming that I'm now the chairman of the committee, by
    default. [Laughter.]
        So, I guess I'll go ahead and do that. I assume Senator
    Warner wishes to return and probably ask some more questions.
        All right, we know your time is very valuable. We
    appreciate it. I appreciate very much your service, as well.
    These are difficult decisions and difficult times. I have full
    confidence, though, in the ability of this country and our
    leadership to meet the needs of the future.
        I'll put the hearing into recess, and appreciate your
    indulgence, and I'm sure Senator Warner will be back soon.
    [Recess.]
        Chairman Warner [presiding]. Thank you very much. Again,
    Senator Levin and I apologize for the requirement to go
    upstairs. He may join me here momentarily. I wanted to finish
    up on one or two matters.
        I had a colloquy with the Secretary of the Air Force
    regarding the JSF engine, and the Secretary indicated that he
    would provide me and the committee with a more complete
    recitation of the procedures and the facts relating to
    consultation with our allies. I stress the need for that, Mr.
    Secretary, because as our industrial base shrinks--and in my 28
    years here, I have seen it--I might add another 5 to that, when
    I was in the Pentagon, so it's over 30 years that I've had the
    privilege of being able to participate in the process of our
    defense procurement--but it has shrunk, by necessity and for
    other reasons. We then have a dependence on our allies overseas
    who have an industrial base and I don't doubt that that base
    has shrunk, also.
        Consequently, I think we have to maintain the closest and
    best possible relationships we can when we enter into these
    joint contracts with our allies, to see that all aspects of the
    contracts are conducted in a manner in which they are, should
    we say, partners.
        Now, my understanding is that, in this contract, Great
    Britain, because of its significant financial contributions to
    the program, is really, in a sense, a full partner. Would that
    be a correct?
        Secretary Wynne. Without a doubt, sir, they are a full
    partner with us.
        Chairman Warner. Right. The other countries, although
    partners, are of a lesser--I don't think anybody's established
    a protocol, but they are very interested, and they're----
        Secretary Wynne. Certainly we value Italy and the
    Netherlands and all of our partners in this program.
        Chairman Warner. Surely. All right. That's fine. That's the
    reason that I'm going to have a special hearing on this in the
    very near future, at which time we'll ask the Deputy Secretary
    of the Defense, Mr. England, to be the lead witness, and, quite
    possibly he'll be joined--it's up to him--by yourself and the
    Chief of Staff, followed by panels, probably two panels, with
    those partners, to get their views, and then we'll allow the
    engine manufacturers themselves to come forward and give us
    information so that we can make a technical evaluation. So, I
    just sort of advise the community of interest of my program for
    that engine.
        Now, on the question of recruiting, I'm not sure that was
    covered fully, and I'd like to go back into it. Recruiters in
    the Active and Reserve components face significant challenges.
    Today, we received reports of shortfalls in achieving goals. At
    the same time, we want to ensure that retention of experienced
    enlisted personnel remains high. Could you give us the
    situation report on your Department, Mr. Secretary?
        Secretary Wynne. Sir, right now, with the exception of the
    Guard, which has some unfulfilled requirements, I think we're
    doing very well. Our recruiters are not having a problem. Our
    retention is very high. So, I think it's a credit, and it's
    something we need to guard in the future, to make sure that
    every airman has noble work and challenging work. Right now I'm
    very proud of all of that. I hope I'm not too corrected by my
    partner, the Chief of Staff.
        Chairman Warner. Chief?
        General Moseley. No, Mr. Chairman, we're online with the
    Active and the Reserve. The Guard, though, is lagging a bit
    behind. What we don't know is, we'll normally have a bump in
    the spring and the summer. We're not there yet, so we don't
    know what the end of the fiscal year will look like. But if our
    Guard is like the Army Guard, there will be some challenges out
    there. We will not get, probably, to 100 percent. We'll be
    above 90 percent. Sir, remember the Guard recruits locally so a
    Guard unit on the east coast is different than a Guard unit in
    Alaska. So we're having those dynamics across the board.
        But right now, the trend lines are positive, just with that
    bump in the Guard and we don't know what'll happen in the
    spring and the summer.
        Chairman Warner. Could you address the retention of Active
    personnel and Guard personnel to have a repeat enlistment for
    officers who wish to continue in service?
        General Moseley. Sir, our retention is high in the Active--
    --
        Chairman Warner. Is it above expectations or your
    projections? I know that the Army is experiencing that now.
        General Moseley. Yes, sir, we are. Please let me take that
    for the record, to get you the exact numbers.
        [The information referred to follows:]

        The Air Force measures retention by Average Career Length (ACL).
    The ACL is a measure that estimates how long airmen are staying in the
    Air Force. It is based on year-group retention over the previous 12-
    month period. The observed measure is compared to a goal, typically the
    historic average.
        Based on data at the end of September 2006, the enlisted ACL is
    12.34 years (124 percent of goal) and the officer ACL is 14.90 (110
    percent of goal). Note that during Air Force strength reduction
    efforts, additional losses obtained from force shaping programs are
    excluded from the ACL measure since they are not part of ``normal''
    loss patterns. Although overall retention is good, there are specific
    career fields such as medical and special operations that require
    special incentives to maintain retention and the desired manning
    levels.
        In the Guard and Reserve, we measure our success of retaining
    members through attrition rates, rather than retention rates like the
    Active Force. Retention does not have the same meaning for the Guard
    and Reserve as it does for the Active Force, and attrition rates
    provide a more comprehensive and applicable measure for the Guard and
    Reserve. The Air National Guard (ANG) once again remained below their
    enlisted attrition ceiling of 12.0 percent in fiscal year 2006 with a
    10.9-percent enlisted attrition rate; the officer attrition rate was an
    excellent 7.7 percent; and, the composite (officer plus enlisted) ANG
    attrition rate was 10.5 percent, reflecting a very motivated and highly
    experienced force.

        General Moseley. But in some of the career fields, we're
    seeing 110-120 percent, which is troublesome in a different
    way. The Active and the Reserve, we're not seeing issues. Only
    in a small percent of the Guard are we seeing the issues, and
    those are the non-prior-service first-term Guard. We're seeing
    a bit of a hiccup in retention and we're focusing everything we
    can on trying to hang onto those people.
        Chairman Warner. It's been my observation--I've been
    privileged to travel extensively to military operations
    throughout the world--flying with the Air Guard. I'll never
    forget one time in the Balkans campaign. I approached an Air
    Guard 130, and said, ``I'd like to go into Sarajevo,'' and the
    guy never blinked an eye, and he said, ``Let's go,'' and I
    went. I think I was the first United States Senator to go in
    there during those tragic operations that were taking place.
    There was sort of a civil war going on in that one city. I
    remember the day very well, because there was a tragic accident
    by another aircraft in that airlift.
        I just think the record of the Air Guard is exceeded by no
    one.
        Secretary Wynne. Sir, I'll tell you, as a Service Chief--
    and I'm, of course, partial to the United States Air Force--I
    view us as a flock that is imperceptibly different, whether
    it's Guard or Reserve or Active. I'm equally proud of the air
    guardsmen who are doing the things that they do every day for
    Operation Noble Eagle, and in Afghanistan and Iraq.
    Unbelievable set of people.
        Chairman Warner. I've been with them so many times, I'll
    never forget one time, we were flying over the high mountains
    in Afghanistan, and I was up in the 130 cockpit with these
    gents up there, and suddenly there were a couple of bells that
    rang, and, in a very calm manner, the plane captain shut down
    an engine, kind of leaned over to me and said, ``Well, we lost
    one up here at 22,000 feet.'' I'm looking down at those
    mountains, and--absolute calm. Then I checked the number, and
    it was an old 1961 or 1962 model, and he sort of said, ``You
    know, Senator, we could use a little help in this area, getting
    some new aircraft.'' So, he got my attention. [Laughter.]
        General Moseley. I'm sure that was an Active Duty airplane
    if it's 1960 or 1961, yes, sir.
        Chairman Warner. It was an Active?
        General Moseley. It probably was, sir. The Guard has the H-
    2s and the H-3s, which are the best C-130s.
        Chairman Warner. Well, all right, whatever he was. But I
    just remember the calm, professional manner in which that crew
    went on with the mission and kind of lobbied me.
        Of course, now we're upstairs in this other room, which I
    just left, requiring all lobbies to be registered. I'm not sure
    whether that's going to apply to you or not, but we'll have to
    figure that out.
        General Moseley. I will be happy to lobby for the Air
    National Guard.
        Chairman Warner. Good.
        Secretary Wynne. What I was going to say, sir, is that this
    whole concept of Total Force Integration really looks at
    reachback, which means that we're flying Predators, we're doing
    a lot more space operations, and tries to identify the
    magnificent part of the experience base that comes from the
    Guard and comes from the Reserve and take full advantage of
    that in training and mentoring and things that they don't have
    to leave their hometown for. I do think they're still going to
    have flying missions. They're probably still going to be
    joining us in wars to come, if you will, or conflicts to come.
    But this is all about trying to make sure that we get the best
    out of them. They want to help.
        Chairman Warner. You know, there have been some stories
    that have appealed to me greatly here recently about men and
    women who have had long service in the various military
    branches, who are now going to Iraq. One fellow flew in
    Vietnam. Maybe you saw that story.
        General Moseley. I saw that.
        Secretary Wynne. Yes, sir.
        Chairman Warner. Do you have some cases like that?
        General Moseley. Yes, sir, we do.
        Chairman Warner. I think people would be interested. How
    does a person, who maybe served previously and got a little age
    on them get back into the Air Force? What options are there?
        General Moseley. Sir, we have lots of folks that are under
    service contracts, or under a variety of other things, to do
    things that are not necessarily uniformed members. That's where
    a lot of those people will volunteer to go. We have lots of
    folks that are running Army and Air Force post exchanges at
    places like Balad and Bagram. A lot of those people are
    volunteers, exactly like you're talking about, that raise their
    hand and say, ``I want to contribute, too.''
        Chairman Warner. They were former uniformed personnel?
        General Moseley. A lot were, yes, sir. Or spouses.
        Chairman Warner. Or spouses that retired and decided that
    they want to go back and shoulder the responsibilities and
    assume the risks of this generation. Is that correct?
        General Moseley. It makes you proud, sir.
        Secretary Wynne. The whole air-traffic control in Bagram is
    ex-military, and they have been there for 5 years.
        General Moseley. Yes, sir.
        Chairman Warner. You're recycling them, I mean, with tours
    of duty? You have a cadre that go in and out of Bagram with
    some frequency?
        General Moseley. Sir, I don't know if it's a cadre, but it
    is a body of people that raise their hand and want to do that.
    We're not short of that sort of volunteerism.
        Chairman Warner. I've had my chief here note that, because
    we're going to be in that proximity, and I want to make sure to
    go up in those towers when I'm over there.
        Secretary Wynne. They're fabulous people.
        General Moseley. Selfless.
        Chairman Warner. I'd like to ask Mr. Abell, you know, this
    question of the funding to the full level of the Active and
    Reserve, we've been addressing that in the context of the Army.
    Do we have a similar problem here? We do not have that problem
    here.
        Mr. Abell. No, sir.
        Chairman Warner. We'd want to make sure to protect the cash
    that enables you to achieve your statutory limits in the
    service.
        General Moseley. Mr. Chairman, could I ask one more plug--
        Chairman Warner. Yes, of course.
        General Moseley.--for the Reserve component? One of the
    strengths in our aviation units, which is the core or soul of
    an Air Force, is the experience levels that are in the Guard
    and Reserve. Those squadrons have experience levels that are
    far beyond an Active squadron, because we bring in second
    lieutenants and first lieutenants. For the most part, a Guard
    unit may get a second lieutenant every once in a while. But
    they are extremely experienced and that's the strength of those
    units.
        Chairman Warner. I'm so glad that you mentioned that,
    because I'd like to bring to your attention a little bit about
    down in Virginia.
        The Air Force has proposed a plan to permanently base F-22s
    at two additional locations and reduce the number of aircraft
    in each squadron from 24 to 18. Has the Air Force made a
    decision to implement this plan? If so, why? Because, in
    Virginia we're so proud of having received an F-22 outfit and
    designation, and the military construction of the taxpayers
    went ahead and built the infrastructure to sustain your earlier
    projections. Now, with the dropping projections, I'm just
    concerned that we're not going to fully utilize that
    infrastructure to justify it from the taxpayers' standpoint.
        General Moseley. Sir, let me address where we are with
    that. We're looking at options, because with 183 airplanes, we
    can get 7 squadrons. Out of the tactical air dominance study,
    and out of some of the other studies, it takes you above 7
    squadrons, but 7 squadrons is what we can field with the 183
    that came out of the QDR. That's 7 squadrons of 18.
        Now, why seven squadrons, or why multiple squadrons in
    multiple locations? Mr. Chairman, I'll tell you, it's very
    important for us to have access to ranges to be able to fly
    these airplanes, and access to the right ranges to be able to
    partner with the Army. For instance, at Holloman, which we've
    announced as a potential, or an optional bed-down location, the
    Army's moving multiple maneuver brigades into Fort Bliss. That
    allows us to partner with them on the White Sands Missile
    Range, and on the McGregor Ranges, to be able to drop bombs and
    work with those maneuver elements because they're changing the
    focus of Fort Bliss not from the Air Defense School, but to
    maneuver brigades. That's important, for us to have that large
    amount of airspace. At Holloman, we have two ranges, Red Rio
    and Oscura, that we can bomb on with that airplane.
        Alaska is important, because it gives us access to the
    Pacific. It also gives us access to those huge ranges that are
    now the Red Flag ranges in Alaska. The ranges around Eielson,
    which are up by Fairbanks, are actually bigger than the ones at
    Nellis, in Nevada.
        Also, to partner with the Guard, the test case has been our
    Virginia association with the unit out of Richmond and I'm very
    happy about that.
        Chairman Warner. It's co-located with our Air Guard.
        General Moseley. Yes, sir, or the Air Guard's co-located
    with the 1st Wing at Langley, because that's where the
    airplanes are. They've not completely moved out of Richmond
    yet, and there are all sorts of opportunities with the city,
    and that's a Virginia issue. But they're happy, and we're happy
    they're happy, and we can partner better with them at Langley.
        So, Mr. Chairman, I'll tell you, our desire is to be able
    to get access to ranges. The east coast ranges off of Langley
    are great air-to-air ranges, but they're less great air-to-
    ground ranges. The ranges in Alaska are big, and the ranges in
    the Southwest are big, and we need access to that so we can fly
    and train.
        Sir, two other parts of this that we're working our way
    through. Because we now have 183 airplanes instead of a bigger
    number, we will keep the F-15Cs around, and we will keep a
    proposal to keep a squadron of F-15Cs at Langley, and make sure
    we have F-15Cs in Alaska, and we'll keep a number of these, of
    the newest F-15Cs around. We're looking at, what do we have to
    do to mod them, if any, to keep them capable for theater
    missions, as well as Operation Noble Eagle missions?
        Sir, the other thing, which I believe is equally important,
    is multiple squadrons.
        Chairman Warner. Mention the mission of Operation Noble
    Eagle. I think it's important to those following this record.
        General Moseley. Yes, sir. Remember the first weekend that
    we were able to declare initial operational capability down at
    Langley, we had the F-22 flying Operation Noble Eagle missions.
    I think another one that I think you will be fully supportive
    of is the inauguration of the Governor of Virginia, down at
    Williamsburg. The flyby was flown with a mix of Virginia Guard
    and 1st Wing guys in F-22s.
        Chairman Warner. I was there that day, but--unfortunately,
    the rain was so hard, and the clouds were so thick, we could
    just hear the roar of the engine. But, anyway----
        General Moseley. It's a stealth airplane, so it's hard to
    see it anyway. [Laughter.]
        But, sir, the other part of it----
        Chairman Warner. Most of us on the ground were trying to
    figure out how we were going to stay for another 2 hours of
    speeches, all soaking wet. But, anyway it was a grand day for
    everybody. We enjoyed it.
        General Moseley. The other part of multiple squadrons and
    multiple operating locations is the depth of leadership. I
    mentioned to you the other day, when we had a chance to chat,
    that we have about 400 aircraft deployed into CENTCOM's area of
    responsibility. So, we have three-plus wings of hardware
    deployed, but we have five wing's worth of leadership deployed,
    because you need wing commanders, group commanders, command
    sergeant majors, you need first sergeants, you need all of
    that. So, multiple squadrons in multiple locations give us
    depth so that we can deploy the airplane and fight with it. So,
    sir, that's what we are attempting to get our arms around.
        Chairman Warner. All right, and I thank you very much.
        General Moseley. Yes, sir.
        Chairman Warner. It's helpful to get your perspective. I
    really strongly support the decisions of the Secretaries and
    Chiefs of Staff of our military, because they're trying to do
    what's right with a national perspective. As proud as I am to
    represent the great State of Virginia, which has enormous
    spectrum of bases and people, I have to continuously remind my
    constituents, I have an overall obligation to the entirety of
    our force structure, wherever they are in the United States,
    and indeed, in the world. We had to go through somewhat of a
    discouraging development on carriers, but it was imperative
    that the Chief of Naval Operations be given the flexibility, as
    you say, to use his assets. I assure you, Mr. Secretary, I will
    look very carefully at the statutory requirements about the
    retention of aircraft, which, in your professional and
    managerial judgment, should be lifted. I thank you for making
    that request.
        Lastly, the famous QDR. As required by law, every 4 years
    the Secretary of Defense will conduct a comprehensive
    examination of our National Defense Strategy and Defense
    Program. Can you provide us with your assessment of both the
    process and the results of that? Because I'm anxious to
    determine how soon we'll need another one of these QDRs.
        Secretary Wynne. Sir, from my perspective--and I would like
    to offer this as my perspective--this QDR was naturally colored
    by the engagement that we're in. This is a long war. We
    recognize that strategies are supposed to look out 20-25 years.
    I think it is difficult to raise your eyes when you're in an
    engagement where soldiers are dying, and you're reaching deep
    into your technology toolkit. I think the QDR did a marvelous
    job of trying to balance, in the force spectra that they did--
    how do you take your resources and allocate them across that
    force spectra. They know that there's still a deterrent factor
    to the United States Air Force and to the United States
    military, in general. They know that they can get more synergy
    out of a joint force than they can out of a single force. They
    are pushing us in that direction, which I think is the right
    direction to go to. I'm doing it, if you will, with the Total
    Force Integration. There is no reason that I should shrink from
    doing it with my colleagues in the Navy and in the Army. In
    fact, what we're seeing is, with the allocation of the sniper
    pod and the viper pod and some of the TARS that you're flying,
    all of a sudden I get to see, and I get to have the ground
    commander see, with the remotely operated video enhanced
    receiver system, exactly what we're doing. This kind of
    synergism is brought about by the engagement and the
    inventiveness of the soldiers and airmen that are on the
    ground.
        So, this QDR took a good, long perspective. I think one
    thing that I really appreciated is, it finally recognized, if
    you will, over the grand spectrum of things, some pressures in
    the bio area, and that we need to look at this weapons of mass
    destruction (WMD) issue, and not just think that someone else
    is doing it. The fact of Katrina and Rita, as it came upon us,
    was duplicative, if you will, of multiple WMD attacks. I
    remember somebody referring to that it was the entirety of
    England and Ireland and Scotland all moving to Europe at the
    same time. That's how large the land mass was, and the
    migration required in this country of ours.
        So, it told us a lot of about making sure that we do not
    ignore those kinds of things and I think it really emphasized
    some of the aspects of the integration of the National Guard.
    The integration of that and some of the lessons learned worked
    their way into the QDR.
        So, I'm quite proud of it. I'm quite proud of the result
    that came out, and I will give you my endorsement.
        Chairman Warner. Thank you very much.
        Chief, from the perspective of the uniformed side?
        General Moseley. Sir, bottom line, upfront, I endorse it.
    We spent a lot of time wrestling and discussing and debating.
    There was a little shouting or throwing of objects, but at the
    end of the day, I would offer to you that this is a product of
    jointness, and it's a product of looking at strategic partners.
    Some of the things that I believe you see that are evident is a
    much closer partnership between myself and the Chief of Naval
    Operations, and projection with naval and air assets on a
    global scale, our ability to support land activities, but also
    our ability to conduct unique air and space activities
    partnered with the Navy, or unique maritime activities
    partnered with the Air Force. You see an increase in special
    operations business. You see an increase in unmanned vehicles,
    which is a direct outcome. You also see an emphasis on long-
    range strike, with the desire to move to an airplane or a
    capability by 2018. You also see reinforcements of tactical air
    and fifth-generation capabilities that require the technologies
    to maintain these edges out there in an uncertain world, which
    brings us back to the F-22 and the F-35 series that we partner
    with the Department of the Navy on, and our very important
    partners in the international market.
        Chairman Warner. Thank you very much.
        Gentlemen, we had an extraordinarily successful hearing,
    not the least of which is to have the introduction of these
    four distinguished airmen. Thank you, airmen, for coming here
    today, and for your service.
        The hearing is now adjourned.
        [Questions for the record with answers supplied follow:]
                   Questions Submitted by Senator John McCain
                      acquisition/award and incentive fees
        1. Senator McCain. Secretary Wynne, according to the Government
    Accountability Office (GAO) the cost of the F-22's development has
    increased by over $10 billion since it began, the program has been
    delayed by over 2 years, and the cost of each aircraft has increased.
    At the same time the Department of Defense (DOD) has paid the
    contractor over 90 percent of the available award fees or almost $850
    million. Those award fee numbers would lead someone to believe that
    this is a very successful program. How do we hold contractors
    accountable when we give them incentive fees for non-performance or
    award fees for just doing their job, regardless of the quality of the
    work they produce?
        Secretary Wynne. While award fee arrangements should be structured
    to motivate excellent contract performance, award fees must be
    commensurate with contractor performance over a range from satisfactory
    to excellent performance. Clearly, satisfactory performance should earn
    considerably less than excellent performance, otherwise the motivation
    to achieve excellence is negated. However, though base fees are
    typically limited to no more than 3 percent of target cost Defense
    Federal Acquisition Regulations ((DFARs) 216.405-2), on future
    contracts and to the extent current contracts can be adjusted, I will
    expect award fee recommendations to reward only realized superior
    performance leading to successful end-item delivery or performance.
    Performance that is less than satisfactory is not entitled to any award
    fee. The Office of the Secretary of Defense (OSD) recently issued a
    policy memo dated March 29, 2006, reiterating the fact that award fees
    need to be directly linked to achieving desired program outcomes.
        With respect to cost, the price of the F-22 has decreased from Lot
    2 to Lot 3 to Lot 4 to Lot 5 by 16 percent, 11 percent, and 13 percent
    respectively.

        2. Senator McCain. Secretary Wynne, what changes do you have in
    store given the GAO findings?
        Secretary Wynne. Prior to the issuance of the GAO report the
    Secretary of the Air Force, Acquisition (SAF/AQ) chartered a
    transformation initiative group (TIG) under the auspices of the Air
    Force Acquisition Transformation Action Council to research existing
    acquisition programs and provide a comparative analysis of performance
    reflected in award fee, contractor performance assessment report
    (CPAR), and the cost, schedule, performance reports for each program.
    The TIG was to determine how well the three separate reports tell the
    same story and determine where changes to Air Force policy and training
    are needed. Due to the efforts, which were recently completed, the Air
    Force is developing a ``Back-to-Basics'' campaign, with one of the
    tenets to re-emphasize the Federal Acquisition Regulations (FAR)
    preference for objective incentive arrangements and to address the Air
    Force's cultural aspects of using award fees. I issued (April 4, 2006)
    a contract incentive policy memo emphasizing a cultural change through
    five criteria:

              1. Incentives must not emphasize cost, schedule, and
            technical performance as they relate to program outcomes and
            successful end-item delivery or performance.
              2. When implementing incentive type contracts, we should
            initially focus on incentives based wholly on objectively
            verifiable criteria.
              3. Award fee contracts, when used, must be structured to
            motivate superior contractor performance and then award earned
            fee only for realized successful performance.
              4. Award fee contracts should be structured to include a base
            fee as well as a combination of objective (performance related)
            and, as appropriate, subjective criteria.
              5. On future contracts and to the extent current contracts
            can be adjusted, I will expect award fee recommendations to
            reward only realized superior performance leading to successful
            end item delivery or performance. The proper combination of
            these criteria will work to ensure contractor emphasis on
            program success and to provide the program manager the
            flexibility required to incentivize performance.

        3. Senator McCain. Secretary Wynne, the same GAO study highlighted
    the serious problem of program rebaselining--in the case of the F-22,
    14 times. This rebaselining obscures the true cost of the program and
    results in a program avoiding a Nunn-McCurdy violation. In the 2006
    Defense Authorization Law, Congress instructed the Pentagon to report
    on every program that costs at least 50 percent more than initial
    projections. The provision was designed to tie programs to their
    original cost estimates. For example, the C-130J originally cost $33
    million a copy but it now costs over $66 million a copy. How do you
    plan to implement this new amendment with regard to Nunn-McCurdy
    violations?
        Secretary Wynne. Many times the program is rebaselined due to
    funding constraints, not performance. This occurred a lot in the 20-
    year F-22 program, this schedule stretch out then drives cost. This is,
    however, not always the case, and the C-13J is a good example. Actual
    implementation over the long-term is straightforward, we will expand on
    existing processes. For Major Defense Acquisition Programs (MDAPs), we
    currently compare the program manager's current estimate each quarter,
    and in conjunction with annual selected acquisition reports (SARs) to
    the acquisition program baseline (APB) to determine if the program has
    breached the Nunn-McCurdy unit cost thresholds. We will add a
    comparison against the ``original baseline estimate'' to this analysis.
    We will be analyzing MDAPs each quarter to determine if there is
    significant or critical cost growth against both the APB and the
    ``original baseline estimate'' using essentially the same procedures we
    have used in the past to evaluate unit cost against the APB.
        In the near-term, we have determined the status of programs against
    their ``original estimate'' based on the fiscal year 2007 President's
    budget submission. The fiscal year 2007 President's budget was
    essentially complete on January 6, 2006, when the changes to Nunn-
    McCurdy were enacted. Programs exceeding the ``original baseline
    estimate'' by more than 50 percent will reset their ``original baseline
    estimate'' to the cost baseline in their current APB, and the Secretary
    of Defense will provide a report to Congress on these programs per
    changes in the National Defense Authorization Act (NDAA) for Fiscal
    Year 2006. Programs with growth between 30 percent and 50 percent will
    include an expanded section 12 in their annual SAR.

        4. Senator McCain. Secretary Wynne, what plans do you have in place
    to ensure programs are held to their original baseline figures instead
    of allowing the current practice of rebaselining?
        Secretary Wynne. We intend to put more emphasis into the execution
    of our programs so it is only rarely necessary to rebaseline a program,
    but rebaselining is occasionally needed to effectively manage and
    oversee our efforts. In our ``Back-to-Basics'' initiative we are
    reemphasizing basic acquisition management principles as we stand up
    new programs, and rebaseline old ones, to establish viable parameters
    for cost, schedule, and technical performance, further minimizing the
    need to rebaseline in the future. On those rare occasions where it is
    necessary, any rebaselining will be done within the rules, as has
    always been the case. We have never taken the need to rebaseline
    lightly, but recognize the need for improvement in this area.

        5. Senator McCain. Secretary Wynne, at one time the Air Force was
    going to purchase 750 F-22s. Now, at $320 million a copy for
    procurement and development costs, it can afford only 180. Once the F-
    22 was an air-to-air fighter then it was a multi-role aircraft and now
    the first spiral of the production aircraft is essentially an air-to-
    air fighter. The Air Force loses credibility with contractors when
    requirements and numbers of units to be purchased change and
    subsequently we then have to pay a higher price for equipment. How do
    you plan to improve this requirements process?
        Secretary Wynne. The Air Force requirements process delivers to the
    combatant commanders the capabilities needed to protect America's
    interests today and in the future. The initial F-22 requirement of 750
    aircraft was based on the force structure at that time. The Defense
    Planning Guidance directed study in 2002 determined that 381 F-22s were
    the minimum number of F-22s needed to support the National Defense
    Strategy with acceptable risk. The fiscal year 2007 President's budget
    procurement of 183 aircraft frees fiscal year 2007 funding for other
    critical Department priorities, extends aircraft production 1 year, and
    provides decision opportunity for more aircraft in future years. We
    must execute our responsibilities in the most efficient way, thereby
    optimizing support to the warfighter while meeting taxpayer
    expectations. Rising costs, like those for health care and fuel, oblige
    reducing our infrastructure and effectively managing our fleet. Costs
    continue to grow to maintain equipment we are legislatively restricted
    from retiring. We do not anticipate challenges getting any easier and
    we are conducting actions to balance Air Force allocation of resources,
    including:

              1) re-examining acquisition programs with respect to their
            impact on furthering the Air Force mission and national
            defense;
              2) husbanding Air Force personnel resources with our total
            force; and
              3) analyzing every aspect of operations and maintenance
            costs.

        The Air Force is focused on excellence in warfighting over the
    long-term. We recognize resources will be constrained for the
    foreseeable future and are rebalancing the Air Force's priorities and
    our long-term commitment to recapitalize, conduct smart operations, and
    size the force structure to meet our responsibilities.

        6. Senator McCain. Secretary Wynne, per the DOD Award Fee Guide,
    ``. . . an award fee is an amount of money which is added to a contract
    and which a contractor may earn in whole or in part during performance
    and that is sufficient to provide motivation for excellence in such
    areas as quality, timeliness, technical ingenuity, and cost-effective
    management.'' A contractor starts with 0 percent of an incentive fee
    and works for the evaluated fee for each evaluation period. The
    contractor does not start with 100 percent and get portions deducted
    along the way. A fee determining officer (FDO) ensures the amount and
    percentage of an incentive fee earned accurately reflects the
    contractor's performance. The incentive fee guide clearly delineates
    the roles and responsibilities of the FDO and defines how an incentive
    fee plan can be developed to map out the process of how a contractor
    should be evaluated.
        The GAO has shown through their recent study that from their sample
    of 597 contracts the median percentage of available incentive fees paid
    was 90 percent. This study clearly demonstrates that not only is the
    incentive fee guide not being followed but in some cases it is being
    blatantly disregarded. Why are our FDOs not using their training and
    the published guidance when determining award fees and what do you plan
    to do to rectify this situation?
        Secretary Wynne. On future contracts and to the extent current
    contracts can be adjusted, I will expect award fee recommendations to
    reward only realized superior performance leading to successful end-
    item delivery or performance.
        Award-fee arrangements are appropriate when, for the most part key
    elements of performance cannot be wholly objectively/quantitatively
    measured and areas of importance may shift over the course of the
    contract. FDOs review the performance of the contractor and determine
    independently the amount of award fee the contractor should receive.
    The award fee evaluation team includes the FDO, an award fee review
    board, and performance monitors--the FDO makes the final determination
    regarding the award fee earned during the evaluation period and ensures
    that award fee process integrity is maintained. The amount of award fee
    paid on any particular contract is dependent upon the award fee
    criteria established in the award fee plan for that contract and the
    judgment of the FDO with regard to how the contractor performed against
    the stated award fee criteria.
        In general, the FDOs are using their training and following their
    award fee guides. However, the guides may be placing too much emphasis
    on subjectivity, which can make performance measurement less than
    optimal. New OSD and Air Force guidance has been issued to provide
    support of the GAO report. This guidance should include the need for
    award fee plans containing objective measurable criteria when possible,
    which when combined with the subjective judgment of the FDO should
    improve the correlation between contractor performance and award fee
    earned.

                                     c-130j
        7. Senator McCain. General Moseley, in April 2005 your predecessor,
    General Jumper, promised that the C-130J contract would be converted
    from a FAR part 12 commercial contract to a FAR part 15 military
    contract thus providing the proper oversight required for a program of
    this magnitude. Two key pieces of legislation were passed concerning
    the procurement of the C-130J:
    SEC. 135. PROCUREMENT OF C-130J/KC-130J AIRCRAFT AFTER FISCAL YEAR
            2005.
              Any C-130J/KC-130J aircraft procured after fiscal year 2005
            (including C-130J/KC-130J aircraft procured through a multiyear
            contract continuing in force from a fiscal year before fiscal
            year 2006) shall be procured through a contract under part 15
            of the FAR, relating to acquisition of items by negotiated
            contract (48 C.F.R. 15.000 et seq.), rather than through a
            contract under part 12 of the FAR, relating to acquisition of
            commercial items (48 C.F.R. 12.000 et seq.).

    SEC. 803. REQUIREMENT FOR DETERMINATION BY SECRETARY OF DEFENSE AND
            NOTIFICATION TO CONGRESS BEFORE PROCUREMENT OF MAJOR WEAPON
            SYSTEMS AS COMMERCIAL ITEMS.
        In fact, the contract is still not converted. Congress was
    absolutely clear in their intent to convert the contract. How could
    this have happened?
        General Moseley. The Air Force executed an undefinitized
    contractual action (DCA) with Lockheed Martin on February 10, 2006 to
    convert the multiyear procurement contract for the C-130J and KC-130J
    aircraft in program years 2006 through 2008. The DCA incorporates the
    standard terms and conditions applicable to a contract negotiated under
    FAR Part 15. Among these are clauses that subject the contractor to the
    requirements of the Truth in Negotiations Act. The Air Force expects
    that the negotiation of final, revised prices for program years 2006
    through 2008 under the multiyear contract will be complete by October
    2006.

                       predator unmanned aerial vehicles
        8. Senator McCain. General Moseley, in November 2004 the Secretary
    of the Air Force (SECAF), the Chief of Staff of the Air Force (CSAF),
    and you sought out both Texas and Arizona because you wanted to put
    Predator unmanned aerial vehicle (UAV) units into these States.
    Immediately thereafter, the SECAF and CSAF tasked the Arizona Air
    National Guard with standing up a Predator squadron which would include
    the proper plus-up in manning as well as a ground control station and
    other essential equipment to execute its mission. Given the flying
    conditions, the quality of life, and the outstanding recruiting record
    of the Arizona Air National Guard, it made sense to stand up a unit in
    Arizona. In the year that followed, two troubling events took place:

              1. October 2005: National Guard Bureau delays the initial
            operational capability (IOC) by 6 months; and
              2. December 2005: Lieutenant General Blum tells Governor
            Nepolitano that the AZ Predator unit will be ``delayed
            indefinitely.''

        Lieutenant General Blum has stated on several occasions that he is
    willing to move force structure from States that cannot recruit to
    support their assigned strength, to States that can. Arizona has one of
    the best recruiting records in the country. Will Arizona be given the
    proper manning, a ground control station, and other essential equipment
    in order to properly stand up the Predator unit by June 2006 as was
    promised in November 2004?
        General Moseley. Our Total Force Integration Office has been
    working closely with the National Guard Bureau and your adjutant
    general to solve manpower and programming issues. This will allow us to
    move forward on positioning the Predator mission in Arizona. We are
    expediting the process and have agreed upon an approximate IOC date of
    second quarter, fiscal year 2007. Specific time lines are being
    determined for the flow of equipment, training, and facilities so an
    exact lay-down plan can be provided. We continue to team with the
    Arizona Air National Guard to develop their unit manning document and
    identify the manpower positions needed to achieve IOC. Due to initial
    delays, our ability to meet the original IOC dates has been hampered,
    but we are confident the plans are now back on track to meet an IOC
    goal of second quarter, fiscal year 2007.

         analysis of alternatives guidance for kc-135 recapitalization
        9. Senator McCain. Secretary Wynne and General Moseley, on January
    26, 2006 the OSD and the RAND Corporation presented the draft Analysis
    of Alternatives (AoA) for KC-135 recapitalization in a staff briefing
    to the Senate Armed Services Committee. Generally, the report seems
    sound. However, the report appears flawed inasmuch as it does not
    consider three options that, according to RAND, were eliminated because
    of Air Force ``guidance'' which applied an arbitrary 20 percent rule to
    the tanker recapitalization effort. The instruction was not in either
    the February 24 or May 25, 2004 guidance you directed the SECAF to
    follow when you held the position of Acting Under Secretary of Defense
    for Acquisition, Technology, and Logistics.
        This arbitrary restriction harms other cost-effective and less
    capital intensive solutions which have been recommended as possible
    alternatives by other expert organizations such as GAO, Congressional
    Research Service, Defense Science Board, National Defense University,
    etc. Specifically, the rule prescribed that 20 percent of the aerial
    refueling tanker fleet would have to be recapitalized out of 545
    tankers--approximately 110 tankers. The three areas that were dismissed
    as suitable efforts for recapitalization were:

              1. Re-engining KC-135E tanker aircraft--dismissed because the
            Air Force says that there are only 73 KC-135Es that could be
            re-engined (less than 110 tanker aircraft);
              2. Purchasing and converting used commercial aircraft and
            converting them to tankers--dismissed because RAND says there
            are only 75-100 used commercial aircraft that could be
            considered to be converted to tankers (less than 110 tanker
            aircraft); and
              3. Commercial air-refueling delivery. This flaw is notable
            where the Navy has, for some time, developed a commercial
            tanker capability. Such an option might be particularly
            suitable in the context of fighter Civil Air Patrols over major
            U.S. and foreign metropolitan cities and other worldwide air
            refueling tanker support--RAND noted that there are only three
            ``Omega Air'' tankers growing to 25 in 3 years (less than 110
            tanker aircraft).

        Secretary Wynne, did you give additional guidance to exclude these
    three options in the so-called RAND 20 percent rule?
        General Moseley, as the former chairman of the Air Force Steering
    Group for Project Air Force which provides resources and assigns
    projects to RAND, did you give additional guidance to exclude these
    three options in the so-called RAND 20 percent rule?
        Secretary Wynne and General Moseley. No guidance was given to RAND
    to exclude these three options.
        In answering this question for the record, RAND states, ``no such
    20 percent rule was applied, either directly or indirectly, in the AoA.
    None of the three options in the list were dismissed. Each of these
    options was evaluated on its merits.'' RAND also states:

              1. ``Re-engining 73 KC-135E tanker aircraft--This option was
            analyzed for cost and effectiveness. The result was that it
            would only have present value cost savings if the re-engined
            aircraft were operated beyond the late 2030s. If the aircraft
            were retired before then, there would be a net present-value
            loss due to re-engining because the sustainment cost savings
            would not amortize the capital cost. Only a small effectiveness
            increase was associated with this option.''
              2. ``Purchasing and converting used commercial aircraft and
            converting them to tankers--The cost-effectiveness of this
            option was analyzed, and the result was that an aerial
            refueling fleet that included converted used aircraft was less
            cost-effective than one that only included new aircraft.
            However, it was noted that the cost-effectiveness penalty was
            not great enough to exclude this option from any future
            competition. It was further noted that careful and detailed
            assessment of the technical condition of the used aircraft
            candidates would be critical in this case.''
              3. ``Commercial air-refueling delivery--The cost-
            effectiveness of this option for meeting the requirements on
            which the AoA was based was analyzed, and it was found that
            this option was less cost-effective than organic air-refueling
            delivery, and resulted in some increased operational risk. All
            of the requirements in the AoA, including support of homeland
            defense patrols, were wartime requirements, which required
            advanced electronics and defensive systems. The Omega
            commercial tanker now operating is not equipped to meet these
            requirements. The Omega tanker is additive to the KC-135 fleet,
            not a substitute for it. The analysis of this option was done
            in the AoA for a commercial contribution of 100 tankers, which
            was representative of the arrangements being proposed by
            private industry in 2004. However, the result is not dependent
            on the number of tankers. Since completion of the AoA, RAND has
            done additional analysis on this option at a level of 20
            tankers, and at a reduced capability level per tanker. The
            results stand in that case as well.''

        10. Senator McCain. Secretary Wynne, would you please look into
    this matter and consider these three less capital intensive
    alternatives as additional ways to recapitalize the tanker fleet as
    your previous guidance directed? Please provide the committee with your
    conclusions.
        Secretary Wynne. I have directed the Air Force to include these
    three alternatives, referenced in your previous question, in the
    request for information to industry that will be released shortly after
    the Acquisition Decision Memorandum is issued by Under Secretary of
    Defense (Acquisition, Technology, and Logistics) (USD(AT&L)).

                 joint strike fighter alternate engine program
        11. Senator McCain. Secretary Wynne, on February 16, 2006, I wrote
    Secretary Rumsfeld regarding the Joint Strike Fighter (JSF) Alternate
    Engine Program. In my letter to him I requested that ``[he] please
    produce a complete copy of the analysis supporting the Department of
    Defense's decision to terminate the F-136 JSF alternate engine program
    in the Department's fiscal year 2007 budget request.''
        On February 27, 2006, Senators Warner, Levin, and I received a
    response from Secretary England which I regret was unresponsive. In
    Secretary England's response he attached briefing slides titled ``JSF
    Alternate Engine Decision''. These slides provide superficial
    background and historic information, but fall short of the complete
    copy of the analysis that was requested in my letter. Would you please
    inform the Department that we are dissatisfied with the response that
    was sent and we reiterate our original request that the information be
    produced as to the complete analysis supporting the decision to
    terminate the F-136 alternate engine program?
        Secretary Wynne. To our knowledge, Secretary England's office has
    provided you all of the information available regarding the decision to
    cancel the F136 alternative engine program.
                                     ______

                 Question Submitted by Senator James M. Inhofe
                       combat flight inspection aircraft
        12. Senator Inhofe. Secretary Wynne and General Moseley, we have
    received the Air Force's 2007 unfunded priority list (UPL) and once
    again see the Combat Flight Inspection (CFIN) aircraft, which is used
    to calibrate navigational aids for safe night or adverse weather
    instrumented flight, is listed as a budget shortfall. The rapidly aging
    C-29 Hawkers suffer from operational shortfalls, which limit the Air
    Force's ability to provide rapid and flexible response to critical
    mission taskings, including support of vital military operations in
    Iraq and Afghanistan. I am very concerned that this situation may be
    creating undue risks in safe flight operations. Therefore,
    notwithstanding any congressional action on the UPL, what is the Air
    Force's plan to meet its commitment to the Federal Aviation
    Administration (FAA) regarding the acquisition of the replacement
    aircraft for the C-29 Hawker to support these critical worldwide
    mobility missions?
        Secretary Wynne and General Moseley. The Air Force agrees the C-29
    fleet is no longer cost effective or operationally efficient to provide
    combat flight inspection, particularly to support global war on
    terrorism operations. As part of the July 2001 Air Force/FAA memorandum
    of agreement, both organizations committed to replacing six aging C-29
    Hawkers with six Challenger 600-series aircraft during the transition
    period between 2002 and 2010. More specifically, the Air Force agreed
    to purchase one Challenger aircraft. In addition to placing the CFIN
    aircraft on the Air Force's fiscal year 2007 UPL, the Air Force Flight
    Standards Agency is planning to submit the CFIN requirement for
    consideration in the fiscal year 2008 Air Force budget process.
                                     ______

                   Questions Submitted by Senator John Cornyn
                             information assurance
        13. Senator Cornyn. Secretary Wynne and General Moseley, protection
    of military networks, information, and communications is critical to
    our safety and operations. You recently updated the Air Force mission
    to include cyberspace as an operational environment. What are the Air
    Force's primary technical, organizational, and policy challenges in the
    area of cybersecurity?
        Secretary Wynne and General Moseley. Securing cyberspace means
    successfully defending and operating our part of the Global Information
    Grid. Most of our network defense today is reactive: we find and
    eventually block intruders after they're already on our network. We are
    trying to get more proactive by identifying and tracking intruders
    before they get into our networks. The long pole in the tent is
    attribution: figuring out who the culprit is.
        Both the technical and policy challenges revolve around attribution
    because of the anonymity, flexibility, and creativity that cyberspace
    affords the intruder. Technology is dynamic--new holes in our networks
    can be found, shared, and exploited quickly by intruders who are able
    to move fast and cover their tracks. U.S. laws and policies that
    properly protect Americans' right to privacy also limit and slow our
    ability to pursue, identify, monitor, and block the culprits.
    Organizational challenges relate to unity of control over the operation
    and configuration of our network. Both the DOD and the Air Force have
    vastly improved unity of command over our portion of global network,
    and those efforts continue.

        14. Senator Cornyn. Secretary Wynne and General Moseley, have you
    completed an inventory of critical Air Force information systems that
    require protection?
        Secretary Wynne and General Moseley. Yes, and this information was
    included in last year's Federal Information Security Management Act of
    2002 (FISMA) report to Congress and will be included in this year's
    report. The Air Force conducts annual inventories of critical
    information systems. The Air Force reported 50 mission critical
    information systems in the fiscal year 2005 FISMA report with 44 fully
    accredited (88 percent). Currently the Air Force has 60 mission
    critical systems in the inventory with 54 systems fully accredited (90
    percent). The remaining six mission critical systems have an interim
    approval to operate and a documented plan of action and milestones to
    obtain full accreditation.

        15. Senator Cornyn. Secretary Wynne and General Moseley, on what
    strategic documents do you rely for guidance on securing the Air
    Force's information systems and networks?
        Secretary Wynne and General Moseley. There are various strategic
    documents that provide us guidance on protecting our information
    systems and networks. These documents range from Presidential Executive
    Orders, DOD and joint guidance, to Air Force level guidance. Examples
    of these are:

             Public law 107-347 (i.e., the E-government act that
            contains the Federal Information Security Management Act)
             U.S.C. titles 10 (``Man, Train, and Equip''), 18
            (Crimes and Criminal Procedure), and 50 (National Security and
            accountability for intelligence activities)
             Executive Order 12333 (Intelligence Activities (IA))
             Homeland Security Presidential Directive-7 (HSPD-7),
            Subject: Critical Infrastructure Identification,
            Prioritization, and Protection, December 17, 2003
             DOD 8500 policy series (i.e., DOD IA policies which
            include IA controls) The National Strategy to Secure Cyberspace
             An implementing component of The National Strategy for
            Homeland Security
             DOD and Air Force Intelligence Oversight policy
             Joint Publication 3-13, Information Operations
             Global Information Grid (GIG) Information Assurance
            Architecture v1.0 (through 2008)
             Air Force Doctrine Document 2-5, Information
            Operations

                              test and evaluation
        16. Senator Cornyn. Secretary Wynne and General Moseley, the recent
    Defense Acquisition Performance Assessment (DAPA) recommends creation
    of an ``operationally acceptable'' evaluation testing category for
    systems whose performance is not fully adequate to meet criteria
    established by the Director of Operational Test and Evaluation (DOT&E)
    but are determined to meet an operationally useful capability by
    combatant commanders. What are your thoughts on this recommendation?
        Secretary Wynne and General Moseley. The Air Force agrees with the
    creation of an ``operationally acceptable'' evaluation testing
    category. Programs can benefit from a rating system that allows for
    other than a pass/fail rating.

        17. Senator Cornyn. Secretary Wynne and General Moseley, in an era
    of rapid fielding initiatives and evolutionary acquisition, what are
    the appropriate roles for developmental testing?
        Secretary Wynne and General Moseley. Developmental Test and
    Evaluation (DT&E) will play the same roles as in the past, but we
    envision developmental testers collaborating much closer and more
    seamlessly with our contractor testers, users, and operational testers.
    We must give our developmental testers the right infrastructure and
    instrumentation, while demanding that all testing be structured as an
    efficient continuum. All test data will be shared among program
    stakeholders to eliminate duplication of effort. Last, we need to
    retain and train our testers to be the best in the Nation. We have made
    and continue to make significant changes in Air Force test and
    evaluation policy to achieve these goals.

        18. Senator Cornyn. Secretary Wynne and General Moseley, in an era
    of rapid fielding initiatives and evolutionary acquisition, what are
    the appropriate roles for operational testing?
        Secretary Wynne and General Moseley. Operational Test and
    Evaluation (OT&E) will play the same roles as in the past, but will be
    more dynamically involved at the earliest, initial stages of system
    development. Working through our integrated test teams, operational
    testers will stay involved by providing operationally relevant test
    data and feedback throughout the program to help ensure the
    warfighters' capabilities-based requirements are addressed. They will
    collaborate closely with contractor and developmental testers, and have
    access to prior test data to help eliminate duplicative testing.
    However, operational testers must still independently evaluate system
    operational effectiveness and suitability as Title 10 requires.

        19. Senator Cornyn. Secretary Wynne and General Moseley, what
    standards for technical maturity should be used for the standard test
    and evaluation process?
        Secretary Wynne and General Moseley. The Air Force has a number of
    tools available for assessing technical maturity at key points in
    system development, one of which is the National Aeronautics and Space
    Administration-developed technology readiness levels (TRLs). TRLs are
    measured on a scale of one to nine, with level 7 being the
    demonstration of a technology in an operational environment. This level
    of technological maturity affords a sufficiently low risk for starting
    a product development program. As the system matures, the Air Force has
    another process called Certification of Readiness for Dedicated OT&E.
    This process requires production-representative articles of sufficient
    maturity and with a stable configuration to be available before
    operational testing may start. These tools cover the early, middle, and
    later phases of system development.

        20. Senator Cornyn. Secretary Wynne and General Moseley, what
    standards for technical maturity should be used for the accelerated
    test and evaluation process?
        Secretary Wynne and General Moseley. We believe the same tools as
    previously discussed will be used in any future (accelerated) test and
    evaluation process. Whatever tools we use, they must have two basic
    characteristics: 1) they must give us clear indications at key decision
    points of a technology's readiness to enter each product development
    phase; and 2) they must remain focused on the most current, realistic
    operational environment in which that system must eventually operate.
    Our bottom line--the final test--must always ensure each new system is
    combat ready and capable of performing the missions for which it was
    designed.

               technical evaluations of pre-acquisition programs
        21. Senator Cornyn. Secretary Wynne and General Moseley, we are
    aware of the new Air Force effort to provide a distinct and separate
    technical voice at the table during service acquisition executive and
    milestone reviews. Could you comment on the impact of this initiative
    so far?
        Secretary Wynne and General Moseley. We are early in the process of
    institutionalizing this initiative, but we believe it is having a
    positive impact. With our technical staff looking at the programs at
    Air Force Acquisition Strategy Panels and Air Force Review Boards
    (e.g., Air Force milestone reviews), program systems engineering and
    technical approaches are getting a more stringent evaluation.

        22. Senator Cornyn. Secretary Wynne and General Moseley, have
    milestone review decisions been altered due to technical risk advice
    provided earlier in the process through this initiative?
        Secretary Wynne and General Moseley. The Air Force Acquisition
    Strategy Panel and Air Force Review Board processes were revised in May
    and August 2005, respectively, to include the Deputy Assistant
    Secretary of the Air Force for Science, Technology and Engineering as
    the technical voice. Of the reviews to date, this technical voice has
    made an impact to the acquisition strategy for the Small Diameter Bomb
    Increment II. However, we expect that a major impact of this initiative
    will be in how a program is managed and reviewed at the program
    executive officer level prior to an Air Force acquisition review or
    decision.

        23. Senator Cornyn. Secretary Wynne and General Moseley, what
    efforts is the Air Force pursuing to provide sufficient personnel and
    resources for pre-acquisition systems engineering and an increased
    technical role in acquisition strategies?
        Secretary Wynne and General Moseley. We are refocusing our internal
    workforce to better address pre-acquisition systems engineering and
    include a technical voice in program milestone and acquisition strategy
    reviews. To obtain the personnel needed for milestone and acquisition
    strategy reviews, the Deputy Assistant Secretary of the Air Force for
    Science, Technology, and Engineering (SAF/AQR) has reorganized duties
    and shifted personnel within the organization to set up a chief
    engineer group. Additionally, SAF/AQR augments this group in several
    ways. SAF/AQR Science and Technology Program Element Monitors (PEMs)
    are utilized to review a major defense acquisition program's technology
    readiness. These PEMs provide valuable experience in these reviews
    since they already support technology readiness assessments for
    programs at milestones B and C. Three career-broadening positions have
    been established to bring in additional product line engineering
    expertise from Air Force product and logistics centers. In addition,
    SAF/AQR has the ability to reach back and tap into the technical
    expertise of Air Force scientists and engineers located in both Air
    Force Space Command and Air Force Materiel Command, to include the Air
    Force Research Laboratory.
        Finally, we are looking at options for initiating a pilot program
    to improve the pre-acquisition systems engineering process. This pilot
    program would utilize existing personnel and would establish a set of
    standard systems engineering process steps that could be tailored for
    application across the Air Force. The pilot program would document the
    systems engineering processes used during concept development to
    generate concepts for the AoA and the systems engineer processes used
    to mature the selected concept from the AoA and mature it to a
    milestone A decision.

                          c-130 avionics modernization
        24. Senator Cornyn. Secretary Wynne and General Moseley, what is
    the Air Force's plan for the Avionics Modernization Program (AMP) for
    the C-130 fleet?
        Secretary Wynne and General Moseley. The Air Force program of
    record modifies 434 C/AC/EC/HC/LC/MC-130s with AMP in order to meet the
    communication navigation surveillance/air traffic management (CNS/ATM)
    and Air Force navigation safety requirements. The first AMP-modified C-
    130H is currently in ground test with first flight planned for August
    30, 2006. Installation of the first production kits is scheduled to
    begin in fiscal year 2008 and continue until fiscal year 2017. An
    updated service cost estimate is scheduled to be completed by August
    2006. This plan, of course, will be reassessed when the updated costs
    and schedules are completed, and resources available considered.

        25. Senator Cornyn. Secretary Wynne and General Moseley, what is
    the estimated cost per aircraft?
        Secretary Wynne and General Moseley. Because of the wide variance
    in complexity across the C-130 fleet (i.e., C-130H versus an AC-130U
    Gunship), there is a range of estimated costs: $8-12 million per
    aircraft depending upon its model. This cost is preliminary since the
    Air Force now plans to compete kit production and installations
    following the low rate initial production (LRIP) run. Also, these costs
    are being evaluated as part of the C-130 AMP service cost estimate to
    be completed in the fall of 2006.

        26. Senator Cornyn. Secretary Wynne and General Moseley, how many
    C-130Es will undergo the modernization program?
        Secretary Wynne and General Moseley. No Combat Delivery C-130Es are
    programmed to receive the AMP modifications.

        27. Senator Cornyn. Secretary Wynne and General Moseley, what is
    the timetable for this work to be done?
        Secretary Wynne and General Moseley. First flight is planned for
    August 30, 2006, first production kits are programmed to be procured in
    fiscal year 2008 with the last installation in fiscal year 2017.

        28. Senator Cornyn. Secretary Wynne and General Moseley, how many
    C-130H1s will undergo the modernization program?
        Secretary Wynne and General Moseley. The current plan has 47 C-
    130H1s programmed to be modified under the AMP. This program is
    undergoing a cost review scheduled to be completed in August 2006.

        29. Senator Cornyn. Secretary Wynne and General Moseley, what is
    the timetable for this work to be done?
        Secretary Wynne and General Moseley. First installation on the C-
    130H1 is programmed to be in fiscal year 2015.

                             c-130 wing box repair
        30. Senator Cornyn. Secretary Wynne and General Moseley, what is
    the Air Force's plan for repairing the wing boxes of the C-130 fleet?
        Secretary Wynne and General Moseley. The fiscal year 2007
    President's budget provides sufficient funding to meet our immediate
    center wing box (CWB) replacement needs while positioning us to meet
    our out-year needs prior to aircraft being placed on operational
    restriction. Additional CWBs will be purchased as needed to ensure the
    fleet remains healthy.
        In addition, we are implementing an inspect and repair program for
    the C-130H1. This program enables us to repair restricted aircraft and
    operate them at full operational capacity until they reach the
    grounding point of 45,000 equivalent base hours. This short-term fix
    provides the time needed to replace the CWBs on these aircraft before
    they are grounded. Ultimately, 47 C-130H1 CWBs are programmed to be
    replaced.

        31. Senator Cornyn. Secretary Wynne and General Moseley, what is
    the estimated repair cost per aircraft?
        Secretary Wynne and General Moseley. The estimated cost to procure
    and install a new CWB is $9 million per aircraft. The estimated cost to
    inspect and repair an original CWB is $800,000.

        32. Senator Cornyn. Secretary Wynne and General Moseley, how many
    C-130Es will undergo wing box repairs?
        Secretary Wynne and General Moseley. We are not planning to replace
    the CWBs of any C-130Es at this time.

        33. Senator Cornyn. Secretary Wynne and General Moseley, what is
    the timetable for these repairs?
        Secretary Wynne and General Moseley. There is no timetable since we
    are not planning to replace the CWBs on the C-130Es.

        34. Senator Cornyn. Secretary Wynne and General Moseley, how many
    H1s will undergo wing box repairs?
        Secretary Wynne and General Moseley. We currently plan to replace
    47 CWBs for the C-130H1s.

        35. Senator Cornyn. Secretary Wynne and General Moseley, what is
    the timetable for these repairs?
        Secretary Wynne and General Moseley. We will begin our procurement
    of the C130H1 CWB kits this year. The table below provides, based on
    the current plan, a year-by-year breakout of the C-130H1 procurements
    and installations:

    ----------------------------------------------------------------------------------------------------------------
                                                                   Fiscal Year
                C-130H1             ------------------------------------------------------------------------  Total
                                       2006     2007     2008     2009     2010     2011     2012     2013
    ----------------------------------------------------------------------------------------------------------------
    Buy............................       1       12       14        4        9        7   .......  .......      47
    Install........................  .......  .......       1        9       10       11        9        7       47
    ----------------------------------------------------------------------------------------------------------------

        36. Senator Cornyn. Secretary Wynne and General Moseley, how many
    H2s will undergo wing box repairs?
        Secretary Wynne and General Moseley. Initially, we plan to procure
    26 CWBs for the C-130H2s during fiscal years 2011-2020. We plan to
    continue the CWB replacement program beyond fiscal year 2020 at a pace
    to ensure fleet aircraft are not placed on restricted operations.

        37. Senator Cornyn. Secretary Wynne and General Moseley, what is
    the timetable for these repairs?
        Secretary Wynne and General Moseley. We plan to begin installation
    of the C130H2 CWBs in fiscal year 2014. The table below, based on our
    current plan, provides a year-by-year breakout of the C-130H2
    procurements and installations through fiscal year 2020:

    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Fiscal Year
                                C-130H2                            -----------------------------------------------------------------------------------------
                                                                      2011     2012     2013     2014     2015     2016     2017     2018     2019     2020
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Buy...........................................................       1        1        1        1        2        2        2        4        6        6
    Install.......................................................  .......  .......  .......       2        1        1        2        2        2        4
    --------------------------------------------------------------------------------------------------------------------------------------------------------

        38. Senator Cornyn. Secretary Wynne and General Moseley, how many
    H3s will undergo wing box repairs?
        Secretary Wynne and General Moseley. The first phase of this
    replacement will be from fiscal year 2011-2017. During that time, we
    plan to procure and install 14 C-130H3 CWBs. We plan to continue the
    CWB replacement program at a pace to ensure fleet aircraft are not
    placed on restricted operations.

        39. Senator Cornyn. Secretary Wynne and General Moseley, what is
    the timetable for these repairs?
        Secretary Wynne and General Moseley. The table below, based on the
    current plan, provides a year-by-year breakout of the C-130H3
    procurements and installations through fiscal year 2017:

    ----------------------------------------------------------------------------------------------------------------
                                                                                Fiscal Year
                         C-130H2                      --------------------------------------------------------------
                                                         2011     2012     2013     2014     2015     2016     2017
    ----------------------------------------------------------------------------------------------------------------
    Buy..............................................       1        2        4        4        3   .......  .......
    Install..........................................  .......  .......  .......       3        4        4        3
    ----------------------------------------------------------------------------------------------------------------

                                c-130 retirement
        40. Senator Cornyn. Secretary Wynne and General Moseley, what is
    the Air Force plan for retiring C-130s?
        Secretary Wynne/General Moseley. The Quadrennial Defense Review
    (QDR), as informed by the Mobility Capabilities Study (MCS), determined
    that 395 C-130 equivalent aircraft are sufficient to meet intratheater
    warfighting needs with a moderate risk level.
        As of March 30, 2006, there are 497 combat delivery C-130s in the
    total Air Force inventory, including 170 C-130E models. Of the 170 C-
    130Es in the fleet, 29 are currently grounded--21 for CWB cracking
    issues, and 8 for other reasons. In addition to the 29 grounded C-
    130Es, 31 more are flown under significant flight restrictions. By the
    end of fiscal year 2011, 62 C-130Es will be grounded, with an
    additional 57 aircraft operated under flight restrictions, for a total
    of 119 aircraft impacted, representing 70 percent of the C-130E fleet.
        The C-130 force structure beddown plan includes retirement of all
    170 C-130E aircraft. The Air Force plans to retire 141 C-130Es by
    fiscal year 2011, with the remaining 29 by fiscal year 2014.
        The Air Force will meet the 395 C-130 equivalent requirement
    through a combination of modernized C-130Hs, C-130Js, Joint Cargo
    Aircraft (JCA), and C-17s operated in an intratheater role.

        41. Senator Cornyn. Secretary Wynne and General Moseley, how many
    C-130Es are to be retired and what is the timetable for retiring C-
    130Es?
        Secretary Wynne and General Moseley. 141 C-130Es will be retired by
    fiscal year 2011. All 170 C-130Es will be retired by fiscal year 2014.
    The NDAA for Fiscal Year 2006 prohibited the Air Force from retiring
    any C-130Es in fiscal year 2006. Therefore, we will retire 51 in fiscal
    year 2007 (which includes 27 originally programmed to retire in fiscal
    year 2006, plus 24 programmed to retire in fiscal year 2007). The Air
    Force will then retire 24 in fiscal year 2008, 24 in fiscal year 2009,
    28 in fiscal year 2010, and 14 in fiscal year 2011 (for a total of 141
    retired in the Future Years Defense Plan (FYDP)). The remaining 29
    aircraft will be retired from fiscal years 2012-2014.

        42. Senator Cornyn. Secretary Wynne and General Moseley, how many
    C-130H1s are to be retired and what is the timetable for retiring these
    C-130H1s?
        Secretary Wynne and General Moseley. The Air Force has no current
    plans to retire C-130H1s.

        43. Senator Cornyn. Secretary Wynne and General Moseley, how many
    C-130H2s are to be retired and what is the timetable for retiring these
    C-130H2s?
        Secretary Wynne and General Moseley. The Air Force has no current
    plans to retire C-130H2s.

        44. Senator Cornyn. Secretary Wynne and General Moseley, how many
    C-130H3s are to be retired and what is the timetable for retiring the
    C-130H3s?
        Secretary Wynne and General Moseley. The Air Force has no current
    plans to retire C-130H3s.

                                  c-130 basing
        45. Senator Cornyn. Secretary Wynne and General Moseley, what is
    the present allocation of C-130s among the Active-Duty, Air National
    Guard, and Air Force Reserve?
        Secretary Wynne and General Moseley. Of the 454 primary assigned
    aircraft (PAA) combat delivery C-130s in the inventory, 165 (36.3
    percent) are in the Active Duty, 190 (41.8 percent) are in the Air
    National Guard, and 99 (21.8 percent--including 10 WC-130Js) are in the
    Air Force Reserve.

        46. Senator Cornyn. Secretary Wynne and General Moseley, please
    provide the current list of C-130 bases and the number and model of C-
    130 aircraft at each base.
        Secretary Wynne and General Moseley. See attached map detailing
    current C-130 bases and the number and model of C-130 aircraft at each
    base.

        47. Senator Cornyn. Secretary Wynne and General Moseley, what is
    the Air Force plan for maintaining C-130s in the Active-Duty Force?
        Secretary Wynne and General Moseley. The Air Force regularly
    evaluates the force structure mix between our Active-Duty, Air National
    Guard, and Air Force Reserve components. Our current force structure
    program maintains approximately 36.3 percent of the PAA C-130 combat
    delivery fleet in the Active-Duty Air Force. We will continue to
    evaluate our future force mix in the fiscal year 2008 and future
    budgets.

        48. Senator Cornyn. Secretary Wynne and General Moseley, what is
    the Air Force basing plan for Active Duty C-130s in the next 5 years?
        Secretary Wynne and General Moseley. Air Mobility Command (AMC), as
    C-130 lead command, has the primary responsibility for recommending
    long-term C-130 force structure adjustments and plans. AMC is
    developing a long-term Mobility Roadmap now that will be presented to
    the Air Staff and C-130 user commands for review and comment in the
    near future. Additionally, the DOD continues to assess requirements for
    intratheater airlift aircraft, to include the C-130 fleet, the JCA, C-
    17s operated in an intratheater role, as well as other future options
    to provide intratheater airlift capability. Analyses such as the MCS
    and Intratheater Lift Capabilities Study will help guide the Air Force
    and DOD as we continue to plan and program intratheater airlift
    capability to best meet warfighter requirements.

        49. Senator Cornyn. Secretary Wynne and General Moseley, what is
    the Air Force basing plan for Active Duty C-130s in the next 10 years?
        Secretary Wynne and General Moseley. AMC, as C-130 lead command,
    has the primary responsibility for recommending long-term C-130 force
    structure adjustments and plans. AMC is developing a long-term mobility
    roadmap now that will be presented to the Air Staff and C-130 user
    commands for review and comment in the near future. Additionally, the
    DOD continues to assess requirements for intratheater airlift aircraft,
    to include the C-130 fleet, the JCA, C-17s operated in an intratheater
    role, as well as other future options to provide intratheater airlift
    capability. Analyses such as the MCS and Intratheater Lift Capabilities
    Study will help guide the Air Force and DOD as we continue to plan and
    program intratheater airlift capability to best meet warfighter
    requirements.

                        purchase of c-130j stretch model
        50. Senator Cornyn. Secretary Wynne and General Moseley, what is
    the Air Force plan for continued acquisition of the C-130J stretch
    model beyond the existing contract?
        Secretary Wynne and General Moseley. The Air Force currently does
    not have any plans to procure C-130Js after the existing C-130J
    multiyear procurement ends in fiscal year 2008 and as a result the Air
    Force will have 79 C-130Js in the inventory. It should be noted,
    however, that the Air Force, U.S. Marine Corps, and U.S. Southern
    Command (SOCOM) are all currently considering requirements that could
    be competed in the future for aircraft in this type of aircraft class.

        51. Senator Cornyn. Secretary Wynne and General Moseley, if the Air
    Force plans to purchase additional C-130J stretch aircraft, will these
    aircraft be placed in the Active-Duty Force, the Guard, or the Air
    Force Reserve?
        Secretary Wynne and General Moseley. The current Air Force C-130J
    procurement program of record ends in fiscal year 2008 with 79 total C-
    130J aircraft.

                              light cargo aircraft
        52. Senator Cornyn. Secretary Wynne and General Moseley, what is
    the Air Force's plan concerning the acquisition of a Light Cargo
    Aircraft (LCA)?
        Secretary Wynne and General Moseley. The Air Force has teamed with
    the Army to form a joint program for the procurement of the Air Force's
    LCA and Army's Future Cargo Aircraft (FCA). The request for proposals
    has been released and contract award is planned for late calendar year
    2006. The aircraft selected will be known as the JCA and will be the
    same aircraft for the LCA and FCA.

        53. Senator Cornyn. Secretary Wynne and General Moseley, how many
    LCAs are needed?
        Secretary Wynne. I coordinated on the Acquisition Strategy Report
    February 24; it was signed by Ken Krieg on March 17, 2006. This report
    contained the initial joint buy profile for the JCA at 145. This
    initial purchase will be shared jointly between the Air Force and Army.
    Ongoing Air Force analysis will further refine the intratheater airlift
    requirements and build a mobility mix to support emerging joint
    warfighting needs.
        General Moseley. We have determined the initial joint requirement
    (Army and Air Force) for the JCA is 145 airplanes, based on analysis
    conducted by the Army. This initial number will be purchased jointly
    between the Army and Air Force. Additionally, the Air Force has
    contracted with RAND Corporation, through Project Air Force, to conduct
    additional analysis required by Joint Capabilities Integration and
    Development System to support broader joint sustainment and maneuver
    requirements for all the Services. Results from this analysis and a
    Joint AoA along with the results of the Program Decision Memorandum III
    will refine the intratheater requirement and fleet mix for the Air
    Force.

        54. Senator Cornyn. Secretary Wynne and General Moseley, what is
    the Air Force's timetable for procuring these LCAs?
        Secretary Wynne and General Moseley. The Air Force plans to begin
    procurement in fiscal year 2010.

        55. Senator Cornyn. Secretary Wynne and General Moseley, is the Air
    Force planning to use LCAs as replacements for C-130s?
        Secretary Wynne and General Moseley. The Air Force intratheater
    fleet will be a mix of C-130, C-17 and JCA, formerly the LCA, to meet
    the needs and requirements of the warfighters. We continue to weigh the
    MCS airlift options as identified in the QDR.

                              apg-68(v)10 upgrade
        56. Senator Cornyn. Secretary Wynne and General Moseley, please
    explain the Air Force's rationale for terminating the APG-68(V)10
    upgrade to the United States Air Force (USAF) F-16 fire control radar.
    This program fulfills the number one Air Force acknowledged capability
    gap of all-weather precision targeting that no other aircraft will
    address before the planned fielding of the JSF in 2014. This $69
    million development program for the (V)10 is more than 50 percent
    complete, on schedule, under cost, and exceeding all performance
    requirements. Today's F-16 is expected to be in service until beyond
    2025 to support our men and women in combat operations. The (V)10
    upgrade will provide an extremely cost-effective, major capability leap
    for the next 2 decades, without having to make the unnecessary larger
    development and procurement investment in an active electronically
    scanned array (AESA).
        Secretary Wynne and General Moseley. We appreciate your concern
    regarding the termination of the F-16 APG-68(V)10 Radar Modernization
    Program. The Air Force considered current F-16 capabilities, plans for
    F-16 fleet retirement by 2025, and fiscal budget realities when
    developing the fiscal year 2007 budget. Based on these factors, we
    decided against continuing the research and development for the APG-
    68(V)10 program. In addition, we determined an AESA radar upgrade is
    also not economically feasible for the F-16. Termination of the (V)10
    program saved $57.2 million in research, development, test, and
    evaluation (RDT&E) and $188.5 million (procurement for 108 Block 50/52
    modifications) within the FYDP. To complete development and modify all
    Block 50/52 aircraft (an additional 143 aircraft), plus modify 403
    Block 40/42 aircraft, would require restoring FYDP funding plus an
    additional $819 million (procurement). Even with the loss of this
    program, the Air Force maintains capability of fulfilling combatant
    commander (COCOM) all-weather targeting requirements.
                                     ______

               Questions Submitted by Senator Joseph I. Lieberman
                                      c-17
        57. Senator Lieberman. Secretary Wynne, it is my understanding that
    the C-17 has been and still is considered the airlift of choice by the
    combatant commanders. However, the proposed fiscal year 2007 budget has
    attempted to terminate production of the C-17 at the end of this year,
    opting for a total buy of 180 planes instead of the anticipated 222. I
    understand there are budget restraints, but this decision appears to
    run against the expressed airlift needs of combatant commanders. If you
    can, please describe the importance airlift operations have played in
    ongoing operations domestically and abroad. Also, can you please
    outline the current state of the airlift fleet?
        Secretary Wynne. Airlift Operations: Mobility airlift--and
    specifically C-17 airlift--has been crucial in the war on terror. From
    the beginning, the airlifter led the way in the projection of United
    States power, whether it was dropping humanitarian supplies on night
    one of the Afghanistan campaign, or the initial positioning of
    warfighters and their supplies into the Iraq theater, or the continuing
    resupply efforts--our Nation's airlifters provide the global reach air
    bridge necessary. Since September 11, utilizing the heavy airlift
    capability of the C-5 and C-17, as well as the C-130, the Air Force has
    moved over 1.287 million tons of critical warfighter cargo and moved
    more than 939,487 passengers.
        This power projection also plays a key role in taking care of needs
    within our own borders. This was best exemplified during the Hurricanes
    Katrina and Rita evacuations. With the help of our Nation's airlift
    fleet, thousands of displaced refugees were moved from the New Orleans
    and Gulf coast area to locations where their needs could best be met.
    It also gave the first responders the equipment they needed. Commercial
    airlift could not accomplish this mission, due to the infrastructure
    damage incurred at the region's affected airfields. Only the C-17 and
    C-130, with their short and unimproved field landing capabilities, were
    able to help the victims in most areas.
        Current Status of the Airlift Fleet: Total C-5, C-17, and C-130
    aircraft availability showed a slight improvement the last three
    quarters increasing from 59.2 percent in fiscal year 2005/3 to 60.4
    percent in fiscal year 2006/1. All three airframes show positive
    mission capable, total non-mission capable maintenance, and total non-
    mission capable supply trends over the same period.

        58. Senator Lieberman. General Moseley, the MCS, which is
    frequently quoted at setting the procurement level of C-17s at 180, was
    completed prior to the QDR and the Army's articulation of its current
    deployment needs. As I understand it, the rationale behind Army
    modularization, specifically the increase in the number of brigades, is
    a supposed expansion in operational ground capabilities. How can we
    expand our ground capabilities if we do not continue to procure the
    only strategic airlifter that can deliver troops, materials, and
    ammunition to the operational front-line?
        General Moseley. The MCS and the QDR occurred in overlapping
    timeframes and there was significant sharing of information between the
    two studies. The fiscal years 2006-2011 Strategic Planning Guidance
    (SPG) directed the OSD and Joint Chiefs of Staff (JCS) staffs to
    complete the MCS study and report results for use in the fiscal year
    2008 program objective memorandum (POM) and the QDR.
        The MCS used the programmed 2012 force structures along with the
    projected, service-approved concepts of operations (CONOPs) that would
    be employed with these future forces. This data, along with other
    detailed modeling information on the scenarios, threat conditions, and
    timing contained in the Multi Service Force Deployment document was
    used to conduct the analysis.
        The MCS task was to determine if the 2012 mobility capabilities
    would support the defense strategy. After a very thorough analysis of
    various scenarios and warfighting demands, the study results indicated
    the projected capabilities meet the strategy with acceptable risk.
        The study also found that continued investment in the mobility
    system, in line with current priorities, is sufficient to maintain
    these capabilities into the future. The MCS provides a solid foundation
    for future studies and eases the data gathering burden, scenario
    development, and time required for study completion. It provides us
    with an analytically sound range of required mobility capabilities to
    use as we manage our force structure to meet the needs of the COCOMs.

        59. Senator Lieberman. General Moseley, what have the COCOMs said
    about the decision to halt C-17 production at 180 instead of the
    projected buy of 222?
        General Moseley. The fiscal year 2007 President's budget and Air
    Force program of record is 180 C-17s. The QDR, informed by the MCS,
    confirmed the current intertheater airlift program, comprised of 180 C-
    17s and 112 modernized C-5s, would support DOD warfighting demands with
    acceptable risk. All of the COCOMs concurred with the MCS.\1\ General
    Schwartz, Commander, United States Transportation Command, reiterated
    this position on March 2, 2006, before the House Armed Services
    Committee.\2\ He also subsequently stated we are using up C-17s at a
    faster rate than expected.\3\ As a result of faster than planned use
    rates, the Air Force has subsequently added seven C-17s as its number
    one unfunded priority in fiscal year 2007.
    ---------------------------------------------------------------------------
        \1\ Confirmed through Joint Staff J-4 Mobility Division, Lt. Col.
    Brian O'Connor.
        \2\ Statement of General Norton A. Schwartz, USAF Commander, United
    States Transportation Command Before the House Armed Services Committee
    On the State of the Command 2 March 2006. Exact quote reads,
    ``USTRANSCOM supports JCS and OSD efforts and agrees with the MCS
    assessment that the overall lift capability is about right, however,
    additional analysis must focus on the correct mix of C-17, C-5, and C-
    130 assets and aerial refueling and sealift recapitalization.''
    Prepared remarks available for download at http://www.house.gov/hasc/
    schedules/3-2-06USTRANSCOMStatement.pdf
        \3\ General Schwartz's response to a question from Representative
    Saxton during Q&A. Transcript provided by USTC J5/4-AM (Major Glen
    Lehman) via e-mail.

                   air force manufacturing technology program
        60. Senator Lieberman. Secretary Wynne, what role does the Air
    Force Manufacturing Technology (ManTech) program play in supporting the
    industrial base on which the Air Force will depend for the production
    of its future systems?
        Secretary Wynne. The ManTech program was established by U.S.C.,
    title 10, for the ``. . . development and application of advanced
    manufacturing technologies and processes for use to meet manufacturing
    requirements that are essential to the national defense . . .'' and to
    ``. . . reduce the acquisition and supportability costs of defense
    weapon systems and reduce manufacturing and repair cycle times across
    the life cycles. . .'' In this role, ManTech advances industrial base
    capabilities for both current and future weapon systems. The program
    typically focuses on manufacturing-related needs that are pervasive
    across multiple weapon systems that might otherwise go unaddressed.
    Another powerful aspect of the ManTech role is that the program has the
    ability to invest in promising technologies that are otherwise
    considered beyond the normal risk of industry and systems program
    offices.

        61. Senator Lieberman. Secretary Wynne, how does the ManTech
    program widely disseminate the manufacturing processes and technologies
    it develops throughout Air Force programs and the industrial base?
        Secretary Wynne. The ManTech program uses multiple avenues to
    disseminate its processes and technologies throughout Air Force
    programs and the industrial base. First, the ManTech investment
    strategy of bringing multiple ``customers'' together in joint ventures
    enables wide dissemination of manufacturing technologies. ManTech
    typically focuses on manufacturing-related needs that are pervasive
    across multiple weapon systems--not only are various Government offices
    involved, but their industry counterparts are as well. Such investments
    are often beneficial to multiple Services and defense agencies and this
    is coordinated through a standing joint leadership body called the
    Joint Defense ManTech Panel (JDMTP). Second, ManTech has an active and
    deliberate ``success story'' program that develops and publishes
    technology accomplishments through various media on a continual basis.
    Also, like other research and development activities, ManTech submits
    final reports to the Defense Technical Information Center, which are
    available to Government and industry. Finally, every year the JDMTP
    holds a well-attended Defense Manufacturing Conference to facilitate
    exchange of information on new and emerging manufacturing processes and
    technologies.

        62. Senator Lieberman. Secretary Wynne, what incentives are in
    place for defense contractors to adopt these new technologies and
    processes?
        Secretary Wynne. The primary incentive for defense contractors to
    adopt the technologies and processes developed within the Air Force
    ManTech program is the potential for improved capabilities and
    efficiencies, which in turn should position a company to better compete
    and win future business. Of further incentive, is the fact that while
    the ManTech program encourages industry cost-sharing in its Government
    investments in military critical industries, it does not require it.

                          joint strike fighter engines
        63. Senator Lieberman. General Moseley, you testified in response
    to Chairman Warner that the alternate engine (F136) would provide
    additional thrust and that it would be better suited for the vertical
    thrust mission. Given that the engines are interchangeable and that the
    lift fan gear box capacity is limited, please explain how this can be
    accomplished.
        General Moseley. It is possible that the F136 engine could generate
    more thrust. However, the Short Takeoff and Vertical Landing (STOVL)
    variant could not benefit from more thrust even if the F136 could
    provide it. Limiting factors for STOVL operation are the lift
    components, specifically lift fan torque and speed limits and exhaust
    system (three bearing swivel case and nozzle) loads. Because the lift
    fan thrust must equal the engine thrust to maintain aircraft balance
    during vertical lift, the lift fan's ability to make thrust is the
    limiter. Additionally, the exhaust system's load capability is limited
    to specification performance to save weight.

        64. Senator Lieberman. General Moseley, you testified that the Air
    Force and the Navy have a history of fleet stand-downs with the F100
    engines, as well as with other General Electric engines on occasion.
    Please provide the details of these fleet stand-downs, including when
    the stand-downs occurred and for how long.
        General Moseley. The Air Force has experienced two system wide
    fleet stand-downs due to engine issues. The first instance of Air Force
    fleet-wide grounding action was the December 1990 grounding of the B-1B
    fleet due to blade retaining ring failure resulting in first stage fan
    blade liberation on the F101 G.E. engine (there were two failure
    events, one severe enough that the engine departed the aircraft). The
    fleet remained grounded from late December 1990 through early February
    1991 until compliance with a 90-day safety time compliance technical
    order (TCTO) to install the new blade retainers that was completed by
    April 1991. The second instance was a F-16 stand down in March 1999 due
    to engine augmentor liberation, for aircraft using the P&W 100-220/220E
    (730 airframes, 101 spares).
                                     ______

                    Questions Submitted by Senator Jack Reed
                      nuclear air launched cruise missiles
        65. Senator Reed. Secretary Wynne and General Moseley, the Air
    Force maintains two types of nuclear cruise missiles, which both use
    the same type of nuclear warhead, the W-80. Over the years there have
    been numerous discussions about the need for these air launched cruise
    missiles, and on several occasions there have been proposals to retire
    these systems. The W-80 warhead is in need of a life extension.
    Planning is currently underway to begin this life extension program at
    the Department of Energy (DOE). Plans call for spending $98 million in
    2006, $102 million in 2007, $100 million in 2008, $154 million in 2009,
    and $118 million in 2010. From now until 2010 this money is used to
    plan and design the life extension program because the first life
    extended W-80 is not produced until 2010. Between now and then the DOE
    will spend over $550 million. If there is any doubt about the need for
    these cruise missiles we need to make the decision to retire them now,
    before half a billion dollars are spent just to get ready to begin the
    life extension. Is there a compelling need for these systems?
        Secretary Wynne and General Moseley. The Commander of U.S.
    Strategic Command (USSTRATCOM) determines current requirements for
    cruise missile forces. As the COCOM responsible for executing the
    Nation's military strategy regarding nuclear weapons, he sets current
    and future requirements. The continuing requirement for nuclear cruise
    missiles compels the Air Force to provide properly trained and equipped
    forces to the COCOM. To support the current cruise missile requirement,
    the W80 warhead requires a life extension program in order to be viable
    through the timeframe required by USSTRATCOM.
        DOD is in the final phase of a comprehensive study that will
    establish cruise missile requirements for the post-2007 timeframe.
    Results of this study may necessitate changes to the existing programs
    of both the Air Force and the DOE.

                       national defense education program
        66. Senator Reed. Secretary Wynne, how has the Air Force
    participated in the newly authorized Science, Math, and Research for
    Transformation (SMART) program?
        Secretary Wynne. The Air Force Office of Scientific Research was
    the executive agent for the SMART Defense Scholarship Pilot Program in
    fiscal year 2005. As part of this pilot program, the Air Force selected
    11 of the 30 initial SMART scholars--5 of whom are scheduled to
    graduate in 2006 and will then be placed in Air Force civilian
    positions. The remaining six SMART scholars not scheduled to graduate
    this year will be interns at the Air Force Research Laboratory this
    summer and will be placed in civilian Air Force positions upon
    graduation.
        With the start of the permanent SMART program in fiscal year 2006,
    the Navy Postgraduate School took over as the executive agent for the
    program. The Air Force, however, is still an active participant in the
    selection of SMART scholars and comprised 40 percent of the DOD
    reviewers on the SMART selection panel that met recently.

        67. Senator Reed. Secretary Wynne, what issues do you see in the
    current setup and execution of the program?
        Secretary Wynne. As with any new program, there will be challenges.
    The main challenge the Air Force faces with the SMART program is
    matching each scholar with an appropriate employment opportunity to
    create a win-win situation. The Air Force is proud of our SMART
    scholars and we want them to succeed in their Air Force civilian
    careers.

        68. Senator Reed. Secretary Wynne, what other initiatives is the
    Air Force undertaking to attract and retain scientists and engineers?
        Secretary Wynne. The Air Force participates in many exciting DOD
    programs to increase the number of scientists and engineers within the
    Air Force. These programs cover the education spectrum from high school
    to post-doctorate levels. We reach out to high school students through
    the Junior Science and Humanities Symposium (JSHS), which awards
    college funding for future researchers. In fact, this year's JSHS is
    being sponsored by the Air Force in Albuquerque, New Mexico. The Awards
    to Stimulate and Support Undergraduate Research Experiences provides
    funding to research universities so that they can reach out to students
    at non-research universities to provide these undergraduates research
    opportunities not otherwise available to them. In addition, the DOD
    National Defense Science and Engineering Graduate (NDSEG) Fellowship
    Program is another program aimed at increasing the number of scientists
    and engineers with doctorate degrees. The NDSEG Fellowship Program does
    this by providing talented graduate students with portable fellowships
    that allow the recipient to pursue their graduate studies at whichever
    U.S. institution they choose to attend. Finally, the Air Force's Young
    Investigator Program is an exciting new program designed to encourage
    recently graduated doctorate-level scientists and engineers by awarding
    them with grants to support their Air Force-relevant innovative
    research efforts. The Air Force is committed to the development,
    mentorship, and hiring of talented scientists and engineers.

                      air force technical workforce needs
        69. Senator Reed. Secretary Wynne, has the Air Force done a survey
    or analysis to determine its current and future technical workforce
    needs?
        Secretary Wynne. We are a capabilities-based force. We continually
    assess our workforce needs based on capabilities defined by the COCOMs,
    today and in the future. Commanders, functional authorities, and career
    field managers design their technical workforces to meet these
    capabilities. Generating and projecting aerospace power in the 21st
    century requires a technological force with a myriad of different
    skills. We use modeling and analysis to assess our Air Force workforce
    sustainment and training requirements based on changes in the global
    threat environment, national security strategy, workforce trends, and
    budgetary constraints. Each of our career field managers develops
    workforce forecasts based on their thorough understanding of evolving
    technology, changes in Air Force roles, and influences from outside
    sources. We consolidate and balance those forecasts to produce our
    overall workforce requirements, and build our accession, retention,
    development, and workforce management strategies to meet those
    requirements.

        70. Senator Reed. Secretary Wynne, what were the general
    conclusions of that analysis?
        Secretary Wynne. Technology is ever changing and because our airmen
    operate within a closed but dynamic personnel system, we must
    proactively recruit, train, and retain people with the necessary mix of
    skills. Our recruiting efforts and incentives allow us to attract
    technically savvy people, who we can develop to respond to the ever-
    changing environment. Based on these changes, we develop education and
    training opportunities to grow the right people with the right
    training/education at the right time. Once we invest resources to
    develop our workforce, we make deliberate and targeted resource
    decisions to retain these skilled professionals.

        71. Senator Reed. Secretary Wynne, which particular technical
    disciplines concern you most when it comes to finding highly qualified
    talent to fill Air Force positions?
        Secretary Wynne. The Air Force enjoys the highest quality recruits
    in the DOD for both technical and non-technical disciplines. We are
    competing favorably with the private sector to access and train top-
    notch officer and enlisted as well as civilian airmen across a myriad
    of functional areas for the employment of air and space power. Our
    biggest challenges are recruiting fully-qualified professionals in
    nursing, dentistry, and specialized medical fields. With increased
    emphasis on culturally-competent airmen, we are also working hard to
    increase the number of foreign language qualified recruits.
                                     ______

                   Questions Submitted by Senator Bill Nelson
                            santa rosa island repair
        72. Senator Bill Nelson. Secretary Wynne, I understand that DOD
    approved but that the Office of Management and Budget subsequently
    disapproved funds in the current Fiscal Year 2006 Supplemental
    Appropriations Request related to storm damage at Eglin Air Force Base
    that would repair and strengthen Santa Rosa Island (SRI). Without this
    repair, the island may not survive another storm. What is the dollar
    value of the necessary repairs?
        Secretary Wynne. The total amount to fully fund the repairs at SRI
    is $169.8 million (this number includes military construction, RDT&E,
    and operation and maintenance (O&M) funded requirements). These funds
    will repair roadways and facilities damaged during the recent hurricane
    season.

        73. Senator Bill Nelson. Secretary Wynne, what are the operational
    consequences or mission risks if this work is not done?
        Secretary Wynne. SRI is the only DOD range with unobstructed
    continuous land-to-sea access. It allows for testing and training from
    sea level to high altitude. It is also currently the only operating DOD
    range with unrestricted testing/training for large safety footprint
    weapons. Last year, test and evaluation (T&E) facilities on this island
    were essential to completing 24 quick reaction tests for munitions in
    support of Operations Iraqi Freedom and Enduring Freedom.
        Losing SRI would require reliance on other heavily tasked and less
    capable test facilities, or a significant investment in land purchase,
    airspace access, and infrastructure to duplicate the SRI T&E
    capabilities. The exact mission impacts are not quantifiable, but
    history has shown that reduced testing results in fielding of weapons
    with poorer operational performance.

                       military/environment relationship
        74. Senator Bill Nelson. Secretary Wynne, the OSD and the Army,
    Navy, and Marine Corps have initiated a number of projects throughout
    the country to protect against encroachment under the authority
    provided by Congress in section 2811 of the National Defense
    Authorization Act for Fiscal Year 2003 (now section 2684a of title 10,
    U.S.C.). This program is commonly referred to as the Range and
    Environmental Protection Initiative (REPI). Last year, the Air Force
    promulgated guidance and procedures to major commands and installations
    with regard to initiating requests for such projects. As far as I can
    find out, not a single project was forwarded by the Air Force to DOD
    for approval. Why not?
        Secretary Wynne. The Air Force uses a systematic approach to
    encroachment. As requested by DOD, the Air Force canvassed for
    potential REPI projects and provided guidance to the major commands and
    installations. We reviewed the candidate submissions and advised major
    commands and installations to first ensure they followed the Air
    Force's systematic approach to encroachment prevention. This means
    working with the local communities so that mission-compatible land use
    controls are adopted. This primary approach ensures the Air Force does
    not take on the necessary O&M costs associated with owning properties
    that should instead continue to contribute to the local tax base and be
    utilized by the community in ways that do not conflict with base
    operations.

        75. Senator Bill Nelson. Secretary Wynne, what is the Air Force's
    view of this program and its potential to protect installations from
    incompatible encroachment?
        Secretary Wynne. The Air Force considers the authority in 10 U.S.C.
    2684a, as amended, as one tool of many available to us for use in
    addressing encroachment concerns. The Air Force prioritizes these tools
    when it comes to encroachment strategies. Our first priority is to
    fully pursue no-cost strategies such as the Air Installation Compatible
    Use Zones (AICUZ) Program. The Air Force has 30 years' experience
    working with neighboring communities and counties in collaborative
    planning efforts under AICUZ, supplemented as needed with joint land
    use studies, interagency/intergovernmental coordination and outreach
    with local and State governments, and State and Federal agencies. In
    those situations where land use planning solutions are inadequate, or
    inappropriate, we have, thanks to Congress, a number of authorities
    available for our use to include 2684a. The Air Force is currently
    evaluating how to best use the partnering opportunities provided by 10
    U.S.C. 2684a in a comprehensive encroachment strategy.

        76. Senator Bill Nelson. Secretary Wynne, the Northwest Florida
    Greenway project is an Eglin Air Force Base, State, and local project
    to rationalize and set aside large tracts of land in West Florida to
    ensure compatible use and prevent encroachment. According to DOD's 2006
    Sustainable Ranges Report, the Greenway is an ``important regional
    success story'' to ``maintain an important flight path for five U.S.
    Air Force and Navy installations in that area that support important
    service and joint testing and training missions.'' The project was
    praised as a national model by Secretary Rumsfeld in remarks he gave in
    August 2005 at the White House Conference on Cooperative Conservation.
    Moreover, the Northwest Florida Greenway project is an element of the
    most recent Joint Gulf Range Complex Strategic Plan, approved by senior
    officials of all four Services that use the range, including the Air
    Force. What is the view of the Air Force with regard to the Northwest
    Florida Greenway project? If the Air Force supports the project, what
    specific steps does the Air Force intend to take to further its
    implementation?
        Secretary Wynne. The Northwest Florida Greenway project is
    certainly a successful cooperative effort to preserve operational
    capability for the military and achieve benefits for threatened and
    endangered species. In fiscal year 2004, the Air Force worked through
    OSD to provide $1 million to the Phase I Nokuse Plantation conservation
    easement; helping prevent development under restricted airspace and
    protecting black bear habitat. The Air Force uses a systematic approach
    to encroachment and will continue to emphasize working with local
    communities so that mission-compatible land use controls are adopted.
    Where this approach does not achieve desired objectives, the Air Force
    will continue to review encroachment prevention projects, including
    those proposed for the Northwest Florida Greenway. We will invest where
    possible in those projects demonstrating the best operational and
    environmental return.

        77. Senator Bill Nelson. Secretary Wynne, last year, Congress
    amended section 2684a of title 10, U.S.C., to expand the scope of
    possible projects under that authority from areas ``in the vicinity of
    a military installation'' to areas ``in the vicinity of, or
    ecologically related to, a military installation or military
    airspace.'' The reason for that change was the recognition by Congress
    that the expanded scope of the authority was necessary in order to
    effectively assure sustainable operations over the long-term, and to
    remove any questions concerning the validity of projects like the
    Northwest Florida Greenway that are designed to protect habitat and
    prevent incompatible development both with regard to the ``near
    vicinity'' of installations and with regard to critical military
    airspace beyond that ``near vicinity''. Will this change in the scope
    of the authority affect the Air Force policy on the use of the
    authority to assure sustainability of Air Force test and training
    operations?
        Secretary Wynne. Pending development of any additional DOD policies
    related to section 2684a, the Air Force does not anticipate the
    referenced amendments to section 2684a--which address areas ``in the
    vicinity of or ecologically related to''--to drive significant change
    in Air Force policy. The authority provided under section 2684a is
    another option in assuring sustainable operations. Through the use of
    fiscally smart and operationally effective approaches, the Air Force
    continuously strives to do better at anticipating and preventing
    encroachment.

        78. Senator Bill Nelson. Secretary Wynne, oil interests have been
    attempting to encroach upon military test and training ranges in the
    Eastern Gulf of Mexico. I would be interested to know your assessment
    of this risk to Air Force weapons testing and training today and into
    the future. I also understand that the Air Force is leading a detailed
    analysis to ensure we can meet future requirements for unencumbered air
    space in the Eastern Gulf for the broad scope of next generation
    hypersonic, precision, long range, and directed energy munitions and
    weapons. What is your role in this analysis? How is this analysis
    structured and how will the results be considered toward a policy
    decision?
        Secretary Wynne. We have thoroughly evaluated current and future
    mission requirements in the Gulf of Mexico. Our analysis revalidated
    the location of our Military Mission Line (MML). The majority of the
    proposed sale area is west of the MML. There is a small triangular
    portion of the proposed sale area which crosses to the east of the MML.
    We requested Minerals Management Service remove this area from the
    program. Therefore, the new proposed program will have minimal impact
    to test and training missions. In addition, there is no prohibition to
    conducting military missions west of the MML, with due regard to any
    surface structures. Our position supports a balance between the
    Nation's energy and DOD needs in the Gulf of Mexico.
        A review of existing Contiguous United States and Outside
    Contiguous United States weapons ranges is being conducted to determine
    possible candidates to test precision and long range weapons. A draft
    screening report will soon be available for review which lists all of
    the pertinent ranges worldwide. A screening criteria is applied to pare
    down the list to a group of reasonable alternatives. Those alternatives
    will then be further researched and put into a description of proposed
    action and alternatives (DOPAA) document. Following senior leadership
    approval of the DOPAA, an environmental impact statement will then be
    conducted to select a location to perform precision and long range
    weapons testing.

                                  f-22 basing
        79. Senator Bill Nelson. Secretary Wynne, I am aware that the Air
    Force has modified its basing plan for the operational squadrons of the
    F-22 and has settled on the number of aircraft for the training base.
    How has this change affected requirement for military construction?
    Specifically, do you have everything you need for the training squadron
    at Tyndall Air Force Base to ensure the facilities will support the
    mission by 2008?
        Secretary Wynne. The modified basing plan has not changed the
    number of F-22A aircraft projected for Tyndall Air Force Base, and thus
    has not changed the requirement for military construction. We believe
    we can support the training squadron at Tyndall with the amounts
    already appropriated in prior years and the $1.8 million project being
    requested in the fiscal year 2007 President's budget.

                           military space investment
        80. Senator Bill Nelson. Secretary Wynne, what are your greatest
    concerns regarding our investment strategy and program management in
    military space and how does this budget request deal with those
    challenges?
        Secretary Wynne. My greatest concern regarding our investment
    strategy and program management in military space is to ensure that we
    are funding programs that demonstrate a high likelihood of success
    based on proven technology maturity. We can ill afford to fund programs
    that are high risk and do not deliver capabilities to the warfighter on
    schedule.
        To address this challenge, we are implementing a ``Back to Basics''
    philosophy that reflects a ``walk before you run'' program construct.
    The cornerstone of the ``Back to Basics'' philosophy is to implement,
    wherever feasible, a classic evolutionary acquisition approach that
    apportions risk by applying a construct of four distinct, interrelated
    stages: science and technology, technology development, systems
    development, and system production. Appropriately funding the space
    portfolio will become even more important as we look to fund our
    programs at an increased confidence level. Space programs tend to have
    small production lots, small production issues such as test failures,
    parts problems, component delivery delays, et cetera that have large
    impacts to total program cost. The Young Panel has recommended
    budgeting to an 80/20 confidence level, which includes a 20-25 percent
    management reserve. Accordingly, the current budget requests funding
    for a higher level of confidence where possible, such as in the
    transformational satellite program.

                       evolved expendable launch vehicle
        81. Senator Bill Nelson. Secretary Wynne, what is your evaluation
    of the Boeing--Lockheed Martin joint venture to produce the Evolved
    Expendable Launch Vehicle (EELV)?
        Secretary Wynne. The Federal Trade Commission (FTC) has final
    approval authority on the United Launch Alliance (ULA) anti-trust
    review. As part of the FTC approval process, the USD(AT&L) provides a
    DOD recommendation to the FTC. The Air Force is supporting the DOD
    evaluation of ULA for this purpose. It is premature for me to comment
    on the Air Force's position on ULA until a DOD position is finalized
    and delivered to the FTC.
                                     ______

             Questions Submitted by Senator Hillary Rodham Clinton
                      proposed cuts in air national guard
        82. Senator Clinton. Secretary Wynne and General Moseley, New York
    has more Air National Guard bases than any other State and these
    installations play a critical role in our national security and our
    homeland defense. Therefore, I have joined with many of my colleagues
    in expressing concern over the proposed cuts in the National Guard
    including the Air National Guard (ANG). Please provide additional
    details about the proposed cuts in the ANG, specifically addressing the
    following issues: Given the importance that the ANG plays in homeland
    defense, is the impact of any cuts on homeland defense considered when
    end strength reductions are considered?
        Secretary Wynne and General Moseley. Bottom line--to modernize the
    Total Air Force, operating efficiencies will have to be found through
    rebalancing among components, reducing redundancies and inefficient
    business practices, and targeted end strength reductions. The National
    Guard Bureau (NGB) will use the following guiding principles,
    methodology, and priorities:
        ANG Mission
             To provide trained units and qualified persons
            available to support the Air Force in its mission to deliver
            sovereign options for the defense of the United States and its
            global interests--to fly and fight in air, space, and
            cyberspace.
             To provide trained and equipped units to protect life
            and property and to preserve peace, order, and public safety
            within the State or territory.
        Guiding Principles
             Flying mission in every State.
             Proportionality--share skill sets.
             Retain surge capability with approximately 60 percent
            part-time, ``Traditional.''
             Maintain regional capability in support of disaster
            response.
             Priority to dual-use (Federal and State) capability,
            weigh against ``how much capability is enough?''

        Initial Methodology/Priorities

             Make units ``whole.''

                     Must fix shortfalls in validated/essential
                    missions and base realignment and closure (BRAC)
                    requirements.

             Align aircrew ratios with Air Force (1.5 to 1.25).

                     Shift from ``strategic reserve'' to
                    ``operational reserve.''

             Align United Manpower Document (UMD) with United Type
            Code (UTC).

                     E.g. Combat Communications.
                     Logistics Composite Mobility (LCOM) vs. ANG
                    manpower model.

             Regionalize domestic capability.

                     E.g. Evaluate need for both ANG Red Horse and
                    Army National Guard (ARNG) Combat Engineers in same
                    region.

             Force-shaping authority to target retention efforts.

                     Selective early retirement or retaining
                    critical skills.

             If this is not enough, we must ``do less with less.''

                     Eliminate capability excess to ANG
                    requirements--``Big Blue'' missions.

                             E.g. Deployable Security Force.

        83. Senator Clinton. Secretary Wynne and General Moseley, are there
    any plans to reduce the ANG full-time equivalents, and if so, by how
    many?
        Secretary Wynne and General Moseley. There are no costs to the ANG
    planned in fiscal year 2007. Program Budget Decision (PBD) 720 provided
    guidelines and targets to the NGB to plan the future. The NGB is
    working with the various adjutants general to adjudicate how to respond
    to the guidelines for fiscal years 2008-2011. Manpower reduction is one
    option. PBD 720 includes cuts to ANG programs of $1 billion.

        84. Senator Clinton. Secretary Wynne and General Moseley, how would
    a reduction support the continued global war on terror and homeland
    security requirements?
        Secretary Wynne and General Moseley. Bottom line--to modernize the
    total Air Force, operating efficiencies will have to be found through
    rebalancing among components, reducing redundancies and inefficient
    business practices, and targeted end strength reductions. The NGB will
    use the following guiding principles, methodology, and priorities:
        ANG Mission
             To provide trained units and qualified persons
            available to support the Air Force in its mission to deliver
            sovereign options for the defense of the U.S. and its global
            interests--to fly and fight in air, space, and cyberspace.
             To provide trained and equipped units to protect life
            and property and to preserve peace, order, and public safety
            within the State or territory.
        Guiding Principles
             Flying mission in every State.
             Proportionality--share skill sets.
             Retain surge capability with approximately 60 percent
            part-time, ``Traditional.''
             Maintain regional capability in support of disaster
            response.
             Priority to dual-use (Federal and State) capability,
            weigh against ``how much capability is enough?''
        Initial Methodology/Priorities
             Make units ``whole.''

                     Must fix shortfalls in validated/essential
                    missions and BRAC requirements.

             Align aircrew ratios with USAF (1.5 to 1.25).

                     Shift from ``strategic reserve'' to
                    ``operational reserve.''

             Align UMD with UTC.

                     E.g. Combat Communications.
                     LCOM vs. ANG manpower model.

             Regionalize domestic capability.

                     E.g. Evaluate need for both ANG Red Horse and
                    ARNG Combat Engineers in same region.

             Force-shaping authority to target retention efforts.

                     Selective early retirement or retaining
                    critical skills.

             If this is not enough, we must ``do less with less.''

                     Eliminate capability excess to ANG
                    requirements--``Big Blue'' missions.

                             E.g. Deployable Security Force.

        85. Senator Clinton. Secretary Wynne and General Moseley, has the
    Air Force finalized its most recent MCS? When will it be released to
    this committee?
        Secretary Wynne and General Moseley. The MCS was co-led by the
    Office of the Secretary of Defense for Program Analysis and Evaluation
    (OSD/PA&E) and the JCS J4 with participation by the Services and the
    COCOMs. The study is complete and the final report signed out by the
    Deputy Secretary of Defense on December 19, 2005. Copies of the entire
    report were made available to congressional offices.

                            combat search and rescue
        86. Senator Clinton. Secretary Wynne and General Moseley, as the
    combat search and rescue (CSAR) mission within the Air Force shifts and
    the current fleet of CSAR helicopters is nearing the end of its service
    life, please provide an update on this program focusing on these
    questions: What is the current plan for the rescue forces as it relates
    to the restructuring of the Air Force?
        Secretary Wynne. As we continue our long war against global terror,
    one of the crucial capabilities the Air Force provides to the joint
    warfighter and our Nation is dedicated CSAR. CSAR capability is
    consistently one of the most requested capabilities by the COCOMs. To
    further enhance this capability, the Air Force is taking actions to
    ensure the most effective means to make available these forces for any
    contingency. Recently, the Air Force moved administrative control of
    its CSAR forces under Air Combat Command (ACC) to ensure integration
    into all facets of the joint community including operational
    deployments, training, as well as national crisis response. This
    transition is clearly the best avenue to ensure CSAR for the joint
    warfighter. Also, the future acquisition of a replacement helicopter
    for CSAR through the CSAR-X program fits hand-in-glove with the recent
    transition.
        General Moseley. I view CSAR as a moral and warfighting imperative.
    As the Air Force transforms in the 21st century, we will ensure a
    robust CSAR capability even in the current budget environment. We have
    recently aligned CSAR forces underneath ACC. This realignment will
    ensure the availability of our CSAR forces, not only for combat
    operations, but also for homeland defense. Also, as noted in your
    inquiry, the current Air Force CSAR helicopter fleet is approaching the
    end of its service life; to continue future CSAR operations the Air
    Force requires a new platform through the CSAR-X program. CSAR-X,
    currently in sourcing, will not only sustain the Air Force ability to
    perform CSAR but will offer faster response, greater survivability, and
    greater rescue capabilities. The recent realignment, coupled with the
    future recapitalization with CSAR-X, will increase the capability of
    the superb CSAR forces the Air Force provides.

        87. Senator Clinton. Secretary Wynne and General Moseley, detail
    the current operations tempo and the maintenance status of the current
    fleet.
        Secretary Wynne and General Moseley. The Air Force currently has
    approximately 29,000 personnel and 240 aircraft deployed worldwide, and
    another 40 aircraft on alert or flying in support of Operation Noble
    Eagle.
        However, the Air Force is unique among the Services in that a very
    large number of people serve multiple COCOMs at one time--often from
    home station. On any given day, approximately 210,000 of our total
    operating force of 405,000 airmen are engaged and actively supporting
    COCOM operations. Some serve through deployment and posturing for the
    Air Expeditionary Force (AEF), but many more through strategic missions
    such as missile duty, strategic mobility, and forward presence.
        The current Active-Duty Special Operations utilization rate for the
    HH-60 and HC-130 separately and combined by fiscal year from 2001 to
    fiscal year 2006/2 is provided in the table below. Average HH-60Gs
    deployed to CENTCOM increased from 13 in fiscal year 2002 to 15.8
    aircraft in fiscal year 2006/2 and average HC-130Ps deployed to CENTCOM
    declined from 54.9 in fiscal year 2002 to 13.9 aircraft in fiscal year
    2006/2.

                                            Active HH-60 and HC-130P UTE Rate
    ----------------------------------------------------------------------------------------------------------------
                                                                            Fiscal Year
                                             -----------------------------------------------------------------------
                                                 2001        2002        2003        2004        2005        2006
    ----------------------------------------------------------------------------------------------------------------
    HH060G..................................        30.4        31.2        29.1        29.7        30.2        37.8
    HC130P..................................        32.0        43.1        36.9        36.7        39.5        37.8
    Combined................................        30.7        33.5        30.6        31.0        31.7        32.5
    ----------------------------------------------------------------------------------------------------------------

                                            Active HH-60 and HC-130P MC Rate
    ----------------------------------------------------------------------------------------------------------------
                                                                            Fiscal Year
                                             -----------------------------------------------------------------------
                                                 2001        2002        2003        2004        2005        2006
    ----------------------------------------------------------------------------------------------------------------
    HH060G..................................        68.7        68.1        66.7        68.5        73.4        74.8
    HC130P..................................        73.4        75.9        72.3        71.3        68.4        78.8
    Combined................................        69.6        69.6        67.7        69.0        72.6        75.5
    ----------------------------------------------------------------------------------------------------------------
    Note: Fiscal year 2006 MC Standard for HC-130P = 72 percent and HH-60G = 70 percent.

        88. Senator Clinton. Secretary Wynne and General Moseley, what is
    the status of the acquisition of a new helicopter for your CSAR mission
    area?
        Secretary Wynne and General Moseley. The CSAR-X is currently in
    source selection. We expect a Milestone B defense acquisition board
    (DAB) and contract award in August 2006.

        89. Senator Clinton. Secretary Wynne and General Moseley, has the
    OSD approved the acquisition strategy for CSAR-X? If not, why not?
        Secretary Wynne and General Moseley. The acquisition strategy is
    currently in coordination with Office of the Secretary of Defense for
    Acquistion, Technology, and Logistics (OSD(AT&L)). Additionally,
    OSD(AT&L) conducted an investment program review (also referred to as
    the concept decision review) on March 23, 2006, to examine the program
    affordability, requirements, and additional directed mixed-fleet
    analysis, and affirmed ``that the department is on track for the
    planned August CSAR-X DAB.''

                       predator bs for air national guard
        90. Senator Clinton. Secretary Wynne and General Moseley, the Air
    Force made preliminary plans for the Predator MQ-9 beddown at the 174th
    Fighter Wing New York Air National Guard at Hancock in the first
    quarter, fiscal year 2010. This coincides with the agreement General
    Jumper made with several members of the congressional New York
    delegation last year. What is the timeline for final funding and
    production decisions of the MQ-9?
        Secretary Wynne and General Moseley. Currently, MQ-9 aircraft are
    in initial, low-rate production, while the system undergoes system
    development and demonstration. Following completion of initial
    operational test and evaluation and a corresponding Milestone ``C''
    production decision, which is scheduled for the first quarter fiscal
    year 2009, the Air Force will commence full-rate production. Current
    program funding supports this schedule.

        91. Senator Clinton. Secretary Wynne and General Moseley, what, if
    any, mechanical/design issues need to be worked out prior to these
    decisions?
        Secretary Wynne and General Moseley. The most significant new
    capabilities remaining to be developed as part of the MQ-9 system
    development and demonstration effort are: a stores management system,
    which allows the aircraft to communicate with and efficiently employ
    precision-guided weapons; a 45 KVA electrical power generation system;
    a digital electronic engine control to increase flight endurance by
    optimizing engine performance; increased-strength landing gear to allow
    the MQ-9 to land using normal procedures without having to jettison
    unexpended weapons; and a characterization of Lynx Synthetic Aperture
    Radar automatic static target cueing.

        92. Senator Clinton. Secretary Wynne and General Moseley, these
    decision impact another timeline which is for the programmatic movement
    (retirement) of the 174th's F-16s to Fort Wayne, Indiana (second
    quarter 2009). General Jumper stated that no F-16s would be moved until
    Predators were on the base and operational. Can you provide assurance
    that regardless of what happens with the timeline of funding and
    production decisions of the MQ-9, the F-16s at Hancock will not move
    until Predators are on base?
        Secretary Wynne and General Moseley. Our current plan includes IOC
    with fully-trained New York ANG manpower and a Ground Control Station
    at Hancock Field by the first quarter of fiscal year 2010. It is
    important to note that it takes a minimum of 6 months and a maximum of
    1 year to train IOC crews and maintainers. Qualified crews at Hancock
    Field can operate Predators that are forward deployed throughout the
    world. This ``reach back'' sourcing allows New York ANG members at
    Hancock Field to provide immediate combat capability even as MQ-9s are
    being delivered. With the F-16s programmed to continue flying until the
    second quarter of fiscal year 2009, we anticipate a smooth transition
    as we re-role the combat capability of New York ANG at Hancock Field.

                          c-5a refurbishment and c-17s
        93. Senator Clinton. Secretary Wynne and General Moseley, are there
    any plans to provide C-17s to the ANG?
        Secretary Wynne and General Moseley. The ANG currently has eight C-
    17s assigned to the 172nd AW in Jackson, Mississippi, plus an associate
    unit at Hickam Air Force Base (AFB). An additional C-17 associate unit
    is planned for Elmendorf AFB. Under our current total force construct,
    no additional C-17 aircraft will be assigned to the ANG.

        94. Senator Clinton. Secretary Wynne and General Moseley, will all
    C-5s, both As and Bs, go through the re-engining (RERP) process and
    AMP?
        Secretary Wynne and General Moseley. The current plan is to
    modernize the entire C-5 fleet (C-5 As, Bs, and Cs) with AMP and RERP
    modifications. This plan is currently in review with the costs,
    schedule, and resources required.

                  computer science and cybersecurity research
        95. Senator Clinton. Secretary Wynne and General Moseley, how much
    funding is the Air Force request for research in computer science and
    cybersecurity?
        Secretary Wynne and General Moseley. As part of its fiscal year
    2007 President's budget request, the Air Force requested $14.7 million
    for research in computer science and $25.0 million for research in
    cybersecurity.

        96. Senator Clinton. Secretary Wynne and General Moseley, how much
    of this funding is for fundamental research efforts?
        Secretary Wynne and General Moseley. As part of its fiscal year
    2007 President's budget request, the Air Force requested $6.7 million
    for fundamental or basic research in computer science and $5.2 million
    for fundamental or basic research in cybersecurity.

        97. Senator Clinton. Secretary Wynne and General Moseley, how are
    these investments coordinated with Defense Advanced Research Projects
    Agency (DARPA) programs in similar areas?
        Secretary Wynne and General Moseley. Air Force investments in
    computer science and cybersecurity are closely coordinated with DARPA
    to ensure programs complement each other, do not duplicate research,
    and both DARPA and the Air Force gain maximum benefit by leveraging
    each others' funding. At DARPA's request, Air Force scientists,
    engineers, and program managers assist DARPA in defining research
    topics, writing solicitations, and evaluating inputs received from
    academia and industry. DARPA then selects the Air Force to be their
    executive agent in managing the contract and technical program for the
    majority of these projects.

        98. Senator Clinton. Secretary Wynne and General Moseley, is the
    Air Force the lead Service for funding 6.1 (basic research) in
    cybersecurity? If not, who is?
        Secretary Wynne and General Moseley. The Air Force is not the lead
    Service for funding 6.1 (basic research) in cybersecurity. The DOD has
    not designated a lead Service in this area.

        [Whereupon, at 11:35 a.m., the committee adjourned.]

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                      2007

                                  ----------

                             TUESDAY, MARCH 7, 2006

                                           U.S. Senate,
                                   Committee on Armed Services,
                                                        Washington, DC.

        COMBATANT COMMANDERS ON THEIR MILITARY STRATEGY AND OPERATIONAL
                                  REQUIREMENTS

        The committee met, pursuant to notice, at 9:36 a.m. in room
    SD-106, Dirksen Senate Office Building, Senator John Warner
    (chairman) presiding.
        Committee members present: Senators Warner, McCain, Inhofe,
    Collins, Talent, Cornyn, Thune, Levin, Reed, Akaka, and
    Clinton.
        Committee staff members present: Charles S. Abell, staff
    director; and Leah C. Brewer, nominations and hearings clerk.
        Majority staff members present: William M. Caniano,
    professional staff member; Regina A. Dubey, professional staff
    member; Ambrose R. Hock, professional staff member; Gregory T.
    Kiley, professional staff member; Derek J. Maurer, professional
    staff member; David M. Morriss, counsel; Lucian L. Niemeyer,
    professional staff member; Lynn F. Rusten, professional staff
    member; Sean G. Stackley, professional staff member; and Scott
    W. Stucky, general counsel.
        Minority staff members present: Richard D. DeBobes,
    Democratic staff director; Daniel J. Cox, Jr., professional
    staff member; Gabriella Eisen, research assistant; Evelyn N.
    Farkas, professional staff member; Richard W. Fieldhouse,
    professional staff member; Bridget W. Higgins, research
    assistant; Michael J. McCord, professional staff member; and
    William G.P. Monahan, minority counsel.
        Staff assistants present: Jessica L. Kingston, Benjamin L.
    Rubin, and Pendred K. Wilson.
        Committee members' assistants present: Samuel Zega,
    assistant to Senator Warner; Christopher J. Paul, assistant to
    Senator McCain; John A. Bonsell, assistant to Senator Inhofe;
    Arch Galloway II, assistant to Senator Sessions; Mackenzie M.
    Eaglen, assistant to Senator Collins; D'Arcy Grisier, assistant
    to Senator Ensign; Russell J. Thomasson, assistant to Senator
    Cornyn; Stuart C. Mallory, assistant to Senator Thune;
    Elizabeth King, assistant to Senator Reed; Darcie Tokioka,
    assistant to Senator Akaka; William K. Sutey, assistant to
    Senator Bill Nelson; and Andrew Shapiro, assistant to Senator
    Clinton.

           OPENING STATEMENT OF SENATOR JOHN WARNER, CHAIRMAN

        Chairman Warner. Good morning, everyone. The Armed Services
    Committee meets today to receive testimony from Admiral Fallon,
    Commander, U.S. Pacific Command (PACOM); General Bell,
    Commander, U.S. Forces Korea (USFK); and General Jones,
    Commander, U.S. Forces European Command (EUCOM), Supreme Allied
    Commander, Europe.
        I want to thank each of you and your families, for the
    leadership, the dedication, and the service that you've given
    our Nation for so many years. I ask that you convey on behalf
    of all the members of this committee to the men and women under
    your command the Nation's deep gratitude for their respective
    service and their families.
        We look forward today to your insights on the developments
    in your area of operations, as well as your assessment of the
    administration's fiscal year 2007 defense budget request as it
    relates to your area of responsibility (AOR). The committee is
    also interested to hear your views with regard to the
    Quadrennial Defense Review (QDR) and about the status of
    planned changes to the U.S. force posture in the years to come.
        North Korea--and we will start off with North Korea--has
    shown extraordinary twists and turns here in the past few
    years; withdrawn from the Nuclear Nonproliferation Treaty, the
    NPT, and resumed production of plutonium for nuclear weapons.
    Although the participants in the Six-Party Talks agreed last
    year on a statement of principles to guide their further
    negotiations, North Korea rather abruptly walked back and is
    currently boycotting a resumption of the talks.
        North Korea's willingness to halt and dismantle its nuclear
    weapons program is in question. This situation poses a grave
    threat to the regional and international stability. I hope that
    the United States, working closely with our friends and allies,
    can resolve this situation through diplomatic means.
        Admiral Fallon and General Bell, we look forward to hearing
    your assessment of this complex situation on the Korean
    peninsula. The committee is particularly interested in any
    changes you have seen over the past year in North Korea's
    military posture, as well as your assessment of North Korea's
    nuclear program, ballistic missile and proliferation
    activities, and the readiness of our forces and those of South
    Korea to respond to any possible developments on the peninsula,
    both now and in the future.
        Developments in China are of continuing interest to this
    committee. Admiral Fallon, I look forward to your assessment of
    China's military modernization program and plans and the impact
    of this military modernization on the U.S. interests in the
    region. Clearly, China is developing military capabilities far
    beyond its requirements to defend its own interests in the
    homeland. What are their intentions?
        I would also be interested in your assessment of the
    current state of China-Taiwan relations in light of the recent
    decision by the Taiwanese president to dissolve the National
    Unification Council and China's continuing buildup of its
    missiles across the strait.
        In the Asia-Pacific region, the global war on terrorism is
    being waged in Singapore, Malaysia, Thailand, the Philippines,
    Indonesia, and other nations. I understand that you have
    recently visited several of these countries, Admiral, and I
    look forward to an update on your opinions.
        General Jones, there has been significant activity in North
    Atlantic Treaty Organization (NATO) since you appeared before
    this committee last year. The committee is interested in your
    assessment of how well the alliance, now 26 members strong, is
    functioning or not functioning in your judgment as well as they
    should. Our NATO allies' spending--what are their defense
    budgets and what is it in relation to what we are spending here
    in our Nation?
        Are they developing the capabilities needed to keep the
    alliance militarily effective and interoperable? How is the
    NATO decisionmaking process working? I know that has been a
    matter of concern to you. Are there plans for further
    enlargement of the alliance in your judgment?
        NATO is increasing the activity in out of area missions.
    This is appropriate and welcome, given that Europe is largely
    stable and that threats to international security are
    increasingly global. Since August 2003, NATO has been leading
    the International Security and Assistance Force (ISAF) in
    Afghanistan. The committee is particularly interested to hear
    your report on how the expansion of the NATO ISAF mission
    throughout Afghanistan is proceeding.
        Last week General Maples, Director of the Defense
    Intelligence Agency (DIA), testified before this committee that
    the security situation in Afghanistan is worsening and could
    further deteriorate in the coming spring. Should that undesired
    scenario unfold, what would be the likely effect on the planned
    expansion of the NATO ISAF force?
        This committee is keenly interested in NATO's commitment to
    help train Iraq security forces. NATO made this commitment at
    the Istanbul summit in June 2004, but the follow-through has
    been slower than we had hoped. We look forward to your report
    on the status and results to date of NATO's training mission in
    Iraq.
        Further, General Jones, you have been a leader in promoting
    an enhanced strategic partnership with Africa and highlighting
    the important strategic role Africa plays in supplying energy,
    fighting against terrorism, and promoting regional stability.
    The committee looks forward to hearing about the efforts of
    your command to counterterrorist and transnational threats in
    Africa and to help African nations develop their capabilities
    to effectively address security and stability changes. The
    committee is also interested in your assessment of China's
    expanding activities in Africa and your views on the
    possibility of an expanded role for NATO in Darfur.
        Another region of continuing interest to this committee is
    the Balkans, the one area of Europe that is most prone to
    conflict. We look forward to your assessment of the political
    and military situation there and to hearing about the status of
    the NATO forces currently serving in Kosovo.
        Again, we welcome all of our witnesses today and thank you
    again for your service.
        Senator Levin.

                    STATEMENT OF SENATOR CARL LEVIN

        Senator Levin. Thank you, Mr. Chairman. First let me join
    you in welcoming our witnesses and thanking them for their
    leadership and for the work that their commands have done in
    their AORs, and also in support of other efforts, including
    those in Iraq and Afghanistan.
        Relative to North Korea, analysts say that North Korea
    could now have up to 12 nuclear weapons this year. North Korean
    officials have declared that they have a nuclear weapons
    arsenal and that they have reprocessed the fuel rods that had
    been frozen from 1994 to 2003 under the Agreed Framework. The
    reactor the North Koreans restarted over a year ago continues
    to produce plutonium and another reactor which had been under
    construction could produce many more times the plutonium than
    the existing one.
        Meanwhile, the Six-Party Talks remain stalled over
    counterfeiting issues that the United States raised in the same
    month the last round of talks concluded. There is apparently no
    diplomatic progress and this time North Korea has not frozen
    its nuclear activities during the talks. North Korea continues
    to use the time to bolster its nuclear arsenal.
        U.S. forces in Europe and in the Pacific will undergo a
    major realignment as part of the administration's integrated
    global posture and basing strategy. In Europe this plan calls
    for the return of thousands of troops to military bases in the
    United States, the closing of hundreds of bases in the
    territories of our traditional NATO allies, and the creation of
    new basing arrangements in Eastern Europe and Africa as
    European Command's strategic emphasis shifts to the East and
    the South.
        While many of these changes are necessary as the Department
    of Defense (DOD) moves to lighter, more flexible expeditionary
    forces, concerns have been raised by the congressionally-
    mandated overseas basing commission and others as to whether
    the Department is moving too quickly or cutting our forward
    stationed forces too deeply without adequately considering the
    impact such a reduction in U.S. presence in Europe and NATO
    will have on our influence and leadership globally.
        I look forward to General Jones' views on the pros and cons
    associated with our posture realignment in the EUCOM's AOR and
    I also look forward to hearing from Admiral Fallon and General
    Bell on the strategic logic and challenges of our reposturing,
    particularly in Korea and Japan.
        NATO is also undergoing a major transformation. This past
    year has seen NATO make the shift from an alliance based on
    collective defense to one based on collective security in
    response to today's threats. NATO has demonstrated its
    willingness to operate outside the alliance's borders leading
    and expanding the ISAF in Afghanistan; deploying a mission
    inside Iraq to train Iraqi security forces; providing
    humanitarian assistance to Pakistani earthquake victims; and
    giving logistical support to African Union (AU) peacekeepers in
    Darfur, Sudan.
        However, as General Jones noted in an interview last
    October, even as NATO has demonstrated a willingness to do
    more, there appears to be a desire on the part of some NATO
    members to fund less. Despite NATO members' commitment at the
    2003 Prague Summit to a spending goal of 2 percent of each
    country's Gross Domestic Product (GDP) for defense, a majority
    of NATO members are below the mark. Further, the recent Dutch
    debate over participating in the expanded ISAF mission in
    southern Afghanistan raises concerns over whether allies will
    provide the resources to match NATO's new missions. General
    Jones, I hope you would address those concerns today.
        I want to commend General Jones for the EUCOM's strong
    leadership in elevating the strategic importance of Africa,
    both as a part of the counterterrorism strategy and because of
    Africa's significant political and economic potential. Through
    its theater security cooperation programs, the EUCOM has been
    proactive in building partner nations' security capacity and
    establishing important relationships in this too often
    neglected part of the world.
        Relative to the crisis in Darfur, I want to thank you,
    General Jones, for passing along a message at my request to the
    NATO Secretary General. On January 30, 2006, a bipartisan group
    of 34 Senators signed a letter to President Bush urging him to
    take immediate steps to help end the violence in Darfur. On
    February 1, I wrote you, General Jones, asking that you provide
    a copy of that letter to the NATO Secretary General, urging him
    to engage NATO members in developing options for an expanded
    NATO role in addressing that crisis. I thank you for your
    assistance in that regard.
        I support President Bush's call for at least a doubling of
    the international peacekeeping force in Darfur and note the
    recent moves by the U.N. Security Council to have the U.N.
    Secretary General begin planning for the AU's mission in the
    region to transition to a U.N. peacekeeping mission. But that
    transition is months away and meanwhile the crisis appears to
    be worsening, including spilling over into neighboring Chad. I
    would very much like to hear from General Jones on what role
    NATO might play in the near-term in assisting the AU mission in
    Darfur and what needs to be done to ensure that the political
    will and resources are provided.
        I would ask, Mr. Chairman, that the rest of my statement,
    including a number of thoughts relative to the situation in
    India and various issues that relate to our relationship with
    China, be inserted in the record at this time.
        [The prepared statement of Senator Levin follows:]

                    Prepared Statement by Senator Carl Levin

        Let me join the Chairman in welcoming our witnesses--General Jones,
    Admiral Fallon, and General Bell. I would like to extend our thanks to
    all of you for the work that your commands have done in your areas of
    responsibility, and in support of other efforts, especially those in
    Iraq and Afghanistan.
        The vital strategic issues that we have to explore this morning
    include: 1) the situation on the Korean peninsula; 2) China's military
    modernization and strategic objectives; 3) the impact of Indo-U.S.
    strategic initiatives; 4) U.S. global force posture in the Pacific and
    European Command (EUCOM) areas of responsibility; 5) North Atlantic
    Treaty Organization's (NATO) new missions in out-of-area operations
    such as Afghanistan, Iraq, the Balkans and elsewhere; and 6) the
    international and U.S. response to the crisis in Darfur.
        Analysts say North Korea could have up to 12 nuclear weapons this
    year. North Korean officials have asserted that they have a ``nuclear
    weapons arsenal,'' and that they reprocessed the 8,000 fuel rods that
    had been frozen from 1994 to 2003 under the Agreed Framework. This
    means that over the last 4 years North Korea has potentially produced
    up to six more nuclear weapons on top of the one to two devices the
    Intelligence Community assessed that they already had. In addition, the
    5 megawatt reactor the North Koreans restarted over a year ago
    continues to produce enough plutonium for about another nuclear device
    per year. If the 50 megawatt reactor under construction is finished in
    a couple of years, as some reports indicate may be possible, North
    Korea would be able to produce 11 additional nuclear weapons annually.
        Meanwhile, the Six-Party Talks remain stalled over counterfeiting
    issues that the United States raised in the same month the last round
    of talks concluded. There is no diplomatic progress, and unlike the
    negotiating process in the 1990s, North Korea has not frozen its
    nuclear activities.
        The recently released Quadrennial Defense Review states that ``U.S.
    policy remains focused on encouraging China to play a constructive,
    peaceful role in the Asia-Pacific region and to serve as a partner in
    addressing common security challenges, including terrorism,
    proliferation, narcotics and piracy.'' Given the concerns raised by
    China's rapid military modernization and global engagement activities,
    it is incumbent upon our Government to devise a wise policy vis-a-vis
    China, one that does not box us--or them--into any corners militarily
    or politically.
        The other potential Asian power, India, is one that the United
    States has seen increased defense cooperation with since the late
    1990s. The relationship between our two democracies is clearly moving
    in a constructive direction. Nevertheless, some concerns have been
    raised about the impact of one potential area of strategic
    cooperation--the recently announced civil nuclear agreement. This
    committee needs to know what impact this agreement would have--if
    Congress took action to allow it to come into force--on global
    nonproliferation efforts and on the regional nuclear balance.
        U.S. forces in Europe and the Pacific will undergo a major
    realignment as part of the administration's Integrated Global Posture
    and Basing Strategy. In Europe, this plan calls for the return of
    thousands of troops to military bases in the United States; the closing
    of hundreds of bases on the territories of our traditional NATO allies;
    and the creation of new basing arrangements in Eastern Europe and
    Africa as EUCOM's strategic emphasis shifts to the east and south.
    While many of these changes are necessary as the Department moves to
    lighter, more flexible expeditionary forces, concerns have been raised,
    by the congressionally-mandated Overseas Basing Commission and others,
    that the Department may be moving too quickly and cutting our forward-
    stationed forces too deeply without adequately considering the impact
    such a reduction in U.S. presence in Europe and NATO will have on our
    influence and leadership globally. I would be interested in getting
    your views, General Jones, on the benefits and downsides associated
    with our posture realignment in the EUCOM's area of responsibility. I
    also look forward to hearing from Admiral Fallon and General Bell
    regarding reposturing, particularly in Korea and Japan.
        NATO also is undergoing a major transformation. This past year has
    seen NATO make the shift from an alliance based on collective defense
    to one based on collective security in response to today's threats.
    NATO has demonstrated its willingness to operate outside the alliance's
    borders leading and expanding the International Security Assistance
    Force, ISAF, in Afghanistan; deploying a mission inside Iraq to train
    Iraqi security forces; providing humanitarian assistance to Pakistani
    earthquake victims; and giving logistical support to African Union
    peacekeepers in Darfur, Sudan. However, as General Jones noted in an
    interview last October, even as NATO has demonstrated a willingness to
    do more, there appears to be a desire on the part of some of NATO
    members to ``fund less.'' Despite NATO members' commitment at the 2003
    Prague Summit to a spending goal of 2 percent of each country's GDP for
    defense, a majority of NATO members are below that mark. Further, the
    recent Dutch debate over participating in the expanded ISAF mission in
    southern Afghanistan raises concerns. General Jones, I hope you will
    address these concerns today.
        I want to commend you for EUCOM's strong leadership in elevating
    the strategic importance of Africa, both as part of a counterterrorism
    strategy and because of Africa's significant political and economic
    potential. Through its Theater Security Cooperation programs, EUCOM has
    been proactive in building partner nations' security capacity and
    establishing important relationships in this too-often neglected part
    of the world. Regarding the crisis in Darfur, Sudan, I want to thank
    you, General Jones, for passing along a message at my request to the
    NATO Secretary General. On January 30, 2006, a bipartisan group of 34
    Senators, including myself, signed a letter to President George Bush
    urging him to take immediate steps to help end the violence in Darfur,
    Sudan. On February 1, 2006, I wrote to you, General Jones, asking that
    you provide a copy of that letter to the NATO Secretary General, and
    urging him to engage NATO in resolving that crisis. Thank you for your
    assistance. I support President Bush's call for at least a doubling of
    the international peacekeeping force in Darfur and note the recent
    moves by the U.N. Security Council to have U.N. Secretary General Kofi
    Annan begin planning for the African Union's mission in the region to
    transition to a U.N. peacekeeping mission. But that transition is
    months away, and meanwhile the crisis appears to be worsening,
    including spilling over into neighboring Chad. I would like to get your
    thoughts about what role NATO might play in the near-term in assisting
    the African Union mission in Darfur and what needs to be done to ensure
    that the political will and resources are provided.
        There are many other issues I hope we can touch on today including:
    (1) our evolving relationship with Japan; (2) efforts to combat
    terrorism, especially in Southeast Asia and Africa; (3) the future of
    our military relationship with Indonesia, the world's most populous
    Muslim country; and (4) the status of Kosovo and the impact of recent
    elections there on ongoing talks.
        I look forward to hearing from our witnesses regarding these issues
    and their assessments of how adequately the budget request for fiscal
    year 2007 and beyond meets their operational, readiness, and quality of
    life requirements.
        Thank you.

        Chairman Warner. Without objection.
        Senator Levin. Thank you.
        Chairman Warner. Thank you very much, Senator.
        Our committee will hold a closed hearing immediately
    following this in our committee room, SR-222, to receive such
    further testimony as each of the witnesses desires and to
    respond to questions. We will also put in today's record the
    entire statement by each of our distinguished witnesses. I
    commend you for getting them here in a timely way and they are
    quite prodigious in size. So I think we had best get a brief
    overview from each of the witnesses and we will proceed to our
    questions.
        Admiral, will you lead off.

      STATEMENT OF ADM WILLIAM J. FALLON, USN, COMMANDER, UNITED
                         STATES PACIFIC COMMAND

        Admiral Fallon. Yes, sir. Mr. Chairman, Senator Levin,
    distinguished members of the committee: It is a great pleasure
    and honor to be here representing the men and women of PACOM to
    testify this morning regarding our military strategy and
    operational requirements in the Asia Pacific region. The
    Pacific area is dynamic, vibrant, and I will tell you that
    overall the outlook is optimistic among most of the people in
    this region.
        Of course, we still have some deep-seated and long-standing
    frictions and mistrusts among nations that are a source of
    continuing challenge in the area. I realize that now, having
    been new in the job last year, the magnitude of this area. It
    is indeed vast. I told you last year that I was going to make
    an effort to get out and about as quickly as possible to see as
    many of these countries as I could, to meet the leaders, to get
    a first-hand view of just what is going on. I will tell you
    that I have been successful in being able to visit many of the
    countries.
        In terms of assessments, I will tell you that we are
    working hard to maintain the readiness of our forces in every
    area and I think we are in very good shape in that regard. I
    will also tell you that we have a great emphasis on maintaining
    our alliances in the region, so that we can work with our
    partners on issues within the region and in other parts of the
    world. The other major area of emphasis is on helping countries
    to develop their own capacities and capabilities, to deal with
    their internal problems, to deal with their people, so that we
    try our best to eliminate the conditions that have been prone
    to foster the extremist activity that has resulted in so many
    problems in the world. We work very hard to try to orchestrate
    our theater security and cooperation plans with the Department
    of State (DOS) and with each of the nations in the area.
        I will tell you that the priorities that I established last
    year are still I think appropriate, first off, to maintain our
    activities in the global war on terror, both within the
    region--and I will cover that in a second--and to support
    activities ongoing in the Central Command (CENTCOM), to mature
    our joint and combined warfighting. We have been continuing to
    work on that--I want to make sure that our operations plans and
    forces are credible if we should need to call upon people to
    execute those plans--continuing to advance our regional
    security cooperation throughout the Asia Pacific area, and then
    working to posture our forces for agile and responsive movement
    if required.
        To address some specific issues, in terms of overall
    threat, I will tell you that since last year there have been
    several areas that have been actually decreasing in tension,
    and I would point out Kashmir on the Indian-Pakistan border as
    one area to highlight. The situation in Korea, General Bell can
    cover in great detail, but my assessment of that is that some
    progress was made in that Six-Party Talks. Actually a couple of
    sessions were held and that was a good opportunity to get
    people together to at least go over a framework. As far as
    substantive results of those sessions, I think the jury is
    still out. I know that Ambassador Hill is working this hard,
    looking forward to another engagement.
        The situation in China, the tension in the Taiwan Strait, I
    would characterize as significantly reduced from a year ago,
    although in recent weeks the move by Chin Shui-ben to take
    action with the Unification Council has caused some concern.
    But I will cite the fact that the response from China has been
    pretty muted. There has not been much of a reaction and that is
    a change from past activity. But I think it is an area that we
    obviously have to continue to watch.
        Chairman Warner. Would you bring the mike up a little
    tighter. Your voice is failing and a lot of people in the back
    cannot hear.
        Admiral Fallon. All right, sir.
        Chairman Warner. Thank you.
        Admiral Fallon. Regarding the Taiwan situation, we have
    been working with the military of Taiwan to encourage them to
    take steps to bolster their own defense, which I think would be
    exceedingly useful both for themselves and to help us. I will
    tell you that we have had success in that regard and we are
    going to continue to work with them closely to move that
    particular initiative forward.
        Regarding our current military operations, we are
    supporting anti-terrorist activities in Southeast Asia,
    particularly in the Philippines. I have recently come back from
    a trip to Indonesia and Malaysia, reporting that both of those
    countries are moving out smartly in tightening security,
    particularly in the area around the Sulu-Aceh Sea, which has
    historically seen a lot of problematic activity, with numerous
    terrorist groups, working in the area to train their forces and
    to prepare for terrorist acts which they have carried out in
    the region.
        Regarding the budget for 2007 and the readiness of our
    forces, I am satisfied that we are generally moving forward in
    areas that would be helpful in the Pacific area, and I do not
    have any specific requirements that are not being met. We are
    paying close attention to force protection in every one of our
    areas in which we have people, working with our own component
    commanders and with the nations which we deploy forces to for
    exercises or training or operations. This is something that we
    watch every day and I'm confident that we have a handle on it.
        The other major area of endeavor is the business of force
    posture changes as we look to the future. As you mentioned, we
    have just concluded a major strategic review with Japan. We are
    in the process of working out the details of implementation. In
    fact, as we are here this morning there is a meeting occurring
    later on today in Hawaii where the representatives of Japan are
    going to sit down again with Office of the Secretary of Defense
    (OSD) and with our people to try to work through details of
    this very, very comprehensive scheme.
        General Bell, I am sure, is going to address the changes in
    Korea that are going to result in our moving essentially out of
    Seoul and down into two enclaves further south in the country.
    We have just concluded this past year a strategic framework
    agreement with Singapore, a staunch ally that continues to
    support our efforts in that area and give us access to some
    very excellent port and airfield facilities.
        There are other countries throughout the region. I will not
    go name by name, but--Australia, our very staunch ally, we
    continue a close relationship with that nation, enhancing our
    training program. I would also highlight the fact that during
    the tsunami relief response earlier last year we were able to
    take advantage of a good relationship with the country of
    Thailand to stage forces, and again just in the past couple of
    weeks, in response to a disaster in the Philippines, the
    advantage of having our forward-deployed, very well prepared
    forces, enabled us to respond within 36 hours to have people on
    the ground in the southern Philippines in Leyte trying to help
    people, to relieve their suffering and do what we could to help
    that nation to recover from its efforts, from yet another
    natural disaster.
        So as you can see, it is a busy theater. We have lots going
    on. Our men and women are working hard every day to support a
    wide range of activities. We are delighted to be there serving,
    and I want to tell you that our people thank this committee for
    your very strong support every day of our efforts. The
    soldiers, sailors, airmen, and marines in the PACOM are very
    proud to serve this Nation in the many endeavors in which they
    are engaged and we are very, very pleased to be working in the
    Asia Pacific area.
        I would be pleased to answer your questions when my
    colleagues here have had their opportunity to have an opening
    statement. Thank you very much, sir.
        [The prepared statement of Admiral Fallon follows:]

                Prepared Statement by ADM William J. Fallon, USN

                                  introduction

        Mr. Chairman and members of the committee: On behalf of the men and
    women of the United States Pacific Command (PACOM), I thank you for
    this opportunity to testify on the posture of our command, and provide
    an assessment of security in the Asia-Pacific region.
        The Asia-Pacific region is an area of dynamic human activity,
    unprecedented economic growth and continuing security challenges in
    several areas. During this past year, Pacific-based U.S. military
    forces have served in large numbers in Iraq and Afghanistan, provided
    relief to thousands in the wake of natural disasters, built capacity in
    Southeast Asian nations combating terrorists and helped stabilize the
    region through exercises and engagement with countries throughout Asia
    and the Pacific.
        In the past year, I have traveled extensively throughout the PACOM
    area of responsibility, meeting with military and government leaders,
    familiarizing myself first hand with issues, and determining how we--in
    concert with allies and partners--should prioritize efforts. These
    face-to-face discussions and first hand experiences have been very
    helpful in charting the course of our work. Several key impressions
    frame my overall assessment of the region.
        In Northeast Asia, the U.S.--Japan relationship--the only military
    alliance for the Japanese--continues as the cornerstone for security in
    that area. The soon to be concluded Defense Policy Review Initiative
    (DPRI) has charted the strategic way ahead for the alliance and
    established a framework for the future U.S. force structure in Japan.
        The U.S.-Republic of Korea (ROK) alliance is healthy and evolving.
    The transformation and rebalancing of our combined military forces
    continue on pace with no impact to our readiness to decisively defeat
    aggression from North Korea, if required. The North Korean leadership
    remains an enigma and the known ballistic missile capability of this
    country plus the potential possession of nuclear weapons are cause for
    continuing concern and attention to the Korean Peninsula. The Six-Party
    Talks, while not yet yielding a resolution to the North Korean nuclear
    issue, provide an encouraging framework for regional diplomatic
    leadership by the ROK, Japan, Russia, and China.
        China's economic momentum and military modernization are
    conspicuous and influential. Regional leaders value the prosperity
    generated by their growing neighbor. Much of Asia's recovery from the
    late 1990's financial crisis was a direct result of strong Chinese
    markets. Asia-Pacific nations are grateful for the many decades of
    security and stability which a strong U.S. military presence has
    provided to the region. But most nations also want to share in the
    economic benefits which are being generated by China. Consequently, a
    positive relationship with both China and the United States remains the
    goal of most nations.
        China continues to modernize its armed forces and acquire new
    capabilities at an accelerating rate. While nowhere near U.S. military
    capabilities, the People's Liberation Army (PLA) is enhancing a diverse
    and robust array of military hardware. While economic, commercial and
    almost every other type of interaction between the U.S. and China has
    been accelerating, military-to-military ties have lagged. We are
    working hard now to change the vector in this area, to encourage
    Chinese military leaders to substantively engage with us in a more
    transparent manner. In my discussions with PLA military leaders, they
    indicated a willingness to reciprocate. It is important to advance our
    mutual military relationship, not only to ease tension and suspicion
    but to encourage, by example, Chinese participation in the full range
    of international engagement.
        While consistently seeking to assure the People's Republic of China
    (PRC) of our desire for peaceful resolution of cross-strait issues, we
    retain our strong commitment to the defense of Taiwan should it be
    threatened by PRC military action. In this regard we have firmly and
    consistently advocated a stronger commitment and investment by Taiwan
    in its own defense. We welcome the general reduction in cross-strait
    tension between China and Taiwan, but recognize the potential for
    danger in this relationship.
        Southeast Asia is the front line of the war on terror in PACOM.
    Activities by terrorists and their supporters have been centered in the
    Philippines, Indonesia, and Malaysia, particularly in the area of the
    Sulawesi Sea. With the cooperation of those nations, we have been
    building capacity and strengthening the ability of those countries to
    resist the activities of the terrorists and to actively seek their
    capture or demise.
        In Indonesia, we are in the early stages of applying newly
    available foreign military financing and we anticipate that this
    investment, along with continued infusion of security assistance
    funding next year, will support efforts to professionalize and reform
    the Indonesian military. Terrorist and separatist perpetuated violence
    in southern Thailand, Sri Lanka, Nepal, and Bangladesh is also a
    serious concern.
        Relations with India are strongly positive. The world's largest
    democracy has much in common with us. We seek to reinforce the
    administration's effort to build a U.S.-India strategic partnership by
    enhancing our military-to-military interaction, particularly with
    increased exercises and engagement.
        These impressions highlight both the challenges and opportunities
    in the PACOM area of responsibility. We have in place key elements to
    succeed in advancing U.S. security interests and enhancing regional
    stability--vibrant alliances, opportunities for new partnerships,
    combat ready and agile forces, and committed soldiers, sailors, airmen,
    and marines to lead our efforts. As we move forward, our initiatives
    are organized into five focus areas--prosecuting and winning the war on
    terror; maturing our joint and combined warfighting capabilities and
    readiness; ensuring the credibility of our operational plans; advancing
    regional security cooperation; and, posturing forces for agile and
    responsive employment.
                           winning the war on terror
        Winning the war on terror is our highest priority at PACOM.
    Cooperating nations of the region, particularly Australia, Japan,
    Republic of Korea, Thailand, Singapore, Fiji, Mongolia, and New
    Zealand, are making or have made significant, worldwide contributions
    to the war effort in Iraq and Afghanistan. Tonga has previously
    committed forces and we expect force contributions again in 2006.
        Within Asia and the Pacific, we strive to eliminate the violence
    that now threatens the people and stability of the region and, more
    importantly, to transform at-risk environments--by, with, and through
    our regional partners. In every case, we work closely with the host
    nation, the OSD, the DOS, and our U.S. Ambassadors in crafting our
    approaches to the at-risk areas.
        Southeast Asia remains the PACOM focal point in the war on terror.
    It has experienced significant terrorist activity--as evidenced by the
    October 2005 bombing in Bali. In the southern Philippines, Mindanao and
    the Sulu archipelago remain a sanctuary, training and recruiting ground
    for terrorist organizations. We continue efforts to create a secure and
    stable environment.
        Operation Enduring Freedom-Philippines (OEF-P) remains focused on
    training, advising, and assisting war on terror efforts of the armed
    forces of the Philippines (AFP). As a result, we note both operational
    and organizational improvement in counterterrorism capacity of the AFP
    and other Philippine security forces. For example, AFP units have been
    able to sustain themselves for longer periods in the field.
    Additionally, they have been able to better coordinate across services
    to pursue objectives. Other efforts, such as strategic communication,
    humanitarian and civil assistance, civil-military operations,
    intelligence fusion, and ongoing peace negotiations between the
    Philippine government and separatist Moro Islamic Liberation Front
    (MILF), have eroded support to the Abu Sayyaf Group and Jemaah
    Islamyah. In summary, we have made progress, but more can and will be
    done.
        The Government of Indonesia's commitment to thwarting extremism and
    maritime security is readily evident, and recent operations against key
    terrorist leaders demonstrate that the skill and capabilities of
    Indonesian forces are improving. Indonesian security forces
    aggressively pursued terrorists responsible for the October 2005 Bali
    bombing, resulting in the death of one of the top two Jemaah Islamyah
    leaders, Al Zahari.
        To support and accelerate Indonesian counterterror actions, and to
    enhance maritime security, particularly in the strategically important
    Strait of Malacca, we endorse a rapid, concerted infusion of
    assistance. Aid to the Indonesian military (TNI) will help sustain
    ongoing reforms as well as increase capacity for action against
    security threats and bolster their professionalism. Our assistance to
    the TNI will contribute to the long-term success of the Indonesian
    democracy--and ultimately--help remove conditions that breed terrorism.
    In the wake of the recent DOS decision to waive the Fiscal Year 2006
    Foreign Operations Appropriations restrictions in the interest of
    national security, we have moved out smartly to implement Foreign
    Military Financing (FMF) for Indonesia. As we move forward in this new
    partnership, we remain committed to the improving the professionalism
    of the TNI and we will continue to closely observe and emphasize their
    support for human rights.
        The dedicated professionals of our Joint Interagency Task Force-
    West (JIATF-W) made major contributions in furthering war on terror
    objectives by attacking a key enabler of terrorism--transnational
    crime--in an exceptionally cost-effective way. JIATF-W personnel
    coordinated military-to-military training, information sharing, law
    enforcement training and infrastructure development projects throughout
    the theater but primarily among countries with the greatest threat of
    drug-related funding to terrorist activities. In a major success, the
    Interagency Fusion Center in Jakarta, Indonesia provided significant
    assistance to the raid of an industrial-scale drug lab outside Jakarta
    on November 11, 2005, the largest seizure in Indonesian history and
    among the largest in the world. The Philippine center is also
    operational and contributing to counter transnational threats.
        Forces from the Special Operations Command (SOCOM) Pacific play a
    key role in supporting PACOM war on terror operations. They lead the
    effort in the Philippines--in concert with our Filipino partners--
    helping stabilize and improve the social-political environment. In
    addition to operations in the Philippines, the Joint Combined Exchange
    Training (JCET) program is the principal mechanism used by Special
    Operations Forces (SOF) to assist partner nations in building capacity
    to defeat terrorism and improve our understanding of complexity of the
    local environment.
       mature our joint and combined warfighting capability and readiness
        Fundamental to success in the war on terror and continued stability
    in the Asia-Pacific region is our joint and combined warfighting
    capability and readiness. As virtually every operation and activity is
    conducted jointly and in concert with allies, it is important that we
    train to operate more effectively as a multinational team.
        The revised PACOM training plan is specifically designed to mature
    joint and combined warfighting capability, and advance security
    cooperation while more effectively using resources. During the past
    year, we have completely reviewed our training program with the goals
    of maximizing scarce training dollars and minimizing unnecessary stress
    on the force. We aligned, reduced, and, where appropriate, eliminated
    exercises. By leveraging rotational forces in theater, we can meet
    obligations with partners and allies, enhance training opportunities
    and demonstrate resolve. As one example, Exercise Cobra Gold continues
    as a premier multilateral event with 5 countries partnering in a
    Command Post Exercise and more than 20 countries participating within
    the Multinational Planning and Augmentation Team. We are also using
    this existing venue to lead the Asia--Pacific Global Peace Operations
    Initiative (GPOI) training and certification. Through the routine
    interaction created by our exercises, we expect to reduce existing
    interoperability barriers, increase military capacity and confidence,
    and enhance the likelihood of an effective regional response to future
    crises.
        Maturing our capability and readiness also requires operational
    improvements that not only span the spectrum of mission types--from
    nontraditional to combat operations--but also reflect the maritime
    nature of our theater.
    Undersea Superiority
        The Pacific Fleet has renewed its focus on Anti-Submarine Warfare
    (ASW) in view of the proliferation and increased capability of
    submarines in Asia and the Pacific. Continued enhancement of air,
    surface, subsurface, and C\4\I systems, as well as regular training and
    operations with partners and allies, will ensure our sustained ability
    to dominate any submarine threat.
    Deep Intelligence Penetration/Persistent Surveillance
        We remain overly dependent on technical collection for our human
    intelligence (HUMINT)--a dependency that prevents us from gaining an
    acceptable degree of insight into adversary intent. Such insight is
    necessary, however, if commanders are to effectively shape, deter, or
    respond militarily, particularly during the initial, escalatory stage
    of a crisis. We are working to adopt better management processes to
    meet our knowledge goals. However, increased and focused capabilities--
    more persistent, deep, and discreet surveillance, better regional
    expertise, better HUMINT--are needed to better assess adversary
    intentions.
    Command and Control (C2)
        A robust, reliable, secure, and shared communications architecture
    is critical to the C2 of military forces in joint and combined
    warfighting. To support current plans and future network-centric
    operations, we need to provide sufficient Military Satellite
    Communications (MILSATCOM) capabilities across the vast Pacific region.
    We are working to diversify critical command, control, communications,
    and computers (C\4\) sites to reduce the possibility of a disabling
    attack on our networks. Furthermore, to facilitate coalition
    interoperability, critical to the war on terror, we need to rapidly
    move from bilateral to multinational information sharing. Since
    extremism does not respect borders, meaningful counterterror response
    requires all affected nations to join hands, creating nodes of
    knowledge to thwart attacks. The ongoing effort to improve information
    sharing among Strait of Malacca littoral states is a good example.
    Strategic and Intratheater Lift
        Given the size and maritime nature of our AOR, agile employment--in
    responding to conventional attack or for a nontraditional mission--
    requires a reliable, versatile, complementary, and rapid airlift and
    sealift force. The arrival of U.S. Air Force (USAF) C-17s this year at
    Hickam Air Force Base (AFB), Hawaii and Elmendorf AFB, Alaska adds
    increased airlift capacity. We are working to ensure that beddown
    support requirements, such as maintenance and training facilities,
    practice assault air strips, and associated infrastructure, keep pace
    with the aircraft delivery schedule.
        High-Speed Vessels (HSVs) are a cost effective sealift alternative,
    providing an exceptionally flexible augment to intra-theater airlift
    assets. The acquisition of HSVs can significantly enhance the rapid
    deployment of the Stryker Brigade Combat Teams and the mobility of SOF
    throughout the AOR. We favor continued leasing of HSVs as an interim
    capability, and strongly support a more aggressive acquisition process
    to expedite Joint HSV delivery.
    Prepositioned Stocks (PREPO)/Preferred Munitions
        Due to the time-distance challenges in this theater, PACOM forces
    require readily available and properly maintained PREPO stocks at the
    outset of any conflict. With command-level attention, we have elevated
    the effectiveness of PREPO maintenance. However, we still have an
    immediate need for replenishment of these stocks and other preferred
    munitions, particularly Global Positioning Satellite (GPS)-aided and
    laser-guided weapons. The appropriate mix of emerging weapons such as
    Guided Multiple Launch Rocket System, new Patriot missiles, and the
    Joint Air-to-Surface Standoff Munitions will be important in the
    future.
        Air dominance, sea control, effective ballistic, and cruise missile
    defense, and the ability to counter chemical, biological, radiological,
    and nuclear (CBRN) attacks on our forces and homeland are essential
    requirements to military readiness in the Pacific theater. Throughout
    our operating environment, these capabilities enable our forces to gain
    access, freely maneuver, and focus on the objective--whether conducting
    maritime interdiction operations or preventing an adversary's lodgment.
    We support Joint and Service programs that would preserve our
    superiority.
                     ensure operational plans are credible
        Operational plans form the basis for military requirements in
    peacetime and initial response in war. As such, they must be both
    credible and executable. At PACOM, we bring to the planning process a
    culture that challenges assumptions, analyzes with rigor, and demands
    refinement when variables change. For homeland defense, we work with
    Northern Command (NORTHCOM) to refine and exercise comprehensive
    strategies that safeguard Americans. Additionally, annual exercises,
    such as Terminal Fury, enable us to more closely examine key aspects
    and potential friction points in our plans and to develop options which
    optimize capabilities. Equally important, our staffs gain confidence in
    their ability to execute as a result of these exercises.
                     advance regional security cooperation
        Our Theater Security Cooperation Plan serves as the primary
    blueprint to enhance U.S. relationships and military capacities of
    allies and regional partners. It is fully coordinated with our embassy
    country teams and integrates available resources--security assistance,
    military-to-military exchanges, exercises, cooperative technology
    development, and outreach programs--into a coherent, mutually
    supportive set of activities for each country. Of note, our enlisted
    leadership development program, targeted at militaries in developing
    nations, serves to enhance the professionalism and capacity of this key
    cohort. With stronger noncommissioned officers, we believe that the
    operational professionalism of units is increased as well as individual
    soldier leadership, important in building capability and respect for
    human rights.
        We view these security cooperation activities as essential to the
    execution of U.S. strategy. For relatively low cost, we can make
    progress in each of the PACOM focus areas, and we facilitate situations
    in which future challenges can be met through strong regional
    cooperation and capacity.
    Japan
        The U.S.-Japan alliance remains the most important pact in the
    Pacific and is as strong as ever. Approximately 50,000 U.S. Armed
    Forces personnel are in Japan, either permanently assigned or forward
    deployed with Naval Forces. The Government of Japan also provides
    approximately $4 billion annually in host nation support to our basing
    arrangements. These forward-stationed and forward-deployed forces send
    a strong signal of U.S. commitment to maintaining peace and stability
    in the region as well as providing a ready response force in East Asia.
        Our alliance is undergoing important changes, ensuring its
    relevance for the long-term. Continuing the work announced in the
    Alliance Transformation and Realignment Report in October, we are
    developing detailed implementation plans with Japan for each of the
    proposed posture changes (discussed later in this text).
    Simultaneously, we are conducting a U.S.-Japan interoperability study,
    exploring ways to improve how our forces coordinate a wide range of
    operations. Close collaboration is also ongoing for cooperative missile
    defense, an effort that will improve the security of Japan as well as
    the U.S.
        Prime Minister Koizumi has demonstrated exceptional leadership in
    support of the U.S.--Japan security alliance and guided the Japanese
    government (GOJ) and military through significant change. With renewal
    of its Special Legislation, Japan continued its deployment of Self-
    Defense Force (SDF) personnel to Iraq and the Indian Ocean in support
    of OEF. Additionally, Japan expeditiously deployed its SDF to Indonesia
    for humanitarian relief in the aftermath of the tsunami disaster. These
    actions clearly show the willingness and capability of the GOJ to
    deploy the SDF regionally and globally in support of security and
    humanitarian operations.
    Republic of Korea (ROK)
        The U.S.-ROK alliance is sound and continues to form the foundation
    to peace and security on the Korean peninsula. Our alliance remains
    focused on the most immediate security threat to the Korean people--
    North Korea (Democratic People's Republic of Korea--(DPRK)). The DPRK
    maintains more than 70 percent of its forces within 100 kilometers of
    the Demilitarized Zone (DMZ) and its export of missiles and missile
    technology poses a very serious proliferation concern. Other illicit
    activities--including probable state-run narcotics and currency
    counterfeiting enterprises--continue to finance the DPRK regime while
    undermining regional security.
        After four complete rounds of Six-Party Talks aimed at eliminating
    North Korea's nuclear weapons programs, it is clear that deliberate and
    coordinated multilateral efforts between the ROK, Japan, Russia, and
    China must continue. The strong ROK-U.S. defense partnership has been
    an essential cornerstone of the effort to deter aggression and resolve
    the North Korean nuclear issue peacefully through regional diplomacy.
        The ROK-U.S. alliance must remain adaptable in light of the
    changing security environment, including unconventional threats,
    China's military modernization, and the potential for reconciliation
    between the Koreas. The ROK and U.S. are working to transform both our
    militaries and the alliance. We also hope to foster greater trilateral
    military cooperation between the ROK, Japan, and the U.S., and we
    welcome Korea's adoption of a more regional view of security and
    stability. By moving forward as partners we will continue to
    successfully modernize the alliance for our mutual and enduring
    benefit.
    Australia
        One of our closest and steadfast allies, plays a key role in the
    Pacific and is a staunch partner in the war on terror. U.S. and
    Australian military forces coordinate security cooperation and
    counterterrorism activities in the Philippines, Indonesia, and
    Malaysia. Additionally, Australia plays a leading role in regional
    security with operations in East Timor, the Regional Assistance Mission
    to the Solomon Islands, and maritime security in the Pacific Islands.
        High quality, bilateral training between the Australian Defense
    Force and the U.S. Armed Forces has been a longstanding and fundamental
    tenet of our alliance, resulting in successful combined operations in
    East Timor, Afghanistan, the Persian Gulf, Iraq, and tsunami relief.
    The establishment of a Joint Combined Training Centre in Australia's
    Northern Territory will take bilateral training to a new level,
    allowing our combined forces to prepare for a modern and dynamic threat
    environment. In addition, we are strengthening intelligence sharing
    with Australia to further enhance our bilateral cooperation and
    interoperability.
    Republic of the Philippines
        The Republic of the Philippines is a steadfast ally in Southeast
    Asia, and our mutual commitment to this alliance was just reinforced by
    rapid U.S. civil and military response to February's Leyte mudslide
    disaster. Challenged by recent threats to stability, the Philippine
    Government (GRP) appears committed to democratic practices and rule of
    law. The GRP has taken the lead on initiatives to improve our
    counterterrorism cooperation, and at the same time, we see steady
    progress in Philippine Defense Reform. The GRP is committed to a
    comprehensive reform program that includes a multiyear planning and
    budgeting process and publication of annual Defense Planning Guidance.
    The Philippine Government is setting aside resources to retrain and re-
    equip up to 14 battalions with U.S. material every year for the next 5
    years and is confident this effort will succeed with very modest U.S.
    assistance. President Arroyo deserves credit for reducing the
    Philippine budget deficit by 22 percent in 2005. This strong fiscal
    position makes military reform more affordable. As Philippine
    commitment is demonstrated, we should reinforce progress appropriately.
        I am encouraged by the continued support and involvement of the
    Philippine government in significant regional events. This year they
    endorsed the Proliferation Security Initiative and its Statement of
    Interdiction Principles. They actively participated in the Association
    of Southeast Asian Nations (ASEAN) Regional Forum venues addressing
    counterterrorism and maritime security and cooperated with Australia
    and other friends and allies on diverse security matters.
    Thailand
        Thailand is a Major Non-NATO Ally, Treaty Ally, and partner which
    maintains a robust military relationship with the U.S. Having led
    military peace observers in Aceh, Indonesia, and completed engineering
    deployments in Afghanistan and Iraq, Thailand routinely demonstrates
    international commitment and also supports our training requirements by
    generously hosting the premier PACOM multilateral exercise, Cobra Gold.
    This annual exercise is a centerpiece for building regional
    competencies to respond to a wide range of transnational security
    threats and humanitarian relief contingencies. Also, Thailand has been
    particularly open and cooperative in the war on terror and
    counternarcotics efforts, and a year ago hosted U.S. and multi-nation
    tsunami relief efforts. We continue to stay abreast of the terrorist
    activity in the Southern Provinces.
    India
        We are working with our Indian armed forces counterparts to realize
    the goal of national strategic partnership envisioned by President Bush
    and Prime Minister Manmohan Singh. As vibrant democracies, India and
    the U.S. are working together to resolve issues of mutual interest such
    as maritime security, counterterrorism, and disaster relief. This year,
    PACOM forces conducted more complex and realistic training exercises
    with the Indian military, including the Malabar naval exercise with
    aircraft carriers from both nations, the second in a series of Army
    exercises leading to a brigade-level Command Post exercise, and the
    Cope India air exercise featuring a wide range of Indian and U.S.
    aircraft. As U.S. and Indian security interests overlap, we will ensure
    our military interaction enhances interoperability and fosters a
    military-to-military relationship based on trust. We believe a strong,
    democratic India will be a cornerstone of stability in the region.
        Singapore and the U.S. signed a Strategic Framework Agreement in
    July 2005 recognizing Singapore as a major security cooperation
    partner. This agreement, and the supporting Defense Cooperation
    Agreement, solidifies strategic access to Singapore for visiting U.S.
    forces and provides a framework to guide our expanding bilateral
    security relationship. Maritime security cooperation remains a key
    common interest, and we continue to work with Singapore and other
    partners to improve capacity in this area. In August 2005, Singapore, a
    regional leader within the Proliferation Security Initiative (PSI),
    held the first Joint and Combined PSI Exercise in Asia. A staunch
    supporter of the war on terror, Singapore continues to provide forces
    to Operation Iraqi Freedom (OIF) and OEF.
        Indonesia plays a unique strategic role in Southeast Asia and the
    Muslim world. As the world's most populous Muslim nation, located
    astride strategic trade routes, Indonesian democracy is critically
    important to security in the Pacific.
        Over the past year, we have advanced engagement with the Indonesian
    military by completing the first JCET since 1992, providing $11 million
    of medical supplies, and formalizing the military-to-military security
    consultative process. Our strategy for moving forward is carefully
    targeted toward areas such as humanitarian assistance and maritime
    security. We are well on the way to providing $15 million in C-130
    parts to the Indonesian Air Force through the foreign military sales
    system to help Indonesia improve its airlift capacity, particularly
    important in responding to natural disasters. We also plan to use $1
    million in Foreign Military Financing (FMF) to support critical
    improvement to the Indonesian Navy maritime security infrastructure.
    Additional FMF funding in fiscal year 2007 would allow us to continue
    airlift development and speed the deployment of coastal radars and
    communications equipment essential to Indonesia and maritime security
    for the region.
        As we move forward in this renewed partnership, we remain committed
    to the improved professionalism and reform of the Indonesian military.
    We will closely observe and strengthen their demonstrated support for
    human rights--a major PACOM focus, continually emphasized during
    numerous high level visits with Indonesia. Just last week, I returned
    from Indonesia, and several of my component commanders have recently
    visited--each of us is heartened by the progress and values we
    observed. Of note, President Yudhoyono has warmly greeted the recent
    U.S. policy changes and remains deeply committed to continued military
    reforms.
    China
        The rapidly expanding economy, growing demand for energy and clear
    aim to assume a more prominent role in regional and international
    affairs is having a major impact on the Asia-Pacific security
    environment. PACOM activities have been in concert with the Taiwan
    Relations Act (TRA) of 1979, the three Joint U.S.-PRC communique's
    (1972, 1979, 1982) and the One China policy. These policies have helped
    maintain peace and stability in the area of the Taiwan Strait for the
    past quarter century. DOD has two obligations under the TRA: assist
    Taiwan in maintaining its self-defense capability and retain the
    capacity to resist any use of force against Taiwan. Our efforts are
    aimed to prevent miscalculation which might result in conflict.
        The PRC has continued to acquire new hardware and expand military
    capabilities. While not constituting a capability near that of the
    U.S., the increasing sophistication and size of modern military
    equipment, coupled with the lack of clear national intent with regard
    to this military capability, merits our close attention. Until the PRC
    renounces any intention of using force to resolve the Taiwan issue, we
    will maintain sufficient military capability in the region to meet our
    obligations under the TRA.
        Given the complex and extensive relationship between the U.S. and
    PRC and the expressed desire to deepen the military relationship
    between us by the political leaders of both countries, PACOM has been
    strongly advocating a reinvigorated military-to-military relationship
    in a variety of areas. We have sought to focus in areas of common
    interest but have made clear to PLA leaders that the relationship
    should be guided by principles of transparency and reciprocity.
    Taiwan
        Our relationship with Taiwan is also guided by the TRA. Recognizing
    that tensions in the area have relaxed in the past year, PACOM has
    continued to encourage both Taiwan and the PRC to work to resolve
    peacefully their differences. Enhancing the ability of Taiwan to defend
    itself is the focus of our military engagement with Taiwan and we have
    seen strong interest by the Taiwan military in strengthening their
    defensive capabilities. We will continue to encourage their acquisition
    of useful technologies and a strong commitment to their own defense.
    Mongolia
        Mongolia remains a staunch ally fighting terror around the world,
    whether through involvement in Iraq, or as a volunteer for U.N.
    missions. Our relationship remains strong. The Mongolians strive to
    establish a regional center for Peacekeeping Training. Khaan Quest, a
    PACOM-Mongolia Peacekeeping exercise, will serve as a capstone to this
    year's peacekeeping training efforts. We are moving from a bilateral to
    a multi-lateral forum to include other nations in the region in this
    exercise. PACOM is steadfast in our support of Mongolian Defense Reform
    efforts; providing guidance and direction to align with more efficient
    models of Command Structure with a Joint Defense Assessment.
    Russia
        EUCOM is the supported command for Theater Security Cooperation
    planning and coordination with the Russian Federation with PACOM in a
    supporting role. Extensive coordination with EUCOM ensures security
    cooperation efforts are consistent and mutually supporting. PACOM
    interaction with Russia during 2005 saw some success; including the
    actual rescue of a trapped Russian submarine crew, the 11th trilateral
    search and rescue exercise with Canada and the U.S., and the historic
    port visit by the U.S.S. Cushing to Petropavlovsk--the first U.S. Navy
    warship visit there since World War II. Cooperative Threat Reduction
    interaction suffered because of sharply reduced funding.
    Sri Lanka
        Limited progress occurred over the past year in the peace process
    between the Government of Sri Lanka (GSL) and the Liberation Tigers of
    Tamil Eelam (LTTE). After a flurry of violence following the November
    2005 elections, we are encouraged by the recent talks in Geneva by the
    GSL and the LTTE and the plan to continue these talks in the near
    future. The PACOM security cooperation program with the Sri Lankan
    armed forces helps deter renewed violence by improving its preparedness
    as well as demonstrating to the LTTE that the GSL has U.S. support.
    Military-to-military activities are aimed at developing institutional
    values that ensure civilian control of the military, and a military
    commitment to human rights.
    Nepal
        Policy decisions as a result of King Gyanendra's February 2005
    assumption of direct rule prevented PACOM from allocating the $1.48
    million in planned Foreign Military Financing (FMF) for Nepal. Prior to
    the cessation of engagement, FMF and Special Forces Joint Combined
    Exercise Training with the Royal Nepalese Army (RNA) Rangers were
    making a difference in Nepal. International pressure and current U.S.
    policy regarding military-to-military activities with His Majesty's
    Government of Nepal have yielded little progress in democratic reform.
    The security situation in Nepal is deteriorating as the Maoist campaign
    of terror against the government and people intensifies. The RNA is
    increasingly challenged in its attempt to protect the population
    against the terrorists.
    Bangladesh
        We seek to reinforce shared values of democracy and human rights
    with the Bangladesh armed forces through security cooperation and
    training. PACOM objectives are to assist Bangladesh in fighting
    extremism, developing border control, increasing maritime security, and
    developing the counterterror skills necessary to align its security
    capabilities. The security situation in this country is deteriorating
    as Muslim extremists take advantage of corrupt government with
    increased terrorist violence.
    Malaysia
        This country has a strongly expanding economy and growing
    affluence. The government supported the ``Eyes in the Sky'' initiative
    to increase combined aerial surveillance over the Strait of Malacca and
    stood up the Malaysia Maritime Enforcement Agency, a Coast Guard-like
    organization, in late November 2005. Additionally, Malaysia has worked
    to develop the Southeast Asia Regional Center for Combating Terrorism
    as a hub for exchanging best practices on combating terrorism. These
    initiatives demonstrate a commitment to combating piracy and other
    maritime threats, reducing the potential for terrorists to use Malaysia
    for sanctuary or transit zone, and a desire to work cooperatively with
    regional partners to increase stability.
    Vietnam
        Our military-to-military relationship with Vietnam is progressing
    in a modest but positive direction. Vietnam accepted the International
    Military and Education Training (IMET) program, co-hosted a PACOM
    multilateral conference on military medicine, and expressed the
    possibility of supporting international peace operations. These are
    strong indicators of increased Vietnamese willingness to participate
    regionally. Along with prisoner of war/missing in action (POW/MIA)
    recovery operations, we promote a combined approach between our Armed
    Forces, particularly on issues that can influence regional security or
    make contributions in humanitarian assistance/disaster relief.
    New Zealand
        New Zealand has been a strong supporter of the war on terror,
    including operations in Afghanistan. The Government of New Zealand's
    1986 legislative ban of nuclear powered ships in its waters continues
    to hinder improved military-to-military relations.
    Compact Nations
        We continue to reinforce our special relationship with the three
    ``freely associated'' states--the Federated States of Micronesia, the
    Republic of the Marshall Islands and the Republic of Palau. We take
    seriously our defense obligations to these nations under the Compacts
    of Free Association through the implementation of our homeland defense
    planning and preparation. We also recognize the significant
    contributions of the citizens of the compact nations as they serve with
    great distinction in the U.S. Armed Forces including OEF and OIF. The
    Marshall Islands have a particular importance as the location of the
    Ronald Reagan Ballistic Missile Defense Test Site, a unique asset which
    is integral to the development of our Nation's missile defense programs
    and the conduct of space operations.
    Security Assistance
        One of the most important features of PACOM theater security
    cooperation is the security assistance effort we execute in partnership
    with the DOS and in close cooperation with our embassy country teams.
    Of special interest are the grant aid security assistance programs
    including IMET and FMF, powerful tools in building partnership capacity
    of security forces from developing countries. It is a vital element of
    the Philippines Defense Reform, and is enhancing counterterrorism and
    maritime security capabilities of other war on terror countries, such
    as Indonesia, Thailand, and Bangladesh. FMF is also improving the
    capability and readiness of war on terror coalition partners Mongolia
    and Fiji. PACOM countries typically receive less than 1 percent of the
    annual worldwide allocation of FMF. These modest investments in
    capacity building and prevention of the conditions which foster
    instability merit increased funding.
        Other key programs in PACOM contribute more broadly to security
    cooperation by addressing transnational concerns. Our Global Peace
    Operations Initiative program, efforts to combat weapons of mass
    destruction, preparations for pandemic influenza, the periodic
    deployment of the hospital ship, U.S.N.S. Mercy, and outreach
    organizations like the Center of Excellence in Disaster Management and
    Humanitarian Assistance (COE) and the Asia-Pacific Center for Security
    Studies (APCSS) provide foundational expertise while establishing
    enduring relationships between nations of the region. Additionally,
    Joint POW/MIA Accounting Command has proven itself as powerful force
    multiplier in our efforts to meet security cooperation goals.
    Pandemic Influenza
        Over the past year, PACOM has conducted planning, preparation,
    education, and an exercise focused on pandemic influenza in an effort
    to prepare U.S. Pacific forces for the potential of this disease. In
    addition, and in cooperation with the DOS and the Department of Health
    and Human Services (HHS), we have engaged with other Asian-Pacific
    militaries to raise the collective level of awareness and cooperation.
    We believe such coordination will help provide better visibility into
    some nations in the region, and buildup limited response capability.
    The U.S. overseas military medical laboratories in Jakarta and Bangkok
    are providing essential services in support of these efforts.
    U.S.N.S. Mercy Deployment
        The deployment of one of the Nation's two hospital ships, U.S.N.S.
    Mercy, during the South Asia tsunami relief operations clearly
    demonstrated the potential of these ships to aid the needy as well as
    advance security cooperation. This year we plan to begin periodic
    humanitarian and civil assistance deployments to further our
    relationships, build capacity and flexibility, and encourage stable,
    secure environment development in key nations in the Asia-Pacific. To
    effectively employ resources and build upon the lessons learned and
    teamwork from tsunami relief, we hope to include nongovernmental
    organizations (NGOs) on U.S.N.S. Mercy to support our operational and
    humanitarian goals.
               posture forces for agile and responsive employment
        Forward deployed forces, ready for immediate employment, send an
    unambiguous signal of undiminished U.S. commitment to the Asia-Pacific
    area. Agile and responsive global forces also act to deter aggression,
    provide the National Command Authority rapid, flexible options in
    crises, and the ability to dominate an opponent in combat if required.
    We are focusing our ongoing transformation and rebalancing efforts on
    improving our responsiveness.
        Importantly, we approached transformation and rebalancing from a
    regional perspective and have enjoyed the support of allies and
    partners in the process. In particular, the cooperation with the GOJ
    and the ROK has set the stage for improved combat capability while also
    reducing the impact on the local populace. Additionally, we are
    coordinating closely with the Government of Guam as we strive to
    optimize our future military posture. In executing the posture changes
    described below, we are concerned first and foremost with preserving
    combat capability. We will relocate U.S. forces in close consultation
    with allies and in a manner which retains our force employment
    capability. Completing the necessary infrastructure on the agreed
    timeline will require expeditious and continued commitment of financial
    resources.
        The realignment and consolidation of USFK into two hubs optimally
    locates forces for combined defense missions, better positions U.S.
    forces for regional stability, greatly reduces the number of major
    installations, returns most installations in Seoul to the ROK, and
    decreases the overall number of U.S. personnel in Korea. When
    completed, these initiatives will also result in joint installations
    that provide more modern and secure facilities, expanded training
    space, a less intrusive presence, and an enhanced quality of life for
    both Koreans and U.S. forces and their families. Additionally,
    transformation reciprocally supports our Korean ally's goal of building
    military self-reliance and a regionally capable force. The redeployment
    of 12,500 American forces remains on schedule for a 2008 completion.
        Our Japan Alliance Transformation and Realignment negotiations
    through the DPRI are nearing conclusion, with an agreed implementation
    plan expected by March 30 of this year. This effort assessed the
    security environment in the region and bilaterally determined the
    required roles, missions, capabilities, and force structure. With this
    initiative, we will inaugurate several substantive changes in Japan
    including transfer of U.S. carrier tactical aviation from Atsugi Naval
    Air Facility to Marine Corps Air Facility Iwakuni, collocation of U.S.
    and Japanese air command and control at Yokota Air Base, reduction of
    the Marine footprint on Okinawa by approximately 7,000 Marines and
    relocation of them to Guam. Subsequent to Marine redeployment and
    consolidation of forces on Okinawa, we intend to return land to the
    Japanese and thereby mitigate some irritants to local communities. The
    GOJ has also approved U.S.S. George Washington, a nuclear carrier, as a
    replacement for U.S.S. Kitty Hawk.
        In South and Southeast Asia, we are continuing efforts to increase
    access and theater security cooperation opportunities through the
    development of Cooperative Security Locations (CSL) and Forward
    Operating Sites (FOS). Such locations would be characterized by minimal
    infrastructure and periodic presence. In December 2004, we validated
    the CSL concept in the tsunami response.
                               quality of service
        Our personnel readiness remains strong. Morale is high. Your
    continued support of our Quality of Service (QOS) initiatives
    contributes immensely to our combat readiness and the retention of our
    highly skilled soldiers, sailors, airmen, and marines. In particular,
    thank you for demonstrating your commitment to our military men and
    women and their families by approving the 3.1 percent pay raise,
    authorizing full Basic Allowance for Housing for reservists called to
    Active-Duty for more than 30 days, making permanent the increase to the
    Family Separation Allowance rate, enhancing the death gratuity benefit
    to $100,000, increasing the Servicemen's Group Life Insurance maximum
    amount to $400,000, and authorizing retroactive Hostile Fire and
    Imminent Danger Pay. In addition, by providing travel and
    transportation rights to family members to visit their hospitalized
    service member and not requiring payment for meals in a military
    hospital by members undergoing recuperation or therapy, you have helped
    to improve morale and build loyalty.
                               summary statement
        Last year's visits to the region by the President and Defense
    Secretary are indicative of the growing prominence of the Asia-Pacific.
    The extraordinarily dedicated men and women of PACOM--serving in and
    out of uniform--understand the region and its importance to our
    national interests. We are committed and prepared to serve those
    interests--whether in peace or at war. The American people and Congress
    have provided staunch support and we sincerely appreciate your advocacy
    and assistance. I am proud and honored to represent the men and women
    of PACOM. On their behalf, thank you for your support, and thank you
    for this opportunity to testify on our Defense posture.

        Chairman Warner. Thank you, Admiral.
        General Bell.

     STATEMENT OF GEN BURWELL B. BELL III, USA, COMMANDER, UNITED
     NATIONS COMMAND AND REPUBLIC OF KOREA/UNITED STATES COMBINED
       FORCES COMMAND, AND COMMANDER, UNITED STATES FORCES KOREA

        General Bell. Thank you, Mr. Chairman, Senator Levin,
    distinguished members of the committee. It is my pleasure to
    appear before you today representing the servicemembers and DOD
    civilians who serve in the Republic of Korea (ROK). On behalf
    of these outstanding young men and women, I want to thank you
    for your continuing support.
        Since I assumed command in Korea last month--last year you
    were on the hook, Admiral Fallon, to be the new guy and that is
    my situation this year--I have had a chance to assess the ROK's
    military capability and certainly that of North Korea. It is my
    belief that our alliance with the ROK remains strong as a key
    strategic partnership for the United States, as well as for the
    ROK.
        The ROK-U.S. alliance provides a pillar of stability in
    northeast Asia while it deters North Korea. The ROK-U.S. mutual
    defense treaty relationship has progressed from a single-
    purpose military alliance into a broader alliance based on
    shared democratic values and common interests. Although the
    United States has many ongoing global commitments, and I
    realize that, I am convinced that we must continue to stand
    with our South Korean partner to deter aggression on the Korean
    peninsula. In doing this, we will also substantially contribute
    to regional stability.
        The success and prosperity of the ROK reflects the results
    of a half century of United States and American commitment.
    Since the Korean War, the alliance has maintained a security
    environment favorable to the development of what is truly a
    remarkable free market economy, as well as a great free and
    democratic society in the ROK. Today South Korea is a world
    economic leader. They are indeed our close friend and our
    partner.
        One-quarter of the world's economic output is generated in
    northeast Asia and the ROK ranks as our seventh largest trading
    partner. United States trade alone in the region exceeds $500
    billion a year. Our Nation, as you may know, is currently
    entering into negotiations with the ROK for a free trade
    agreement. All this is good for us at home in my view as we
    trade in the global economy.
        Meanwhile, my assessment of the ROK military is that it is
    on a solid path to modernization and transformation. It
    continues to assume tough mission sets which heretofore could
    only be accomplished by the United States forces. Today, with
    our help, the ROK is fully capable of defending itself from
    North Korean aggression.
        In contrast, North Korea is a significant threat that must
    still be deterred. North Korea's Kim regime continues to build
    and sustain a military arsenal far beyond any requirements for
    self-defense, at the dire expense of its own people's
    wellbeing. North Korea's military is located forward along the
    DMZ and is positioned to strike, well within range of Seoul,
    where about half of South Korea's 48 million population
    resides.
        North Korea's missile inventory and its self-declared
    possession of nuclear weapons threaten the northeast Asia
    region and beyond. North Korea proliferates a range of weapons
    and technologies and it appears willing to sell to anyone. As
    North Korea continues to proliferate and pursue weapons of mass
    destruction (WMD) capability, they may eventually threaten the
    continental United States and indeed the entire world.
        The United States and our allies have attempted significant
    engagement efforts with North Korea and we will continue to do
    so in the future. But North Korea delays discussion, breaks
    commitments, and disregards international standards of
    behavior. The Kim Jong Il regime prefers to pursue its own
    ends, regardless of the good faith efforts of the United States
    and other regional actors.
        With the reality of North Korea ever present, there is a
    desire in both the United States and the ROK to see our half-
    century alliance mature and adapt to the contemporary and
    foreseeable security environments. I think this approach is
    reasonable and healthy.
        As we support the ROK's desire for a greater role in its
    own defense, we also complement our efforts to meet our own
    transformation objectives. In the past few years, we have begun
    to reposition our forces south of Seoul, redeploy selected
    units to our home shores, and return valuable land to the
    Korean people. This process will continue over the next few
    years.
        Recently the ROK government has asked us to revise the
    command structure which characterizes our current military
    relationship should war break out on the peninsula. Today the
    alliance calls for a combined or equally shared operational
    command arrangement between our two nations, under my
    leadership of what we call the Combined Forces Command (CFC).
    In the future, South Korea would like to move to a command
    relationship where they would independently direct combat
    operations of their forces, and the United States forces would
    transition from our current equally shared command relationship
    to more of a supporting role. The ROK military is in my view
    modern and capable and my assessment is that this arrangement
    that they seek will make sense for both nations, while
    continuing to effectively deter and ensure victory should
    deterrence fail.
        In the future, to support the ROK where our ally is
    exercising independent combat command, I envision U.S. military
    contributions to the alliance to be air- and naval-centric. As
    I see it, our past commitment to the ROK and the region has
    significantly benefited our own Nation as well as that of the
    ROK. Throughout our history, the United States has prided
    itself in our promotion of democracy, free market economies,
    the celebration of individual freedoms and rights, and the
    propagation of peace and security. The ROK-U.S. alliance
    demonstrates our continued dedication to those ideals today and
    into the future.
        That is my current assessment. I really do thank you for
    this opportunity to appear before you today and I look forward
    to taking your questions during this hearing. Thank you, Mr.
    Chairman.
        [The prepared statement of General Bell follows:]

                  Prepared Statement by GEN B.B. Bell III, USA

        Mr. Chairman, and distinguished members of the committee, thank you
    for the opportunity to appear before you today as Commander, United
    Nations Command; Commander, ROK--United States CFC; and Commander,
    USFK. It is my distinct honor to represent the soldiers, sailors,
    airmen, marines, and their families who serve in the ROK. On behalf of
    these outstanding men and women who serve our country, I thank you for
    your unwavering commitment to our Nation's Armed Forces and improving
    the quality of life of our servicemembers and their families. Your
    support allows us to ensure security on the Korean peninsula and
    promote stability in the Northeast Asia region. I appreciate this
    opportunity to report on the state of the Command and on the
    strengthening of the ROK-United States Alliance.
        Much has changed in the more than half-century of the ROK-United
    States Alliance, change affected both by the events of September 11,
    2001 and by new developments on the Korean peninsula, revealing a far
    more complex security environment. These changes have resulted in
    increased security responsibilities for the United States and increased
    interdependence with our allies and coalition partners throughout the
    world. A new generation of South Korean leaders, cognizant of their
    national achievements, is eager to achieve a more constructive
    relationship with North Korea and to take a more active role in
    regional affairs. At the same time, while still dependent on
    international aid for economic survival, North Korea has continued to
    defy international conventions through its declared possession of
    nuclear weapons, presenting a clear threat to both the region and the
    entire world.
        While the dynamics of the security environment are evolving and our
    security relationships continue to mature, the fundamental purpose of
    the ROK-United States Alliance remains unwavering: deter and defend
    against a North Korean threat; and sustain a mutual commitment to
    regional security and stability. We continue to encounter calculated
    North Korean efforts to divide an alliance that has been the foundation
    for peace and prosperity in the Northeast Asia region for over half a
    century. Together, we are working to transform the ROK-United States
    Alliance into a stronger, far more capable alliance, while setting
    conditions for an enduring United States military presence in Korea.
    This military transformation of the ROK-United States CFC will also
    bolster regional security and stability, promote prosperity, and better
    defend democracy in the region.
                    the northeast asia security environment
        The United States has significant, long-term interests in Northeast
    Asia; namely, mitigating threats to regional stability, promoting
    economic cooperation and free market enterprise, and fulfilling our
    commitments to allies and friends. The longstanding presence of United
    States forces and the strength of our strategic partnerships provide
    the foundation for stability and the catalyst for continued cooperation
    and prosperity in the region. Forward-deployed United States forces
    demonstrate our resolve to strengthen and expand alliances, counter the
    proliferation of weapons of mass destruction, work with partners and
    friends to defuse regional conflicts, and stand with our partners to
    oppose threats to freedom wherever they arise. United States forces
    based in South Korea, along with military forces from the ROK and other
    regional partners, enable the promotion of long-term regional stability
    by continuing to deter an increasingly manipulative and provocative
    North Korea.
        Northeast Asia is a nexus of economic might. United States trade in
    the region accounted for about 24 percent of our Nation's total
    international trade in goods for 2005, exceeding the share of goods
    traded with the European Union (EU) and second only to our trade with
    the countries of the North American Free Trade Agreement (NAFTA).
    Bilateral United States-ROK trade alone totaled $72 billion in 2005.
    All told, over one-quarter of the world's total trade flows through the
    Northeast Asia region. With this trade and investment likely to expand
    in the future, the stability of Northeast Asia is essential to the
    vitality of global markets, upon which the prosperity of the United
    States also greatly relies.
        While economic cooperation and interdependence within Northeast
    Asia represent a positive trend toward encouraging stable relations,
    our military presence remains essential in a region that includes five
    of the world's six largest militaries, three of the world's proven
    nuclear powers, and one self-declared nuclear state--North Korea.
    Historical enmity amongst nations, coupled with the continuing upward
    trend in regional military expenditures, present the potential for
    large-scale military competition and corresponding instability. Over
    the last decade, while average global defense spending has declined,
    defense spending in Northeast Asia has increased by about one quarter.
        Within this context, North Korea continues to defy the
    international community by declaring its possession of nuclear weapons,
    which are a threat to the security and stability of the peninsula, the
    region, and the world. The Six-Party Talks between the United States,
    ROK, North Korea, China, Japan, and Russia on the issue of North
    Korea's nuclear weapons programs represent the six countries most
    engaged in this area of the world with respect to the assurances of a
    peaceful and stable Korean peninsula. The United States is committed to
    resolving the North Korean nuclear issue peacefully. Because the North
    Korean nuclear issue is complex, the solution will likely be
    complicated, requiring substantial effort by all parties involved.
    However, the fact that the six parties remain engaged is an indication
    of positive intent. Throughout this process, the Alliance will remain
    ready to deter, and if necessary, to defeat a North Korean attack.
            north korean challenges to regional and global security
        North Korea poses a variety of threats to regional and global
    stability: an active nuclear weapons development program; growing
    proliferation of missiles and missile technology; assessed possession
    of chemical weapons and a biological research program; large
    conventional and SOF; and a failing economy. Its leader, Kim Jong Il,
    shows little regard for the welfare of ordinary citizens, and uses
    extensive internal security measures to ensure that no internal
    challenge to his regime emerges. He increasingly encourages illicit
    activities such as drug trafficking and counterfeiting of U.S. currency
    to generate hard cash, and demonstrates little regard for international
    convention or agreements. The regime repeatedly uses the threat of
    large-scale war and WMD in order to extort aid or other concessions
    from the international community.
        Kim Jong Il's paramount concern is to remain firmly in control. He
    rules the Nation through a small cadre of elites who control all
    aspects of North Korean life. While the reunification of the peninsula
    under North Korean control remains the primary stated purpose of his
    regime, the ultimate goal of the North Korean dictator is self-
    preservation. Currently, there is little evidence to suggest that any
    internal threat to the regime exists.
    The North Korean Military
        The world's most militarized nation in proportion to population,
    North Korea has the world's fourth largest Armed Forces with over 1.2
    million Active-Duty personnel, and more than 5 million Reserves.
    Mandatory military conscription lasts 8 years on average, with most
    servicemen performing the same job in the same unit the entire period.
    This stability in the ranks allows North Korean units to maintain
    readiness while limiting the expenditure of scarce resources. With more
    than 70 percent of its Active-Duty combat forces deployed south of the
    Pyongyang-Wonsan line, within approximately 50 miles of the DMZ, North
    Korea poses a significant and immediate threat to the security of the
    ROK.
        Despite aging equipment and simplistic methods, North Korea's
    conventional military forces pose a continuing threat due to its sheer
    size and forward positions. Approximately 250 long-range artillery
    systems are within range of Seoul from their current locations.
    Although qualitatively inferior, North Korea's air force and navy, with
    over 1,600 aircraft, 700 ships, and the world's largest submarine
    fleet, are postured to launch operations against the ROK or other
    nations in the region with little or no warning.
        While North Korean economic difficulties have impaired the
    readiness, modernization, and sustainability of its conventional forces
    to some degree, North Korea, through its ``Military First'' policy, has
    continued significant investment in asymmetric capabilities that
    include nuclear weapons programs, SOF, missiles, and WMD.
    North Korean Asymmetric Threats: Nuclear Capabilities, Special Forces,
            Missiles, and WMD
        North Korea's asymmetric capabilities are substantial and represent
    a significant threat to the ROK and the region. The most pressing
    concern of these threats is North Korea's nuclear weapons programs.
    North Korea's abandonment of the 1994 Agreed Framework and
    International Atomic Energy Agency (IAEA) Safeguards Agreement,
    withdrawal from the Nuclear Non-Proliferation Treaty, restart of the
    Yongbyon nuclear reactor, and declarations that it possesses nuclear
    weapons and reprocessed 8,000 spent nuclear fuel rods are all matters
    of great concern. North Korea claims to have nuclear weapons--a claim
    the Director of National Intelligence (DNI), Ambassador John D.
    Negroponte, assesses as probably true. These weapons are a threat to
    regional stability and, if proliferated, global security. In addition,
    the Kim Jong Il regime continues to use its ``nuclear deterrent
    capability'' as a bargaining tool for economic assistance and political
    concessions.
        North Korea's 100,000-man SOF are the world's largest and enjoy the
    highest military funding priority for the regime. Tough, well trained,
    and profoundly loyal, these forces are engaged in strategic
    reconnaissance and illicit activities in support of the regime. During
    conflict, these forces will direct long-range missile and artillery
    strikes against key facilities in the ROK, attack to disrupt command
    facilities of the ROK-United States CFC, and seek to destroy the
    Alliance's ability to generate combat power through off-peninsula
    reinforcement.
        The North Korean ballistic missile inventory includes over 600 SCUD
    missiles that can deliver conventional or chemical munitions across the
    entire peninsula. North Korea also possesses as many as 200 medium
    range ballistic No Dong missiles with a range of 1300km that are
    capable of reaching Japan with these same payloads. Reports indicate
    North Korea is also preparing to field a new intermediate range
    ballistic missile which could easily reach United States facilities in
    Okinawa, Guam, and possibly Alaska. The regime's continued development
    of a three-stage variant of the Taepo Dong missile, which could be
    operational within the next decade, would not only provide North Korea
    the capability to directly target the continental United States, it
    would also allow North Korea--the world's leading supplier of missiles
    and related production technologies--the ability to provide its clients
    with the intercontinental capability to undermine stability in other
    regions.
        The size of North Korea's chemical weapons stockpile is likely
    significant. We assess North Korea is probably capable of weaponizing
    chemical agents for conventional weapons systems, missiles, and
    unconventional delivery. Some reports suggest that Pyongyang may have a
    biological weapons research program. North Korea believes its nuclear
    and missile programs complement its conventional military capabilities
    to contribute to its security, providing deterrents to external
    intervention. Given North Korea's record of ballistic missile
    proliferation, we are concerned they may proliferate WMD.
    The North Korean Economy
        Severe economic problems remain the most pressing threat to the
    viability of the Kim Jong Il regime. Despite North Korea's limited
    experiments with free-market reform, its leadership is struggling with
    the cumulative impacts of a decade of economic decline. Total economic
    output has dropped nearly 25 percent since 1992 and factories operate
    at less than 25 percent capacity. The Nation's power and transportation
    infrastructure are in need of massive overhaul and agricultural output
    can only feed two-thirds of the population. Compounding these
    difficulties, the regime institutes a ``Military First'' Policy which
    directs approximately one-third of the limited domestic output to the
    military. This policy ensures that the military receives top priority
    with all resources, thus limiting the resources that could be used for
    the welfare of the North Korean people. While many factors contribute
    to North Korea's economic decline, the regime's high rate of military
    spending remains the major impediment to long-term recovery. North
    Korea's economy remains bolstered by aid from the international
    community. The regime also directs illicit activities such as drug
    trafficking, smuggling, and counterfeiting, as well as the
    proliferation and international sale of missiles, missile technology,
    and conventional arms to raise hard currency.
    Assessment of the North Korean Threats
        Despite its apparent economic decline and political isolation,
    North Korea continues to pose a dangerous and complex threat to
    regional and global peace and security. It maintains a massive,
    offensively postured conventional force that far exceeds the
    requirements to defend its country. There is little evidence to suggest
    the regime will abandon its ``Military First'' Policy, provocative
    diplomacy, nuclear challenges, missile proliferation and illegal
    activities, all of which are designed to contribute to its survival.
    North Korea will continue to maintain its bellicose stance toward the
    rest of the world, implementing limited policy and economic changes,
    while subjecting its people to continued repression. For now and into
    the foreseeable future, it will remain a major threat to stability and
    security in Northeast Asia and the world.
                  the republic of korea-united states alliance
        The ROK-United States Alliance has, for over 50 years, guaranteed
    the security of the ROK against the threat of North Korean aggression,
    while enhancing peace and stability in the region. This alliance was
    forged during the Korean War and is exemplified today through the CFC.
    While there have been many challenges in the region, the ROK--United
    States Alliance has remained stalwart in its mutual and enduring
    commitment to the security of the ROK and stability in the region. The
    ROK has been and remains a reliable ally to the United States,
    promoting peace and stability in the region and around the world.
    The Republic of Korea Today
        In the course of the Alliance's half-century of economic and
    security cooperation, the ROK has emerged as one of the leading
    economic powers and one of the preeminent democracies in the region.
    The ROK is the world's 12th largest economy with a gross national
    income of $673 billion; exceeded in the region only by Japan and China.
    With economic growth fueled by global exports of high technology and
    consumer goods, the ROK is a major economic partner for the United
    States, ranking as our seventh-largest trading partner, seventh-largest
    export market, and an important investment location for American
    companies.
        While the ROK has firmly secured its place as an important player
    in the global economy, declines in domestic consumption and business
    investment have slowed the growth of the economy over the past few
    years. Although private consumption appears to be improving, high
    household debt continues to be an issue of concern as well as the
    generation of jobs, particularly for South Korean youth. The effort to
    achieve 5 percent economic growth this year, while improving
    employment, will remain a top priority for the Roh administration. This
    recovery is essential to realizing the ROK's vision of becoming the
    transportation, financial, and information technology hubs of Northeast
    Asia, and in improving the quality of life for all of its citizens.
        On the political front, the ROK enjoys a vibrant democracy.
    Generational perspectives impact the ROK's view of the threat posed by
    North Korea, which at times impacts the South Korean perception on the
    importance of our longstanding alliance. While impassioned debates and
    public demonstrations clearly exist, most South Koreans share the same
    view on two important issues: first, a nuclear armed North Korea is an
    intolerable threat to stability in the region, and second, a
    catastrophic failure within North Korea would destabilize the entire
    region and have extremely adverse consequences for South Korea.
        In an effort to lessen the dangers of these potential threats, the
    Roh administration has adopted its ``Policy for Peace and Prosperity''
    in guiding South Korea's approach to inter-Korean relations. This
    policy formally opposes North Korea's pursuit of nuclear weapons while
    continuing efforts toward inter-Korean rapprochement through
    humanitarian assistance, family reunions, tourism, and trade.
        As a result of this policy, inter-Korean trade and South Korean aid
    to the North grew to over $1 billion last year. In July 2005, the tenth
    meeting of the Inter-Korean Economic Promotion Committee was held in
    Seoul. In its discussions, the two governments agreed to combine
    economic production factors such as labor, capital, and technology to
    achieve balanced development of both nations' economies; invest in
    North Korea's Kaesong Industrial Complex; and conduct discussions on
    fisheries cooperation to promulgate peace in the West Sea. Through its
    Policy for Peace and Prosperity, Seoul hopes to promote gradual
    economic integration and reconciliation, providing the catalyst for a
    formal peace agreement to replace the Korean Armistice Agreement. While
    this is the intent, full implementation of this policy is predicated on
    resolving the North Korean nuclear issue on favorable terms for the
    region.
    Strengthening the Republic of Korea-United States Alliance
        During the December 2002 34th Security Consultative Meeting (SCM)
    the United States Secretary of Defense and the Republic of Korea
    Minister of National Defense established the Future of the Alliance
    (FOTA) Policy Initiative, a 2-year dialogue designed to develop options
    for modernizing and strengthening the alliance. Following the
    conclusion of the FOTA dialogue in late 2004, the ROK-United States
    Security Policy Initiative (SPI) was established as a high-level
    consultative forum to address the broader, long-term issues of the
    alliance, and to monitor the successful implementation of the
    initiatives that were begun under FOTA. Major SPI agenda items include
    managing the relocation of USFK, transferring military missions and
    responsibilities from American forces to Korean forces, enhancing
    combined readiness, and expanding security cooperation. The goal of
    these discussions is to develop a broad, comprehensive alliance based
    upon guiding principles that underpin our two nations. It is our
    expectation that this new vision will look beyond potential threats
    from North Korea and produce a robust view of what the alliance stands
    for, showcasing it as the embodiment of our common principles, common
    values, and common objectives to include democracy, open markets,
    nonproliferation, counterterrorism, human rights, rule of law, and
    civilian control of the military.
        During senior policy dialogues in 2005, it was mutually agreed to
    appropriately accelerate discussions on command relations and the
    transfer of wartime operational control in light of the ROK's
    increasing role in its national defense. The two alliance partners set
    a goal of presenting agreed recommendations on future command
    relationships, to include wartime operational control, at the 38th SCM
    in the fall of 2006.
        In March 2004, the Roh administration published its first-ever
    national security strategy outlining its plan for the peaceful
    unification of Korea and for common prosperity in Northeast Asia. In
    this plan, the administration restates its opposition to North Korea's
    pursuit of nuclear weapons, while stating its ``plans to first resolve
    the North Korean nuclear issue through dialogue based on a firm
    national defense posture.'' \1\
    ---------------------------------------------------------------------------
        \1\ Republic of Korea National Security Council, Peace, Prosperity
    and National Security: National Security Strategy of the Republic of
    Korea (Seoul, Cheongwadae, 1 May 2004), 21. In November 2004, President
    Roh stated that ``there is no other means than dialogue [to resolve the
    North Korean nuclear issue].'' Roh Moo-hyun, ``Speech by President Roh
    Moo-hyun at a Luncheon Hosted by the World Affairs Council of the
    United States,'' (13 November 2004).
    ---------------------------------------------------------------------------
        This strategy also outlines the Roh administration's plan for a
    more self-reliant defense posture, advocating the continued
    transformation of the ROK-United States alliance, the promotion of
    security cooperation with other nations, and the enhancement of its own
    capabilities to assume greater responsibility for the defense of the
    ROK. This ``Cooperative Self-Defense Pursuit Plan'' accommodates the
    reduction of United States military forces in Korea, the relocation of
    United States forces to the south of Seoul, and the transfer of a
    number of military missions from United States forces to ROK forces as
    the first of many steps toward a more self-reliant defense posture.
        During 2005, the ROK government unveiled a draft defense
    transformation initiative called Defense Reform 2020. The year 2020 is
    the objective year for this defense transformation initiative, which
    envisions the development of a technology oriented, qualitative defense
    force that is capable of self-reliance while still strongly aligned
    with the United States. Additional targeted reforms include the
    increased civilianization of the defense ministry; the reformation of
    defense management systems for military justice, personnel management,
    defense acquisition, and the reorganization of the Joint Chiefs of
    Staff as a warfighting planning and execution headquarters.
        Under the defense reform initiative, the Republic of Korea's
    Ministry of National Defense has requested an average defense budget
    increase of 11 percent per year until 2015, followed thereafter by an
    average increase rate of 9 percent until 2020. In December 2005, the
    National Assembly provided $22 billion for defense in 2006--a 6.7-
    percent increase over the 2005 budget. While this defense budget
    increase shows growth, successful execution of Defense Reform 2020
    requires both legislative support and consistent, substantive annual
    defense budget increases to enable the ROK to achieve its stated
    defense objectives.
        With the ROK's increasing economic capacity and prominence in the
    international community, a balanced defense burden sharing arrangement
    in support of United States forces in Korea is fundamental to the
    strength of the Alliance. Early last year, the ROK and United States
    concluded a 2-year Special Measures Agreement for 2005 and 2006. Per
    this agreement, the ROK agreed to provide a 2-year annual payment of
    $680 billion Korean Won ($680 million), resulting in a decrease in
    2005 of $67 billion Korean Won ($67 million) for non-personnel
    stationing costs of United States forces in Korea from 2004 levels.
    Inevitably, such funding shortfalls require the USFK to make difficult
    decisions on important combat readiness issues. Clearly, defense
    burdensharing is advantageous to both Alliance partners. For the United
    States, the ROK's willingness to equitably share appropriate defense
    costs is a solid indicator that United States forces in Korea are
    wanted, needed, and respected by our host. For the ROK, cost-sharing
    contributions are returned back to the Korean economy at a ratio
    greater than one point four to one. These funds are injected directly
    back into the South Korean economy by paying the salaries of Korean
    USFK employees, Korean contractors, and Korean construction firms.
    Additionally, as the ROK builds its self-reliant defense force, the
    United States continues to invest in capabilities enhancements that
    contribute enormously to the security of the ROK. As the Alliance
    evolves, the ROK and the United States must develop a burden sharing
    framework that accurately reflects the realities of our allied
    partnership and properly supports United States forces in the ROK.
        During their May 2003 Summit Meeting, President Bush and President
    Roh noted the significance of the 50-year partnership and highlighted
    the importance of building a dynamic alliance relationship for
    continued peace and prosperity on the Korean peninsula and in Northeast
    Asia. Noting the ROK's growing national strength, the presidents
    pledged to increase mutual security cooperation and to modernize the
    ROK--United States Alliance. These same sentiments were again echoed in
    their November 2005 bilateral meeting in Gyeongju, South Korea during
    the Asia-Pacific Economic Cooperation (APEC) Economic Leaders' Meeting.
    During this bilateral summit, the two sides introduced a new strategic
    dialogue for ministerial-level talks between the United States
    Secretary of State and the Republic of Korea Foreign Minister. Under
    this framework, the ROK and the United States will periodically discuss
    and review bilateral, regional, and global issues of mutual interest.
        During the January 2006 inaugural session of the ministerial-level
    strategic dialogue, the United States and ROK governments reached
    agreement on strategic flexibility of United States forces in Korea.
    The agreement has two basic tenets: the ROK fully understands the
    rationale for the transformation of United States global military
    strategy, and respects the necessity for strategic flexibility of
    United States forces in Korea; and in the implementation of strategic
    flexibility, the United States respects the ROK's position that it
    shall not be involved in a regional conflict against the Korean
    people's will. This agreement is a testament of alliance strength and
    solidarity between the ROK and United States.
        South Korea's efforts to develop improved warfighting capabilities
    for self-reliant defense are consistent with the United States' aims of
    encouraging our allies to assume greater roles in regional security.
    Peaceful resolution of the North Korean nuclear issue, enhanced
    Republic of Korea military forces, and greater regional cooperation--
    key elements of Seoul's national security strategy--are congruent with
    Washington's policies, and the USFK fully supports the realization of
    such initiatives.
    The Republic of Korea's Support of Global and Regional Security
        Consistent with the spirit of mutual cooperation, the Republic of
    Korea continues to assist United States' efforts to promote global and
    regional security as an active partner in the global war on terrorism;
    support for operations in Iraq and Afghanistan; and participation in
    United Nations' peacekeeping, humanitarian assistance, and disaster
    relief missions. Recalling the sacrifice of so many countries during
    the Korean War, the Republic of Korea's ability to now contribute to
    international stability elsewhere is commendable and noteworthy.
        Since 2002, the Republic of Korea has been an active supporter in
    the global war on terrorism, contributing millions of dollars in aid
    for reconstruction and providing and deploying a large contingent of
    troops to support operations in Afghanistan and Iraq. In 2004, the
    Republic of Korea National Assembly authorized the military deployment
    of South Korea's Zaytun \2\ Division to assist with stability and
    reconstruction efforts in Iraq. In August 2004, the Republic of Korea
    deployed this unit to Iraq, where it joined the ranks of its previously
    deployed advance contingent of medics and engineers at Irbil in
    Northern Iraq. In December 2005, the Republic of Korea National
    Assembly approved a second, 1-year extension of the Zaytun Unit to
    remain in Iraq through 2006, although with a reduced force structure of
    2,300 troops. The Republic of Korea's continued participation in OIF is
    a testament to its continuing support to the global war on terrorism,
    its commitment to the democratization of Iraq, and its efforts at
    enhancing and sustaining the Republic of Korea-United States Alliance.
    ---------------------------------------------------------------------------
        \2\ Zaytun is Arabic for olive branch, which is a symbol
    representing peace.
    ---------------------------------------------------------------------------
        At the same time, the Republic of Korea's support to Afghanistan
    has been substantial, to include providing a 58-person medical unit
    (which recently surpassed 10,000 in total medical patients treated), a
    147-person engineer construction unit in Afghanistan, and contributing
    other military assistance worth millions of dollars.
        Beyond Afghanistan and Iraq, the Republic of Korea has been a
    partner in United Nations peacekeeping operations around the globe. The
    Republic of Korea has dispatched Sudanese mission supporters in
    November 2005, while continuing to post medical officers in the Western
    Sahara, and observers deployed to the United Nations Observer Missions
    in Kashmir, Georgia, Liberia, and Burundi. Collectively, these
    contributions are a strong testament to the Republic of Korea's
    commitment to stability and security beyond the Korean Peninsula.
      united nations command, combined forces command, and united states
                                  forces korea
        The Republic of Korea-United States Alliance, the United Nations
    Command, the CFC, and the USFK provide the foundation for the security
    of the Korean peninsula, and peace and stability in the region.
    Together, the forces of these commands provide a potent, integrated
    team with dominant military capabilities to deter any provocation and
    deter escalation that could destabilize the region. The commands remain
    trained and ready to fight, even as they are being transformed to adapt
    to a changing security environment by leveraging strengths of the
    Republic of Korea-United States Alliance and advanced warfighting
    technologies of increasingly more capable military forces. Throughout
    this transformation process, my command priorities will remain
    consistent: namely, to ensure peace and stability on the Korean
    Peninsula; strengthen the Republic of Korea--United States Alliance
    through transformation; enhance warfighting readiness; and improve
    force well-being.
    Ensuring Peace and Stability on the Korean Peninsula
        For over 50 years, United States forces have contributed to
    stability in the Republic of Korea and the region. The impenetrable
    friendship between our two nations continues to grow stronger every
    day; in large part, because of America's ongoing commitment to ensure
    security on the Korean Peninsula and to promote stability in the
    Northeast Asia region. The Republic of Korea continues to be a valuable
    ally and partner in the region and around the globe. The presence of
    United States forces in Korea demonstrates our commitment to shared
    interests: regional peace and stability; free trade; and the spread of
    democratic principles. The United Nations Command, CFC, and the USFK
    are trained and ready. We remain confident in our ability to deter, and
    if necessary, defeat aggression against the Republic of Korea.
    Strengthening the Republic of Korea--United States Alliance through
            Transformation
        During the October 2005 37th SCM, the United States Defense
    Secretary and Republic of Korea Defense Minister emphasized the
    continuing transformation of the Republic of Korea--United States
    Alliance into a comprehensive and dynamic bilateral relationship. Both
    sides concurred that transformation of the commands into a solid
    combined defense posture is vital to securing peace and stability on
    the Korean peninsula and in Northeast Asia.
        United Nations Command
        As the longest standing peace enforcement coalition in the history
    of the U.N., the United Nations Command represents the international
    community's enduring commitment to the security and stability of the
    Korean Peninsula. With 15 current member nations, the United Nations
    Command actively supervises compliance with the terms of the Korean
    Armistice Agreement, fulfilling the members' mutual pledge to ``fully
    and faithfully carry out the terms'' of the Armistice, and if there is
    a renewal of North Korean armed attack, to provide a unified and prompt
    response to preserve the security of the Republic of Korea.
        With exclusive authority south of the Military Demarcation Line for
    the maintenance of the Armistice, the United Nations Command holds
    meetings with the North Korean People's Army, inspects U.N. units along
    the DMZ, and conducts investigations into alleged violations to prevent
    minor incidents from escalating into destabilizing crises. In October
    2004, the responsibility for the protection of the Joint Security Area
    at Panmunjom shifted from the United States Army to Republic of Korea
    forces. This mission transfer is part of the Alliance agreement that
    recognizes the increased capabilities of the Republic of Korea
    military.
        Although the United Nations Command is a multi-national
    organization, the United States has historically provided the Command
    with a majority of its personnel, while other coalition members have
    primarily functioned in liaison and advisory roles. It is the Command's
    intent to create a truly multi-national staff by expanding the roles of
    the member nations and integrating them more fully into our contingency
    and operational planning and operations. This integration is even more
    vital with the recent opening of two inter-Korean transportation
    corridors crossing the DMZ. The United Nations Command has approached
    coalition members to augment its staff to assist in the management of
    the two transportation corridors crossing the DMZ. The United Kingdom,
    Australia, France, and New Zealand now provide officers on a rotational
    basis for these duties. Several other countries, including Columbia,
    Philippines, and Thailand, are also considering sending augmentees.
    Additionally, member nations participated in the first contingency
    planning conference last year and are sending observers to major
    exercises with the objective of integrating their expertise where it is
    needed. The United Nations Command hopes to further expand the
    coalition on a more permanent basis throughout the United Nations
    Command staff.
        Combined Forces Command and United States Forces Korea
        Since its inception nearly 30 years ago in 1978, the CFC has been
    the warfighting command supporting the Republic of Korea-United States
    Alliance. Through authority based on the 1953 Mutual Defense Treaty
    between the Republic of Korea and the United States, the CFC provides
    the cornerstone of deterrence against North Korean aggression, and if
    deterrence fails, is ready to win decisively. Vigilant and well
    trained, the CFC is the most powerful combined warfighting alliance in
    the world today.
        The CFC continues to adapt to the changing security environment by
    advancing warfighting technologies and leveraging a more capable
    Republic of Korea military force. United States capabilities
    enhancements are significant, including the fielding of the PAC-3
    Patriot Missile System coupled with the stationing of a Patriot brigade
    headquarters, and a second Patriot battalion with two additional
    Patriot batteries to strengthen our theater missile defense. The
    upgrade of our Apache Helicopters to AH-64D Longbows greatly increases
    the lethality and survivability of that weapon system and significantly
    enhances its ability to destroy North Korea's long-range artillery that
    threatens Seoul. The Republic of Korea is also enhancing its military
    capabilities as it continues to field and upgrade its fleet of K1A1
    tanks, K-9 self-propelled howitzers, and multiple launch rocket
    systems. Additionally, in 2005 it launched its first Landing Platform
    Experimental (LPX) amphibious ship, and the first 4 of 40 F-15K multi-
    role fighters. The Republic of Korea is also in the final stages of
    constructing a new naval base for their third fleet. This facility will
    include a nuclear-powered carrier capable pier and will be completed in
    late June 2006.
        We must continue to expand our capabilities and revise the way we
    conduct operations. Simultaneous maneuvers, parallel planning, effects-
    based operations, and asymmetrical assaults all conducted in a dynamic
    battlespace will improve the conduct of our future combined operations.
        As a result of combat capabilities enhancements, in 2003 the United
    States and the Republic of Korea agreed to transfer 10 selected
    military missions from United States forces to Republic of Korea forces
    over a 3-year period. This effort, which began in 2004, continues and
    to date we have successfully transferred seven missions, to include the
    early transfer of the Main Supply Route Regulation Enforcement mission,
    the Counterfire Task Force Headquarters mission (transferred last year
    on time and with a subsequent increase in capability), and most
    recently, in January 2006, the Maritime Counter SOF mission. Indeed,
    this is a direct reflection of the Republic of Korea's military
    capabilities. With the Republic of Korea's procurement of required
    equipment and training, it is expected that each of the remaining three
    missions will also be transferred without any loss in combined
    readiness.
        Concurrent to these mission transfers, the United States and
    Republic of Korea governments agreed to the reduction of 12,500
    personnel from United States Forces Korea over a 5-year period which
    began in 2004. Per this agreement, between 2004 and 2005, we reduced
    8,000 troops to include the deployment of the U.S. Second Infantry
    Division's 2nd Brigade Combat Team to Iraq, followed thereafter by its
    restationing at Fort Carson, Colorado. This year we will reduce 2,000
    more troops, and in 2007 and 2008, an additional 2,500 will be reduced,
    leaving an authorized end strength of 25,000 military personnel on the
    peninsula.
        This reduction plan principally affects the Eighth United States
    Army, which is reducing its force by 40 percent as it simultaneously
    restructures many of its units as part of the Department of the Army's
    Total Force Transformation effort. Army-wide, the United States is
    tailoring its command and control echelons from four headquarters-type
    elements--brigade, division, corps, and field army--to three types of
    headquarters elements, while forming modular, self-sustaining brigade-
    level organizations. The Eighth United States Army's transformation
    efforts align with this, and last year the Second Infantry Division
    completed the transformation of its division headquarters; heavy
    brigade combat team; fires brigades; and combat aviation brigade.
    Seventh U.S. Air Force is also reducing, but on a much smaller scale.
        Finally, we have made significant progress in properly aligning
    U.S. forces in Korea. In October 2004, the Republic of Korea Minister
    of National Defense and Commander, USFK signed the Yongsan Relocation
    Plan Agreement, which was ratified by the Republic of Korea National
    Assembly in December 2004. According to the terms of that agreement,
    the headquarters elements of the United Nations Command, CFC and USFK
    will relocate to Camp Humphreys, near Pyeongtaek, in 2007, and all
    other units at Yongsan will finish relocating by December 2008.
        The realignment of the United States Army's 2nd Infantry Division
    is part of this alignment plan which, when complete, will allow United
    States forces to assume a more efficient and less intrusive footprint
    within two hubs of enduring installations south of Seoul's Han River,
    significantly improving the quality of life for our servicemembers,
    while returning valuable land to the citizens of the Republic of Korea.
        Per our international agreements, we are making significant
    progress in relocating United States forces from facilities and areas
    in and north of Seoul into two hubs of enduring installations south of
    Seoul. At the end of 2005, we had closed a total of 31 USFK facilities
    and areas, amounting to 11,000 acres with a tax assessed value of over
    $500 million. By the end of 2008, we will have closed 59 facilities and
    areas--two thirds of all land, granted under the Status of Forces
    Agreement, totaling 36,000 acres.
        In exchange for the eventual return of the majority of our
    dispersed camps, the Republic of Korea, per our agreements, has
    purchased an additional 2,852 acres of land that is needed to expand
    Camp Humphreys and Osan Air Base to accommodate our relocation. It has
    now granted the first 200 acre parcel to USFK, and is currently
    conducting an environmental impact assessment of all these properties
    that will be completed in September 2006. Thereafter, the land will be
    prepared and major construction initiated.
        The relocation of the 2nd Infantry Division will begin once
    construction at Camp Humphreys is complete. Sustained funding of United
    States military construction projects in Korea, coupled with sufficient
    host nation-funded construction by the Republic of Korea, is crucial
    for this plan to remain on track.
    Enhancing Warfighting Readiness
        While our militaries transform, it is critical that we continue to
    enhance readiness, and the key to enhancing readiness is by ensuring
    unfettered access to suitable training ranges and areas for the CFC. As
    Commander of CFC, vested with combined delegated authority, warfighting
    readiness is a major priority. Training ranges in Korea are small,
    austere, de-centrally managed, and subject to encroachment. As our
    military capabilities are enhanced and transformed, our training
    facilities must keep pace. We must work together on a long-term
    solution to keep our Combined Forces trained and ready in the future.
    Our recent upgrades to Pilsung Range, and planned upgrades at Chik-do
    Range, are only the beginning of that long-term combined solution. Of
    great immediate concern is the closure of Koon-ni Range. Closing that
    range was the right decision, but we now have a loss of training
    capacity in Korea until Chik-do Range modifications are completed later
    this summer. Until that time, we need to regain required levels of
    training access to keep USFK forces combat ready. These forces are
    critical to seizing the initiative should the Republic of Korea be
    attacked. We are working closely with the Republic of Korea government
    to restore training access.
        Training is central to our capabilities and at the core of what
    binds our CFC into an effective fighting force. Tough, realistic,
    battle-focused training will enable our components to deter hostile
    acts of aggression and, if necessary, defeat the forces that mount an
    external attack against the Republic of Korea. As a forward deployed
    force, we must be ready at all times to deploy to wartime locations and
    conduct operations. The robust annual CFC exercise programs ensure that
    we are trained and ready for contingencies. The theater-level
    exercises--Ulchi-Focus Lens; Reception, Staging, Onward Movement, and
    Integration; and Foal Eagle--collectively train over 400,000 Republic
    of Korea and United States active and Reserve component personnel in
    the critical tasks essential to deterring, and if necessary, defeating
    North Korean aggression against the Republic of Korea. These command
    post and field training exercises use battle simulations technologies
    to train leaders in battle command, leveraging the significant United
    States theater-wide investment in Command, Control, Communications,
    Computers, and Intelligence (C\4\I) systems. These combat enablers
    provide the Collaborative Information Environment to plan, execute, and
    assess effects from distributed locations; allowing the CFC to see,
    understand, and act to dominate the battlespace.
        Ulchi-Focus Lens is a simulation-driven command post exercise
    focused on joint and combined effects-based operations, and sustaining
    command and control, logistics, and dominant maneuver skill sets. The
    objective of the Reception, Staging, Onward Movement, and Integration,
    or RSO&I exercise, is to improve our ability to rapidly reinforce and
    sustain operations in the Korean theater. Foal Eagle is a tactical-
    level joint and combined exercise that hones warfighting and
    interoperability skills. These exercises, supplemented by subordinate
    command training programs, ensure that the CFC remains ready and
    capable to win decisively, thus deterring North Korean aggression.
        Your continued support to our joint and combined training programs
    and theater exercises are critical to our readiness, as is your support
    to our capabilities enhancements. Key focus areas for modernization
    are: joint and C\4\; theater missile defense; intelligence,
    surveillance, and reconnaissance (ISR); prepositioned equipment and
    logistics; and counterfire and precision munitions.
        With your help, we have made meaningful progress in Joint and
    Combined C\4\ integration and interoperability. The CFC and the USFK
    have successfully linked all United States and Republic of Korea
    command centers and staff elements with secure and protected
    information systems. Each command center is equipped with increased
    bandwidth to provide shared situational awareness via a near real-time
    common operational picture of the battlespace. These command centers
    are equipped with secure video teleconference, collaboration tools, and
    information portals which are supported across a Combined Enterprise
    Regional Information Exchange System (CENTRIXS) network enterprise.
    This capability enables parallel planning for all Combined Forces and
    USFK units as well as other friendly forces. Current initiatives in
    coalition interoperability seek to extend a seamless command and
    control capability throughout the theater that will greatly improve
    multi-national information sharing capability. Your support for these
    improvements and your assistance in coupling our coalition warfighting
    C\4\ systems to hardened, secure long-haul strategic communications
    nodes on peninsula and throughout the region is essential to our
    continued progress in this important area.
        The regional missile threat requires a robust theater missile
    defense system to protect critical CFC capabilities and personnel. PAC-
    3 Patriot Missile System upgrades and improved munitions have
    significantly enhanced our posture. To protect critical United States
    facilities in Korea, we must complete upgrading the remainder of our
    systems with advanced theater missile defense capabilities. Continued
    production of PAC-3 missiles in the near-term, followed by continued
    development of the Theater High Altitude Air Defense (THAAD), Airborne
    Laser, and Aegis Ballistic Missile Defense (BMD) will provide the
    layered missile defense capability we require in the future. Your
    continued support to these and other service component programs remains
    essential to protecting our forces on peninsula, and to our ability to
    reinforce the peninsula in the event of a crisis.
        Robust ISR capabilities are essential to provide sufficient warning
    of an impending crisis and to support rapid, decisive operations in the
    event of a North Korean attack or collapse. The CFC's efforts to
    transform our combined intelligence capabilities are progressing, but
    require sustained and significant support from Congress and the combat
    support agencies if we are to achieve the full spectrum persistent
    surveillance we require to avoid surprise. Our intelligence
    transformation efforts are focused on three things: improving our
    warning posture, modernizing legacy C\4\I architectures and sensor
    suites, and improving our ability to discern intent.
        As evident in the Intelligence Community's recent completion of our
    Intelligence Campaign Plan, there are a number of intelligence
    shortfalls in our national and theater coverage that require immediate
    attention. Chief among these are the need for persistent national and
    theater surveillance systems that provide continuous multi-discipline
    base-lining of the threat. Central to this is the accelerated fielding
    and installation of state-of-the-art Signal Intelligence (SIGINT),
    Imagery Intelligence (IMINT), and Measurement and Signal Intelligence
    (MASINT) sensors that are relevant to target sets. In addition to the
    fielding of a long-range unmanned aerial sensor, upgrades for the
    theater's aerial sensors, and modernization of our SIGINT and Tactical
    Exploitation of National Capabilities (TENCAP) architectures, the
    theater will benefit greatly from increased access to space systems
    supporting ISR operations. With these improvements to our collection
    capabilities, we must also sustain the expansion and modernization of
    our C\4\I architectures to improve the theater's reach back to the
    PACOM and the combat support agencies, to provide bridging technology
    to our host nation's systems, and to enable the horizontal integration
    of the national to tactical intelligence enterprise that supports our
    theater.
        The Under Secretary of Defense for Intelligence and the Joint
    Forces Command's Information Dominance Center Initiative and Project
    Morning Calm have demonstrated the technical approaches we require to
    improve our theater's intelligence architecture and to fuse live
    intelligence with operational data in a common domain to speed decision
    making. Continued support for this effort will allow us to expand the
    fielding of Information Dominance Center technology across our joint
    and combined components, and to extend a common architecture across the
    enterprise to enable rapid data sharing and collaboration in near real
    time. Support to these initiatives will provide us with the timely,
    accurate assessments we require to establish conditions that enable
    rapid dominance of the battlespace. Your continued support to
    modernizing intelligence, surveillance, and reconnaissance capabilities
    is required and an essential investment for the Alliance.
        Logistically supporting USFK is a complex, multi-faceted
    undertaking. The proximity of the North Korean threat, coupled with the
    long distances from United States sustainment bases, requires a robust
    and responsive logistics system to support United States forces based
    in Korea. The capability enhancements currently programmed will
    significantly improve our core logistics functions through modern pre-
    positioned equipment, responsive strategic transportation, and modern
    logistics tracking systems.
        Prepositioned equipment sets, which include critical weapons
    systems, preferred munitions, repair parts, and essential supplies, are
    critical to the rapid power projection to reinforce the Korean theater.
    Of note, command leadership took an aggressive approach last year to
    improve the readiness of Army Pre-positioned Stocks in Korea. The Army
    Material Command significantly increased their workforce for these
    stocks, and from March 1 through September 23, 2005, inspected and took
    corrective action on 1,531 pieces of equipment in the Heavy Brigade
    Combat Team. These efforts ensured all of this equipment met standards.
    Present operational readiness of the Heavy Brigade Combat Team combat
    systems is at 96 percent fully mission capable. Monthly video
    teleconferences occur to track the maintenance and readiness, as well
    as the shortfall posture. However, shortages continue to exist and can
    only be overcome through increasing the priority of fill for Army
    Prepositioned Stocks and the allocation of additional funding.
        Responsive strategic transportation--fast sealift ships and cargo
    aircraft--remains indispensable to rapidly reinforce the Korean theater
    and sustain United States forces. Expeditious fielding of the Air
    Force's C-17 fleet, and the Joint High Speed Vessel to the PACOM area
    of responsibility remains a high priority to support United States
    forces based in Korea.
        Equally important is the ability to maintain in-transit visibility
    of supplies and equipment with a modernized joint Logistics C\4\I
    system. Lessons from OIF and OEF have highlighted several areas where
    relatively small investments in asset tracking systems and theater
    distribution yield significant efficiencies and improve the overall
    effectiveness of our logistics systems.
        Also of great assistance is legislation recently enacted by
    Congress and signed by the President that authorizes the United States
    government to offer, for sale or concessions, surplus ammunition and
    military equipment to the Republic of Korea from the War Reserve Stocks
    Allies--Korea (WRSA-K) program that will terminate soon. This
    legislation relieves the United States of the burden to maintain this
    stockpile and further encourages the government of the Republic of
    Korea to continue its stated goal of a self-reliant defense posture.
    Your continued support for improved logistics and sustainment programs
    will ensure that United States forces remain prepared with the highest
    levels of readiness.
        Counterfire and precision strike are core capabilities for all of
    our contingency plans, allowing us to change the dynamics of a conflict
    and rapidly achieve campaign objectives. Increasing the forward stocks
    of preferred munitions is critical to operational success in the Korean
    theater. Our priority ordnance requirements include: the GPS-guided
    Multiple Launch Rocket System with extended range capability; a ground-
    launched, extended range and all weather capability to defeat hardened
    and deeply buried targets (HDBTs); precision guided munitions; air-to-
    ground missiles; and air-to-air missiles. Your continued support to
    these programs provides the overmatching capabilities to buttress our
    deterrence.
    Improving Force Well-Being
        The staying power of the United States military fighting for
    freedom in the Republic of Korea comes at a cost that is born daily by
    the men and women in uniform that live and work in facilities unlike
    their counterparts in the continental United States. Establishing a
    stable stationing environment will enhance readiness, force protection,
    and overall quality of service. Adding to your support of programs such
    as Assignment Incentive Pay and Cost-of-Living Allowance, our current
    initiatives to improve quality of life and readiness include increasing
    the number of accompanied personnel, increasing accompanied tour
    lengths to 3 years, and working with the Services to provide forces
    using unit rotations. Unit rotations provide the benefit of enhanced
    readiness and unit cohesion as well as reducing personnel turbulence.
    These measures, in addition to upgrades to facilities (e.g., housing,
    schools, commissaries, community centers) and equitable pay, provide an
    attractive working environment that result in an increased number of
    military and civilian personnel extending their tours. These
    initiatives also allow us to recruit and retain the talented and
    motivated people we need to accomplish our mission in Korea.
        Furthermore, improvements in programs such as the Army's Family
    Readiness Group, which recently incorporated programs to support
    unaccompanied servicemembers' families living outside of the Korean
    peninsula, ensure that these families are properly cared for during
    their separation. With your assistance, we will continue to sustain
    momentum and continue to build on these initiatives.
        Upgrading and Building New Infrastructure
        The relocation of USFK to two hubs of enduring installations will
    provide a unique opportunity to upgrade our servicemembers' quality-of-
    life while establishing the long-term infrastructure that is required
    to maintain an enduring presence on the peninsula. As we move forward
    with our overall construction master plan--executable with sustained
    military construction funding under the Future Years Defense Plan and
    host nation-funded construction--we must also maintain our existing
    facilities. Your support of our Sustainment, Restoration, and
    Modernization Program requirements, along with host-nation
    contributions, will allow us to complete our infrastructure renewal
    program to enhance our force protection posture and the quality of life
    for our personnel. The President's fiscal year 2007 budget request
    includes several military construction projects that are essential to
    our forces in Korea and critical to the execution of our overall
    theater master plan.
        The challenge in recapitalizing our infrastructure is substantial
    and continues to be underfunded. Our facilities and infrastructure are
    old: over one-third of the buildings in the command are between 25 and
    50 years old and another one-third are classified as temporary
    structures. Due to previously underfunded Sustainment, Restoration, and
    Modernization Programs, many buildings have deferred maintenance,
    contributing to their continual deterioration. Our annual allocations
    for sustainment funding have been about 50 percent of requirements,
    while restoration and modernization funding has been much less than
    that. A robust Sustainment, Restoration, and Modernization profile is
    absolutely essential if we are to maximize the appropriated military
    construction dollars we receive. Without the funds to sustain, restore,
    and modernize our facilities, we will perpetually be relegated to live
    and work in run-down, patched-up facilities.
        Many of our unaccompanied and accompanied servicemembers continue
    to live in substandard housing, whether in military facilities or in
    crowded urban areas outside our installations. Our realignment to two
    enduring hubs will allow us to focus on improving living and working
    conditions at our enduring installations; to this end, sustained access
    to several different funding programs will be essential to include
    United States military construction, host nation-funded construction,
    and commercial build-to-lease programs.
        We are making good progress towards achieving the DOD's goal to
    house all unaccompanied servicemembers in adequate installation housing
    by 2007. The Army and Air Force are using military construction to
    build 10 unaccompanied housing facilities (or 3,316 barracks spaces)--6
    facilities at Camp Humphreys, 2 at Osan Air Base, and 2 at Kunsan Air
    Base. In addition, we are contracting two host-nation funded
    construction projects in our southeast hub to provide adequate barracks
    space for all of our marines and sailors assigned to Camp Mu Juk in
    Pohang. To improve the unaccompanied senior enlisted and officer
    quarters, we have contracted a commercial build-to-lease project at K-
    16 Air Base and plan similar projects at Camp Humphreys. In fiscal year
    2007, I am requesting $123.7 million in military construction funds to
    build two barracks complexes at Camp Humphreys ($77 million) and a
    large dormitory at Kunsan Air Base ($46.7 million).
        Currently, over 25 percent of our Government family housing units
    do not meet the DOD minimum living standards. Continued support for
    family housing construction in Korea through commercial build-to-lease
    projects will help ensure quality housing for all our servicemembers'
    families, facilitating the attainment of DOD or Service living
    standards, and is essential to support the relocation program. I want
    to assure you that we will continue to be stalwart stewards of the
    appropriations that you entrust to us, which will provide our
    servicemembers with adequate working and living facilities.
        Force Protection
        Well being is about providing a safe, high quality, productive, and
    predictable environment. Through the combined efforts of our men and
    women, we will employ appropriate force-protection measures to ensure
    that all members stationed in the Republic of Korea can go about their
    daily lives confident that we have done everything possible to
    safeguard and protect them. I expect commanders to empower subordinates
    while holding them accountable for the safety of their soldiers,
    sailors, airmen, and marines.
        Prostitution and Human Trafficking and Sexual Assault
        USFK has a zero tolerance policy towards prostitution and human
    trafficking. To ensure members are fully aware of this policy, we
    initiated a four-pronged approach focusing on awareness,
    identification, reduction and enforcement. As a result, we experienced
    few violations in the past year that resulted in disciplinary action.
    Equally important is the command's initiatives in combating sexual
    assault. Since its inception in 2004, the USFK Sexual Assault Working
    Group has developed and implemented an education program for training
    our leaders and servicemembers on awareness and prevention of sexual
    assault. This training stresses sexual assault risk factors and victim
    care. I will continue to be vigilant in enforcing the sexual assault
    prevention programs and zero tolerance approach adopted by the command.
    Promoting dignity and respect are of the utmost importance and a
    mandate we fully embrace within USFK.
        Ensuring Equitable Pay
        Major improvements have been made on the pay disparity in the
    Republic of Korea. For the first time in over 50 years of the Alliance,
    a cost-of-living allowance (COLA) was authorized in 2003. Additionally,
    the Army and the Air Force implemented the Assignment Incentive Pay
    (AIP) Program, authorizing a cash incentive for servicemembers who are
    willing to extend their tours in Korea. So far, over 14,000 soldiers
    and airmen have volunteered for AIP, saving the DOD nearly $67 million
    in reduced permanent change of station costs. Although the cost savings
    will be reduced due to recent program enhancements such as payment
    beginning the month of signature, the benefits of this program are
    immeasurable. Following on the great success of the Army and Air Force,
    in January 2006, the Navy implemented AIP for its sailors. AIP improves
    stability, predictability, and operational readiness of the Alliance.
                          transforming for the future
        Transformation of USFK is well underway. Your continued investments
    in equipment and infrastructure are greatly improving our operational
    capabilities and the quality of life for United States servicemembers,
    DOD civilian employees, and family members. Our transformed forces and
    state-of-the-art capabilities greatly improve deterrence on the
    peninsula by providing strategically mobile overmatching power to
    dissuade potential threats to Alliance interests. Your continued
    support will ensure we achieve our transformation objectives by
    providing our forces with the resources needed to deter aggression and
    to foster peace and stability on the Korean peninsula and in the
    region.
        You can be justifiably proud of the soldiers, sailors, airmen,
    marines, and civilians serving in the Republic of Korea. Their daily
    dedication and performance continue to earn the trust and confidence
    that you have placed in them.

        Chairman Warner. Thank you very much, General.
        General Jones.

    STATEMENT OF GEN. JAMES L. JONES, JR., USMC, COMMANDER, UNITED
      STATES EUROPEAN COMMAND AND SUPREME ALLIED COMMANDER, EUROPE

        General Jones. Good morning, Mr. Chairman, Senator Levin,
    members of the committee. It is a great honor and a pleasure
    for me to be once again in front of this remarkable committee
    that means so much to the welfare and security of our Nation,
    our families, and our troops, and we thank you for everything
    you do for us.
        I am particularly honored to be at the same table with
    Admiral Fallon, whom I have known for a number of years, and
    General Bell. General Bell just recently left Europe, where he
    commanded the U.S. Army in Europe and lent his considerable
    skills to the transformation of the U.S. Army's footprint. I
    have enjoyed very much our personal and professional
    relationships and I am delighted that the Secretary of Defense
    saw fit to ask General Bell to stay on on Active-Duty and take
    over this very important command.
        I would also like to bring to the committee's attention the
    presence today of an extraordinary marine, sitting to my left
    rear, the fourteenth Sergeant Major of the Marine Corps and the
    first Sergeant Major of the Supreme Headquarters, Allied Powers
    in Europe, Sergeant Major Al McMichael, who for over 35 years
    has been the consummate marine, typifying everything that we
    want in a staff noncommissioned officer (NCO), providing
    leadership, mentorship, guidance, courage, dedication. He and
    his wife have contributed immeasurably to the status of the
    Marine Corps today and through his leadership and innovation as
    the first Sergeant Major of Supreme Headquarters Allied Powers
    Europe (SHAPE) in NATO he has virtually singlehandedly, with
    just a few of his colleagues, brought eight nations to adopt
    the NCO structure, mostly in Eastern Europe, to adopt an NCO
    structure that they had never had before. He has done that in a
    remarkable 2\1/2\ years.
        Sergeant Major McMichael will be leaving Active-Duty this
    summer after a sterling career and I wanted to take a few
    moments to highlight this remarkable American and his
    remarkable contribution to the security of our Nation. Thank
    you, Sergeant Major.
        Chairman Warner. Thank you very much. [Applause.]
        I think it is most appropriate that you do that, General
    Jones. Particularly I was impressed with his work to establish
    the concept of the NCO structure. Former Warsaw Pact nations
    and indeed the old Soviet Union just did not put that emphasis
    on its military, and that is today's military. So I commend
    you, Sergeant.
        General Jones. Thank you, sir.
        As the Commander of the United States European Command and
    as the Supreme Allied Commander, Europe (SACEUR), we continue
    to commit our resources towards proactively addressing the
    challenges and opportunities of our new security landscape,
    while stressing the ever-important transatlantic relationships
    necessary to preserve our security, our collective security, as
    Senator Levin pointed out.
        With your support, we are now implementing the
    transformation in depth that I originally discussed with you in
    2003 during my first year in this assignment. This portion of
    the strategic theater transformation is achieving a posture and
    force capability that ensures the greatest strategic effect
    while providing operational agility to serve as both a
    supporting and supported combatant commander within the
    framework of the U.S. National Security Strategy and the
    National Defense Strategy.
        Your continued backing also ensures that we maintain
    sufficient critical assets and capabilities in theater to
    sustain forward stationed and rotational conventional and
    special operations forces. These forces preserve our leadership
    role throughout our theater. They provide a visible example for
    NATO's transformation. They serve as a defense in depth for
    homeland security. They strengthen U.S. diplomacy and foreign
    policy. They signal the United States' commitment to the
    transatlantic link. They demonstrate the United States
    Government's resolve and bolster common security through a
    critical array of theater security cooperation programs.
        We base our strategies on the principle that it is much
    more cost effective to prevent conflict than it is to stop one
    once it has started. The scope and diversity of the 91
    sovereign nations that fall within EUCOM's AOR encompass the
    full range of human conditions and government. As such, our
    theater requires a multifaceted approach, including a
    complementary relationship with many international
    organizations in developing and implementing a strategy that
    fully addresses the challenges to European, African, and the
    United States' strategic interests.
        Despite being faced with nontraditional and continually
    evolving threats, we are committed to expanding the peace and
    prosperity long enjoyed by Western Europe to Eastern Europe and
    Africa. Our development of a more agile force and strengthening
    of our trans-Atlantic partnerships has enhanced our capability
    to conduct far-reaching operations while ensuring that Europe
    remains engaged in a collaborative effort to counter common
    security challenges both today and in the future.
        The centerpiece of our efforts remains our theater security
    cooperation programs. These programs represent a much-needed
    proactive approach to building partnership capacity with the
    intent of enabling emerging democracies to defend their
    homelands, defeat terrorist extremists, develop common economic
    and security interests, and respond to health crises such as
    potential pandemic influenza outbreaks.
        Our approach is regional, linking individual country
    objectives to broader theater goals. We assist our friends and
    allies in developing the capabilities required to conduct
    effective peacekeeping and contingency operations with well-
    trained, disciplined forces. This helps mitigate the conditions
    that lead to conflict, paves the way for peaceful growth, and
    reduces the would-be burden on U.S. involvement.
        In Europe, our priorities are to deepen and strengthen our
    relations with allied and partner nations, to assist our allies
    in developing capabilities to deploy rapidly and to be
    interoperable with our forces, to encourage our allies in
    developing a robust special operations force capability, to
    align our forces in a manner that enables a more rapid
    deployment to areas of instability, and to increase U.S.
    influence with our new NATO members.
        In Africa, our priorities are to increase the capability of
    African nations to conduct peacekeeping and contingency
    operations, to protect their natural resources, and to promote
    stability by providing medical advice and assistance in dealing
    with health issues such as HIV-AIDS, cholera, malaria, and
    other diseases that have both humanitarian and strategic
    consequences.
        In trans-Saharan Africa, EUCOM supports the long-term
    interagency plan to combat terrorism, the plan known as Trans-
    Sahara Counterterrorism Initiative, through Operation Enduring
    Freedom Trans-Sahara (OEF-TS). Using a preventive approach,
    EUCOM builds indigenous capacity and facilitates cooperation
    among governments in the region in order for them to gain
    better control of their territories and deny terrorist groups a
    safe haven.
        Of equal importance, OEF-TS promotes democratic governance
    while fostering the development, education, and emphasis of the
    military's proper role in supporting democratic ideals.
    Political instability in Africa, left unattended or
    unaddressed, will require reactive and repeated interventions
    at enormous cost in the future. Prudent funding, coupled with
    small military-to-military engagement today, will pay enormous
    dividends in the future. It will strengthen our presence and
    offset the gains of other state actors in this critical region.
        I remain optimistic that the steady development of the
    African regional organizations, combined with modest,
    consistent investment in our efforts in Africa, will assist in
    halting the deteriorating conditions and impede the potential
    for some regions in Africa to become the next front in the war
    on terrorism.
        The United States' continued security cooperation measures
    will ultimately lead to peace, stability, and hope for people
    who have little at present. In this context, the future of
    EUCOM is as critical today as it ever was, perhaps even more
    so, to the implementation of our Nation's policies and our
    commitment to the forward defense of freedom.
        Better synchronization and more streamlined policy and
    legislative lines of authority at the interagency level will
    provide increased efficiencies and greatly assist in developing
    and implementing a more effective overarching strategy for
    achieving these foreign policy objectives. Such reforms might
    also prevent some nations from turning elsewhere for security
    assistance needs.
        With regard to the relevance of NATO in the post-Cold War
    era, as the SACEUR I am among those who passionately believe in
    the relevance and importance of NATO in this still new and
    emerging century. NATO is transforming and redefining itself as
    we speak to meet the new challenges of this century. It is
    making significant progress and is in the midst of the most
    fundamental physical and philosophical transformation in its
    history.
        While operational structures have been transformed, the
    political and military decisionmaking procedures of the
    alliance, as well as the budgetary funding mechanisms, are also
    being addressed. Much more needs to be done with regard to the
    funding mechanisms which support our operations, to include the
    new and emerging NATO response force.
        Formerly anchored to the need for common defense against
    the Soviet Union, the alliance is now identifying and
    committing itself to a new set of anchor points. Such anchor
    points could potentially include a better definition of
    operations in support of combating terrorism, enhancing
    security, stability, and reconstruction activities, increasing
    its attention to critical infrastructure security, ensuring the
    security of the flow of energy to markets and consumers, and
    more actively engaging in preventing the proliferation of WMD
    and corresponding consequence management actions.
        NATO's commitment to ongoing operations, 30,000 troops
    deployed on three different continents today, including the
    ISAF in Afghanistan, NATO's training mission in Iraq, NATO
    assistance to the AU in Darfur, Operation Active Endeavor in
    the Mediterranean, the Balkan operations with emphasis on
    Kosovo, and humanitarian operations in response to Katrina and
    Pakistan disasters, demonstrates that NATO has turned the
    corner from common defense and begun the journey to promote
    stabilization and security at strategic distances, and all of
    this in the past 3 years.
        NATO remains the preeminent security alliance in the world.
    I believe it is destined to provide its most significant
    contribution at some point in the future. Keeping this in mind,
    our leadership of and contributions to this alliance are more
    critical now than at any time in the alliance's history. This
    year's November summit in Riga, Latvia, will cap this year as
    one of the most remarkable in the history of the alliance.
        In conclusion, the EUCOM is fully and actively engaged in a
    diverse and expanding AOR while simultaneously transforming its
    posture to better meet the new and evolving security
    environment. Success will require institutional innovation,
    increasingly cohesive and more comprehensive national
    approaches to the challenges, greater coordination throughout
    the interagency and within the framework of the international
    community, and investment in a number of critically important
    areas, such as military construction, security cooperation
    programs, and our theater intelligence architecture.
        As we further refine the nature and scope of our efforts to
    implement an effective security strategy, we would do well to
    reflect and appreciate the value of our leadership role in
    global affairs. We should redouble our efforts to remain a
    shining example of the principles of freedom which stand as a
    beacon of hope for so many in our unsettled world.
        The indispensable benefits of our forward-deployed presence
    will continue to be a hallmark of our efforts as we expand our
    national influence and enhance the framework of our theater
    cooperation programs.
        We look forward to working with the members of this
    committee as we assist in the development of effective security
    structures that are essential to our theater, our Nation, and
    to our allies. 2007 will be a critically important year in this
    regard, and on behalf of the soldiers, sailors, airmen,
    marines, DOD civilians, contractors of EUCOM, and their family
    members, I want to express our gratitude for your continuing
    support, especially during this very challenging time.
        Thank you, Mr. Chairman.
        [The prepared statement of General Jones follows:]

                Prepared Statement by Gen. James L. Jones, USMC

                                  introduction

        Chairman Warner, Senator Levin, distinguished members of the
    committee, thank you once again for the opportunity to appear before
    you to discuss the United States European Command (EUCOM). On behalf of
    the soldiers, sailors, airmen, marines, Department of Defense civil
    servants, civilian contractors of EUCOM, and their family members, I
    want to express our gratitude for your continued support, especially
    during these very challenging times.
        In my testimony before this committee over the past 3 years, I have
    emphasized the changing security landscape that has emerged since the
    end of the Cold War. It continues to evolve in ways that were largely
    unforeseen just a few years ago. An increasingly interconnected world
    is shaping our economic, political, and social realities in a manner
    that is in stark contrast to the previous century. The wide scope and
    unpredictable nature of this new landscape has compelled us to develop
    new strategies that require the harmonization of the full spectrum of
    national power. In concert with our friends and allies, as the
    Commander, EUCOM and as SACEUR, I have continued to commit our
    resources to proactively address the challenges and opportunities of
    this new environment.
        With the support of the United States Congress, we have begun to
    implement the ``transformation in depth'' I originally discussed with
    you in 2003. The path and pace of our transformation is continually
    assessed in order to ensure that we meet our Nation's strategic goals.
        The intricacy of the changing security landscape also reaffirms the
    importance of our transatlantic relationships in preserving the
    security and stability of our Homeland, that of our allies and partner
    nations, increasingly in areas outside the traditional borders of the
    North Atlantic Treaty Organization (NATO). The founding principles that
    prompted NATO's creation over 50 years ago remain valid today, albeit
    for different and evolving purposes. NATO's ``raison d'etre'' no longer
    simply addresses common defense, but addresses the evolving necessity
    for common security in the face of the asymmetric array of threats now
    facing the Alliance.
        By establishing new capabilities and undertaking nontraditional
    missions, NATO is increasingly able to better address the challenges of
    the new security environment. A key relationship in NATO's continuing
    evolution is EUCOM. EUCOM is the ``sine qua non'' embodiment of the
    U.S. military's commitment to NATO and to our theater's allies. The
    simultaneous transformations, which both began in 2003, are central to
    our ability to meet both the challenges and enormous opportunities of
    the 21st century.
        Our main security objective in EUCOM is to achieve a posture and
    force capability that ensures greater strategic effect, both within our
    area of responsibility and with other combatant commands within the
    framework of the U.S. National Security Strategy and the National
    Defense Strategy. Forward-stationed and rotational forces will preserve
    our leadership role in NATO and provide a visible model for its
    transformation. Our agile forces also enhance our capability to conduct
    operations, and ensure that Europe remains engaged in a collaborative
    effort to counter common security challenges, both today and in the
    future. This transatlantic partnership will dramatically help solidify
    regional and global security efforts.
        The developed world faces threats that are sub-national and supra-
    national; threats which are based on ideological, theological,
    cultural, ethnic, and political factors. Our adversaries do not
    recognize international law, sovereignty or accepted international
    norms of behavior. As such they are able to exploit the seams of the
    international order. This reality, and our understanding of the new
    world ``disorder,'' brings with it unique challenges that require new
    and different approaches by which we cooperate with our allies,
    allocate resources, and develop strategies to protect our national
    interests.
        Our current structures do not always give us the required agility,
    flexibility, and responsiveness needed to convert innovative ideas into
    actionable programs. The complexities of the world and the diversity of
    its threats require our continued focus on fully implementing our
    transformation. We must institutionalize our new operational concepts,
    complete our institutional reforms, and reform our enhanced business
    and acquisition practices in order to better provide positive outcomes
    to our many undertakings. With continuing reform we can assist our
    friends and allies in securing their borders, defeating terrorism, and
    improving the economic outlook in many regions of the European-African
    theater.
        I remain optimistic that the steady development of African regional
    organizations presents opportunities to positively shape the security
    environment for the continent. An improved security posture among
    African partner nations, Regional Economic Communities, and the AU is a
    key element in winning the global war on terrorism. Working with
    partners, allies, and multiple United States Government agencies, we
    are making long-term investments in African-developed programs that are
    aimed at improving that posture.
        I appreciate the opportunity to discuss recent developments and to
    highlight the latest activities in the various regions of our theater.
    I will also discuss ongoing initiatives within the command and the key
    theater investment needs required to maintain and employ our forces in
    a manner that supports our transformation efforts. I hope to show how
    programs executed with our security partners further our national
    security interests. Lastly, I will offer some suggestions with regard
    to how transformation improves the ability of a combatant commander to
    better achieve our national strategic goals and objectives.
                              strategic assessment
        The EUCOM area of responsibility comprises a vast geographic region
    covering over 46 million square miles of land and water, stretching
    from the northern tip of Norway to the southern tip of South Africa,
    and from Greenland in the west to Russia's Pacific coastline (See
    Enclosure 1). The scope and diversity of these 91 sovereign nations
    encompass the full range of human conditions and governments. As such,
    our theater requires a multi-faceted approach, including a
    complementary relationship with many international organizations in
    developing and implementing a strategy that fully addresses the
    challenges to European, African, and U.S. strategic interests.
    Therefore, rather than focus on 91 individual nations, our theater
    perspective and efforts are framed around 8 regions and special
    relationships with Russia and Ukraine (See Enclosure 2). This approach
    is supported by our experiences that problems are often not confined by
    national boundaries, but require regional solutions.

        Western Europe has now benefited from 60 years of peace and
    stability. Our strategic goal is to expand similar peace and prosperity
    to Eastern Europe and Africa. Our ability to maintain this prolonged
    period of stability is attributable to our shared recognition of the
    threat once posed by the Soviet Union and the common desire to
    establish an alliance that would seek to safeguard the freedom and
    security of its members. Today, in the absence of a discernable,
    predictable, and traditional threat, we are faced with a more menacing
    adversary; one that is multi-dimensional, non-traditional, and
    continually evolving from region to region. It metastasizes itself in
    ways that presents challenges to a coherent, collective security
    strategy to rapidly and effectively address its asymmetric expansion.
        Progress toward a more peaceful and prosperous world in this
    century is predicated on recognizing the new array of challenges that
    clearly threaten our common interests, strengthening NATO as the
    centerpiece of our regional security framework, and implementing a
    comprehensive strategy that can effectively address our concerns. As a
    global community we struggle to come to agreement on what truly
    threatens our common security. We also need better coherence concerning
    the most effective response to the challenges we all face.
        Issues that were previously overshadowed by the 20th century threat
    of conventional and nuclear war have come to the forefront. In no
    particular order, these threats include pandemic disease, terrorism,
    famine, economic collapse, uncontrolled illegal immigration,
    proliferation of weapons of mass destruction, narcotrafficking, radical
    fundamentalism, and of course, armed conflict. These perils are
    transnational in nature and are not easily contained within established
    geopolitical borders or by the past century's traditional military
    structures. Our historical experience in working within alliances and
    coalitions has shown us that the most lasting solutions to existing
    threats will be found within collaborative and multifaceted approaches.
    In other words, common solutions for common problems are probably the
    best path to success.
        Terrorism has only recently emerged as our preeminent security
    threat. Many European nations have dealt with terrorism for a much
    longer period of time, and hold differing views on how to combat it
    successfully. For example, some perceive terrorism as an issue for
    local national law enforcement rather than a problem to be handled by
    classic military means. We view terrorism as an interconnected network
    that is global in nature, requiring both domestic (interagency) and
    international participation in order to defeat it. To the point that
    terrorism is a threat to all of us, there is no disagreement on either
    side of the Atlantic.
        While our respective approaches to countering terrorism may differ
    somewhat, I believe we are now closer to understanding its nature and
    the structures that provide it support. For example, the success both
    the U.S. and Europe have had in reducing traditional means of support
    to such networks is clearly forcing terrorist groups to turn to
    alternative means of financing. There is no question but that
    transnational crime and the terrorist world are converging. Terrorist
    groups increasingly adopt the same methods as organized crime and have
    developed their own money laundering, drug processing and trafficking
    rings, as well as human smuggling operations. To ensure success in our
    goals of advancing common security in the 21st century we must adjust
    our tactics correspondingly in order to counter the new array of
    threats.
        It is clear that the primary fronts in the war on terror are
    currently in Afghanistan and Iraq; however, EUCOM's current and future
    impact on this front is a point of strategic interest. Today,
    increasing numbers of foreign fighter support to both areas originate
    from, train in, and transit through the EUCOM AOR. There is evidence
    that terrorist efforts may eventually shift from Iraq and Afghanistan
    to Northern Africa and Western Europe as experienced fighters return
    from the Middle East. The time to prepare for this strategic transition
    is now.
    Europe
        Our successful Western European strategy was built on the
    foundation of common values and common interests. Without full European
    assistance in addressing the demographic, cultural, and energy
    challenges which loom on the near horizon, our long-term collective
    security interests will be at higher risk. Even as we orient our focus
    on regions to the south and east, new demographic and energy security
    issues are evolving to highlight emergent fault lines within Western
    Europe itself. Last year's riots in France, the recent natural gas
    dispute between Russia and the Ukraine, and rapidly changing
    demographics are but three of the challenges Europe will face in the
    near future.
        From our shared foundation of common interests we continue to
    reinforce three main pillars. First, we continue to promote and seek to
    preserve NATO as the primary instrument for European security while
    encouraging the European Union's military capability to develop, but
    not in competition with the proven capability of the Alliance. Our
    second pillar encourages our European allies to play a greater role in
    their own security affairs. Third, we encourage the modernization of
    Europe's military capabilities to become more expeditionary and to be
    better able to cope with our mutual security challenges.
        NATO and EUCOM continue to build partnerships with Russia and
    Ukraine, including the development of security cooperation
    architectures which have proven to be effective in ensuring access to
    the region and promoting common interest. EUCOM conducts regular
    military consultations with the Russian military and we are making
    steady progress through the U.S.-Russia Work Plan in developing a
    normalized military relationship that moves us past the days of the
    Cold War. NATO routinely conducts high-level consultations on a wide
    range of interoperability security issues with the Russian Foreign
    Ministry, Defense Ministry and General Staff. NATO's establishment of
    Military Liaison Missions in Moscow and Kiev has improved
    communications and facilitated day-to-day coordination of activities.
    Similarly, Russia, as a Partner Nation, has a full delegation
    permanently assigned to my NATO headquarters at SHAPE.
        Ukraine's strategic location, recent history as a contributor to
    coalition operations, and its newly reinvigorated policy of Euro-
    Atlantic integration, make it an increasingly important regional ally.
    The Ukraine is at a crossroads between achieving modern western
    institutions and Soviet models. Its near-term success or failure will
    effect the political evolution of the entire region. We are working
    hard to expand and accelerate our already robust military cooperation
    with Ukraine. Through our bilateral work plan we assist Ukraine in
    adopting the military and defense reforms necessary to achieve NATO
    aspirations, and to enable them to continue to provide trained and
    ready forces to coalition operations.
    Africa
        Political instability in Africa is exacerbated by social, economic,
    and security problems related to high population growth rates, poor
    land management, desertification, agricultural and environmental
    disruptions, massive refugee movements and, pandemic conditions. Over
    the past 5 years, the United States has responded to humanitarian
    crises and political instability in Somalia, Mozambique, Liberia, Chad,
    Sierra Leone, the Democratic Republic of Congo, Cote d'Ivoire, and most
    recently in Darfur.
        For the past few years, we have worked to take a more engaged
    approach to achieving long-term stability through proactive, preventive
    measures. Consequences for inaction may include continued and repeated
    U.S. intervention in conflicts and humanitarian crises, disruption of
    economic trade vital to the development of Africa's nascent economies,
    and increased presence of radical fundamentalism, especially in
    Africa's vast ungoverned spaces.
        Violence in West Africa has created ungoverned pockets that extend
    across national borders and threaten to further destabilize an already
    fragile region. Broad expanses of marginally governed areas can become
    havens for terrorists and criminals and have become attractive to
    terrorist groups increasingly denied sanctuaries in Afghanistan and the
    Middle East. North Africa, and in particular the Pan-Sahel region of
    Sub-Saharan Africa, offers opportunities to Islamic extremists,
    smugglers, and various insurgent groups. Parts of Africa have also
    become home to ``franchise groups'' who ally themselves with major
    terrorist organizations and have the unique characteristic of being
    composed of native African members.
        East Africa continues to undergo great human tragedy, as
    exemplified by the situation in Darfur. In response to a request from
    the African Union (AU) NATO has provided airlift, coordination of
    strategic airlift movement, and staff capacity training to the African
    Union Mission in Sudan (AMIS). This AU mission has had some limited
    success, but the situation in Darfur remains critical. There have been
    discussions concerning a possible transition of AMIS to the U.N., with
    a general realization that the eventual handover of the mission to an
    international organization will be necessary.
        Africa's vast potential makes African stability a near-term global
    strategic imperative. The Gulf of Guinea is a largely poorly governed
    maritime security region where smuggling, piracy, and oil bunkering are
    a way of life. Africa currently provides over 15 percent of U.S. oil
    imports and recent explorations in the Gulf of Guinea region indicate
    potential Reserves that could account for 25-35 percent of U.S. imports
    within the next decade. In addition to their size, these high-quality
    Reserves also have the advantage of geo-strategic location on the west
    coast of Africa, allowing for rapid transit by sea to Western Europe
    and the United States. Through the interagency process, we will
    increasingly assist the AU and African regional organizations in
    developing their security structures and in fostering continent-wide
    efforts to achieve stability and security. Throughout our engagement,
    we will continue to assist in the fight against HIV-AIDS, perhaps the
    region's greatest ongoing internal struggle.
        The United States is not unchallenged in its quest to gain
    influence in and access to Africa. We face continuing competition by
    other nations seeking international political support and access to
    natural resources. As Asia's emerging industries expand, requirements
    for petroleum products and strategic metals will grow exponentially and
    will likely compete more intensely for these resources with the U.S.
    Other nations offer money, military aid, and political support, and
    many other incentives without the conditions that we traditionally
    require.
        It is in our national interest to help Africa achieve broad-based
    and sustainable economic, security, political and social development.
    This is the most effective way to fight hunger, poverty, and extremism.
    Over the longer term, EUCOM will work aggressively with our interagency
    partners, allied nations, and the African regional organizations to
    advance our common interests and values. There can be no doubt that
    Africa will occupy an increasingly larger amount of our national
    attention in the years ahead. Early recognition of this reality is very
    important.
                             u.s. european command
        In support of our national engagement policies in Europe and
    Africa, EUCOM continues our efforts to expand security and stability
    throughout the theater. The challenges I have previously enumerated are
    what the National Defense Strategy terms ``irregular and
    catastrophic.'' Enduring success against such challenges has both an
    interagency and an international component. Continued investment in our
    current transformational capabilities and initiatives is critical to
    furthering our international collaborative efforts toward achieving
    common security. In order to be successful in the strategic environment
    in which we find ourselves, we must be capable of responding to a much
    wider variety of potential contingencies.
        In this context, the future of EUCOM is as critical as ever,
    perhaps even more so, to the implementation of our Nation's policies
    and our commitment to the forward defense of freedom. Our forward-based
    and rotational forces are powerful and visible instruments of national
    influence: They provide defense-in-depth for homeland security;
    strengthen U.S. diplomacy and foreign policy; signal U.S. commitment to
    the transatlantic link; demonstrate U.S. Government resolve; and
    bolster common security through a critical array of Theater Security
    Cooperation (TSC) programs. The majority of our operations are ``peace
    support'' operations, ranging from peace enforcement, to stability
    operations, to training missions and exercises. Proactive peacetime
    engagement activities reassure allies and partners, promote stability
    and mitigate the conditions that lead to conflict. We base our
    strategies on the principle that it is much more cost effective to
    prevent conflict than it is to stop one once it has started.
        Due to the modern day complexity of our theater's security
    challenges, U.S. efforts will require a broad interagency approach. In
    EUCOM we integrate our TSC program in ways that maximize effectiveness
    of each TSC dollar by allocating resources towards priority countries
    and regions identified by our plans. We work to improve interagency
    coordination across the spectrum of governmental and nongovernmental
    organizations in order to achieve optimal national results. As I will
    discuss, a critical component to this effort is the long overdue
    implementation of necessary TSC reforms.
    Strategic Theater Transformation
        We execute our Strategic Theater Transformation (STT) plan in order
    to posture ourselves to meet the emerging security landscape. Our
    objective remains constant: to enhance our strategic effect and our
    operational agility. Success hinges on maintaining sufficient critical
    assets and capabilities in theater as both a ``supported and a
    supporting'' combatant command. Such assets include: mobility; power
    projection platforms; operating bases; a joint forces command
    structure; nurturing and developing alliances and coalition partners;
    integrated intelligence systems; and agile, expeditionary forces. To
    ensure the full implementation of our STT plan, we request an
    investment of $940 million in military construction and family housing
    in fiscal year 2007. While this is a large request, it needs to be
    understood within the overall context of our STT plan which supports
    the Secretary of Defense's Global Defense Posture.
        Since 2003 and projected through 2006 we will have closed 43 bases
    and installations and repatriated approximately 10,000 forces and
    13,800 family members. Upon the completion of our STT plan we
    anticipate the closure of several hundred bases and installations and
    the return of over 40,000 military personnel, 65,000 DOD civilians, and
    over 57,000 family members. The rightsizing of forces and bases in
    Europe has yielded considerable benefits to DOD's ability to manage
    personnel and infrastructure globally, while empowering EUCOM to
    counter new threats throughout a greater proportion of the AOR.
        Certain elements of the EUCOM transformation plan--including force
    levels, training, and access to facilities and protocols to assure
    freedom of action for our forward forces--continue to be negotiated
    with host nations. Additionally, our transformation is being
    coordinated through the Services, the Joint Staff and OSD. It is also
    being synchronized with the efforts of other combatant commands, NATO,
    and the results of the Base Closure and Realignment Commission (BRAC)
    process in the United States.
        Through a dramatically reformed forward presence concept, we will
    create a more adaptive infrastructure with increased use of rotational
    units to improve on our operational reach and tactical flexibility.
    Increasing access to strategic host nation infrastructure and
    cooperation with friendly nations will improve our responsiveness. Our
    evaluation of infrastructure requires focus on Main Operating Bases
    (MOBs), Forward Operating Sites (FOSs), and Cooperative Security
    Locations (CSLs).
        In Europe, our basing strategy seeks to sustain and leverage our
    commitments to our longstanding alliances. We maintain a robust
    presence in Western Europe--making necessary improvements to existing
    bases and training facilities--while at the same time shifting our
    focus to improving the ability of new allies and partners to be able to
    deploy rapidly and operate with our forces. The goals of this strategy
    are to deepen and strengthen relations with our newer allies; develop
    our focus to the south and east of our theater; maintain our national
    commitment to NATO; and to improve our interoperability with like-
    minded friends, allies, and major NGOs. The Eastern Europe Task Force
    initiative in Romania and Bulgaria is a good example of our developing
    relationship towards the east.
        For relatively small, but consistent investments, our theater
    efforts in Africa will have major impacts on the multitude of
    strategic, security, economic, and political challenges we face. As we
    strive to assist in halting the deteriorating conditions in this
    increasingly important continent, we impact on Africa's potential for
    becoming the next front in the war on terrorism. We should remain
    engaged in Africa in order to build upon international relationships
    and to strengthen the many institutions that help mitigate the risk of
    armed conflict and provide relief when they do occur.
    Theater Security Cooperation
        Our TSC programs remain the centerpiece of our efforts to promote
    common security to strengthen the transatlantic link. TSC programs
    represent a much needed proactive approach to building partnership
    capacity with the aim of enabling emerging democracies to defend their
    homelands, address and reduce regional conflicts, defeat terrorist
    extremists, develop common economic and security interests, and respond
    to health crises, such as pandemic influenza outbreaks. Our approach is
    regional, linking individual country objectives to broader theater
    goals. Assisting our allies in developing the capabilities required to
    conduct effective peacekeeping and contingency operations with well-
    trained, disciplined forces helps mitigate the conditions that lead to
    conflict, prepares the way for success, and reduces the potential
    burden of U.S. involvement. Excluding Israel, we have requested a total
    of $166.6 million in Foreign Military Financing (FMF) and $40.5 million
    in International Military Education and Training (IMET) for fiscal year
    2007. If approved, these programs will have direct benefit in regions
    where we need them the most.
        Regional Approach
        In EUCOM our TSC strategy derives from regional priorities and
    policy themes outlined in the Secretary of Defense's Security
    Cooperation Guidance. Our priorities are: to deepen and strengthen our
    relations with allied and partner nations; to assist our allies in
    developing capabilities to deploy rapidly and to be interoperable with
    U.S. forces; to encourage our allies in developing a robust SOF
    capability; to align our forces in a manner that enables a more rapid
    deployment to areas of instability; and to increase U.S. influence with
    new NATO members. We continue to focus on enhancing stability through
    Operation Active Endeavor, NATO's only Article V counterterrorism
    operation. Additionally, we have strategic security interests in other
    regions such as the Black Sea and the Caucuses. We will continue to
    support the Balkans in their reconstruction and in their eventual, but
    still conditional, integration into Euro-Atlantic institutions.
    Multinational training and exercises are essential elements of our
    regional approach to build military-to-military cooperation, to improve
    interoperability, and to facilitate the development of professional
    militaries. Our continuing mission in Georgia is a good example of
    ``low investment, high yield'' TSC strategy.
        In Africa, our priorities are to increase the capability of African
    nations to conduct peacekeeping and contingency operations in each of
    their five regions, particularly through the AU and other regional
    organizations; to protect natural resources; and to promote stability
    by providing medical advice and assistance in dealing with health
    issues such as HIV/AIDS, cholera, malaria, and other diseases that have
    both humanitarian and strategic consequences.
        Stability programs targeting improvements in health, education,
    good governance, and civil infrastructure are focused on countries with
    the greatest need. Development of effective security structures in
    Africa will establish the foundation for future success; however, they
    are dependent on the commitment of manpower, as well as the financial
    and institutional resources necessary to establish and sustain real
    progress. Working with donor nations and the interagency, our security
    initiatives--providing military training and education and enhancing
    peace operations capabilities, resources, and infrastructure--are
    focused on countries that possess the capability and show the desire to
    lead Africa into the future. African security issues will increasingly
    continue to directly affect our homeland security. Modest near-term
    investments will enable us to avert future crises that could, left
    unaddressed, require costly intervention in the future.
        Trans-Sahara Counterterrorism Initiative (TSCTI)
        TSCTI is the long-term interagency plan to combat terrorism in
    trans-Saharan Africa using a full range of political, economic and
    security tools. The need for TSCTI stems from concern over the
    expansion of operations of Islamic terrorist organizations in the Sahel
    region, a region that approximates the size of the United States. In
    EUCOM we support TSCTI through our involvement in Operation Enduring
    Freedom-Trans Sahara (OEF-TS). OEF-TS is a regional and preventive
    approach to combat terrorism and enhance partner nation border security
    and response in Trans Sahara Africa. It is designed to assist
    governments who seek to better control their territories and to prevent
    large areas from becoming safe havens for terrorist groups. TSCTI
    builds upon the successful 2002 Pan Sahel Initiative (PSI) which helped
    train and equip at least one rapid-reaction company in each of the four
    Sahel states: Mali, Mauritania, Niger, and Chad. TSCTI is a follow on
    effort, more ambitious in both programmatic and geographic terms.
        TSCTI's overall approach is straightforward: to build indigenous
    capacity and facilitate cooperation among governments in the region.
    Participating nations, Algeria, Chad, Mali, Mauritania, Morocco, Niger,
    Senegal, Nigeria and Tunisia, join in the struggle against Islamic
    extremism in the Sahel region. This cooperation strengthens regional
    counterterrorism capabilities, enhances and institutionalizes
    cooperation among the region's security forces, promotes democratic
    governance, fosters development and education, emphasizes the
    military's proper role in supporting democratic ideals and ultimately
    strengthens our bilateral relationships in the region. It also assists
    participating nations in halting the illegal flow of arms, goods, and
    people through the region, helps nations better protect their vast
    borders and contributes to common security.
        Political instability in Africa, left unattended or unaddressed
    will require reactive and repeated interventions at enormous costs
    (i.e. Liberia). For a relatively small investment, TSCTI has the
    potential to produce significant results in countering terrorism. It
    will be a powerful brake on future terrorist expansion, leading to an
    increasingly stable region. The administration is working to integrate
    TSCTI into future budget and planning cycles. Long-term, continuous
    engagement will build bonds where few existed and strengthen those
    already established. The United States should continue security
    cooperation measures with nations supporting regional initiatives which
    ultimately lead to peace, stability, and hope for people who have
    little at present.
        Global Peace Operations Initiative (GPOI)
        GPOI is a Department of State program, which is planned and
    implemented in consultation with the Department of Defense to train and
    equip peacekeepers. The bulk of real world GPOI activities is
    undertaken by African Contingency Operations, Training and Assistance
    (ACOTA), which is directed toward African nations and currently
    includes 15 ACOTA ``partners.'' Countries considered for GPOI funding
    must demonstrate a strong commitment to participate in Peace Support
    Operations, as is one of the four criteria for being an ACOTA member.
    In fiscal year 2005, for the first time, operating funds to the ACOTA
    program were distributed via GPOI channels, as opposed to being a line-
    item in the Bureau of African Affairs, as has been the case since 1997.
        Through GPOI and our own theater security cooperation and
    engagement programs, we will continue to support the AU and regional
    organizations to help ensure their success in progressing towards self-
    sufficiency. We believe GPOI and ACOTA should continue to be designed
    to help African regional organizations and their member countries
    develop the military capabilities needed to respond to regional
    problems, protect their strategic resources, reduce internal
    destabilizing tensions, and further develop cooperative, mutually
    beneficial external relationships. Our top priority in Africa is to
    support the AU's Common African Defense and Security Policy (CADSP) and
    other viable regional security organizations. The AU's five regional
    economic communities are developing common policies on defense and
    security issues in support of the AU CADSP. In EUCOM's view, GPOI
    funding should support ACOTA and benefit those programs and activities
    that promote the growth and increase the capabilities of the AU as the
    lead organization for increasing African responsiveness to crises.
        Caspian Guard Initiative (CGI)
        CGI is a framework program designed to coordinate security
    cooperation activities in Azerbaijan and Kazakhstan with those of
    CENTCOM and other U.S. Government agencies to enhance Caspian security.
    CGI assists Azerbaijan and Kazakhstan in improving their ability to
    prevent and, if needed, respond to terrorism, nuclear proliferation,
    drug and human1 trafficking, and other transnational threats in the
    Caspian region. With CENTCOM we work with the Defense Threat Reduction
    Agency (DTRA), DOS, the DOD (Under Secretary of Defense for Policy),
    and the Department of Energy (DOE) to improve Azerbaijan's and
    Kazakhstan's capacities. As a result, U.S. Government ``stakeholders''
    know their contributions are part of a coherent, strategic effort that
    promotes interoperability among activities, identifies capability gaps
    and cooperation opportunities, and mitigates redundant and duplicative
    efforts. CGI-related projects in Azerbaijan and Kazakhstan include
    maritime special operations training, weapons of mass destruction (WMD)
    detection and response training and equipment, naval vessel and
    communications upgrades, development of rapid reaction capabilities,
    border enhancements, counternarcoterrorism and border control training,
    naval infrastructure development planning, and interministry crisis
    response exercises.
        Maritime Security in Africa
        The West Indian Ocean and Gulf of Guinea (GOG) regions of Africa
    are areas which epitomize the complexity of maritime security
    challenges. Problems such as criminal activity, piracy, environmental
    and fisheries violations, resource theft, and trafficking occur on a
    regular basis. In order to address these challenges, EUCOM is engaged
    in the creation of a comprehensive maritime security initiative for
    Africa. U.S. Naval Forces, Europe (NAVEUR), EUCOM's lead component in
    this initiative, has developed a robust maritime security strategy and
    regional 10-year campaign plan for the Gulf of Guinea region. Gulf of
    Guinea Guard, EUCOM's investment initiative for long-term regional
    security and stability, will help GOG nations protect natural resources
    and use their wealth to develop economically and socially. Enabling
    objectives of the initiative are: enhancing physical security of
    national ports; improving control of littoral areas; and promoting
    collective and cooperative maritime security beyond littoral areas.
    African Contingency Operations, Training, and Assistance (ACOTA)
        ACOTA is a DOS Peace Support Operations (PSO) training initiative
    designed to improve the AU's ability to respond quickly and
    professionally to regional crises at the battalion, staff, brigade, and
    increasingly, at the multinational and Regional Economic Community
    level. ACOTA has for several years been a crucial African engagement
    and capacity-building program, directly supporting U.S. national
    objectives and EUCOM theater objectives of promoting stability,
    democratization, and military professionalism in Africa. Objectives of
    the ACOTA program include training and sustaining an African
    peacekeeping operations forces of 40,000 personnel by 2010; developing
    and improving sustainable PSO capacities for African forces to deploy
    and conduct peace support and humanitarian relief operations within
    Africa; and developing new programs of PSO training that will be
    relevant to the African Standby Force (ASF) and the Regional Brigades
    as they come on line.
        Our support to the DOS contract-led training will continue
    throughout 2006. We will continue to provide active and Reserve
    component uniformed mentors to support battalion or brigade-level
    training focused on the peace support operations skills for individual
    soldiers, squads, platoons, and companies, culminating with a
    battalion-level exercise, along with staff training and multinational
    exercises for larger components, mixed staffs, and more complicated
    joint exercises. Training for specialty units will also be included.
        Security Cooperation Activities
        Security Cooperation Activities are managed programs planned and
    executed for the purpose of shaping the future security environment,
    spreading democratic values, and developing the potential of nations.
    Key among U.S. combatant command's TSC tools are Combined/Multinational
    Training and Exercises, FMF, Humanitarian Assistance (HA), Joint
    Contact Team Program (JCTP), Military-to-Military (M2M) Program,
    International Military Education and Training (IMET), Foreign Military
    Sales (FMS), and direct commercial sales. These programs provide access
    and influence, help build professional, capable militaries in allied
    and friendly nations, and promote interoperability. We execute the
    larger security assistance programs using our 44 Offices of Defense
    Cooperation in concert with U.S. Embassy Country Teams, while smaller
    programs are executed by Defense Attaches and Embassy Offices.
        IMET remains our most powerful security cooperation tool, and
    proves its long-term value every day. At a relatively low cost, the
    program exposes foreign military and civilian leaders to U.S. military
    training, builds relationships, facilitates access, and builds
    influence. It is the single most effective tool available to
    demonstrate democratic control of militaries, and in many cases is the
    primary theater security cooperation activity that we have. Today, we
    continue to see the value of this program in the professional
    development and transformation of militaries in such establishing
    allies as Poland, Bulgaria, Romania, and many other countries.
        The National Guard State Partnership Program (SPP), a united
    security cooperation program, also continues to be one of our most
    effective programs (See Enclosure 3). By linking our states and
    territories with designated partner countries, we promote access,
    enhance military capabilities, improve interoperability, and advance
    the principles of responsible governance. The unique civil-military
    nature of the National Guard allows it to actively participate in a
    wide range of security cooperation activities. During the past 3 years
    the SPP has conducted over 115 events and expanded into Africa with 5
    additional partnerships, including the latest partnership between
    Nigeria and California.

        Combating WMD is among our highest priorities, and the DTRA
    provides support unique within DOD that EUCOM has fully incorporated.
    DTRA's contributions cover the entire spectrum of our mission:
    Cooperative Threat Reduction programs address the nonproliferation of
    known WMD; detection programs address counterproliferation,
    particularly interdiction of unknown items; and DTRA's exercise
    programs address our consequence management responsibilities,
    reassuring our friends and allies with regard to EUCOM capabilities.
        The EUCOM Sustainment and Stability Operations Program (SSOP) in
    Georgia focuses on enhancing the capabilities of Georgian military
    forces to assist in preparing deployments in support of OIF. The U.S.
    and Georgia have developed a solid, cost effective partnership
    dedicated to promoting peace and stability and countering terrorism.
    This program still serves as a model for other programs designed for
    the same purpose.
        Additionally, U.S. Army, Europe supported training of Romanian
    tactical human intelligence teams at Grafenwoehr, Germany, which has
    been instrumental in creating military-to-military relationships
    between units, and in bridging the gap between U.S. and foreign
    military concepts. This training has allowed participating countries to
    replace EUCOM personnel in the Balkans, thus freeing up U.S. personnel
    for other duties elsewhere.
        We attach great value to our programs offering multinational
    educational activities. They foster the professional development of
    emerging civilian and military leaders, reinforce ideals of democratic
    governance and stable apolitical militaries, and facilitate long-term
    dialogue with and among future international leaders. The George C.
    Marshall European Center for Security Studies, our preeminent
    transatlantic security and defense educational institution, is
    dedicated to the creation of a more stable security environment. It
    plays a major role in advancing democratic institutions and relations,
    peaceful engagement, and enhancing enduring partnerships between the
    Nations of North America, Europe and Eurasia. Three other prominent
    educational institutions are the NATO School, the Near East-South Asia
    Center for Strategic Studies, and the Africa Center for Strategic
    Studies (ACSS). Such educational activities achieve their greatest
    effectiveness when they are permanently located in the regions they are
    designed to influence. For the ACSS, currently based in Washington, DC,
    its success would be greatly enhanced by relocation to Africa, with
    mechanisms to give African nations greater ownership of its programs.
    All such schools play a central role in our engagement strategy by
    building trust and cooperative relationships with the leaders (current
    and future) of over 50 nations across Europe, Eurasia, and Africa.
        HIV/AIDS Prevention Programs continue to be a key influence
    activity within our AOR. We have worked with DOD HIV/AIDS Prevention
    Program personnel in advocating projects and programs sponsored by the
    country teams and worked to incorporate these into the theater security
    cooperation plans. We appreciate the provision of $5.3 million in
    Public Law 109-148 for this program in Africa in fiscal year 2006. All
    government and nongovernmental HIV/AIDS programs are important in
    supporting security cooperation.
        To ensure that U.S. actions are coordinated with other nations
    within the same region, we have established a regional security
    cooperation approach known as Clearinghouse Initiatives. Clearinghouses
    help deconflict programs, avoid duplication, and find ways to
    collaborate on matters of mutual interest. They have been created for
    Africa, the South Caucasus, and Southeast Europe, and serve as a multi-
    national forum for interested countries to share information about
    security assistance programs. The goal is to capitalize on limited
    resources by merging various security cooperation programs into a
    comprehensive, synchronized regional effort.
        Comprehensive TSC Reforms
        Traditionally, our Armed Forces focus on fighting and winning wars.
    While we need to be prepared to operate across the full spectrum of
    conflict, in the new security landscape we conclude that early
    engagement, often requiring modest investment, can yield significant
    long-term dividends. In many cases, early actions can minimize or
    eliminate future engagements. Our approach to proactive versus reactive
    engagement highlights TSC as a cost effective and very important
    capability. Reforms to our existing national TSC authorization are
    necessary to promote greater efficiencies, and to more effectively
    expand U.S. influence in accordance with National Military Strategy and
    OSD Security Cooperation.
        EUCOM has an abundance of programs, initiatives, and policies
    designed to help in developing and implementing our TSC strategy. There
    are as many as 30 sources of funding which emanate primarily from the
    DOD and the DOS--and which are regulated by various, often times
    competing, authorities and guidelines. Although the Unified Command
    Plan establishes the authority of the Geographic Combatant Commander
    (GCC) to plan and conduct security cooperation activities within an
    assigned area of responsibility, there are a number of programs or
    activities over which the GCC has no influence. Additionally, there
    exist government and nongovernment programs of which the GCC has no
    visibility.
        In 2006, we will continue working to improve the efficiency and
    effectiveness of our TSC programs. We will complete development of
    effects-based, regionally focused plans that fully support nationally-
    directed strategic guidance. These plans, and our TSC strategy, support
    our overarching effects and capabilities-based theater strategic
    objective and effects management process. To increase efficiency, we
    will seek security cooperation funding and authority reform. The OSD,
    the Joint Staff, and individual Services work closely with the unified
    commands to explore ways to improve program element structure in order
    to provide greater resources to the combatant commanders.
        Ultimately our goals should include matching resource management
    with the responsibility for TSC success under the various unified
    regional commands. For EUCOM, this would empower us to better compete
    in the developing parts of our theater, particularly Africa and Central
    Asia. Recent changes in the Security Cooperation Guidance (SCG) which
    requires all DOD components to coordinate their SCG implementation
    strategies, plans, and activities with the relevant geographic
    combatant commanders and the identification of the combatant commanders
    as the DOD's supported entities for security cooperation is a positive
    development.
        At the interagency level, better synchronized and more streamlined
    policy and legislative lines of authority would provide increased
    efficiencies and greatly assist in developing and implementing a more
    effective, overarching strategy to achieve our Nation's foreign policy
    objectives. Such reforms would also help develop democratic principles,
    common ideals, and defense reform of potential coalition partners and
    might also prevent some nations from turning elsewhere for security
    assistance needs. By streamlining these processes, we increase our
    agility and effectiveness, thereby allowing increased assistance and
    enhanced programs to those that need them most.
    Component Command Activities
        U.S. Army, Europe (USAREUR)
        USAREUR is in the midst of transforming to restructure and refocus
    the Army footprint in Europe. This transformation incorporates
    substantial force redeployments to the United States, reconfiguring
    tactical units, and creating a new command and control structure.
        The new command--which will be designated 7th Army--will combine
    the command functions of USAREUR with the warfighting capabilities of V
    Corps. When the transformation initiatives are complete, 7th Army will
    have eight separate organizations (instead of the current 20) and two
    permanently assigned combat brigades--a Stryker Brigade Combat Team
    (SBCT) in Vilseck, Germany, and an Airborne Infantry Brigade Combat
    Team (BCT) in Vicenza, Italy. The command is planning to utilize a
    third brigade on a rotational basis in support of the Eastern European
    Task Force.
        Transformation of Army forces is now shifting from planning to
    execution of key decisions of the Integrated Global Presence and Basing
    Study (IGPBS) with the return this summer of 1st Infantry Division
    headquarters and one of its brigades to the Continental United States
    (CONUS). The other Germany-based 1st Infantry Division Brigade will
    redeploy to CONUS after its current tour in Iraq. The redeployment of
    these units from Europe is offset with the re-stationing of a 4,000 man
    Stryker Brigade Combat Team in Vilseck, Germany by August 2006.
        Over the past 3 years, USAREUR has continued to provide substantial
    support to the global war on terrorism. Southern European Task Force
    (SETAF) and the 173rd Airborne Infantry Brigade formed the U.S.-led
    combat force in Afghanistan (Combined Joint Task Force 76), while V
    Corps headquarters re-deployed with two Brigade Combat Teams from 1st
    Armored Division to Iraq to form the bulk of the Multinational Corps-
    Iraq Headquarters for the two U.S. Army divisions, Marine Corps and
    coalition forces in Iraq. USAREUR recently deployed medical and support
    personnel to Pakistan to provide critical humanitarian assistance to
    earthquake victims.
        Despite high rates of operational and personnel tempo, USAREUR
    continues to provide tremendous support to our TSC initiatives.
    Particularly, the command is working with our allies and partners to
    improve their capabilities and increase coalition contributions to
    multinational operations. For example, USAREUR's support to the Polish
    Land Forces--training NCOs and officers; supporting and participating
    in rehearsal exercises; and providing Mobile Training Teams to assist
    deployments--have directly assisted six successful Polish deployments
    of brigade and division headquarters to Iraq. Additionally, USAREUR led
    the way in nurturing our relationships with Russia and Ukraine via
    interoperability and peace support exercises through the ongoing Torgau
    Exercise series with Russia, coupled with key senior leader engagement.
    USAREUR continues to build upon the Peace Shield and Rapid Trident
    exercise programs with the Ukraine, focusing on the Ukraine's emerging
    Rapid Reaction Force and NATO/U.S. standard operating procedures. This
    year USAREUR will also initiate an airborne exchange program with the
    Ukraine.
        USAREUR's focused activities in Eastern Europe have advanced our
    transformation goals throughout this critical region, helping to
    realign the U.S. global defense posture through cooperation with
    allies. Bilateral exercises in Bulgaria (immediate response) and
    Romania in July 2005 (ROMEX) provided both an outstanding opportunity
    to train as NATO allies and test critical training areas and movement
    infrastructure. The Defense Cooperation Agreement with Romania will
    enable U.S. forces to start establishing the Eastern European Task
    Force (EETAF), which will operate from Forward Operating Sites at
    Mihail Kogalniceanu Air Base (MK) as the EETAF headquarters and
    adjacent to the Babadag Training Area. We are studying the concept of
    making Mihail Kogalniceanu Air Base a joint forward operating base for
    rotational presence and training of not only Army forces, but Air
    Force, Marine, and Special Operations units. The potential also exists
    to establish the EETAF operational command post at MK air base as a JTF
    HQs as well. Additionally, the USAREUR-led EETAF will significantly
    improve our ability to plan, coordinate, and execute security
    cooperation and allied interoperability in Eurasia and the Caucasus
    regions.
        In Africa, USAREUR's 212th Mobile Army Surgical Hospital (MASH) led
    a historic mission: Exercise MEDFLAG 2005, the first-ever exercise by
    U.S. forces in Angola, was viewed by both U.S. and Angolan military and
    government officials as a tremendous success. The 212th MASH gained
    valuable training experience in deploying personnel and equipment in
    support of a humanitarian assistance operation in a challenging
    multinational environment by completing a civil engineering project,
    conducting joint training with the Angolan military, and providing
    medical assistance to Angola's civilian population. Immediately
    following this exercise, 212th MASH deployed to Pakistan to conduct
    operations in support of CENTCOM's earthquake assistance mission.
    Lastly, USAREUR has established a formal liaison--Military Liaison
    Officer-Africa--to establish contacts with a variety of African nations
    such as Senegal, Angola, Sao Tome, Nigeria, Mali, Tunisia, and others.
        NCO development with partners and allies remains a cornerstone of
    USAREUR security cooperation. USAREUR has opened its Warrior Leader
    Course at Grafenwoehr to international participation by junior non-
    commissioned officers. Poland, Russia, Albania, and Slovenia have all
    participated in this IMET-funded program which will increase the level
    of interoperability. Furthermore, Botswana and South Africa have
    expressed interest in the program.
        USAREUR has transformed the 7th Army Training Command to the Joint
    Multinational Training Command with enhanced expeditionary training,
    exercise capability, and theater security cooperation support. Over the
    last 3 years, the command conducted significant expeditionary training
    in both Bulgaria and Romania, while simultaneously conducting
    certification events for two combined joint task force headquarters
    (for Afghanistan and Iraq). The command continues to provide training
    at the brigade level to U.S. forces in Germany and to coalition
    partners both in Germany and in partner nations.
        U.S. Air Forces Europe (USAFE)
        Over the past year, USAFE has continued its broad transformation
    while simultaneously developing Theater Security Cooperation
    relationships in key geographical areas. It has also continued to
    provide substantial direct support to the global war on terrorism with
    both personnel and equipment.
        The most visible change in USAFE over the past year was the
    transfer of mobility throughput capabilities from Rhein Main Air Base
    to Ramstein and Spangdahlem air bases. The closure of Rhein Main and
    the return of real estate to the German government was the culmination
    of 6 years of work and was planned and executed with no effect on
    either theater or global-mobility capability. This seamless transition
    will ensure the continued support of global military operations.
        A second notable change is the activation of the Warfighting
    Headquarters (16 AF) at Ramstein Air Base, Germany. This is part of the
    overall Air Force transformational effort to enhance wartime
    operations. The 16 AF provides a single, full-time air component
    command structure capable of assuming responsibilities of a combined/
    Joint Air and Space Component Headquarters when required. The 16 AF
    ensures effective command and control of air, space, and information
    operations forces. A key underlying benefit of this organization is the
    ability to immediately transition to any mission across the full
    spectrum of conflict. It increases command and control capability due
    to embedded communication systems coupled with co-located functions
    such as intelligence, surveillance, and reconnaissance (ISR), and
    logistics.
        USAFE is supporting OSD's training transformation through its
    implementation of the Joint National Training Capability. Together with
    USAREUR, USAFE is providing the warfighter integrated constructive
    simulations with virtual and live instrumented ranges. This provides
    theatre forces and NATO allies training opportunities in both joint and
    combined operations. We are conducting operational and tactical level
    exercises, linking warfighters in live, virtual and constructive
    scenarios. This capability allows USAFE and USAREUR, through the
    Warrior Preparation Center, to link warfighters from across Europe and
    the world with C2 weapon systems to provide realistic and relevant
    training.
        USAFE Theater Security Cooperation programs support the command's
    overarching initiatives. In 2005, USAFE participated in over 500 events
    with 66 of the 91 countries in our AOR. Events ranged from major JCS
    exercises and NATO support activities to bilateral/multilateral events.
    One shining example of USAFE's Theater Security Cooperation was
    Exercise Rescuer-Medceur 2005 with the Georgian Army. This USAFE-led
    exercise provided 15 NATO and Partnership for Peace nations medical
    training, a forum to exchange information on medical techniques and
    procedures, and medical assistance to the rural populace in Western
    Georgia.
        Theater Security Cooperation also extends to the operational arena.
    In an effort to further interoperability and extend the capacity of
    U.S. ISR assets, USAFE has taken a two-pronged approach to security
    cooperation. First, it has almost doubled its traditional exchanges and
    added new contacts with our partner nations. Second, because USAFE
    currently operates a limited number of airborne ISR assets in this
    theater, it has aggressively pursued working with partner nations who
    have or are developing airborne ISR capabilities. By building these
    relationships and working with these nations on standardizing tactics,
    techniques, and procedures, we may have the opportunity to integrate
    their assets into our contingency operations.
        In addition to conducting operations within the USEUCOM AOR, USAFE
    continues to support CENTCOM and ongoing OEF and OIF operations. The
    USAFE Basing Strategy maintains and improves infrastructure at its Main
    Operating Bases that support the massive mobility throughput that is
    resupplying OIF/OEF forces and other worldwide operations. A strategic
    cargo hub has been activated at Incirlik which has enabled increased
    mobility throughput to CENTCOM. Support is not limited to mobility
    throughput, but also includes the contributions of USAFE units and
    individual personnel. Additionally, 4 of USAFE's 10 flying squadrons
    are conducting operations in CENTCOM; USAFE C-130s are on indefinite
    deployment to CENTCOM; the USAFE Air Operations Center is deployed to
    CENTCOM and is providing effective Air Command and Control for OIF.
    Finally, USAFE airmen and civilians are also on individual deployments,
    providing critical support to support both OEF and OIF.
        U.S. Naval Forces, Europe
        NAVEUR continues to transform its footprint in Europe. Since it
    began to restructure in 2003, it has reduced assigned military
    personnel from more than 14,000 to just over 10,000. The command has
    accomplished this through the consolidation of three headquarters
    staffs and refocusing all activities in the AOR. This footprint will
    continue to shrink with the planned closure of the U.S. Naval Facility
    at La Maddalena, Sardinia.
        While NAVEUR's mission has changed substantially, its value and
    impact in the AOR has not decreased. Initiatives like the U.S. Navy's
    Fleet Response Plan--enhancing the Fleet's surge capability--have
    enabled NAVEUR to focus on the development of new skill sets. While
    retaining the ability to maintain supremacy at sea in the traditional
    sense, NAVEUR is also building regional nation maritime capability and
    capacity to provide maritime stability, safety, and security and to
    help win the global war on terror.
        Prime examples of effective relationship building from 2005 include
    the West Africa Training Cruise and the U.S.S. Emory S. Land deployment
    to the Gulf of Guinea. The West Africa Training Cruise featured U.S.S.
    Gunston Hall with embarked U.S. Marines, Spanish Marines, and Italian
    Marines and Army personnel working with navy and land forces from
    several Gulf of Guinea nations. U.S.S. Emory S. Land deployed to West
    and Central Africa where they hosted personnel from seven African
    nations and embarked personnel from numerous NATO partners as well.
    These efforts gave our emerging and enduring partners first-hand
    experience with our Navy, providing the type of interaction that makes
    lasting impressions.
        This trend will continue. Already in 2006 the Navy sent the U.S.S.
    Mount Whitney to support Liberia's presidential inauguration in January
    and will deploy U.S.S. Emory S. Land to the Gulf of Guinea for 3 months
    this spring.
        Operationally, maritime security is at the top of NAVEUR's priority
    list. The long range vision for maritime security in the region
    includes a series of Automated Identification System (AIS) receivers
    along the coast of West Africa providing the ability to identify ships
    transiting the region. AIS, coupled with a system of coastal radars
    able to detect suspicious vessels at sea and a communication
    infrastructure that will allow our partners to receive notification
    that there is a potential security issue/risk at sea, is the first
    step. These measures are attainable and affordable. Ultimately, partner
    navies in this region must possess the capability and capacity to
    engage lawbreakers at sea. Earlier this year, NAVEUR leadership met
    with Gulf of Guinea nations to lay the groundwork for this priority.
        Later in March, NAVEUR will jointly sponsor--with the Africa Center
    for Strategic Studies--a Maritime Safety and Security Workshop in Ghana
    that will be attended by each of the Gulf of Guinea nations, additional
    African maritime nations and several NATO nations. This workshop is
    preparatory to a maritime safety and security ministerial-level
    symposium this fall.
        NAVEUR has also been active in engagement with all of the Black Sea
    littoral nations in improving maritime security in the east. Bilateral
    training, multi-lateral exercises, ship visits, senior officer
    engagements and operational staff talks are part of the engagement
    effort. Success stories include NAVEUR providing assistance in
    developing the noncommissioned officer corps of some navies in this
    region. This serves as a model for developing relationships with
    emerging partners.
        NAVEUR continues to operate with NATO to strengthen enduring
    partnerships and improve interoperability. The NAVEUR push south and
    east will increasingly include NATO whenever possible. As NAVEUR
    increases presence in the Gulf of Guinea to the south and in the Black
    Sea to the east, their goal is to operate with NATO allies as
    frequently as possible. Force multiplying with our allies is essential
    to success in the maritime domain.
        U.S. Marine Forces, Europe (MARFOREUR)
        MARFOREUR continues to transform, while retaining its flexibility
    to ramp up and down based upon missions, priorities, and real world
    contingencies. The net effect is greater output from a smaller command.
        MARFOREUR's support to the global war on terrorism remains strong.
    Its training of the Georgian military, now in its fourth year, through
    the Georgia Sustainment and Stability Operations Program (SSOP) has
    resulted in the deployment of over 1,000 Georgian soldiers on a
    permanent rotation basis to OIF since 2004. MARFOREUR's maintenance of
    a Hospital Liaison Staff at Landstuhl Regional Medical Center (LRMC)
    since January 2003 is another example of its contribution to OIF. This
    detachment is responsible for the in-patient reception of our wounded
    marines from operations throughout our AOR and CENTCOM. Over 2,500
    marines and family members have been assisted by this team since its
    inception.
        MARFOREUR's Security Cooperation activities range from individual
    and small team efforts to battalion and squadron-size unit deployments.
    In all instances, the security cooperation focus continues to shift to
    furthering the attainment of objectives in the Black Sea and Caucasus
    Regions and North and West Africa. Support to the International
    Military Assistance Training Team in Sierra Leone, various Africa
    Contingency Operations Training and Assistance program sponsored
    events, and numerous Joint Contact Team Program (JCTP) activities
    create long-term dividends for a relatively small investment.
    MARFOREUR's support to the Joint Exercise Program relies largely on the
    Marine Corps Reserves, offering unique annual training opportunities to
    U.S.-based forces while offsetting the impact of limited Active-Duty
    Force availability. MARFOREUR is coordinating activities that occur in
    Trans-Sahara Counter Terrorism Initiative (TSCTI) countries with
    Special Operations Command, Europe--such as Exercise Shared Accord in
    Niger and intelligence-focused JCTP events in Niger and Mali.
        Special Operations Command, Europe (SOCEUR)
        SOCEUR also continued to transform in 2005, while maintaining its
    emphasis on operations and exercises in the global war on terror. Naval
    Special Warfare Unit (NSWU) 10 de-activated at Rota, Spain, merging its
    responsibilities into NSWU Two, in Stuttgart, Germany. SOCEUR conducted
    operations in the Balkans, and deployed forward-stationed forces to OEF
    and OIF. SOCEUR designed its exercise program to have operational
    impacts in the global war on terror, improving partner nation capacity
    in Europe and Africa and diminishing the conditions that support
    terrorism.
        SOCEUR's premier European counterterrorism exercise in Romania
    fostered improved cooperation with one of our new NATO members. SOCEUR
    will continue this trend with its 2006 European counterterrorism
    exercise, cooperating with new NATO nations in the Baltic region. In
    addition, SOCEUR deployed 900 SOF to Africa for exercise Flintlock,
    cooperating with our African partners to support the Trans-Sahara
    Counterterrorism Initiative.
        With continuing support of operations in the CENTCOM's AOR, SOCEUR
    has fewer forces to execute security cooperation programs. To mitigate
    against this shortage, SOCEUR has contracted trainers and cooperated
    with theater partners. For example, SOCEUR facilitated Italian support
    to Albanian commando training, and will continue to facilitate the
    expansion of this cooperative effort to develop special operation
    forces capability among the Adriatic nations. Despite its force
    availability, SOCEUR was able to conduct 15 Joint Combined Exchange
    Training (JCET) events in 12 countries during fiscal year 2005.
        SOCEUR plans to execute 37 JCET events to 17 nations during fiscal
    year 2006. These JCETs will directly support Secretary of Defense
    Security Cooperation Guidance and USSOCOM Global Security Cooperation
    Strategy. SOCEUR JCETs will primarily target OEF-TS nations, with
    secondary emphasis upon both Caucasus/Baltic Regional Partner
    Development and Traditional NATO Partner Cooperation. We accept risk in
    not engaging with all TSC Partners in order to achieve the persistence
    required to make measurable progress in Trans-Saharan Africa.
        Truly transformational is SOCEUR's emerging role as a model and
    enabler for NATO SOF. SOCEUR leads NATO's effort to develop, organize,
    and train interoperable SOF forces which will hopefully culminate in a
    U.S.-led NATO SOF component consolidated around a ``Center of
    Excellence'' for SOF. This will increase U.S. leadership opportunities
    as the commander of SOCEUR could ultimately be ``dual-hatted'' as both
    a NATO commander and a U.S. component commander.
        Key to SOCEUR transformation initiatives and its evolving
    leadership role for NATO is the consolidation of our Theater SOF
    forces. SOCEUR, EUCOM, Special Operations Command, and DOD are
    developing future basing options for an eventual consolidation. The
    importance of maintaining relationships with both our traditional and
    future partners underscores the importance of sustaining SOF
    capabilities within our theater.
    Theater Investment Needs
        EUCOM's ability to transform and achieve U.S. national security
    objectives depends directly on the investment provided in a number of
    critically important areas, such as military construction, security
    cooperation programs, and our theater intelligence architecture (See
    Enclosure 4). Your support to our infrastructure programs over the next
    3 years is critical to reshaping our transformed future basing posture.
    These investments will pay important dividends as we divest our many
    non-essential bases and consolidate our forces into more efficient
    communities such as Grafenwoehr/Vilseck, Ramstein and Spangdahlem in
    Germany and Vicenza/Aviano Italy.

        We continue our efforts to consolidate our geographically separated
    units throughout the theater at enduring, major operating bases. This
    will provide greater crisis response capabilities, enhance joint
    training opportunities, and more effectively position our assets for
    use in future mission areas. Upgrades to essential theater
    transportation nodes are essential for the sustainment of strategic
    throughput required to support OEF and OIF and other global
    contingencies and operations. Recent global deployments have
    reemphasized the strategic value and necessity of our MOBs in Europe.
        Theater Infrastructure
        Continued support of Military Construction (MILCON) is absolutely
    necessary in order to achieve our Strategic Theater Transformation. The
    theater's most important effort is to complete USAREUR's Efficient
    Basing Grafenwoehr (EB-G), which provides an ideal training and
    operating bed-down location for the majority of enabling forces with
    the ability to rapidly respond to current and emerging threats south
    and east. We are seeking an additional $176.6 million in the fiscal
    year 2007 budget for this initiative, which had its origin in 2003. If
    approved, we will be able to bring the project to 90 percent completion
    this year. Completing this major program permits the repositioning of
    3,500 soldiers who form our early deploying units, as well as the
    closure of many obsolete installations, all the while supporting the
    desired end-state of our strategic footprint in the theater.
        Equally important to adjusting the theater structure is the modular
    conversion of the 173rd Infantry Brigade Combat Team (ABN) beginning in
    fiscal year 2006. The Brigade will increase in size and capability and
    will be stationed south of the Alps at Main Operating Base Aviano-
    Vicenza, Italy, improving and ensuring its deployability. The fiscal
    year 2007 budget request includes $306 million for phase I of the
    critical mission and soldier support facilities at Vicenza for the
    arrival of the expanded number of soldiers and units. Continued funding
    of this project through fiscal year 2008 for phase II is critical to
    completing the remaining facilities for the standup of the modular
    brigade.
        Finally, the fiscal year 2007 request includes a request for
    facilities to establish FOSs to carry out EETAF operations that foster
    stability via Theater Security Cooperation initiatives. This project
    will establish initial operating capability. The project will provide
    the base camp with approximately 60 percent of basic infrastructure
    (utilities) and operations facilities. We plan to complete base camp
    construction for EETAF with our fiscal year 2008 MILCON request.
    Through these FOSs, we will engage with multiple countries through
    expeditionary training events across the EUCOM's AOR.
        Concurrent with these actions, we need to ensure our soldiers are
    housed in facilities comparable to their CONUS counterparts. The DOD
    goal is to modernize barracks to 1+1 standards by fiscal year 2008,
    although DOD accepted a 1-year delay at Army OCONUS sites. To date, we
    are at 70 percent, slightly behind the Army average, and appreciate
    your continued support of barracks projects as we strive to achieve the
    Army goals for modernization projects which are essential quality-of-
    life, retention and readiness initiatives.
        Family Housing
        The well-being of our military families is linked to readiness,
    retention, reinforcement of core values, and mission accomplishment.
    Housing remains at the top of the list for our servicemembers and has
    become even more critical over the past 3 years as many of our
    personnel have deployed leaving their families behind. These families
    are an absolutely integral part of our team and deserve quality
    housing. Currently, 42 percent of our families still live in inadequate
    housing. The DOD-wide goal is to eliminate substandard housing by 2007.
    While NAVEUR will meet this goal, USAFE and USAREUR are not currently
    projected to meet it until 2009.
        Significant Family Housing MILCON investments are included in the
    President's budget request for fiscal year 2007. We will not invest
    resources in housing we anticipate closing in the near future. USAREUR
    requests $107 million in MILCON funds to fully renovate more than 515
    housing units in Stuttgart, Ansbach, and Wiesbaden. The closure of the
    logistics gateway at Rhein-Main Air Base required expansion at Main
    Operating Bases in Ramstein and Spangdahlem to meet EUCOM mission
    requirements. USAFE requests $148.0 million for new construction and
    renovation of 254 housing units to meet the increased family housing
    requirements created by the expanded mission at main operating bases in
    Ramstein, Spangdahlem and Lakenheath. NAVEUR continues to improve its
    housing inventory through build-to-lease projects and USAREUR is using
    this program to acquire over 800 additional houses in the Grafenwoehr
    area. Both USAREUR and USAFE continue to explore additional build-to-
    lease housing opportunities in Europe to meet our housing shortages.
        Quality-of-Life Programs
        Quality-of-Life programs are a top priority for this command. The
    top three quality-of-life issues are: obtaining quality living
    accommodations, predictable access to health care to include family
    member dental support, and dependent education programs provided by the
    DOD dependent schools. Paramount in this effort is the need for
    adequate Operations and Maintenance funding to sustain Base Operations
    Support programs. The importance of these programs is magnified in an
    overseas environment where personnel and families cannot rely on off-
    base options as they do in the United States.
        The well-being of soldiers, sailors, airmen, marines, DOD
    civilians, contractors, and their families are inseparable from combat
    readiness and mission success. They have endured hardships in support
    of many diverse missions. We must match their commitment to duty and
    country with a pledge that our troops and their families experience a
    standard of living that is comparable to the society they are pledged
    to defend. Commanders depend on these resources to provide crucial
    morale programs, enhance retention, and foster esprit de corps.
        To respond to the changing needs of our personnel and their
    families, we host an annual theater-wide quality of life conference.
    The command consistently receive requests for increased support of
    child development centers, school age programs and youth services. We
    are dedicated to increasing funding for child care and family child
    care subsidy programs as 44 percent of EUCOM personnel have children.
    Family member employment is also a major concern raised at our
    conferences, as the overseas environment limits employment
    opportunities. We are aggressively focusing on alternatives to enhance
    opportunities for spouses seeking employment, and to expand educational
    opportunities and unemployment compensation eligibility.
        In addition, we must simplify Reserve duty status for our Reserve
    component members, particularly given our reliance on Reserve component
    augmentation in support of our mission. There are currently 32
    different duty status categories for reservists which can affect
    operational access and greatly complicate benefits to the member. We
    are working through the DOD in an effort to consolidate and standardize
    Reserve multiple duty statuses.
        Non-Lethal Capabilities
        Non-lethal capabilities remain an important transformational
    requirement, offering a wide range of flexible response options to our
    forces. To combat the emerging asymmetric threats throughout our AOR,
    we have expanded our use of these capabilities, so that they are now a
    regular part of operations and exercises. Current non-lethal
    capabilities, while rapidly improving, still have limited application,
    focusing primarily on tactical, short-range, crowd control equipment,
    and techniques. Rapid development and acquisition of non-lethal systems
    with a higher degree of precision, increased range, and more effective
    payloads, will provide EUCOM with far greater force response options
    capabilities than currently exist. These capabilities will continue to
    have application across the full range of military operations and to
    offer positive alternatives to more traditional means of physical
    security, crowd control, force protection, and search and seizure.
        Security Assistance
        FMF provides critical resources to assist strategically important
    nations without the financial means to acquire U.S. military equipment
    and training. This year's FMF request for countries in the EUCOM area
    of responsibility, included in the International Affairs (Function 150)
    account, totals approximately $2.5 billion, of which more than 90
    percent is earmarked for Israel.
        FMS and Direct Commercial Sales (DCS) demonstrate our Nation's
    continued commitment to the security of our allies and friends by
    allowing them to acquire superior U.S. military equipment and training.
    Funding requests by country in our area of responsibility are contained
    in Enclosure 5.

        International Military Education and Training (IMET) and Expanded
    IMET (E-IMET) provides education and training opportunities for foreign
    military (IMET) and civilian personnel (E-IMET). The EUCOM portion of
    the fiscal year 2007 IMET request is approximately $40.5 million and
    like FMF, is also included in the International Affairs (Function 150)
    account.
        Theater C\4\ISR
        A critical investment need relates to the dissemination, analysis,
    and sharing of information. It is imperative that our C4 investment
    needs include information sharing, electromagnetic spectrum access,
    assured information networks, and a robust Satellite Communications
    (SATCOM) architecture for the transformed operational environment.
        Our theater transformation plan places operational forces in
    regions not currently supported on a day-to-day basis by the DOD Global
    Information Grid (GIG). Establishing a networking and information
    sharing capacity with our allies and partners is a critical first step
    in mitigating this problem. We need long-term investment in persistent
    ISR capability with assured electromagnetic spectrum access utilizing
    up-to-date collection technologies to find, track and interdict mobile
    and technologically competent terrorist groups and platforms operating
    within the vast regions of Africa and Europe, including both air and
    maritime environments. SATCOM programs meeting the goals of the
    Transformational Communications Architecture are a critical step
    towards realizing persistent ISR capabilities.
        For our expanding agenda in Africa, we need to establish a
    networking and information sharing capacity with our partners there so
    that they can better execute internal and cross-boundary
    counterterrorism activities in support of the global war on terror. We
    also need to address the chronic shortage of information assurance
    personnel to defend the information networks that are critical in
    enabling theater command and control both for warfighting and for
    stability, security, transition, and reconstruction operations.
        We have made significant progress in our effort to establish an
    intelligence fusion capability within NATO to better support NATO
    military operations, both in and out of area. A provisional capability
    operates at RAF Molesworth in the United Kingdom and supports, or has
    recently supported, the International Security Assistance Force (ISAF)
    operating in Afghanistan, as well as NATO forces deployed in support of
    Darfur, Sudan and Pakistan earthquake relief operations. We plan on the
    Intelligence Fusion Center (IFC) reaching full operational capability
    by 2007.
        In another major transformational step, we are implementing the
    Joint Intelligence Operations Center-Europe (JIOCEUR) as part of the
    greater DOD JIOC effort. JIOCEUR will enhance our ability to
    synchronize and direct theater and national collection, analytic, and
    production efforts. It will also help strengthen the intelligence and
    operations interface through the establishment of a robust intelligence
    operations and planning team capability embedded within the EUCOM Plans
    and Operations Center (EPOC). These measures will significantly improve
    our ability to leverage all available intelligence assets against
    theater and component requirements.
        A central aspect to our strategy in combating terrorism is the
    development of partner-nation intelligence capabilities and the
    increased utilization of their cultural and linguistic expertise. We
    seek to apply U.S. technological advantages to leverage partner
    strengths in order to build more cohesive relationships. Integrated
    Intelligence Security Cooperation funding coupled with information
    sharing authorities are required to fully leverage partner nations in
    the global war on terrorism.
        Lastly, as more collection platforms add to the amount of data to
    support EUCOM, NATO, and interagency support operations, I strongly
    recommend increasing the capacity of our intelligence analytical force.
    Such an increase would facilitate fused intelligence sharing capacity
    across the spectrum of allied and interagency organizations, ensuring
    that key intelligence gets disseminated quickly to those who need it
    most.
        Strategic Mobility and Maneuver
        As we become more expeditionary, our ability to rapidly respond to
    crises becomes more dependent on strategic airlift and its close
    association with prepositioned equipment for timely projection and
    sustainment of operational forces. Looking south, we envision expanding
    our ``en route'' infrastructure system in order to respond to
    developing conditions in the vast underdeveloped expanse of sub-Saharan
    Africa, and elsewhere as required.
        As we continue to adjust our European footprint to enable the rapid
    deployment of forces across Europe, Africa and elsewhere in the world,
    our requirement for intra-theater strategic airlift will also increase.
    Our small fleet of aging C-130s does not have the operational range or
    capacity to support rapid mobility and maneuver of forces throughout
    the AOR. Our experience in Exercise Flintlock 2005 revealed that
    successful deployment of forces to austere locations in Africa are best
    served by strategic airlift platform such as the C-17. USAREUR's
    transformation to the Brigade Combat Team force structure will also
    increase their dependence on heavy lift for both training and combat
    operations.
        Much of the Service's War Reserve Material/Prepositioned Equipment
    within our theater has been removed in support of ongoing operations
    and will not be reset in the near future. For example, the Marine Corps
    Pre-positioning Program-Norway (MCPP-N) and the Maritime Pre-positioned
    Force (MPF) programs have directly supported OIF and OEF with weapons,
    ammunition, and equipment. The full reconstitution of these assets to
    pre-OIF levels is necessary and will allow us the flexibility to
    support real-world contingency operations and the multiple TSC
    initiatives of the future.
        Given the current posture of our prepositioned equipment, we will
    temporarily rely heavily on U.S. based stocks to respond to a major
    contingency operation within our area of operations, making
    intertheater strategic lift, and hence C-17 availability, a top
    priority for the future.
        A recent success story has been the arrival of the High Speed
    Vessel (HSV) Swift, a Theater Support Vessel (TSV), whose capabilities
    are an integral part of our transformation efforts. Its high speed,
    large capacity, and shallow draft provide EUCOM a viable alternative to
    intratheater airlift for the operational movement and sustainment of
    combat forces along the vast littoral region. The capability
    demonstrated by HSV Swift will complement both Army and SOF
    Transformation efforts while enhancing Marine Corps maneuver by
    increasing operations throughput, providing additional means to counter
    probable anti-access threats.
                                 eucom and nato
        Since the Prague Summit in 2002 when the Alliance signaled its
    recognition of the changing security landscape, it has made major
    shifts in its organization membership and capabilities. NATO is in the
    process of ``reinventing'' itself to meet the new challenges of the
    21st century. It is making significant progress and is in the midst of
    the most fundamental physical and philosophical transformations in its
    history. While operational structures have been transformed, the
    political and military decision making procedures of the Alliance, as
    well as resourcing and funding mechanisms are similarly being
    addressed. Reforms in these critical areas must be achieved in order to
    ensure that the Alliance can adequately align its political will to
    take on new missions with its ability and flexibility to resource them.
        Across the NATO command structure, U.S. military leaders are
    privileged to hold key positions of influence shaping the direction of
    the Alliance (See Enclosure 6). The combined U.S. and European military
    experience helps in promoting new solutions to today's security
    challenges. Such solutions have resulted in NATO's increased
    flexibility and agility and have resulted in increased deployments
    NATO's forces around the globe.

    Operational Trends In the Alliance
        NATO recognizes the interdependent instability of the current
    strategic environment. As such it has assumed a more active leadership
    role in ongoing operations. These include: ISAF in Afghanistan, NATO
    Training Mission-Iraq, NATO assistance to the AU in Darfur, Operation
    Active Endeavor, Balkan operations, and humanitarian operations in
    response to the Katrina and Pakistan disasters. EUCOM works closely
    with the Alliance to ensure the seamless execution and successful
    conduct of these operations.

             International Security Assistance Force. ISAF is
            NATO's primary operation and is currently responsible for the
            security and stability of half of the territorial landmass of
            Afghanistan and is in the process of expanding its operations
            to the south and east. As NATO assumes this increased
            responsibility, its force levels will surpass those of the
            coalition, and will constitute the largest ground operation in
            Alliance history. It is envisioned that the United States will
            continue to contribute significantly to this mission. U.S.
            leadership in both the ISAF command structure and the adjacent
            counterterrorist operations of the coalition will be offered to
            NATO. NATO has built on the coalition concept of Provincial
            Reconstruction Teams and successfully supported the Government
            of Afghanistan in its Presidential, National Assembly, and
            Provincial Council elections.
             NATO Training Mission-Iraq (NMT-I) In Iraq, NATO has
            deployed a successful training mission to Baghdad to assist the
            government's efforts to establish security and stability. Its
            ``in country'' mission complements the work of the U.S.-led
            Multi-National Security Transition Command-Iraq (MNSTC-I) in
            training Iraqi security forces. NATO focuses on the military
            strategic and operational levels, strengthening the Iraqi
            Training and Doctrine Command and providing command and staff
            training for mid- to senior-level officers. In September 2005,
            with support from the NATO Training Mission, Iraq opened its
            National Defense University. The Alliance has also provided
            numerous training opportunities for Iraqi officers and civilian
            leaders in educational facilities across Europe and coordinated
            the acquisition and delivery of donated military equipment from
            NATO nations.
             African Mission in Sudan (AMIS). In Africa, NATO and
            the European Union jointly responded to an AU request to
            airlift its forces. NATO generated and coordinated the majority
            of airlift, provided personnel to assist with staff capacity
            building activities in key AU headquarters and deployed
            training teams to work with their AU counterparts. Currently
            NATO's support is committed until May 2006; however, strategic
            partnerships are developing, and extensions or expansion of
            NATO support is possible if requested by the AU. NATO's
            capacity building approach to increase stability and security
            on the continent complements EUCOM's efforts to deliver
            considerable long-term reward with minimal, focused, and
            appropriate effort.
             Operation Active Endeavor (OAE). Closer to Europe,
            NATO's only Article V operation, OAE, continues to counter
            terrorism and illegal activities in the Mediterranean.
            Additionally, it provides an opportunity for non-NATO
            ``Partnership for Peace'' and ``Mediterranean Dialogue''
            nations to enhance their involvement and interoperability. In
            2006, Russian vessels will join OAE, with Ukrainian vessels
            anticipated participation in 2007. Formal discussions have
            commenced on the possible involvement of Algerian, Israeli,
            Moroccan, and Georgian participation as well.
             Balkan Operations (Kosovo Force). The Balkans were
            arguably NATO's first test in addressing the dangers associated
            with interdependent instability. Showcasing NATO's enduring
            commitment to its neighbors, and by using security sector
            reform initiatives, the Alliance has successfully set the
            conditions in the region for the peaceful transition to
            democratic institutions and is making progress toward
            government controlled and reformed militaries. Political and
            institutional incentives linked to standards of behavior have
            encouraged Balkan states to recognize the benefits of closer
            integration with the EU and NATO. This has resulted in
            considerable progress in the capture of persons indicted for
            war crimes, though two ``most wanted'' remain at large.

        An example of NATO's successful operations in the Balkans to date
    is Kosovo Force (KFOR) which continues to provide critical security to
    this region in support of the international community. NATO's
    persistence in Kosovo has enabled the international community to
    establish the Kosovo status talks. As these talks develop over the
    coming months and consensus is reached between ethnic Kosovar Albanian
    and Serbian communities, NATO will be postured to restructure force
    levels significantly in the province and in the Balkans.
    Evolving Operational Capabilities
        NATO's quick response to Hurricane Katrina and the devastating
    earthquake in Pakistan demonstrates that not all stability operations
    emanate from armed conflict. Through its primary transformational
    vehicle--the NATO Response Force (NRF)--the Alliance has prepared
    itself to respond to future crises across the full spectrum of military
    missions. Due to its agility, adaptability, and expeditionary nature,
    the NRF proved ideally suited to assist in the relief efforts and to
    stabilize the affected region. These two disasters highlighted the
    NRF's ability to operate at a strategic distance, outside NATO's
    boundaries, and in the most challenging of environments.
        Upon reaching full operational capability (FOC), planned for
    October 1, 2006, the NRF will be supported by five capability
    ``pillars'' of strategic lift, advanced planning and intelligence
    fusion, integrated logistics, deployable communications and information
    systems, and full force generation. Failure to meet the full Combined
    Joint Statement of Requirements (CJSOR) is a current obstacle to
    achieving FOC. Its future viability will depend on member nations'
    willingness to resource the necessary forces and commit to a structure
    of common Alliance funding.
        Additionally, NATO is dedicated to establishing a SOF capability,
    recognizing a gap during recent operations. Recent NATO transformation
    initiatives, especially in the NRF, have provided a real focus for
    establishing NATO SOF capabilities, co-operation, and cohesion. EUCOM's
    SOCEUR actively leads an effort to establish the Alliance's special
    operation capabilities by the end of this year. Like their U.S.
    counterparts, NATO SOF will be specially selected, trained, equipped
    and organized. This new capability will strengthen NATO's out-of-area
    crisis prevention and ensure a rapid deployment capability.
    Common Values for Common Security
        NATO's commitment to ongoing operations demonstrates it has turned
    the corner from common defense and begun the journey towards common
    security. As the Alliance continues to redefine its role in the 21st
    century, it anticipates further opportunities to promote stabilization
    and security.
        The Alliance was formerly anchored to a need for common defense in
    order to deter the enormous conventional military threat posed by the
    Soviet Union. With the end of the Cold War, however, the anchor point
    stabilizing the Alliance in turbulent seas was removed and to date the
    Alliance has not successfully articulated its new course. Economic
    interdependence, the nexus of WMD and terrorism, vulnerable energy
    infrastructure, disenfranchised people and ethnic minorities, abject
    poverty and natural disasters have created a new security mosaic and
    demand new ``anchor points.''
        Potential ``anchor points'' include expanding NATO operations in
    support of combating terrorism; enhancing security, stability, and
    reconstruction activities; increasing involvement in critical
    infrastructure security; ensuring the flow of energy to markets and
    consumers by assuring safe and secure access to sources; and engaging
    in a more active role in preventing the proliferation of WMD and
    corresponding consequence management actions. This mosaic of asymmetric
    security challenges will define the contribution NATO will make towards
    our common security. A key component of such an effort would be clearly
    articulating to member nations' populations the Alliances new ``raison
    d'etre.'' There is an opportunity during the Heads of State NATO Summit
    in November 2006 to identify the new ``anchor points'' that could
    secure the Alliance's direction for the foreseeable future.
        While NATO was critical to preserving peace and stability in Europe
    throughout the Cold War, it is becoming increasingly apparent its
    future will be even more dynamic. As the Alliance endeavors to overcome
    new challenges, it recognizes that the security landscape requires a
    more far-reaching strategy to protect its interests and a different
    methodology by which it resources its evolving missions. Over the
    course of the past few years, NATO has brought the benefits of
    strategic security of the trans-Atlantic relationship to new locations
    throughout the world. Through its actions, NATO has enhanced the
    concept of common security, which supports the Alliance's traditional
    objective of providing for the common defense.
        NATO is a great alliance which remains destined to do great things.
    As we look to the future, it is possible to conclude that NATO's most
    important days and most significant contributions still lie in the
    certainty of a challenging future.
                                   conclusion
        The EUCOM is fully and actively engaged in a diverse and expansive
    area of responsibility while simultaneously transforming its posture to
    better meet the new and evolving security environment. As we further
    refine the nature and scope of our efforts to implement an effective
    security strategy, we would do well to reflect and appreciate the value
    of our leadership role in global affairs. We should redouble our
    efforts to remain a shining example of the principles of freedom which
    stand as a beacon of hope for so many in our unsettled world. The
    indispensable benefits of our forward-deployed presence will continue
    to be a hallmark of our efforts as we expand our rotational influence
    and enhance the framework of our Theater Security Cooperation programs.
    Success in the years ahead will require institutional innovations,
    increasingly cohesive and comprehensive national approaches to the
    challenges and greater coordination throughout the interagency and
    within the framework of the international community.
        There has been debate with regard to the relevance of NATO in the
    post-Cold War era. I am among those who passionately believe in the
    relevance and importance of NATO in this still new century The vitality
    of this organization lies in its ability to find solutions through
    dialogue. Those who fail to understand the value of democratic dialogue
    perceive occasional political differences and associated animated
    discussions as divisions that undermine the viability of the
    organization. In truth, our so-called differences are the pillars that
    uphold the institution and strengthen its character. Many have
    predicted the demise of the Alliance; yet it has demonstrated
    astounding resiliency by transforming itself in ways no one would have
    thought possible in 2000. Unquestionably, NATO remains the preeminent
    security organization in the world. Its future viability and its built-
    in ability to recognize the interdependency of our world, as well as
    the threats that challenge our common interests will fuel a continuing
    transformation process for years to come. The changes underway clearly
    demonstrate that NATO member nations have understood the need for
    reform in order to be relevant on the world stage. Challenges remain,
    but they are visible and are being addressed. Our leadership
    contributions to the Alliance are more critical than at any other time
    in the Alliance's history.
        We look forward to working with the members of this committee as we
    assist in the development of effective security structures that are
    essential to our theater, our Nation, and to our allies. The next 2
    years will be critically important in this regard. The EUCOM looks
    forward to making important contributions to the achievement of our
    national goals and objectives.

        Chairman Warner. Thank you very much, General, for a very
    excellent statement covering a lot of responsibilities that you
    have.
        Given that we will have a classified session following this
    and the need for each of us to attend various functions in the
    middle of the day, I would suggest we try an 8-minute round and
    hopefully we can conclude our questions in one round for each
    member. So we will proceed on that basis.
        First, General Jones, we awakened this morning with the
    distressing news that a very prominent senior officer in the
    Iraqi forces lost his life in Baghdad. It draws our attention
    then to what NATO is doing by way of training and equipping
    those security forces so they can fully provide for their own
    security.
        First, did you know that officer in conjunction with the
    work that you are doing over there?
        General Jones. No, sir, I did not know him.
        Chairman Warner. The type of training that you are doing,
    how does that bear on what is now the immediate concern, namely
    insurgency--a variety of terms have been applied to it, but
    insurgency, real operations, terrorists--and the need to
    rapidly train the security forces in Iraq to take on that
    responsibility?
        At the present time--I am speaking for myself--I do not
    believe that the term ``civil war'' applies to the overall
    situation there, even though it is gravely serious, and there
    is all too much secular interest in fighting at the very time
    that we are trying to urge this country to bring together its
    diverse political structures into a unified new government and
    for that government to quickly, and I underline ``quickly,''
    take over the full responsibilities of administering to a
    sovereign nation.
        Could you elaborate on the type of training and the success
    that you feel that has been achieved to date by NATO and the
    extent to which there is serious participation in other
    nations, members of NATO of course, in contributing to these
    goals?
        General Jones. Mr. Chairman, the NATO mission in Iraq is
    relatively straightforward. It consists of three elements. One
    is to train approximately 1,000 junior officers a year for
    service in the Iraqi army. We do this at a training base called
    Arustemaya, which is on the outskirts of Baghdad. This
    operation is fully resourced and functioning. I was in Baghdad
    a month ago and I attended the first graduating class of these
    young officers. They are trained along the Sandhurst model. The
    lead nation is Great Britain. I was very impressed by the
    training I saw.
        Chairman Warner. How soon do you anticipate that some will
    be graduating and available for immediate assignments?
        General Jones. This graduating class after graduation went
    right to the field and took over units.
        Chairman Warner. How long ago was that?
        General Jones. A month ago, sir.
        Chairman Warner. Good.
        Have you had an opportunity to really assess in some depth
    the capability of these young men to become good professionals
    and to establish a solid loyalty to the government of Iraq, as
    opposed to their understandable loyalties to their own origins,
    namely the tribal situation which is very dominant throughout
    that region?
        General Jones. Mr. Chairman, the class that I saw and the
    training that I saw--and I am responsible for, along with the
    Allied Command for Transformation, for developing the syllabus
    and the manning, the instructors, and I have spoken to the
    trainers, and they believe that the product that they are
    delivering is in fact a very, very good product.
        I attended the swearing-in ceremony of these young officers
    as they took the oath of alliance to the government of Iraq, to
    the constitution of Iraq. It was--one can never be completely
    sure, but it was certainly--there was a lot of passion in that
    room. You could see it on their faces, that they believed in
    what they were doing.
        Chairman Warner. The ultimate question is, should the
    conditions continue to deteriorate where a civil war in fact is
    taking place and this new government is struggling to continue,
    it is dependent on these forces that you have trained and that
    we and other coalition partners have trained to fight to
    support that new government, because, speaking again for
    myself, I strongly urge that we have plans whereby we do not
    commit the coalition forces and principally the U.S. forces
    into a civil war situation and subject our young men and women
    to that type of risk.
        We fought bravely side-by-side with the Iraqis to free
    their nation. It is a sovereign nation. They have a government
    elected by the people, and it is time that they took charge and
    took that full responsibility.
        Do you feel that these young men that have been trained
    under your command will keep the allegiance to that new
    government in the time of civil strife and fight to preserve
    it, rather than revert to their own constituent interests back
    in the tribes? I do not have any disrespect for the tribes. It
    is just that they have a very powerful influence.
        General Jones. They do, Mr. Chairman. I was impressed by
    the seriousness of purpose as they took the oath. I am
    confident that they were put through a rigorous program and I
    believe they will do their job.
        Now, far more important than my observation is, of course,
    General Abizaid's and General Casey's----
        Chairman Warner. We are going to have that opportunity very
    shortly.
        General Jones.--who are deeply involved. They also are very
    high on these young people.
        I might just, to complete my answer to your question, say
    there are two other aspects to NATO's training mission. The
    first one is the training of the 1,000 officers. The second is
    NATO has invited Iraqis to come out of country to go to various
    countries for more specialized training. So we are doing that
    as well. The third part is we are providing equipment for the
    emerging Iraqi army. Most recently, we shipped over 170 T-72
    tanks from Hungary to the new army.
        Chairman Warner. Let me quickly go on and touch on the
    Afghanistan situation. Your own views as to whether or not the
    security situation is not improving--as a matter of fact, it is
    becoming more serious and the ability of ISAF to continue its
    goals, given those changes in the security situation?
        General Jones. Mr. Chairman, I am very optimistic that the
    NATO force that is going to take over more of Afghanistan in
    the next few months, that they will be a force of very great
    capability and will be able to withstand any challenges that it
    faces.
        I would like to comment on the security situation because I
    think it is important to understand that violence in
    Afghanistan is of a disparate nature. It is at least composed
    of a group of five different sectors of the society: the
    criminal element, some Taliban, some al Qaeda, the narcotics
    traffickers, remnants of warlord organizations. These are
    people that are operating in the fringes between where the
    Karzai government can reach and the higher level of the
    people's expectations.
        I think that we should be very careful not to fall into the
    easy trap of saying that every act of violence means that there
    is an insurgency coming back. Of far more importance to me in
    Afghanistan for the long-term reconstruction of Afghanistan is
    the narcotics problem and the percentage of the GDP that is
    dependent on the narcotics trade. It is not to say that I do
    not recognize the fact that there are upticks in violence, but
    they are generally tied to specific events: a parliamentary
    election, a presidential election, a local election.
        What I see in Afghanistan is an inability of an insurgency
    to mass. I will see--we will see more instances of improvised
    explosive devices (IEDs) and things like that because they are
    going to copycat what they see elsewhere. But I think we would
    be wrong at this point in thinking that this is a trend in
    terms of an insurgency.
        I think the Karzai government deserves our support. We
    should continue to bolster the five pillars of reconstruction
    that the G-8 nations have agreed to. We should make sure that
    this year we particularly add reinforcements to the developing
    of a police, which needs to be paid and needs to be honest and
    free of corruption. We should continue to lend our efforts to
    the reform of the judicial process.
        Chairman Warner. General, I am going to have to ask you to
    finish that for the record.
        General Jones. I understand.
        Chairman Warner. I want to finish my last question to both
    Admiral Fallon and General Bell. You commented, General, on the
    half century we have had a very significant part of our
    military there securing the southern part of that Korean
    peninsula. It has been an important mission and a successful
    mission.
        But I pause to reflect on, the Korean War was a coalition
    war. I am not able to recall from memory, even though I had a
    minor role there during the winter of 1951-1952 in the Marines,
    but it seems to me there were at least seven or eight nations
    that had forces aligned to secure that peninsula. Since then we
    have seen through the evolution of NATO, the Balkans
    operations, all multinational, Gulf One, Gulf Two,
    multinational, Afghanistan multinational.
        Has anyone given some thought as to whether or not we
    should rethink this very heavy commitment of the United States
    and begin to internationalize that additional support that the
    South Korean government and our government think is necessary?
    Because if, Admiral, a conflict burst out on the Korean
    peninsula it would have serious adverse effects on other
    nations in that region. Consequently, it seems to me some
    thought ought to be given to having them, not only members of
    the Six-Party Talks, but also other nations bearing some of the
    heavy costs and burden of maintaining the current posture on
    that peninsula.
        Has any thought ever been given to that, in light of all
    the other operations that have taken place in the half century
    since that conflict?
        General Bell. Thanks, Senator. I think I can take a pretty
    good stab at that. There are two factors at play here with
    respect to our commitment or the international community's
    commitment. One is the bilateral security treaty that we have,
    and I know you are fully familiar with that, with the ROK,
    which is really the basis for our commitment today and that
    commitment that we have had over the last decades.
        Secondarily, there still remains the United Nations
    Command, very much viable but admittedly not with troop
    contributions. That U.N. command consists of 15 nation
    representatives which are at hand today and prepared, at least
    in theory, should war break out to recommit to military
    operations.
        Now, I am also the U.N. commander as well as the bilateral
    treaty commander under the auspices of what we call the CFC. So
    while I cannot speak for all those nations certainly in terms
    of what they might or might not commit, what I can inform you
    of is that the framework to discuss a potential broader
    commitment is resident and that could certainly be undertaken.
        But meanwhile, the ROK continues to progress----
        Chairman Warner. Well, that is all fine, but I'm trying to
    think about the very heavy commitment. We have a force today,
    our United States military, spread throughout the world, and it
    is placing severe burdens on the members of the Armed Forces
    and their families. We continue for over a half century with
    one concept, against experience in all the other conflicts of
    significance where there has been multinational participation.
        If that conflict were to erupt over there, you and I know
    it is probably going to be decided within days or weeks. It is
    not going to be a prolonged one.
        General Bell. No, sir, it is not.
        Chairman Warner. Therefore they should have people there,
    and if they had them there I think they would be more serious
    about trying to deal with North Korea because they would have
    some exposure and risk that they do not have now.
        Do you have any comments, Admiral?
        Admiral Fallon. Mr. Chairman, I would point out that,
    regarding our force levels in Korea, we are in the process of
    coming down about 20 percent of that structure over the past
    year and I think that drawdown to 28,000 or so should be
    completed this year, and going down to 25,000 as a goal for the
    year beyond that.
        General Bell knows the details of this, but the ROK
    government is clearly interested in picking up more of the
    responsibility for particularly the land operations on the
    peninsula. I see that as this desire develops into actionable
    plans, which we are going to have to work with, and General
    Bell has the lead on this, I would expect to see that our force
    levels might continue to decline.
        Chairman Warner. All right. I gave you the option to
    comment on something innovative in the future. So be it.
        Senator Levin.
        Senator Levin. Thank you, Mr. Chairman.
        I'd like to pick up on Senator Warner's first questions,
    General Jones, relative to the training and equipping of Iraqi
    officers, what is the goal in terms of total number of officers
    to be trained under the NATO program that you described? What
    is that number?
        General Jones. That number is 1,000 per year, sir.
        Senator Levin. For how many years? How many do we need
    totally?
        General Jones. I think it complements General Abizaid's
    program, so I think it's 1,000 a year, and of course there will
    be----
        Senator Levin. Indefinitely?
        General Jones. Indefinitely, to feed the requirements, the
    spaces.
        Senator Levin. Do we know whether or not there is a balance
    of Shiite, Sunni, and Kurd in the officer corps that you are
    training?
        General Jones. In this, in the NATO mission, they are
    integrated. There is no Shiite class or Kurd class.
        Senator Levin. Is there a significant number of all three
    groups?
        General Jones. Yes, sir.
        Senator Levin. On another NATO issue, is the NATO Response
    Force or the NRF expected to become operational in October?
        General Jones. By October 1, the goal is to declare the
    force fully operationally capable.
        Senator Levin. All right. Relative to Africa, is NATO
    prepared to take on a larger role in support of the AU mission
    in Darfur?
        General Jones. NATO's role is to provide some airlift into
    the Sudan for participating battalions, which we have done and
    are doing, provide capacity-building for the AU forces in the
    way of helping them get ready for expeditionary operations,
    command and control, logistics, and the like. But it is a
    modest number of people involved in this and that is the extent
    of the mission at present.
        Senator Levin. According to an article in the Washington
    Post last Friday, the U.N. Secretary General has requested that
    U.N. members consider providing close air support to AU mission
    forces in combat situations. Is it your opinion, judgment,
    prediction, that our NATO allies would be prepared to provide
    close air support to those forces in combat situations?
        General Jones. Senator, I think that I have no--I have
    received no guidance and no instructions from the NATO to
    prepare for that kind of mission, and as a matter of fact NATO
    has not received any communication from either the U.N. or the
    AU that would lead me to believe that there is--there is no
    request on the table for an extension of the mission.
        Senator Levin. If there were a request, what do you think
    the response would be?
        General Jones. I think it is quite possible that nations
    would consider expanding the capacity-building and doing those
    things that would help the African battalions be more
    successful as they have deploy into Darfur. Whether they would
    extend to close air operations and the like would be very
    speculative on my part and I would just as soon not comment.
        Senator Levin. Okay, thank you.
        General Bell, you mentioned to me when we met in my office
    that for the first time in 2 years North and South Korean
    military officials at the general officer level have now met to
    discuss issues of common interest. Would you tell us what you
    believe the significance of that meeting is and whether you
    regard this as a development as favorable or unfavorable?
        General Bell. Thank you, Senator. You are right, they have
    just concluded a series of meetings over 2 days last week.
    There were no substantive outcomes from the meeting, however.
    Their purpose in this meeting--and there was an agenda which
    they put forward initially--was to talk about the fishing zone
    in the western sea area, which has been an area of contest over
    the last several years. You may recall back in 2002 the gunboat
    incident.
        Nonetheless, what they were hoping to do is come to an
    arrangement during the upcoming fishing season, which starts in
    May and goes through June, to lower tensions in the area. So we
    supported that and we were encouraged by the fact that the
    North agreed to discussions with the South.
        Regrettably, the North's position during these talks was to
    eliminate the very demarcation regimen that we have that keeps
    forces separated over there, to eliminate that and create some
    kind of free zone of movement. This was not satisfactory to the
    ROK and so the talks did not produce substantive outcome.
        Having said that, the fact that at the two-star level the
    two nations met to discuss mutual issues of this nature I think
    is positive. We should encourage this. These kinds of
    confidence-building opportunities and confidence-building
    measures, engagement strategies, can be beneficial. So I would
    continue to encourage it. As I meet with ROK military, I will
    encourage them to continue these kind of engagements, and
    hopefully we can see some progress in the near future.
        Senator Levin. Thank you, General.
        Admiral Fallon, the QDR identifies China as a likely
    competitor. China has announced recently that its defense
    budget is going to increase by 15 percent this year. Is it a
    foregone conclusion that China and the United States are going
    to be at odds over security in the Pacific or even globally?
        Admiral Fallon. No, sir, I do not think that is necessarily
    the case at all. There is a tremendous potential for good here
    in this relationship between the two countries. We have many,
    many common interests. It has been our desire to try to work
    with China to find areas in which we might move forward on a
    constructive relationship.
        That said, of course we are going to have to be cautious
    and careful because there is still activity ongoing with the
    Chinese that makes it challenging for us to engage with this
    country. The defense budget increases which apparently are
    continuing and certainly at a rate, near as we can tell, that
    is higher than their GDP growth, which has been pretty
    spectacular in the past decade, and the lack of transparency
    with the Chinese is a cause for concern.
        We have asked for a significantly increased engagement
    program this year. The Secretary of Defense has agreed to that.
    We have had a negotiation with the Chinese and that is on the
    table to take place this year. I think that we need to continue
    to press on in this area because the absence of any engagement
    whatsoever would put us back where we were in the last couple
    of years, where we virtually have gone down parallel paths with
    no interaction.
        I think this gives us an opportunity to by example try to
    get them into the kinds of behaviors that we enjoy with other
    countries in the region.
        Senator Levin. Do you in the DOD want increased military-
    to-military cooperation and contact with China?
        Admiral Fallon. Yes, sir, we do.
        Senator Levin. Finally, Admiral, what impact, if any, do
    you believe that the U.S.-India civilian nuclear cooperation
    agreement, assuming that Congress supports it and allows it to
    come into force, would have on relations between India and
    Pakistan?
        Admiral Fallon. Senator, I think there are several
    opportunities here for positive impact. First of all, the
    relationship we have with India. This is a very, very large
    country, huge population, that has been not particularly
    working with us until very recently. We are trying to form a
    new strategic alliance with this country. Certainly in the
    military-to-military area we have opportunities and we would
    like to see continuing engagement, because we think that this
    country not only has an existing huge influence over South
    Asia, but its strategic position in the world with its huge
    population, very advanced technological and educational know-
    how, is a major factor in the world.
        The situation regarding Pakistan in the past year has been
    getting considerably better in my opinion. De-tensioning along
    the lines of friction in Kashmir through active engagement by
    both Pakistan and India have moved us forward in this area.
        The fact that the President went to visit both countries,
    the proposal for a very significant arrangement with India,
    then going to Pakistan, I think that the potential for
    continued de-tensioning and for an improving situation between
    these two countries is, I would hope, likely. We have had a
    close relationship with Pakistan. They have been cooperating
    very well with us in the war on terror and I think that the
    outreach to India in the last year or so is significant. I
    think both countries see that we are reaching out to both in
    parallel, and it would be my expectation that we actually make
    progress in our relationship with both.
        Senator Levin. Thank you, Mr. Chairman.
        Chairman Warner. Thank you very much.
        Colleagues, I am advised that we will be having a vote in a
    matter of a few minutes, and it is my hope that we can continue
    this hearing. Senator Inhofe has left to go vote early and he
    will return and chair. But right now, Senator McCain.
        Senator McCain. Thank you, Mr. Chairman. I want to thank
    the witnesses for being here today and thank them for their
    great service, as well as the members of the Armed Forces who
    were brought with them today.
        General Jones, it has been about 3 years since we expanded
    NATO. There was some controversy surrounding this rather
    significant enlargement. How are these new members doing?
        General Jones. Senator, in 2004 we did in fact admit seven
    new members, and in my judgment they are bringing not only
    value but also renewed energy and spirit to the alliance. New
    members, especially former Warsaw Pact countries, are still
    basking in the glow of freedom and they bring that energy to
    the alliance. They are trying hard to align their military
    capabilities with what the alliance needs. Some of the
    economies are not quite as strong as we would like, but we have
    this pledge of 2 percent of GDP for national security and they
    are trying hard to meet those goals.
        So my report would be that they are bringing value and
    capability and spirit to the alliance and it has been a good
    thing.
        Senator McCain. Thank you.
        I would like to go back to Darfur a second with you. In the
    last 2 years the United States has provided $150 million in
    support to the African mission in Sudan. In the same period, it
    is estimated that 300,000 to 400,000 Sudanese have been killed
    and almost 2 million refugees created. It was I believe 2 or 3
    years ago that then-Secretary of State Colin Powell declared
    that genocide was taking place in Darfur. The latest reports
    are that it has now spilled over into Chad.
        General, I know you do not make policy and I know that this
    is a tough question. But this trend seems to me that we are
    just going to see continued needless deaths and dislocation
    and, as was determined by our Secretary of State a couple years
    ago, was genocide in Darfur. Do you have a recipe or an idea of
    what we need to do from a pure military standpoint, or is it
    not a military solution?
        General Jones. Senator, I think obviously when you have
    chaos and the types of events that are going on in a place like
    Darfur, there is an application for military forces. The
    problem has been that there has been an insufficient number of
    AU peacekeeping forces in terms of the problem.
        Senator McCain. In terms of numbers or capability?
        General Jones. In terms of numbers and perhaps
    capabilities, but certainly numbers, to stem the violence
    against the humanitarian operations, which puts a couple of
    million refugees at risk as well as--I just met with the
    International Committee of the Red Cross in Geneva 2 weeks ago
    and they have a big program on the ground, and one of the
    things that they are hoping for is that we do not have this
    displacement of upwards of 3 million people towards the cities.
    They are trying to get out to keep people in their homes in
    order to try to keep some management of this crisis.
        But it is a serious problem. It has a military solution
    set, but it takes the will of the nations. It takes the U.N. to
    task us to do things, and we are waiting for that political
    process to come together as to what it is the international
    community wishes to do.
        Senator McCain. I thank you, General. Again, I know it is
    not your job, but it is frustrating for us to keep saying never
    again, and it is very clear that the situation, the status quo,
    is not going to have a measurable effect. I would like to say
    that I was pleased that the President of the United States made
    a very strong statement concerning this issue recently.
        I am afraid we are going to have to at least come clean and
    say there is nothing we can do about it, there are going to be
    some millions of people that are going to die, and that is the
    way things happen in Africa, which I would deeply regret, or we
    have to develop some kind of plan to attack this situation. I
    understand it is not purely military. It is political,
    divisions within the country.
        But we may be asking you and NATO, since you are already
    very involved, at least in northern Africa, in a very
    beneficial way in the war on terror, to come up with some ideas
    as to how we can address the issue. So it is very disturbing
    and I hope that you can give us the kind of advice we need, or
    at least the President, as to what would be necessary to bring
    this genocide under control.
        I would like to just mention to you, the State of Israel
    now is under direct threat, according to the President of Iran,
    who has called for on numerous occasions the eradication of the
    State of Israel. How are NATO's relations with Israel? Are
    there any?
        General Jones. Israel is part of a group of seven nations
    called Mediterranean Dialogue nations and that is a formal
    relationship with NATO, to include military-to-military
    relationships. We have recently this year revitalized that
    Mediterranean Dialogue to include five countries of North
    Africa and Israel and Jordan on the northern rim of the
    Mediterranean.
        We have had NATO Airborne Warning and Control System
    (AWACS) deployed to do some demonstrations in Israel and we do
    have an active dialogue with the Israeli Defense Force in terms
    of interoperability, and particularly as it regards the
    security of the Mediterranean Basin at sea.
        Senator McCain. Clearly, if there were an attack on Israel
    by Iran--it is not inconceivable, given their public
    statements--this could destabilize the whole region.
        General Jones. Absolutely. If that happened that would
    certainly do that.
        Senator McCain. Thank you, Mr. Chairman. I thank the
    witnesses.
        Chairman Warner. Thank you very much, Senator McCain.
        Senator Akaka.
        Senator Akaka. Thank you very much, Mr. Chairman.
        Admiral Fallon, it is good to welcome you here to
    Washington, DC.
        Admiral, the QDR released last month stated that it is the
    DOD's intention to increase the Navy's presence in the Pacific.
    According to the QDR, the Navy will adjust its force posture to
    provide at least six operationally available and sustainable
    carriers and 60 percent of its submarines in the Pacific.
        I believe basing an aircraft carrier in Hawaii, co-located
    with our nuclear-capable shipyard, will prove the best option
    from an economic and quality of life standpoint, in addition to
    its strategic benefits. Admiral, when will the Navy plan to
    move forward on implementing the QDR's decisions and when will
    the specifics on the forward basing of an additional aircraft
    carrier in the Pacific be determined?
        Admiral Fallon. Aloha, Senator. Thank you very much for the
    question and for your suggestion.
        The Navy is working closely with us as we look at the
    overall force posture laydown in the Pacific to try to optimize
    our force structure. Several submarines have already had their
    home ports moved to Pacific bases. We are studying particularly
    the intricacies of forward basing on Guam as we absorb the
    negotiations, the DPRI negotiations with Japan and what that
    means. I am leading from my staff a study of each of the
    components, the Navy, Army, Air Force, and Marine Corps'
    changing plans in the Pacific, so that we can have one
    comprehensive look at this.
        The Navy is taking steps to try to increase the
    availability of aircraft carriers in particular in the region.
    There has not been any decision to go forward on a new
    permanent home basing for one of those carriers yet. We are
    still looking at this and, sir, we will advise you. The Navy
    and we together will come forward when we have what we think is
    the recommended position here.
        Senator Akaka. In addition, Admiral, please comment on the
    increased capability and flexibility that an additional
    aircraft carrier in the Pacific would provide?
        Admiral Fallon. Sir, the striking power and flexibility of
    having these ships have certainly been demonstrated many times
    in the past. We will be looking at this to ensure that we have
    enough capability to meet our response requirements under
    existing contingency plans and as we try to forecast the future
    requirements.
        We are also mindful that there are other demands on these
    forces in other parts of the world, and that the Nimitz-class
    carriers are going through a cyclic refueling cycle, so that at
    any period of time now for the next couple of decades we are
    going to have one of these ships off the line. So I believe
    that the commitment the Navy is making to the Pacific is as we
    go through this restructuring and the refueling that the Navy
    is going to make every effort to make sure that there are six
    actually available in the Pacific. Exactly how we do that is
    still under study and it is going to have to be closely
    coordinated with these refueling schedulings that are ongoing.
        Senator Akaka. Admiral, at a recent Homeland Security and
    Government Affairs Committee hearing on Hurricane Katrina the
    Secretary of Homeland Security, Michael Chertoff, was unaware
    of the relationship between PACOM and NORTHCOM as it relates to
    homeland security. Given what appears to be some confusion
    regarding the appropriate delegation of authority, what
    assurances are you able to give me that Hawaii's needs will be
    able to be met in an emergency situation? Also, what plans do
    you have to make sure that lines of authority and lines of
    communication are more visible in the future?
        Admiral Fallon. Yes, sir. No confusion here in the military
    between NORTHCOM and PACOM. We know that I have responsibility
    for Hawaii and the Pacific islands. We have been working this
    with NORTHCOM in an ongoing series of dialogues and exercises
    to ensure that we have seamless coverage in this area. We
    recently had a session with Governor Lingall and our people to
    discuss emergency responses to cover Hawaii. I feel very
    confident that we have this well in hand and we will continue
    to work with NORTHCOM to solidify the lines of responsibility
    to make sure we are well covered here, sir.
        Senator Akaka. Since 1997, Admiral, the avian flu has
    spread to more than a dozen countries in Asia and Eastern
    Europe. Just recently, the first fatalities outside of Asia
    were reported in Turkey and Iraq. Although there have been no
    documented cases of avian flu in Hawaii, I am concerned about
    its potential spread to the State due to its position as an
    important Pacific entry port.
        Please tell me what plans PACOM has made in case of an
    outbreak and what role you would play in relation to other
    Federal and State agencies in this?
        Admiral Fallon. Yes, sir, Senator. It is a high interest
    item. We have had a lot of discussion, a lot of research.
    Marine Forces Pacific Commander is my designated lead for this
    project. I have reviewed several in-progress reports from him
    and his staff. In fact, I believe that we are in the lead--if
    not in the lead, we are certainly close to it--in this Nation's
    study and understanding of this particular problem.
        We have provided material back here to Washington to both
    the DOD and to the DHS. We have had ongoing discussions with
    our allies in the region. In fact, just several months ago in
    Hawaii we hosted a chiefs of defense conference at which we
    invited commanders from throughout the Pacific area and we
    specifically took up this issue of the pandemic flu potential.
        It was very enlightening for us to see that there is a lot
    of work being done by other countries in this area, too. We
    exchanged ideas and in fact I think we are poised to continue
    to develop our responsive plan. We talked to the governor about
    this as well. It is certainly an area of high interest and as
    we continue to see cases develop we are working hard to refine
    exactly how we can respond.
        We have a very good template based on the tsunami response
    last year. There is an ongoing series of meetings in which we
    have continued to share lessons, not only among U.S. staffs and
    organizations, but with our allies as well. We are going to pay
    very, very close attention to this in concert with each of the
    organs of government here in the U.S. as we go forward.
        Senator Akaka. Thank you very much, Admiral, for your
    responses.
        Thank you very much, Mr. Chairman.
        Chairman Warner. Senator Reed.
        Senator Reed. Admiral Fallon, if I may, India is in PACOM
    and Pakistan is in CENTCOM, so you have a potential unity of
    command issue at a critical border. How do you handle this on
    an operational basis, not only with respect to those two
    countries, but with respect to CENTCOM?
        Admiral Fallon. Yes, sir. So far not an issue and I aim to
    keep it that way. We have very good relationships with CENTCOM
    in this area. Each of my component commanders works very
    closely with his counterpart in CENTCOM. In fact, we can talk
    about this maybe in the closed session, but I just had a
    communication from one of the CENTCOM commanders on an issue
    asking for help. We have had several recent events involving
    forces and exercises that have been very well-handled across
    the border.
        So I think we are pretty well-poised to make this a non-
    issue. We pay close attention to it and the people that
    actually operate out in that area are very attuned to it.
        Senator Reed. Do you have a formal India-Pakistan cell, a
    staff section?
        Admiral Fallon. No, I do not have a specific cell that
    works those two issues in concert. Of course, we stay very
    close to the Indian military and from CENTCOM I understand that
    they also stay close to Pakistan.
        Senator Reed. In your statement, Admiral Fallon, you say
    that PACOM forces require ready, available, and properly
    maintained prepo stocks. You go on to say we still have an
    immediate need for replenishment of these stocks and other
    preferred munitions. What is the status of your prepo? What
    percent is there at the moment?
        Admiral Fallon. I cannot give you an exact percent, but I
    will tell you that we looked at this very closely because last
    year I was concerned about the status of some of these supplies
    because of the material that had been taken out and sent to
    CENTCOM. I am satisfied that we are on track to replenish these
    supplies in a manner that makes sense. Recognize that there are
    several factors at work here. Certainly there is an absence of
    material that was intended to be dedicated to the Pacific. But
    I also realize that there are equipment changes and weapons
    changes that are in progress and it would not make a lot of
    sense to me from an economic standpoint to go ahead and build
    up these supplies with material that we know is in the process
    of changing out, such as armored vehicles and precision weapons
    and Navy Tomahawk missiles.
        So I think the plans are sound. I have drilled into this
    pretty heavily and my chief of logistics is the point man for
    it. I think we are on the right track, sir.
        Senator Reed. Does this budget that has been sent to us
    make you whole, give you 100 percent of your prepositioned
    stocks?
        Admiral Fallon. It is moving us in the right direction,
    sir. It is not going to happen in 1 year.
        Senator Reed. Do you have any idea how many years?
        Admiral Fallon. I will get back to you with the specifics
    on it, sir.
        [The information referred to follows:]

        The equipment is still being tested with no conclusive results at
    this time. Results will be forthcoming.

        Senator Reed. General Bell, could you make a comment on the
    same issue, your prepositioned stocks, what percentage do you
    have and how fast will it take you to get whole?
        General Bell. Thank you, Senator, I sure can. The principal
    nature of the prepositioned stocks on the peninsula in Korea
    surrounds a heavy brigade combat team, Army--M-1 tanks, Bradley
    fighting vehicles, et cetera. That is the essence of it. The
    readiness of that heavy brigade combat team has been an area of
    great focus for the last year. What we found about a year ago
    was that the amount of money that we were spending to maintain
    the equipment, repair parts, just maintenance by mechanics,
    hours on the job--and it is mostly by civilian mechanics--was
    inadequate and consequently some of that equipment was not as
    ready as it should have been.
        We have done an enormous amount of work. The amount of
    money that we are spending to buy repair parts and to hire
    people has been tripled just in the last year. The Army
    Materiel Command has hired an additional 160 mechanics to work
    on the equipment and the latest numbers are very positive on
    the readiness of the equipment, 96 percent readiness. All the
    combat equipment is present.
        So it is very encouraging and very positive. I will tell
    you that we are still missing some equipment, and obviously if
    it is missing it is not ready. While most of this equipment is
    in the area of combat service support--trucks, Humvees, which
    went to Iraq, deuce and a half trucks--these are very important
    and necessary to make this combat team operate effectively. We
    do need that equipment, but it is not a show-stopper.
        So my report to you, Senator, would be that a lot of energy
    has been put into that forward prepositioned heavy brigade
    combat team, which is right on the cusp of potential combat,
    and the results are positive. The budget accounts for a
    continuing focus on that equipment, although I would tell you
    there is about one-third again more money that I believe we
    should put into the maintenance of it to really give me the
    satisfaction that I would prefer. But it is a very positive
    story and a lot of great work has gone on, sir. Thank you.
        Senator Reed. I appreciate the progress that is made, but
    how does that translate into readiness? Because one of the key
    aspects of the strategy is if hostilities ensued folks would
    have to fall in on that equipment, and without trucks you have
    a problem.
        General Bell. It is vital. As you are aware, we redeployed
    a heavy brigade combat team from Korea to Iraq, where they
    performed magnificently for a year in combat, and then back to
    Fort Carson, Colorado. So the ability of a heavy brigade from
    the United States Army to come and fall in on that equipment
    and have that confidence that it is ready is necessary.
        So the first thing we have to do is make sure the stuff is
    ready. The second thing we have to do is exercise it. We have
    to draw it, at least a good sample of it, and take it to the
    ranges, put it out on the roads, et cetera, to make certain
    that what we are seeing in the warehouses is translated into
    capability where it counts. We are doing that in various
    exercises. We are beginning this exercise called Reception,
    Staging, Onward-Movement, and Integration. I will not go into
    the details, but we will sample this equipment and I will get
    back to you on how well it is performing. I think it is going
    to be pretty good.
        [The information referred to follows:]

        [Deleted.]

        Senator Reed. Thank you.
        General Jones, just to be consistent, can you comment on
    your command's prepositioned stocks?
        General Jones. Yes, Senator. I will be brief. With regard
    to the Army, about 88 percent of the Army's European
    prepositioned stocks were deployed in support of OEF and OIF.
    This equates to roughly 11 out of the 12 battalions
    prepositioned in Europe. The cost to reset these 11 battalions
    will be approximately $144 million. Of the 11 battalions, EUCOM
    has refitted one battalion to date.
        The Navy has approximately 30 percent of prepositioned
    ordnance that was used to support OIF. The Marines,
    approximately 40 percent of the prepositioned items in Norway
    were used to support OIF-OEF. The Air Force has a wide variety
    of equipment that was used in both missions and is still being
    used in both missions. It is estimated that their
    reconstitution cost is about $2.9 million. If you add the
    Harvest Eagle replacement, it would be about $3.9 million.
        Senator Reed. Are these funds identified in the budget that
    has been sent up to us?
        General Jones. They are identified. Some of this equipment,
    for instance the Marines' equipment, will go right back to
    Norway. But some of it will have to be--and I might say that
    the Army's reconstruction will have to be done very carefully
    because with the departure of the First Armored Division and
    the First Infantry Division, their prepo stocks of the future
    will look considerably different than what they did with a
    larger footprint. So we are adjusting that.
        Senator Reed. Thank you very much, General. Thank you for
    your service.
        Thank you, Mr. Chairman.
        Chairman Warner. Thank you very much, Senator Reed.
        Senator Clinton.
        Senator Clinton. Thank you, Mr. Chairman, and thank you,
    gentlemen, for being here and for your service. Thank you, too,
    General Bell, for coming and giving me an excellent briefing
    about the Korean peninsula.
        I want to start with you, General Bell. Last week
    Lieutenant General Maples, Director of DIA, responded in a
    public hearing to a question about North Korea's efforts to
    develop a long-range missile that could reach the United
    States. He stated that North Korea is, ``in the process of
    developing an intercontinental ballistic missile that would be
    capable of delivering a nuclear warhead, but they have not done
    so yet nor have they tested it.''
        Do you agree with General Maples' assessment and,
    furthermore, how far do you believe they are from developing
    and testing, and how best can we deter that?
        General Bell. Thank you, Senator Clinton. I have looked at
    this in some detail. The Taepodong 2 and 3 missiles, as we call
    them, are of the kind that, at least in theory, could produce
    intercontinental capability. Up through the late 1990s, there
    was a fairly active program in North Korea to develop that
    missile technology and potentially to test it. In the years
    since the late 1990s, the last 6, 7 years, we have seen very
    little activity by the North Koreans to actively continue to
    develop and test long-range missile systems.
        There is no doubt in my mind that they have the capability
    to begin more technological investigation and to begin a
    regimen to lead to testing and potentially to lead to fielding.
    But there is no evidence of it right now. The evidence that we
    see is in short-range missiles, most useful, quite frankly, in
    a conflict on the peninsula. I would be more than happy to
    discuss that in some detail with you in a closed session.
        But I do agree with General Maples and I think his
    assessment is accurate.
        Senator Clinton. General Bell, do you think that the
    Chinese have the same interest as we do in putting an end to
    North Korea's nuclear efforts?
        General Bell. We are taking a good look at the Chinese
    relationship first with North Korea to see what kind of partner
    or ally they are with North Korea and try to make some
    assessment with regard to that. Now, Admiral Fallon would also
    be able to address this in some detail. First and foremost, the
    relationship between the People's Republic of China and North
    Korea is not as active as one might think. The exercising that
    you would expect between the ROK--I am sorry--the North Koreans
    and the Chinese, is very low and essentially not extant. The
    supply of military hardware, et cetera, et cetera, is very low
    and non-extant.
        So these are all positive things. My sense would be if
    North Korea wanted to confront the United States with respect
    to nukes that it would be more engaged in a conventional sense
    at the baseline, but they are not. Does North Korea have--do
    the Chinese share our interests in the Six-Party Talks to see
    these talks conclude positively? It is not in the interest of
    China in my view to see the Six-Party Talks fail. I am not
    certain that they are as excited about the conclusion at an
    early point as we are, but they have been good hosts. They hold
    the talks in Beijing. They have been positive in their comments
    with respect to North Korea and their desire to see this
    resolved peacefully.
        So all the members of the Six-Party Talks in my view have
    their own agendas and their own perspectives, but they have
    repeatedly said in open session that they are committed to the
    same objectives, and that is a de-nuclearization of North
    Korea, the return of North Korea to the peaceful community of
    nations. My assessment at this point is that China is helping
    us in that regard as opposed to hurting us.
        I would be glad to let Admiral Fallon continue, ma'am, if
    you would like.
        Senator Clinton. I would, thank you.
        Admiral Fallon. Thanks, Senator. I concur with what General
    Bell said; maybe just add a couple of additional comments. It
    seems to me that the Chinese put a premium on stability,
    certainly within their own country, and the potential for
    having instability along that border with North Korea, either
    instigated because of actions that Korea might provoke with its
    neighbors over nuclear weapons or any other issue, seems to me
    to be motivation for the Chinese to stay engaged in this
    process.
        In my discussions with Ambassador Hill, who is our chief
    negotiator----
        Chairman Warner. Would you speak more directly into the
    microphone? Thank you, Admiral.
        Admiral Fallon. Sorry, sir.
        In my discussion with Ambassador Hill, our negotiator in
    the Six-Party Talks, he indicates that the Chinese have been
    helpful, particularly in the last session, in trying to move
    forward in this area. So it seems to me it is tough to get into
    their heads and see exactly what the calculus might be that
    they are using, but by all appearances it is in their interest
    and they appear to be working in this area with us.
        Senator Clinton. Admiral Fallon, what military assistance
    do you plan to provide to the Philippine government over the
    next year or so?
        Admiral Fallon. Senator, we have been engaged for some time
    with the Philippine government in a number of areas. We are
    trying to help them to build the capacity to deal with the
    terrorist problem in the southern Philippines. We have been
    working with them in a significant effort called Philippine
    defense reform. It has been undertaken by the government of the
    Philippines, led by their Secretary of National Defense, the
    Honorable Secretary Cruz, in which they are looking at a far-
    reaching overhaul of their entire structure, which I think
    would be in their best interest and ours as well.
        We are helping them on the ground with advisers in Mindanao
    and the Sulu Archipelago and we are working a number of
    military assistance cases to try to help them in the material
    condition to build up their capability, particularly airlift
    and in other areas that would be helpful to them in gaining a
    better military that might be more useful for them and for the
    region.
        Senator Clinton. Your predecessor, Admiral Fargo, agreed to
    inform this committee in advance of any changes in our
    involvement with the Philippines and particularly with respect
    to conditions under U.S. servicemembers would be involved in
    combat activities. Will you honor that agreement so that we
    would have advance knowledge of any changes?
        Admiral Fallon. Yes, ma'am, I certainly will.
        Senator Clinton. Thank you.
        General Jones, I just want to go back to a point that
    Senator McCain was asking you with respect to Darfur. You may
    remember that a year ago February we talked in Munich about the
    potential of NATO providing airlift, and I note that from
    personal conversations with you in the months since that there
    was a great effort undertaken to get the appropriate permission
    and then to find the necessary resources.
        Could you just enlighten me at least on what the process
    was and what actually came out of that process, because I know
    you worked it and pushed it. It was difficult and we did not
    really provide all that much airlift in retrospect. I do not
    know what the specifics are, but I know that it has not been
    adequate, and now we are looking to see what else we can do.
        What is the problem? Is the problem it is an out-of-area
    commitment? Is the problem that our other allies in NATO are
    not committed to it? Can you just briefly describe, what is the
    obstacle to doing something even as limited as airlift to the
    extent necessary?
        General Jones. Senator, thank you for that. With regard to
    the airlift, actually it turned out to be successful. NATO did
    lift six out of the seven African battalions into Darfur and
    has committed to doing the same for the ongoing rotation. So we
    are--at present we are doing our second round of airlift. So I
    think NATO has the capacity and the will to do this, as well as
    the capacity-building that we have been doing with the AU.
        The problem, the fact is that both of those mandates run
    out. One I think runs out in March and the other one in May. In
    order to continue a NATO mission, either the AU or the U.N. or
    both need to come and make a request to the NATO for a
    continuation or for an expansion or whatever it is they wish.
        Absent that, the NATO does not have the mandate to respond,
    and that is generally what the state of play is right now.
    There is a lot of discussion. There are a lot of telephone
    calls, but the official letter that comes from the
    organizations that would be able to trigger the process of a
    decision by the North Atlantic Council, that has not happened
    yet.
        Senator Inhofe [presiding]. Thank you, Senator Clinton.
        Senator Thune, I have already voted. I know you have not.
    Why don't you go next and then I will wait until after you are
    through.
        Senator Thune.
        Senator Thune. Thank you, Mr. Chairman. I think we have 4
    minutes left on the vote, so I will not have a lot of time to
    ask questions here.
        But I appreciate, General and Admiral--thank you so much
    for your very distinguished service to our country and for the
    extraordinary work of those under your command. Please extend
    our deepest appreciation and support for the troops.
        We have an interest, the Senator from Oklahoma and I both,
    in making sure that Congress is responding appropriately in
    terms of the funding and the resources that we need to deal
    with the many threats that exist around the world today. We
    have been involved in an effort to increase the top line
    funding for our readiness. So that is an effort, a debate that
    we will have around this place ongoing for some time, every
    budget year. But we want to make sure that we are taking the
    steps that are necessary so that the troops are able to
    complete their mission and fulfill the responsibilities that
    you ask of them and that we ask of you.
        I just--we have, many of us, I think, our National Guard in
    town. I will be meeting tomorrow with the Adjutant General from
    South Dakota. I guess I am curious as to what sort of update
    you can give us about the role the National Guard is playing,
    about the types of--there is concern when you talk to Guard
    members and their families about the deployments and bringing
    greater predictability and as we talk about modernization and
    all these other things associated with that. There are concerns
    about funding levels for the National Guard, what the future
    entails.
        So I am wondering if you could give me, in a nutshell, your
    assessment of things and how they play in, how they integrate
    into the overall objectives that you have to achieve.
        General Jones. Senator, thank you for that question. The
    National Guard plays a very important role in the European and
    African theaters. Currently the National Guard and Reserve in
    EUCOM are composed of about 3,300 members on duty. Most of them
    are in Kosovo doing very good work, very important work in that
    mission in the Balkans.
        The Navy has a very modest, a couple of people. The Air
    Force has 197. Marines have 49, for a total of about 3,500
    National Guard and Reserve on duty in Europe and Africa.
        I should comment that one of the most critical programs
    that we have, that I value almost above all others, is the
    State partnership program, where Air and Army Guard units have
    relationships directly from the State to a particular country.
    Three years ago in Africa we had no programs and now we have I
    think eight, with as many as four or five more getting ready to
    be established. In Europe, in Western and Eastern Europe, we
    have considerably more because we have had longer time to get
    them going.
        But these are very intensive relationships between a
    sovereign country and one of our States, and the interaction
    between our members of the National Guard, both Air and Army
    Guard, really has a lot to do with the transformation and the
    ongoing military-to-military relationships that build long-term
    relationships between the State--and not just at the military
    level, but at the economic level, the political level, and so
    on and so forth. A very important element of our theater
    engagement plan.
        So I hope that answers your question, Senator.
        General Bell. Thank you, Senator. I would like to come at
    it from just a bit of a different perspective and talk
    specifically about the United States Army and what we in the
    Army as a Service have tried to do since the breakout of OIF
    and OEF. I think you are aware that for years, decades
    literally, since the end of World War II, the National Guard in
    many respects, in this case Army Guard, was the victim of a
    tiered readiness process that said fundamentally that, while
    these units in theory would be late deployers in a general
    conventional war, it was okay to not organize them and equip
    them and man them at the same level as an Active-Duty division
    or an Active-Duty unit might be.
        That approach over the years resulted in many of our
    magnificent Guard units not being trained and not being as
    ready as they ought to be, principally because we did not focus
    on them. The Chief of Staff of the Army and the Army as an
    institution for the last 3 to 5 years for certain has attempted
    to reverse that and I think done a masterful job. I have had
    the distinct pleasure of going to Afghanistan many times, Iraq
    many times, all over Europe, the Balkans, both Kosovo and in
    Bosnia, and now in Korea, and I have had a chance to look at
    these units in their current configuration and talk to them.
        Two quick examples, and I will not take too long. First the
    Tennessee National Guard. I am from Tennessee and I am proud of
    it, sir. I am sorry you are not from Tennessee, but it is okay.
    [Laughter.]
        The Tennessee 278th Armored Cavalry Regiment went to Iraq a
    little bit north of Baghdad and took over a very difficult
    area. They were trained, they were ready, they were proud. They
    brought their traditions of service over a century of
    commitment and they pridefully and effectively made a huge and
    lasting difference in a large segment of Iraq.
        This is a radically different outcome than what we could
    refer to back during the Operation Desert Storm days, when in
    attempting to get some of our National Guard brigades--and the
    278th is a regiment--ready, we learned that they were not ready
    and they were not capable. That has been changed.
        While the National Guard is under stress--and I will tell
    you that they are working awfully hard--what they are bringing
    to the global war on terror, this long war, is a perspective of
    magnificent service to their Nation, something like I have not
    seen, at least in reading history, since World War II.
        So that the issue for all of us now is what do we do from
    here as we go forward. I would argue that, one, we need to
    continue to resource our National Guard units effectively. We
    need to man them at the highest levels. We need to recognize
    that they are not going to be latecomers; they are going to be
    firstcomers in many cases. We need to finally recognize that as
    a cultural institution that they represent the very best and
    brightest of the United States of America. They are citizen
    soldiers. They represent the Nation perhaps better than anybody
    and they deserve the best training, best equipping, and best
    consideration by the Active-Duty Forces.
        I think we are getting it today and I would hope that as we
    go into the future that we would all, both the administration
    side and the congressional side, keep them in the forefront of
    our readiness paradigm and make certain that they continue to
    be as ready in the future as in my view they are today.
        Thank you, sir.
        Senator Thune. Thank you, General.
        Admiral Fallon. Senator, just to pile on a little bit, in
    the Pacific theater, as you are well aware, we are particularly
    dependent on air and maritime forces to be able to execute our
    responsibilities. This would not be possible without a
    significant contribution from the National Guard and Reserve. I
    will give you a couple of examples.
        We are in the process of introducing the C-17 to the
    Pacific both in Alaska and Hawaii, a very, very much needed
    capability increase, and the units in both States are going to
    be mixed units of National Guard, Reserve, and Active Forces,
    and this integration is well underway. In fact, the first
    aircraft have cast their shadows over the ramp there at
    Hickham.
        I get to see on a regular basis particularly the Air Guard
    coming through, stopping at Hickham mid-Pacific. Most of the
    tanker fleet as well as a big chunk of the airlift support is a
    mixture of Active and Reserve Forces.
        I might also highlight that there is a major contribution
    being played by ground forces, particularly Army Guard and
    Reserve, in the war effort in CENTCOM, and many of these forces
    are being taken from Pacific-based units. So we get to see
    their phenomenal contribution and their sacrifices on a daily
    basis.
        Thank you, sir.
        Senator Thune. Thank you all very much, and thank you, Mr.
    Chairman.
        [The information referred to follows:]

        Senator Inhofe. Thank you, Senator Thune. Frankly, I am
    glad you are from South Dakota for a lot of reasons, one being
    very obvious.
        Let me just ask you a question, General Jones. I told you I
    was going to ask it. Am I the only one who is disturbed by this
    map [indicating], the way our commands are divided up? I have
    been very active for 10 years now in Africa and you have Africa
    under the EUCOM except for Sudan, Ethiopia, Somalia, Kenya, and
    Eritrea. But right now, in the case of Ethiopia that is the
    location of the AU. It would just seem to me it just seems real
    cumbersome, because I will be going again next week and I will
    be in two different commands but in one continent. So again, I
    just thought I would throw that out there and hopefully you
    will have a meeting some time and bring it up and see if I am
    the only one who is disturbed by it.
        General Jones. Sir, the unified command plan is always a
    document that gets a lot of attention and where you draw the
    lines is important. I would just simply say that I think this
    is something that we need to take a constant look at. The
    relations between the EUCOM and the CENTCOM in this case, where
    the lines intersect separating one from the other in Africa,
    have become increasingly blurred. In other words, I want to
    reassure you that, although the lines are there, the crosstalk
    between CENTCOM and EUCOM is----
        Senator Inhofe. Yes, I know that is true. I know what is
    going on.
        Several have talked about Darfur. It seems as if that is
    getting an awful lot of attention from members, a lot of
    members who are not all that familiar with Africa or not
    perhaps as familiar as I am. Consequently, I have not really
    been spending a lot of time on that, but I am very much
    concerned about the Lord's Resistance Army, about what is
    happening in northern Uganda. To me--and nobody ever talks
    about that and here we have one guy up there, Joseph Koni. He
    has been there for 30 years, beating up and killing and maiming
    kids, and nothing seems to be done about it.
        The other day I was up in Gulu and we saw the product of
    his efforts there. Our intelligence knows where he is most of
    the time. President Museveni in Uganda just went through having
    to change the constitution and was then elected. I guess it is
    the first real election they have had in some 25 years.
        Now, when you look and you see these horrible atrocities--
    and they are all little kids--and that there is an easy
    solution to it--and I do not want to get into something you
    would have to go into a closed session to talk about, but with
    those dynamics, with Museveni now back re-elected and having
    come from a military background, I might add, do you think
    that--do you have any light at the end of that tunnel? What
    statement could you make publicly as to any progress you see
    down the road in getting rid of this Joseph Koni?
        General Jones. Senator, I think that this should be an
    achievable goal and I think that, with the elections over with
    and the refocus, I think that I am in accord with you that
    generally speaking the area that he operates in is relatively
    known, although it is a large issue. There is the issue of the
    borders that people hide behind quite a bit. But I think we
    need to continue to put pressure on the regional governments to
    bring this thing to a close.
        It is not going to be NATO or anybody else. They are going
    to have to get this guy themselves and they are going to have
    to be encouraged and supported in any way we can to make sure
    that he is brought to justice, because it is outrageous what he
    is doing.
        Senator Inhofe. If you see it and you see it first-hand, it
    is really, really, really disturbing.
        The New York Times had a report that 25 percent of the
    nearly 400 foreign fighters--this has been about 6 months ago--
    captured in Iraq were from Africa. I was not aware of this. Do
    you think that is accurate today? Do you think--because my
    experience has been that the Africans are very anxious to help
    us and they have joined us, many of the countries, in our war
    against terrorism. They recognize that Africa through the Horn
    and down through Djibouti, that as the squeeze goes on the
    Middle East that they are coming their way, and we are
    preparing and helping them prepare for that.
        Do you see that there is that big of a presence there of
    Africans within the insurgents?
        General Jones. I do not know what the percentage is,
    Senator. But one of the things we guard against is the obvious
    ease with which recruiters can come into regions in Africa,
    particularly the poor regions, and marshal the passions of
    people who do not have much hope. We are worried about people
    going to and from the conflict areas, fighting for a while,
    then coming back to Africa and bringing back what they have
    learned and generating and fomenting similar groups to cause
    problems in Africa.
        I do not know what the size is, but I do know that it is
    going on. We do have a general sense of the highways that they
    use to get to and from the conflict and we are doing our best
    to stay engaged with the theater security cooperation plans
    that we have to mitigate against that.
        Senator Inhofe. One last question about Africa. Not too
    long ago, the President announced this Trans-Sahara
    Counterterrorism Initiative. Then for quite some number of
    years now we have been working with the five African brigades.
    We know that they are very proud that they are the ones who are
    putting that together and we are just trying to assist where
    our assistance is requested, and we are doing a very good job
    with them.
        Can you give us any kind of an update as to where we are
    now with these African brigades? Because I think it is going to
    become increasingly important as the squeeze continues in the
    Middle East.
        General Jones. Sir, I think, looking at Africa the same way
    that the Africans look at Africa, based on the five regions, is
    an important thing to do. They are obviously, the ones that are
    deploying into Darfur, the ones in the highest state of
    readiness. But it is coming along. I believe that there is a
    lot more capacity-building that we could bring, not only the
    United States but the family of nations could bring, to
    accelerate the process of the emerging capabilities of the AU
    peacekeeping battalions. I think this is a good way to help the
    Africans help themselves. To do it in the right way and to do
    it over a protracted period of time would be very beneficial.
        Senator Inhofe. I think that is right. You had mentioned
    the area, the Sea of Guinea, and the serious problems there. I
    just came back from there. They asked me a lot of questions
    that I cannot answer in terms of the locations of the various
    regional operations and what they can get. One thing that they
    need more than anything else seems to be lift capacity and that
    comes up almost every time that we are there.
        Admiral, I want to just mention one thing. I wrote down
    three words from your opening statement, where you said that
    the tension has been significantly reduced, referring to China
    and Taiwan. Only this morning, in USA Today talk about--well, I
    will just read it. It says: ``Symbols are everything when it
    comes to the prickly relationship between China and Taiwan, and
    recent moves by both countries could signal the potential
    tightening of tensions between China and Taiwan,'' referring to
    President Chen's recent action to scrap this council that they
    have had, which has not met in 5 years, so I can understand why
    they would scrap it.
        But they go on to talk about how serious the tension is.
    The vice chairman of the central military commission in China,
    Guo Boxiong, talked about how serious that was, that it is
    something they are now going to be able, that China--I got the
    impression, anyway, is going to be able to use that in order to
    try to escalate the hostilities, and the fact that they have
    some 700 missiles aimed at Taiwan right now.
        So do you have any further evidence that the tensions are
    lessening there? Because I was glad to hear it.
        Admiral Fallon. I guess I would like to go back and review
    the year's history. A year ago things were indeed tense. There
    was not only--there was a lot of rhetoric being thrown back and
    forth by both sides, but in fact there was significant activity
    going on on the ground.
        That has subsided significantly during the year. This
    recent announcement by Chen, not particularly helpful, I think,
    in the situation. But I guess the absence of any significant
    activity from the Chinese, from the PRC, other than the
    statements which have indicated that this particular move was
    not helpful--but there have not been the types of activity we
    have seen in the past, such as riots and loud protests
    involving large numbers of people. So I think that to me, at
    least so far, is indicative of taking this more in stride than
    just reacting. We have certainly, to the best of my knowledge,
    not seen any military movements.
        Senator Inhofe. If it is all right, Mr. Chairman, I would
    like to pursue just one more question along that line.
        Something that has bothered me for a long time, starting
    back in the 1990s when the drawdown, the military drawdown, was
    taking place in this country, and it happened during that
    decade of the 1990s the military procurement in China increased
    by 1,000 percent. So we are not looking at just something, a
    potential nuclear power. We are looking at great conventional
    assets and opportunities.
        This has been really troublesome for me for quite some
    time. I look also and I see that China is doing a lot of smart
    things that we ought to be doing and we are not, such as
    cornering the market of energy all around. Getting back to
    Africa, everyplace down there around the Sea of Guinea you see
    the presence of China trying to do their thing. We know that
    they had their $70 billion deal with Iran and now they are
    getting 13 percent of their energy from Iran.
        But I look at it just from the military might that they
    have and the fact that most Americans believe that we in
    America have the best equipment out there and that we give our
    kids the best equipment, when it is just not true. We suffered
    mightily during the 1990s. I was very proud of General John
    Jumper when in 1998 he stood up and he said that now the
    Russians are making with their SU series, SU-27, SU-30s, SU-
    35s, a better strike vehicle than the best that we have, which
    was the F-15 and the F-16. That was borne out again in the
    trials in India.
        So with that, what is your level of comfort with the
    direction that China is going with the massive buildups that
    they are in the middle of right now?
        Admiral Fallon. Senator, I think I would break this down
    into a couple of different areas. One, they have a massive
    sized force, but I do not believe that the majority of that
    force is particularly well-equipped. I believe that they are a
    legacy force of the past and I think that the Chinese--the PLA
    leadership knows this and they would like to see this changed.
        Certainly from my visit there and discussion with their
    leaders, they make this a high priority. They made it a high
    priority with me to point out that they really need to
    overhaul. They would love to transform their military probably
    in a way that we have been doing.
        The second point is that the new equipment, the hardware
    that they are acquiring, they are buying most of this stuff off
    the shelf and most of it from the Russians. Some of the stuff
    is high end relative to certainly what they have had in the
    past, and the numbers are increasing on a percentage basis
    because they are starting from a pretty low, low beginning. So
    the types of equipment are troubling because the capabilities
    are new and modern. The numbers are not yet anywhere near the
    kinds of numbers that I believe truly threaten this country.
        Regarding the raw materials, it is pretty obvious that they
    are heavily dependent on the outside world to sustain their
    economic development and they are obviously very active in
    trying to get materials from any place they can in the world to
    keep this economic engine going.
        Senator Inhofe. Thank you, Admiral.
        Admiral Fallon. Thank you, sir.
        Thank you, Mr. Chairman.
        Chairman Warner. Thank you very much, Senator.
        I was quite interested in your colloquy with Senator
    Clinton and indeed others about China's depth of sincerity to
    try and bring to closure and hopefully a positive outcome of
    the talks with North Korea. One man's opinion, it is just mine:
    I think they are trying to play it both ways. How vividly I do
    recall in the Korean War how it was their support in the
    military decision which turned the tide in that conflict and
    ended up with this rather heavy burden on the United States to
    remain there all these many years.
        But on the other side, you say there is an enhancement of
    the military-to-military relationship, and I think that is a
    good positive one. I come back to again a chapter in our
    military history, which I think from time to time has been
    examined in the context of China. That is the tragic situation
    we had with the shootdown of one of our aircraft, as you will
    recall, the patrol aircraft years ago, and the question of
    whether or not we could work out the executive agreement,
    commonly referred to as an incident at sea agreement, that we
    once had with the Soviet Union, and it continues to this day
    with Russia, as a means by which to lessen tensions between the
    interoperability of--well, maybe not the interoperability, but
    the parallel missions that our forces and the Chinese seem to
    be running in part of the AOR for which you are responsible.
        Admiral Fallon. Thank you, Senator. I share your interest
    in moving forward in this area. In fact, the talks, ``MMCA'' is
    the designated term, Military Maritime Consultative
    Arrangements. We have made a little progress on this this year.
    I think it is critical that we move this ball forward because
    the Chinese do things in a very structured manner, particularly
    military-to-military. I mentioned earlier the challenge we have
    in actually getting things accomplished with them. A very rigid
    bureaucracy. Just about everything is funneled through their
    foreign affairs office in the PLA and it makes life challenging
    for us.
        So their inclination is to want to do things in a very
    structured manner. We have tried to use these talks to actually
    move this from an overarching policy discussion to very
    concrete measures, so that when our forces are operating in
    close proximity we will have a framework for action, something
    that we can give our commanders and hopefully they give their
    commanders to lessen the likelihood that we are going to have
    an untoward incident.
        Maybe by working this agreement to actually take steps to
    move forward, we might be able to move the military
    relationship as well. But I share your concern and your
    interest in doing this.
        Chairman Warner. I would hope that you would refer to that
    chapter of history between the United States and the Soviet
    Union. It took place basically from 1970 to 1972. In 1972 the
    agreement was executed in Moscow, as a matter of fact at the
    occasion of President Nixon going over. It was an historic
    moment in our history.
        But the tensions between the United States and Russia, the
    tensions between NATO and Russia, were at a high pitch in those
    days and yet they suddenly decided that they did not want to
    see an accident between our military forces as they operated in
    the open seas and it came about, and it has been very positive.
        So I hope that you might blow off the dust and try it a
    little bit.
        Admiral Fallon. Yes, sir. That said, I will tell you that
    the instances in which our forces have been in close proximity
    certainly in the past year appear to have been conducted quite
    reasonably and quite professionally, and we watch this very
    closely.
        Chairman Warner. But for them to enter into an agreement
    would be a signal in the region that they want to try and do
    business in a positive way.
        Admiral Fallon. I agree, yes, sir. I certainly agree.
        Chairman Warner. General Jones, to you the question of your
    opinion regarding the relationship between NATO and Russia. As
    your posture statement indicates, NATO-Russia cooperation
    appears to have deepened significantly over the past few years
    and is based on acting and exercising jointly, not just
    talking. That seems to be a positive development.
        Now, I ask this question because I think it is within days
    that the Russian foreign minister is here, is it not? As a
    matter of fact, I am going to be meeting today with the foreign
    minister. I would like to have your assessment as to NATO's
    long-term objectives with respect to this cooperative
    engagement with Russia.
        General Jones. Mr. Chairman, thank you very much for that
    question. I am happy to be able to report that the relationship
    between NATO and Russia, as overseen by the NATO-Russia
    Council, which is a standing body, is very positive. I guess
    that is the word I would use. It is consistent over the last
    several years, where the Russians have shown a willingness to
    work with NATO to achieve measures of interoperability that are
    probably of the highest order that we have ever had between the
    two.
        Just a few weeks ago, two Russian warships joined Operation
    Active Endeavor, which is an ongoing article 5 mission,
    Mediterranean mission, counterterrorist mission. They are now
    fully interoperable with the maritime mission being directed by
    Admiral Ulrich. Those kinds of relationships have gone on now
    for the past several years.
        In my headquarters I have a Russian general officer and a
    staff full-time as a partner nation, and I have visited in my
    NATO capacity Moscow and the chief of defense of the Russian
    forces has also visited me in his official capacity at SHAPE.
        So I characterize it just the way I wrote it in the posture
    statement. It is positive, it is ongoing, and it is
    substantive.
        Chairman Warner. To what extent is the deliberation within
    NATO about new membership revolving around the Ukraine and
    their desire to become a NATO member, and how would that affect
    the cooperation that you perceive today between Russia and
    NATO?
        General Jones. The idea of expansion, of course, is
    something that is on many aspiring nations' minds. The Ukraine
    is one of them. The issue of expansion will be taken up I would
    imagine at the Riga summit in November of this year. I do not
    think that they will announce an expansion this year, but I
    think the subject matter will be discussed.
        Chairman Warner. What candidates do you anticipate will be
    the subject of that discussion?
        General Jones. In the open press the nations that have
    expressed the desire to become members of NATO include
    virtually every nation in the Balkans, the Ukraine. Generally
    speaking, it is that group.
        I think that obviously these will be sensitive discussions.
    I think Russia will make its voice known when and if the time
    comes that NATO does decide to enlarge, which it has not yet. I
    think we have to be careful about too much alienation and some
    unintended consequences that may or may not come as a result of
    those kinds of discussions.
        But new members are not on the table at present and that is
    for work in the future.
        Chairman Warner. I would like to return to Afghanistan,
    General Jones. Last Friday an article appeared in the
    Washington Post suggesting that the State Department was unable
    to get the Pentagon to agree to have U.S. troops provide force
    protection for provincial reconstruction teams, PRTs, that the
    United States would like to deploy throughout Iraq, similar to
    what ISAF is doing in Afghanistan.
        Are you in a position to comment on the veracity of this
    article and the conclusions?
        General Jones. Mr. Chairman, I am not. That is new to me.
        Chairman Warner. All right. Would you agree with me that
    providing security to the PRTs is an appropriate role for our
    troops in Iraq and that expanding the use of the PRTs in Iraq
    with adequate force protection would further our objective of
    helping reconstruct Iraq and enhancing long-term stability
    there?
        General Jones. Mr. Chairman, PRTs in Afghanistan have
    proven to be really the coin of the realm for reconstruction.
    They are the most visible manifestation that help is on the way
    while the government of Afghanistan develops its reach into the
    hinterlands. Obviously, if you are going to establish PRTs, you
    have to have some measure of adequate security. It has to be
    done by somebody. You cannot put these small units out there
    and leave them by themselves, especially in a hostile
    environment. So whether it is Afghanistan or Iraq, to me the
    principles remain the same.
        Chairman Warner. Thank you.
        Lastly, Admiral Fallon, the question again, China and
    Taiwan. Describe this latest incident which caused a problem?
    It seems to me that in our opening statement my recollection is
    you felt it was not a serious one, but it is nevertheless one
    of those unfortunate incidents that seem to continue to arise.
        Admiral Fallon. Senator, this is a political issue. I
    believe you are referring to President Chen's----
        Chairman Warner. Right.
        Admiral Fallon.--whatever the actual characterization is,
    and this is debatable. I have seen a number of interpretations
    of what actually transpired in Taipei. But by certainly
    diminishing the importance of this Unification Council, which,
    as somebody indicated, had not really done much in recent
    times, it just to my way of thinking exacerbates the challenge
    we have here, where rhetoric goes back and forth.
        I guess--again, I will look for other indicators. If it is
    just rhetoric and it is reasonably moderate in tone, I think
    that is unfortunate, but probably not particularly damaging. If
    other steps are taken, other military, some military actions or
    other indications that people are being agitated or stirred up
    to take other actions, then I think this would be a real
    concern.
        So we are in an interesting position here. We are trying to
    do what we can to see China come in to play a major
    constructive role in the world and at the same time to honor
    our obligations to an emerging democracy in Taiwan and not get
    ourselves wrapped around the axle here where we end up with
    another major engagement. So we are trying to walk a thin line.
        Chairman Warner. You say another major engagement. I will
    just give you again my own view. I think if that conflict were
    precipitated by just inappropriate and wrongful politics
    generated by the Taiwanese elected officials, I am not entirely
    sure that this Nation would come full force to their rescue if
    they created that problem. I just give you my own view.
        If you look at the history of our engagement with Asian
    nations in terms of conflict, it has not been one that
    encourages us to go further into military actions of that type,
    particularly if they are brought on in such a way that it just
    shows totally injudicious judgment in politics. One thing for
    Taiwan--and I have been supportive--to build up their military
    capacity, but at the same time they build that up they ought to
    build down the heated politics.
        We will now recess and resume this hearing in 222 Russell,
    the committee spaces, for such period of time as may be
    required.
        Thank you very much, gentlemen. We are adjourned.
        [Questions for the record with answers supplied follow:]
                   Questions Submitted by Senator John Warner
                   u.s.-china military-to-military relations
        1. Senator Warner. Admiral Fallon, under your leadership, U.S.
    Pacific Command (PACOM) has recently initiated an exchange of military
    officers with China to enhance mutual understanding and reduce the
    chances of miscalculation leading to hostilities. Do you believe there
    is an opportunity for expanded U.S.-China military-to-military
    engagement over the next few years?
        Admiral Fallon. I think we can do more with the PLA. PACOM strongly
    advocates a reinvigorated military-to-military relationship, focused in
    the near-term on mid-level officer exchanges, dialogue on humanitarian
    assistance and disaster relief experiences, and expanded educational
    interaction at the Asia-Pacific Center for Security Studies. At the
    same time, we have emphasized to the PLA that forward progress should
    be guided by principles of transparency and reciprocity--areas where
    improvement is necessary. I believe that these activities contribute to
    the overall U.S. efforts to shape the U.S.-China relationship and
    promote a peaceful resolution of the cross-strait conflict. However,
    the extent to which we are successful in encouraging more effective
    military-to-military engagement with the PLA over the next few years
    will be largely determined by the Chinese response.

        2. Senator Warner. Admiral Fallon, what are the benefits of
    increased military-to-military contacts, in your view?
        Admiral Fallon. Military-to-military interaction enhances mutual
    understanding of each other's military capabilities and intention,
    reducing the potential for miscalculation. Increased contact also
    encourages responsible Chinese participation in regional and
    international fora. We have encouraged Chinese engagement in areas of
    common interest, including counterterrorism and pandemic influenza.
    Through increased military-to-military activities, PACOM contributes to
    U.S. efforts to shape the broader U.S.-China relationship and promote a
    peaceful resolution of the cross-strait conflict.
        Importantly, as we move forward in the military-to-military arena,
    we continue to emphasize to PLA leaders the need for transparency and
    reciprocity--areas where PLA improvement is necessary to promote mutual
    understanding.

        3. Senator Warner. Admiral Fallon, do you recommend any changes in
    current legislated authorities or restrictions governing U.S.-China
    military-to-military exchanges in order to carry out a program of
    exchanges that you believe will be beneficial to the United States?
        Admiral Fallon. [Deleted.]

     northern atlantic treaty organization (nato) financing and acquisition
        4. Senator Warner. General Jones, you have been an advocate of
    changing the manner in which NATO peacekeeping missions are financed.
    As I understand it, your concept would require an increase in the NATO-
    common funded budgets so that the cost of operations would be shared
    more equitably, regardless of which members were actually contributing
    forces for a particular effort. How is this idea being received by your
    counterparts and colleagues at NATO?
        General Jones. The idea is receiving mixed reviews among the
    nations. While some newer members (such as Bulgaria and Romania) appear
    favorably disposed, some older members (such as France) are not.
        There is a concern that common funding could create disincentives
    that would not be good for the Alliance. For example, the United
    Kingdom is worried that expanding common funding might encourage
    nations to delay developing their own capabilities in the false belief
    that NATO would pay Belgium is concerned that common funding would make
    it too easy for the U.S. to push NATO into operations without gaining
    sufficient political consensus within the Alliance.
        At the same time, newer members with relatively small budgets and a
    relatively large willingness to deploy, would welcome the opportunities
    that increased common funding would bring.
        NATO's mission is changing from one of near static defense to one
    of collective security. In my view, the Alliance needs to transform its
    Cold War institutional processes such as funding so that they more
    effectively and efficiently support NATO's expeditionary operations in
    remote locations at strategic distances from the Euro-Atlantic region.

        5. Senator Warner. General Jones, you have also indicated that NATO
    should consider acquiring more defense equipment of its own, similar to
    the AWACs planes NATO currently owns and operates. What are your
    thoughts regarding whether NATO should acquire its own assets, such as
    lift capability?
        General Jones. NATO strategic lift capability covers sea and
    airlift. NATO is continuing to support long-term solutions to reduce
    strategic sealift shortfalls and encouraging nations to declare some of
    their capacities to be available to NATO. NATO is also examining the
    possibility of warning contractors through an early ``Warning Notice''
    that could improve shipping companies' response time.
        As NATO roles and missions continue to expand beyond the
    traditional area of responsibility (AOR), the Alliance will most
    certainly have an increasing need for airlift to support those far-
    reaching operations. However, with few exceptions, NATO funding does
    not cover the procurement of military forces or of physical military
    assets such as ships, submarines, aircraft, tanks, artillery, or weapon
    systems. Military manpower and materiel are assigned to the Alliance by
    member countries, which remain financially responsible for their
    provision.
        An important exception is the NATO Airborne Early Warning and
    Control Force, a fleet of radar-bearing aircraft jointly procured,
    owned, maintained, and operated by member countries and placed under
    the operational command and control of a NATO Force Commander
    responsible to the NATO Strategic Commanders. NATO also finances
    investments directed towards collective requirements, such as air
    defense, command and control systems, or Alliance-wide communications
    systems which cannot be designated as being within the responsibility
    of any single nation to provide. Such investments are subject to
    maintenance, renewal, and ultimately replacement in accordance with
    changing requirements and technological developments and the
    expenditures this requires also represent a significant portion of NATO
    funding.
        National and multinational programs such as Strategic Airlift
    Interim Solution (SALIS) contribute to overall NATO airlift
    capabilities, however the SALIS program relies on a fixed number of
    airframes, not in the possession of NATO. Nations must continue to
    acquire a modern and capable means by which to deploy forces in support
    of alliance/national operations. The A-400M program is absolutely
    essential to improving NATO's deployment posture and nations must see
    it through. In addition, NATO is examining securing it own strategic
    airlift capability over which it would operational control. Military
    advice has been provided on this specific initiative and currently sits
    with NATO HQ.

        6. Senator Warner. General Jones, if NATO were to acquire large and
    costly defense items, do you think NATO should use a competitive
    bidding process to acquire such assets? How would such a process work?
        Admiral Fallon. In the vast majority of cases, yes, the acquisition
    process should be by competitive bid. There are rare occasions due to
    expediency or supply that could make the competitive bid process
    cumbersome.
        U.S. industry may use a number of avenues in seeking business
    opportunities associated with NATO. These include pursuing
    International Competitive Bidding (ICB) opportunities through the U.S.
    Department of Commerce as well as non-ICB opportunities directly with
    the NATO Maintenance and Supply Agency; the NATO Consultation, Command,
    and Control Agency (NC\3\A); the Supreme Headquarters Allied Powers
    Europe; and the Supreme Allied Commander Transformation.
        There is already an established precedent concerning NATO's
    acquisition processes for large costly defense items. Under the NATO
    Infrastructure Committee the NATO Security Investment Program has
    managed common funded programs that support the Alliance. Here are
    three examples of competitively bid program efforts active in NATO.
        The NATO ACCS Level of Operational Capability 1 (LOC1) program is a
    NATO-funded command and control program being implemented in NATO
    Europe. The system will provide both static and deployable assets as
    part of the NATO Reaction Forces.
        NATO also has joined the Radar System Improvement Program (RSIP), a
    multinational cooperative effort. RSIP will improve the E-3's radar by
    increasing the sensitivity of the pulse Doppler radar so the aircraft
    can detect and track smaller stealthy targets over a longer range.
        Air Command Systems International, a joint venture equally owned by
    Raytheon Company and Thomson-CSF, has been awarded four additional NATO
    Air Command and Control Level of Capability 1 (ACCS LOC1) contracts for
    work associated with validation sites in Belgium, France, Germany, and
    Italy.

                funding for the joint pow/mia accounting command
        7. Senator Warner. Admiral Fallon, the Joint POW/MIA Accounting
    Command (JPAC)--which is subordinate to the PACOM--performs the crucial
    and sensitive job of recovery and identification of the remains of U.S.
    servicemembers from past wars, including World War II, Korea, Vietnam,
    and more recent conflicts. Funding for JPAC operations in fiscal year
    2006 has been reduced significantly and, even though some actions have
    been taken to restore some of the funding, JPAC's level of effort in
    Southeast Asia--including in Vietnam and Laos--will be reduced by 22
    percent and the world-wide level of effort will be down about 50
    percent. What is the current status of funding for JPAC?
        Admiral Fallon. After applying a proportional share of fiscal year
    2006 congressional marks, POM taxes, and program review adjustments,
    the JPAC operating budget for fiscal year 2006 was $44,004,000. Of
    note, to offset expenses and permit increased mission activity, Navy
    provided an additional $2,500,000.
        The JPAC annual operating plan strives to meet the following
    objectives: 10 Joint Field Activities (JFAs) in Southeast Asia (SEA), 5
    JFAs in North Korea, and 10 JFAs worldwide. In fiscal year 2006, JPAC
    expects to complete 10 of 10 JFAs in SEA and 8 of 10 planned JFAs
    worldwide. The U.S. suspension of operations in North Korea prevents
    JFAs in that country.
        Finally the Department of Defense (DOD) is working with the Navy,
    PACOM, and JPAC to identify the appropriate operational tempo and the
    budget to support it for both fiscal year 2007 and beyond.

        8. Senator Warner. Admiral Fallon, what is the rationale for
    reducing funding for JPAC?
        Admiral Fallon. Throughout JPAC existence, the only reductions
    applied to its funding have been a proportionate share of
    congressional, OSD, and Navy marks that were levied against PACOM
    baseline resources. The JPAC baseline represents approximately 30
    percent of the total PACOM BA-1 (O&M, N) baseline. When taxes/marks are
    levied against PACOM, JPAC funds are part of the base against which
    those taxes are calculated.

        9. Senator Warner. Admiral Fallon, what is the status of recovery
    operations in North Korea?
        Admiral Fallon. The U.S. suspended JPAC operations in May 2005, at
    the conclusion of the first joint field activity, in response to
    aggressive DPRK actions regarding nuclear weapons and belligerent
    rhetoric against the United States.

                           host nation burdensharing
        10. Senator Warner. General Jones, in your written statement
    describing United States European Command's (EUCOM) Strategic Theater
    Transformation (STT) plan, you state that almost a billion dollars of
    new construction is required in fiscal year 2007 to enhance existing
    infrastructure as well as establish new bases for rotational forces.
    Citing the need for continued investment, you specifically mention
    ``shifting our focus to improving the ability of our new allies and
    partners to be able to deploy rapidly and operate with our forces.'' In
    your plan, have you considered the desire and ability of host nations
    or NATO to share the investment burden and to contribute towards the
    construction of new facilities and housing?
        Admiral Fallon. As a preliminary matter, every project is examined
    first for NATO funding eligibility as part of a prefinancing agreement.
    NATO Security Investment Program (NSIP) provides the funding for NATO
    facilities investment. NSIP funding can only be used to construct NATO
    operational facilities that meet NATO identified minimum military
    requirements.
        At each step of EUCOM's transformation, we have aggressively sought
    to have allies and partners pay their fair share of the burden in
    material, operations, and manpower costs. For example, at new Forward
    Operating Sites (FOS) in Eastern Europe, EUCOM forces are basing troops
    at host nation bases, and using host nation training ranges. EUCOM is
    not paying for these bases or ranges; rather we are only paying for use
    of facilities for EUCOM forces and any new structures that are
    specifically needed to carry out our missions. Our NATO allies stand
    behind our transformation efforts, and we have been able to direct NATO
    funding away from legacy bases, and have the resources directed towards
    enduring facilities. Additionally, EUCOM is closing bases that don't
    fit into our strategy to combat current and future threats. In the long
    run, changes EUCOM makes today will save U.S. taxpayers millions, and
    at the same time put EUCOM in a position to best meet evolving security
    challenges.

        11. Senator Warner. General Jones, can some of this construction,
    which also supports the host nation's military and NATO forces, be
    funded by NATO?
        General Jones. The operational facilities and family housing
    projects requested in the fiscal year 2007 presidential budget request
    are for U.S. only facilities and NSIP or host nation military funding
    is not authorized.
        Only United States military families reside in United States funded
    family housing. Additionally, it is the responsibility of the host
    nation to fund quality-of-life for their military personnel.

        12. Senator Warner. General Jones, I recently met with local German
    Government officials who expressed the most sincere desire to build new
    housing for our military personnel at Ramstein Airbase. Are you aware
    of this offer and have you had the chance to evaluate it?
        General Jones. Yes, EUCOM is aware of the offer and U.S. Air Forces
    Europe is actively exploring cooperative ventures with the State
    Minister Karl-Peter Bruch of Rheinland-Pfalz (R-P). The State Minister
    has proposed a plan for cooperation but we cannot fully evaluate it
    until the German Government establishes the details and specific
    timelines of their plan. R-P officials are concerned the local economy
    cannot satisfy the combined housing demand of both U.S. military and
    local German families, and this must be considered in their plan. They
    view their housing construction plans and incentives as a necessary
    supplement to the U.S. family housing construction program on base, not
    as a substitute. Recent dialogue with R-P officials suggests their
    initiative may gain momentum and eventually help support the
    Kaiserslautern Military Community's overall housing needs. We continue
    to aggressively work with Minister Bruch's staff to coordinate our
    efforts that provide a satisfactory housing solution for our military
    families and will keep you apprised of developments as they occur.

              military construction (milcon) investment in romania
        13. Senator Warner. General Jones, the fiscal year 2007 budget
    includes a request for the first phase of military construction funds
    to support the rotational basing of U.S. forces in Romania. The United
    States recently signed a base support agreement with the Romanian
    government to allow access to their military bases and training ranges,
    and is currently negotiating with the Government of Bulgaria for the
    same purpose. How may U.S. personnel do you envision will maintain in
    Romania and Bulgaria?
        General Jones. U.S. Army Europe is spearheading the establishment
    of the Eastern European Task Force (EETAF) split-based between Romania
    and Bulgaria. EETAF command and control will be a Seventh Army command
    post at Mihail Kogalniceanu (MK) Airbase, Constanta, Romania, manned by
    approximately 100 personnel. Rotational Brigade sized units deploying
    to EETAF will be ``split-based'' in Novo Selo, Bulgaria (up to 2,500
    servicemembers) and Babadag, Romania (up to 1,700 servicemembers). Also
    at MK, U.S. Air Forces Europe is looking to establish a small support
    unit (20-60 airmen) to support fighter aircraft training deployments to
    the region. The daily presence (rotational brigade and EETAF Command
    Post) between Romania and Bulgaria locations would range from 1,500-
    4,000 personnel based on the types and size of units participating.
        In addition, Special Operations Forces (SOF) in Romania and
    Bulgaria will be limited to short duration deployments to conduct
    training. Approximate personnel during these deployments will range
    from 10 to 300 personnel, depending on the type of training event.

        14. Senator Warner. General Jones, what type of training will these
    forces undertake?
        General Jones. Training will center on theater security cooperation
    events that support the global war on terrorism--i.e., measures which
    we believe deliver very high value for a relatively small investment.
    These would include:

             EUCOM or Joint Staff-directed exercises;
             enhance interoperability and contribute to future coalitions;
             combined/partnership training with host nation or other NATO/
            regional partner armies; and
             individual soldier or unit level collective training
            opportunities in host nations.

        In addition, time will be available for bilateral training with
    host nation forces to enhance their ability to support the global war
    on terrorism, and expose them--and particularly their noncommissioned
    officers--to U.S. Army soldiers.
        Units will also have time to conduct unit training which is key to
    maintaining individual and collective proficiency.

        15. Senator Warner. General Jones, will the training syllabus be
    unique to these two countries?
        General Jones. All land and air forces that deploy to Romania and
    Bulgaria will be fully trained to conduct operations throughout the
    spectrum of warfare. This allows U.S. forces to focus on improving NATO
    and eastern European partner nations capability during training
    evolutions. Training objectives for each country will require a
    tailored approach to bring units at different proficiency levels
    operating with equipment that may not yet meet NATO Standardization
    Agreement interoperability.
        Operational land and air forces that will deploy for up to 6-month
    deployments to FOS in Romania and Bulgaria will conduct
    interoperability training exercises on a bilateral and multilateral
    basis. U.S. objectives are to develop and enhance military capability
    of former eastern bloc nations making these nations more interoperable
    with NATO. The overarching goal is to anchor the eastern expansion of
    the NATO Alliance through FOSs and training ranges in Romania and
    Bulgaria and promote cooperative security relationships that will
    advance our national interests.

        16. Senator Warner. General Jones, will the bases in these two
    countries serve strictly as training locations or power projection
    platforms?
        General Jones. The EETAF will be a credible expeditionary land
    force that will serve as a powerful instrument for building military-
    to-military relationships and partnership capabilities that will
    enhance U.S. interests in the Black Sea Region. The move to Romania and
    Bulgaria will be beneficial in helping these former eastern bloc
    countries transform their militaries into vital assets for inclusion
    into NATO missions. Romania and Bulgaria offer greatly improved
    training opportunities over legacy bases in Central Europe, providing
    access to ranges without encroachment issues.
        Land and air forces will deploy from the U.S. and Europe to FOS
    installations in Romania and Bulgaria for multi-month deployments. The
    DOD and EUCOM envision deployments will be up to 6 months in duration.
    Along with training at ranges in Romania, Bulgaria, and Germany, EETAF
    forces will deploy for shorter periods from the EETAF FOSs to training
    facilities in Eastern Europe and Southwest Asia to conduct NATO,
    bilateral, and multi-national training. In the case of contingencies
    that require deployment of the forces deployed to Bulgaria and Romania,
    the EETAF FOS installations will serve as a staging and departure base
    to the region of conflict. U.S. presence in EETAF will provide
    strategic reassurance of an enduring U.S. commitment to Central and
    Eastern Europe.

        17. Senator Warner. General Jones, has EUCOM developed base master
    plans for each location in these countries that can provide this
    committee an idea of the total expected investment in facilities and
    infrastructure required to support U.S. operations?
        General Jones. The fiscal year 2007 EUCOM Master Plan contains
    primary facilities at FOS in Romania and Bulgaria. The President's
    fiscal year 2007 budget request includes facility costs of $34.8
    million in military construction to achieve initial operating
    capability for 1,000 servicemembers in Babadag, Romania. The Phase II
    funding will support an additional 700 servicemembers in Babadag,
    Romania and will achieve Full Operating Capability for 2,500 soldiers
    in Bulgaria and 100 servicemembers at MK Airbase, Romania.
        The facilities at FOSs in Romania and Bulgaria will include
    container or prefabricated/panel type structures to serve as
    expeditionary-type billets, operational, and maintenance facilities.
    These structures will be simple, lightweight, and modular to support
    the requirements of rotational training units.
        The one-time costs associated with establishing the FOSs for EETAF
    are as follows:

                                                [In millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                   Fiscal Year 2007 (Phase   Fiscal Years 2008-2013
                                                                             I)                    (Phase II)
    ----------------------------------------------------------------------------------------------------------------
    MILCON......................................................                     34.8                      73.3
    OMA.........................................................                      6.1                      11.9
    OPA.........................................................                      6.9                      15.5
    Total (one-time)............................................                     47.8                     100.7
    ----------------------------------------------------------------------------------------------------------------

        The facility support operations costs associated with the FOSs for
    EETAF are as follows:

                                                [In millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                       Fiscal Year 2007            Future Years
    ----------------------------------------------------------------------------------------------------------------
    OMA..........................................................                      5.0     12.4 million per year
    ----------------------------------------------------------------------------------------------------------------

        The operations costs include only those fixed costs to operate and
    maintain the facilities regardless of troop presence.
        Other variable costs, such as transportation, sustainment of
    soldiers and equipment, and training support, will be incurred when
    units rotate through EETAF. These costs will vary according to the type
    and size of the unit, length of their rotation, and location of
    training or Theater Security Cooperation engagements. In addition, the
    availability of units will be dependent on other global commitments.
    The initial rotations will be at the combined arms task force level
    (BCT-) for ``proof of principal'' and subsequent rotations for planning
    purposes will be full brigades. The following are notional costs for a
    6-month rotation for a full brigade:

                            [In millions of dollars]
    25.7......................................  Transportation of a brigade
                                                 from Continental United
                                                 States (CONUS) (fiscal year
                                                 2008 at the earliest).
    7.3.......................................  Transportation of brigade to/
                                                 from exercises.
    9.8.......................................  Sustainment (e.g., sup
                                                 services personnel, AT/FP,
                                                 food, laundry).
    O.8.......................................  Training Support from Joint
                                                 Multi-National Training
                                                 Center.
    3.9.......................................  Facility Support including
                                                 utilities and guards.
    39.0......................................  Unit (BDE) OPTEMPO (includes
                                                 maintenance of aircraft,
                                                 tactical and non-tactical
                                                 vehicles). \1\

    \1\ Unit OPTEMPO is not an incremental cost and will be incurred
      regardless of whether the unit is in garrison or deployed.

        In addition, the United States Air Forces in Europe (USAFE) is
    planning to establish a small unit of approximately 30 personnel at MK
    Airbase, Romania beginning in 2007 to facilitate Weapons Training
    Deployments. To prepare for this, USAFE in fiscal year 2006 is
    executing repairs to the MK Airbase runway and taxiways and is
    constructing a new fire station and a combined maintenance and
    logistics facility using modular construction. The estimated cost for
    these fiscal year 2006 projects is $1.2 million for the runway and
    taxiway repairs and $750,000 for the two buildings (from Operation and
    Maintenance funds). USAFE has not yet established the budget for this
    facility beyond 2006.

        18. Senator Warner. General Jones, are you also planning to
    construct the infrastructure required to support the mobility
    requirements of U.S. forces in these countries? If not, how will EUCOM
    address these strategic mobility requirements?
        General Jones. No new or additional Air Point of Debarkation (APOD)
    or Reception, Staging, Onward-Movement, and Integration (RSOI)
    facilities will be required to move land, sea, and air forces in and
    out of Bulgaria and Romania. EUCOM's intent is to utilize host nation
    infrastructure in existing commercial and military facilities.
        Sea: All equipment is loaded on railcars at the point of
    origination (assuming the unit is not stationed in a port city) and
    railed to the port of embarkation. At the port all equipment is loaded
    onto one or two vessels (dependent upon size of vessels and type of
    Brigade Combat Team (BCT) and travels to the port of debarkation (SPOD)
    which is Burgas, Bulgaria and Constanta, Romania. At the port of Burgas
    and Constanta the equipment is discharged and road marched to the FOS.
    Tracks, containers and NMC equipment will be line hauled (tractor/
    trailer) to the FOS. Travel time from the port to the FOS is
    approximately 60 to 90 minutes.
        Rail: All equipment is loaded on rail cars at the point of
    origination and moved to rail heads in Romania and Bulgaria. Equipment
    is offloaded at the rail head and road marched to the FOS. Tracks,
    containers, and NMC equipment will be line hauled (tractor/trailer) to
    the FOSs. The travel time from the rail head to the FOS is
    approximately 15 to 45 minutes.
        Personnel: All BCT personnel are embarked on hired wide body
    aircraft at the nearest air port of embarkation and transported to the
    APOD, which is either Bezmer, Bulgaria or MK Airbase (Constanta),
    Romania. Personnel are then transported by bus to the FOS. Travel time
    from the APOD to the FOS is approximately 30 to 60 minutes.
        Facilities infrastructure (sea ports, air ports, rail heads) is
    adequate for land, air, and sea rotational deployed forces. Overall
    RSOI operations (logistical portions) will be planned and managed by
    the logistics staff of the EETAF headquarters (14 military and 17
    civilians). The intent is maximize the use of personnel from the
    rotating BCT to assist with all RSOI functions (each BCT has movement
    control and deployment cells) from road marching vehicles to planning
    redeployment. As required, host country military and local national
    contractors will be used to augment U.S. forces at the APOD/SPOD or
    railheads.

                        training of u.s. forces in korea
        19. Senator Warner. General Bell, as we draw down our forces on the
    Korean Peninsula and consolidate their garrisons in three areas south
    of the Han River, the only large training area for U.S. ground forces
    will be located, in a reduced footprint, approximately 150 kilometers
    to the north. Meanwhile, U.S. air forces stationed on the peninsula
    have lost a key air to ground training area and are currently sharing a
    range with the host nation. What is your assessment of how the
    consolidation of U.S. forces on the Peninsula will affect their
    training?
        General Bell. The consolidation of U.S. forces into enduring hubs
    will have a net positive impact on training. The consolidation of our
    units also results in the consolidation of our training support
    resources resulting in more efficient home station training. Our
    installation master plans for the enduring hubs provide for adequate
    training facilities to sustain individual, crew, and staff skills
    utilizing the live, virtual, and constructive training domains.
        Units will deploy to our enduring major training facilities north
    of Seoul for gunnery and large scale maneuvers on joint use ROKA
    training areas and ranges. The master plans for our enduring training
    facilities at Rodriguez and Story Live Fire Complexes have addressed
    adequate training and life support facilities to support unit training.
    Aircraft from every Service will use combined ranges and select off
    peninsula training opportunities to maintain at least minimum readiness
    requirement in the near-term, with the ability to meet training
    requirements upon the completion of improvements to Chik-do Range this
    fall. All units, regardless of which Service, will continue to deploy
    to these facilities to train in much the same way they do today.
    Additionally, the USFK Battle Simulation Center and the Warrior
    Training Center (supporting 2d Infantry Division) will be replaced with
    a newly constructed modem state-of-the-art simulation center capable of
    meeting all virtual and construction simulation requirements. As U.S.
    forces are consolidated in Korea, they will remain well-trained and
    fully-prepared to execute their wartime mission.

        20. Senator Warner. General Bell, what are the training
    requirements for our forces stationed in Korea, and what is being done
    to ensure they will be adequately trained?
        General Bell. All Service components in Korea train to the same
    standard of readiness as required by their respective Service, with
    their mission set being tailored to support their wartime mission.
        In order to meet our future training requirements, we must continue
    to ensure the proper training environment exists. With the
    consolidation of forces on the Korean peninsula, we have secured the
    best possible state of land training capabilities available to meet
    both current training requirements and those of future force
    modernization as driven by transformation. Conditions are set for added
    training capacity, the elimination of encroachment and infringement,
    the ability to secure our remaining land acquisitions towards the
    future, and the provision of land areas within which we can train our
    weapon systems that have large training area requirements. Our master
    planning efforts for our enduring training facilities have been focused
    to ensure that units in Korea will have the training enablers they
    need, in the locations they need them, to ensure that our forces remain
    trained and ready.
        With the completion of Chik-do Range this fall, we will be able to
    meet the Services' requirements for air to ground training. U.S. naval
    aviation coordinates with the U.S. Air Force and ROK Air Force to gain
    valuable Korean Theater Operations air to ground training when U.S.
    Navy Carrier Strike Groups deploy in support of exercise Foal Eagle.
        Additionally, U.S. and ROK Marine Forces are developing a Combined
    Expeditionary Warfare Training Capability that will significantly
    increase training opportunities within the Korean peninsula. U.S.
    Marine Forces are also expanding training facilities and life support
    areas in key locations on the peninsula which will facilitate increased
    training.
        SOF terminal guidance operations and close air support training
    opportunities were reduced through training range closures. With the
    reallocation of ranges on the peninsula and the modifications to Chick-
    do Range, SOF training opportunities will increase.
        For every Service, the training programs in Korea are effective at
    all levels and ensure our forces are combat ready at all times. Your
    continued support to our joint and combined training programs and
    theater exercises are critical to our readiness.

                         land partnership plan in korea
        21. Senator Warner. General Bell, the Land Partnership Plan
    developed by the ROK and the U.S. will result in the consolidation of
    U.S. personnel at Camp Humphreys and Osan Airbase, and the closure of
    59 installations formerly used by U.S. forces. Another basing
    initiative will close our main headquarters in Seoul at Yongson and
    relocate it to Camp Humphreys. Can you provide an update on the
    progress of these two initiatives. What challenges are you currently
    facing?
        General Bell. We are well into execution of the Concept Plan
    briefed in 2003. To date, we have reduced the troops assigned to Korea
    by 8,000, closed 31 installations, and transferred 7 missions that had
    been performed by U.S. forces to ROK forces. The Republic of Korea has
    already invested over $1.8 billion to support the plan, and has
    completed the purchase of over 2,800 acres of land to expand our
    enduring installations. This fall, we will complete master planning and
    implement a bilateral program management organization.

        22. Senator Warner. General Bell, how are these two initiatives
    being funded and what is the current estimate for the total U.S.
    investment?
        General Bell. The relocation is funded by a combination of Korean
    government funds, private investment under a build-to-lease program,
    and U.S. MILCON funding. Of these funding sources, U.S. MILCON is less
    than 10 percent of the total estimated cost of $8 billion. Since fiscal
    year 2003, we have focused $580.5 million of U.S. MILCON into our
    enduring installations to support the plan. In fiscal year 2007, we
    have asked for $137.8 million, and plan to ask for another $89.5
    million in fiscal year 2008 to complete the MILCON portion of the
    relocation. Most of these MILCON investments are to provide barracks
    and dorms for our servicemembers at our enduring installations.

        23. Senator Warner. General Bell, you mentioned in your comments
    that an opportunity exists for further reductions of U.S. ground forces
    in Korea. How would this opportunity affect investment plans at Camp
    Humphreys?
        General Bell. Our current and planned investments, to include the
    DOD MILCON proposed for fiscal year 2007 at Camp Humphreys, are prudent
    and necessary under all the possible scenarios I currently envision for
    USFK. I can assure the committee that we will only request
    congressional support and funding for capital investments where we are
    certain that the improvement is located at an enduring installation and
    will have the desired positive impact on the force--regardless of
    potential future reductions. I will review carefully every requested
    project and only send forward those projects in which I am convinced
    the investment is necessary, and in the best interests of our
    readiness, our servicemembers, their families, and the United States.

                              construction in guam
        24. Senator Warner. Admiral Fallon, the fiscal year 2007 budget
    request includes over $180 million for new construction and housing
    improvements on the island of Guam. This follows last year's
    authorization of over $190 million for the same purpose. The
    Departments of the Navy and Air Force plan another $886 million in
    construction over the next 4 years. Also, the United States is
    currently in negotiation with the government of Japan to relocate 7,000
    marines from Okinawa, which will result in additional construction on
    Guam totaling well over a billion dollars. Has PACOM assessed whether
    the utility infrastructure on Guam, specifically electricity, water,
    and waste water, can sustain the additional military requirements?
        Admiral Fallon. PACOM has taken the lead role in coordinating
    various Service planning and infrastructure expansion initiatives in
    Guam. This joint planning process has been underway since March 2005
    and received additional emphasis since the recently announced plan to
    transfer significant USMC personnel and capabilities from Japan to
    Guam. This joint effort has been examining infrastructure, facilities,
    support requirements, and environmental considerations and will provide
    DOD leadership detailed data to make informed decisions regarding Guam
    and Commonwealth of Northern Marianas. A final report is expected by
    July 2006.
        Planning activities in Guam are closely linked with each of the
    Service initiatives as well as regional planning efforts.
        At the recently concluded U.S.-Japan negotiations, the Government
    of Japan agreed to provide $6.09 billion of the currently estimated
    $10.27 billion required for the Marine Corps relocation from Okinawa to
    Guam. The U.S. will fund the remainder of the required infrastructure
    improvements. PACOM is working closely with the Services and DOD to
    ensure resources are programmed for the MILCON needed to support these
    force posture changes.

        25. Senator Warner. Admiral Fallon, do masterplans exist for our
    bases on Guam to coordinate the requirements of all the new missions
    and functions?
        Admiral Fallon. We are currently developing a Guam master plan that
    will establish infrastructure, facilities, and support requirements as
    well as develop costs and identify environmental issues for future
    basing on Guam.
        The existing Service (Navy and Air Force) base master plans served
    as starting points for the PACOM-led planning effort, which we expect
    to conclude in July 2006.

        26. Senator Warner. Admiral Fallon, what types of training will be
    available for our forces stationed on Guam? Will this training be
    sufficient to meet requirements? If not, how does the Department plan
    to address this issue?
        Admiral Fallon. As U.S. force capabilities are adjusted, training
    facilities and capabilities on Guam and the Northern Marianas will need
    to be expanded and improved.
        Currently available training airspace and target ranges on Guam
    will not adequately support the robust aircraft/aircrew training or the
    next generation of aircraft being envisioned for Guam. Farallon De
    Medinilla (FDM), the only live ordnance range in the area, is not
    compatible with current or future advanced weapons capabilities. The
    small land footprint, lack of scoring instrumentation, and encroachment
    issues at FDM severely restrict the types and quantities of training
    munitions that can be used. FDM lacks radar coverage and air
    controllers as well as telemetry devices for scoring accuracy and
    feedback to aircrews. The Joint Guam Military Master Plan Working Group
    is studying these challenges and will recommend appropriate solutions/
    mitigations.
        Navy training facilities available on Guam are not at desired
    levels. Simulators available to CONUS units, for example, do not exist
    on Guam. The Guam Distance Learning Center is being upgraded to provide
    training to Guam homeported submarines (SSN). The Center can currently
    provide 23 of the required 101 courses for SSN training and is
    upgrading the number of courses available. Forward Deployed Naval
    Forces units have historically relied on actual operations and U.S./
    coalition field exercises to provide training and experience.

                         environmental issues in korea
        27. Senator Warner. General Bell, the United States is in the
    process of closing and returning to the ROK over 59 installations used
    by U.S. forces as we draw down our presence and consolidate remaining
    forces south of the Han River. The Korean press has recently reported
    that U.S. and Korean negotiators are discussing responsibility for
    environmental restoration at these sites prior to their return to our
    hosts. What responsibilities and liabilities does the United States
    have for environmental issues at bases being returned to South Korea
    under our current agreements with the South Korean government?
        General Bell. Under our current agreements with the Korean
    government, the United States has committed to implement the DOD policy
    of remedying any known, imminent, and substantial endangerment to human
    health and safety caused by U.S. forces. The United States is not
    obligated to restore facilities and areas, and in return the Korean
    government is not obligated to pay the United States any compensation
    for residual value.

        28. Senator Warner. General Bell, what is the position of the
    United States on paying for environmental restoration costs at these
    sites?
        Admiral Fallon. The United States is responsible for the costs
    associated with remedying any known, imminent, and substantial
    endangerment to human health and safety caused by U.S. forces at the
    sites. In the best interests of the alliance, and in our role as good
    stewards of the land, the DOD is sharing with our Korean ally the
    specific actions we will take in fulfilling this responsibility.
    Additional restoration measures may be taken by the host nation at
    their own expense. We will begin returning vacated camps to the ROK
    government in the very near-term.

        29. Senator Warner. General Bell, what cleanup standards will
    apply?
        General Bell. Cleanup standards for U.S. forces in Korea are
    determined by the Commander USFK, based on DOD policy and guidance, the
    best interests of the alliance, and our commitment to act as good
    stewards of the land. In this regard, the DOD is continuing to share
    with our Korean ally actions we will take regarding land return issues.
    We will begin returning vacated base camps to the ROK government in the
    very near-term.

        30. General Bell, what is the estimated cost and time to complete
    any required cleanup?
        General Bell. We will complete all of our required actions within 6
    months of closing each base. Our current estimate of the cost is less
    than $20 million.

        31. General Bell, how will this issue impact turnover of the bases
    to South Korea?
        General Bell. The Korean government has asked the United States to
    perform environmental remediation substantially beyond what is required
    by our agreements. The discussion of this request has delayed the
    return of the facilities and areas that have been closed over the last
    year and a half. Both governments have committed to resolving this
    dispute over the next few months, which will allow us to quickly turn
    over the bases we have closed. We expect to begin turning over base
    camps in the very near-term.
                                     ______

                   Questions Submitted by Senator John McCain
                             eucom/security issues
        32. Senator McCain. General Jones, how successful have you been in
    implementing your STT plan?
        General Jones. STT continues in Europe and is an ongoing process
    that is being continuously evaluated in the context of the Secretary of
    Defense's Global Defense Posture. The next 2 years represent a critical
    phase of the EUCOM STT as we restructure land forces for the 21st
    century. This will enable EUCOM to more appropriately orient our forces
    south and east towards the ``Arc of Instability'' thereby increasing
    our strategic effectiveness throughout a greater proportion of our AOR.
        In the areas of command and control, USAFE, Marine Forces, Europe
    (MARFOREUR), and Navy, Europe have streamlined and consolidated their
    staffs, developing Joint Task Force capable command and control
    structures that can deal with day-to-day command issues, and also
    seamlessly transition to deal with contingencies.
        United States Army, Europe's (USAREUR) transformation efforts are
    much broader in scope than the other EUCOM components. Nevertheless,
    following the establishment of the EETAF and reorganization of the
    Southern European Task Force in Vicenza, Italy--in approximately 2010--
    we expect a consolidation of USAREUR and V Corps into 7th Army.
    Department of State (DOS) negotiations are complete for Romania and
    Bulgaria. In July 2007, elements of the Germany-based Stryker Brigade
    Combat Team will rotate to EETAF for two 6-month deployments. In spring
    2008, the EETAF command post will be established at Mihail Kogalniceanu
    Airbase, Romania. In July 2008, the first full Brigade Combat Team will
    rotate to EETAF from the United States, ``split-based'' between
    Babadag, Romania, and Novo Selo, Bulgaria. Pending resource
    availability, new Brigade Combat Teams will rotate in every 6 months or
    as exercise employment timelines dictate. Troops will train not only
    with Bulgarian and Romanian forces, but will also conduct security
    cooperation missions with other allies and partners.

        33. Senator McCain. General Jones, what, if any, difficulties or
    shortfalls have you incurred while striving to obtain your goals?
        General Jones. Our biggest single obstacle has been obtaining a
    consolidation base for Special Operations Command, Europe (SOCEUR) in a
    geographically advantageous location south and/or east of the Alps.
    SOCEUR has looked diligently for a suitable location to consolidate its
    forces, but has run into numerous problems with training area
    accessibility and with freedom of action, i.e., the ability to perform
    tasks and deploy to locations that comply with local laws. Currently,
    the U.S. Special Operations Command (SOCOM) is reviewing its worldwide
    basing structure--it remains to be seen what its recommendations will
    be with regard to keeping SOFs assigned in EUCOM.
        Our main goal goes beyond preparing for the next war--rather we
    seek to prevent the next war in our AOR. Investments in our newest NATO
    allies and Partnership for Peace nations will allow us to engage these
    democracies and set the infrastructure needed to prevent problems. If
    we are faced with a contingency, U.S. engagement south and east in the
    AOR will have set the stage to build coalitions with these allies and
    partners to meet the threat.
        Our Theater Security Cooperation programs remain the centerpiece of
    our efforts to promote common security to strengthen the transatlantic
    link and provide a means to building partnership capacity. Our aim is
    to enable emerging democracies to defend their homelands, defeat
    terrorist extremists, develop common economic and security interests,
    and respond to health crises, such as pandemic influenza outbreaks. As
    we transform EUCOM it is imperative that we retain the necessary force
    structure that will more effectively enable this capacity building with
    our security partner nations. Therefore, it is very important that we
    have a continuous presence in EETAF in order to have a cadre for our
    security cooperation activities, and that we keep special forces units
    in EUCOM to further enhance NATO's capability.

        34. Senator McCain. General Jones, where are the areas we can begin
    to develop a common understanding of, and agreement on, a security
    architecture that is viable in the 21st century?
        General Jones. Perhaps the greatest alliance in history, NATO
    remains the key institutional link to our allies across the Atlantic.
    It is upon NATO that we might be able to frame a new understanding and
    agreement on a viable security architecture for the 21st century.
    However, in order to agree on the architecture to provide for common
    security, we need to first agree on the threats that require it.
        NATO's Cold War success in deterring a conventional military attack
    on the west depended on an embrace of a unifying concept of common
    defense deterrence of the Soviet threat. During this period, there was
    little doubt about the Alliance's ``raison d'etren,'' either with
    policymakers or with the general public. In the same spirit of
    identifying those unifying concepts where threats require preparations
    for common defense, it would be appropriate for nations at the upcoming
    2006 NATO Summit to reaffirm NATO's role in providing transatlantic
    security and the Alliance's impact on global strategic security. Making
    this reaffirmation in this high-visibility forum would also begin the
    process of educating the publics of NATO member nations about the
    Alliance's role, importance, and commitment to providing the common
    security benefits of the transatlantic link to other nations and
    regions throughout the world.
        A key feature of this new construct of strategic stability is
    interdependent instability, that is, instability within one region
    creates instability for the entire global economic, security, and
    political system. Global security in the 21st century is threatened not
    only by the enemies of stability and security who want to attack the
    current international security system to weaken, disrupt, and split it,
    but also by the instability resulting from natural disasters, non-
    governance in regions throughout the world, proliferation of weapons of
    mass destruction (WMD), and the global narcotics trade. NATO's success
    in both realms leads to a critical question: in what other areas might
    NATO engage, from a strategic standpoint, to help provide for common
    security?
        In naval terms, NATO's deterrent purpose during the Cold War was
    the ``anchor point'' upon which the stability of the Alliance rested.
    With the end of the Cold War, however, the anchor point stabilizing the
    Alliance in turbulent seas was removed and the nations have not yet
    agreed upon a replacement.
        Tomorrow's NATO could assume even greater significance in
    international affairs as the Alliance strives to confront new threats
    that not only endanger member nations, but arguably global strategic
    stability. A key component of such an effort would be the clear
    articulation to member nations' populations of the Alliance's new
    raison d'etre for helping to enhance common security, regardless of the
    means through which member nations might choose to do so. There are as
    many as five anchor points in which the Alliance could contribute to
    common security.
        1. Global War on Terrorism--After the attacks on New York City and
    Washington, DC, on September 11, 2001, there were many who believed
    NATO's new anchor point would be the global war on terror. This belief
    was supported by NATO's actions when the NATO Military Committee
    subsequently approved MC 472, NATO Military Concept for Defence Against
    Terrorism. But the global war on terrorism did not resonate with some
    nations to the same degree as the Cold War anchor point did during the
    20th century. Global war on terrorism is an anchor point, but it is not
    the only one, due primarily to the different philosophical and cultural
    outlooks on both sides of the Atlantic. On the one hand, the September
    11 attacks inflicted as deep a wound on the United States as anything
    that has ever been perpetrated on the Nation, to include the attack on
    Pearl Harbor in 1941. On the other hand, European nations have had more
    history and experience with terror attacks in recent decades, perhaps
    leading to a greater ability to recover quickly psychologically from
    such events. Neither the November 2003 Istanbul attacks, nor the March
    2004 Madrid bombings, nor the July 2005 London assaults led these
    nations to ask NATO to invoke Article V in response. NATO itself,
    through the approval of MC 472 in December 2002, approved a concept for
    combating terrorism, yet no further steps have been taken to develop or
    enhance the procedures outlined in the document.
        2. NATO and Stability, Security, and Reconstruction in the 21st
    Century--A second potential enduring anchor point might be stability,
    security, and reconstruction operations, an area where NATO already has
    extensive experience. The Alliance has been engaged on the ground in
    the Balkans for a decade, first in Bosnia and now in Kosovo. The
    Alliance's success in fulfilling many of the military tasks set out by
    the Dayton Accords has allowed Bosnia and Herzegovina to reach the
    point where starting the process of integration in to trans-Atlantic
    security organizations is conceivable. NATO also experienced success in
    Afghanistan, where it has led the International Security Assistance
    Force (ISAF) since August 2003. Such efforts are the most concrete and
    publicly visible missions that NATO performs.
        3. Critical Infrastructure Security--A third potential area NATO
    could consider for enhancing common security is its possible role in
    the future protection of critical infrastructure. As with terrorism,
    the ``point defense'' of infrastructure is a national sovereignty
    issue. However, could not the Alliance, on a strategic basis, provide a
    better capability to defend critical infrastructures, such as air,
    land, and sea communications?
        4. Energy Security--A fourth potential area where NATO could take
    steps to enhance common security could be ``energy security:'' ensuring
    the flow of energy to markets and consumers by assuring safe and secure
    access to its sources. The recent dispute between Russia and Ukraine
    over natural gas, and the spectre of a far-reaching impact of a lengthy
    disruption, demonstrates the importance of a diversified set of energy
    sources. Companies are developing new sources of oil and natural gas in
    an effort to diversify and to keep up with the rising demand.
        5. Weapons of Mass Destruction and Consequence Management--A fifth
    potential area--where the Alliance could provide common security is
    centered on WMD and the corresponding consequence management actions.
    In the very near future the international community could face, as
    during the Cold War, the possibility of the use of a WMD. This time,
    however, such a weapon would most likely not be delivered by an
    individual nation state, but by a non-state actor traveling through the
    seams of our political boundaries and acting on the perceived
    weaknesses in our willingness, our desire, our ability, and our
    organization to prevent such an event from occurring. The challenges
    and dangers the international community faces with the proliferation of
    WMD increase every day--the recent experience of A.Q. Khan, the father
    of the Pakistani nuclear program, serves as a sobering reminder of this
    threat.
        NATO has been, and needs to remain, a great Alliance; and great
    Alliances do great things. It is possible, even probable, that NATO's
    most important days and most important missions lie ahead in the
    future.

        35. Senator McCain. General Jones, in light of the changing
    security landscape that has emerged since the post-Cold War era, what
    are the changes that are taking place in both the NATO Alliance and the
    EUCOM to address present and future challenges?
        General Jones. NATO's ongoing expansion has moved the Alliance's
    influence eastward and EUCOM's focus mirrors this move.
        While NATO welcomes these eastern European nations, their military
    capabilities are not yet completely interoperable with other NATO
    forces. EUCOM transformation efforts will improve new member
    interoperability, but will require significant focus on security
    cooperation and considerable time and resources invested by EUCOM and
    other allies.
        NATO is also likely to discuss global partnerships with like-
    minded, highly developed countries such Australia and Japan at the NATO
    Summit in Riga, Latvia, this November. This will enhance future
    contributions to NATO and provide the Alliance with additional momentum
    for its transformation toward a more efficient expeditionary and global
    capability. Additionally, with our transformation strategy, EUCOM
    forces will be in a position to exercise and maintain a leadership role
    in the NATO command structure and also help develop our constructive
    influence within new NATO countries.

        36. Senator McCain. General Jones, explain how a EUCOM migration
    toward the south and east will more aptly address the threats to U.S.
    national security interests?
        General Jones. Our history of bringing stability to areas plagued
    by ethnic and cultural conflict has prepared us to extend our focus to
    the east and south. Our goal is to assist nations in building and
    sustaining effective and responsive governments and to develop security
    structures responsive to emerging democratic governments. As EUCOM
    moves its operations south and east, we will achieve economies of
    effort and higher training and readiness levels, while simultaneously
    achieving security cooperation objectives. It will also provide the
    training foundation to help lead the transformation of NATO and our
    allies to better address threats to our interests. Power projection
    platforms and operating bases must optimize the limited U.S. strategic
    air and sealift available, leverage existing and viable enduring bases,
    and maintain the ability to preposition equipment.
        Our success depends on maintaining relevant, focused, and
    complementary security cooperation programs that are tailored to the
    social, economic, and military realities in both the southeastern
    regions of Europe and Africa. The new security menace is transnational
    and characterized by enemies without territory, borders, or fixed
    bases. Threats include the export and franchising of terrorism,
    proliferation of WMD, narco-trafficking, uncontrolled refugee flow,
    illegal immigration, and piracy on the seas. Many of these threats are
    nurtured in undergoverned regions where terrorists and extremist
    organizations seek new havens from which to recruit and to operate. We
    are evolving our strategic posture to reflect the new security reality.

        37. Senator McCain. General Jones, Theater Security Cooperation
    initiatives include Foreign Military Financing (FMF), International
    Military Education and Training (IMET), Foreign Military Sales (FMS),
    and direct commercial sales; what is the value to the United States and
    NATO of such activities?
        General Jones. The value to the United States and NATO falls
    primarily in two areas--influence and interoperability.
        Sales of American equipment--whether financed through FMF or paid
    for by the purchasing country through FMS or Direct Commercial Sales--
    improves interoperability because the equipment provided is either
    identical or similar to U.S. equipment, as are the tactics, techniques,
    and procedures associated with the equipment. At the same time,
    purchasing U.S. equipment usually means purchasing U.S. training, which
    transmits not only American business practices but also American
    values. Being interoperable with the U.S. essentially results in
    interoperability with NATO. Unfortunately, legislative restrictions
    often impinge on our efforts to develop relationships with partner
    nations. These unintended consequences undermine regional and military-
    to-military relationships in the short- and long-term.
        Ideally these sales would be targeted toward countries which would
    effect EUCOM theater security cooperation objectives.
        IMET more directly increases influence for the U.S. Students
    usually come to the U.S. for their training or education. While they
    learn American practices and thinking directly through such training,
    they also learn American values by living in American society. This has
    a profound impact on these students, who in large part are already
    marked as future leaders in their countries. They return with not just
    new skills, but also a positive view of the U.S., which usually results
    in increased U.S. influence as they assume leadership positions.
        Examples of direct results of these programs include (but is
    certainly not limited to):

             Poland's acquisition of 48 F-16 through FMS, leading to U.S./
            NATO interoperability and increased NATO commitments;
             the various train and equip programs in Georgia, using IMET,
            FMF, and FMS, leading to support for both Operation Iraqi
            Freedom (OIF) and for NATO;
             building capabilities in Ukraine into NATO interoperable
            Joint Rapid Reaction Force (JRRF); using IMET and FMF; and
            JRRF; NATO and OIF support; and
             building capabilities in Senegal for peacekeeping operations
            through FMF and IMET.

        38. Senator McCain. General Jones, a common theme throughout your
    statement is the need for proactive vice reactive engagement throughout
    your AOR, including the increased utilization of SOF or SOF-like forces
    in your theater. What is the current status of your efforts to
    consolidate SOF assets in the theater?
        General Jones. Proactive engagement is key to success in the global
    war on terrorism and in supporting U.S. interests across the changing
    security landscape. SOF are an integral part of this engagement
    strategy. As a part of our STT plan, we determined that the
    consolidation of SOF assets would substantially improve SOF's joint
    warfighting capabilities as well as its ability to respond to crises.
    Our initial assessments identified Naval Air Station Sigonella, Italy,
    as the best location; however, further analysis led us to conclude that
    this site was no longer suitable. The EUCOM continues to conduct
    prudent military planning and is examining various SOF consolidation
    options.
        The Secretary of Defense, in consultation with SOCOM, is conducting
    a thorough review of SOF assets in the context of the Global Defense
    Posture in order to determine their future basing. EUCOM is working
    closely with SOCOM, the Joint Staff, and the Office of the Secretary of
    Defense to achieve the best solution. In this process, EUCOM has
    emphasized that our ability to maintain relationships with both our
    traditional and future partners underscores the importance of
    sustaining SOF's capabilities within our theater. Coincident with that
    effort is the position that the consolidation of SOF remains an
    important part of our STT plan. We have also highlighted U.S. SOF's
    relevance within EUCOM as a potential model for NATO's own
    transformation and development of a robust SOF capability within the
    Alliance. Therefore, I do not support any withdrawal of U.S. SOF from
    this theater.

        39. Senator McCain. General Jones, do you have a sufficient number
    of available SOF assets to conduct the level of operations you require
    for this proactive approach?
        General Jones. SOF is a critical tool for our Theater Security
    Cooperation (TSC) strategy within the EUCOM AOR. Our TSC engagement
    strategy places a particular emphasis on Phase Zero operations that
    help ``shape'' the environment with the goal of preventing or
    mitigating the conditions that give rise to crises.
        Within the framework of our Phase Zero efforts in the EUCOM AOR,
    U.S. SOCEUR pursues two types of engagement. First, they conduct
    bilateral expeditionary capacity building operations to enable partner
    nations to deploy to needed areas worldwide. Second, SOCEUR helps build
    partner nation capacity to deny terrorists sanctuary and prevent
    recruitment and travel of terrorists to the Middle East. A prime
    example of this effort can be found in the DOS-led, interagency effort
    called Trans-Sahara Counterterrorism Initiative (TSCTI). EUCOM
    participates in TSCTI through its military component, Operation
    Enduring Freedom-TransSahara (OEF-TS).
        These engagements offer considerable returns in the form of new
    partner nation SOF which can undertake special operation activities
    traditionally undertaken by SOCEUR forces. The ISAF, under NATO
    leadership in Afghanistan, is a prime example of partner nations
    assuming traditional U.S. SOF missions. This permits high-demand, low-
    density U.S. forces to undertake operations elsewhere. Over the past 2
    years approximately one-third of EUCOM's assigned SOF remain engaged in
    Operations Iraqi Freedom and Enduring Freedom.
        We are now working closely with SOCOM, the Joint Staff, and OSD to
    ensure SOF levels are available to maintain ongoing and emerging
    theater requirements. The framework eventually established will serve
    as the foundation for the continued effectiveness of SOF now and into
    the future. Forward-based forces have proven to be the best capability
    to respond to crises and execute our global theater security
    cooperation activities, which in turn, help prevent future crises. It
    is my hope that we will retain these forces in theater in order to
    continue our success in engagement with new partners, as well as
    continued commitment to and support of the greatest partnership we have
    known in NATO.

        40. Senator McCain. General Jones, what sort of measures or reforms
    should be undertaken to increase your ability as a combatant commander
    to perform your mission as it relates to theater security?
        General Jones. In a resource constrained environment, it essential
    to create greater efficiencies to ensure Security Cooperation (SC)
    success in a Geographic Combatant Commander's (GCC) AOR. Frictions
    exist between what a GCC is responsible for and authorized to do in his
    AOR (Unified Command Plan (UCP) responsibilities) versus the resources
    available. There are several funding and policy issues that need to be
    addressed to create efficiencies and achieve needed success for ``Phase
    0'' operations in the global war on terror.
        The GCC lacks the capability to effectively shape the AOR in
    ``Phase 0'' global war on terrorism operations due to a variety of laws
    and policy restrictions placed on SC programs and activities. As the
    supported commander for SC in his AOR, the GCC needs the authority as
    well as the resources to plan and execute SC operations, and to
    coordinate with other U.S. Government (USG) agencies. Reforming the SC
    system would serve to promote not only greater efficiencies, but would
    expand U.S. influence and strategic agility.
        Improve coordination of SC strategies and plans. GCCs are
    responsible for policies and priorities in their AOR. Besides DOD, a
    variety of USG agencies have authorities in a GCC's AOR, each with
    their own agenda and priorities, many of which complement the GCC's SC
    objectives. The Joint Interagency Coordination Group (JIACG) is an
    entity which we could do much more to develop to support USG activities
    in the GCC's AOR. More coordination needs to take place, not just
    between the Departments of Defense and State, but throughout the
    interagency, to decrease redundancies, and to ensure scarce resources
    are used most efficiently to benefit SC objectives. A vibrant JIACG
    would be an excellent vehicle to coordinate the various programs and SC
    initiatives of the myriad agencies in the GCC AOR.
        Synchronize the activities of the Departments of Defense and State.
    Whenever possible, the activities of these Departments should be
    combined, servicing multiple objectives with minimal effort, in our
    resource-constrained environment.
        Coordinate FMS with Theater priorities. GCCs require visibility and
    oversight of FMS in their AOR, not only for situational awareness, but
    to target sales toward SC objectives. Currently, the Services negotiate
    and coordinate FMS with industry, country teams, DOS, Office of
    Secretary of Defense (OSD), and Congress. The GCC finds out about FMS
    through a bottom-up approach through our Office of Defense Cooperation
    (ODC) and Defense Attaches (DATT), but that is often too late to
    influence decisions.
        Consider impact of legislative restrictions on SC policies.
    Existing legislative restrictions should be re-examined, and proposed
    restrictions should be carefully considered, to determine the overall
    affect on the SC program. For example, the American Servicemember
    Protection Act's so-called ``Article 98 restrictions'' often hamper SC
    objectives and may unintentionally prove counterproductive to advancing
    U.S. security interests by stalling development of democratic
    principles, common ideals, and defense reform of potential coalition
    and SC partners. The unintended cost of many well-intentioned
    restrictions is often a diminished influence in our AOR, opening a
    window of opportunity for competing nations to fill the void.
        There are short-, mid-, and long-term reforms that should be
    pursued, as follows:

             SC country funding levels. Country funding levels should be
            targeted toward regional objectives and initiatives. EUCOM is
            developing regional strategies using the effects based,
            deliberate planning process with concrete measures of
            effectiveness. SC funding should be directed to countries which
            reflect regional objectives.
             Multiyear budget approach. FMF and IMET budgets should follow
            a logical consistency that preserves the gains made through
            previous year efforts. With increased GCC budgetary influence,
            and emphasis on regional objectives, this should be easier to
            accomplish.
             Reduce administrative inefficiencies. Coordination of all SC
            funding resources is required to ensure the right resource is
            directed at a particular activity, preventing redundancies and
            disconnects which tend to hinder implementation and execution
            of SC activities. The full spectrum GCC JIACG model would be
            beneficial in coordinating SC activities.
             Link resources with GCC implementation. Funding of SC
            activities is diverse and uncoordinated. GCCs should have more
            authority over funding issues associated with major
            initiatives. In fiscal year 2005, the DOS controlled 70 percent
            of SC funding in the EUCOM AOR, whereas the GCC, who is
            accountable for SC execution in his AOR, controlled only 3
            percent of discretionary SC funding.

        Mid-Term

             Increase GCC influence in budget development process.
            Increased GCC budgeting influence and authority would allow
            greater flexibility in SC execution, both in the near-term for
            emergent circumstances and for long-term regional consistency.
            The GCC should be given expanded funding authority to create
            efficiencies and synergies to more effectively accomplish the
            SC mission.
             Establish an Emerging Requirement Fund. This fund would allow
            the GCC to immediately affect the direction of nations which
            experience an unforeseen significant change within a budget
            cycle (e.g., Ukraine's Orange Revolution). Expansion (both in
            funding and scope) of the Combatant Commander Initiative Fund
            may be an acceptable alternative.

        Long-Term

             Legislative changes to resolve ``title 10'' and ``title 22''
            inefficiencies. Generally, the DOD--which operates under title
            10 of the U.S. Code--cannot fund training, while the DOS--
            operating under title 22--cannot fund operations. This affects
            efficient execution of counterterrorism and peacekeeping
            operations and delays or curtails mission accomplishment,
            affecting U.S. credibility amongst partner nations and hampers
            realization of SC objectives.
             Amend title 10 to fund training and equipping of foreign
            forces to conduct counterterrorism operations on a permanent
            basis. We are grateful for Congress's faith in the Department
            by enacting section 1206 of the National Defense Authorization
            Act for Fiscal Year 2006 (Pub. L. No. 109-163), which permits,
            for 2 years, a limited use of DOD funds for training and
            equipping.
             Amend title 22 to permit the DOS to fund operations, and
            Active-Duty and Reserve personnel, to facilitate programs such
            as Africa Contingency Operations Training and Assistance, and
            Global Peace Operations Initiative.
             Authorize FMF and IMET funds to be used to train and support
            security sector units outside of the Ministry of Defense (such
            as Ministry of Interior or gendarmerie) in nations that conduct
            antiterrorism and counterterrorism operations.

        The Geographic Combatant Commander requires control over resources
    commensurate with assigned Unified Command Plan responsibilities to
    execute his SC mission efficiently. If enacted, the funding and policy
    reforms highlighted in this paper would create efficiencies and promote
    effective SC programs. A concerted effort on the part of each USG
    agency involved will be required to ensure the synergy necessary to
    reform the SC system to achieve greater efficiencies and win the global
    war on terrorism.

        41. Senator McCain. General Jones, if provided additional funding,
    where would you invest and why?
        General James. The changing security landscape that has emerged
    since the end of the Cold War continues to evolve in ways that were
    largely unforeseen just a few years ago. An increasingly interconnected
    world is shaping our economic, political, and social realities in a
    manner that is in stark contrast to the previous century. This reality,
    in combination with an increasingly strained budget, compels us to
    develop strategies that harmonize the full spectrum of national power
    and a broad interagency approach--not only to ensure a fully
    coordinated effort, but to minimize redundancy and maximize
    efficiencies.
        Traditionally, our Armed Forces focus on fighting and winning wars.
    While we need to be prepared to operate across the full spectrum of
    conflict, in the new security landscape we conclude that early
    engagement, often requiring modest investment, can yield significant
    long-term dividends. In many cases, early actions can minimize or
    eliminate future engagements. Our approach to ``proactive versus
    reactive'' engagement highlights TSC as a cost effective and very
    important capability. Reforms to our existing national TSC
    authorization are necessary to promote greater efficiencies, and to
    more effectively expand U.S. influence in accordance with National
    Military Strategy and OSD Security Cooperation.
        Efforts by EUCOM to engage in regions using a full spectrum,
    regional strategy means fighting the war on terror by focusing on
    terrorism's long-term underlying conditions. This deliberate strategy
    of engagement has come to be called ``Phase Zero,'' but in truth it is
    much more than just a new phase of systematic campaign planning. It is
    a new form of campaign in and of itself.
        In my view, our TSC programs and the methodologies by which they
    are financed (resourced) need to be overhauled/modernized in order to
    ensure that the United States is able to be competitive and influential
    in this still new century. Currently, the combatant commanders have a
    ``responsibility to authority'' mismatch which makes it difficult to
    have the agility and flexibility required for future success.
        Having said that, given additional funding there are several areas
    that could provide substantial enhancement to EUCOM's current TSC
    efforts, including:

             Operation Enduring Freedom-Trans Sahara: Additional funding
            would expand current initiatives to build counterterrorism
            capabilities in nine countries throughout the Sahel region of
            North Africa.
             Joint Intelligence Operations Center/Intelligence Mission
            Operations Center (JIOC/IMOC): Additional funding would better
            prioritize, synchronize, and integrate intelligence activities.
             Operation Assured Voice: Information operations for planning
            and execution of theater information/shaping initiatives.

        Although the Unified Command Plan establishes the authority of the
    GCC to plan and conduct security cooperation activities within an
    assigned AOR, there are insufficient resources available to the
    combatant commander to adequately respond to unanticipated challenges
    and crises that threaten regional stability. Increasing the resources
    and enhancing the responsiveness of these programs to fund
    unanticipated contingencies will enable combatant commanders to
    effectively meet the evolving threats of the 21st century.

                             eucom/rebasing issues
        42. Senator McCain. General Jones, given your assessment on the
    benefits associated with forward stationed forces and bases, have we
    moved too quickly and cut too deeply in the number of forces we intend
    to return to the United States?
        General Jones. There is no substitute for forces in theater to
    maintain a security cooperation event schedule that will preclude
    repercussions in the form of increased instability and the spread of
    radical Islam. Having said that, STT is a plan in which we have spent
    considerable time and investment studying the best ways and means to
    achieve greater strategic effectiveness to meet the challenges of the
    21st century. Thus far, I do not believe we have moved too quickly or
    cut too deeply. Our transformation plan is constantly being reviewed,
    updated, and refined within the context of our overarching U.S.
    strategic objectives--to include OSD's global defense posture and
    available resources.
        For example, by shifting our focus to the south and east, Cold War
    legacy naval bases and single function bases will be eliminated. The
    remaining bases across the Mediterranean are ideally located and
    manned, trained, and equipped in line with our new focus. The remaining
    bases support multiple functions; air and seaport operations, joint
    operations, and weapons and fuel storage.
        Similarly, throughout the 1990s, the USAFE executed a significant
    post-Cold War reduction in forward-based forces, closing 80 percent of
    main operating bases, reducing aircraft more than 70 percent, and
    reducing personnel by 60 percent. We assess that our current Air Force
    force structure in Europe is about the right amount required for
    Theater Security Cooperation, global air mobility throughput, and
    forward-based deterrence.
        The most ambitious and challenging aspect of EUCOM's transformation
    involves the realignment of forces and bases for USAREUR. The goal is
    to establish a more agile strategically positioned land force that has
    a greater capability to shape the security environment and to respond
    to crises throughout the theater. As we tailor the existing force
    structure, the combination of permanent forces in the AOR and
    rotational forces from CONUS will satisfy the full spectrum of
    operational requirements. The primary combat forces will include a
    fully structured Airborne Infantry Brigade Combat Team stationed in
    Italy, a Stryker brigade stationed in Germany, and a rotational brigade
    combat team to form the EETAF.
        EUCOM's ability to implement a robust TSC strategy is predicated on
    having sufficiently forward stationed forces. These forces will enable
    EUCOM to achieve the following objectives: allow the U.S. to deepen and
    strengthen relations with allied and partner nations; assist our allies
    in developing capabilities to deploy rapidly and to be interoperable
    with U.S. forces; encourage our allies in developing a robust SOF's
    capability; facilitate an alignment of our forces in a manner that
    enables a more rapid deployment to areas of instability; and permit an
    increase in U.S. influence with new NATO members. Due to competing
    global needs the ability to provide a continuous rotational force
    presence at EETAF may not be tenable because of global force management
    pool requirements levied against both those forces within, and those
    outside the EUCOM AOR.
        We must also retain our Special Forces in theater. EUCOM has
    emphasized that our ability to maintain relationships with both our
    traditional and future partners underscores the importance of
    sustaining SOF's capabilities within our theater. We have also
    highlighted U.S. SOF's relevance within EUCOM as a potential model for
    NATO's own transformation and development of a robust SOF capability
    within the Alliance.

        43. Senator McCain. General Jones, what will be the impact on our
    allies and partner nations regarding these planned adjustments?
        General Jones. A transformed EUCOM will have forces that are more
    agile, flexible, and expeditionary, capable of rapid deployment within
    the AOR or in support of another combatant command.
        The success of EUCOM's STT is measured by the increase in the
    strategic effectiveness of U.S. military forces in theater, as well
    that of our NATO allies to meet the challenges of the 21st century. Our
    adjustments will serve to strengthen our overall relationships in the
    EUCOM AOR.
        With greater strategic effectiveness than exists today, EUCOM will
    be better able to achieve the vision contained in the National Security
    Strategy and ensure the United States remains a nation of great
    influence with our allies and around the world.

        44. Senator McCain. General Jones, can we be sure that these
    reductions will not have a detrimental impact on our capability to
    conduct operations, and ensure that Europe remains engaged in a
    collaborative effort to counter common security challenges now and in
    the future?
        General Jones. The Global Defense Posture changes EUCOM is
    implementing, will still have the requisite forces based in Europe to
    engage allies and partners. These forces living and operating from
    Europe are necessary elements of the EUCOM strategy, which involves
    building strong, capable, contributing military members of NATO. One of
    the principle tenets of EUCOM's transformation is to provide a visible
    model for NATO's own transformation. The focus is not a reduction in
    forces, but rather an effort to achieve a posture and force capability
    that ensures greater strategic effect, both within our AOR and with
    other combatant commands within the framework of the U.S. National
    Security Strategy and the National Defense Strategy. The simultaneous
    transformations of EUCOM and NATO are central to our ability to meet
    both the challenges and enormous opportunities of the 21st century. As
    we implement this transformation we must ensure that we possess the
    capabilities and force structure in the theater that will serve to
    enhance NATO's development.
        Transformation initiatives being implemented by USAREUR include
    moving two heavy divisions back to the U.S. while accepting one Stryker
    BCT in Germany, consolidating a light infantry BCT (airborne) in Italy,
    and a rotational deployed brigade sized force to Romania and Bulgaria.
    These land forces in Europe will provide the right number and
    capabilities to engage our allies and partners. Units up to Brigade
    size will conduct training with our NATO and partner forces to build
    the capacities of European, African, and Asian militaries. Air forces
    stationed in Europe will continue to provide critical air operations in
    the theater, including the global mobility airlift flow, along with
    engaging with current and emerging military partnership in East Europe,
    Africa, and Southwest Asia. Such partnerships will improve U.S. access
    to critical regions, as well as our efforts to counter common security
    challenges. Naval forces assigned to EUCOM will continue to be deployed
    through the DOD Global Force Management program that provides forces
    from CONUS when required.

        45. Senator McCain. General Jones, do these transatlantic
    partnerships truly enhance regional and global security?
        General Jones. Western Europe has now benefited from 60 years of
    peace and stability. Our strategic goal is to expand similar peace and
    prosperity to Eastern Europe and Africa. Our ability to maintain this
    prolonged period of stability is attributable to our shared recognition
    of the threat once posed by the Soviet Union and the common desire to
    establish an alliance that would seek to safeguard the freedom and
    security of its members. Today, in the absence of a discernible,
    predictable, and traditional threat, we are faced with a more menacing
    adversary; one that is multi-dimensional, nontraditional, and
    continually evolving from region to region.
        Progress toward a more peaceful and prosperous world in this
    century is predicated on recognizing the new array of challenges that
    clearly threaten our common interests, strengthening NATO as the
    centerpiece of our regional security framework, and implementing a
    comprehensive strategy that can effectively address our concerns. As a
    global community we struggle to come to agreement on what truly
    threatens our common security.
        The United States partnership with Georgia is a great example of
    how partnerships pay dividends. Programs such as the Georgia Train and
    Equip Program and the Sustainment and Stabilization Operations Program
    have improved capability to the extent that Georgia is now a force/
    security provider on the international scene. Georgia provides almost
    two brigades of troops to OIF. Indeed, per capita Georgia is one of the
    top coalition providers in the world. Regionally, the nation now holds
    a more respected position and can enhance security with the forces
    trained and equipped by the U.S. These forces have also given Georgia a
    position of strength from which to negotiate regarding its breakaway
    regions and, more importantly, made it a more viable candidate for NATO
    accession in the near-term.
        U.S. partnership with Georgia is a model of successful capability
    building, whose synergistic effects have made it a key partner in the
    global war on terrorism.

        46. Senator McCain. General Jones, is the Global Posture Review
    adequately linked to an overarching strategic framework agreed upon by
    all key government parties in the National Security Strategy process?
        General Jones. In 2001, the Secretary of Defense directed all
    combatant commands to evaluate their structure, organization, and
    processes in order to gain transformational efficiencies and develop
    new capabilities to meet the emerging requirements of the international
    security environment. President Bush endorsed the decisions made during
    that evaluation in August 2004, saying ``The new plan will help us
    fight and win the wars of the 21st century.'' The transformation we are
    undertaking supports the U.S. National Security Strategy and maximizes
    our ability to meet the objectives of our National Defense Strategy,
    namely:

             We are putting ourselves in a better position to
            secure the U.S. from direct attack by creating forces with
            greater operational flexibility to contend with uncertainty by
            emphasizing agility and not overly concentrating military
            forces in a few locations for particular scenarios.
             A critical component of our global defense posture
            changes are the legal arrangements pertaining to our military
            presence, access, and activities in other countries. We are
            negotiating Status of Forces Agreements and access arrangements
            with new allies and friends, enabling the necessary flexibility
            and freedom of action to meet 21st century security challenges,
            and directly support the strategic objective to strengthen
            alliances and partnerships.
             We are strengthening alliances and partnerships by
            seeking to expand allied roles, build new partnerships, and
            encourage transformation both in allied military forces'
            capabilities and in allies' ability to assume broader global
            roles and responsibilities. We are setting an example of
            efficiency and modernization for our allies and friends. At the
            same time, we are seeking to tailor the physical U.S.
            ``footprint'' to suit local conditions.

        In sum, our global posture initiatives are linked directly to the
    National Security Strategy via the Defense Strategy and work to
    establish favorable security conditions throughout the world.

        47. Senator McCain. General Jones, are the DOD's projected costs
    for overseas realignment accurate? Will projected savings outweigh the
    cost of realignment and associate systems procurement?
        General Jones. Although cost estimates for realignment of EUCOM
    facilities, military units, and relocations of personnel to the U.S.
    are continually being refined as we implement Global Defense Posture
    changes within the EUCOM AOR, we are finding that our initial estimates
    were accurate.
        We currently estimate costs of approximately $1.3 billion through
    2010. Beginning in 2011, we will begin realizing cost avoidance of
    about $400 million per year.

        48. Senator McCain. General Jones, is it feasible to conduct basing
    realignment moves given the deployment tempo driven by ongoing military
    operations in Iraq and Afghanistan?
        General Jones. The EUCOM STT plan includes moving two USAREUR
    divisions from Germany back to the U.S. This plan is on schedule and
    has been coordinated through the DOD's Global Force Management (GFM)
    program for Iraq/Afghanistan deployments. In addition to operational
    requirements, quality of service for servicemembers and their families
    remains a pivotal factor in developing Iraq/Afghanistan deployments, as
    well as moving the divisions back to the U.S.
        Army leadership continues to refine the plans to best fit global
    war on terrorism requirements. One example of a midcourse adjustment
    was delaying the return of the 1st Armored Division to Fort Bliss,
    Texas for 1 year. This will allow servicemembers who return from Iraq
    to move to the U.S. with their families in an orderly manner. In
    conjunction with the U.S. Army, EUCOM will continue to keep a close
    watch on units that have deployed and that are scheduled to deploy to
    Iraq and Afghanistan.
        Certainly, there are a number of variables that we must be
    cognizant of as we prosecute the global war on terrorism and realign
    our forces to more effectively address 21st century threats. We must
    execute a plan that is well synchronized with the Services and the
    Secretary of Defenses GFM program. This interlocking plan also
    underscores the importance of our fiscal year 2007 MILCON that is
    linked to our theater transformation. EUCOM will continue its efforts
    to close legacy bases, streamline headquarters command and control, and
    return operational units back to the U.S., where they are being
    assimilated into stateside organizations.
        The initial deployment of the EETAF will be executed with EUCOM's
    assigned forces to minimize the impact on Iraq/Afghanistan forces
    deployed through GFM. Beginning in 2008, future deployments will
    involve a U.S. based brigade sized force of Army soldiers, marines, or
    Special Forces.

        49. Senator McCain. General Jones, what will be the effect of the
    rebasing on the relationship with long-term U.S. allies, such as
    Germany, where a drawdown is proposed?
        General Jones. Relocation of U.S. forces presently stationed in
    Europe will affect bilateral relationships with many of our host
    countries. Germany will experience by far the largest loss in U.S.
    forces presence, but well understands the changing strategic security
    environment and our global defense transformation activities. The
    German military is also undergoing its own long-term transformation,
    which involves closing around 400 military facilities throughout
    Germany.
        By the time our total Global Defense Posture program in EUCOM is
    fully implemented, a total of over 84,000 U.S. soldiers, sailors,
    airmen, civilian employees, and family members will have departed
    Germany since 2000. We have worked very closely with the German Federal
    Government to ensure they have a thorough understanding of the planning
    processes and proposed timelines for unit movements and community
    closures; to coordinate public announcements of such moves; and to
    properly implement many other important considerations such as the
    compensation and relocation of German civilian employees and the
    disposition of transferred U.S. forces, facilities, and installations.
        The effects of closing down six major U.S. military communities
    will have some negative economic effects at the local level; but the
    gradual departure of U.S. personnel from these locations, phased over
    several years, will help to minimize the impact on local communities,
    especially in smaller towns where U.S. presence makes up a larger
    percentage of the community's economic base. The installation closure
    announcements and the proposed timelines have been coordinated with the
    German government and publicized as far in advance as possible.
        The removal of large U.S. combat formations from German soil may
    well alter the perceptions of some Germans regarding our commitment to
    NATO and long-term security and stability in the greater European area.
    In actuality, U.S. commitment remains as strong as it's always been.
    German military and civilian leadership understand the nature of our
    commitment, and our overall purpose for realigning our military forces.
        A reduction in U.S. forces stationed in Germany is also likely to
    increase European concerns on a range of security issues, to include
    long-term stability in the Balkans and global war on terror-related
    security threats from outside the region. In no way should the change
    in our posture be interpreted as a reduced commitment to the region. It
    is, rather, a shift to better methods of promoting our interests in
    today's international security environment. As we move forward with our
    global defense transformation activities, it will be necessary to
    reassure Germany and all of our allies and partners of our long-term
    commitment to security and stability in the entire EUCOM area.

        50. Senator McCain. General Jones, I would imagine that the
    Romanian rail lines compare poorly to the BundesRail. Is infrastructure
    in Romania and Poland capable of supporting U.S. bases?
        General Jones. The Romanian rail infrastructure is currently
    capable of supporting the planned FOSs that are part of the EETF.
        The rail infrastructure in Romania and Poland is not in the
    condition of and cannot be compared to that currently found in Germany
    (Deutsche Bahn). We cannot expect the same support that we have in
    Germany.
        In general, the existing poor condition of the rail lines and the
    limited number of rail cars must be taken into account during
    operational and support planning. Plans for infrastructure improvement
    in Romania and Poland are being worked; process is slow since
    infrastructure has been neglected for years, cost is high, and funding
    is a problem.
        That said, however, we have focused our efforts on enhancing
    railhead capabilities in the vicinity of the FOSs, and believe that as
    former Warsaw Pact nations expand their trade with European Union
    nations (and become European Union members themselves), the economic
    impetus to improve their rail infrastructure will move them forward.

                              eucom/africa issues
        51. Senator McCain. General Jones, you have continuously emphasized
    the increasing importance of Africa--from both a security concern as
    well as the enormous potential the continent possesses. What measures
    is EUCOM taking to ensure that Africa does not become the next front in
    the war on terrorism?
        General Jones. Africa is a dynamic area that requires continuous
    reassessment. It is geographically, culturally, politically, and
    economically diverse. International terrorists will continue to target
    ongoing political-economic reform efforts throughout the region, thus
    threatening the stability and security of U.S. friends and allies.
    Ungoverned areas throughout Maghreb and Trans-Saharan Africa will
    continue to provide a haven for terrorists and insurgent groups. The
    terrorist threat in Northern Africa will increase as operations in Iraq
    and Afghanistan are most successful and foreign fighters flee those
    battlefields and/or return to their homelands.
        Continued EUCOM and USG involvement in the region remains the key
    to enhancing regional security and promoting reform.
        Morocco, Algeria, and Tunisia will remain key partners in the war
    on terror and important to regional security. The U.S. remains
    committed to long-term relationships with these countries. Transforming
    our relations with Algeria and Libya presents a vital opportunity to
    improve stability in Northern Africa and increase strategic
    partnerships in the region.
        The Trans-Sahara Counterterrorism Initiative (TSCTI)--and more
    specifically OEF-TS--enables our African partner nations to build their
    own capacity to fight terrorism within their borders and deny the enemy
    safe haven throughout the Trans-Sahara region. Additionally, the
    African Contingency Operations Training and Assistance (ACOTA) and
    Global Peace Operations Initiative (GPOI) programs are providing
    peacekeeping training and building capacity for many African countries
    and the African Union.

        52. Senator McCain. General Jones, what hurdles can you identify
    which will adversely affect your ability to carry out a security
    strategy in Africa?
        General Jones. Although we factor it into our strategy, EUCOM chief
    hurdle in Africa relates to resources. Most African countries have poor
    infrastructure, inadequate training and equipment, and rely on donor
    assistance for most of our engagement. Additionally, our ability to
    directly influence African militaries and enhance their capabilities
    remains problematic due to our global troop commitments, as well as
    various theater security cooperation restrictions imposed on key
    countries prohibiting the use of IMET and FMF--two key outreach tools
    for EUCOM.

        53. Senator McCain. General Jones, what are your most effective
    tools or resources with regard to achieving your goals in the various
    regions of Africa?
        General Jones. IMET, FMF, and FMS make up the bulk of the security
    cooperation funding that is vital to providing education and resources
    to African countries. ACOTA and GPOI programs are providing
    peacekeeping training and building capacity for many African countries,
    as well as the African Union.

        54. Senator McCain. General Jones, what are DOD's plans with regard
    to U.S. troop disposition in Africa?
        General Jones. Presently, Africa is divided among three combatant
    commanders: EUCOM, which has 46 countries in its AOR, U.S. Central
    Command, which has 7 (including ongoing operations in the Horn of
    Africa), and PACOM, which has jurisdiction over the Madagascar,
    Seychelles, Mauritius, and Comoros Islands groups.
        Currently, EUCOM's presence on the Africa continent remains small--
    as of May 2, 2006, EUCOM had a total of 251 military personnel in
    Africa, including 32 deployed personnel. The U.S. Central Command had a
    total of 1,525 personnel in Africa, including 1,504 deployed personnel
    (1,302 in Djibouti as part of Joint Task Force Horn of Africa (JTF-
    HOA)). PACOM had no personnel stationed or deployed in Africa.
        In the EUCOM AOR, we have worked to take a more engaged approach to
    achieving long-term stability through proactive, preventive measures.
    Consequences for inaction may include continued and repeated U.S.
    intervention in conflicts and humanitarian crises, disruption of
    economic trade vital to the development of Africa's nascent economies,
    and increased presence of radical fundamentalism, especially in
    Africa's vast ungoverned spaces. We continue to provide military
    training and assistance teams to enable our African partner nations to
    better develop their militaries and to build their own capacity to
    fight terrorism and improve security within their borders. These
    efforts and others like them will be able to rely on the use of
    Cooperative Security Locations (CSLs) located throughout Africa. CSLs
    are a critical part of EUCOM's basing plan in host nations and will
    require little or no permanent U.S. presence.
        The majority of our operations are ``peace support'' operations,
    ranging from peace enforcement, to stability operations, to training
    missions and exercises. Proactive peacetime engagement activities
    reassure allies and partners, promote stability, and mitigate the
    conditions that lead to conflict. We base our strategies on the
    principle that it is much more cost effective to prevent conflict than
    it is to stop one once it has started.
        EUCOM's engagement through programs such as the GPOI, the ACOTA,
    and providing support to the African Union (AU) are intended to
    diminish the requirement for U.S. forces sent to the continent in
    response to a crisis/conflict. These efforts provide much needed
    support to meet the world's growing need for well-trained peace
    operations forces, as well as to assist current peacekeeping efforts
    such as those in Darfur. In Africa, the U.S. will continue its work
    through existing programs and expand its activities aimed at enhancing
    African capacity to conduct peace support operations.
        There are a number of important Security Cooperation Activities
    that greatly assist our efforts and strategy in the theater. Key among
    these tools are Combined/Multinational Training and Exercises, FMF,
    Humanitarian Assistance (HA), Joint Contact Team Program (JCTP),
    Military-to-Military Program, IMET, FMS, and direct commercial sales.
    These programs provide access and influence, help build professional,
    capable militaries in allied and friendly nations, and promote
    interoperability. We execute the larger security assistance programs
    using our Offices of Defense Cooperation in concert with U.S. Embassy
    Country Teams, while smaller programs are executed by Defense Attaches
    and Embassy Offices. In essence, EUCOM is and will continue to leverage
    existing programs, while utilizing a broad interagency approach, to
    achieve U.S. foreign policy objectives in Africa. Our intent is to have
    a well-managed comprehensive strategy that doesn't require large U.S.
    forces or bases.

        55. Senator McCain. General Jones, what agreements have we reached
    with regard to basing in the region?
        General Jones. We have no ``basing'' agreements that allow for a
    permanent military presence per se in Africa. There is a signed
    agreement providing for the use of a small amount of land, permission
    to construct some buildings, and arrangements as to their maintenance
    and use with Ghana (signed in 2005). We are currently in negotiations
    with Uganda, Gabon, and Senegal for similar agreements with them.

        56. Senator McCain. General Jones, should Africa remain part of
    EUCOM? Should DOD stand up a separate African Command?
        General Jones. With the assumption that USG commitment and
    resources would support the establishment of a new headquarters for
    Africa, I believe that the Department should consider establishing a
    separate command for Africa during future Unified Command Plan (UCP)
    reviews.
        Africa is of growing interest to the United States due to
    compelling humanitarian needs, natural resources, and potential
    terrorist safe havens and operations within its ungoverned areas. From
    a unity of command and unity of effort perspective, a change in U.S.
    command arrangements in Africa has merit and should be considered
    during future UCP discussions.
        Numerous studies have proposed unifying Africa under a different
    command structure. The 1993 Committee on Roles and Missions proposed
    transferring sub-Sahara Africa from EUCOM to CENTCOM and the recent UCP
    2004 slate considered a possible EUCOM/CENTCOM merger in which the
    establishment of a sub-unified command for Africa was considered.
        Until a thorough, cross-agency review of all courses of action can
    be conducted, however, Africa should remain part of EUCOM. In the
    meantime, as Africa's relationship with the U.S. military grows
    incrementally, so too should our treatment of Africa vis-a-vis the UCP.
    First, we might consider changing the name of the EUCOM to incorporate
    Africa. Another subsequent incremental change might include creating a
    sub-unified command for Africa. Finally, as we progress toward further
    development we should consider creating a separate unified command for
    Africa.
        A separate command for Africa would provide better focus and
    increased synergy in support of U.S. engagement in Africa, but would
    also require a commitment of significant resources. A new staff
    presupposes that the USG would provide the resources required to
    establish a new headquarters and support increased engagement in
    Africa. Despite increased USG interest in Africa, without a significant
    change in U.S. national policy towards Africa, any new command would
    most likely have inadequate resources (budget, available forces,
    manpower, and infrastructure) available to justify establishing a
    separate command.
        While most of Africa is assigned to EUCOM, future UCP country
    assignments should be reviewed and consideration given to assigning all
    African countries to one Geographic Combatant Command. As a result of
    established mature relationships with European partners, EUCOM is able
    to effectively leverage European partners to promote U.S. policy goals
    in Africa. A review of the feasibility of establishing a separate
    command for Africa should also weigh the advantages and disadvantages
    of maintaining responsibility for Africa under EUCOM. Should Africa
    eventually become a separate Unified Command, I strongly recommend that
    such a headquarters be located in Africa.

                                     sudan
        57. Senator McCain. General Jones, are you satisfied with NATO's
    role in helping restore peace in Sudan? Specifically, do you favor
    deploying NATO troops to Darfur?
        General Jones. Any activity undertaken by NATO in support of the
    African Union Mission in Sudan (AMIS) must be designed around the
    ``African solutions to African problems'' principle and an aim of
    increasing the effectiveness of AMIS and through it the African Union.
    NATO has deployed troops to Darfur (El Fashir) already in support of
    capacity building missions for the African Union and will continue to
    do so in line with tasking from the North Atlantic Council.

        58. Senator McCain. General Jones, how well do you think AU troops
    are doing? If they aren't effective, should NATO keep ferrying them in
    and out?
        General Jones. African Union troops are made up of battalions from
    several African nations. The quality of the battalions ranges, though
    overall, these troops are up to the task they face. They lack the
    numbers and mobility capabilities to cover the significant distance and
    tasks required as and rapidly as needed. However, where they are
    deployed as balanced forces, they are executing their mission
    successfully. The presence African Union troops in Darfur has
    contributed to the conditions for recently brokered peace agreement.
        Based on military advise, NATO is authorized to continue supporting
    the African Union mission, including airlift of troops in and out of
    theater, until September 30, 2006.

        59. Senator McCain. General Jones, the United States has provided
    over $150 million in support to the AMIS over the past 2 years. In that
    same time period, it is estimated that 300,000 to 400,000 Sudanese have
    been killed and almost 2 million refugees created. From your
    perspective, how might we better execute resources to prevent further
    genocide in Sudan?
        General Jones. The crisis in Darfur requires a political solution.
    It was unrealistic to expect the AMIS to end the violence and create
    secure conditions in the region. They entered Darfur with a mandate to
    monitor a ceasefire that no side has honored. However, as the mission
    matured and their leadership adjusted to the realities of the situation
    on the ground, AMIS did contribute somewhat to improving security in
    Darfur.
        The recent signing by one of the rebel factions of the Darfur Peace
    Agreement (DPA) is a positive first step in ending the crisis in
    Darfur. This is the beginning of the political solution that is
    required. The role of AMIS is important as conditions of the DPA are
    implemented.
        When asked by the African Union and the U.N., NATO stands prepared
    to work with AMIS to increase their capacity to not only monitor the
    DPA, but also report and respond to violations. Increasing the
    capability of AMIS in preparation for subsequent transition to a U.N.
    mission is an important aspect of improving security in Darfur. Our
    continued support to the AMIS, financially, and militarily through
    NATO, will effectively bridge the gap until the U.N. assumes
    responsibility for the mission in Darfur.

                                  afghanistan
        60. Senator McCain. General Jones, what is NATO's overall goal in
    Afghanistan? Is the ISAF sufficiently manned to accomplish the mission,
    particularly when an emergency response is necessary?
        General Jones. NATO's political objective in Afghanistan is to a
    self-sustaining, moderate, and democratic Afghan government able to
    exercise its sovereign authority, independently, throughout
    Afghanistan.
        As ISAF expands and its authority extends over the Southern and
    Eastern regions, we anticipate its deployed numbers being greater than
    Operation Enduring Freedom (OEF) had deployed at its peak. ISAF's
    forces will bring with them considerable capability for the task they
    have been given, including the ability to respond rapidly and
    appropriately when required.

        61. Senator McCain. General Jones, what arrangement has NATO made
    to ensure that OEF and ISAF may act in concert, if the forces and
    capabilities of one operation are needed by another?
        General Jones. The Commander of OEF is dual-hatted with his second
    hat being that of Deputy Commander Security for ISAF. This will ensure
    operations involving OEF and ISAF troops in concert are coordinated and
    controlled at the highest levels. In addition, in the areas we
    anticipate the majority of OEF operations, ISAF troops have already
    been operating alongside coalition OEF forces for some time in an
    effective manner.

        62. Senator McCain. General Jones, in the past NATO has had
    difficulty raising forces at force-generation conferences for ISAF. Is
    there still difficulty in persuading governments to send appropriate
    forces and equipment?
        General Jones. Currently 36 nations provide forces for ISAF. By the
    end of this year, we anticipate that number increasing to 39 nations.
    As ISAF's roles and responsibilities increase, nations' willingness to
    provide the capabilities required have correspondingly increased. There
    remain small areas of the Combined Joint Statement of Requirement
    (CJSOR) unfilled but they are not mission critical issues at present.

        63. Senator McCain. General Jones, U.S. officials on the ground
    report that some Provincial Reconstruction Teams (PRT) are effective
    and some are not. They contend that the Germans, for example, are
    reluctant to engage local leaders beyond the PRT perimeter, and that
    little is accomplished. Others note that the Lithuanians have
    volunteered to lead a PRT, but must rely heavily on U.S. logistics and
    expertise to manage operations. Are there different models for a PRT?
    What is the difference in the way a U.S. PRT and a German PRT is funded
    and run?
        General Jones. The reports by U.S. officials on this issue are
    misleading and in the case of the German PRT, wrong.
        Nations volunteering to lead PRTs deploy a PRT model appropriate
    for their area and task based upon their assessment of both. NATO has
    provided in its recent operations plan revision a set of minimum
    standards required to ensure a consistency of approach in our PRTs.
    Based on this information, nations are then able to build on that
    guidance and our PRTs more standard in their organizational structure
    and methods of operation. Many of the ideas on best practice come from
    the PRTs deployed in the northern region of Afghanistan and in
    particular the German model. These PRTs are civilian-led (unlike PRTs)
    but include military personnel. Together they deliver a coherent
    multiagency approach to long-term reconstruction and development in
    Afghanistan. How these NATO PRTs are funded is a national decision.

        64. Senator McCain. General Jones, what is the effect of national
    caveats on NATO's ability to carry out its missions in Afghanistan?
    Please describe the attack on the Norwegian-Finnish PRT at Meymaneh in
    mid-February 2006. Did caveats play a role in the ability of the
    Norwegians and Finns to defend themselves?
        General Jones. No. Both the Norwegian and Finnish personnel
    demonstrated considerable and appropriate military restraint during
    that incident given the tactical circumstances they found themselves
    in. The PRTs had appropriate rules of engagement in place for the
    situation encountered. In this instance, the local commander's actions
    were proportional and prudent given the actual threat faced by the PRT.

        65. Senator McCain. General Jones, does the narcotics trade
    endanger the future of the Afghan state?
        General Jones. The extension of the Afghanistan government
    authority, the maintenance of long-term stability, and the economic
    reconstruction of Afghanistan are inextricably linked to the successful
    tackling by the Afghan government of the illicit opium trade. This may
    be the Karzai Government's biggest challenge.

        66. Senator McCain. General Jones, in May or June 2006, NATO-led
    forces will move into southern Afghanistan. What are ISAF's rules of
    engagement when it confronts a drug lab?
        General Jones. If a drug lab is discovered in the course of routine
    operations, ISAF can seize and secure drugs, associated equipment, and
    traffickers before handing them over to the appropriate Afghan
    authorities. ISAF can also gather information and provide area security
    for counternarcotics operations.

        67. Senator McCain. General Jones, what does ISAF do if it finds a
    poppy field? Are there viable alternatives to poppy production for
    Afghan farmers? How does ISAF deal with warlords who benefit from the
    drug trade?
        General Jones. Poppy eradication is not a military task for ISAF,
    but supporting Afghan government counternarcotics programs is an ISAF
    Key Supporting Task.
        The United Kingdom as the G8 lead nation for counternarcotics is
    working with the Afghan government and international community to
    tackle the illicit opium trade. Part of their strategy is to introduce
    viable, legal alternatives. The Afghan government's integrated approach
    to counternarcotics incorporates interdiction, eradication, law
    enforcement, the judiciary, alternative livelihood programs, regional
    cooperation, improved border controls, and domestic demand reduction.
        ISAF can offer the Afghan authorities supporting capabilities to
    enable them to counternarcotics and offer support to Afghan-led
    counternarcotics operations. If a drugs warlord was discovered
    conducting an illegal narcotics act during the course of a routine
    operation, he could be held by ISAF before handing him over to the
    appropriate Afghan authorities.

                                      iran
        68. Senator McCain. General Jones, it seems clear to me that all
    NATO members share both alarm at Iran's nuclear program and revulsion
    at the anti-Israel threats that President Ahmadinejad continues to
    issue. Israel, in the face of these threats, shares the democratic
    values of NATO members. As a way of deterring an Iranian nuclear threat
    to Israel--and other existential threats to Israel--I believe that NATO
    should look closely at expanding cooperation with Israel, possibly
    leading to eventual membership. Could you describe the current state of
    NATO talks with Israel and possible areas in which we could upgrade our
    relations?
        General Jones. Israel is a proactive country with NATO primarily
    through its active participation in NATO's Mediterranean Dialogue (MD).
    This program provides for political dialogue and practical cooperation
    with participating countries and helps foster democratic and military
    development with countries important to the U.S. and NATO in the war on
    terrorism.
        The MD initiative aims to enhance security and stability by
    offering tailored advice on defense reform, budgeting, planning, and
    building civil-military relations. One of the most significant effects
    of MD is the promotion of better understanding and cooperation between
    Arab participants and Israel on a military-to-military basis. Such
    cooperation not only enhances a member's ability to help fight
    terrorism through information sharing and maritime cooperation, it also
    improves overall interoperability with NATO member nations.
        In terms of NATO membership, Israel has recently developed and
    discussed the first work plan for cooperation with NATO and is playing
    a valuable role as a supporter of our Mediterranean and North African
    Security agenda. However, Israel has not requested NATO membership.

                                  taiwan/pacom
        69. Senator McCain. Admiral Fallon, have recent political
    developments in Taiwan or China increased danger in the Taiwan Strait?
    What is your assessment of the threat?
        Admiral Fallon. [Deleted.]

        70. Senator McCain. Admiral Fallon, has the People's Republic of
    China (PRC) redeployed forces in the wake of Chen Shui-bien's
    statements?
        Admiral Fallon. [Deleted.]

        71. Senator McCain. Admiral Fallon, is Taiwan acting assertively
    enough to defend itself?
        Admiral Fallon. Taiwan has made some progress in procuring systems
    to defend itself, but they have yet to arrest a long-term decline in
    defense spending as a percentage of Gross Domestic Product.
        [Deleted.]

        72. Senator McCain. Admiral Fallon, what is the state of Taiwan's
    capability to defend itself against potential cross-Straits attack?
        Admiral Fallon. [Deleted.]

        73. Senator McCain. Admiral Fallon, does Taiwan's defense posture
    put the onus on the United States to secure the Taiwan Strait or repel
    a Chinese attack?
        Admiral Fallon. [Deleted.]

        74. Senator McCain. Admiral Fallon, how has the PRC's military
    buildup influenced the defense postures and budgets of other states in
    the region, including India, Vietnam, Japan, and Indonesia?
        Admiral Fallon. [Deleted.]

                                  japan/pacom
        75. Senator McCain. Admiral Fallon, what is your assessment of our
    bilateral relationship with Japan?
        Admiral Fallon. [Deleted.]

        76. Senator McCain. Admiral Fallon, the Government of Japan has
    expressed a more active role in missile defense. What can you tell us
    about this? Have they deployed missile defense equipment or associated
    radars in or around Japan?
        Admiral Fallon. [Deleted.]

                               u.s. forces korea
        77. Senator McCain. General Bell, I continue to worry about the
    wisdom of large-scale redeployments of American troops from South
    Korea. Given that we are still in the midst of Six-Party Talks with
    North Korea over its nuclear program, and that we are looking for
    leverage over Pyongyang now, why would we preemptively withdraw troops
    from the peninsula? Wouldn't we at least keep our troops in place as a
    potential bargaining chip?
        General Bell. I do not believe it is necessary to keep our current
    force structure in place as it is as a bargaining chip. Our commitment
    to the ROK-U.S. Alliance is enduring and remains unwavering; and our
    purpose is to deter and defend against a North Korean threat; and to
    sustain a mutual commitment to regional security and stability. Our
    commitment is not measured by the size of our force structure in Korea,
    but by the collective national power of the United States.
        Historically, the metric of readiness has been the number of troops
    on the ground; however, what is truly important are the complementary
    deterrent and combat capabilities that each nation contributes to the
    security of the peninsula. Over the past several years, there has been
    a tremendous improvement in the interoperability of our combined
    forces. Concurrently, the U.S. Armed Forces have transformed our
    capabilities in many areas to include strategic deployability, command
    and control, precision strike, and joint and combined operations. These
    capabilities allow us to focus overmatching combat power when and where
    we choose to defeat armed aggression. United States forces can now be
    sized to provide tailored capabilities that complement those of our ROK
    allies, providing overwhelming strategic deterrence. Our regional and
    strategic reinforcing capabilities allow us to defeat any potential
    North Korean aggression.
        My bottom line is that the United States has both the on-peninsula
    and in areas of close proximity to the peninsula the capacity to
    respond to a North Korean attack with immediate and devastating combat
    power. Additionally, the ROK military is modern, large, capable, and
    competent. Regarding the North Korean nuclear issue, it is my
    assessment that today and into the future the United States will have
    the requisite military combat power in the region to ensure our
    national command authority has the full range of options it needs to
    work towards a settlement of the nuclear issue with North Korea.
                                     ______

                  Questions Submitted by Senator Susan Collins
                     quadrennial defense review (qdr)/china
        78. Senator Collins. Admiral Fallon, the recently released QDR
    characterizes China as the nation with the ``greatest potential to
    compete militarily'' with the U.S. and field technologies that could
    disrupt U.S. supremacy. The strategy directs the Navy to adjust its
    force posture and basing to provide ``at least six operationally
    available and sustainable carriers and 60 percent of its submarines in
    the Pacific to support engagement, presence, and deterrence."
        While this sounds like a good policy in light of China's largest
    defense budget increase in 4 years and aggressive military
    modernization, I am concerned that shifting Navy ships from the east
    coast to the west coast could make it harder to maintain deployments of
    a given number of ships to the Persian Gulf.
        Ships from both the Atlantic and Pacific fleets are used to conduct
    operations in the Persian Gulf and Indian Ocean area. Atlantic Fleet
    ships homeported on the east coast use the Suez Canal and have a
    shorter transit distance to the Persian Gulf than do Pacific Fleet
    ships homeported on the west coast.
        Given the increase in transit distance to the Gulf for ships
    transferred from the east coast to the west coast, are you concerned
    that this could make it more difficult for the Navy to balance the
    maintenance demands of the fleet against the locations of repair and
    overhaul yards, some of which are located on the Atlantic and Gulf
    coasts, including the Portsmouth Naval Shipyard in Kittery, Maine?
        Admiral Fallon. [Deleted.]

        79. Senator Collins. Admiral Fallon, the recently released QDR
    expresses concern over the modernization of the Chinese military as a
    risk to regional stability, noting its investment in submarines,
    advanced torpedoes, and ballistic and cruise missiles. As I raised with
    Secretary Rumsfeld during a hearing last year before this committee, I
    am concerned about China's submarine modernization--particularly when
    combined with the decreasing number of ships and submarines being
    procured in the United States.
        At the end of fiscal year 2005, the Navy operated a total of 54
    attack submarines. Admiral Mullen's 313-ship fleet plan includes 48
    attack submarines and four converted Trident cruise missile submarines.
    China's aggressive military modernization, particularly its emphasis on
    naval capabilities and platforms, makes a persuasive case for
    supporting a force structure of 55 or more attack submarines.
        The argument concerning uncertain future threats was one element of
    the successful campaign last year in my home State in convincing the
    Base Realignment and Closure Commission to reject the Pentagon's flawed
    recommendation to close the Portsmouth Naval Shipyard in Kittery,
    Maine.
        The Navy's fiscal year 2007 budget, however, requests funding to
    inactivate four attack submarines. In addition, the Navy's Future Years
    Defense Plan does not call for the Service to increase its purchase of
    Virginia class submarines to two per year until 2012.
        What is your perspective on the dramatic buildup of the Chinese
    military capacity, particularly its Navy?
        Admiral Fallon. [Deleted.]

        80. Senator Collins. Admiral Fallon, based upon current operational
    requirements of the PACOM, and assuming the funding were available,
    would you prefer that Congress and the Navy keep submarines in the
    fleet as long as possible through overhauling or maintaining them
    versus retiring or inactivating them?
        Admiral Fallon. [Deleted.]

        81. Senator Collins. Admiral Fallon, in 2002, the Navy began
    funding the DD(X) destroyer program to pursue a series of new
    technologies in propulsion, power management, weaponry, and stealth.
    This next-generation DD(X) destroyer will have high-tech capabilities
    that do not currently exist on any Navy surface combatants. These
    capabilities include:

             Far greater offensive and precise firepower;
             Numerous engineering and technological innovations that will
            allow for a reduced crew size; and
             Sophisticated, advanced, weapons systems, such as the
            electromagnetic rail gun.

        That year you spoke to the Surface Navy Association Symposium in
    Arlington, Virginia. You stated: ``We believe that we are best suited
    to approach the conditions today with a family of ships. This is the
    vision from the top. We want to take the hull form of the DD(X) and
    have it be the basis for two distinct classes of ships, the DD(X) and
    the cruiser version, that are going to have theater-wide strategic
    reach.''
        I would like to know your views on the usefulness of the DD(X) to
    operations worldwide and specifically in the Pacific theater. What
    benefits do the design and capabilities of the DD(X) bring to your
    warfighting command?
        Admiral Fallon. [Deleted.]

        82. Senator Collins. Admiral Fallon, last year's Navy budget
    request slashed production of the DD(X) over the next 6 years, from 12
    to 5 DD(X)s. This cut will affect the size of our major surface
    combatant fleet far in to the future. The former Chief of Naval
    Operations Admiral Clark stated to me before this committee that the
    requirement for DD(X) destroyers is unchanged at 12. Do you agree with
    Admiral Clark regarding the ongoing requirement for the DD(X)? Also,
    your command is as reliant on the U.S. Navy fleet as any in our
    military. What risks do we incur by these cuts in the procurement of
    major surface combatants?
        Admiral Fallon. [Deleted.]

        83. Senator Collins. Admiral Fallon, earlier this week, China
    announced that it would boost its defense budget by almost 15 percent
    this year--the biggest increase in its defense budget in 4 years. In
    fact, China's public military budget has increased by double digits in
    nominal terms every year since 1989.
        Noting that China's public military budget markedly underestimates
    actual defense-related expenditures (excluding categories such as
    weapons research and foreign arms purchases), the DOD's 2005 Report to
    Congress on PRC military power generally concludes that China is
    greatly improving its military, including the number and capabilities
    of its nuclear forces, and that this build-up poses a long-term threat
    to Taiwan and ultimately to the U.S. military presence in Asia.
        Do you think the Navy's fiscal year 2007 budget request adequately
    reflects the strategic and operational requirements needed to counter
    China's increasing military investments?
        Admiral Fallon. [Deleted.]

        84. Senator Collins. Admiral Fallon, what does the Pentagon report
    on China's military might mean for U.S. interests in the region?
        Admiral Fallon. [Deleted.]

        85. Senator Collins. Admiral Fallon, does the proposed 313-ship
    plan reflect a current and future naval force structure that can
    adequately respond to the growing Chinese threat?
        Admiral Fallon. [Deleted.]
                                     ______

                   Questions Submitted by Senator Carl Levin
                        eucom force posture realignment
        86. Senator Levin. General Jones, under the DOD's Integrated Global
    Presence and Basing Strategy, or IGPBS, the posture of our armed forces
    in the European theater will undergo significant changes. Last year,
    the DOD announced plans for the return of the 1st Infantry Division
    Headquarters to the United States, and other U.S. Army Europe units
    will be returned, inactivated entirely, or converted or reassigned.
    These actions will eventually result in 11 Army bases being returned to
    Germany, and will affect thousands of soldiers, their family members,
    civilian DOD employees, and host nation positions.
        The report of the congressionally-established Overseas Basing
    Commission, issued in August 2005, questions the timing and depth of
    the force cuts in the DOD's overseas basing plan. That report
    questioned the need to shift so rapidly to an expeditionary posture and
    recommended that the pace of changes be slowed and reordered, saying
    ``we are putting the cart before the horse.''
        Do you believe we are moving too quickly to return forces to the
    United States and cutting too deeply the U.S. presence overseas,
    particularly in the EUCOM AOR?
        General Jones. There is no substitute for forces in theater to
    maintain a security cooperation event schedule that will preclude
    repercussions in the form of increased instability and the spread of
    radical Islam. Having said that, STT is a plan in which we have spent
    considerable time and investment studying the best ways and means to
    achieve greater strategic effectiveness to meet the challenges of the
    21st century. Thus far, I do not believe we have moved too quickly or
    cut too deeply. Our transformation plan is constantly being reviewed,
    updated, and refined within the context of our overarching U.S.
    strategic objectives--to include OSD's global defense posture and
    available resources.
        For example, by shifting our focus to the South and East, Cold War
    legacy naval bases and single function bases will be eliminated. The
    remaining bases across the Mediterranean are ideally located and
    manned, trained, and equipped in line with our new focus. The remaining
    bases support multiple functions; air and seaport operations, joint
    operations, and weapons and fuel storage.
        Similarly, throughout the 1990s, the USAFE executed a significant
    post-Cold War reduction in forward-based forces, closing 80 percent of
    main operating bases, reducing aircraft more than 70 percent, and
    reducing personnel by 60 percent. We assess that our current Air Force
    force structure in Europe is about the right amount required for
    Theater Security Cooperation, global air mobility throughput, and
    forward-based deterrence.
        The most ambitious and challenging aspect of EUCOM's transformation
    involves the realignment of forces and bases for USAREUR. The goal is
    to establish a more agile strategically positioned land force that has
    a greater capability to shape the security environment and to respond
    to crises throughout the theater. As we tailor the existing force
    structure, the combination of permanent forces in the AOR and
    rotational forces from CONUS will satisfy the full spectrum of
    operational requirements. The primary combat forces will include a
    fully structured Airborne Infantry Brigade Combat Team stationed in
    Italy, a Stryker brigade stationed in Germany, and a rotational brigade
    combat team to form the EETAF.
        EUCOM's ability to implement a robust Theater Security Cooperation
    strategy is predicated on having sufficiently forward stationed forces.
    These forces will enable EUCOM to achieve the following objectives:
    allow the U.S. to deepen and strengthen relations with allied and
    partner nations; assist our allies in developing capabilities to deploy
    rapidly and to be interoperable with U.S. forces; encourage our allies
    in developing a robust SOF capability; facilitate an alignment of our
    forces in a manner that enables a more rapid deployment to areas of
    instability; and permit an increase in U.S. influence with new NATO
    members. Due to competing global needs, the ability to provide a
    continuous rotational force presence at EETAF may not be tenable. I
    would not be comfortable with an Army posture that goes below three
    full brigades available for use by this theater.
        We must also retain our Special Forces in theater. EUCOM has
    emphasized that our ability to maintain relationships with both our
    traditional and future partners underscores the importance of
    sustaining SOF capabilities within our theater. We have also
    highlighted SOF's relevance within EUCOM as a potential model for
    NATO's own transformation and development of a robust SOF capability
    within the Alliance.

        87. Senator Levin. General Jones, are you concerned that a reduced
    U.S. presence in Europe could have a negative impact on our ability to
    exercise leadership within NATO? Is there a risk that these reductions
    could give a new impetus to efforts on the parts of European countries
    to create a military force alternative to NATO under European Union
    command and control?
        General Jones. The United States leadership in the NATO is
    predicated in large measure on the units stationed in Europe, as well
    as a willingness on the part of the U.S. to provide the necessary
    resources and personnel. Our leadership and influence is what generated
    the NATO Response Force. Our presence provides a model for the
    Alliance's own transformation that is necessary to meet the challenges
    and threats of the 21st century. In fact, some NATO allies have
    questioned U.S. commitments to NATO operations and initiatives such as
    the NATO Response Force and the ISAF due to a perceived lack of U.S.
    contributions of personnel and equipment to these efforts. While it is
    possible that the EU could eventually compete with NATO for resources
    and military influence, we are working hard with our allies to ensure
    any operational military effort on the part of the EU is complementary
    to NATO and not competitive or duplicative, wasting valuable national
    resources that could be used more effectively elsewhere.

                 ballistic missile defense facilities in europe
        88. Senator Levin. General Jones, I understand that the United
    States is discussing with a number of European governments the idea of
    constructing a third deployment site for deploying 10 Ground-Based
    Interceptors of the Ground-Based Midcourse Defense system for ballistic
    missile defense. What is the status of those discussions, and will they
    be concluded this year?
        General Jones. [Deleted.]

        89. Senator Levin. General Jones, are there discussions underway
    with any European governments for the deployment or use of other
    missile defense equipment on their territory, including radars? If so,
    what are the issues being discussed and what is the status of those
    discussions? Could those discussions affect the outcome or timing of
    the discussion on a third deployment site?
        General Jones. [Deleted.]

                        patriot pac-3 missile inventory
        90. Senator Levin. General Jones, although there is concern about
    the development and potential deployment of long-range ballistic
    missiles, there are already many hundreds of short-range, Scud-class
    ballistic missiles deployed today within range of U.S. forces. Do you
    believe the inventory of Patriot PAC-3 missiles currently available in
    the EUCOM theater is sufficient to defend against the existing threat,
    or would you want additional PAC-3 missiles deployed in your AOR?
        General Jones. [Deleted.]
                                     ______

                 Questions Submitted by Senator Daniel K. Akaka
                                  philippines
        91. Senator Akaka. Admiral Fallon, in your testimony you mention
    that southeast Asia is the front line of the war on terror and that
    with the cooperation of the governments of the Philippines, Indonesia,
    and Malaysia, we have been building capacity and strengthening the
    ability of those countries to resist the activities of the terrorists
    and to actively seek their capture or demise. However, just last month,
    a group of Philippine marine officers attempted to overthrow the
    Philippine Government. Although the plot failed, there seems to be
    every evidence that there will be similar uprisings in the future.
        What effect do you believe the recent political instability in the
    Philippines will have on efforts to neutralize the growth of terrorist
    groups in the Philippines such as the Abu Sayyaf Group and Jemahh
    Islamiyah?
        Admiral Fallon. [Deleted.]

                                  north korea
        92. Senator Akaka. Admiral Fallon, in your testimony, you state
    that ``the North Korean leadership remains an enigma and the known
    ballistic missile capability of this country plus the potential
    possession of nuclear weapons are cause for continuing concern and
    attention to the Korean Peninsula. The Six-Party Talks, while not yet
    yielding a resolution to the North Korean nuclear issue, provide an
    encouraging framework for regional diplomatic leadership by the ROK,
    Japan, Russia, and China.''
        Do you believe that the United States should play a more active
    role in these discussions rather than outsourcing it to China, Japan,
    Russia, and South Korea?
        Admiral Fallon. The U.S. plays an active role in the Six-Party
    Talks, focused on reaching consensus between key partners while
    attempting to leverage Chinese, Japanese, South Korean and Russian
    relationships with North Korea. Although the Six-Party Talks have not,
    to date, yielded a resolution to the North Korean nuclear issue,
    working closely together is a very useful way to leverage the strengths
    of each country. Firm resolve and steady determination will be key in
    any successful negotiations with North Korea.

                    united states alliance with south korea
        93. Senator Akaka. Admiral Fallon, in your testimony you state that
    the alliance between the United States and the ROK is healthy and
    evolving. Yet recently, a number of critics have suggested that the
    historic alliance between the United States and South Korea is
    deteriorating. In particular, they mention the different approaches
    that the United States and South Korea have taken with regard to North
    Korea's continued nuclear program. Please respond to these critiques
    regarding the stability of the alliance between the United States and
    South Korea.
        Admiral Fallon. [Deleted.]
        General Bell. The alliance is strong, and remains the pillar of
    stability for Northeast Asia. Moreover, our multi-faceted partnership
    extends beyond security and includes strong economic, political,
    diplomatic, and cultural ties.
        While impassioned debates and public demonstrations do exist, a
    recent poll shows that 77 percent of ROK citizens support our military
    presence, viewing the alliance as essential to security and stability.
    Moreover, most South Koreans share the same view on two important
    issues: first, a nuclear armed North Korea is an intolerable threat to
    stability in the region; and second, a catastrophic failure within
    North Korea would destabilize the entire region and have extremely
    adverse consequences for South Korea.
        Regarding the denuclearization of North Korea, both governments of
    the United States and the ROK support the denuclearization of North
    Korea through peaceful negotiations. Our national approaches to North
    Korea engagement may be different, however, we both share the common
    objective of verifiable denuclearization of North Korea.

                                  north korea
        94. Senator Akaka. Admiral Fallon and General Bell, in November
    2005, North Korea instituted its second boycott of the Six-Party Talks,
    demanding that the Bush administration lift recent U.S. financial
    sanctions against Banco Delta Asia in Macau. The U.S. Treasury
    Department accused Banco Delta of laundering counterfeit U.S. $100
    bills produced by North Korea. Last month, North Korea agreed to send
    representatives to New York this month to discuss claims that North
    Korea is involved in large-scale counterfeiting and distribution of
    U.S. currency.
        Do either of you believe that a successful outcome of the upcoming
    talks with North Korea in New York regarding these allegations could
    lead to the resumption of the Six-Party Talks?
        Admiral Fallon. U.S. Treasury officials briefed North Korean
    officials in New York on March 7; providing a useful opportunity to
    discuss the Banco Delta Asia issue. North Korea, however, continues to
    maintain that they will not return to the Six-Party Talks until the
    U.S. lifts the freeze on disputed North Korean assets, which I believe
    is unlikely without positive change in North Korean behavior. I have no
    understanding of what motivates North Korean actions regarding the Six-
    Party Talks or their behavior in general. I do believe that we are
    correct in pursuing a dialogue and resumption in the Six-Party Talks.
        General Bell. The U.S. Treasury officials' briefing to North Korean
    officials in New York on March 7, 2006, provided the U.S. and North
    Korea with a forum to discuss the Banco Delta Asia issue and to explain
    both sides' positions. In that sense, the meeting appears to be a
    positive step and I believe that this type of engagement will
    contribute to the resumption of the Six-Party Talks. However, it is the
    U.S. policy not to link the criminal activity associated with
    counterfeiting with the resumption of the Six-Party Talks. As such, I
    am not able to predict how meetings regarding counterfeiting and other
    criminal activity sponsored by the North Korean regime might relate to
    the potential resumption of the Six-Party Talks.

        [Whereupon, at 11:58 a.m., the committee adjourned.]

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                      2007

                                  ----------

                            THURSDAY, MARCH 9, 2006

                                           U.S. Senate,
                                   Committee on Armed Services,
                                                        Washington, DC.

                                  NAVY POSTURE

        The committee met, pursuant to notice, at 9:38 a.m. in room
    SH-216, Hart Senate Office Building, Senator John Warner
    (chairman) presiding.
        Committee members present: Senators Warner, McCain,
    Collins, Talent, Thune, Levin, Lieberman, Reed, and Akaka.
        Committee staff members present: Charles S. Abell, staff
    director; and Leah C. Brewer, nominations and hearings clerk.
        Majority staff members present: Ambrose R. Hock,
    professional staff member; David M. Morriss, counsel; Lucian L.
    Niemeyer, professional staff member; Stanley R. O'Connor, Jr.,
    professional staff member; Sean G. Stackley, professional staff
    member; Scott W. Stucky, general counsel; Diana G. Tabler,
    professional staff member; and Richard F. Walsh, counsel.
        Minority staff members present: Richard D. DeBobes,
    Democratic staff director; Jonathan D. Clark, minority counsel;
    Daniel J. Cox, Jr., professional staff member; Gabriella Eisen,
    research assistant; Creighton Greene, professional staff
    member; Bridget W. Higgins, research assistant; and Gerald J.
    Leeling, minority counsel.
        Staff assistants present: Micah H. Harris, Jessica L.
    Kingston, and Benjamin L. Rubin.
        Committee members' assistants present: Cord Sterling,
    assistant to Senator Warner; Christopher J. Paul, assistant to
    Senator McCain; Mackenzie M. Eaglen, assistant to Senator
    Collins; Lindsey R. Neas, assistant to Senator Talent; Mieke Y.
    Eoyang, assistant to Senator Kennedy; Frederick M. Downey,
    assistant to Senator Lieberman; Elizabeth King, assistant to
    Senator Reed; Darcie Tokioka, assistant to Senator Akaka; and
    William K. Sutey, assistant to Senator Bill Nelson.

           OPENING STATEMENT OF SENATOR JOHN WARNER, CHAIRMAN

        Chairman Warner. Good morning, everybody. I apologize for
    being tardy a few minutes. Particularly for the good old Navy
    Department, I try to be punctual. But I started the morning
    over in your building at 7 o'clock with the Secretary, the
    Chairman, and General Abizaid, and I am just catching up here
    to get started today.
        We meet today to receive the annual testimony of the
    Secretary of the Navy, and I congratulate you on your
    appointment and I guarantee you it will be the best job in your
    life bar none. I still say that. The Secretary is joined by the
    Chief of Naval Operations (CNO) and the Commandant of the
    United States Marine Corps, on the posture of the Department of
    the Navy and President Bush's defense budget for 2007.
        We thank you, Secretary Winter, Admiral Mullen, and General
    Hagee, for joining us today and particularly our military
    witnesses, for your long and magnificent service to our country
    in uniform. We are proud of you. You occupy a unique vantage
    point and we are quite anxious to receive your views today with
    regard to the budget and your respective uniformed Services and
    how they fare under this budget. If they did not fare well, I
    hope you will bring it out this morning the best you can. We
    recognize you want to support the President.
        Also, at all of our hearings we stop to pause and extend
    our gratitude to those soldiers, sailors, airmen, and marines
    and all others serving the cause of freedom around the world
    and the families which support them. We humbly offer our
    thoughts and prayers to those families and friends of those who
    lost their lives and those who are hopefully going to be
    nourished back to the best possible physical condition, given
    the seriousness of so many of the injuries that are being
    experienced.
        Your operations place heavy demands on our sailors and
    marines and their families and provide the backdrop for our
    review of this year's budget. Alongside the request, we
    carefully consider the insights offered by the Quadrennial
    Defense Review (QDR), which has served as the Department's
    guide for shaping the future force. As well, we will weigh the
    administration's supplemental funding request for fiscal year
    2006.
        Trends in the Navy's ship force structure, I say to you,
    Mr. Secretary and the Admiral, remain of concern to this
    committee. One year ago in a hearing before the committee, it
    was noted that, if left unchecked, the rate of naval ship
    construction would drive our fleet below 250 major combat
    ships. While these ships' capabilities remain the envy of the
    world, the inescapable fact is that the Nation cannot consider
    downsizing to a fleet of such a small size without sacrificing
    the unchallenged freedom of access on the high seas throughout
    the world.
        We are encouraged by the Navy's recent report which defines
    a future force structure of 313 ships to meet our national
    security needs. However, as is often the case, the challenge of
    building this Navy weighs heavily on the future years and
    indeed Congress to give you the support. I assure you this
    Senator will and I think most of my colleagues on this
    committee likewise.
        As we witness significant naval expansion by emerging
    powers today, we must be uncompromising in our commitment to
    build our future force, to ensure the continued naval
    superiority and to preserve our strategic shipbuilding
    industrial base, and to support our forward-deployed forces the
    world over in this fight against terrorism.
        Thank you.
        [The prepared statement of Chairman Warner follows:]

                   Prepared Statement by Senator John Warner

        The committee meets today to receive the annual testimony of the
    Secretary of the Navy, the Chief of Naval Operations, and the
    Commandant of the Marine Corps on the posture of the Department of the
    Navy and President Bush's defense budget request for fiscal year 2007
    and the Future Years Defense Program.
        Thank you, Secretary Winter, Admiral Mullen, and General Hagee, for
    joining us today. As you're well aware, I've been proudly associated
    with the Navy and Marine Corps for over 6 decades now, and it is from
    this unique vantage point that I am able to remark that yours is the
    privilege to represent the finest Navy and Marine Corps in the world. I
    commend you gentlemen for your outstanding leadership to our Nation,
    our service men and women, and their families.
        At this time, we pause to extend our deepest gratitude to our
    sailors and marines at their posts, serving the cause of freedom around
    the world, and we humbly offer our thoughts and prayers to the families
    and friends of those who have been lost or wounded serving this vital
    cause.
        We are mindful that the public has entrusted in us the authority,
    not merely to raise an Armed Force, but to properly equip, safeguard,
    and support that force in the performance of its duties, and we must be
    painstaking in exercising that authority. It is with this end in mind,
    that we begin these proceedings.
        As President Lincoln once observed, the domain of our Navy and
    Marine Corps extends wherever the waters may reach. At this moment,
    deployed ships stand vigilant on distant seas, sailors and marines keep
    lit the torch of freedom in Iraq and Afghanistan, peacekeeping and
    humanitarian operations are performed with professionalism and
    compassion throughout the world, and our forces stateside stand ready
    to respond to global crises, many we cannot even contemplate today.
        These operations place heavy demands on our sailors and marines and
    their families, and provide the backdrop for our review of this year's
    President's budget request. Alongside this request, we carefully
    consider the insights offered by the Quadrennial Defense Review, which
    has served as the Department's guide for shaping the future force. As
    well, we weigh the administration's supplemental funding request for
    fiscal year 2006.
        These key elements must be taken together in arriving at a budget
    that assures victory in today's wars, and maintains a posture of
    deterrence for the future, or should deterrence fail, provides the
    measures which would enable us to meet future conflict.
        This year's President's budget requests $127 billion for the
    Department of the Navy.
        The priorities of supporting the global war on terror,
    restructuring our forces toward more agile, deployable forces, building
    joint capabilities for future threats, and taking care of our service
    men and women and their families are clearly the right emphasis within
    this budget request.
        I commend the President for continuing his commitment to improving
    our defense capabilities and providing our forces with the resources
    and capabilities they need to successfully perform their missions.
        While supportive of the overall request, I have some concerns on
    which I look forward to working with you and the Department over the
    coming months.
        Congress is committed to doing all we can to ensure the safety of
    our soldiers, sailors, airmen, and marines. Our experience in the war
    on terrorism dictates that we dedicate the full extent of our
    resourcefulness to protect our warfighter, and to bring an end to the
    destruction caused by improvised explosive devices.
        As well, we need to fully exploit our asymmetric advantage provided
    by the superior technologies which our forces bring to the fight. Most
    notably, unmanned aerial vehicles have contributed greatly to our
    battlefield dominance, and in the effort to further leverage this
    capability, we must work to explore greater use of this technology on
    the ground and on, above, and below the seas.
        Trends in the Navy's ship force structure remain of concern. One
    year ago, in a hearing before this committee, it was noted that if left
    unchecked, the rate of naval ship construction would drive our fleet
    below 250 major combatant ships. While these ships' capabilities remain
    the envy of the world, the inescapable fact is that this Nation cannot
    consider downsizing to a fleet of such small size without sacrificing
    the unchallenged freedom of access which command of the seas provides
    our forces today.
        I am more encouraged by the Navy's recent report, which defines a
    future force structure of 313 ships to meet our national security
    needs. However, as is so often the case, the challenge of building this
    future Navy weighs heavily in the future years. As we witness
    significant naval expansion by emerging powers today, we must be
    uncompromising in our commitment to building our future force--to
    ensure continued naval superiority and to preserve our strategic
    shipbuilding industrial base.
        One of this committee's most important duties is to oversee the
    large sums that the Department invests each year for acquisition of
    supplies, services, and equipment. While we commend the President for
    committing the resources necessary for the common defense, there is
    increasing concern regarding the eroded buying power of our defense
    dollars.
        This committee has initiated and supported a number of legislative
    provisions to curb these cost trends, and to facilitate more sound
    acquisition practices. Maintaining our focus on improving the
    affordability of our weapons systems, we will continue to work with the
    Department on these and further initiatives.
        With these competing demands in mind, we listen for your assessment
    of our readiness in Iraq, our performance in global operations, and the
    direction of our future force.
        I thank you all for your distinguished service and look forward to
    your testimony.

        Chairman Warner. Senator Levin.

                    STATEMENT OF SENATOR CARL LEVIN

        Senator Levin. Mr. Chairman, first let me join you in
    welcoming our three distinguished witnesses this morning. I
    also join you in extending through them our thanks to the men
    and women in uniform who are serving in dangerous places like
    Iraq and Afghanistan and in other places maybe less dangerous,
    but still far from home, and to their families for the
    sacrifices which they make on our behalf. We all salute them
    and we pledge to do our part and to do everything we can to
    ensure that they and their families are fully-supported as they
    face these hardships and dangers.
        I believe that the world we face will continue to be one of
    uncertainty and unrest. Decisions that we make this year will
    have a direct effect on the forces and capabilities that future
    combatant commanders will have available to protect our
    interests.
        We all know that our men and women in the Armed Forces will
    respond admirably in any crisis, just as they have been doing
    in the operations in Afghanistan and Iraq. Without adequate
    funding for readiness, however, our forces in the field could
    be exposed to unnecessary risk. Without adequate modernization,
    we could be faced with a situation of having forces without
    necessary capabilities or we could be in a position of trying
    to support theater combatant commanders' requirements with
    forces that are too small or too lacking in capability to meet
    their needs.
        We must ensure that we are getting the most from our budget
    investments. We owe it to the taxpayers and, even more
    importantly, we owe it to those serving our Nation in the
    military. Over the long-term we cannot count on unceasing
    heroic performance from men and women in uniform to make up for
    inadequate or inappropriate resource allocations.
        At previous hearings I have talked about the need for
    responsible budgeting and my view that this budget request
    understates the true cost of our defense program because it
    does not fully recognize or pay for the cost of ongoing
    operations in Iraq and Afghanistan. In the interest of time, I
    will not restate my concerns this morning since I expressed
    them just yesterday.
        There are a number of other, more programmatic issues that
    we will be discussing here this morning, including incremental
    funding of the DD(X) destroyer, reduction in Marine Corps force
    structure, developing conventional ballistic missiles to be
    deployed on Trident submarines, and cancelling the development
    of an alternate engine for the Joint Strike Fighter (JSF).
        Mr. Chairman, again I join you in welcoming our witnesses
    and thanking them for their service.
        Chairman Warner. Thank you very much, Senator Levin.
        Are there other Senators that would like to offer a word or
    two by way of opening comment?
        Senator Lieberman, you are early bird on the block here.
        Senator Lieberman. Thanks, Mr. Chairman.
        I welcome the Admiral, the General, and the Secretary. We
    are at a point in our Navy where--and I know the Admiral and
    the Secretary are on top of this--our fleet is at the smallest
    size I believe since before World War I. I know that you
    together have plans to try to get us back--we are around 280
    ships now, and you want to get us back, get us up to 313 within
    5 years. I think that is a worthy goal. I think it is a
    necessary goal.
        What concerns me is that the budget--and I will go into
    this in my questioning--does not actually, by the Congressional
    Budget Office (CBO) estimate, give you the funding to be able
    to achieve that goal. I think we have to recognize that reality
    and try in our own way to deal with it as best we can to help
    you get to not only where you want to be, but where the Nation
    needs you to be.
        General, I thank you for your leadership of the Marines and
    particularly for hanging in there and making a case that the
    end strength that the current budget gives the Marines of
    175,000 may not be enough. There is a lot of concern on this
    committee, I think, about the end strength of the Army and the
    Marine Corps, particularly in light of the extraordinary range
    of demands that our Nation is putting on you in our defense and
    the extraordinary way in which the marines are carrying out
    those demands. So I look forward to questioning you about that.
        The defense budget is large. It has been much larger as a
    percentage of our gross domestic product at different times in
    our history, so it may be going against the wind to say it
    should be larger, but I think in the ways that we are talking
    about here, both the size of our naval fleet and the size of
    the marines on the ground, we need to spend more at a very
    dangerous and difficult time in our Nation's history to secure
    our freedom and our security. I hope to ask you questions along
    that line.
        But let me join the chairman and the ranking member in
    thanking the three of you for your service and through you the
    men and women who serve in uniform for us every day and do just
    an incredible job. We cannot thank them enough. So I thank you
    as much as I can this morning.
        Thanks, Mr. Chairman, for giving me that opportunity.
        [The prepared statement of Senator Lieberman follows:]

               Prepared Statement by Senator Joseph I. Lieberman

        Good morning and thank you for attending. I want to welcome Admiral
    Mullen, Secretary Winter, and General Hagee to our committee hearing,
    which begins our discussion of the Navy's proposed budget and its
    warfighting plans for the future. You have served your country with
    honor, and I want to commend your continued service to our Nation's
    military.
        I applaud Admiral Mullen's ambitious, long-range, shipbuilding plan
    which he submitted to Congress last month. Our current Navy fleet is at
    its smallest size since prior to World War I. The Quadrennial Defense
    Review (QDR) made it clear that the United States cannot plan only for
    conventional threats. Since the terrorist attacks of September 11, our
    security environment has grown more complex. To respond, we must
    prioritize our warfighting capabilities to match the new threats we
    face. Admiral Mullen has taken this challenge seriously, and has
    responded with a bold initiative to ensure that the Navy is well-
    equipped to fight the range of threats which may confront our Nation.
        I support the plan submitted by Admiral Mullen. But I am worried
    about whether we have provided enough money for shipbuilding in the
    budget to achieve these goals. According to the Congressional Budget
    Office, if the Navy wants to grow to 313 ships in 5 years, it will need
    an average of $18.3 billion per year for shipbuilding, or $19.5 billion
    if nuclear refueling is included. This year, the President's fiscal
    year 2007 budget includes $11.1 billion for shipbuilding and
    conversion. This is quite a disparity. If we are serious about growing
    the Navy to 313 ships in the near future, we must invest more money in
    our shipbuilding account. There is no way that the Navy can fulfill its
    new emphasis on expeditionary warfighting missions, as outlined in the
    QDR, with inadequate funding for shipbuilding.
        In addition to a paucity of money for shipbuilding, I am also
    afraid that our plan for submarine construction is woefully inadequate.
    The Navy's plan calls for a submarine fleet of 48 boats. I believe this
    number is too low for the strategic threats we face. First, several
    submarine officers and Defense Department officials argue that
    fulfilling the day-to-day demands for attack submarines, particularly
    intelligence, surveillance, and reconnaissance (ISR) missions, would
    require a fleet of at least 70 submarines. Even with our current fleet
    of 54 submarines, the fleet can only provide combatant commanders with
    65 percent of the ``presence with a purpose'' they requested. If our
    submarine fleet is too small now to perform the tasks required, we are
    inviting a level of risk that is unacceptable if we accept an even
    smaller fleet. Due to the proliferation of new trouble spots around the
    world, the need for undersea ISR has dramatically increased. A
    diminished submarine fleet cannot meet the demands of a post-September
    11 world.
        The prognosis only gets worse. If we adopt the Navy's proposed
    plan, which delays an increase of submarine production to two boats a
    year in fiscal year 2012, we will fall below the minimal requirement of
    48 submarines in 2018. At that time, our intelligence estimates
    conclude that China will have a well-equipped, modernized submarine
    fleet of at least 50 boats. In addition, new submarines are being built
    elsewhere, and they may be in the hands of future competitors. If we do
    not move to produce two submarines a year as soon as possible, we are
    in serious danger of falling behind China, and we may have to accept
    dangerous risks elsewhere because we will have too few submarines.
        To mitigate this strategic threat, the time to act is now. Our
    superiority in undersea warfare is not a capability we can recover
    quickly if it is lost. For the first time in 40 years, there is no new
    submarine design on the drawing board. We are losing our submarine
    designers and engineers at a rapid pace. Electric Boat, a submarine
    manufacturing company in Groton, Connecticut, projects that it will
    terminate almost half of its design team by 2008. When the dangerous
    reality of our diminished submarine fleet finally hits home, it will be
    very difficult, if not impossible, to recover our industrial base in
    order to meet the impending need.
        The submarine is not a Cold War legacy. In fact, the Virginia-class
    submarine was designed specifically for post-Cold War operations. It
    operates well in littoral waters, gathers intelligence, engages in
    strike operations and antisubmarine warfare, and provides Special
    Operations Forces with delivery and support. Because of its near-shore
    capabilities, our submarines can intercept signals that are invisible
    to reconnaissance satellites and other platforms. These unique and
    powerful features make the Virginia-class an indispensable weapon in
    our arsenal to fight the ``long war'' on terrorism. However, if we do
    not increase our build rate, we will not replace our aging Los Angeles-
    class submarines fast enough. As a result, we run the risk of turning a
    deaf ear and a blind eye to a gaping hole in our national security. We
    live in a world in which we sometimes cannot anticipate attacks upon
    our homeland and military. In this instance, we can prevent a looming
    threat on the horizon with decisive action.
        The very least we can do is escalate production to two submarines
    as soon as possible. If we do this, we will maintain the recommended
    force structure fleet of 48 boats until 2025. While I still believe a
    fleet of 48 boats is too small for the conventional and asymmetric
    challenges ahead of us, it does put us in a better position to reduce
    the production gap between the United States and China.
        In addition, I think we should act deliberately to transition New
    London from the world's best submarine center of excellence to the
    world's best undersea warfare center of excellence. Concentrating the
    east coast submarine force there, and basing the LCS antisubmarine
    warfare and countermine modules there would be a good start. Devoting
    more resources to new design at Electric Boat would further strengthen
    the remarkable synergy among New London, Electric Boat, and the world's
    leading undersea expertise in the region.
        The Defense Science Board has described the attack submarine as the
    ``crown jewel'' of American defense. If we neglect our submarine
    production, we jeopardize our global undersea warfare superiority. We
    must move forward to devise a plan that will maintain a robust
    submarine force in the United States which can readily meet all of the
    challenges of warfighting, reconnaissance, and joint support placed
    upon it.

        Chairman Warner. Senator Thune.
        Senator Thune. Thank you, Mr. Chairman.
        I too want to welcome our panel. Thank you for your service
    and for those who serve with you and under your command, we
    appreciate the great work that they do. I would echo and
    associate myself with some of the comments of my colleague from
    Connecticut. I am one on the committee who, like him, has some
    concerns about where we are. I know that we are in terms of
    funding levels historically in a good place, but you also
    talked about the size and some of the needs that we have and
    the fact that we are running a lot of our equipment into the
    ground. The size of the challenge that we are asking you all to
    meet, too, is much larger than it has been for some time. There
    are a lot of demands and a lot of needs around the planet.
        As we look at the size of our force and the capabilities
    that we have, the budget numbers are historically high, but
    there are some of us who think we may have to do better, and I
    happen to be, along with my colleague from Connecticut, in that
    category.
        So we welcome you and appreciate your being here and look
    forward to your testimony and to working with you as the
    defense bill moves forward. Thank you.
        Thank you, Mr. Chairman.
        Chairman Warner. Thank you Senator.
        Senator Akaka, Senator Reed, do you have anything by way of
    opening?
        Senator Reed. No, thank you.
        Senator Akaka. Thank you, Mr. Chairman. I will just make a
    brief statement. I want to add my welcome to Secretary Winter
    and Admiral Mullen and General Hagee and to tell you that I am
    certainly proud and appreciative of the brave men and women
    serving in the Navy, Marine Corps, and Navy Reserve, and also
    the veterans that served in the Navy in the past.
        This is what I want to pass on to you--I am committed to
    ensuring the members of the armed services that they receive
    the best training, the best equipment, and the best support
    that our Government can provide. I also am committed to
    ensuring that their families are provided with a good quality
    of life by our Government. Toward that end, I will continue to
    serve on this committee.
        Thank you, Mr. Chairman. I have further questions.
        Chairman Warner. Thank you very much, Senator.
        By way of announcement, the Senate Armed Services Committee
    next week on Tuesday will hold its first of two hearings on the
    JSF. On Tuesday we will have representatives from the partner
    nations testifying. The following day on Wednesday, we have
    Deputy Secretary of Defense England and Admiral Giambastiani,
    followed by the executives from United Technology, Senator, in
    your State, and the General Electric (GE) and Rolls-Royce
    partners will also be on. I will have a question on that to our
    witnesses in the course of the morning.
        But at this time, Mr. Secretary, we welcome you. This is
    your first appearance before this committee as Secretary of the
    Navy.

       STATEMENT OF HON. DONALD C. WINTER, SECRETARY OF THE NAVY

        Secretary Winter. Thank you very much.
        Chairman Warner. We will put your entire statement in the
    record, as will the other witnesses' statements be put in the
    record, and we would hope that you would just give us such
    summary as you feel appropriate.
        Secretary Winter. Thank you very much, Senator.
        Chairman Warner, Senator Levin, members of the committee: I
    want to thank you for the opportunity you have given the Navy-
    Marine Corps team to appear before this committee.
        Chairman Warner. I am going to ask you to draw that mike up
    because there are folks in the back that cannot pick it up too
    well.
        Secretary Winter. See if this works a little better.
        Chairman Warner. It does indeed.
        Secretary Winter. Very good. Thank you.
        Today I am joined by Admiral Mullen and General Hagee and I
    could not ask for better, more honorable teammates. It is a
    pleasure to work with them. Each of us has provided a statement
    to this committee and I appreciate the inclusion of those into
    the record of this hearing. These documents outline in detail
    this Department's priorities. Our top priority is clear: We
    must prosecute the global war on terror today while deterring
    potential adversaries and resetting the force for tomorrow.
        Mr. Chairman, let me be blunt. We are a Nation at war.
    Support for sailors and marines in the Iraqi theater of
    operations is our most urgent task and I am focused daily on
    what the Navy and Marine Corps can do to help achieve victory
    in Iraq and against terrorists elsewhere around the globe.
        This week marks the start of my third month as Secretary,
    and being a firm believer in the idea that there is no
    substitute for personal observation, I recently made my first
    visit to Iraq and to the Fifth Fleet. I met with sailors and
    marines at a number of major naval bases in the United States
    and overseas, and visited several leading shipyards on the east
    coast. During my visit to Iraq last month, where I traveled
    throughout al-Anbar Province from Falujah to the Syrian border,
    I spoke to hundreds of marines and sailors on an individual
    basis and the experience has left me with more pride and
    admiration for their courage and commitment than I had thought
    possible. I was truly struck by their genuine enthusiasm and
    professionalism and humbled by their achievements.
        It is difficult to describe the feeling one gets, for
    example, after meeting a team of four marines at al-Taqadam,
    southwest of Baghdad, standing in front of a mangled and broken
    Humvee, a vehicle destroyed by an improvised explosive device
    (IED) while they were patrolling in it just days before. Though
    the vehicle was damaged beyond repair, all four marines were
    healthy, resolute, and determined, ready to go back out on
    patrol.
        Mr. Chairman, the courage of those four marines is symbolic
    of the courage shown by countless others on duty in the global
    war on terror, and it is inspiring to all of us who serve our
    Nation. There are countless unsung heroes--yes, heroes--doing
    extremely important work under demanding conditions on land and
    at sea 24 hours a day, 7 days a week, all over the globe.
        To highlight one example, Navy sailors are guarding
    strategically vital oil terminals off the coast of Iraq,
    thereby protecting not only Iraq's but the world's economy from
    attacks by terrorists. They know the importance of their
    mission and they take great pride in doing it well.
        Now, I would like to thank this committee for its strong
    support for the Navy and Marines and note that your visits to
    forward-deployed marines and sailors are essential and they are
    deeply appreciated by those serving so far from home. The same
    applies to your visits to wounded heroes at Bethesda Naval
    Hospital, Walter Reed Medical Center, and other medical
    facilities. I know from my own visits with injured sailors and
    marines that your personal concern and support means a great
    deal to these young patriots who have sacrificed so much in the
    service of this Nation.
        Thank you, Mr. Chairman. I look forward to your questions.
        [The prepared statement of Secretary Winter follows:]

                  Prepared Statement by Hon. Donald C. Winter

     Providing the Right Force for the Nation Today . . . While Preparing
                       for the Uncertainties of Tomorrow.

                                  Introduction
        Mr. Chairman and members of the committee, thank you for the
    opportunity to appear before you today. I recently had the opportunity
    to visit our forces in Iraq. This was my first visit to Iraq. I was
    truly impressed by the genuine enthusiasm and drive of our forces. Our
    marines and sailors believe in what they are doing and they are
    performing superbly in very challenging circumstances. From the Iraqi-
    Syrian border region to Iraq's off-shore oil terminals, our troops are
    making a difference in the transition of Iraq to a democratic nation.
    Our troops recognize they are making a difference and are proud of what
    they do. I am very proud of what they are doing to win the war. It is
    not an easy battle but one that, with the support of the American
    people and Congress, we can and will win. Your continued support of our
    sailors and marines has a profound, positive impact on our ability to
    provide matchless naval forces for the defense of the United States.
        Throughout the world, the Navy and Marine Corps team continues to
    answer the Nation's call and play a leading role in the global war on
    terror. During 2005, the versatility and flexibility of expeditionary
    naval forces were repeatedly demonstrated while undertaking missions
    that ranged from major combat operations in Afghanistan and Iraq, to
    Humanitarian Assistance and Disaster Relief (HA/DR) operations in
    Indonesia and on our own Gulf Coast after Hurricanes Katrina and Rita.
        Providing the right force for the Nation today, in a time of war,
    is not the only challenge. We must also prepare for the uncertainties
    of tomorrow that include future terrorists and other emerging
    asymmetric threats, as well as potential peer competitors. All of these
    will require Navy and Marine Corps forces capable of preserving
    America's longstanding maritime dominance.
        Naval forces have inherent, unique warfighting capabilities that
    include global access, a non-intrusive footprint, persistent presence,
    and expeditionary power that always figure prominently in the
    President's deliberations during times of crisis. Farsighted leaders in
    Congress, recognizing naval forces' unique strengths, deserve our
    thanks for the key resource decisions they have made in recent years.
        This past year featured a long and impressive list of Navy and
    Marine Corps achievements in support of the global war on terror. Last
    year in Iraq, Navy and Marine Corps personnel proved critical to the
    achievement of wartime objectives. A Marine Expeditionary Force
    conducted operations in Al Anbar province, the heart of the Baathist
    insurgency, and was successful in ensuring security for the historic
    elections in January and December 2005. Marines also executed missions
    in Afghanistan and the Horn of Africa. Sailors were deployed to U.S.
    Central Command (CENTCOM) in various missions ashore, requiring boots
    on the ground. Missions were performed by sea, air, land (SEALs),
    Seabees, military police (MP), explosive ordnance disposal (EOD),
    medical, intelligence, civil affairs, and other support personnel.
        The flexibility and professionalism of naval forces were also on
    display in providing humanitarian relief to tsunami victims in South
    Asia, earthquake victims in Pakistan, and to our own citizens along the
    Gulf Coast. After Hurricane Katrina hit, naval forces responded with 23
    ships, more than 12,000 sailors and marines, and 104 aircraft to
    evacuate more than 8,000 victims and deliver more than 2 million pounds
    of food and countless gallons of water. The zeal and professionalism
    with which sailors and marines rushed forward to save lives and provide
    comfort to the afflicted were brought under an international spotlight,
    proving once again that naval forces have the versatility to serve as
    first responders with global reach.
        In carrying out these missions, from Kabul to Baghdad, and
    Indonesia to New Orleans, the Navy and Marine Corps performed superbly,
    taking advantage of their unique capabilities to engage the enemy or
    rescue those in distress, achieving objectives ranging from eliminating
    a terrorist enclave to building enduring relationships and gaining
    influence through our goodwill gestures. Faced with the strategic
    imperatives of providing the right force for the Nation today, while
    simultaneously building naval capabilities for the challenges of
    tomorrow, the Department must continue on its course toward
    transformation and modernization. Funding technologies and weapons
    systems that will enable naval forces to enlarge their contributions to
    global war on terror is our most urgent task. Investing in the ships,
    aircraft, submarines, and Marine Corps warfighting equipment and people
    to preserve this Nation's historic naval power to dissuade or deter
    peer competitors, to prevail in war, and to win hearts and minds,
    remains an enduring, fundamental strategic requirement.
        Responsible and successful statesmanship requires matching
    strategic ends to available means. This requires trade-offs and hard
    choices in a security environment where errors or misjudgments can
    result in significant consequences. The Department of the Navy's
    portion of the President's budget for fiscal year 2007 is the product
    of a realistic, rigorous assessment of naval requirements, resources,
    and priorities. It reflects both wartime exigencies and prudent
    investments, with a vigilant eye on the uncertainties of tomorrow.
        As Navy and Marine Corps forces are actively engaged in combat
    operations in Iraq, Afghanistan, and stand ready around the globe, we
    have a solemn duty to ensure that our sailors and marines are trained,
    equipped, and prepared for all missions. The fiscal year 2007
    President's budget meets these requirements.
                       fiscal year 2007 budget priorities
        In support of the Department of the Navy's mission and as validated
    by the 2006 Quadrennial Defense Review (QDR), the fiscal year 2007
    President's budget provides the right force for the Nation today,
    prepares for the uncertainties of tomorrow, and effectively manages the
    risk imposed by legitimate fiscal constraints.
        The fiscal year 2007 budget includes $127.3 billion for the
    Department of the Navy, an increase of $4.4 billion over last year's
    baseline appropriations.
        In fiscal year 2007, every appropriations category increases except
    for research and development (R&D). Military Personnel accounts
    increase due primarily to health care costs and retired pay. Operating
    accounts increase because of the rising cost of fuel, and to support
    higher readiness levels that overall generates a more cost-efficient
    use of valuable naval assets. Procurement accounts increase as we build
    the future fleet. The R&D accounts decrease as a result of programs
    transitioning from development to production. The following summarizes
    the fiscal year 2007 budget highlights for the Department of the Navy:
    Personnel Salary and Benefits
        The fiscal year 2007 President's budget includes an increase of
    $1.4 billion in military personnel spending which includes a basic pay
    raise of 2.2 percent for all servicemembers, health benefits, a 5.9-
    percent increase in housing allowance, special pays, and targeted pay
    raises for warrant officers and mid-grade/senior enlisted personnel. As
    a result of targeted pay incentives, the Navy and Marine Corps achieved
    nearly every Active-Duty recruiting and retention goal with exceptions
    found only in highly technical specialties. To maintain momentum, the
    Navy and Marine Corps have increased funding for enlistment bonuses.
    Congressional support is appreciated for the reenlistment bonus
    increases slated for selected technical ratings.
    Operation and Maintenance
        The fiscal year 2007 President's budget increases operation and
    maintenance by $2.1 billion. As part of a joint warfighting team, the
    Navy and Marine Corps will control the seas, assure access, and project
    offensive power and defensive capability to influence events at sea and
    ashore. The ability of naval forces to meet the combatant commanders'
    requirements is a function of their combat readiness. The Navy's Fleet
    Response Plan (FRP) produces adaptable force packages and better
    sustains readiness throughout a unit's operational cycle to ensure the
    availability of fully ready carrier strike groups (CSG) and other fleet
    assets. The goal of FRP is to provide the Nation with six CSGs within
    30 days, and an additional CSG within 90 days. Fiscal year 2007 funding
    will invest in future readiness for an experienced and trained fleet
    and will also provide better trained, safer, and more lethal marines
    before they deploy. Marine forces preparing for combat operations also
    require additional training resources. Fiscal year 2007 funds will also
    pay to implement the following new joint capabilities, which reflect an
    increased role for the Department of the Navy in prosecuting global war
    on terror:

              a. The Marine Corps Special Operations Command (MARSOC) will
            enhance interoperability, and provide greater flexibility and
            increased capability to conduct irregular warfare.
              b. Regeneration of a Navy riverine capability will fill a
            critical capability gap by extending operations into the
            ``brown water'' environment, and provide additional
            opportunities to build partner-nation cooperation.
              c. The Expeditionary Security Force will increase the
            effectiveness of shipborne security and maritime interdiction
            operations by supporting intercept and boarding capabilities in
            every CSG/expeditionary strike group (ESG), as well as
            providing high end defensive capabilities within the Navy in
            support of force protection, harbor/port defense, and
            protection of maritime infrastructure.
              d. The National Maritime Intelligence Center, serving as the
            Nation's Global Maritime Intelligence Integration Center, will
            increase maritime domain awareness (MDA) by strengthening
            interagency operations and enhancing partner-nation
            cooperation.
    Shipbuilding Account
        The fiscal year 2007 budget for shipbuilding ensures that
    tomorrow's fleet will remain the world's preeminent. In fiscal year
    2007, 14 ships will be delivered to the Navy that include: 4 Amphibious
    Transport Dock ships (LPD)--(Hurricane Katrina impact may delay 2 ships
    to fiscal year 2008), 3 Dry Cargo and Ammunition ships (T-AKE), 3
    Guided-Missile Destroyers (DDG), 1 Amphibious Assault ship (LHD), 1
    Attack submarine (SSN), and 1 Oceanographic Survey ship (T-AGS). Also,
    the first of its class Littoral Combat Ship (LCS) will be delivered,
    and built in less than 2 years. This is the payoff of previous years'
    investments toward buying naval capabilities for the future.
    Aviation Account
        The fiscal year 2007 budget increases aviation procurement by $1.2
    billion to support the continued acquisition of critical programs
    including the Joint Strike Fighter (JSF), F/A-18E/F, EA-18G, MV-22, AH-
    1Z/UH-1Y, MH-60R, MH-60S multimission helicopters, and the Joint
    Primary Aircrew Training System (JPATS). Funding for 165 aircraft in
    fiscal year 2007 reflects an increase of 31 aircraft over fiscal year
    2006, and a total of 1,150 new aircraft over the Future Years Defense
    Plan (FYDP).
    Marine Corps Ground Equipment Accounts
        High Mobility Multi-Purpose Wheeled Vehicle (HMMWV), Light Armored
    Vehicle Product Improvement Program (LAV PIP), Lightweight 155mm
    Howitzer (LW-155), High Mobility Artillery Rocket System (HIMARS), and
    the Assault Breaching Vehicle (ABV) are vital programs funded in this
    budget. The Expeditionary Fighting Vehicle (EFV) begins initial low
    rate production in fiscal year 2007.
    Research, Development, Test & Evaluation (RDT&E) Account
        In fiscal year 2007, research and development decreases by $1.8
    billion, reflecting acquisition maturation and the transition to
    production. Additionally, there is a transfer of $280 million from Navy
    R&D to Defense Wide R&D for Joint Forces Command efforts. Critical
    Shipbuilding programs include CVN 21, DD(X), LCS, Joint Highspeed
    Vessel, and the SSN 774 Virginia-class submarine. Critical manned
    aviation programs include the JSF, P-8A Multi-Mission Maritime Aircraft
    (MMA), VH-71 presidential helicopter replacement, E2D, EA-18G, and CH-
    53K.

              Providing the Right Force for the Nation Today . . .

                                naval workforce
        Those of you who have visited forward deployed Navy and Marine
    forces, as I have recently done, know that naval forces include the
    best of America's young men and women. I am energized every time I have
    an opportunity to meet and talk with our sailors and marines. It is
    pure joy each time I reenlist or promote these true patriots. I deeply
    admire their willingness to continue their service and swear an oath of
    allegiance knowing the dangers and hardships they face. My visits
    reinforced the highest regard I already hold for the tremendously
    dedicated men and women who serve our Nation, in uniform and out, and
    for their leadership.
        Commitment to the welfare and professional development of these
    sailors and marines is a top priority. I give the same emphasis to
    safety. The Department is making investments in protecting sailors and
    marines through accident prevention initiatives and with armor and
    specialized equipment. Our sailors and marines, civilians, and
    contractors deserve our very best efforts to maintain their continued
    safety and welfare.
        The rising cost of naval manpower continues to drive the overall
    budget significantly. While the Department continues to increase
    performance efficiency through targeted manpower reductions, total
    manpower costs continue to rise. We must invest in this force so that
    it remains technically competent, properly equipped, and well trained.
    Protect Sailors and Marines
        Protecting sailors and marines is a top priority. In response to
    growing force protection concerns in Iraq and Afghanistan, the
    Department has expeditiously acquired technology and hardware to equip
    marines and sailors for current wartime operations.
        Personal Protective Equipment
        Every marine, sailor, and Department of the Navy civilian is issued
    a complete set of body armor before going into Iraq or Afghanistan.
    They are outfitted with the Interceptor Body Armor System, including
    outer tactical vests, small arms protective inserts (SAPI), ballistic
    helmets, and ballistic goggles. Enhanced SAPI plates have been
    providing a significant force protection improvement, with 13,798 sets
    fielded. In June 2005 the Marine Corps identified the need for armor
    side plates. Delivery to the field began in November 2005, and to date
    11,614 sets of body armor side plates have been shipped to theater, and
    an additional 9,000 sets will be fielded during the third quarter of
    fiscal year 2006. Other initiatives, such as an improved lightweight
    combat helmet, and lower face and body armor, are under development.
        Vehicle Hardening
        Since August 2004, all Marine Corps vehicles operating outside
    forward operating bases have been equipped with Level II armor or
    better. The Marine Corps worked hard to replace the first generation
    armor with this improved zonal protection.
        A fiscal year 2006 bridge supplemental of $179 million is procuring
    the final 524 M1114s (Up-Armored Armament Carrier configuration of the
    HMMWV family) to fill the requirement for 2814 M1114s, by September
    2006. The Marine Corps Systems Command and the Marine Corps Warfighting
    Lab teamed with the Army Developmental Test Command to test and rapidly
    assess various materials for use in vehicle hardening, to include
    improved ballistic glass, armor, and ceramics. These added armor
    capabilities have been incorporated into the next generation of vehicle
    hardening initiatives: the Marine Armor Kit (MAK) for the HMMWV, and
    the Medium Tactical Vehicle Replacement (MTVR) Armor System (MAS). MAK
    and MAS armor are replacing previous generations with an integrated,
    comprehensive (improved perimeter, top, and under-body) armor kit. A
    total of 2660 HMMWV MAK installations were completed by November 2005.
    MTVR MAS kit installation is over 60 percent complete with an estimated
    completion date of May 2006 for the remaining vehicles.
        Counter Improvised Explosive Devices Technology and Equipment
        The Department has aggressively developed technologies to counter
    the threat posed by improvised explosive devices (IEDs) in Iraq and
    Afghanistan. I recently had the opportunity to visit our forces in
    Iraq. From first-hand observation, I can assure you that we are working
    the IED problem comprehensively and with a great sense of urgency. IEDs
    are a continuously evolving problem and we are constantly evolving our
    response. We are effectively addressing challenges associated with
    IEDs.
        The Department of Defense (DOD) designated the Navy as the single
    manager for Explosive Ordnance Disposal (EOD) technology and training
    responsible for the development of Joint Service EOD technology. The
    Department has fully supported the Joint IED Defeat Organization with
    leadership as well as delivery to Iraq of a number of high and low
    powered jammers. The Office of Naval Research (ONR) is focusing on
    long-term (5-10 years) research for solutions to countering the IED
    threat. Over 450 responses to their Broad Agency Announcement have been
    received and are currently being evaluated.
    Recruit/Retain the Right Force
        With advances in the technology of weapons systems and platforms
    requiring personnel with highly specialized knowledge of computers and
    engineering, Navy and Marine Corps recruiters must target the top of
    the talent pool. Those who join and are subsequently trained to further
    develop their skills become increasingly valuable and are difficult to
    replace. Monetary incentives to recruit and retain are important, but
    not sufficient. Effective leadership and the sense that one is engaged
    in a noble, rewarding profession are even more important in motivating
    talented people to serve the Nation.
        Pay Compensation Initiatives
        Officer retention rates remain well above the historical lows of
    the late 1990s. The improvement is directly attributable to targeted
    incentive/critical skill pays established to address shortfalls.
    Despite the current positive retention trend, shortfalls remain in the
    lieutenant commander through captain ranks in the surface and submarine
    communities. The use of continuation pay to target shortfalls will be
    continued.
        Family Support
        Military service places unique demands on families and communities.
    The fiscal year 2007 President's budget for family and community
    services supports my personal emphasis on our people. It improves
    recruiting and retention, and supports our personnel in times of
    crisis. Family support programs and services assist in achieving
    operational readiness and improve retention by caring for our families.
    The Marine for Life--Injured Support Program provides continuing care
    for the critically injured marines and sailors serving with marines. A
    robust family support system is an essential element to maximizing
    every sailor's and marine's quality of service, and is my personal
    priority.
        Housing Initiatives
        Improving housing is a top priority as we recruit, retain, and
    improve the naval workforce. The complete elimination of inadequate
    military housing is our goal. The Department's housing strategy focuses
    on several areas including zero average out-of-pocket expenses for
    sailors and marines by raising basic allowance for housing (BAH) in
    high-cost areas, completing construction of new housing units, and
    completing our successful program of privatizing military family
    housing. Additional initiatives include maintaining the ``Homeport
    Ashore'' program that constructs new housing for single, junior (E1-E3)
    personnel currently living onboard their ships, even while in homeport.
    Marine Corps improved housing for single marines will be completed by
    fiscal year 2011.
        Healthcare
        Providing superb health care to sailors, marines, and their
    families is a critical part of the Department's support for personnel.
    The fiscal year 2007 budget includes an increase in funding to support
    healthcare accrual costs. Navy medicine is focused on supporting the
    deployment readiness of the uniformed services by delivering the right
    medical care for the fleet and Fleet Marine Force while providing for
    the health care needs of families and retirees. This health care
    includes improved post deployment care for returning marines, sailors,
    and their families.
    Shape the Force to Match the Need
        As the world gets more complex, the future force must continue with
    technology intensive training, but must also develop new skill sets as
    we move from the blue to the green and brown water environments.
    Advances in ship and systems designs will allow us to use technology to
    improve warfighting readiness, while skills like cultural awareness and
    foreign languages will enhance our effectiveness as we operate across
    the littorals and ashore. Future emphasis will focus on matching the
    right skills and experience to the right place at the right time, and
    providing the personal and professional tools needed to succeed.
        Moving forward to execute a comprehensive strategy to enhance
    combat effectiveness in the 21st century, the Department is designing a
    force that is aligned, shaped, and developed to current and future
    mission requirements. In order to reduce and reshape the force,
    incentives and tools are needed to identify personnel in obsolete or
    overmanned skill sets. The Perform-to-Serve and Early Release programs
    are two examples that have helped create a more experienced, better
    trained, and smaller force.
                                   operations
        Today, sailors and marines are postured worldwide, fighting the war
    on terror, deterring aggression by would-be foes, preserving freedom of
    the seas, and promoting peace and security. On 15 February 2006, 141
    ships (50 percent of the battleforce) were underway of which 97 ships
    (35 percent) are forward deployed. Navy Active strength totals 357,474
    of which 5,298 are mobilized Reserves. Marines are forward deployed
    worldwide, including the combat zones of Iraq and Afghanistan. Marine
    Corps strength totals 179,139 with 7,040 mobilized Reserves.
    Project Naval Power in the Global War on Terror
        Winning the global war on terror is our number one strategic
    priority. Sailors and marines are actively engaged in operations in
    both Iraq and Afghanistan, as well as in counter-terrorist operations
    in the Horn of Africa, the Philippines, the Persian Gulf, and elsewhere
    around the globe.
        Currently over 26,000 marines are serving in the CENTCOM Area of
    Responsibility (AOR), together with both sea- and shore-based Navy
    personnel in support of Operations Iraqi Freedom and Enduring Freedom.
    Marines continue to conduct operations in the Al Anbar province of Iraq
    with counter-insurgency operations in the Euphrates river valley and
    other locations in Iraq. Training of Iraq forces is of particular
    importance. In Afghanistan, marines provide a reinforced infantry
    battalion to the multi-national forces, and three embedded training
    teams within the Afghan National Army. These teams train, mentor, and
    operate with their Afghan counterparts. Building up the capacity of our
    partners is critical to the strategy of countering extremist influence
    in the war on terror.
        All together there are over 10,000 sailors serving ashore
    throughout the CENTCOM AOR including more than 4,000 in Iraq, and an
    additional 2,600 in Kuwait that include SEALs, Seabees, MPs, EOD,
    medical, intelligence, legal, civil affairs, and other support
    personnel. Navy CSGs and ESGs continue to deploy in support of global
    war on terror, conduct combat operations in Iraq and Afghanistan,
    execute counter-piracy missions, and provide humanitarian assistance
    and disaster relief such as the tsunami relief, Pakistani earthquake,
    and on our own Gulf Coast after Hurricanes Katrina and Rita.
    Additionally, there are approximately 400 sailors in Afghanistan and
    700 sailors at the Guantanamo Bay Naval Station, where the Navy is
    scheduled to assume responsibility for the joint task force in the
    spring 2006.
    Improve Surge Capability
        The global war on terror requires a naval force capable of surging
    to protect our interests throughout the world. The FRP is the
    operational framework that capitalizes on investments that have been
    made for higher readiness throughout a unit's operational cycle. By
    leveraging increased readiness under the framework of the FRP, the Navy
    has responded to support combatant commanders around the globe. The
    Navy today is meeting all commitments with trained and ready forces,
    and taking on new roles to address security challenges. The Marine
    Corps accounts for 4 percent of the DOD budget while providing 23
    percent of the Nation's Active-Duty ground forces. Currently, over
    39,000 marines are forward deployed conducting combat, peacekeeping,
    humanitarian assistance, and training missions worldwide. This
    investment in expeditionary combat power is more than just a good
    value; it is a product of focused, responsible stewardship.
    Enhance Homeland Security
        The Navy has established a strong cooperative working relationship
    with the U.S. Coast Guard in support of maritime defense operations.
    The existing DOD/Department of Homeland Security (DHS) Memorandum of
    Agreement (MOA) enables rapid provision of Coast Guard forces to the
    Navy in the event of a national crisis. The Services are currently
    working the modalities of inter-service cooperation cited in the
    Maritime Operational Threat Response plan of the President's National
    Strategy for Maritime Security. Additionally, the Department will
    remain prepared for continental U.S. (CONUS) consequence management
    with capabilities that include maritime and aviation assets for
    logistics, search and rescue (SAR), EOD, headquarters and communication
    platforms, medical, salvage, and Seabee construction support.
    Increase Maritime Domain Awareness (MDA)
        Protection of the U.S. homeland and critical interests around the
    world requires a strong commitment to enhancing MDA, a key component of
    an active layered maritime defense in depth. The U.S. Navy is a vital
    part of this initiative. The Presidential Directive for Maritime
    Security Policy calls for a national plan to achieve MDA. The Navy
    actively participates in the National MDA Implementation Team with U.S.
    Northern Command (NORTHCOM) and 19 other agencies to develop an
    investment strategy. The team is improving MDA through interagency
    cooperation, developing and strengthening relations with international
    partners, and accelerating investment in multinational coordination,
    such as the Automatic Identification System (AIS), and the
    Multinational Information Sharing System (MNIS). Proliferation Security
    Initiative (PSI) and the Container Security Initiative (CSI) are
    important tools in this effort. Additionally, the Navy and Coast Guard
    are exploring other focused technology areas including data fusion and
    anomaly detection capabilities to enable analysts and watchstanders to
    transform large quantities of data into actionable intelligence.
    Provide Humanitarian Assistance/Disaster Relief
        The Navy and Marine Corps team can rapidly respond to crises around
    the globe to provide combat power projection or humanitarian assistance
    and disaster relief. After the tsunami struck South Asia late last
    year, forward-deployed naval forces were the first on-scene providing
    life-saving assistance. Within a few days of the disaster, U.S.S.
    Abraham Lincoln (CVN 72), U.S.S. Bonhomme Richard (LHD 6) and
    supporting ships arrived off the coast of Indonesia, and commenced
    ferrying supplies ashore and evacuating critical patients to sea-based
    medical facilities.
        During the relief operation, over 25 ships with embarked aircraft
    and landing craft, and the hospital ship U.S.N.S. Mercy (T-AH 19),
    delivered more than 24 million pounds of relief supplies and treated
    over 6,500 patients. Recovery and relief in Pakistan following the
    devastating earthquake were led by on-station Navy and Marine Corps
    units. These kinds of missions show our Nation's compassion and are
    just as important as showing our military strength.
        When Hurricanes Katrina and Rita left a swath of destruction across
    our southern Gulf Coast, the Navy and Marine Corps team responded.
    Ships of all types sortied from their homeports to the Gulf of Mexico.
    Navy and Marine Corps helicopters from air stations around the country
    quickly flew into New Orleans in the critical first few days following
    the storm to rescue thousands of stranded citizens. U.S.S. Bataan (LHD
    5), conducting training exercises in the area, was first to respond.
    U.S.S. Iwo Jima (LHD 7), our newest amphibious assault ship, transited
    from Norfolk and docked pierside in New Orleans to serve as a joint,
    interagency command and control center, a landing strip for a multitude
    of helicopters, and a base for rescue workers. U.S.S. Harry S Truman
    (CVN 75) sortied from Norfolk to act as an additional aviation platform
    for ferrying relief supplies. Navy and Marine Corps Reserve personnel
    used their amphibious training and equipment for rescue operations, and
    in many cases, were the first help to arrive on-scene. The hospital
    ship U.S.N.S. Comfort (T-AH 20) surged from reduced operating status in
    Baltimore to be on-scene in a few days. Bases at Gulfport and Meridian
    provided over 7,000 meals a day to evacuees, military personnel and
    relief workers. Marines flew 815 sorties and transported 1.1 million
    pounds of cargo and 5,248 passengers. A total of 446 rescue missions
    were flown, resulting in the recovery of 1,467 personnel. The Seabees
    built self-contained tent cities that housed 6,500 people each and
    included hot showers, hot meals and laundry facilities. Fleet and
    family support centers from unaffected naval stations moved into the
    area to set-up ``safe haven'' programs to help military families deal
    with the enormous stress that Katrina brought in her wake. All the
    efforts of the sailors and marines focused on helping others in time of
    need, regardless of geography or circumstance. Carrying on the proud
    tradition of naval service, they earned a particular sense of
    accomplishment in these noble missions.
    Expand Presence and Capabilities into Littoral and Riverine
            Environments
        The Navy and Marine Corps are expanding the Nation's ability to
    extend combat power from the sea to the littoral regions of the world.
    These regions encompass large portions of the world's populace and hold
    many vital centers for transportation, commerce, and government. One
    key initiative, the Naval Expeditionary Combat Command (NECC), will
    combine a riverine and small boat capability with expeditionary
    training, security, and logistics, maritime civil affairs, Seabees,
    EOD, and Mobile Diving and Salvage. This realignment of existing force
    structure with new warfare initiatives will enhance maritime boarding
    operations, port security, foreign military training, and crisis/
    disaster response to create influence and capacity for near-shore and
    inland waterway operations.
                                   equipment
        The Department of the Navy is committed to enhancing procurement
    programs to improve capabilities, efficiency, and productivity. The
    Department's strategy is to establish consensus for procurement among
    the administration, Congress, and contractors to forge a new commitment
    to building a force for the future, while establishing a stable
    industrial base.
    Simultaneously Reset, Recapitalize, and Modernize Equipment
        Combat operations in Iraq and Afghanistan and the increased
    operational tempo in support of global war on terror are stressing
    equipment and diminishing pre-positioned stocks of hardware, munitions,
    and supplies.
        Harsh environments, unavoidable maintenance delays, and battle
    damage are all taking their toll on equipment. The cost associated with
    resetting the force is above the baseline budget and will be covered
    with appropriate supplementals.
        Combat operations have subjected much U.S. Marine Corps equipment
    to a lifetime worth of use in just a few years. Many systems are
    already at or beyond program service life. Examples include the M198
    howitzer, HMMWV, EA-6B, CH-53D, CH-46E, and UH-1N. Service life
    extension programs and innovative forward deployed maintenance programs
    are helping keep current equipment combat-ready.
    Enhance Procurement Programs: Improvements and Affordability
        The Sea Enterprise initiative is transforming naval business
    processes and driving efficiencies and effectiveness, essentially
    balancing the ``Right Force, Right Readiness, and Right Cost.'' Sea
    Enterprise is changing the Department's business culture, improving
    productivity, streamlining processes, and harvesting savings to support
    higher priorities.
        The Department is developing leaders with a better understanding of
    business strategies, cost control, program risk, and rapid flexible
    design. As stewards of the Department's acquisition and total ownership
    processes, the systems commands, direct-reporting program managers
    (DRPMs), and program executive officers (PEOs) are responsible for
    furnishing high-quality yet affordable technologies, systems,
    platforms, training, and support to the operating forces.
        To help guard against the danger of procurement fraud, the
    Department established the Naval Acquisition Integrity Office in the
    Office of the General Counsel. This office coordinates all parts of the
    procurement fraud program and provides training and guidance on
    procurement fraud matters.

            . . . While Preparing for the Uncertainties of Tomorrow

                        shape our 21st century workforce
        Future combat effectiveness and employment are dependent upon
    obtaining a force with the right skills in the right place at the right
    time. The Active and Reserve military components, civil servants, and
    the Department's contractors must continue to adapt to different
    operating environments, develop new skills, and rebalance capabilities
    and people to remain prepared for the new challenges of an uncertain
    future. The Department of the Navy is working to increase efficiency by
    implementing force shaping tools to target manpower reductions, and by
    defining the skill-mix of the force to capitalize on new technologies
    and conduct new missions.
    Ensure the Correct Endstrength
        To facilitate transformation, the Navy strength will decrease by
    12,000 in fiscal year 2007 to 340,700. The budgeted Navy endstrength
    reflects a commitment to proper sizing and includes the following
    initiatives:

              a. ``Sea Swap'' rotational crews for smaller ships.
              b. Decommissioning of older, manpower intensive platforms.
              c. Improved use of technology to reduce shipboard manning and
            shorten training pipelines.
              d. Conversion of military to civilian, as appropriate. This
            includes the continued conversion of billets on selected
            Military Sealift Command ships and in medical facilities in
            rear areas or ashore.

        The Marine Corps is realigning within its endstrength to ensure
    continued readiness to sustain combat capabilities. The Marine Corps is
    utilizing selected Marine Corps Reserve units and individual augmentees
    as necessary to maintain essential wartime capability. Baseline funded
    Marine Corps manning levels for Active and Reserve Forces remain the
    same in fiscal year 2007 at 175,000 and 39,600 respectively.
    Develop a Force with the Skills Required for the Future
        Future force attributes such as foreign language skills, cultural
    awareness, mastering technology and cyberspace, together with
    traditional warfighting skills will be critical to the Navy and Marine
    Corps. The Navy is expanding the Foreign Area Officer (FAO) program
    that will form a professional cadre of officers with regional expertise
    and language skills to provide support to fleet commanders, combatant
    commanders, and joint staffs. The immediate mission for the community
    is to rapidly improve the Navy's ability to conduct theater security
    cooperation, improve partner capacity in global war on terror, and
    generate actionable intelligence. These personnel will work in complex
    environments in remote locations and will forge personal relationships
    that could be useful during times of crisis.
        The Marine Corps Center for Advanced Operational Culture Learning
    (CAOC-L) is the corps' ``one-stop'' clearing house for operational
    culture and language training. Through focused training for the
    operating forces, individual training and professional military
    education, distance learning, and professional reading, it promotes a
    grasp of culture and language as regular, mainstream components of the
    operating environment--the human terrain--throughout the full spectrum
    of military operations.
        The Marine Corps is establishing a Marine Corps Special Operations
    Command (MARSOC) as a component of the U.S. Special Operations Command
    (USSOCOM). MARSOC will enhance Marine Corps and USSOCOM
    interoperability and provide greater flexibility with increased
    capability to fight non-traditional threats. The mission of MARSOC
    headquarters will be to organize, man, train, and equip Marine Special
    Operations Forces. The command's subordinate units will provide
    training to foreign military units and perform specific special
    operations missions such as: direct action, special reconnaissance,
    counterterrorism, and foreign internal defense. MARSOC will be
    organized into 3 subordinate elements with an authorized strength of
    2,600 marines and sailors. The current plan calls for initial
    operational capability (IOC) during the fall of 2006 and a full
    operational capability by 2010.
    Active/Reserve Integration
        Active Reserve Integration (ARI) aligns Reserve component (RC) and
    Active component (AC) personnel, training, equipment, and policy to
    provide a more effective and efficient total force capable of meeting
    dynamic national defense requirements.
        The Navy is currently aligning RC and AC units to better meet
    Operation Iraqi Freedom and Operation Enduring Freedom requirements and
    the Navy's vision for our future force structure. RC helo-combat
    support (HCS) forces will be integrated into AC helo, RC and AC EOD
    units are being integrated and two RC Navy coastal warfare units (NCW)
    are being converted to AC. The Navy established integrated Operation
    Vigilant Mariner units providing vessel security, as well as
    expeditionary training teams improving multinational capabilities.
        The Navy is studying the role of the RC in future Navy mission
    areas of riverine warfare and civil affairs. Ongoing initiatives to
    meet Operation Iraqi Freedom and Operation Enduring Freedom provisional
    unit requirements, AC and RC sailors are working together to fill
    billets in civil affairs, detainee operations, intelligence, and
    reconstruction team efforts.
    Implement the National Security Personnel System (NSPS)
        NSPS is a new civilian personnel system, designed to meet the DOD
    national security challenges of the 21st century. NSPS will strengthen
    the ability to accomplish the Department's mission in an ever-changing
    national security environment. NSPS accelerates efforts to create a
    total force (Active military, Reserve, Guard, civilian, and
    contractors), operating as one cohesive unit, with each performing the
    work most suitable to their skills. NSPS will provide a human resources
    system that appropriately recognizes and rewards employees' performance
    and the contributions they make to the Department's mission.
                           changing the way we fight
        The Department of the Navy continues to transition to a force more
    capable of winning wars, deterring aggression, preserving the high
    seas, and securing the maritime domain, while ensuring access and
    sustainability of the joint warfighting team in the blue, green, and
    brown water arenas. The Navy and Marine Corps team will continue to
    transform in response to a new force planning construct as articulated
    in the 2006 QDR. Naval forces will use the sovereignty of the sea and
    enhanced networked joint Sea Basing to operate without restrictions.
    The Department's sailors, marines, and civilians will leverage
    innovative concepts, advanced technologies, and new business practices
    to increase warfighting effectiveness.
    Meeting Future Challenges
        Naval forces will engage potential adversaries as far from the
    United States and our interests as possible, and during times of crisis
    will form the leading edge of America's response. The ability of our
    forces to embrace and prevail in a future characterized by unrestricted
    warfare and uncertainty will be essential to mission success. The
    enduring role as our Nation's sea-based force will require that the
    Navy and Marine Corps team provide access, fight and win, and
    continually transform.
    Strengthening Joint Concepts and Operations
        The Navy and Marine Corps team is committed to strengthening and
    refining concepts and operations as part of the joint fight. From
    combat operations in Iraq, to stability operations in the Horn of
    Africa, to counter-drug operations in the Caribbean, naval forces are
    increasingly working in concert with other uniformed services and
    Government agencies. Joint acquisition of weapon systems and command,
    control, communications, computers, intelligence, and reconnaissance
    (C\4\ISR) capabilities will increase interoperability and effectiveness
    while reducing costs. The vision for joint maritime forces, to include
    the Coast Guard, is a networked fleet that is more capable of
    projecting naval power in the brown and green waters of coastal areas.
    Enhancing Navy's Role in Ballistic Missile Defense (BMD)
        National Security Presidential Directive 23 identifies the Navy's
    role in BMD. That role is to support and ultimately field the maritime
    elements of the BMD system to support detection, tracking, and
    engagement of ballistic missile threats in all phases of flight. The
    Aegis BMD system contributes to the overall plan by providing the
    capability for Navy surface combatants, on-station near any area of
    concern, to detect missile launches, as well as cue and provide fire-
    control quality tracking information to ground-based interceptors.
    Additional capabilities to provide area defense by intercepting short-
    and medium-range ballistic missiles are being delivered to the fleet.
    U.S.S. Lake Erie (CG 70), the dedicated BMD test ship, has executed six
    successful flight tests of the SM-3 missile in seven attempts since
    2002. The next test flight is scheduled for June 2006. The Aegis BMD
    capability has been installed on 12 ships: 2 cruisers (engagement
    capable), and 10 destroyers (long-range surveillance and tracking
    capable). By demonstrating the ability to track long-range ballistic
    missiles, and developing plans to demonstrate a sea-based engagement
    capability, the Aegis fleet has paved the way for the Navy to play a
    significant role in the Nation's missile defense.
    Define Future Force Structure/Capability
        The fiscal year 2007 President's budget supports a larger, more
    capable naval force structure to meet joint warfighting requirements,
    presence missions, and global war on terror demands. The budget
    provides for an increase in overall force structure, as well as a
    significant increase in capability. The annual investments in this
    budget support the growth of naval forces across the FYDP and lay the
    foundation for the force structure outlined in the Annual Long Range
    Plan for Construction of Naval Vessels for fiscal year 2007. The plan
    is to build to a target force structure based on our best estimate of
    the requirements. The number of ships and types of ships in this target
    force structure will evolve over time. The Department intends to
    maintain near-term stability to allow proper workforce, process, and
    capital end product planning. Based on Navy analysis, the capability
    required to support the QDR Force Planning Construct is about 313 ships
    of a mix as defined in the long-range shipbuilding plan, providing
    capabilities that will make the fleet even more agile, fast,
    persistent, and lethal.
    Surface Platforms
        The fiscal year 2007 shipbuilding plan supports the Navy's vision
    of a new generation of ships with higher speed, more persistence and
    precision, and reduced manpower and life cycle costs. The Navy's
    challenge is to build a fleet of the future that possesses the
    capability and capacity to meet joint demands for naval forces across
    the spectrum of operations from major combat operations to humanitarian
    assistance and disaster relief. The Department, through the Defense
    Planning Guidance, and QDR, has defined the required capabilities for
    the joint force through 2020. The fiscal year 2007 President's Budget
    provides for seven new ships. The total number of new ships across the
    FYDP is 51, an increase of 3 ships from last year's budget projection.
        CVN 21
        Aircraft carriers remain the premier asset for rapid crisis
    response and early decisive striking power in major combat operations.
    CVN 21 balances improved warfighting capability and quality of life
    improvements for the crew, with reduced acquisition and life cycle
    costs. Efficient nuclear propulsion, electromagnetic aircraft launch
    system, advanced arresting gear, and a three-fold increase in
    electrical generating capacity will enable CSGs to provide forward
    presence, rapid response, endurance on station, and multi-mission
    capability. Construction of the lead ship (CVN 78) will cost $10.5
    billion, of which $2.4 billion is non-recurring. Advanced procurement
    funding of $784 million is requested in fiscal year 2007 for CVN 78 and
    CVN 79. New technology development is on track and component testing is
    in progress. Steel was cut on the first advanced construction hull unit
    on April 2005, with the lead ship due to be delivered in fiscal year
    2015 to replace U.S.S. Enterprise (CVN 65).
        DD(X)
        The DD(X) is the Navy's next generation destroyer. It is designed
    as a multi-mission surface combatant tailored for land attack and
    littoral dominance by providing persistent volume fires with high
    survivability. Under the ``Dual Lead Ship'' strategy, Northrop Grumman
    Ship Systems and General Dynamics-Bath Iron Works will each build a
    lead ship to the common design. The funding for these ships will be
    split between the fiscal year 2007 and fiscal year 2008 budgets.
        Littoral Combat Ship (LCS)
        The LCS will be a fast, agile, and networked surface combatant with
    capabilities optimized to assure naval and joint force access into
    contested littoral regions. Two ships are currently under construction
    with delivery of the first LCS, designated U.S.S. Freedom, scheduled
    for fiscal year 2007. A total of 23 LCS ships will be procured between
    fiscal year 2007 and fiscal year 2011. LCS is designed with a speed
    goal of over 40 knots at full displacement in sea state 3 to help
    defeat anti-surface threats. It will possess inherent capabilities to
    conduct missions supporting special operations, maritime interception,
    and homeland defense. The LCS sea frame is designed to be outfitted
    with reconfigurable payloads that can be changed out quickly. This
    modular design feature will provide the flexibility required to adapt
    to the uncertainty of the future.
        San Antonio Class Amphibious Transport Dock Ship (LPD 17)
        U.S.S. San Antonio (LPD 17) was commissioned on 14 January 2006.
    LPDs 18 and 19 have been launched, and LPDs 20 and 21 keels have been
    laid and are in full production. Contract awards for LPDs 22-24 are
    expected in the 2nd quarter of fiscal year 2006. LPD 17 is an
    amphibious transport dock ship that functionally replaces the LPD 4,
    LSD 36, LKA 113, and LST 1179 classes of amphibious ships for
    embarking, transporting, and landing elements of a marine force by
    helicopters, landing craft, amphibious vehicles, and by a combination
    of these methods. Its unique design will facilitate expanded force
    coverage and decreased reaction times of forward deployed marine
    expeditionary units. In forcible entry operations, LPD 17 will help
    maintain a robust surface assault and rapid off-load capability for the
    Marine Air-Ground Task Force (MAGTF) far into the future.
        Maritime Preposition Force (Future) (MPF(F))
        MPF(F) will transform the maritime prepositioned ships-supported
    marine expeditionary brigade (MEB) from an ashore fighting unit to one
    that can operate continuously from a sea base without the need for
    support from land. The MPF(F) family of ships will advance the
    capability of seabasing to support a wide spectrum of joint force
    operations.
        The fiscal year 2007 budget provides for procurement of one Dry
    Cargo and Ammunition Ship (T-AKE) in the National Defense Sealift Fund
    (NDSF). This will be the tenth ship of the class. The NDSF budget also
    includes funding for the development of future seabasing ships. The
    MPF(F) squadron of ships, a central part of the Sea Base operational
    concept, leverages current designs and production lines where possible.
    MPF(F) new construction commences in fiscal year 2009 and includes one
    T-AKE variant and one Mobile Landing Platform (MLP).
        Amphibious Assault Ship (Replacement) (LHA(R))
        The President's budget for fiscal year 2007 includes $1.1 billion
    for the LHA(R) program. LHA(R) will replace four aging LHA class ships
    that will reach the end of their extended service life in 2011. The
    LHA(R) will be a modified LHD 1 class, amphibious assault ship variant
    designed to leverage capabilities inherent in the JSF and MV-22. A
    four-ship LHA(R) shipbuilding program is needed to maintain future
    power projection and forward deployed combat capabilities of the Navy
    and Marine Corps. As noted in the 23 October 2004 LHA(R) report to
    Congress, the requirement for four ships is based on the current force
    structure (four LHAs being replaced by four LHA(R)s, with two of the
    four going to the MPF(F) squadron). LHA(R)s will include a significant
    increase in aviation lift, sustainment, and maintenance capabilities,
    spaces for an MEB, amphibious group, or small-scale joint task force
    (JTF) staff, a dramatic increase in service life allowances for new-
    generation Marine Corps systems, and substantial survivability
    upgrades.
    Submarines
        SSN: Virginia-Class Nuclear-Powered Attack Submarine
        Exceeding expectations and meeting all mission requirements, SSN
    774 completed its first deployment in 2005, 14 months before its
    planned November 2006 IOC. Fiscal year 2007 funds the fourth of five
    submarines under a multi-year procurement contract awarded in January
    2004. A total of 10 ships have been ordered. Our intent is to increase
    the production rate to two attack submarines per year starting in
    fiscal year 2012.
        SSGN: Nuclear-Powered Guided-Missile Submarine
        The first of four Ohio class Trident fleet ballistic missile
    submarine, U.S.S. Ohio (SSGN 726), completed the conversion process to
    launch Tomahawk missiles, completed sea trials, and returned to fleet
    service on February 7, 2006. The other three are scheduled to return to
    fleet service by September 2007. These submarines can carry up to 154
    Tomahawk land-attack missiles and have the ability to conduct large-
    volume strikes with the surprise inherent in submarine operations. The
    SSGN has the capability to support a Special Operations Force
    contingent for an extended period of time, providing clandestine
    insertion and retrieval via built-in lockout chambers and dry deck
    shelters.
    Aviation Platforms
        The fiscal year 2007 budget sustains aviation superiority for the
    Navy and Marine Corps and emphasizes capability-based investment
    strategies, new warfighting concepts, and enabling technologies. The
    Navy and Marine Corps tactical air integration plan continues to reduce
    the total number of new aircraft needed to maintain naval air
    superiority. The fiscal year 2007 budget provides robust development
    funding for the F-35 JSF, MV-22, EA-18G, P-8A Multi-Mission Maritime
    aircraft (MMA), E-2D, CH-53K, VH-71 Presidential Support Helicopter,
    and Joint Unmanned Combat Air Vehicle (JUCAV). The budget continues to
    maximize the return on investment, primarily through the use of multi-
    year procurement contracts for the F/A-18E/F, EA-18G, E-2C, MH-60S/MH-
    60R, and KC-130J. Additionally, the fiscal year 2007 budget
    demonstrates the Department's continuing commitment to developing,
    acquiring, and fielding transformational unmanned aerial vehicle (UAV)
    technologies for intelligence, surveillance, reconnaissance, and
    tactical missions. The budget includes funding for the Fire Scout for
    deployment on LCS ships, and the Broad Area Maritime Surveillance
    (BAMS) UAV.
        F-35 Joint Strike Fighter (JSF)
        The fiscal year 2007 President's budget requests $2.28 billion for
    the JSF. The first flight of the conventional takeoff and landing
    (CTOL) variant is scheduled for August 2006; the first operationally
    ready carrier-based JSF squadron enters the fleet in 2013. The JSF will
    provide the Navy and Marine Corps with long-range, stealthy striking
    power from CVNs, large deck Amphibious Assault Ships (LHA/LHD, LHA(R)),
    and airfields. JSF variants will provide naval aviation with a 21st
    century multi-mission tactical strike fighter, replacing the AV-8B, F-
    14, and the older F-18A/B/C/D airframes. Jointly developed with the Air
    Force and 8 other countries, the JSF is in its 5th year of development.
    The Marine Corps is pursuing the Short Take-Off/Vertical Landing
    (STOVL) version, while the Navy will purchase a follow-on aircraft
    carrier (CV) variant. High commonality between the variants will reduce
    both acquisition and operating costs. It has been concluded that a
    single engine supplier provides the best balance of risk and cost. The
    maturity of technology as demonstrated with the engine development of
    the F/A-18E/F and F-22 indicate that sole source risks are modest and
    acceptable. Canceling development of the alternate source engine
    program will save $1.8 billion through fiscal year 2011.
    MV-22 Osprey
        The fiscal year 2007 President's budget contains $1.5 billion for
    14 aircraft. The MV-22 completed operational evaluation (OPEVAL) in
    2005 and will reach its IOC in 2007. Block A and Block B aircraft have
    been procured to support developmental testing, OPEVAL, training, and
    initial fleet fielding. In full rate production, the aircraft
    procurement rate will ramp up to 37 aircraft per year. The program of
    record includes 360 MV-22s for the Marine Corps and 48 for the Navy.
    The demands of global war on terror and modernization of our
    expeditionary warfare capabilities have increased the urgency to
    rapidly field the MV-22 Osprey. Its design incorporates advanced
    technologies in composite materials, survivability, airfoil design,
    fly-by-wire controls, digital avionics, and manufacturing. The MV-22 is
    capable of carrying 24 combat-equipped marines or a 10,000-pound
    external load, and has a strategic self-deployment capability of 2,100
    nautical miles with a single aerial refueling. It is vastly superior to
    the CH-46E it replaces, with twice the speed, three times the payload,
    and six times the range. The V-22 Osprey, as a joint platform for the
    Navy, Marine Corps, and Air Force is providing significant
    opportunities for joint training, tactics development, and mission
    execution.
        E/A-18G Growler
        The fiscal year 2007 budget includes $0.9 billion for 12 EA-18Gs.
    The critical design review for the EA-18G was successfully completed in
    April 2005. The aircraft has completed its second year of system
    development and demonstration, is on cost, on schedule, and meeting
    performance standards. The EA-18G Growler will replace the EA-6B
    Prowler, providing full-spectrum electronic attack to counter enemy air
    defenses and communication networks. Many of the systems provided with
    the EA-18G will fulfill the Navy role in the joint force in providing
    advanced technology to strengthen electronic warfare capabilities. As a
    tactical aircraft, its expanded flight envelope offers much greater
    speed, altitude, and maneuverability. The EA-18G will maintain a high
    degree of commonality with the F/A-18F, retaining the strike fighter
    and self-protection capabilities, while providing air-to-air self-
    escort to free other assets for strike-fighter tasking.
        P-8A Multi-Mission Maritime Aircraft (MMA)
        President's budget for fiscal year 2007 requests $1.13 billion for
    continued development of the MMA program. The program has successfully
    completed the system requirements review, system functional review,
    preliminary design review, and has entered the detailed design phase.
    The MMA will replace the P-3C Orion aircraft, which has reached the end
    of its service life. The MMA's transformational architecture will
    integrate its onboard mission suite with UAVs, satellite systems, and
    other external sensors to assure maritime access.
        E-2D Advanced Hawkeye
        The President's budget for fiscal year 2007 provides $498 million
    for the E-2D Advanced Hawkeye program that replaces the older E-2C.
    Utilizing new state-of-the-art radar, open architecture processing
    systems, and other critical surveillance systems, the E-2D provides a
    two-generation leap forward in capability. The Advanced Hawkeye also
    adds improved surface and air search, air traffic control and
    communications, search and rescue coordination, and battle management
    capabilities. The E-2D completed critical design review in October
    2005. The first test aircraft's flight is on track for fiscal year
    2007, with IOC expected in fiscal year 2011.
        CH-53K Heavy Lift Helicopter Replacement
        The President's budget for fiscal year 2007 provides $363 million
    for the continued development of the CH-53K program. The current Marine
    Corps heavy-lift aircraft, the CH-53E, has experienced significant
    operational wear, interoperability, and maintenance supportability
    challenges. In order to support the MAGTF and the JTF in the 21st
    century joint environment, the CH-53K will maintain the Marine Corps'
    heavy-lift capability. Major systems improvements include larger and
    more capable engines, expanded gross weight airframe and drive train,
    advanced composite rotor blades, modern interoperable cockpit, external
    and internal cargo handling systems, and improved survivability. The
    CH-53K will be capable of externally lifting 27,000 pounds, more than
    double the current CH-53E ability under similar conditions.
    Additionally, the CH-53K will be capable of carrying 30 combat-loaded
    troops. IOC is planned for fiscal year 2015.
        F/A-18E/F Super Hornet
        The President's budget for fiscal year 2007 provides $2.3 billion
    for 30 aircraft. The F/A-18E/F Super Hornet continues to be the
    centerpiece of Navy combat aviation. Enhanced warfighting capability
    investments for the F/A-18E/F introduce a transformational radar,
    helmet-mounted sight, advanced targeting pod, and fully integrated
    weapons system. Significant improvements in combat range, payload,
    survivability, and growth capacity make the F/A-18E/F the dominant
    strike-fighter well into the 21st century. The F/A-18E/F is replacing
    the F-14 and early model F/A-18s. Lethality, flexibility, reliability,
    and survivability of the F/A-18E/F make it the right aircraft to
    fulfill a wide range of future missions.
        MH-60R/MH-60S Seahawk Multi-Mission Combat Helicopters
        The President's budget for fiscal year 2007 provides $915 million
    for 25 MH-60R and $548 million for 18 MH-60S models. Successful OPEVAL
    of the MH-60R was completed in September 2005 and the first four
    helicopters were delivered to the fleet in December 2005. The MH-60S
    was approved for full-rate production in August 2002 and is currently
    undergoing scheduled block upgrades for combat and airborne mine
    countermeasure missions. The Navy plans to acquire 271 MH-60S models.
    MH-60R/S platforms are produced with 85 percent common components to
    simplify maintenance, logistics, and training.
        KC-130J Hercules Tactical Tanker and Transport
        The fiscal year 2007 President's budget provides $299 million for
    the procurement of four KC-130Js. The KC-130J is replacing the Marine
    Corps' aging fleet of KC-130Fs and KC-130Rs. The KC-130J will include
    warfighter modifications such as the addition of aircraft armor,
    upgrading the aviation survivability equipment suite, and improved in-
    flight refueling pods. Twenty-one aircraft have been delivered to date,
    with marines making the first combat deployment of six KC-130Js in
    February 2005. The program of record for the KC-130J is 51 aircraft.
        Unmanned Aerial Vehicles
        The Department is investing in a family of advanced UAVs. Systems
    such as the Fire Scout and the Broad Area Maritime Surveillance
    Unmanned Aircraft System (BAMS UAS) contain a variety of advanced
    sensors to give warfighters immediate actionable intelligence, and in
    the case of armed UAVs, the ability to strike targets that appear for a
    fleeting moment.
        Fire Scout. The President's budget for fiscal year 2007 provides
    $38 million for 4 Fire Scout UAVs and $105 million for Fire Scout
    development. The Fire Scout Vertical Takeoff and Landing Tactical UAV
    (VTUAV) is designed to carry modular mission payloads and operate using
    the Tactical Control System (TCS) and Tactical Common Data Link (TCDL).
    Fire Scout will provide day/night real time intelligence, surveillance,
    reconnaissance, and targeting as well as communications relay and
    battlefield management capabilities to support LCS mission areas.
        Broad Area Maritime Surveillance Unmanned Aircraft System. The
    fiscal year 2007 President's budget provides $26.4 million for the
    development of the BAMS UAS program. BAMS UAS is integral to the Navy's
    intelligence, surveillance, and reconnaissance (ISR) recapitalization
    strategy providing a persistent, maritime, worldwide ISR capability.
    BAMS will consist of unmanned aircraft, payloads and ground/shipboard
    systems. The BAMS program will meet the Navy requirement for a
    persistent ISR capability, and address the enhanced maritime
    surveillance capability. IOC is expected in fiscal year 2013.
    Marine Corps Equipment
        Expeditionary Fighting Vehicle (EFV)
        The fiscal year 2007 President's budget includes $266 million for
    procuring 15 EFVs. The EFV will be the primary means of tactical
    mobility for the marine rifle squad during combat operations. As a
    self-deploying, high speed, armored amphibious vehicle, the EFV is
    capable of transporting 17 combat-loaded marines from ships located
    beyond the horizon to inland objectives. The EFV program is in the
    systems development and demonstration (SDD) phase of the acquisition
    process with IOC scheduled for 2010. The Milestone C Operational
    Assessment began on January 16, 2006, and is being conducted with four
    SDD vehicles (three personnel (P) variants and one command and control
    (C) variant. An additional five SDD vehicles are undergoing extensive
    reliability, availability, and maintainability testing to grow vehicle
    reliability in support of low-rate initial production (LRIP). Certain
    operational assessment phases will occur 3 months later than planned to
    synchronize with the return from Iraq of the unit designated to
    participate. This will result in the Milestone C Operational Assessment
    being completed in August 2006, and the Milestone C decision in
    December 2006. This schedule change does not breach the program
    baseline, and will not affect the fiscal year 2007 budget request.
        Lightweight Howitzer
        The fiscal year 2007 budget provides $94 million to procure 34
    M777A1 Lightweight Howitzers. The M777A1, through design innovation,
    navigation and positioning aides, and digital fire control, offers
    significant improvements in lethality, survivability, mobility, and
    durability over the M198 howitzer. The Marine Corps received the first
    of 356 new howitzers in April 2005.
        Internally Transportable Vehicle (ITV)
        The ITV program is a Marine Corps-led joint program with the U.S.
    SOCOM to field an assault vehicle supporting expeditionary maneuver
    warfare and over-the-horizon amphibious operations. The ITV will
    provide MAGTF combat units with a vehicle that fits internally in the
    CH-53 and MV-22 aircraft. IOC is scheduled for September 2006, when a
    selected infantry battalion receives eight ITVs.
    Light Armored Vehicle Product Improvement Program (LAV PIP)
        The fiscal year 2007 budget includes $26 million for the LAV PIP
    program, which will extend the service life through 2015, improve the
    readiness, survivability, and sustainability of these vehicles, and
    reduce the LAV fleet's operations and support costs. The extension
    program includes a block of vehicle upgrades, incorporating a next
    generation improved thermal sight system, and thermal and visual
    signature-reduction kits.
                          improving business practices
        Providing sailors, marines, and Department of the Navy civilians
    with high quality facilities, information technology, and an
    environment to achieve goals are fundamental to mission accomplishment.
    As the QDR states, this will demand a revolution in management,
    technology and business practices to reduce redundancies and ensure the
    efficient flow of businesses processes. The Navy and Marine Corps team
    are implementing continuous improvement initiatives consistent with the
    goals of the President's Management Agenda. These improvements enable
    realignment of resources to increase our output and re-capitalize our
    force. The cornerstone of the continuous improvement effort is the
    implementation of industry proven Lean Six Sigma efficiency
    methodologies in day-to-day operations. The Department of the Navy will
    continually evaluate systems and processes to optimize their
    responsiveness.
    Efficiently Implement BRAC 2005 Decisions
        The BRAC process has been a major tool for reducing the domestic
    base structure and generating savings. Continuing to balance the
    Department's force and base structures by eliminating unnecessary
    infrastructure is critical to preserving future readiness. The fiscal
    year 2007 budget reflects a fully financed implementation program that
    completes all closures and realignments within the statutory 6-year
    implementation period. In fiscal year 2010 and beyond, annual savings
    exceed annual costs, and the Department will see a positive return on
    investment.
    Actively Foster Department of the Navy Business Transformation
        The Department is transforming people, processes, and systems, and
    aggressively adopting proven best commercial practices to support
    business transformation objectives. Initiatives will complement each
    other, resulting in better-controlled, integrated, and automated
    processes that deliver more accurate, reliable, and timely financial
    management information. The goal of the Department's business process
    transformation is to provide reliable, accurate, and timely business
    intelligence, supporting resource efficiency and sound business
    decisions. It will involve building a modern, integrated, automated
    environment within the DOD architecture. The Department's business
    transformation continues to evolve, providing the framework within
    which future business processes will operate.
        Since 2002, the Navy and Marine Corps have integrated their
    tactical aircraft to reduce excess capacity and provide equal or
    greater combat capability with fewer resources. Efficiencies gained
    through integration, and investing in more capable aircraft (F/A-18E/F
    Super Hornets and F-35 Joint Strike Fighters) allows the Navy and
    Marine Corps to reduce the number of Active and Reserve squadrons while
    continuing to provide flexible, responsive, and interoperable forward
    deployed combat air power. It also allows for reduction in the
    sustainment, maintenance, and training requirements, providing
    operations and maintenance savings to be invested in more pressing
    areas.
        The Department will continue to be aggressive in pursuing new
    business initiatives that will make the Navy and Marine Corps more
    efficient, effective, and responsive.
    Optimize Management of Naval Installations, including Environmental
            Stewardship
        Building the Navy and Marine Corps' future shore infrastructure
    requires the ``right bases'' in the ``right places'' with the ``right
    capabilities'' at the ``right price.'' The Commander of Naval
    Installations is providing the mechanism for senior Navy leadership to
    guide planning ashore in support of operations afloat through Navy
    Ashore Vision (NAV) 2030. This document develops the first set of
    guiding principles to help leadership plan and execute basing and
    investment strategies. NAV 2030 provides an agile foundation to size
    and locate ashore infrastructure. It capitalizes on innovation and
    effectiveness to sustain fleet readiness and reduce cost. Success in
    realigning and revitalizing the shore infrastructure is vital to our
    future Navy. We must capitalize on joint basing opportunities with our
    sister services to consolidate support delivery, reduce duplication,
    and improve operational efficiency while enhancing combat
    effectiveness.
        Regionalization of Marine Corp installations will bring all Marine
    bases and stations, with the exception of recruit training depots,
    under the purview of five Marine Corps Installation Commands. This
    transformation will provide optimal warfighter support, improve
    alignment, enhance use of regional assets, return marines to the
    operating forces, and reduce costs.
    Utilize Information Technology to Improve Efficiency and Effectiveness
        Information Technology (IT) is critical to providing secure,
    accessible, timely, and accurate information needed for the 21st
    century Navy and Marine Corps team. By integrating national security,
    business, and warfighting systems, we will reduce redundancies,
    inefficiencies, and time-critical delays across the Department. The use
    of standardized, open architecture protocols and equipment reduces
    costs, enhances flexibility, and improves network security. Today, the
    Navy and Marine Corps Intranet (NMCI) is serving over 600,000 users and
    supporting critical business and combat support applications. During
    fiscal year 2006/2007 we will complete the deployment of NMCI seats,
    transition legacy systems and servers to NMCI, shutdown the vast
    majority of our legacy networks, and seamlessly integrate the sea and
    shore networks to provide one secure high performance environment for
    our next generation of combat, combat support, and business operations.
                                   conclusion
        The Navy and Marine Corps team is proudly serving our Nation,
    answering the call to protect America and her strategic interests. In
    preparing for the future we will not overlook the present. The fiscal
    year 2007 President's budget request is about both prevailing in
    today's wartime environment and bridging to a successful future. We are
    confident in our warfighting success and contribution to the joint
    force today and will improve it with the investments of this budget. As
    we commit to being responsible stewards of the American treasure, both
    in lives and in dollars, we set a course to do our share to win our
    Nation's wars and prepare to meet future challenges.
        Our sailors and marines are bearing the burden of today's war. More
    than just forward deployed, they are continuing to make sacrifices in
    defense of liberty. They are performing superbly, bringing honor and
    renown to the naval service. These proud warriors deserve not only the
    accolades and laurels of a grateful Nation, but our full measure of
    support as they continue to serve in defense of the United States.
        In supporting the funding decisions outlined in the fiscal year
    2007 President's budget request, Congress will continue to provide the
    Department of the Navy the right force for the Nation today, while
    preparing for the uncertainties of tomorrow. We are grateful for the
    unwavering support that Congress has given the Navy and Marine Corps in
    the past, and we appreciate its clear intent to ensure our strategic
    readiness for any future contingency. Its continued support is critical
    to our Nation's security and to our ability to meet America's global
    responsibilities. On behalf of every sailor and marine in today's naval
    forces and the warriors who will serve tomorrow, I thank Congress for
    its continued support of and confidence in the United States Navy and
    the United States Marine Corps.

        Chairman Warner. Thank you, Mr. Secretary.
        Admiral.

        STATEMENT OF ADM MICHAEL G. MULLEN, USN, CHIEF OF NAVAL
                               OPERATIONS

        Admiral Mullen. Good morning, Mr. Chairman, Senator Levin,
    distinguished members of this committee. Thank you for the
    opportunity to appear before you today as part of the Navy-
    Marine Corps leadership team. It is an honor to be here with my
    good friend General Hagee, with whom I go back a very long
    time. As I made clear before the House last week, I know I
    speak for sailors everywhere when I say how privileged we feel
    to have Secretary Winter now at the helm. He has certainly, as
    we like to say in the Navy, hit the deckplates running and we
    are better for his leadership.
        Mr. Chairman, you are fond of reciting the Constitution's
    requirement that Congress provide and maintain a Navy. I know
    you hold those words dear. I am here to report to you and to
    the American people that Congress has again met that
    requirement. Today your Navy is in fighting trim. Out of the
    281 ships we have today, 99 of them, ships and submarines, and
    over 39,000 sailors are forward deployed right now. More than
    half of those men and women, some 22,000, are serving in the
    Central Command (CENTCOM) theater and half of that number are
    on the ground in combat and combat support roles.
        I too have traveled much of these first 7 months as CNO,
    spending time with sailors at sea and ashore. They know the
    task before them. They understand the importance of their work
    and they are eager to contribute. While some, such as those in
    Japan, Korea, and Guam, keep faith with enduring missions in
    that vital area of the world, others are adapting quickly to
    new missions in new places. Seabees are driving convoys and
    building forward staging bases deep inside Iraq. Ships are
    acting as forward staging bases in the Arabian Gulf. Navy
    security personnel are guarding a new prison near Baghdad.
    Explosives technicians are finding and disarming IEDs. Our
    special warfare forces remain hotly engaged in the jungles, the
    deserts, and in the mountains, finding and apprehending
    terrorist leadership and training our allies to do the same.
    Doctors, nurses, and corpsmen are accomplishing amazing medical
    feats in the most austere conditions, often under fire, risking
    life and limb to save the lives and limbs of others. We are
    chasing pirates, flying ground support missions from our
    carriers, and helping rebuild communities devastated by natural
    disasters far away and here at home.
        We will be pitching in even more. A Navy Admiral takes
    command of the detainee operation in Guantanamo Bay this month.
    We will take command of the joint task force in the Horn of
    Africa and naval officers will soon lead 6 of the 12 United
    States-led provincial reconstruction teams in Afghanistan.
        There is incredible talent in your Navy. Our sailors have
    character and resolve and hold themselves and their shipmates
    to high standards. I am enormously proud of them and their
    families and grateful for their service at this critical time
    in our history.
        As I said, we are in fighting trim, but we must work hard
    to stay that way. During my confirmation hearing last April, I
    identified three challenges facing our Navy: the need to
    sustain our combat readiness, the need to build the right force
    for the future, and the need to transform our manpower and
    personnel system. Everything I have seen in these last 7 months
    has only convinced me further that sea power in this century is
    taking a whole new meaning and that these are exactly the right
    priorities.
        America is a maritime nation. We need a strong Navy. We are
    a strong Navy. What I seek is balance. We must be able to win
    the big and the small wars--two challenges, one fleet.
        Our fiscal year 2007 budget request, like the QDR itself,
    helps provide that balance. The fleet today stands at 281
    ships, not enough in my view to deliver the joint warfighting
    capabilities combatant commanders will need over the course of
    this long war. Nor does the current rate of shipbuilding
    provide the stability this country must possess to preserve its
    vital industrial base. Our long-range shipbuilding plan,
    centered on 11 carriers with a fleet of about 313 ships, meets
    these needs, for the good of the Navy, for the good of the
    Nation, and for the good of our allies and partners.
        On this very day back in 1862, the Civil War ironclads
    Monitor and Virginia fought a historic duel, mauling each other
    for more than 4 hours in the waters off Hampton Roads. There
    were few casualties. Neither suffered much in the way of
    damage. But the face of warfare changed forever. It was the
    beginning of the end of the age of sail.
        Today we stand on the cusp of a new age, an age of speed
    and stealth and information dominance. New warships like DD(X),
    CVN-21, the Freedom class Littoral Combat Ships (LCS), and our
    new class of Virginia submarines will do for our Nation's
    maritime security what Monitor and Virginia did for it at the
    dawning of the age of iron and steam.
        Mr. Chairman, members of this committee, with your
    continued support, which is greatly appreciated, we will usher
    in this new age and we will lead it. I thank you again for that
    support, for your time, and for your commitment to the men and
    women of the United States Navy. They and their families are
    the best I have ever seen. On their behalf, I stand ready to
    answer your questions.
        [The prepared statement of Admiral Mullen follows:]

                Prepared Statement by ADM Michael G. Mullen, USN

        Mr. Chairman and members of the committee, it is a privilege for me
    to appear before you today, and it is with pride and humility that I
    address you for the first time since becoming the Chief of Naval
    Operations in July of last year. In November 2005 our Service
    celebrated 230 years of honor, courage, and commitment to the ideals
    that make our country a beacon of freedom and democracy spanning the
    world's waterways. The greatest honor I will ever have is to serve and
    represent the sailors and civilians--the people--who are your United
    States Navy.
        During my confirmation testimony last April, I identified three
    challenges facing our Navy: the need to sustain combat readiness at a
    high level; the need to build a Navy capable of meeting the most
    demanding future threats; and the need to transform our manpower and
    personnel system to better serve and to be more responsive to our
    people.
        Having now been in the job for a little more than 6 months, I have
    visited our fleet, have observed numerous operations at home and
    overseas, participated in the comprehensive Quadrennial Defense Review
    (QDR), and met with the chiefs of many foreign navies. This has helped
    shape my perspective of our Navy today and where I believe we need to
    go in the future. It has also validated the challenges I identified
    last April as the right priorities upon which we must focus. It is my
    belief that the QDR and our fiscal year 2007 budget are the first steps
    toward establishing this critical balance between maintaining current
    readiness, building a future Navy, and serving our people. Your Navy
    remains first and foremost a warfighting, seagoing service.
        This budget:

             Sustains combat readiness . . . with the right combat
            capabilities--speed, agility, persistence, and dominance--for
            the right cost.
             Builds a fleet for the future . . . balanced, rotational,
            forward deployed, and surge capable--the proper size and mix of
            capabilities to empower our enduring and emerging partners,
            deter our adversaries, and defeat our enemies.
             Develops 21st century leaders . . . inherent in a strategy
            which, through a transformed manpower, personnel, training, and
            education organization, better competes for the talent our
            country produces and creates the conditions in which the full
            potential of every man and woman serving our Navy can be
            achieved.

        Our future Navy will ensure access and sustainability of the joint
    force in blue, green, and brown waters through globally distributed and
    networked operations. It will do so in partnership with the Marine
    Corps, and will be symbiotic with the Coast Guard, as envisioned in the
    President's National Strategy for Maritime Security. It will be a
    larger and more lethal fleet of faster ships, with capacity to
    overmatch our most capable adversaries, including any future strategic
    competitors, and to further develop our emerging and enduring
    partnerships worldwide. It will rely on joint seabasing that will
    provide for sustained, air and ground anti-access operations in access-
    restricted environments. It will leverage both manned and unmanned
    capabilities. It will build upon the programmatic foundation of
    FORCEnet and Sea Power 21.
        Sea power in this new century will require speed, agility,
    persistence, and dominance. To achieve this your Navy must deliver a
    balanced force of the right capabilities, the right mix, and the right
    size, at the right cost.
                                  introduction
        During my recent tour in Europe, as Commander U.S. Naval Forces and
    Commander, Joint Force Command, Naples I gained an extraordinary
    appreciation of the partnership of nations--not only through NATO's
    engagement in the global war on terror, Operation Active Endeavor in
    the Mediterranean, and NATO's training mission in Iraq--but through the
    multitude of operations conducted daily with our allies and emerging
    partners throughout the European Command area of responsibility. I also
    learned, first hand, that staying the course in post-conflict Bosnia
    and Kosovo had paid rich dividends as military presence was eventually
    transitioned to civilian infrastructures and maturing rule of law.
    Here, too, partnerships were the key, including multi-national
    militaries, non-governmental organizations (NGO), and interagency and
    international community players. Interoperability and timely
    communication remain critical. Throughout Europe, the Caucasus, and
    Africa I witnessed the true value of our Navy's work with emerging and
    enduring partners through the Theater Security Cooperation program. We
    are building confidence, trust, and lasting relationships that will
    most assuredly prevent future crises and conflicts.
        In July of last year I took over a Navy in great shape, with
    sailors and civilians at the peak of readiness and proud of their
    warfighting ethos. I set about defining the capabilities needed to
    remain strong and to prevail in this new century. It wasn't long,
    though, before hurricanes Katrina and Rita devastated our gulf coast. I
    was reminded of the power of the sea, and was struck by the tremendous
    potential of ``sea power.'' Our Navy answered the call just as we had
    after the Indonesian tsunami, where no other institution in the world
    was better equipped or more ready to respond than your Navy. In a
    powerful demonstration of the flexibility provided by the Fleet
    Response Plan, 23 ships sailed to the Gulf. The hospital ship U.S.N.S.
    Comfort, sister ship to the Mercy that had opened the world's eyes to
    America's compassion following the tsunami, was underway within 72
    hours.
        U.S.S. Bataan was the first Navy responder, arriving in the
    vicinity of New Orleans one day after Katrina's landfall, coordinating
    helicopter rescue efforts with the Coast Guard and providing medical
    care to some 800 evacuees. HSV-2 Swift's high speed and shallow draft
    combined to make it an ideal platform for the delivery of relief
    supplies and the support of other platforms operating in the gulf area,
    just as it had during relief operations in Indonesia. In both cases,
    Swift was able to reach ports inaccessible to other ships in the
    logistics force and played a critical role in the early delivery of
    supplies. More than 3,300 Seabees paved the way to hurricane recovery
    by clearing 750 miles of roads, removing more than 20,000 tons of
    debris, restoring 60 schools serving 40,000 students, and completing
    453 utility projects.
        The crew of U.S.S. Tortuga essentially conducted a non-combatant
    evacuation in the flooded parishes of New Orleans taking their boats
    inland to pull people out of dilapidated houses. The Harry S Truman,
    uncharacteristically carrying no strike aircraft, anchored off shore
    with 19 helicopters embarked and provided a ready deck for rescue
    helicopters that saved lives through dramatically decreased response
    times. U.S.S. Iwo Jima, pier side in downtown New Orleans, served as
    the city's only functional airport, command center, hotel, and
    hospital. I met with Vice Admiral Thad Allen of the Coast Guard aboard
    Iwo Jima shortly after he had taken command of FEMA's efforts--and he
    raved about the significant role the ship was playing in the crisis and
    the brilliant performance of her crew.
        This reminded me of a comment I had heard in Europe following our
    tsunami relief effort from an individual representing an NGO. She said,
    ``Thank God for the U.S. Navy. No other institution in the world could
    have responded with that level of effort so quickly.'' It struck me
    that our Navy really is like a ``city at sea,'' offering hope and
    relief in times of crisis. We have seen it again, in the wake of the
    Pakistani earthquake, where Navy ships, aircraft, Seabees and medical
    personnel lent a helping hand and made a difference in winning hearts
    and minds in the global war on terror.
        In September I addressed the International Sea Symposium--49 Chiefs
    of Navy and Coast Guard and representatives from 72 countries in
    Newport, Rhode Island. My topic was ``Establishing a Global Network of
    Maritime Nations for a Free and Secure Maritime Domain.'' While I asked
    the participants to imagine an international maritime force of 1,000
    ships--the world's navies and coast guards working together to face the
    challenges of a new era--I realized this was becoming a reality before
    my very eyes. There were meaningful discussions taking place regarding
    regional cooperation in countering piracy, terror, and the
    proliferation of weapons of mass destruction. There were testimonials
    from NATO and ASEAN navies, and from South American and African navies.
    It occurred to me that this is what Sea Power in the 21st century is
    all about. The U.S. Navy has taken the lead as a global maritime force
    for good, and there are plenty of nations willing and eager to do their
    part.
        But the Navy's capabilities extend beyond traditional missions of
    sea-borne shaping and stability operations, conventional and irregular
    warfare, freedom of navigation, homeland security, and deterrence. In
    fact, the Navy is tackling new missions every day that don't involve
    ships. More than 10,000 sailors are currently on the ground in the
    Central Command (CENTCOM) area of responsibility (AOR), 4,000 of whom
    are in Iraq. In March of this year, the Navy will take command of the
    detainee mission in Guantanamo Bay, Cuba. We recently took command of a
    new high security prison in Iraq. In April, a Navy admiral will take
    command of the Joint Task Force Horn of Africa in Djibouti.
        This is in addition to counter piracy operations off east Africa
    and a return visit to Southeast Asia and the South Pacific from Navy
    medical personnel aboard U.S.N.S. Mercy. Soon, we will have a riverine
    capability that will extend the outreach of our newly established Navy
    Expeditionary Combat Command and Expeditionary Security Force into the
    world's shallow waterways. Whether extending a helping hand or fixing,
    finding, and finishing our enemies, we are redefining the limits and
    meaning of Sea Power in the 21st century.
        Over the past 2 months, I have visited our sailors at Guantanamo
    and in the CENTCOM AOR, spending time in Iraq, Kuwait, Bahrain,
    Djibouti, and at sea in the North Arabian Gulf. I have also recently
    been to Japan, Korea, Guam, and Hawaii. In every respect, these were
    terrific trips--eye-opening and encouraging. Our people are doing
    amazing things. Their morale is high, their sense of accomplishment
    firm. I didn't speak with a single sailor who didn't know how, or to
    what degree, his or her job contributed to the overall effort in this
    war. In fact, you would be hard pressed to find one who didn't believe
    what he or she was doing was the most important thing that could be
    done.
        It was against this operational backdrop that we tackled the QDR,
    the most comprehensive review of its type since the first was produced
    more than a decade ago. For the first time, the QDR was conducted in a
    time of war. It represents an important step in a continuum of
    transformation that began more than 5 years ago. The Navy was an
    integral participant in the QDR process and I am confident in the
    course it sets for DOD and the Navy.
        QDR 2006 has helped shape a naval force with increased capability
    and capacity. Specifically it:

             Reaffirms the need for a forward deployed, rotational, and
            surge capable force to provide persistent awareness and
            decisive joint combat power when and where needed;
             Supports a modern, fast, and lethal fleet of ships able to
            fight in all waters around the globe;
             Expands capability to conduct conventional and irregular
            warfare, especially in littoral waters;
             Expects the Navy and Marine Corps team to project its
            combined air, land, and sea power from innovative ``sea bases''
            of ships and personnel, regardless of access to land bases.
            This will better enable us to engage in missions ranging from
            traditional combat and special operations to humanitarian
            assistance and disaster relief.
             Increases our ability to enhance the capabilities and
            capacity of partner nations.
             Improves DOD's contribution to the active, layered defense of
            our homeland, working closely with the United States Coast
            Guard and other agencies.
             Provides 60 percent of our submarines and six operational
            aircraft carriers to the Pacific.

        In summary, the QDR and my own recent experiences, further support
    my three priorities and have helped shape the following eight tenets
    that guide my vision for the 21st century Navy:

              1. America is and will remain a maritime nation.
              2. We live in a challenging new era.
              3. The Navy will remain rotational, forward deployed, and
            surge capable.
              4. The level of maritime cooperation will increase.
              5. New opportunities and security challenges require new
            skills.
              6. Calculating the size of the force demands balance between
            capabilities, capacity, and fiscal reality.
              7. The future fleet will be more capable, larger, and more
            lethal.
              8. Sea Power 21 will remain the framework for our Navy's
            ongoing transformation.

                            i. sustaining readiness
    A. Taking a Fix
        Current Operations
        We are a maritime nation, and we are at war. For the last 230
    years, our Navy has defended our shores, kept our sea-lanes free, and
    promoted our national interests around the globe. For generations, our
    Navy has been the world's premier maritime force for freedom, time and
    again proving its flexibility and unique adaptability in support of
    liberty, national security, and our economic viability.
        Your Navy today is in great shape. Readiness is high. Maintenance
    is being performed faster and more efficiently. Recruiting and
    retention remain strong. Our people are motivated, well trained, and
    battle-tested. They understand the mission, their role in it, and the
    importance of the effects they are achieving. In addition to the
    critical strategic deterrence our forward presence and global strike
    capabilities represent, there are more than 10,000 of our shipmates on
    the ground in Kuwait, Afghanistan, Iraq, and the Horn of Africa. Many
    thousands more are deployed aboard ships at sea in direct support of
    the global war on terror and regional deterrence, strengthening
    capabilities and relationships with our enduring and emerging partners,
    and dissuading potential adversaries from attempting to threaten our
    freedom at home or abroad. They are performing magnificently.

        While numbers vary slightly with daily operations, on 15 February
    2006 we had 97 ships on deployment (35 percent of the fleet) and 142
    ships underway (51 percent of the fleet) serving our combatant
    commanders in every theater of operation; this includes 6 aircraft
    carriers, 7 big deck amphibious ships (LHA/LHD), and 29 submarines
    (Figure 1). On that day there were 2,614 Active and Reserve Seabees
    working tirelessly overseas to provide our joint force and many
    civilians with vital infrastructure such as roads, runways, schools,
    and hospitals. There were also 3,574 of our Active and Reserve medical
    corps serving in foreign and sometimes hostile environments.
    Additionally, 673 members of the Navy special warfare community were
    deployed overseas (of 3,633 deployable), as were 256 explosive ordnance
    disposal personnel (of 1,321 available to deploy), and 838 security
    personnel (of 5,929 deployable).
        On 15 February 2006, there were 39,775 of our sailors deployed in
    support of the Nation's interests in the Persian Gulf, the
    Mediterranean, the Indian Ocean, and the Western Pacific, continuing
    operations like strategic deterrence; intelligence, surveillance, and
    reconnaissance missions; extended maritime interdiction, counter
    piracy, and counter-drug patrols. No less vital are the sailors and
    civilians--the total Navy--who serve the shore-based infrastructure
    that underpins our fleet worldwide.
        The fiscal year 2007 budget provides funds necessary to support 36
    underway days per quarter of the Active operational tempo (OPTEMPO) for
    deployed forces and 24 underway days per quarter for non-deployed
    forces (primarily used for training). Our fiscal year 2007 baseline
    budget estimates also include reductions to peacetime OPTEMPO levels.
    For aircraft carrier OPTEMPO, the fiscal year 2007 budget supports the
    ``6+1'' surge readiness level. As in fiscal year 2006, it is
    anticipated that operational requirements will continue to exceed
    peacetime levels in fiscal year 2007.
        Oceans that once served as insulating barriers now provide open
    access to friends and enemies alike. The world's waterways are open
    highways that are becoming more congested with pirates and those
    trafficking in drugs, weapons of mass destruction, illegal immigrants,
    slaves, criminals, and terrorists. Ninety-five percent of U.S. overseas
    trade travels by water and that volume is expected to double by 2020.
    Our Nation's prosperity depends upon unimpeded maritime commerce just
    as our security demands continued maritime dominance. Sea power in the
    21st century must provide this assurance while serving as freedom's
    global lifeline.
        Whether spearheading Operation Enduring Freedom (OEF) by providing
    sovereign deck space from which to launch the war in Afghanistan,
    continuing to support ground operations in Iraq from the sea, in the
    air, and on the land as part of Operation Iraqi Freedom (OIF),
    conducting deterrence operations in the Persian Gulf, responding to
    humanitarian crisis in Indonesia or Pakistan, patrolling for pirates
    and interacting with developing navies in Africa, serving with the NATO
    Response Force in Europe, supporting counter-terrorism operations in
    the Philippines, exercising with the navies of Russia and India, or
    remaining keenly vigilant while expanding cooperative interaction with
    others, our Navy must work in non-traditional ways with our global
    partners to preclude or forestall conflict. Equally important is that
    our Navy maintain its strategic deterrence and global strike
    capabilities that remain vital to our Nation's defense.
        Emerging Missions
        In March of this year, the Navy will take command of Joint Task
    Force Guantanamo, relieving the U.S. Army of that mission. In May of
    this year, the Navy will take command of the Joint Task Force, Horn of
    Africa, relieving hundreds of marines who have led that effort since
    October 2002. Almost 500 sailors have already begun performing security
    duties at Fort Suse Prison in Iraq.
        As the Navy develops shallow water and riverine capabilities, we
    will seek increasing synergies with the Coast Guard, at home and
    abroad, exploring complementary design, acquisition, operations, and
    training initiatives. Working cooperatively with the Joint Services,
    interagency, allied, coalition, and non-governmental organizations, our
    Navy will expand our global maritime domain awareness and provide
    unique operational options for the President of the United States and
    our combatant commanders.
    B. Plotting the Course: Where we're heading in sustaining readiness
        The world has entered a ``new era'' in which our military is
    confronting a highly dynamic security environment far more complex,
    uncertain, and potentially threatening than any we have faced before.
    While this is a time of promise and developing partnerships, it is also
    an era of irregular and increasingly unrestricted warfare. Our
    adversaries, unable and unwilling in some cases to match our
    technological warfighting advantage, will increasingly resort to
    whatever means are available to wreak havoc and destruction--
    physically, economically, and psychologically--unhindered and
    unconstrained by moral conscience or social norms. To be effective in
    this environment, our combatant commanders need tools that are not only
    instruments of war, but implements for stability, security, and
    reconstruction.
        To be successful as an interdependent part of the U.S. Joint Force,
    our Navy must be balanced. We must be balanced in our support of
    diplomatic, informational, military, and economic efforts intended to
    positively influence the world's diverse people and cultures. We must
    be balanced in our global maritime presence: providing non-threatening
    outreach to emerging and enduring partners while demonstrating
    overwhelming military superiority and unflinching determination to our
    adversaries.
        We must at the same time represent hope and empowerment to our
    friends and convincing deterrence to our enemies. The United States
    Navy will need to be a highly visible, positive, engaged, and
    reassuring presence among the global maritime community of nations--
    sometimes a ``cop on the beat,'' but always a respected and valued
    member of a global neighborhood watch. We must encourage nations to
    provide security within their territorial waters and to seal seams
    between neighbors, either by accepting assistance to improve their own
    capabilities, or through collective security and information sharing
    arrangements.
        We must adopt a more comprehensive and coordinated approach to
    regional engagement, synchronizing our efforts with other Services,
    agencies, and allied nations through the Theater Security Cooperation
    program, and shaping stability operations. Wherever the opportunity
    exists, we must develop and sustain relationships that will help
    improve the capacity of our emerging partners' maritime forces. We will
    do this through the deployment of expeditionary teams capable of
    addressing specific developmental deficiencies. From personnel
    specialists and base infrastructure advisors, to trainers afloat and
    network consultants, these tailored teams will foster the ability of
    partner nations to contribute to collective security and shared
    maritime domain awareness, and to fend off threats to their economic
    and regional stability.
        To enable our operations at home and away, our Navy, in partnership
    with the Coast Guard, must be supported by the right information at the
    right time--expanding maritime domain awareness throughout the global
    commons and the world's shallow waterways. In pursuit of pervasive and
    persistent intelligence, surveillance, and reconnaissance, however, we
    must ensure the ``unblinking eye'' does not become an ``unthinking''
    eye. In a world of growing global connectivity, the volume of
    information we are able to collect matters less than our ability to
    identify and understand what is important. Our sailors must learn to
    recognize what matters, and to comprehend the implications of the
    complex information they gather, so that we can act upon it instantly,
    with the right capabilities, when required to do so.
        Naval Intelligence remains focused on addressing the multitude of
    intelligence requirements from the fleet, theater, and national
    decisionmakers, augmenting and transforming its intelligence capability
    to support the increasing range of Navy missions. The intelligence and
    cryptologic resources requested in the President's budget submission
    will allow the Navy to remain postured to support the war against
    terror, defend the homeland, shape the environment overseas, and
    counter the most capable potential adversaries.
        In concert with interagency and foreign partners, we are developing
    Global Maritime Intelligence Integration (GMII) as part of Global
    Maritime Domain Awareness (MDA) in support of joint and Navy
    operations. It is no longer acceptable to focus intelligence only on
    the most obvious potential threats. We need, and are building, a
    capability that will lead us to a more complete understanding of the
    maritime environment--close to home and abroad. We are shaping our
    relatively small Naval Intelligence cadre to work more closely with
    Special Operations Forces, the interagency, the Coast Guard, joint
    forces, and our international partners. The establishment of a National
    Maritime Intelligence Center will further enhance our maritime domain
    awareness.
        Maritime domain awareness contributes to the Navy's ability to
    provide flexible forward presence such as that provided by the Fleet
    Response Plan (FRP).
        The FRP is the maintenance, training, and operational framework
    through which the Navy meets global combatant commander demand signals
    for traditional (e.g., global war on terror, major combat operations,
    humanitarian assistance/disaster relief, shaping and stability
    operations, counter piracy, etc.) and emerging mission sets (e.g.,
    riverine warfare, NECC, medical outreach). FRP is mission-driven,
    capabilities-based, and provides the right readiness at the right time
    (within fiscal constraints). It enables responsive and dependable
    forward presence. With FRP we can deploy a more agile, flexible, and
    scalable naval force capable of surging quickly to deal with unexpected
    threats, humanitarian disasters, and contingency operations.
        The FRP maximizes the Navy's ability to respond to emergent crises,
    changes the way ships are maintained, and keeps the Navy at a high
    state of readiness. FRP provides the capability of deploying numerous
    Carrier Strike Groups (CSGs), in whole or in part, immediately to
    wherever in the world the mission calls, with an additional CSG
    deploying within 90 days. This planning is currently structured to
    fulfill a 6+1 goal: six CSGs would be ready to deploy within 30 days of
    notification and another within 90 days.
        The ability to surge dramatically shortens response times to any
    contingency and enables the United States to increase global presence-
    with-a-purpose as needed. Commander Fleet Forces Command, based in
    Norfolk, Virginia, is leading the implementation of the FRP across the
    Navy. Last fall, the FRP concept was vividly validated by the response
    to Hurricane Katrina, in which 23 ships were immediately made available
    for relief efforts. FRP will further help to facilitate Navy's
    establishment and defense of the joint sea base, allowing for a reduced
    footprint ashore in anti-access operations.
        In the Pacific, response time is exacerbated by the tyranny of
    distance. Consistent with the global shift of trade and transport, the
    QDR has recognized the Navy's need to shift more strategic assets to
    this vital and rapidly developing theater. In the future, approximately
    60 percent of our submarines and six operational aircraft carriers will
    be based in the Pacific. The FRP and basing options will provide a
    rheostat to meet foreseeable forward presence requirements.
        As FRP bolsters fleet effectiveness and efficiency, so too does the
    aviation maintenance program called AIRSpeed.
        AIRSpeed is the naval aviation business model that has increased
    the combat effectiveness of naval aviation through more efficient
    business practices. The AIRSpeed program balances and aligns
    maintenance and supply activities to end-user demands by ensuring the
    right material is in the right place, at the right time and at the
    right cost. We are committed to implementing this throughout the Navy.
    AIRSpeed has moved naval aviation away from ``readiness at any cost''
    to ``cost-wise readiness'' practices, enabling Naval Aviation to answer
    the call in every corner of the globe.
        Another initiative to improve global readiness addresses the
    expeditionary nature of emerging missions ashore and in coastal
    waterways. In January of this year, the Navy officially established the
    Navy Expeditionary Combat Command (NECC) to help meet some of the
    asymmetric challenges of the 21st century. The NECC will serve as a
    functional command in control of manning, training, equipping, and
    organizing forces that will execute force protection, shore-based
    logistical support, and construction missions across the joint
    operational spectrum.
        The Navy plays a vital role in direct and indirect support of Joint
    stability and shaping operations worldwide. To this end, NECC will re-
    establish a riverine force to close gaps in very shallow-water littoral
    areas, ensuring access to the world's waterways. NECC will be the
    single advocate for the expeditionary security force, to include
    existing forces/missions (Seabees, explosive ordnance disposal,
    expeditionary security, naval coastal warfare, mobile diving and
    salvage, port handlers, etc.) and key new Navy capabilities (riverine,
    maritime civil affairs group, expeditionary training team, advanced
    visit, board, search, and seizure, etc.).
        Our Navy must stand ready to support the current critical and
    emerging requirements of the combatant commanders. Whether this is
    accomplished through grey hulls, white ships, hard hats, blue shirts,
    or red crosses, we need to complement the FRP with sustainable sea
    basing, intelligently and selectively applied Sea Swap, and a forward
    deployed naval force.
    C. Getting Underway: Programs and Practices in Support of Sustaining
            Readiness
        Through FRP, the deployment of adaptable force packages, and the
    strategic realignment of key assets, the Navy will increase its ability
    to aggregate and disaggregate the force as required to provide
    persistent forward presence and overwhelming combat power. This
    supports the Nation's requirement for an immediate, credible response
    and sustainable naval forces necessary not only to fight the global war
    on terror, but also to support a meaningful naval presence in key areas
    of concern to U.S. strategy and policy.
        Programs and practices of particular interest include:
        Fleet Response Plan
        As highlighted by the QDR, the FRP is an ongoing mission-driven
    means to provide the right readiness at the right time (within fiscal
    constraints). FRP enables responsive forward presence and drives our
    ability to answer the combatant commanders' demand signals. With FRP,
    Navy has deployed and developed a more agile, flexible, and scalable
    naval force capable of surging quickly to deal with unexpected threats,
    humanitarian disasters, and contingency operations.
        Sea Swap
        Sea Swap is an initiative designed to keep a single hull
    continuously deployed in a given theater, replacing the entire crew at
    6-month intervals. The primary objective is to effectively and
    efficiently increase forward Naval presence without increasing
    operating cost. Navy commenced its second Sea Swap experiment in March
    2005 with three east coast destroyers--U.S.S. Gonzalez (DDG 66), U.S.S.
    Laboon (DDG 58), and U.S.S. Stout (DDG 55). The first of the three
    overseas swapping of the crews occurred in September 2005. While the
    results of these experiments are still being evaluated, it is clear
    that when selectively applied, Sea Swap will offer greater flexibility
    in the deployment of a variety of platforms.
        Forward Deployed Naval Forces (Japan)
        The government of Japan has agreed to have U.S.S. George Washington
    (CVN 73) replace the U.S.S. Kitty Hawk (CV 63) as our forward deployed
    aircraft carrier at the Yokosuka naval base. The move represents a
    strong commitment to the security of the Asian Pacific region and our
    alliance. The George Washington will become the first nuclear aircraft
    carrier to join the Navy's permanently forward deployed naval forces
    (FDNF), replacing the conventionally powered the Kitty Hawk in 2008.
        Facilities Recapitalization
        Facilities recapitalization is comprised of modernization and
    restoration. Modernization counters obsolescence by updating and
    renewing a facility to new standards or functions without changing the
    fundamental facility size. Restoration includes repairs necessary to
    restore degraded facilities to working condition beyond design service
    life (C3/C4 corrections) or to fix accidental damage from natural
    disaster, fire, accident, etc. Our goal is to modernize facilities at a
    rate of 67 years (Recap Rate). The restoration goal is to eliminate all
    C3/C4 deficiencies by 2013.
        Facilities Sustainment
        Facilities Sustainment includes those maintenance and repair
    activities necessary to keep facilities in working order through their
    design service life. It includes regularly scheduled maintenance and
    major repairs or replacement of facility components that are expected
    to occur periodically throughout the life cycle of facilities. The
    Fiscal Year 2007 Sustainment Rate is 91 percent of the Facility
    Sustainment Model (FSM).
        Utilities Privatization (UP)
        Navy had originally planned to complete all competitive UP
    evaluations by September 2005. However, delays for 159 utilities
    systems have extended the completion schedule. To date, Navy has
    completed source selection decisions for 486 of our 645 systems.
        Environment and Marine Mammal Protection Act
        Effective antisubmarine warfare (ASW) is critical to ensuring the
    Navy's ability to defend national interests around the world. The
    Navy's ASW forces must be highly trained and capable in littoral-water
    operations in order to provide assured access for the joint force to
    strategic areas worldwide.
        The Navy takes seriously our responsibility to act as good stewards
    of our natural resources and incorporates protective measures into
    training to minimize effects on the environment. The Navy is committed
    to environmental compliance, and we are committed to working with those
    interested in protecting valuable environmental resources.
        The Navy's use of sonar, and the ability to test and train with it,
    is critical to operational readiness and our national defense.
    Effective use of active sonar is a perishable skill that demands
    realistic training. The Navy recognizes that such active sonar testing
    and training must be accomplished in an environmentally sound manner
    that is science-based and protective of marine life.
        The Navy has recently published a Draft Environmental Impact
    Statement (DEIS) for an undersea warfare training range (USWTR) to be
    located off of the east coast of the United States. This DEIS marks the
    first time the Navy will apply for a permit under the Marine Mammal
    Protection Act for a permanent training range vice a one-time training
    authorization. The Navy's Fleet Forces Command and regional staffs are
    cooperating with Federal and State agencies throughout the process to
    keep them informed and to coordinate for the appropriate permits.
        Intelligence Surveillance and Reconnaissance (ISR)
        Navy Human Intelligence (HUMINT) initiatives remain consistent with
    those of the Under Secretary of Defense for Intelligennce (USD(I)) and,
    in cooperation with Defense HUMINT, we are creating Navy manned,
    maritime collection elements worldwide. These elements will provide
    maritime focused collection capability, postured to capitalize on
    regional opportunities, and prosecute the global war on terror and
    other non-traditional missions.
        Furthermore, the Navy has established maritime interception
    operations (MIO) intelligence exploitation teams to increase on-scene
    intelligence collection and exploitation during MIO boardings in
    support of OEF and OIF. This unique effort will significantly reduce
    time lags between MIO boardings and analysis of intelligence collected.
        Additionally, Navy is creating a cadre of trained and certified
    Navy interrogators to sustain operations at the joint interrogation
    facility at Guantanamo Naval Base, Cuba and to support future joint
    interrogation requirements.
        Advanced Deployable System (ADS) is a rapid, unobtrusively deployed
    undersea surveillance system and capability focused against enemy
    diesel-electric submarines, nuclear submarines, high-interest merchant
    shipping, and the detection of sea-mine laying activities in the
    littorals.
        Cobra Judy Replacement (CJR) is a deployed shipboard radar system
    designed to collect high fidelity radar data in support of treaty
    monitoring obligations and U.S. missile defense system testing. CJR is
    the functional and operational replacement for the current Cobra Judy
    system and the USNS Observation Island hull, which has reached the end
    of its service life.
        Submarine Support Equipment Program (SSEP) develops electronic
    warfare support (EWS) systems improvements to enhance operational
    effectiveness in the increasingly dense and sophisticated
    electromagnetic/electro-optic littoral environment. SSEP provides agile
    threat warning capability to respond to emerging threats.
        Distributed Common Ground/Surface Systems (DCGS) is a joint family
    of interconnected C\4\I systems for posting, processing, exploiting,
    and updating ISR information. The Common Data Link (CDL) program
    ensures interoperability between the airborne ISR platforms and the
    family of ground systems.
                         ii. building the future force
    A. Taking a Fix
        The QDR included a rigorous evaluation of requirements and
    budgetary constraints that will shape how we confront the very
    uncertain and challenging security environment of this new century and
    the ``long war'' in which we are currently engaged. The fleet we are
    building today, and the leaders we are training, will be the Navy that
    confronts tomorrow's challenges. The environment in which that force
    operates will be very different from that in which we have come of age.
        Due to the fiscal and temporal realities associated with the design
    and development of modern, sophisticated weapons systems, the Navy is
    continuing to transform. As recognized in the QDR, the size and
    capabilities of our force are driven by the challenges we will face.
    The capacity of the force is determined by its global posture in
    peacetime and the requirement to respond from this posture, as well as
    to surge, in crisis. In the case of our Navy, it is based upon the need
    for a ubiquitous but carefully tailored maritime presence that can
    provide our President and our allies with strategic options in support
    of dynamic security requirements.
        The Navy recently submitted to Congress our 30-Year Shipbuilding
    Plan designed to replenish the fleet, while stabilizing workload and
    funding requirements. A stable plan will allow the shipbuilding
    industry to maintain critical skills and to make sound corporate
    decisions to best meet the Navy's projected shipbuilding requirements.
        A stable shipbuilding industry is essential to sustain optimum
    employment levels and retain critical skills to meet our requirements
    for an affordable and capable force structure. We must align the
    industrial base for long-term force development through advanced
    procurement and incentivized cost savings. We must have a robust enough
    industrial base to withstand natural disaster or catastrophic attack.
    We must build ships more efficiently, cost effectively, and quickly. To
    do this, we are committed to help provide stability in the shipbuilding
    plan and rigorously control requirements. Costs and production
    schedules must be kept within contractual limits. Industry must be
    viewed as a trusted partner while we provide a stable baseline upon
    which to plan.
        The 2007 Annual Long Range Plan for Construction of Naval Vessels
    is an investment plan that is both executable and affordable based on
    balancing several factors: naval force operational capability, risk,
    and the ability of the shipbuilding industrial base to execute the
    plan. The Navy continues to analyze operational requirements, ship
    designs, costs, acquisition plans, tools, and industrial base capacity
    to further improve its shipbuilding plan. Full funding and support for
    execution of this plan is crucial to transforming the Navy to a force
    tuned to the 21st century and built upon the foundation of Sea Power 21
    and FORCEnet.
        Our Sea Strike capability will continue to revolve around carrier
    and expeditionary strike groups, with sufficient lift, sustainability,
    and tactical air (TACAIR) assets to meet irregular and conventional
    joint warfighting requirements.
        Seabasing provides assured access to the joint force by keeping the
    logistics tail safely at sea while putting the teeth of the combat
    forces ashore. The iron mountain of equipment we staged on land in
    earlier operations, now will come from international waters at sea,
    minimizing our footprint ashore and the associated permissions required
    from host nations. Our seabasing will be facilitated by large deck,
    expeditionary warfare ships and connectors, by heavy lift and transport
    aircraft, by maritime prepositioning forces, and by the combat
    logistics force.
        Our Sea Shield capabilities will be advantaged by advanced anti-
    submarine warfare, internetted under sea warfare, and theater ballistic
    missile defense (TBMD) technologies, and our submarine fleet will need
    to maintain its technological edge over all adversaries in warfighting,
    ISR, detectability, and survivability.
        As a primary catalyst for naval transformation, FORCEnet has the
    potential to fundamentally transform operations themselves, generating
    greater effectiveness, efficiency, and adaptability. Further, through
    the transformation of systems related to training, administration,
    recruitment and acquisition, FORCEnet is expected to influence the
    entire naval enterprise.
        As highlighted by the QDR, achieving the full potential of net-
    centric warfare requires viewing information as an enterprise asset to
    be shared and as a weapon system to be protected. The underlying power
    of FORCEnet derives from leveraging the network effect, which causes
    the value of a product or service in a network to increase
    exponentially as the number of those using it increases. FORCEnet will
    extend visibility of information and will support a more horizontal
    command, control, and communications structure.
        To better fight the global war on terror and prevent piracy and the
    trafficking of weapons of mass destruction, humans, and narcotics we
    will need faster, multi-mission ships, and the right mix of
    helicopters, small boats, and combat capabilities. To expand the number
    of maritime nations able to contribute to regional stability and join
    us in the fight against violent extremism, we will need shallow draft
    ships and more helicopters to better support a variety of training,
    outreach, and civil affairs operations.
    B. Plotting the Course: Where we're heading in building the Future
            Force
        In building the Navy of the future, access is as important as
    presence. Whether delivering training, humanitarian assistance, or
    lethal combat power our Navy cannot be restricted in its access to the
    world's navigable waterways. Conducting disbursed and networked
    operations, with the proper force mix, people, and tools, will enable
    us to simultaneously fight an irregular war, defend the homeland, and
    participate in pro-active, cooperative engagement on a day-to-day basis
    while retaining the capability to rapidly aggregate dominant combat
    power to deter or conduct major combat operations should they arise.
        Two challenges, one Navy.

        As part of the QDR process, the Navy used a capability-based
    approach (shown above in Figure 2) to calculate the size and
    composition of the future force required to meet expected joint force
    demands in peace and in the most stressing construct of the Defense
    Planning Guidance. Further, we evaluated detailed assessments of risk
    associated with affordability and instabilities in the industrial base.
    The analysis concluded that a fleet of about 313 ships is the force
    necessary to meet all of the demands, and to pace the most advanced
    technological challengers well into the future, with an acceptable
    level of risk. The Navy expects to achieve this force structure by
    fiscal year 2012.
        Through transformation, recapitalization, and modernization, we
    seek a balanced force that delivers speed, agility, persistence, and
    dominance--characterized by disbursed and networked operations,
    comprehensive maritime domain awareness, cooperative engagement with
    allies and partners, and lethal combat capabilities.
        Our naval aviation capabilities are a vital part of this balanced
    force. Here, too, we must invest in the technology and platforms that
    will carry us into a future joint environment of low observability,
    electronic attack, unmanned aerial vehicles, broad ocean surveillance
    and reconnaissance, complex command and control, and precision strike.
    We must outpace and overmatch the most capable technological
    competitors and overcome the most difficult and time-critical targeting
    challenges.
        Aircraft carrier-based strike capability is a concrete example of
    the Navy's ongoing transformation. During Operation Desert Storm it
    took, on average, more than one ``sortie'' or flight of strike aircraft
    to engage a single target. This trend was reversed during Operation
    Iraqi Freedom as technology and operations improved, allowing multiple
    targets to be engaged per single flight. For example, it took two
    divisions (eight aircraft) to attack and destroy a single bridge during
    Operation Desert Storm, but two divisions of F/A-18C Hornets carrying
    GPS guided bombs attacked more than eight aim points with precision
    during Operation Iraqi Freedom.
        In 2020, our carrier air wings with F/A-18E/F Super Hornets and F-
    35C Joint Strike Fighters will attack targets at nearly twice the range
    currently possible. They will do this in the highest threat
    environments without the extensive tanker support required today, and
    they will destroy more targets with 24/7 persistence.
        As underscored by the response to the tsunami and hurricanes, we
    must also have a robust rotary wing capacity. This will be achieved
    primarily through recapitalization and modernization programs such as
    the CH-53X and the MH-60R/S. The flexibility and versatility of rotary
    winged aircraft have proven increasingly more valuable in support of
    the global war on terror, anti-submarine warfare, humanitarian and
    disaster relief operations, theater security cooperation programs, and
    logistics support. We must consider this in future acquisition
    planning.
        The Navy's challenge is to build an affordable fleet for the future
    with the capability and capacity to meet joint demands for naval forces
    that range from homeland security and humanitarian assistance to major
    combat operations.
    C. Getting Underway: Programs in Support of Building the Future Force
        A balanced force of about 313 ships and about 3,800 aircraft meets
    the criteria we have established for the future. Within this force,
    eleven aircraft carriers and their associated air wings are sufficient
    to ensure our ability to provide coverage in any foreseeable
    contingency and do so with meaningful, persistent combat power.
    Although there is risk here, we believe the risk is both moderate and
    manageable.
        There is risk in other areas as well. Despite the fact the total
    SSN numbers drop below 48 between 2020 and 2034, our fast attack
    submarines will provide the ISR capability we need to support
    indications and warning of any impending threat throughout their areas
    of operations and will be sufficient to sustain minimum required
    deployed presence needed for major combat operations.
        Surface combatant capability is robust, but does not provide
    extended TBMD capacity--that just isn't affordable within the top line
    we have today. Navy is, however, expanding our currently limited short-
    and medium-range ballistic missile defense capabilities through the
    fielding of the Aegis BMD and SM-3 missiles. A future sea-based
    terminal (SBT) BMD capability will be addressed initially through
    upgrades to existing missile inventories and eventually through Navy
    open architecture initiatives in Aegis ships and CG(X).
        Our expeditionary capability provides the joint forcible entry
    capacity necessary to support the sea base as a lodgment point for
    joint operations but represents an acceptable decrease in marine
    expeditionary brigade lift capacity. A myriad of tactical, surveillance
    and reconnaissance, heavy lift, and support aircraft, as well as a
    variety of support ships, provide the Navy with sufficient capacity in
    each mission area.
        To win the ``long war'' against terror we need a Navy that can be
    many places simultaneously. Engagement with allies and friends is the
    only effective way to deter this kind of aggression. We must operate
    with, and show commitment to, our friends around the world in order to
    ensure their assistance in active pursuit of terrorist organizations.
    In developing our capabilities and ship-count, we matched the demand
    signal to ship types and ensured we were not ``over-building'' our Navy
    based on this demand signal. Additional global reach is provided, in
    part, by our flexible Littoral Combat Ship (LCS) platform which
    leverages modular capability against cost. The planned build of 55
    Freedom class LCS, augmented by the Navy Expeditionary Combat Command's
    riverine capabilities, will better serve our combatant commanders and
    complement the capability of our partners worldwide.
        Programs of particular interest include:
        CVN 77, CVN 21
        Navy plans to launch the aircraft carrier, U.S.S. George H.W. Bush
    (CVN 77) in October 2006, and we expect it to enter the fleet in late
    2008. Meanwhile, we continue to design the future aircraft carrier, CVN
    21, which will serve as the replacement for U.S.S. Enterprise and our
    Nimitz class aircraft carriers. CVN 21 balances significantly improved
    warfighting capability, quality of life improvements for our sailors,
    and reduced acquisition and life cycle costs. Highlights of these
    enhancements include: 25 percent increase in sortie generation rate,
    nearly three-fold increase in electrical generating capacity, and
    increased operational availability. At the same time, CVN 21 will also
    achieve over $300 million reduction in procurement costs, $5 billion
    reduction in life cycle costs, and up to 1,000 billet reductions. These
    manpower reductions are expected in several key areas:

             Damage Control, Bridge/Navigation.
             Warfare System
             Air Wing
             Staffs
             Supply Chain Management
             Weapons Handling
             Pit Stop
             Automation

        CVN 21 and the carrier strike group will continue to provide
    forward presence, rapid response, endurance on station, and multi-
    mission capability to serve our Nation's needs for generations to come.
        DD(X)
        DD(X), a multi-mission surface combatant tailored for land attack
    and littoral dominance, will provide independent forward presence and
    deterrence, and operate as an integral part of joint and combined
    expeditionary forces. The DD(X) will capitalize on reduced signatures
    and enhanced survivability to maintain persistent presence in the
    littoral. DD(X) program provides the baseline for spiral development to
    support future surface ships as part of Navy's ``family of ships''
    strategy.
        With its Advanced Gun System (AGS) and associated Long Range Land
    Attack Projectile (LRLAP), DD(X) will provide volume and precision
    fires in support of joint forces ashore. A GPS-guided, 155mm round,
    LRLAP will provide all-weather fires capability out to 83 nautical
    miles. The DD(X) Dual Band Radar represents a significant increase in
    air defense capability in the cluttered littoral environment.
    Investment in open architecture and reduced manning will provide the
    Navy life cycle cost savings and technology that can be retrofit to
    legacy ships.
        The open architecture environment in the DD(X) total ships
    computing environment will allow Navy to rapidly and cost-effectively
    upgrade ships through software changes while avoiding costly hardware
    changes. This in turn will allow us to keep ships viable against
    emerging threats and avoid the high cost of supporting numerous
    baselines, a problem that we are paying for in the AEGIS program today.
        CG(X)
        While DD(X) is a multi-mission destroyer tailored for land attack
    and littoral dominance, CG(X) will be focused on sea-based solutions to
    theater ballistic and cruise missile gaps. CG(X) will provide airspace
    dominance and protection to all joint forces operating with the sea
    base and will reach initial operational capability (IOC) in 2019. CG(X)
    will bring to sea significant warfighting capabilities.
        LCS
        Navy will commission the first LCS, U.S.S. Freedom (LCS 1) in
    fiscal year 2007. The Freedom class will be a fast, agile, and
    networked surface combatant with capabilities optimized to assure naval
    and joint force access to contested littoral regions.
        LCS operates with focused-mission packages that deploy manned and
    unmanned vehicles to execute a variety of missions, including littoral
    anti-submarine warfare, anti-surface warfare and mine countermeasures.
    Innovations for the LCS include:

             Focused mission ship with interchangeable mission packages
             Reduced manning to reduce lifecycle cost
             Optimization for warfighting in the littorals
             Inherent capabilities to increase utility in littorals beyond
            focused mission packages
             Extensive use of Unmanned Vehicles and off-board sensors for
            mission packages
             Acquisition Strategy that provides two LCS variants designed
            to the same requirements
             Contracting for complete systems (less mission packages)
             Seaframe and mission package acquisition strategies that
            provide for spiral design

        LPD 17
        The lead ship of the class, U.S.S. San Antonio (LPD 17) was
    commissioned on January 14, and will soon be joined by four other ships
    currently under construction. LPD 17 functionally replaces four classes
    of amphibious ships for embarking, transporting, and landing elements
    of a Marine Landing Force in an assault by helicopters, landing craft,
    amphibious vehicles, and by a combination of these methods.
        LHA(R)
        LHA(R) flight 0 is a modified LHD 1 class variant designed to
    accommodate aircraft in the future U.S. Marine Corps (USMC) Aviation
    Combat Element (ACE), including JSF/MV-22, and to provide adequate
    service life for future growth. LHA(R) will replace four aging LHA
    class ships that reach their administrative extended service life
    between 2011-2019. This program maintains future power projection and
    the forward deployed combat capability of the Navy and Marine Corps.
    LHA(R) enables forward presence and power projection as an integral
    part of joint, interservice, and multinational maritime expeditionary
    forces.
        Modernization
        The Navy must ensure we achieve full service life from our fleet,
    something we have not done well in the past. Modernization of our
    existing force is a critical component of our ability to build the Navy
    of the future. Our platforms must remain tactically relevant and
    structurally sound for the entire duration of their expected service
    lives.
        Naval aviation modernization efforts continue with the F/A-18 A/B/
    C/D Hornet and the EA-6B Prowler as a bridge to a more capable air wing
    that will include the F-35 Joint Strike Fighter, the EA-18G Growler,
    and the F/A-18 E/F Super Hornet. Modernization also continues with the
    E-2D Advanced Hawkeye, the CH-53X, and the SH-60R/S.
        The surface force modernization program will help bridge the gap to
    DD(X) and CG(X) and mitigates the risk associated with transitioning
    from legacy combat systems to Open Architecture compliant commercial
    off-the-shelf (COTS) technologies. We expect modernization efforts on
    our AEGIS CGs and DDGs to enable these ships to realize an expected
    service life of 35 years. Historically, ships that were not modernized
    were decommissioned (on average) after 17-20 years of service due to
    obsolescence of sensors, command, control, communications, computers,
    and intelligence (C\4\I) suites, and combat systems.
        Cruiser (Mod)
        AEGIS cruiser modification improves warfighting capability through
    enhanced self-defense (close-in weapon system (CIWS) block 1B, Evolved
    Sea Sparrow Missile (ESSM)), expanded information sharing and
    collaborative engagement (Cooperative Engagement Capability ((CEC)),
    improved littoral anti-submarine warfare capability and significant
    land attack improvements (Tactical Tomahawk (TACTOM)). A comprehensive
    mission life extension (MLE) package includes the All Electric
    Modification, SmartShip, hull mechanical, and electrical system
    upgrades and a series of alterations designed to restore displacement
    and stability margins, correct hull and deck house cracking, and
    improve quality of life and service onboard. This modernization will
    extend the service life of the AEGIS cruisers to approximately 35
    years.
        The SmartShip installation reduces enlisted crew manning on CGs by
    13 (297 vice 310). At its inception, the CG Mod Program was not
    established with a requirement for manning reductions; however, program
    executive officer (PEO) Ships has commissioned a Total Ship Integration
    Team (TSIT) study in conjunction with DDG Mod efforts to determine
    additional areas for potential manning reductions in CG Mod. The TSIT
    works with the system program managers and Navy manpower analysis
    center (NAVMAC) to fully model CG Mod manning with respect to
    watchstanding, maintenance, and fatigue analysis.
        Destroyer (Mod)
        The DDG Modernization Program is likewise designed to reduce
    manning and total ownership costs while increasing warfighting
    capability. DDG modernization supports the transition to DD(X) and
    CG(X), and mitigates the risk associated with the transition from
    legacy combat systems to open architecture (OA) compliant, commercial-
    off-the-shelf (COTS) technologies. The intent is to provide a coherent
    strategy to keep each ship relevant and affordable through their entire
    35-year hull life.
        Virginia Class Fast Attack Nuclear Submarine (SSN)
        Navy needs to maintain an SSN force structure sufficient to meet
    current operational requirements, the global war on terror, and any
    potential future threat from near peer competitors. The first 10
    Virginia Class (SSN 774) submarines are already under contract. Navy is
    pursuing a number of cost reduction initiatives intended to lower SSN
    774 acquisition costs to $2.0 billion (in fiscal year 2005 dollars) at
    a stable build rate of two-per-year, currently planned for fiscal year
    2012.
        The Navy intends to pursue design modifications to the Virginia
    class that will lower acquisition cost, while sustaining or improving
    warfighting capability. The Navy and our submarine shipbuilders are
    conducting a detailed study of design options that will dovetail with
    ongoing production and contracting initiatives and sustain the critical
    skills necessary for nuclear submarine design. A detailed report
    meeting the requirements of the National Defense Authorization Act
    statute and reflecting the outcome of the study will be available later
    this spring.
        F-35 Joint Strike Fighter (JSF)
        The JSF is an affordable multi-mission strike fighter aircraft that
    incorporates matured and demonstrated 21st century technology to meet
    the warfighting needs of the Navy, Marine Corps, Air Force, and eight
    other countries. The JSF program pillars are range, lethality,
    survivability, supportability, and affordability. The U.S., U.K.,
    Italy, Netherlands, Denmark, Turkey, Norway, Australia, and Canada
    comprise the JSF cooperative partnership. There are three JSF variants:
    conventional take off and landing (CTOL), carrier variant (CV), and
    short take off vertical landing (STOVL). Department of Navy procurement
    is expected to be 680 aircraft.
        The JSF CV variant is projected to exceed its required 600 nautical
    mile combat radius, and the STOVL variant is projected to exceed its
    required 450 nautical mile combat radius.
        F/A-18E/F Super Hornet
        The Super Hornet is the Navy's next generation strike-fighter. The
    F/A-18E/F replaces the F-14, older model F/A-18, and S-3 carrier-based
    tankers. F/A-18E/F is five times more survivable than the F/A-18C. The
    Super Hornet provides a 40-percent increase in combat radius, a 50-
    percent increase in endurance, 25 percent greater weapons payload, and
    three times more ordinance bring-back than the F/A-18C. The F/A-18E/F
    will have the active electronically scanned array radar system (AESA),
    Integrated Defensive Electronic Countermeasures System (IDECM), Joint
    Helmet Mounted Cueing System (JHMCS), Advanced Targeting Forward-
    Looking Infrared Radar (ATFLIR), Shared Reconnaissance Pod (SHARP),
    Multi-Function Information Distribution System (MIDS), and Advanced
    Crew Station (ACS). 246 Super Hornets have been delivered of a total
    procurement of 460.
        EA-18G Growler
        The EA-18G is a two-seat carrier-based replacement aircraft for the
    EA-6B Prowler electronic attack aircraft. The Growler is scheduled for
    initial operational capability (IOC) in 2009. The Growler shares a
    common airframe with the F/A-18F Super Hornet. A total inventory of 90
    aircraft is planned for service in 11 squadrons. EA-18G upgrades
    include the destruction of enemy air defenses with joint weapons,
    advanced radio frequency (RF) receiver and jamming modes, integrated
    peer-to-peer networking, integration with stand-in assets, and
    coordinated off-board electronic support (ES).
        F/A-18A/B/C/D Hornet
        The F/A-18 Hornet is naval aviation's primary strike-fighter. The
    Hornet is the workhorse of Navy/Marine Corps tactical aircraft and is
    also flown by the armed forces of seven allied and friendly countries.
    Its reliability and precision weapons-delivery capability highlight the
    Hornet's success. Improvements to the Hornet A/B/C/D variants provide
    state-of-the-art war fighting enhancements in precision strike, anti-
    air and C\4\I capabilities. The more than 680 Navy and Marine Corps
    Hornets will continue to comprise half of the carrier strike force
    until 2013, and the A/B/C/D Hornet variants are scheduled to remain in
    the Naval Aviation inventory through 2022.
        E-2D Advanced Hawkeye
        The E-2D Advanced Hawkeye (AHE) program will modernize the current
    fleet of aircraft carrier based airborne early warning E-2C aircraft.
    AHE will have a new radar and other aircraft system components that
    will improve nearly every facet of tactical air operations. The
    modernized weapons system will be designed to maintain open ocean
    capability while adding transformational littoral surveillance and
    theater air and missile defense capabilities against emerging air
    threats in the high clutter, electromagnetic interference and jamming
    environment. The AHE will be one of the four pillars contributing to
    naval integrated fire control-counter air. The AHE program plans to
    build 75 new aircraft. The program is on track to meet the first flight
    milestone in fiscal year 2007.
        P-8A Multi-Mission Maritime Aircraft (MMA)
        The P-8A is the Navy's next generation MMA, replacing the P-3C. The
    P-8A missions will include broad area maritime and littoral
    surveillance, anti-submarine warfare, anti-surface warfare and ISR. The
    P-8A fulfills the combatant commander's requirements for major combat
    operations, forward presence and homeland defense. It will replace the
    P-3C on a less than one-for-one basis, and trades 4,500 military
    billets for 900 contractor billets. IOC for the P-8A is fiscal year
    2013.
        MV-22B Osprey
        The MV-22 Osprey is the Navy and Marine Corps' next-generation
    medium-lift assault support aircraft. It will replace the CH-46E and
    CH-53D. The Osprey will significantly improve the operational reach and
    capability of deployed forces: The MV-22 is twice as fast, has triple
    the payload, and has six times the range of the airframes it will
    replace. The Navy and Marine Corps MV-22 requirement is 408 Osprey
    aircraft.
        MH-60R/S Multi-Mission Helicopter
        The MH-60R and MH-60S are the Navy's multi-role helicopters that
    incorporate advanced sensors and weapons systems to perform a multitude
    of missions that were previously performed by six different types of
    aircraft. The MH-60R Multi-Mission Helicopter will replace the SH-60B
    and SH-60F Seahawk helicopters entirely, and perform the anti-ship role
    of the fixed-wing S-3 Viking, which is currently being phased out of
    service. The MH-60R will perform anti-submarine, undersea, and surface
    warfare missions.
        The MH-60S is the Navy's primary combat support helicopter designed
    to support the carrier strike group and expeditionary strike group in
    combat logistics, vertical replenishment, anti-surface warfare,
    airborne mine countermeasures, combat search and rescue, and naval
    special warfare mission areas.
        CH-53X
        The CH-53X is the follow on to the Marine Corps CH-53E heavy lift
    helicopter and will have double the lift capacity of the CH-53E. The
    CH-53X will incorporate more powerful engines, an expanded gross weight
    airframe, composite rotor blades, updated cockpit, and cargo handling
    systems and will be more survivable. The CH-53X will serve the Navy's
    sea base and is an integral part of the Marine Corps 2015 ship-to-
    objective maneuver doctrine. IOC is planned for 2015.
        Broad Area Maritime Surveillance (BAMS) Unmanned Aircraft System
            (UAS)
        BAMS UAS is an unmanned aircraft capable of carrying various
    mission payloads. BAMS UAS will incorporate radar, electro-optical,
    infrared, and electronic surveillance measures capabilities that will
    allow BAMS UAS to detect, classify, and identify targets using either
    active or passive methods. The BAMS UAS is also a key node in the
    Navy's FORCEnet C\4\I architecture. It will be capable of providing
    persistent worldwide maritime ISR capability, supporting maritime
    domain awareness, and providing information that enables commanders to
    achieve decision superiority.
        Global Hawk Maritime Demonstration (GHMD)
        GHMD provides a high altitude, high endurance UAV capability 7
    years before the IOC of the BAMS UAS. Two Global Hawk UAVs are being
    procured on an Air Force production and modified with a radar and
    limited capability electronic support measures (ESM) suite that support
    ship detection. GHMD will be used to support testing of persistent
    maritime ISR technologies, and to help develop concepts of operation
    (CONOPs) and tactics, training, and procedures (TTP) for maritime UAVs.
        Joint Unmanned Combat Air System (JUCAS)
        JUCAS is a Boeing industries project that will provide the Navy
    with a carrier-based unmanned combat air vehicle (UCAV) capable of
    performing strike, suppression of enemy air defense (SEAD), and ISR
    missions in high threat environments against future air defense
    systems. JUCAS capabilities will help minimize the risk of loss or
    capture of friendly forces. JUCAS is anticipated to fulfill ISR
    missions by 2018, with follow-on strike and SEAD mission capabilities
    achieved by 2024. The Navy's primary initial objective is to complete
    aircraft carrier flight demonstration of a tailless UAV. Three land-
    based vehicles are scheduled for first flight in fiscal year 2007 and
    will demonstrate in-flight refueling capabilities and limited weapons
    and sensor integration. Two carrier suitable vehicles are scheduled for
    their first flights in fiscal year 2008. An aircraft carrier
    demonstration is scheduled for fiscal year 2011.
        MQ-8B Fire Scout Vertical Takeoff UAV (VTUAV)
        The Navy VTUAV is designed to operate from all aircraft- capable
    ships. VTUAV will carry modular mission payloads and use the tactical
    control system (TCS) and tactical common data link (TCDL). VTUAV will
    provide day/night real time ISR and targeting, as well as C\4\I and
    battlefield management capabilities to support the LCS core mission
    areas of antisubmarine warfare, mine warfare, and anti-surface warfare.
    Fire Scout is currently in engineering and manufacturing development
    (EMD).
        Tactical Control System (TCS)
        The TCS provides a common interface for future tactical and medium
    altitude unmanned aerial sensors (UAS). TCS will enable different UAS
    to use a common system for mission planning, command and control, and
    C\4\I. TCS software will provide a full range of scaleable UAS
    capabilities, from passive receipt of air vehicle and payload data to
    full air vehicle and payload command and control from ground control
    stations both ashore and afloat. TCS gives the LCS a UAV capability
    when fielded in conjunction with the Fire Scout VTUAV system. TCS will
    also be evaluated for use in future programs such as BAMS UAS, Multi-
    mission Maritime Aircraft (MMA), and DD(X).
        Pioneer Tactical Unmanned Aerial Sensor (UAS)
        The Pioneer UAS system is a transportable ISR platform capable of
    providing tactical commanders with day and night, battlefield, and
    maritime ISR in support of Marine expeditionary warfare and maritime
    control operations. Currently eight air vehicles are deployed with
    Marine forces and have flown over 12,000 flight hours in support of
    Operation Iraqi Freedom. The Navy operates two air vehicles as test
    platforms for equipment and system upgrades, which will allow Pioneer
    sustainment until a follow-on system is fielded. The current USMC UAS
    plan calls for sustainment of the Pioneer UAS through at least fiscal
    year 2015, pending the fielding of a replacement system.
                      iii. developing 21st century leaders
    A. Taking a Fix
        The men and women of the United States Navy--Active, Reserve, and
    civilian--are the lifeblood and heart of the Service. Today they are
    the best, most talented, and capable team of professionals the Nation
    has ever assembled. The Navy currently has an Active Force of 357,474,
    of which 39,775 are now deployed. Our Reserve community consists of
    74,632 sailors, 4,281 of whom are now activated.

        The Navy's Strategy for Our People provides overarching guidance
    for achieving a capabilities-based and competency-focused total Navy
    workforce (Active, Reserve, civilian) in sync with joint and Service-
    specific mission requirements. Capitalizing on the success of manpower
    and personnel reforms over the last several years, we will shape a more
    agile and operationally capable Navy. While we address our skill
    imbalances we will also focus and improve our efforts in the talent
    marketplace to achieve a more diverse workforce (see Figure 3 above).
    We will link and leverage Sea Warrior and National Security Personnel
    System (NSPS) processes to achieve an agile and robust total Navy
    personnel architecture that rewards performance and can quickly respond
    to emerging competency demand signals.
        In fiscal year 2005 the Navy met 100 percent of its Active-enlisted
    accession goal, with 95 percent high school graduates and 70 percent in
    test score category I-IIIA. For Reserve enlisted recruiting, Navy met
    85 percent of fiscal year 2005 accession goals, with shortfalls in
    ratings with insufficient numbers of Navy veterans (e.g. Seabees,
    Master at Arms). In officer programs, 84 percent of Active component
    goals and 90 percent of Reserve goals were attained in fiscal year
    2005. Shortfalls were mostly in medical programs.
        Retaining the best and brightest sailors has always been a Navy
    core objective and essential for our success. Navy retains the right
    people by offering rewarding opportunities for professional growth,
    development, and leadership directly tied to mission readiness. Navy
    has remained successful in filling enlisted operational billets around
    the world to sustain fleet readiness objectives.
        Key to these successes has been Navy's aggressive program to
    enhance quality of service for our total Navy (the combination of
    quality of work and quality of life). We continue to monitor the
    impacts of an improving economy and the war on terror to ensure
    programs support sailors and their families and contribute to making
    the Navy their career of choice. We remain focused on providing
    adequate pay, health care, housing, proper work environments, and
    career-long learning for our sailors.
        But retention and the drive to attract and hold onto the best
    people, underscores the need to seek efficiencies in the force--
    efficiencies that ultimately will translate into reduced end strength.
    By the end of fiscal year 2006, your Navy will have reduced its Active
    end strength by almost 30,000 (7.7 percent of the Active component)
    since 2003. Further reductions will result from efficiencies yet to be
    realized through technological advances that eliminate outdated, labor-
    intensive jobs. As potential reductions in manpower are identified, the
    Navy will execute these reductions in a planned, controlled, and
    responsible manner that is consistent with the security interests of
    the country.
        Prior to considering sailors for separation (and selective
    application of voluntary separation incentives), we employ a
    progressive approach to evaluate options for retaining sailors by
    shifting personnel from overmanned to undermanned skills through
    retraining and conversion. This is accomplished through a variety of
    means, including the perform to serve, lateral conversion bonus,
    transfer to fill valid Reserve component requirements, or through
    interservice transfer (e.g. Army's Blue-to-Green initiative).
        After exhausting all logical retention options, consideration is
    given to releasing sailors whose service/skills are no longer required.
    Under no circumstances should we retain personnel in over-manned skills
    if it is not feasible and cost-effective to move them into undermanned
    skills. To do so would be poor stewardship of taxpayer dollars and
    would force Navy to endure gaps in undermanned skills to remain within
    authorized aggregate strength levels, thereby adversely impacting
    personnel readiness.
        In parallel with the strategy for our people, we are pursuing an
    Active-Reserve Integration (ARI) program that will support a more
    operational and flexible unit structure. The Navy Reserve is evolving
    into a flexible, adaptive, and responsive operational force needed to
    fight the asymmetric, nontraditional threats of our future. Active-
    Reserve integration has already enabled a Reserve Force that is ready,
    relevant, and fully integrated into our Nation's defense both overseas
    and in the homeland. We recognize and value the diverse skills our
    reservists possess, accrued in both military service and civilian life.
        Our vision for the future is to capture the skills of our
    outstanding citizen sailors for life. In the ``Sailor for Life'' model,
    reservists would seamlessly transition between Reserve and Active
    components, answering the Nation's call to arms when needed. Congress'
    continued support of financial incentives and bonuses will ensure the
    retention of these highly-skilled sailors.
        Navy Reserve sailors have performed a pivotal role in the global
    war on terror. Mobilized sailors provide a portion of this support--
    4,281 sailors are currently serving on involuntary mobilizations in
    such areas as Customs Inspection, cargo handlers, Navy coastal warfare,
    naval construction battalions, medical and corpsmen, helicopter Special
    Operations Forces support and numerous others. But mobilization alone
    does not reflect the total contribution of the Navy's Reserve. On any
    given day, an additional 15,000 reservists are providing operational
    support to the fleet around the globe. During the past year, Reserve
    sailors have provided over 15,000 man-years of support to the fleet.
    This support is the equivalent of 18 naval construction battalions or 2
    carrier battle groups.
        Finally, we must recognize another aspect of readiness that is
    equally as important as preparing and maintaining our ships and
    training and equipping our sailors. ``Family readiness'' describes the
    support needed to ensure our sailors and their families are as well
    prepared for operations as our ships and airframes. The Navy is working
    hard to implement the right support mechanisms, ombudsman training,
    family advocacy programs, spouse education and employment programs,
    mentorship, and family counseling. We can do little without the support
    of our families, and it is up to us to ensure they are well taken care
    of and ready and eager to support.
    B. Plotting the Course: Where we're heading in Developing 21st Century
            Leaders
        To better serve the men and women who are the United States Navy,
    and in turn, enable them to be as effective as possible in a
    challenging new global era, we must: improve diversity; encourage and
    reward continuing education and training that stresses critical
    thinking; institutionalize executive development; assign our best and
    brightest to critical joint, interagency, and foreign exchange tours;
    increase access to foreign language and cultural awareness training;
    respond rapidly to significant changes in leading indicators for
    recruiting and retention; and, better recognize the important role
    families play in our readiness and quality of life. It is this
    commitment to our own that will best demonstrate our resolve and
    determination in a new era.
        New opportunities and security challenges require new skill sets.
    Brainpower is as important as firepower. Our sailors must be empowered
    to operate and fight in a vast array of environments that range from
    failing states and ungoverned spaces to the most technologically
    advanced nations, virtual worlds and cyberspace. They will form the
    foundation of an expeditionary force when and where required. They will
    be expected to understand and foster cooperation in cultures far
    different from our own. They will be ambassadors, educators, health
    care providers, mentors, and friends to a diverse cross-section of the
    global community. They must be equipped with the tools and skills to
    meet these challenges, to excel as professionals, and to develop as
    individuals.
        We are increasingly leveraging technology to improve our
    warfighting advantage and to broaden the skill sets required to meet
    the multi-cultural, asymmetric challenges of this century. Advances in
    ships and system design allow us to shed some obsolete, labor-intensive
    functions while improving productivity and warfighting readiness.
    Economies are gained by eliminating redundant and non-essential skill
    sets. The optimal end strength for our Active and Reserve components
    must reflect the economies derived from transforming the force to meet
    the challenges we face in this new century.
        The concept of total Navy encompasses those serving the Department
    of the Navy in uniform and in a civilian capacity, Active and Reserve
    component alike. NSPS is a new personnel system that will create civil
    service rules for the 750,000 civilian workers in the Department of
    Defense. It strengthens our ability to accomplish the mission in an
    ever-changing national security environment. NSPS accelerates
    Department of Defense efforts to create a Total Force (military
    personnel, civilian personnel, Reserve, Guard, and contractors),
    operating as one cohesive unit, with each performing the work most
    suitable to their skills. The Navy's Strategy for our People needs a
    manpower and personnel system that appropriately recognizes and rewards
    our civilian employees' performance and the contributions they make to
    the Department of Defense mission. NSPS gives us better tools to
    attract and retain good employees.
        Throughout total Navy, diversity is a fundamental building block
    upon which the Strategy for our People stands. The Navy's diversity
    objectives are aimed at improving our access to the full range of the
    Nation's talent and improving our ability to harvest and represent the
    full strength of the Nation. The Strategy for Our People views total
    Navy as a team, whose people are treated with dignity and respect, are
    encouraged to lead, and feel empowered to reach their full potential.
    Total Navy diversity represents all the different characteristics and
    attributes of individual sailors and civilians, which enhance our
    mission readiness.
        Training, education, mentoring, and leadership programs are aimed
    at increasing awareness of diversity and creating a culture that
    promotes growth and development opportunities for every member of the
    Navy. These programs are currently funded through training and
    education commands. Specific diversity-focused training for leadership
    is a newly-funded initiative that seeks to create awareness and
    communication skill competencies for all levels of leadership and embed
    diversity values into the force.
        The Navy is a full partner and supporter of the Department's
    Training Transformation Program. We are better preparing units and
    staffs for joint operations through the Joint National Training
    Capability, and individuals for joint assignment through the Joint
    Knowledge Development and Distribution Capability.
        The cornerstone of Navy's Strategy for Our People is the Sea
    Warrior program. Sea Warrior comprises the Navy's training, education,
    and career-management systems that provide for the growth and
    development of our people. It provides them with greater individual
    career management and enables them to take a more active role in
    furthering their careers through education and training opportunities.
    Sea Warrior will include an automated, web-enabled system and processes
    which will increase overall mission effectiveness by efficiently
    developing and delivering an optimally matched, trained, educated, and
    motivated workforce.
    C. Getting Underway: Programs and Practices in Support of Developing
            21st Century Leaders
        The Navy's Strategy for our People provides the guidance and tools
    to assess, train, distribute, and develop our manpower to become a
    mission-focused force that truly meets the warfighting requirements of
    the Navy. At the same time, we must improve the work-life balance, and
    quality of service so our sailors and civilians will enjoy meaningful
    job content, realize their important contributions, and have expanded
    opportunity for professional and personal growth. We will deliver all
    the above, while tackling head-on the pernicious challenges of sexual
    harassment, sexual assault, and substance abuse, and offering an
    environment that values and rewards diversity.
        Programs and practices of particular interest include:
        Diversity
        The Navy diversity strategy is aimed at creating and maintaining
    our Navy as a team, whose people are treated with dignity and respect,
    are encouraged to lead and feel empowered to reach their full
    potential. Specific initiatives are aligned under the four focus areas
    of recruiting, growth and development, organizational alignment, and
    communications. Navy has increased advertising and marketing funds
    specifically targeted at diversity recruiting for the past 5 years. We
    have also chartered outreach programs aimed at minority and female
    engineering and technical organizations.
        Transforming training, education, mentoring, and leadership
    programs are aimed at increasing awareness of diversity and creating a
    culture that provides growth and development opportunities for every
    member of the U.S. Navy. The Navy is currently developing CONOPs for an
    aggressive program to increase the diversity of our Service.
        Some examples of progress to date include:

             Recruiting--Coordination of national public awareness
            and recruiting events. Increased diversity event sponsorship.
            More visibility into ROTC application, recruiting, and board
            processes.
             Developing--Diversity awareness and communication
            training has been built into all levels of leadership
            development courses; Navy-wide Equal Opportunity Advisor (EOA)/
            Diversity symposium will become an annual event.
             Alignment/Oversight--Diversity Senior Advisory Group
            and Fleet Diversity Councils will coordinate best practices
            with various Navy enterprises.
        Enlisted Retention (Selective Reenlistment Bonus)
         Selective Reenlistment Bonus (SRB) continues to be our most
    effective retention and force-shaping tool, enabling us to retain the
    right number of high quality sailors with the right skills and
    experience. More importantly, it affords Navy the ability to compete in
    a domestic labor market that increasingly demands more skilled,
    technically proficient, and adaptable personnel.
        The Navy is continuing to transform our workforce by recruiting
    fewer generalists and becoming a predominantly technical and more
    experienced force. To retain the critical skills we need, our SRB
    strategy has shifted from targeting general skill sets with less than
    10 years of service, to focusing on the specialized skills of sailors
    across the career continuum (up through 14 years of service). Navy has
    applied increasing analytical rigor in predicting and monitoring
    reenlistment requirements. By monitoring actual reenlistment behavior
    down to the individual skill level, Navy personnel managers review
    clear and unambiguous data to ensure precious SRB dollars are applied
    only when and where needed, based on requirements and outcome.
        We are grateful to Congress for increasing the SRB cap from $60,000
    to $90,000 and will ensure the higher award cap is judiciously applied.
    A portion of this increased SRB may be used to reverse declining
    retention among our most skilled personnel in the Nuclear Propulsion
    specialties. Fiscal year 2005 culminated in achieving only half of our
    zone B nuclear rating reenlistment goal and left several nuclear
    specialties at less than 90 percent of required manning. Applying an
    increased SRB level to retain these highly trained, highly skilled, and
    highly sought after personnel makes sense, both financially and from a
    force readiness perspective. The Navy saves over $100,000 in training
    costs and 10 to 14 years of irreplaceable nuclear propulsion plant
    experience for each individual SRB enables us to reenlist. The
    additional flexibility provided by the SRB cap increase will allow Navy
    to incentivize experienced nuclear-trained personnel and to address
    other skill sets as retention trends emerge.
        Having a flexible and adequately resourced SRB program will help us
    continue to sustain high readiness with a top quality workforce.
        Officer Retention
        Creating an environment conducive to professional growth that
    provides an attractive quality of service, including education,
    adequate pay, health care, and housing, will aid retention efforts.
    However, continued focus on increasing unrestricted line (URL) officer
    retention across all warfighting disciplines is required. Officer
    retention shows positive trends despite shortfalls in the ranks of
    lieutenant commander to captain in the surface and submarine
    unrestricted line communities.
        National Security Personnel System (NSPS)
        NSPS strengthens our ability to accomplish the mission in an ever-
    changing national security environment. NSPS accelerates the
    Department's efforts to create a Total Force (military personnel,
    civilian personnel, Reserve, Guard, and contractors), operating as one
    cohesive unit, with each performing the work most suitable to their
    skills.
        Civilian Career Management
        The Navy supports efforts to develop a career management system for
    civilian employees. Our approach includes documenting and validating
    competencies for use in career planning and development. The validated
    competencies will be made available to the workforce as career roadmaps
    through both 5 Vector Models (Navy) and the Civilian Workforce
    Development Application (CWDA) (USMC). Also in process is the
    development of guidance directed toward supervisors and employees
    indicating how to use competency data to assist with the performance
    management process including career planning and development.
        Health Care
        A vital part of Navy and family readiness hinges on our commitment
    to provide top quality health care for our Active and retired personnel
    and their dependants. Navy Medicine transformation initiatives link
    authority and accountability to facilitate performance-based management
    that maximizes efficiencies while maintaining quality. Increases in the
    cost of providing health services in Navy medical treatment facilities
    (MTFs), for example, have been kept below the healthcare rate of
    inflation and that trend is expected to hold true in the out years. As
    a priority, the Navy is also carefully monitoring the support offered
    to servicemembers who were injured during OEF/OIF service, ensuring a
    seamless transition to the services available through the Veteran's
    Administration (VA).
        The Department of Defense and Congress have established TRICARE as
    the ``gold standard'' health care benefit. Health care costs have
    increased dramatically in recent years and are expected to grow at
    rates that exceed standard indices of inflation \1\. Far from being
    immune to these costs, the DOD must include this reality in the
    budgetary calculus of providing for the Nation's security. DOD TRICARE
    costs have more than doubled in 5 years from $19 billion in fiscal year
    2001 to $38 billion in fiscal year 2006, and analysts project these
    costs could reach $64 billion by 2015--more than 12 percent of DOD's
    anticipated budget (versus 8 percent today). On the other hand, TRICARE
    Premiums have not changed with inflation since the program began in
    1995, so that total beneficiary cost shares have declined
    substantially--27 percent of total benefit cost in 1995 while 12
    percent in 2005.
    ---------------------------------------------------------------------------
        \1\ Total national health expenditures increased by 7.7 percent in
    2003 (over 2002), four times the rate of inflation in 2003. Smith, C.C.
    Cowan, A Sensenig and A. Catlin, ``Health Spending: Growth Slows in
    2003,'' Health Affairs 24:1 (2005): 185-194.
    ---------------------------------------------------------------------------
        When TRICARE for Life was developed for the 2001 National Defense
    Authorization Act, we could not have anticipated the growing number of
    retirees and their dependents, not yet Medicare eligible, who would
    choose or be driven to switch from private/commercial health care plans
    to TRICARE in order to better cope with rising health care costs.
    Indeed, the Services are increasingly picking up the tab for businesses
    and local and State governments unwilling or unable to provide adequate
    health care benefits to their retired veteran employees.
        The Navy will continue to meet our security commitments to the
    American people while fully supporting the health care needs of our
    Active and Reserve members and their families and keeping the faith
    with those who stood the watch before us. This can be accomplished by
    working cooperatively with Congress to implement carefully crafted
    initiatives and administrative actions that will restore appropriate
    cost sharing relationships between beneficiaries and the DOD.
        Family Advocacy
        Navy Family Advocacy Program (FAP) has led the way among the
    Services and the DOD in domestic abuse policy and process by: providing
    victim advocacy at some Navy installations since the mid-1990s, and by
    (since 1997) responding to allegations of domestic abuse between
    unmarried intimate partners, providing a formal diversion process for
    low-risk cases, and providing limited discretionary reporting when a
    victim of domestic abuse seeks counseling voluntarily. Navy commands
    remain active partners in stopping family violence and responding to
    domestic abuse.
        Sexual Assault
        Navy now provides 24/7 response capability for sexual assaults on
    the installation and during deployment by activating watchbills for
    victim advocates and notifying the installation Sexual Assault Response
    Coordinators (SARC). Victims of restricted cases of sexual assault are
    offered advocacy, medical and counseling services without triggering an
    investigation through law enforcement or the command.
        Active-Reserve Integration
        Active Reserve Integration (ARI) aligns Reserve component (RC) and
    Active component (AC) personnel, training, equipment, and policy to
    provide a more effective and efficient total Navy capable of meeting
    dynamic national defense requirements.
        The Navy is currently aligning RC and AC units to better meet OIF
    and OEF requirements and the Navy's vision for our future force
    structure: RC Helicopter-Combat Support (HCS) missions will be
    integrated into AC helicopter missions; RC and AC explosive ordnance
    disposal (EOD) units are being integrated and two RC Navy Coastal
    Warfare Units (NCW) are being converted to the AC. The Navy is also
    studying the role of the RC in future Navy mission areas of riverine
    warfare and civil affairs. In support of OIF/OEF, AC and RC sailors are
    working together to fill billets in civil affairs, detainee operations,
    intelligence, and reconstruction team efforts.
        The Navy Reserve has evolved from a strategic force of the Cold War
    to the flexible, adaptive, and responsive operational force required to
    fight the asymmetric, irregular wars of the future. Change of this
    magnitude is not easy and challenges the senior leadership of both the
    AC and the RC. Support of Congress is critical as we implement
    initiatives that will enable the effective and efficient use of both
    manpower and equipment, providing resources needed to recapitalize the
    Navy of the future. The total number of Navy reservists, both Selected
    Reserves (SELRES) and full-time support (FTS), will be 73,100 at the
    end of fiscal year 2006.
        Sea Warrior
        Sea Warrior comprises the training, education, and career-
    management systems that provide for the growth and development of our
    people and enhance their contribution to our joint warfighting ability.
    Sea Warrior leverages technology to provide sailors the choice and
    opportunity for professional development and personal growth through
    Navy Knowledge Online (NKO), the Job Career Management System (JCMS),
    and the maturing of the 5 Vector Model&VM) (professional development,
    personal development, leadership, performance, certification, and
    qualification). Sea Warrior will also provide commanders with a better
    manpower fit, matching the sailor with exactly the right skills and
    training to the billet.
        Task Force Navy Family
        Task Force Navy Family (TFNF) was established to help our people
    who were affected by hurricanes Katrina, Rita, or Wilma. In all, the
    lives of more than 88,000 Navy personnel, retirees, and immediate
    family members were severely disrupted. TFNF leveraged existing
    agencies and local community support centers to ensure that each Navy
    family was contacted personally and, if desired, assigned an individual
    ``family case manager.'' TFNF has resolved 15,300 unique issues (76
    percent of those reported). Housing and financial problems were, and
    remain, the most difficult to resolve, with over 1,000 severe issues
    yet to be resolved.
        TFNF has now completed its original task and has transitioned
    outstanding issues to Commander, Naval Installations Command and others
    for final resolution. In the process of serving our Navy family, TFNF
    has helped develop tools and structures that can be rapidly deployed in
    the event of future catastrophic events and render aid more efficiently
    and quickly.
        Key lessons learned by TFNF focused on communications, information
    sharing, and taking care of those affected by the devastation. These
    lessons learned, including the need for a more effective method of
    accounting for the whereabouts of ashore personnel and their families
    during crises, have been tasked to the appropriate organizations within
    the Navy for follow up and development of action plans.
        Foreign Area Officer Program
        Recognizing the need to build partner capacity, the QDR calls for
    the Navy to reinvigorate the Foreign Area Officer (FAO) program. Navy
    has begun establishing a separate Restricted Line community of 300-400
    officers that will compete discretely for statutory promotion through
    flag rank. Navy's FAOs will form a professional cadre with regional
    expertise and language skills who will provide support to fleet,
    component commander, combatant commander, and joint staffs. Their
    immediate mission will be to rapidly improve the Navy's ability to
    conduct theater security cooperation (TSC), improve partner capacity in
    global war on terror, and generate maritime domain awareness while
    improving Navy's readiness and effectiveness in the conduct of
    conventional campaigns against increasingly sophisticated regional
    adversaries. The first FAO selection board was held 14-15 Dec 2005.
    Forty-two personnel were selected for lateral transfer and four of
    these officers already meet regional/cultural expertise and language
    skill requirements. They will be detailed to existing FAO billets in
    fiscal year 2006.
        Joint Professional Military Education (JPME)
        As ongoing operations in Iraq, Afghanistan, and the global war on
    terror vividly illustrate, Navy must continue to adapt to growing Joint
    warfighting and interagency planning demands. Meeting such requirements
    will prepare our Nation to defeat extremist groups and state
    adversaries who will challenge us in ways far different than in the
    past. We continue to develop a continuum of professional education and
    training to enhance the ability of Navy leaders to provide unique and
    complementary warfighting skills. Leaders who demonstrate the highest
    potential for service will be rewarded with in-residence joint
    professional military education (JPME), to prepare them to excel in
    naval, joint, multi-national, and interagency billets around the world.
    Non-resident courses are often facilitated through advanced distributed
    learning. Navy personnel are also enrolled in joint knowledge
    development and distribution capability courses to better prepare them
    for joint assignments.
        Navy Education
        Education is a key enabler in developing the competencies,
    professional knowledge, and critical thinking skills to deliver
    adaptable, innovative combat-ready naval forces. The Navy will develop
    a continuum of capabilities-based and competency-focused life-long
    learning to keep naval forces on the cutting edge for mission
    accomplishment as well as to provide for the professional and personal
    growth of our people. Navy education must be tied to requirements and
    capabilities. Central to our efforts are the Naval Reserve Officers
    Training Corps (NROTC), the Naval Academy, Naval Postgraduate School,
    and the Naval War College.
        The Naval Reserve Officers Training Corps (NROTC) Program comprises
    59 NROTC units at 71 host institutions of higher learning across the
    Nation. In addition, departments of naval science are located at the
    United States Merchant Marine Academy and 6 selected state maritime
    institutions, two of which also host NROTC units. NROTC is the key
    source of nuclear power candidates, nurses and increased officer corps
    diversity. NROTC is designed to educate and train qualified young men
    and women for service as commissioned officers in the Navy or Marine
    Corps. NROTC prepares mature young men and women morally, mentally, and
    physically for leadership and management positions in an increasingly
    technical military. In addition, participation in the naval science
    program instills in students the highest ideals of duty, honor, and
    loyalty.
        The Naval Academy gives young men and women the up-to-date academic
    and professional training needed to be effective naval and marine
    officers in their assignments after graduation. Renowned for producing
    officers with solid technical and analytical foundations, the Naval
    Academy is expanding its capabilities in strategic languages and
    regional studies.
        The Naval Postgraduate School (NPS) is our cornerstone of graduate
    education providing relevant, defense-focused degree and non-degree
    programs in residence and at a distance. We are expanding resident
    opportunities at NPS where the distinctly joint and international
    environment contributes to the resident academic experience by
    mirroring the nature of today's operating forces. Included in this
    expansion is the support of regional expertise development within our
    Foreign Area Officer program. We are also increasing access to NPS
    graduate education through a variety of non-resident, distance learning
    opportunities.
        NPS may be one of our best tools to ensure the alignment of
    advanced operational concepts and technologies among the Department of
    Defense, Homeland Security, interagency, and international military
    partnerships. NPS provides specialized programs that support U.S.
    national security priorities and the combatant commanders, including
    counterterrorism, homeland security, and security cooperation. Masters
    Degree programs and seminars have been developed on homeland defense
    and security, as well as counter-drug strategy and policy, for the
    Department of Homeland Security. NPS teaches a classified graduate
    education program for the National Security Agency, is a University of
    choice for the National Reconnaissance Office, and NASA sponsors the
    annual Michael J. Smith NASA chair at NPS with focused areas of space
    research, education, and training for future astronaut candidates.
    Additionally, NPS receives sizeable annual funding from the National
    Science Foundation for basic research in oceanography, meteorology,
    information sciences, engineering, and technology development, often
    partnering with other universities on interdisciplinary research
    projects.
        The Naval War College is the centerpiece of Navy professional
    military education and maritime-focused joint professional military
    education that develop strategically minded critical thinkers and
    leaders who are skilled in naval and joint warfare. The Naval War
    College is restructuring its programs to improve comprehensive
    development of operational warfighting competencies, and key cross-
    functional and special competencies, including regional studies. We are
    increasing both War College resident and distance learning
    opportunities. Completion of non-resident courses and programs is
    facilitated through advanced distributed learning.
                                 iv. conclusion
        The Navy cannot meet the threats of tomorrow by simply maintaining
    today's readiness and capabilities. Our adversaries will not rest, our
    global neighbors will not wait. Neither will we. Building upon Sea
    Power 21, we must continue to transform and recapitalize for the future
    without jeopardizing our current readiness and the strides we have
    made--and continue to make--in personnel and manpower management. With
    our partners in industry, the acquisition community, OSD, and the
    interagency, and with the continuing support of Congress, the Navy will
    build a force that is properly sized, balanced, and priced for
    tomorrow.
        We will build for our Nation and its citizens the right Navy for a
    new era. American sea power in the 21st century is the projection of
    power, and more: it extends beyond the sea; it is joint and
    interagency; it requires awareness and understanding; it enables access
    and cooperation; it provides for presence and interaction; it is driven
    by compassion and collective security; and, it is decisive and lethal.
        Your Navy would not have remained, for 230 years, the world's
    premier maritime force without the constant support of Congress and the
    people of the United States of America. I would therefore like to thank
    you once again, on behalf of the dedicated men and women who daily go
    in harm's way for our great Nation, for all that you do to make the
    United States Navy a force for good today and for the future.

        Chairman Warner. Thank you, Admiral. That was a very moving
    statement, recognizing that this is your first delivery of a
    posture statement on behalf of your beloved Navy. I listened
    attentively and learned a few things. I did not realize so many
    of our sailors were involved in the construction battalions in
    Afghanistan and now on the Horn of Africa. We always associate
    them at sea.
        What is the total number of sailors on the ground in the
    Iraq area?
        Admiral Mullen. 10,000, just about 10,000.
        Chairman Warner. 10,000 sailors.
        Admiral Mullen. I expect it to go up over the next couple
    of years. A couple more thousand is what we anticipate.
        Chairman Warner. Commandant.

      STATEMENT OF GEN. MICHAEL W. HAGEE, USMC, COMMANDANT OF THE
                              MARINE CORPS

        General Hagee. Good morning, Mr. Chairman, Senator Levin,
    distinguished members of the committee. I am really happy to be
    here with, as the CNO said, a good friend and shipmate.
    Actually, since the summer of 1964 we have been shipmates and
    it, in fact, does make a difference. I am very honored to be
    here with our new Secretary of the Navy, and privileged to
    report on the state of your Marine Corps.
        Sixty-one years ago approximately today, there was a slight
    pause in the battle on Iwo Jima. The flag-raising on Mount
    Suribachi had occurred just a few days earlier, but it seemed a
    distant memory to the marines on the island. Lieutenant General
    Howland ``Mad'' Smith and the leadership of the Fifth
    Amphibious Corps peered down on Motiyama Plateau. They
    contemplated the scope of hardships that they would endure in
    securing the remaining northern third of that island from a
    determined and lethal foe.
        Today we pause to report on the state of the Department of
    the Navy and our preparedness for the unknown battles which
    await us in the long war against yet another determined and
    lethal foe. Marines executing this war today know they are
    well-equipped, well-trained, well-led, and have the backing of
    the American people and their Congress. They and their families
    also know that they are doing something important and they are
    making a difference.
        On behalf of all marines and our families, I would like to
    thank you for your strong and unwavering support. Like the
    Secretary, I would also like to extend my personal appreciation
    for the time you take to visit our wounded and console the
    families of our fallen warriors.
        Now in the fifth year of this conflict, the future remains
    uncertain. However, history teaches us that uncertainty is best
    met with flexibility and adaptability, two principles which
    have long characterized your Marine Corps.
        My written statement lays out some of the actions we have
    taken in training, education, and organization to increase our
    flexibility and adaptability in the fight against this ruthless
    and determined enemy. We have embraced culture and language as
    combat multipliers. We are institutionalizing this effort
    through our Center for Advanced Operational Cultural Learning.
    This center will help develop regional expertise in our career
    marines. Additionally, we have revamped our predeployment
    training at Twentynine Palms and Bridgeport, California, and
    Yuma, Arizona, to better prepare our units for the
    nontraditional environment.
        Finally, on February 24, 2006, we activated the Marine
    Corps Special Operations Command (MARSOC), which will add about
    2,600 marines to the Special Operations Command (SOCOM),
    increasing its capacity and capability.
        With over a third of our operating forces deployed, we
    retain the ability to rapidly respond to additional
    contingencies as they arise. This Nation invests tremendous
    capital in its naval forces. Last year these forces responded
    across the spectrum of conflict from Iraq and Afghanistan to
    tsunami relief in the Indian Ocean, to earthquake relief in
    Pakistan, to aid for fellow Americans across Louisiana and
    Mississippi, and finally in a mudslide-engulfed village in the
    Philippines. Maritime forces have demonstrated their readiness,
    relevance, and responsiveness as part of the joint force.
        In terms of recruiting and retention, this year has been
    challenging but successful. Thanks to the dedication of your
    marines and your continued support of our recruiting,
    advertising, and reenlistment bonuses, we continue to make
    mission. Further, the quality of marines we recruit and retain
    remains high.
        We continue to modify our equipment, training, and tactics
    to the adaptive enemy of today and to be ready to face the
    warfighting challenges of the future. However, as I have
    mentioned in previous testimony, the current operational tempo
    (OPTEMPO) and environment are significantly degrading the
    service lives of our equipment. We estimate the total cost to
    reset our force is about $11.7 billion. This amount is in
    addition to the annual cost of war needs, which we estimate to
    be approximately $5.3 billion in fiscal year 2006. We ask for
    your support of the supplemental request to reset our
    capabilities and ensure we remain prepared for the unseen
    challenges of tomorrow.
        However, in the final analysis it is not the equipment but
    our people who make the difference. Be they Active, Reserve, or
    civilian, your marines and their families are making the
    greatest sacrifices. I know that you share the conviction that
    we cannot do enough for these young Americans who so willingly
    go forward for the sake of our country. I firmly believe that
    the most dangerous weapon system on any battlefield is a well-
    armed, well-educated U.S. marine, and with your continued
    support I do not believe that will change.
        I look forward to your questions, sir.
        [The prepared statement of General Hagee follows:]

               Prepared Statement by Gen. Michael W. Hagee, USMC

        Chairman Warner, Senator Levin, distinguished members of the
    committee, it is my honor to report to you on the state of your Marine
    Corps. Now entering the fifth year of what is a long war, your Marine
    Corps is wholly fixed on this challenge to the Nation. This conflict
    requires the uniformed services to provide a broader range of
    capabilities supporting extended global operations, ultimately
    delivering greater agility, adaptability, and duration of sustainment.
    While our Armed Forces continue to predominate in traditional warfare,
    our current enemy necessitates the adoption of unconventional and
    indirect approaches throughout the joint force.
        History reveals a pattern of marines aggressively adapting to
    circumstances, and we consider ourselves in the vanguard of instituting
    the changes required to address the present challenge. The over 30,000
    marines serving on the forward fronts in the Central Command Area of
    Operations today are a manifestation of transformational advances in
    manning, training, educating, and equipping to confront this latest
    threat to our way of life. From force structure revision, to urban
    training facilities, to cultural and language instruction, to
    leveraging emerging technologies, our efforts recognize the new
    character of conflict, and we are delivering both marines and Marine
    Corps units that thrive in the uncertainty which will likely define
    warfare throughout the coming decades.
        This war, like any other, is costly, and the essence of this
    statement outlines the challenges we share in sustaining the caliber of
    service the Nation has come to expect from its Corps of Marines.
    Readiness is the enduring hallmark of your Marine Corps, and if this
    war ended today, we would require continued supplemental budgetary
    support in order to ``reset the force.'' We also remain committed to
    providing for your marines and their families in a manner befitting
    their dedication and selfless sacrifice.
        Marines are grateful for the unwavering support of Congress,
    welcome the opportunity to report on the present state of the corps,
    and consider service to the Nation during this demanding period a
    distinct privilege.
                                i. introduction
        Today, marines are forward deployed in prosecution of the global
    war on terror, as they have been since that fateful day in September
    2001. The performance of marines on the field of battle during these
    last 4 years has validated our commitment to warfighting excellence and
    to remaining the world's foremost expeditionary warfighting
    organization.
        Our bedrock is our warrior ethos and the philosophy that every
    marine is first a rifleman. We recruit quality Americans whom we then
    infuse into a culture that requires individuals to think independently
    and act aggressively in chaotic and unpredictable environments where
    information is neither complete nor certain. We rigorously train these
    young marines to perform under adverse circumstances, and to accept
    greater responsibility as part of a team. We educate these marines and
    their leaders to prepare their minds for the intellectual component of
    the clash of wills and chaos inherent to combat. These past 4 years
    have further validated our forward deployed posture, our maneuver
    warfare doctrine, our adaptive logistics backbone, and the unique
    flexibility and scalability of the combined-arms Marine Air-Ground Task
    Force construct. Time and again, we have delivered to the combatant
    commander a solution tailored to their joint force requirements.
        In an uncertain world, readiness is the coin of the realm. In
    November 2001, at the direction of the combatant commander, we
    projected the combat power of two marine expeditionary units some 350
    miles into the heart of Afghanistan during Operation Enduring Freedom.
    Less than 18 months later, we deployed 70,000 marines and sailors in
    less than 60 days in support of Operation Iraqi Freedom. As part of the
    joint force, our 500-mile push from Kuwait, through Baghdad, and up to
    Saddam's hometown of Tikrit more than doubled our doctrinal expectation
    for force projection.
        After a short respite at home, we again demonstrated the readiness
    and responsiveness to the Joint Force Commander by deploying 25,000
    marines back to Iraq in March 2004. We are now entering our third year
    in the Al Anbar province and the service men and women of the Multi-
    National-Force-West have acquitted themselves in such locales as
    Fallujah, Ramadi, and throughout the Euphrates River valley with valor
    and distinction.
        In 2004, we also provided a combined-arms marine expeditionary unit
    for the ``Spring Offensive'' in Afghanistan, significantly reducing the
    Taliban's influence and setting the stage for the national elections
    which followed. We continue to provide support in Afghanistan in the
    form of embedded training teams with the Afghan National Army.
        The Nation invests tremendous capital in its naval forces, and this
    past summer the Navy-Marine team had an opportunity to turn that
    capability homeward in support of our fellow Americans along the gulf
    coast ravaged by Hurricanes Katrina and Rita. Organized as a special-
    purpose marine air-ground task force, over 2,500 marines from both the
    Active and Reserve Forces came to the aid of communities across
    Louisiana and Mississippi. Marines and sailors welcomed this direct
    involvement in a domestic humanitarian crisis that further highlighted
    the strategic flexibility of naval forces in meeting challenges to the
    Nation both around the world and at home.
        The Nation is receiving a superb return on its investment in the
    world's finest expeditionary force. Nearly one in three marines of our
    operating forces is today forward deployed or forward based protecting
    America's interests.
         ii. resetting the force and preparing for the next contingency
        The war on terror has made extraordinary demands on the Marine
    Corps' tactical equipment. Extended operations in Iraq, Afghanistan,
    and elsewhere over the past several years have severely tested our
    materiel. The great majority of our equipment has passed the test of
    combat with flying colors. However, it has been subjected to a
    lifetime's worth of wear stemming from vehicle mileage, operating
    hours, and harsh environmental conditions.
        We documented this situation last year in an Iraqi theatre
    assessment of equipment readiness report. Figure 1 demonstrates the
    impact of the operating tempo on both ground and air vehicles. We have
    responded to enemy tactics and techniques, such as the employment of
    increasingly destructive improvised explosive devices (IED), by adding
    armor protection to vehicles--thereby increasing their weight and
    ultimately increasing the wear and tear on frames, axles, and
    suspension systems. In the case of the High Mobility Multipurpose
    Wheeled Vehicle (HMMWV), for example, its expected ``peacetime''
    service life is 14 years. Under current conditions, we will have to
    replace it after less than 5 years of service in Iraq.

        The significant distances in the Al Anbar Province, which is
    approximately the size of the State of Utah, exacerbates the demand on
    equipment. The extended distances, enemy tactics, and continuous nature
    of operations have placed extraordinary demands on marine engineering
    equipment as well. We maintain roads and infrastructure across the Al
    Anbar province to accommodate the heavy logistics support demanded by
    coalition forces. Control points and compounds require round-the-clock
    power generation for vital communications, equipment repairs, and
    hospitals. These requirements place a heavy demand on the existing
    inventory of Marine Corps' engineering equipment such as power
    generators, tractors, forklifts, and road construction vehicles.
        Our expansive area also requires our headquarters' elements to
    perform the command and control functions normally held by the next
    higher command in traditional tactical and operational settings (e.g.,
    battalion headquarters often function like a regimental headquarters).
    The marine expeditionary force in Al Anbar has command and control
    requirements that far exceed the existing organizational tables of
    equipment.
        The equipment readiness report also noted that the types of
    missions we are conducting in Iraq require an increase in the number of
    some weapons contained in the units' table of equipment allowance. For
    example, most infantry, logistics, and security battalions are
    employing twice the number of .50 caliber, M240G and MK19 machineguns
    they normally rate.
        Supplemental funding (Figure 2 below) is essential to address
    ``reset the force'' and wartime contingency costs since our annual
    baseline budget procurement averages approximately $1.5-$2.0 billion.

        Where there are equipment shortages, we equip units preparing to
    deploy at the expense of our non-deploying units. Maintaining the
    readiness of our forward deployed units remains our top priority, and
    their readiness remains high. The equipment shortages experienced by
    non-deploying forces are exacerbated by the requirement to source the
    Iraqi transition teams (advisors). Although the overall readiness of
    our remain-behind units is suffering, it will improve when sufficient
    quantities of equipment procured via supplemental funding becomes
    available. Until then, sustaining the Corps' readiness requires that
    our remain-behind units continue cross leveling equipment with each
    force rotation.
        Reset of Strategic Prepositioning Programs
        Equipment from the Marine Corps' two strategic prepositioning
    programs (the Maritime Prepositioning Force and Marine Corps
    Prepositioning Program--Norway) has been employed in support of the
    global war on terror. Maritime prepositioning ships squadrons 1 and 3
    are fully reconstituted. The majority of Maritime prepositioning ships
    squadron 2's equipment was employed during Operation Iraqi Freedom II.
    This squadron will complete its initial reconstitution in April 2006,
    but will only be partially mission capable until all ground equipment
    is delivered. The Marine Corps Prepositioning Program--Norway currently
    possesses approximately 35 percent of its ground equipment, and the
    other classes of supply are at 98 percent or better. The majority of
    the other maritime prepositioning ships squadron capabilities range
    between 92-100 percent.
                  iii. preparing for the future: the last year
    Recent Modernization and Transformation Initiatives
        Componency
        Over the last year, we have restructured our service components to
    meet the requirements of the Unified Command Plan, National Strategy,
    and combatant commanders. This effort has resulted in four major
    changes to our componency construct. First, we established Marine
    Forces Command as the Marine Corps component to the joint force
    provider, U.S. Joint Forces Command. Second, U.S. Marine Corps Forces,
    Central Command is now a stand-alone component staff of approximately
    100 Active-Duty marines. Third, the Commander of Marine Forces Reserve
    and his staff have assumed the service component responsibilities for
    U.S. Northern Command. Finally, on 24 February 2006, we established a
    Marine component within Special Operations Command (MARSOC). The new
    Marine component will provide approximately 2,600 USMC/Navy billets
    within U.S. Special Operations Command (SOCOM), lead by a marine major
    general. The MARSOC will provide additional capability and capacity to
    SOCOM by adding forces that will conduct direct action, special
    reconnaissance, counterterrorism, and foreign internal defense.
        Force Structure Review Group
        In 2004, we conducted an extensive total force structure review
    recommending approximately 15,000 structure changes to improve the
    Marine Corps' ability to meet the long-term needs of the global war on
    terror and the emerging requirements of the 21st century. This effort
    was end strength and structure neutral--offsets to balance these
    increases in capabilities come from military to civilian conversions
    and the disestablishment and reorganization of less critical
    capabilities.
        We are currently implementing these changes. Additionally, we will
    stand up a capabilities assessment group in the first part of March
    2006 to take a focused look at our operating forces in order to ensure
    we have properly incorporated lessons learned on the battlefield,
    Quadrennial Defense Review guidance, and the MARSOC standup.
        The Marine Corps continues to examine other opportunities to
    augment needed capabilities. For example, we are assigning each
    artillery regiment a secondary mission to conduct civil military
    operations (CMO). To do this, each regiment will be augmented by a
    Reserve civil affairs capability. By assigning a secondary CMO mission
    to artillery units, we have augmented our high-demand/low density civil
    affairs capability while retaining much needed artillery units. We will
    continue to look for additional innovative ways to maximize our
    capabilities within our existing force structure.
        Regionalization of Bases and Stations
        The Marine Corps is transforming its bases from singularly managed
    and resourced entities to ones strategically managed in geographic
    regions. With the exception of our recruit training depots, our bases
    and stations will fall under the purview of five Marine Corps
    installation commands with the majority of the installations under the
    oversight of Marine Corps Installation Command--East and Marine Corps
    Installation Command--West. Regionalization goals include providing
    optimal warfighter support, improving alignment, enhancing the use of
    regional assets, returning marines to the operating forces, and
    reducing costs.
    Programmatic and Organizational Developments
        MV-22
        VMX-22 completed operational evaluation in June 2005, and the
    operational test report was completed and released in August 2005. The
    report found the MV-22 Block A to be operationally effective and
    suitable. All key performance parameters met or exceeded threshold
    requirements, and on 28 September 2005, the V-22 program defense
    acquisition board approved Milestone B and authorized the program to
    begin full rate production. Twenty-nine block A aircraft have been
    delivered and are supporting training at Marine Corps Air Station, New
    River, North Carolina. The first CH-46E squadron stood down in June
    2005 to begin transition to the MV-22 and is scheduled to deploy in the
    fall 2007.
        KC-130J
        In February 2005, the KC-130J attained initial operational
    capability (IOC). The aircraft has been continuously deployed in
    support of Operation Iraqi Freedom since IOC and has provided the
    warfighter a state of the art, multi-mission, tactical aerial
    refueling, and fixed wing assault support asset that has exceeded
    expectations. The introduction of the MV-22, combined with the forced
    retirement of the legacy aircraft due to corrosion, fatigue life, and
    parts obsolescence, significantly increases the requirement for the
    accelerated procurement of the KC-130J. The Marine Corps is currently
    in a multi-year procurement program with the Air Force to procure a
    total of 34 aircraft by the end of fiscal year 2008. This number is 17
    aircraft short of the inventory objective of 51 necessary to support
    the Marine, Joint, and Combined Forces.
        M777A1 Lightweight Howitzer
        The new M777A1 lightweight howitzer replaces the M198 howitzers.
    The howitzer can be lifted by the MV-22 tilt-rotor and CH-53E
    helicopter and is paired with the medium tactical vehicle replacement
    truck for improved cross-country mobility. The M777A1, through design
    innovation, navigation and positioning aides, and digital fire control,
    offers significant improvements in lethality, survivability, mobility,
    and durability over the M198 howitzer. The Marine Corps began fielding
    the first of 356 new howitzers to the operating forces in April 2005
    and expects to complete fielding in calendar year 2009.
        High Mobility Artillery Rocket System
        The high mobility artillery rocket system (HIMARS) fulfills a
    critical range and volume gap in Marine Corps fire support assets by
    providing 24-hour, all weather, ground-based, indirect precision and
    volume fires throughout all phases of combat operations ashore. We will
    field 40 HIMARSs (18 to 1 artillery battalion of the Active component,
    18 to 1 battalion of the Reserve component, and 4 used for training/
    attrition). When paired with the acquisition of Guided Multiple Launch
    Rocket System rockets, HIMARS will provide a highly responsive,
    precision fire capability to our forces in conventional as well as
    unconventional operations.
        Expeditionary Fire Support System
        The Expeditionary Fire Support System (EFSS) will be the principal
    indirect fire support system for the vertical assault element of Marine
    Air-Ground Task force executing ship-to-objective maneuver. The EFSS is
    a rifled-towed 120mm mortar paired with an internally transportable
    vehicle, which permits the entire mortar/vehicle combination to be
    internally transported aboard MV-22 and CH-53E aircraft. EFSS-equipped
    units will provide the ground component of a vertical assault element
    with immediately responsive, organic indirect fires at ranges beyond
    current infantry battalion mortars. IOC is planned for fiscal year 2006
    and full operational capability is planned for fiscal year 2010.
        Explosive Ordnance Disposal Equipment Modernization
        Explosive ordnance disposal equipment is undergoing major
    configuration changes and modernization. Our current modernization
    focus is towards neutralization and render-safe of unexploded ordnance/
    IED. The following robotic systems were tested and approved for joint
    explosive ordnance disposal usage: Bombot, Manual Transport Robotic
    System, Remote Ordnance Neutralization System, and RC-50.
        Force Service Support Group Reorganization
        The force service support groups were redesignated as Marine
    logistics groups in August 2005 as the initial step in the logistics
    modernization effort's reorganization initiative. The Marine logistics
    group will be reorganized/realigned with standing Direct and General
    Support subordinate units and include the Combat Logistics Regiment
    Forward, Direct Support Combat Logistics Regiment, and General Support
    Combat Logistics Regiment. Reorganization to the Marine Logistics Group
    facilitates rapid and seamless task organization and deployment
    operations, experienced logistics command and control, operations and
    planning support, and strong habitual relationships between supported
    and supporting units.
    Equipping Marines
        Force Protection
        Unable to match our conventional force in like fashion, our enemies
    have resorted to asymmetric tactics such as the IED. Thanks to your
    support, we completed the installation of the Marine armor kits on all
    A2 HMMWV last year. We will complete the transition to an all M-1114
    fleet by July 2006. The Medium Tactical Vehicle Replacement Armor
    System for our 7-ton trucks is scheduled for completion in May 2006.
    Additionally, we continue to bolster our force protection capabilities
    through explosive device jammers, additional vehicle armoring efforts,
    personal extremity protective equipment, and a host of unmanned ground
    vehicles.
        Tactical Wheeled Vehicle Armor
        We have joined with the U.S. Army to look at the M-1151/2 as a mid-
    term replacement for our base HMMWV and A2 models that have reached the
    end of their service life. The M-1151/2 is the bridge to the next
    generation of combat tactical vehicles. The Joint Light Tactical
    Vehicle Program will define this next generation vehicle. This program
    is a Joint Army-Marine effort to establish the requirement and way-
    ahead for the upcoming Fiscal Year 2008 Program Objective Memorandum.
    The design of this vehicle will incorporate the recent lessons learned
    from Iraq and technical advances in survivability, energy management,
    and network operations to provide the survivability, mobility, and
    tactical flexibility.
        Individual Marine Initiatives
        We have been able to address the highest priority capability gaps
    of our deploying forces associated with the individual marine. The
    issue of protection, however, must be balanced with agility, weight,
    and heat retention. An infantryman going into today battle carries
    nearly 100 pounds of equipment and ammunition--much of this for
    individual protection. This is too much. In combat lives can just as
    easily be lost due to an inability to move swiftly across a ``kill
    zone,'' or from mental and physical fatigue, as from bullets and
    shrapnel. We will never stop searching for ways to better protect the
    warrior of tomorrow by taking advantage of emerging technologies, but
    we must strike a balance between individual protection and mission
    accomplishment.
        The lightweight helmet provides improved ballistic protection
    capability over the existing helmet while reducing weight by one-half
    pound and introducing an improved suspension system to increase
    comfort. We have fielded over 74,000 lightweight helmets to date, and
    we plan to procure 43,145 more in fiscal year 2006. The Enhanced Small
    Arms Protective Insert (E-SAPI) provides increased ballistic protection
    over the existing SAPI plate. The plates weigh approximately 1.5 pounds
    more than the standard SAPI per plate depending on size. Delivery of E-
    SAPI plates began in September 2005. In addition, the procurement of
    side SAPI plates further enhances the warfighters' protection,
    survivability, and armor options. In April we will complete delivery of
    37,000 side SAPI plates.
        The QuadGard (QG) system was designed to provide ballistic
    protection for arms and legs in response to blast weapon threats and
    combat casualty trends in Operation Iraqi Freedom. This system is an
    additive capability that integrates with existing armor systems. We
    procured 4,500 QG systems with initial delivery beginning in first
    quarter, fiscal year 2006. The Individual Load Bearing Equipment (ILBE)
    is a direct replacement for the Modular Lightweight Load Bearing
    Equipment system that integrates an assault pack and hydration system.
    We have fielded over 96,000 ILBE packs to date and this effort
    continues.
    Transforming, Training, and Education
        One of our fundamental tenets--every marine a rifleman--continues
    to prove its worth in the global war on terror. This serves as the
    solid foundation for all of our training, and provides the common core
    that defines every marine. Over the past year, we have refined our
    training and education programs. Our goal remains the same, to prepare
    and sustain Marine Air-Ground Task Forces enabled by small-unit leaders
    directing small, enhanced units, which have a bias for action, are more
    lethal, and are better able to operate across the spectrum of conflict.
        Culture and Language
        An individual understanding of local culture and languages is a
    force multiplier in irregular operations, such as those we are
    conducting in Iraq, Afghanistan, and Africa. Our cultural awareness and
    language training programs accomplished several milestones this past
    year. The Marine Corps graduated its first class of new lieutenants
    with formal training in the operational aspects of foreign cultures.
    During February 2005, we opened our new Center for Advanced Operational
    Culture Learning, and it is already proving its value. The Center has
    distributed its first basic tactical language training programs,
    preparing individuals to serve in Iraqi Arabic and Pan-Sahel French
    cultures (Pan-Sahel French is a predominant language in the former
    French colonies of Northwest Africa). The Center also provided training
    to our newly established foreign military training unit, as well as to
    marines selected to serve as advisors to the Iraqi security forces and
    Afghan National Army. In the future, we look to build a permanent
    facility to house the Center as well as establishing satellite sites
    for sustaining language and culture training in our career force.
        Pre-deployment Training Today
        We have embarked on a concerted effort to improve our pre-
    deployment training. At the center of these efforts is our revised pre-
    deployment training program conducted at the Marine Air Ground Combat
    Center, at Twentynine Palms, California, at Marine Corps Air Station
    Yuma, Arizona, and at the Mountain Warfare Training Center, Bridgeport,
    California. The real-time and continuous connectively with forward
    forces enables our units in training to apply combat lessons learned
    directly into their pre-deployment training. During this past fiscal
    year over 21,000 marines received combined arms and urban operations
    training at Twentynine Palms. In addition, over 4,000 marines and
    coalition partners trained in the mountain operations course at
    Bridgeport, and another 11,000 marines participated in the adjacent
    Desert Talon exercise series at Yuma. The success of our marines in
    Iraq and Afghanistan is due in large measure to the demanding training
    that they experience at these three sites.
        Modernization of Training Ranges
        In the past 2 years, and again taking advantage of combat lessons
    learned from Iraq and Afghanistan, we have initiated an unprecedented
    investment in our training range capabilities. We built a robust urban
    and convoy operations training program at our major desert training
    base at Twentynine Palms, California. Marine Corps battalions deploying
    to Iraq are provided a realistic training venue to hone their urban and
    convoy skills and to heighten their awareness of both IEDs and the
    complexities of stability operations.
        To better prepare your marines for this ``graduate level'' training
    at Twentynine Palms, we are also providing essential building block
    capabilities in urban warfare at their home stations. Camp Lejeune,
    North Carolina has recently completed fielding a suite of urban and
    convoy training systems on their ranges and with your continued
    support, we hope to do the same at Camp Pendleton, California and the
    Marine Corps bases in Hawaii and Okinawa. We also intend to upgrade our
    aviation urban training facility at Marine Corps Air Station, Yuma and
    to provide an enhanced aviation urban training environment.
    Infrastructure
        Encroachment Partnering
        In fiscal year 2005, the Marine Corps completed six projects to
    acquire development rights over 1,227 acres at a cost of $8 million,
    which was split between the Marine Corps and our partners.
        The Marine Corps continues to use legislation that allows the
    Secretary of the Interior to accept integrated natural resources
    management plans as suitable substitutes for critical habitat
    designation to protect and enhance populations of these species while
    continuing to conduct essential training.
        Public Private Venture Family Housing
        Our efforts to improve housing for marines and their families
    continue. Thanks to previous congressional action that eliminated the
    budgetary authority cap on public private venture investments in
    military family housing, the Marine Corps will have contracts in place
    by the end of fiscal year 2007 to eliminate all inadequate family
    housing.
        Military Construction
        Our military construction plan now focuses on housing for our
    single marines. Barracks are a significant critical quality of life
    element in taking care of single marines. We are committed to providing
    adequate billeting for all our unmarried marines by 2012. We tripled
    the amount in bachelor housing from fiscal year 2006 to 2007. We will
    triple it again in fiscal year 2008. We are also committed to funding
    barracks' furnishings on a 7-year replacement cycle and prioritizing
    barracks repair projects to preempt a backlog of repairs.
        Energy Efficiency in Transportation
        The Marine Corps has exceeded the Energy Policy Act requirements
    for the past 5 years and has been a leader in the Department of Defense
    (DOD) and among other Federal agencies in the adoption of alternative
    fuels. Through use of biodiesel neighborhood electric vehicles, we have
    reduced petroleum use 20 percent from a 1999 baseline, and are
    expanding the deployment of hybrid vehicles in our garrison fleet. We
    are also supporting future use of hydrogen-powered fuel cell vehicles
    with the establishment of a refueling station aboard Marine Corps Base
    Camp Pendleton, California.
                   iv. manning the force and quality of life
        Though we embrace the advances of technology, we believe that the
    most important asset on any battlefield is a well-equipped, well-
    trained, and well-led United States marine--our people make the
    difference. We hold that today's marines are unique and special
    individuals, and the character of their service throughout the global
    war on terror has rivaled that of any preceding generation. Recruiting
    and retaining a force of this quality requires the dedicated efforts of
    our recruiters, career retention specialists, manpower experts, and
    leaders throughout the Corps. Ours is a force of Active-Duty, Reserve,
    and civilian marines, as well as thousands of marine families who share
    in the sacrifices to our Nation. Though the mission must always come
    first, we continue to search for opportunities to improve the
    experience of serving as a marine both during and after their active
    service--once a marine, always a marine.
        Retention
        Retaining the best and the brightest marines is a top manpower
    priority. Our future officer and staff noncommissioned officer ranks
    are dependant on our successful accomplishment of this mission.
        We have two enlisted retention measures to ensure healthy service
    continuation rates. The First Term Alignment Plan (FTAP) involves the
    first reenlistment of marines and we consistently achieved our goals
    over the past 13 years. The Subsequent Term Alignment Plan (STAP)
    involves the subsequent reenlistments of marines, those who likely
    remain in the Corps for a career, and we have consistently attained our
    goals since creating the STAP in 2002. In fiscal year 2005, we exceeded
    the FTAP requirement by achieving 103 percent of this retention
    mission, with notable success in the infantry community; we also
    exceeded the STAP retention mission. The substantial increase in the
    infantry reenlistment rate during fiscal year 2005 was influenced by
    higher selective reenlistment bonuses (SRBs).
        Certain military occupational specialties perennially suffer high
    attrition, such as those involving highly technical skills or extensive
    security clearances. Contributing factors include lucrative civilian
    employment opportunities for those marines who attain these specialized
    skills and qualifications. We address this challenge by targeting these
    military specialties with higher SRBs. Retaining high quality and the
    proper skills in our ranks necessitates military compensation that is
    competitive with the private sector. Sustainment of SRB funding remains
    a crucial element to our ongoing efforts to retain these valuable
    skills.
        The retention forecast for the officer corps in the near term is
    positive and consistent with our historic average of 90.8 percent. The
    close of fiscal year 2005 saw officer retention at 91.3 percent. The
    Marine Corps has active programs in place, both monetary and non-
    monetary, to ensure that officer retention remains high. All of these
    programs provide incentives to officers for continued service even in
    the face of significant operational tempo, while allowing flexibility
    for manpower planners to meet requirements across the Marine Corps
    total force.
        Selected Reserve enlisted retention for fiscal year 2005 continued
    to be strong at 79.5 percent, well above our historical norm. Reserve
    officer retention of 80.1 percent was also above the historical norm of
    75.3 percent
        Recruiting
        An equally important factor in sustaining a viable force is
    continuing to recruit tremendous young men and women with the right
    character, commitment, and drive to become marines. In fiscal year
    2005, the Marine Corps overcame unprecedented recruiting challenges and
    achieved over 100 percent of our Active component accession goal with
    no degradation in quality.
        The Marine Corps Reserve achieved 101 percent of its enlisted
    recruiting goals. We achieved our officer accessions goals as well, but
    Reserve officer numbers remain challenging, as our primary accession
    source is from officers that are leaving Active-Duty. We appreciate the
    continued authorization for a selected reserve officer affiliation
    bonus in the National Defense Authorization Act for Fiscal Year 2006.
    It continues to make a significant contribution in this critical area.
        We anticipate that both Active and Reserve recruiting will remain
    challenging in fiscal year 2006, and we welcome the continued support
    of Congress for a strong enlistment bonus and other recruiting
    programs, such as recruiting advertising, which will be essential to us
    in meeting these challenges.
        Reserve Marines
        To date, more than 37,500 Reserve marines have served on Active-
    Duty in the global war on terror. As part of an integrated total force,
    our Reserve marines and units receive the same pre-deployment training
    and serve alongside their Active component counterparts. Currently,
    over 7,000 Reserve marines are on Active-Duty, and the Marine Corps
    Reserve expects to provide approximately 4,250 marines in support of
    operations in Iraq in 2006. Overall, our Reserves provide personnel for
    a wide-variety of operations and activities, including Iraq military
    transition, Afghan National Army embedded training, civil affairs, and
    personnel recovery and processing. They also perform anti-terrorist and
    humanitarian duties in the Horn of Africa, Afghanistan, Central
    America, and the Caribbean. The strength of integrating our Active and
    Reserve components into a total Marine Corps force epitomizes the
    warrior concept of ``one team, one fight.''
        Civilian Marines
        Civilian marines continue to provide an invaluable service to the
    Corps as an integral component of our total force. Working in true
    partnership with marines, civilian marines will continue to play in
    important role in supporting the mission of the Marine Corps and the
    global war on terror. Our commitment is to define for them what the
    Marine Corps will offer its civilian marines, and what the Corps
    expects from this select group who support our marines.
        Military-to-Civilian Conversions
        The Marine Corps continues to pursue sensible military-to-civilian
    conversions in support of Marine Corps warfighting initiatives. These
    conversions are important because they increase the number of marines
    in the operating force and help reduce stress on the force. Funding
    remains a critical issue to the success of this initiative.
    Congressional cuts in both the Fiscal Year 2005 Appropriations Bill
    ($35 million) and Fiscal Year 2006 Appropriations Bill ($20 million)
    has impacted our ability to execute our planned fiscal year 2005
    program and will reduce our planned fiscal year 2006 conversions.
        National Security Personnel System
        The Marine Corps is committed to successful implementation of the
    National Security Personnel System and creating and maintaining an
    innovative and distinctive civilian marine workforce capable of meeting
    the ever-changing requirements of today and the challenges of tomorrow.
    The Marine Corps is actively participating with the DOD in the
    development and implementation of this new personnel system. Following
    an intensive training program for supervisors, managers, human
    resources specialists, employees, commanders, and senior management, we
    will begin implementation.
    Quality of Life for Our Marines and Their Families
        For marines, success has always been measured first on the
    battlefield, but part and parcel to this is the health and welfare of
    marines and the families who support them. As an expeditionary force,
    marines are accustomed to frequent deployments, yet the current
    environment contains increased elements of personal danger and family
    risk that must be addressed with appropriate and timely support. We
    have been careful to monitor our programs to ensure our marines and
    their families receive the necessary care to sustain them throughout
    the deployment cycle. In this regard, our Marine Corps Community
    Services organizations' combined structure of family services, morale,
    welfare, and recreation programs, voluntary off-duty education, and
    exchange operations has positioned us to efficiently and effectively
    leverage and direct community services assets to help marines and their
    families meet the challenges associated with the Marine Corps lifestyle
    and current operational tempo.
        For marines in theater, few things are more important than staying
    in touch with their loved ones at home. To keep communication open
    between deployed marines and their families, we provide phone service,
    mail service, and our internet-based mail service, ``MotoMail,'' which
    has created more than half a million letters since its inception in
    December 2004.
        Combat and Operational Stress Control
        While our marines and their families have proven to be resilient
    ``warriors,'' combat and operational stress is not an uncommon
    reaction. We closely interact with marines and their families to
    reassure them; we provide many services and programs for help and urge
    servicemembers and their families to seek the help they require.
        To integrate our combat and operational stress control (COSC)
    programs and capabilities properly, we have established a COSC section
    within our manpower and reserve affairs department. To gain clarity of
    mission, we instituted a tracking system that allows commanders to
    monitor COSC training and decompression requirements. As a component of
    COSC, we created a Web-based information and referral tool that leaders
    at all levels can readily access. The ``Leader's Guide for Managing
    Marines in Distress'' provides specific guidance on 40 distress areas.
        The Marine Reserves, through their chaplain corps, have developed
    Marine and Family Workshops, which are a post-deployment program
    designed to assist marines and their family members with return and
    reunion stressors and adjustment difficulties. The goals and objectives
    of the workshop are to: 1) provide an opportunity for marines and their
    family members to strengthen their coping skills; 2) mitigate the
    impact of traumatic events and war zone stressors; 3) accelerate the
    normal recovery process; and 4) identify those who might need
    additional help and provide resources.
        Casualty Support
        Our support and dedication to the families of our fallen marines
    and their survivors is especially strong. Casualty support is a duty
    and honor. It is also a human process requiring a measured and
    thoughtful engagement by our casualty assistance calls officers
    (CACOs). As with our other deployment-related programs, our casualty
    process has evolved and improved significantly. Our CACOs monitor the
    survivor's transition through the grief process--from casualty
    notification, to burial, to ensuring survivors receive the appropriate
    benefits. CACOs connect families needing extended support to a long-
    term survivor case manager who personally monitors and communicates
    with them to ensure they receive the support they need for as long as
    it is required.
        Critical Incident Stress Management Teams
        In cases of mass casualties experienced by a command or unit,
    whether combat, natural disasters, training, or missions, we use a DOD-
    sponsored managed health network capability where trained critical
    incident stress management teams provide crisis management briefings to
    family members and friends of the unit. During the briefings, Marine
    Corps personnel, chaplains, and managed health network counselors
    provide information and answer questions concerning the casualties.
    These crisis response teams provide support at remote sites throughout
    the country, making them highly useful in situations where Reserves are
    involved. In particular, after Lima Company, 3rd Battalion, 25th
    Marines experienced mass casualties in Iraq last summer, crisis
    management briefings were conducted at various cities in Ohio where
    questions about the unit were answered, briefs were provided on helping
    children cope, individual counseling was offered to family members, and
    materials on support services were distributed.
        Marine for Life--Injured Support
        Built on the philosophy ``once a marine, always a marine" and
    fulfilling our obligation to ``take care of our own,'' the Marine For
    Life program offers support to approximately 27,000 honorably
    discharged marines transitioning from Active service back to civilian
    life each year.
        Leveraging the organizational network and strengths of the Marine
    for Life program, we implemented an injured support program during
    January 2005 to assist combat injured marines, sailors serving with
    marines, and their families. The program essentially seeks to bridge
    the gap that can exist between military medical care and the Department
    of Veterans Affairs, providing continuity of support through transition
    and assistance for several years afterwards.
        The program recently assigned two full-time Marine Corps liaison
    officers to the Seamless Transition Office at the Veterans Affairs.
    These liaison officers interface between the Veterans Health
    Administration, the Veterans Benefits Administration, and the Marine
    Corps on individual cases to facilitate cooperative solutions to
    transition issues.
        Additionally, the injured support program conducts direct outreach
    to injured marines and sailors via phone and site visits to the
    National Naval Medical Center, Walter Reed, and Brooke Army Medical
    Centers. On average, 30 percent of our seriously injured marines
    requested and received some type of assistance.
        Lastly, the program continues to work closely with Office of the
    Secretary of Defense (OSD) on Marine Corps-related injury cases.
    Information sharing between the program and OSD contributes to
    developing capabilities for the Military Severely Injured Center
    (formerly known as the Military Severely Injured Joint Support
    Operations Call Center).
        Healthcare
        Marines receive high quality, state-of-the-art care from a
    worldwide Military Health System. We enjoy the lowest disease, and non-
    battle injury rates in history and our marines know that if they are
    injured or wounded in action they have an unprecedented, better than 97
    percent survival rate once they arrive at one of our forward
    resuscitative surgical units. The Military Health System provides a
    superb care and health benefit program for our marines, their families,
    and our retired population--services we must sustain. Unfortunately, at
    its current rate of cost growth, the program is unsustainable. We fully
    support changes in legislation that would allow the DOD to ``renorm''
    the cost of health care.
        Sexual Assault Prevention and Response
        The Marine Corps has maintained vigilance in engaging marines to
    prevent sexual assault, to care for the victims, and to punish
    offenders. Our actions included establishing a sexual assault
    prevention office to serve as the single point of contact for all
    sexual assault matters, such as victim support and care, reporting,
    training, and protective measures. We have also instituted extensive
    sexual assault awareness training into all entry-level officer and
    enlisted training, provided procedures to protect a victim's privacy,
    and trained hundreds of uniformed victim advocates to support our
    deployed marines. Lastly, to ensure victims receive appropriate and
    responsive care with timely access to services, we have appointed
    command level sexual assault response coordinators to serve as the
    single point of contact for sexual assault matters.
                          v. capabilities development
        For 230 years, the Marine Corps has answered the Nation's call to
    arms without fail, but we do not intend to rest on those laurels. To
    remain the world's foremost expeditionary warfighting organization and
    preserve our tradition of being most ready when the Nation is least
    ready, the Marine Corps is steadfastly focused on the fundamental
    tenants of our success--a maneuver warfare mindset and a warfighting
    construct built around combined-arms air-ground task forces. We are
    forwarding and expanding these capabilities through aggressive
    experimentation and implementation of our seabasing and distributed
    operations concepts. These transforming concepts will increase our
    agility and tempo in operations, from cooperative security to major
    combat, and perpetuate the unrivaled asymmetric advantage our Nation
    enjoys in its ability to project and sustain power from the sea.
    Warfighting Concepts
        Seabasing
        Seabasing is a national capability for projecting and sustaining
    power globally, using the operational maneuver of sovereign,
    distributed, and networked forces operating from the sea. Seabasing
    will provide unparalleled speed, access, persistence, and is recognized
    as the ``core of naval transformation'' (Naval Transformation Roadmap).
    Seabasing breaks down the traditional sea-land barrier, allowing us to
    use the sea as maneuver space. It enables us to rapidly deploy,
    assemble, and project joint and combined forces anywhere in the world,
    sustaining these forces during operations and reconstituting forces for
    employment elsewhere. Seabasing assures access by leveraging the
    operational maneuver of forces from the sea and by reducing dependence
    upon fixed and vulnerable land bases. This concept will provide our
    combatant commanders with unprecedented versatility in operations
    spanning from cooperative security to major combat. Seabasing also
    represents a present capability that can be tailored and scaled to meet
    a broad range of requirements.
        The Nation invests tremendous resources with the full understanding
    that the ability to project power from the sea is a prerequisite for
    defending our sovereignty. As demonstrated by the Navy/Marine Corps
    response to hurricanes Katrina and Rita, seabasing is a relevant and
    adaptive capability possessing the flexibility to meet our countrymen's
    needs around the world and at home. Marines and sailors embarked from
    such platforms as the U.S.S. Iwo Jima (LHD 7) provided an asymmetric
    and sustainable solution to the storm ravaged Gulf Coast, and in
    several hundred instances saved the lives of their fellow Americans. In
    short, seabasing is both a real-world capability and a transformational
    future concept. Realization of the future seabasing potential is
    dependent upon an investment in ships and other seabasing platforms.
        Distributed Operations
        The attributes of sea power are extremely useful to the combatant
    commanders. However, this operational capability must also be matched
    by increased tactical capabilities that enhance the effectiveness of
    our ``boots on ground" to enable operational maneuver and to create
    stability, especially in irregular and counterinsurgency operations.
    After a quarter century of unwavering commitment to our maneuver
    warfare philosophy, we are harvesting a generation of junior officers
    and noncommissioned officers who are better prepared to assume much
    greater authority and responsibility than traditionally expected at the
    small-unit level. As a complementary capability to our seabasing
    concept, distributed operations describes an operating approach that
    will create an advantage over an adversary through the deliberate use
    of separation and coordinated, interdependent, tactical actions enabled
    by increased access to functional support, as well as by enhanced
    combat capabilities at the small-unit level. The essence of this
    concept lies in enhanced small units gained through making advances on
    the untapped potential of our marines and the incorporation of emerging
    technologies which will support them.
        Once implemented, a networked Marine Air-Ground Task Force
    operating in a distributed operations manner will disperse or mass to
    exploit opportunities the enemy offers. The integration of new
    doctrine, force structure, training, equipment, personnel policies, and
    leader development initiatives will afford our tactical and operational
    commanders a significantly enhanced weapon in the increasingly
    sophisticated global war on terror.
        Experimentation, Technology, and Concepts
        The Marine Corps Warfighting Laboratory develops innovative
    concepts and conducts concept-based experimentation in support of the
    Marine Corps Combat Development Command's mission. By examining future
    warfighting concepts, the Lab identifies capability shortfalls and
    matches them with potential solutions that can be effectively addressed
    by the experimentation process. In support of current operations and
    the global war on terrorism, the Lab rapidly identifies
    transformational solutions in the areas of training, equipment,
    organization, and doctrine needed to resolve critical short falls and
    gaps. Experiments have resulted in modified and new tactics, training,
    and procedures for marines operating in Iraq.
        The Marine Corps Warfighting Laboratory is specifically developing
    methods to defeat IEDs, provide superior body amour, improve vehicle
    armor, counter the urban sniper, and to counter attacks with rockets
    and mortars. The Marine Corps exploits the investment of the Defense
    Advanced Research Projects Agency (DARPA), other Services, and industry
    while focusing our Marine Corps' unique investment to mature Marine
    Corps combat development and future materiel needs. This effort is
    highlighted by the lab's interaction with DARPA in the successful
    testing and assessment of improved armor, small-unmanned aerial
    vehicles, and the deployment of extended user assessment in Iraq of
    small numbers of acoustic sniper location systems. These successful
    programs will result in early deployment of systems that will
    contribute to force protection and survivability.
        Sea Viking 06 Advanced Warfighting Experiment
        The Sea Viking 06 Advanced Warfighting Experiment culminates years
    of planning, study, and experimentation. With a focus on Marine
    infantrymen, the experiment aims to revolutionize Marine Corps
    warfighting capabilities. By testing and examining our current
    training, organization, and equipment against new warfighting
    initiatives (e.g., Distributed Operations), rooted in real-world
    lessons from Iraq and Afghanistan, we have adapted and overcome
    deficiencies, allowing the Marine Corps to actualize its experiment
    data and outcomes. Results have produced changes in, training,
    equipment, and responsibilities of infantry small unit leaders. Such
    innovation has inspired the establishment of the distributed operations
    implementation working group, which socializes the changes and
    implements the changes across the doctrine, organization, training,
    materiel, leadership and education, personnel, and facilities pillars.
        Because of Sea Viking 06's first limited objective experiment,
    Training and Education Command (TECOM) developed new courses and
    curriculum to formalize the training culture of marine infantry
    noncommissioned officers. TECOM and the Lab collaborated to establish
    ``mobile training cadres'' to institute a train the trainer course and
    a tactical small unit leader course to support company-level leaders in
    the development of their small unit leaders, as they will always remain
    our most critical assets in the global war on terror. Concurrently,
    Marine Corps Systems Command, through its project managers and Marine
    Expeditionary Rifle Squad program at the forefront, remains acutely
    attuned to all equipment aspects of the Sea Viking experiments,
    ensuring that our marines have the best equipment available. These same
    innovations, when applied Marine Corps wide, will ensure that Marine
    Forces remain the force of readiness in response to our Nation's future
    needs.
        Countering Irregular Threats
        Consistent with the emerging challenges laid out in the National
    Defense Strategy, we are developing new concepts and programs to
    address the rising salience of irregular threats to our security
    especially that posed by protracted, complex insurgencies and
    terrorism. The rise of irregular and catastrophic challenges to
    international order could potentially include the use of weapons of
    mass destruction by non-state actors seeking to blackmail U.S. leaders
    and foreign policy. Exploring this challenge is a major aspect of our
    annual Expeditionary Warrior wargame this year.
    Enabling Programs
        Amphibious Warfare Ships
        Amphibious ships are the centerpiece of the Navy/Marine Corps'
    forcible entry and seabasing capability, and have played an essential
    role in the global war on terror. Not only must our Naval forces
    maintain the ability to rapidly close, decisively employ, and
    effectively sustain marines from the sea, they must also respond to
    emerging global war on terror requirements, crisis response, and
    humanitarian assistance missions on short notice. The Nation would be
    hard pressed to satisfy both requirements with separate forces.
    Fortunately, we possess the ability to conduct both forcible entry and
    persistent global engagement with the same naval force package.
        The current DOD force-sizing construct requires the capability to
    respond to two major ``swiftly defeat the efforts'' events--each of
    which could require a minimum of 15 capable amphibious ships. One of
    these crises may further necessitate the use of a Marine Expeditionary
    Force requiring 30 operationally available amphibious ships. Ten of
    these ships should be large-deck amphibious ship capable of supporting
    the operations of the air combat element of a Marine Expeditionary
    Force. Today's 35 amphibious warships can surge the required 30
    operationally available warships and provide the peacetime rotation
    base for Marine Expeditionary Units in up to three regions.
        In part due to the recognized flexibility of these platforms, as
    well as the projected need to enhance their power projection
    capabilities to support stability operations and sustained counter-
    terrorism efforts, many of our coalition partners are planning to
    acquire amphibious shipping with the capacity to support both surface
    and aviation maneuver elements. Such efforts acknowledge the great
    utility of a robust amphibious capability in the face of growing anti-
    access threats.
        Amphibious Transport Dock (LPD)
        The LPD 17 San Antonio class of amphibious ships represents the
    Department of the Navy's commitment to a modern expeditionary power
    projection fleet and will assist our naval forces across the spectrum
    of warfare. The lead ship was successfully delivered in January 2006.
    The LPD 17 class replaces four classes of older ships--the LKA, LST,
    LSD 36, and the LPD 4--and is being built with a 40-year expected
    service life. The LPD 17 class ships will play a key role in supporting
    the ongoing global war on terror by forward deploying marines and their
    equipment to respond to crises abroad. Its unique design will
    facilitate expanded force coverage and decreased reaction times of
    forward deployed Marine Expeditionary Units. In forcible entry
    operations, the LPD 17 will help maintain a robust surface assault and
    rapid off-load capability for the Marine Air-Ground Task Force far into
    the future.
        Amphibious Assault Ship (Replacement) (LHA(R))
        Our Tarawa-class amphibious assault ships reach the end of their
    service life during the next decade (2011-2015). An eighth Wasp-class
    amphibious assault ship is under construction and will replace one
    Tarawa-class ship during fiscal year 2007. In order to meet future
    warfighting requirements and fully capitalize on our investment in the
    MV-22 and Joint Strike Fighter, ships with enhanced aviation
    capabilities will replace the remaining LHA ships. These ships will
    provide increased jet fuel storage and aviation ordnance magazines, and
    an enhanced hanger to support aviation maintenance. The first ship,
    designated LHA 6, is a transitional ship to the succeeding ships in the
    class that will be transformational in capability and design. This lead
    ship is on track for a detailed design and construction contract award
    in fiscal year 2007 with advanced procurement funds provided in the
    fiscal year 2005 and 2006 budgets.
        Maritime Prepositioning Force
        Our proven maritime prepositioning force--capable of supporting the
    rapid deployment of three Marine Expeditionary Brigades (MEBs)--is an
    important complement to this amphibious capability. Combined, these
    capabilities enable the Marine Corps to rapidly react to a crisis in a
    number of potential theaters and provide the flexibility to employ
    forces across the battlespace.
        Maritime Prepositioning Force (Future)
        In addition to the 30 operationally available amphibious ships
    needed to employ a Marine Expeditionary Force (MEF) during a forcible
    entry operation, the Maritime Prepositioning Force (Future) (MPF(F)) is
    the key enabler for seabasing, providing support, and sustainment for
    early entry Marine Expeditionary Brigades. MPF(F) enables four new
    capabilities: (1) at-sea arrival and assembly of the sea base echelon
    of the MEB; (2) projection of one surface and one vertically delivered
    battalion landing team in one 8-10 hour period of darkness; (3) long-
    term, sea-based sustainment; and (4) at-sea reconstitution and
    redeployment. These capabilities will be invaluable in supporting joint
    forcible entry operations, forward engagement, presence, and
    relationship building operations with allies and potential coalition
    partners by our forward deployed forces, as well as support of disaster
    relief and humanitarian operations. Additionally, this flexible asset
    can remain in support of post-conflict activities and forces ashore
    from a relatively secure location at sea. Each future Maritime
    Prepositioning Squadron will include one LHD, two LHA(R), three cargo
    and ammunition ships (T-AKE), three fast logistics ships (T-AKR), three
    mobile loading platform ships, and two legacy maritime prepositioning
    ships. This mix of ships will be capable of prepositioning critical
    equipment and 20 days of supplies for our future MEB.
    High Speed Connectors
        High-speed connectors will facilitate the conduct of sustained sea-
    based operations by expediting force closure and allowing the
    persistence necessary for success in the littorals. Connectors are
    grouped into three categories: inter-theater, intra-theater, and sea
    base to shore. These platforms will link bases and stations around the
    world to the sea base and other advanced bases, as well as provide
    linkages between the sea base and forces operating ashore. High-speed
    connectors are critical to provide the force closure and operational
    flexibility to make seabasing a reality.
        Joint High Speed Sealift
        The Joint High Speed Sealift (JHSS) is an inter-theater connector
    that provides strategic force closure for continental U.S.-based
    forces. The JHSS is envisioned to transport the Marine Corps' non self-
    deploying aircraft, personnel, and high-demand/low-density equipment,
    as well as the Army's non self-deploying aircraft and personnel, and
    brigade combat team rolling stock and personnel, permitting rapid force
    closure of this equipment. Additionally, the JHSS will alleviate the
    need to compete for limited strategic airlift assets, and reduce
    closure timelines by deploying directly to the sea base rather than via
    an intermediate staging base or advanced base. The JHSS program is
    currently in the early states of capability development and has merged
    with the Army's austere access high speed ship program. Current
    fielding of the JHSS is projected in fiscal year 2017.
        Joint High Speed Vessel
        The Joint High Speed Vessel (JHSV) will address the combatant
    commanders' requirements for a forward deployed rapid force closure
    capability to support the global war on terror. The JHSV will enable
    the rapid force closure of fly-in Marine Forces to the sea base from
    advanced bases, logistics from pre-positioned ships to assault
    shipping, ship-to-ship replenishment, and in appropriate threat
    environments, maneuver of assault forces to in-theater ports and
    austere ports. Army and Navy programs were recently merged into a Navy-
    led program office with an acquisition strategy intended to leverage
    current commercial fast ferry technology, and acquisition of a modified
    nondevelopmental item. Contract award for new vessels is expected in
    fiscal year 2008, with delivery in 2010. To meet the current and near-
    term combatant commanders' requirements, the Department of the Navy
    continues to lease foreign built vessels until the JHSV is delivered.
        Westpac Express (WPE) is providing support to III MEF and other
    Okinawa-based forces, enabling III MEF to expand off-island training
    and engagement while reducing battalion-training days spent off island.
    Additionally, WPE played a key role supporting the Indian Ocean tsunami
    relief effort. HSC-2 ``Swift'' (picture below) provides a test bed for
    research and development prototypes as well as an operational platform
    in support of current real world requirements. Most recently, HSC-2
    played a key role in support of Joint Task Force Katrina, providing
    high-speed delivery of supplies, equipment, and personnel to ships and
    ports along the U.S. Gulf Coast.

        Joint Maritime Assault Connector
        The Joint Maritime Assault Connector (JMAC), previously known as
    the sea base to shore connector, will replace the venerable legacy
    landing craft air cushion (LCAC) as a critical tactical level platform
    supporting Marine Corps assault forces, as well as joint forces
    operating within the sea base. In comparison to the LCAC, the JMAC is
    envisioned to have many enhanced capabilities, such as the ability to
    operate in higher sea states, increased range, speed, and payload,
    increased obstacle clearance, and reduced operating and maintenance
    costs. The JMAC is planned for fleet introduction in fiscal year 2015.
    Aviation Transformation
        Marine aviation will undergo significant transformation over the
    next 10 years as we transition from 13 types of legacy aircraft to
    seven new platforms. We developed a new transition strategy to better
    balance numbers of assault support and tactical air aircraft based on
    operational requirements. This strategy supports our seabasing concept
    and enables ship-to-objective maneuver utilizing the Joint Strike
    Fighter, MV-22, and Heavy Lift Replacement, recently designated CH-53K.
    At a distance of 110 nautical miles, a squadron of MV-22s will lift a
    975 Marine battalion in four waves in under 4 hours. Similarly, the CH-
    53K will replace our aging, legacy CH-53E helicopter, lifting more than
    twice as much over the same range and serving as the only sea-based air
    assault and logistics connector capable of transporting critical heavy
    vehicles and fire support assets. An Assault Support Capability
    Analysis is underway to determine the optimal mix of MV-22 and CH-53K
    aircraft required to support ship-to-objective maneuver and distributed
    operations. Similarly, the short takeoff and vertical landing variant
    of the Joint Strike Fighter represents a transformational platform that
    will generate 25 percent more sorties and provide a multi-spectral
    engagement capability for the expeditionary strike force.
    Ship-to-Shore Mobility
        CH-53K
        The CH-53K is our number one aviation acquisition priority.
    Consequently, the CH-53K received full funding in 2005 and has reached
    ``Milestone B'' status--initiation of system development and
    demonstrations. Our current fleet of CH-53E Super Stallion aircraft
    enters its fatigue life during this decade. The CH-53K will deliver
    increased range and payload, reduced operations and support costs,
    increased commonality with other assault support platforms, and digital
    interoperability for the next 25 years (Figure 3).

        The CH-53K program will both improve operational capabilities and
    reduce life-cycle costs. Commonality between other Marine Corps
    aircraft in terms of engines and avionics will greatly enhance the
    maintainability and deployability of the aircraft within the air combat
    element. The CH-53K will vastly improve the ability of the Marine Air-
    Ground Task Force and joint force to project and sustain forces ashore
    from a sea-based center of operations in support of expeditionary
    maneuver warfare, ship-to-objective maneuver, and distributed
    operations.
        Expeditionary Fighting Vehicle
        The Expeditionary Fighting Vehicle (EFV) is our number one ground
    acquisition program, and it replaces the aging Assault Amphibious
    Vehicle that has been in service since 1972. It will provide Marine
    surface assault elements with better operational and tactical mobility
    both in the water and ashore, and will exploit fleeting opportunities
    in the fluid operational environment of the future. Designed to launch
    from amphibious ships stationed over the horizon, it will be capable of
    carrying a reinforced Marine rifle squad. The EFV will travel at speeds
    in excess of 20 nautical miles per hour in a wave height of 3 feet.
    This capability will reduce the vulnerability of our naval forces to
    enemy threats at sea and ashore. Our surface assault forces mounted in
    EFVs will have the mobility to react and exploit gaps in enemy defenses
    ashore. Once ashore, EFV will provide marines with an armored personnel
    carrier designed to meet the threats of the future. The EFV has high-
    speed land and water maneuverability, highly lethal day/night fighting
    ability, and enhanced communications capability. It has advanced armor
    and nuclear, biological, and chemical collective protection. These
    attributes will significantly enhance the lethality and survivability
    of marine maneuver units.
    Supporting Capabilities
        Logistics Modernization
        Logistics modernization is the largest coordinated and cross-
    organizational transformation effort ever undertaken within Marine
    Corps logistics. It is a Marine Corps-wide, multi-year, three-pronged
    improvement and integration initiative focusing on Marine Corps people,
    processes, and technology dimensions. This will produce a far more
    effective and efficient logistics chain management process to include:
    supply, maintenance, and distribution processes, integration of
    emerging information technology, and the introduction of new
    occupational specialties to support these advancements.
        Global Combat Support System-Marine Corps
        Global Combat Support System-Marine Corps (GCSS-MC) is the Marine
    Corps' member 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.
    GCSS-MC is designed to provide logistics information technology
    capabilities to satisfy the Marine air ground task force and combatant
    commander/joint task force requirements, as well as support the Marine
    Corps logistics modernization strategy. The goal of GCSS-MC is to
    provide modern, deployable information technology tools for both
    supported and supporting units. Achieving this goal requires the
    establishment of a shared data environment so that GCSS-MC data and
    information may be shared across the Marine Corps enterprise and with
    other Services and agencies. GCSS-MC is being implemented in phases, or
    ``blocks.'' Block 1 provides logistics chain management and basic
    planning tools, while blocks 2 and 3 will see the expansion of block 1
    capabilities and provide major upgrades to the Oracle software. The
    focus will be on logistics planning, command and control, and asset
    visibility.
                                 vi. conclusion
        Your marines are fully dedicated to serving and protecting this
    Nation. Their bravery, sacrifice, and commitment to warfighting
    excellence have added new chapters to our Corps' rich legacy. We
    recognize we have an essential mission, and that we have the solid
    backing of the American people. The Marine Corps fully understands that
    our greatest contribution to the Nation is our high level of readiness
    across the spectrum of conflict. That readiness is predicated upon your
    sustained support, for without it your marines will not enter the
    coming battles as the well-equipped, well-led, and well-trained
    fighting force you have come to expect. We face the unprecedented
    reality of overlapping and competing fiscal priorities--resetting the
    force from an extended war while undertaking a comprehensive
    modernization plan to prepare for the challenges of tomorrow. Marines
    and their families greatly appreciate the unwavering support of
    Congress, which is material to achieving our high level of success and
    securing the Nation's interests.

        Chairman Warner. I thoroughly enjoyed the statement,
    Commandant. Well spoken, from the heart.
        We will now proceed with rounds of questions. Why do we not
    just do, say, 8 minutes for the first round.
        To both the CNO and the Commandant: The pace of operations
    in support of global commitments, particularly Iraq and
    Afghanistan, have placed a heavy strain on manpower, equipment,
    and other things. What are the key indicators that you most
    closely watch and what trends are you observing as you assess
    the force's OPTEMPO, readiness, and posture for continued
    sustained operations? Admiral, would you lead off.
        Admiral Mullen. Thank you, Mr. Chairman. In the first
    almost 8 months since I have been here, I have been able to
    travel a lot to really try to better understand what is on the
    minds of our young sailors. They are out doing the work for our
    country that we have described. I spend a fair amount of time
    in interaction with them, both in large groups and small, to
    try to get at the state of their morale, the state of their
    support, what is on their mind. Almost to a person, the sailors
    are focused on their mission, delighted to be here, eager to
    participate, and enthusiastic about their future.
        That does not mean they do not ask challenging questions,
    but by and large, and whether it has been in Japan or Hawaii or
    in San Diego, Jacksonville, Pensacola, the Horn of Africa, the
    Gulf area, or up in Iraq, I get basically the same response. So
    they are very focused and I am very comfortable that in the
    kinds of things that you have described we are in good shape.
        That said, I do not take a day of their service for
    granted. I am concerned about the high OPTEMPO for our Special
    Operations Forces in particular. They have been turning at a
    high rate since September 11. The corpsmen that are supporting
    the marines, the Fleet Marine Force (FMF) corpsmen, have a
    particularly high OPTEMPO. We are calling them up for
    additional duty while they are ashore. So I am anxious about
    that rate and making sure we have it right for them in the
    future.
        The face of deployed Navy medicine is changing as we speak,
    sometimes so quickly it is hard to see exactly what it is going
    to be, but it is going to be different because of the
    deployments that they are on. That said, they are excited about
    what they are doing. In the battlefield, this is what many of
    them trained to do and they feel challenged and extremely
    satisfied in what they are doing.
        The OPTEMPO for the rest of the Navy in some areas is up. I
    am supporting many more forces on the ground through mostly
    individual augmentees and so we are working our way through the
    difficulties that that creates in units. But there is a lot of
    talent in this Navy. This is a war for the Nation, not just one
    Service or two Services, and I am anxious to see the Navy pitch
    in as much as we can.
        My wife, Deborah, has also spent a lot of time on the road
    with me and with Navy families, and there are certainly
    concerns there. But again, the families have been incredibly
    supportive. It is one of the reasons I focus so hard on family
    readiness for the future, to make sure their needs are met. Our
    retention numbers are up. They continue to be up at a very high
    rate. Again, I do not take that for granted. We work that very
    hard. I want to hedge against any possibility those numbers
    would go down in the future.
        So those are some of the things that I see right now. But
    it is summed up by saying your Navy is in good shape.
        Chairman Warner. We are going to the Commandant. I am
    particularly struck, and I am glad we provide the record with
    the number of naval personnel on the ground in Iraq. My
    understanding is that you are assigning all types of experts to
    the IED force over there; am I correct in that?
        Admiral Mullen. Yes, sir, we have.
        Chairman Warner. In other words, you have actually got ship
    handlers and people who have experience with weapons and the
    like working alongside the Army and Marine Corps?
        Admiral Mullen. Sir, we have had the lead on the
    technological part of the IED task force for some time now,
    because we have experts in that area, in explosives in
    particular. But we have some other expertise which we have also
    stepped up and contributed to and will continue to do that to
    try to solve this problem.
        Chairman Warner. I am sure there is no fixed table, but
    what is the turnaround time for a person who has done a tour in
    the Iraq-Afghanistan theater, come back to continental U.S.
    (CONUS), and then undertake another tour?
        Admiral Mullen. Mr. Chairman, we are actually going through
    setting that up. It varies based on what part of the Navy you
    are talking about. For the sea, air, land (SEALs) it is about a
    two-to-one turnaround, meaning in for a period of 3 or 4 months
    and out for a period of about 4, 5, or 6 months. That rotation
    has been going on for some time by and large.
        Chairman Warner. Are they mostly with the Special
    Operations Forces?
        Admiral Mullen. It is about a two-to-one turnaround for our
    Seabees. That is another area that is running very hard and
    performing magnificently, as both I have seen them and General
    Hagee has seen them for several years now in the desert in
    support of the Marine Corps.
        I talked about that concern with some of the medical
    personnel, regarding the corpsmen in particular. That is
    probably my tightest turn right now, the FMF corpsmen. They
    want to go back. They love their marines. At the same time, we
    need to make sure that that balance is right for the long haul
    with respect to our corpsmen.
        Chairman Warner. What about your aviators?
        Admiral Mullen. The aviation turnaround right now is
    reasonable. It is about 3.0.
        Chairman Warner. You better translate that to the person
    who is uninitiated in this.
        Admiral Mullen. For 6 months in, they would come back for
    18 months and then they would turn again. So three times what
    they spent in they come back for, and then they would turn
    around again. That is the carrier aviation side.
        Some of our oldest airplanes, particularly the P-3s, are
    working the hardest and that is a concern. That is a longer-
    term concern I have with making sure our maritime patrol
    aircraft are here for the future. We are starting to replace
    them, in the multi-mission aircraft (MMA) program that we have
    before Congress this year. So they are working very hard.
        It is varied in various parts of the Navy. But there are
    many parts of the Navy that are pushing very hard to support
    this long war.
        Chairman Warner. Those are extraordinary figures. In the
    face of that, your retention rate--that means those people now
    in uniform who decide to re-up for another tour of duty--is
    above expectations?
        Admiral Mullen. Yes, sir. We have had 50 to 60 percent
    retention since 2000. It has been extraordinary. Again, I do
    not take it for granted. We work it very hard.
        Chairman Warner. Sure.
        Admiral Mullen. When I talk to sailors about going to Iraq,
    going on the ground, there are many of them that put their
    hands up and say: Throw me in, coach; that is where the fight
    is; that is what I signed up for; I want to participate.
        Chairman Warner. Even aviators who are willing to forego
    the cockpit----
        Admiral Mullen. Yes, sir.
        Chairman Warner.--to go onto the ground billets?
        Admiral Mullen. Yes, sir.
        Chairman Warner. Remarkable.
        General?
        General Hagee. Mr. Chairman, I have a similar story to what
    the CNO laid out. You can use several metrics, but actually the
    most important one is to get out there and talk with the
    marines and talk with their families, to get that feel on how
    their morale is and how they are doing and what they need.
        Like Mike and Deborah, Silke and I travel a great deal to
    talk with marines and talk with families. In fact, she is
    actually probably more important because they will tell her
    things that they will not tell me, with full knowledge that she
    is going to report to me on what is really going on. Like in
    the Navy, morale is unbelievably, unbelievably high.
        Some of the metrics: Our retention is very good. In fact, a
    recent Center for Naval Analyses (CNA) study indicated that
    over the last 2 to 3 years we have retained higher quality
    marines than we have before. Right now, for fiscal year 2006 we
    are at 86 percent of our retention goal and we are matching the
    military occupational skills that we need, so individuals are
    staying.
        Another metric is how often does an individual serve or
    what is the turnaround ratio. If you are in the operating
    forces and if you stay with one battalion, you are going to be
    over in Iraq or Afghanistan for about a 7-month period, you
    will come back for about 7 months, and then you will go back.
    So we are about on a one to one.
        We do not have stop-loss or stop-move. So most of them
    after a couple rotations, for a few of them after a third
    rotation, they will leave the operating forces and they will go
    to, to use the Navy term, shore duty somewhere, and so they
    will not be exposed to another rotation.
        I do an informal, unscientific poll wherever I travel,
    especially in Iraq and Afghanistan, and I ask individuals to
    raise their hands to indicate how many rotations they have
    made. For a normal battalion, I would say well over half are on
    their first rotation, there is about a third who are on their
    second rotation, and then a relatively small group who are on
    their third rotation.
        Back here, one of the metrics we look at is do they have a
    chance to take leave when they want to take leave and do we
    have enough time and equipment to ensure that if they are
    training to go back in that they can accomplish the training
    that is needed. As far as equipment is concerned, obviously the
    main effort is to ensure that the troops in Iraq have the
    equipment that they need and in fact they do.
        Two years ago, we took equipment out of our prepositioned
    stocks in order to ensure that they had the proper equipment in
    Iraq and that we had sufficient equipment to train with back
    here. Because of the supplemental, we are now replenishing
    those stocks. For example, last year at this time two of our
    three prepositioning squadrons were down to around 30 percent
    capability. We kept one ready to go at 100 percent. Today we
    have two of those prepositioning squadrons at 100 percent. The
    other is at over 90 percent on all equipment except for major
    end items like vehicles, and we are just waiting for them to
    come off the line. That is what the supplemental has been able
    to do in order to ensure that we are ready to address other
    contingencies.
        Chairman Warner. You mentioned your equipment. Take us
    through the various chapters of body armor. There have been
    some high points and some points that cause us great concern.
    Where are we today on that progress?
        General Hagee. First off, as I mentioned in my opening
    statement, this is a dynamic, changing battlefield. We are
    going against a smart and lethal enemy. As we change our
    tactics, he changes his tactics. We are trying to stay inside
    of his decision cycle to anticipate what he would do.
        When we initially went over there, we went over with outer
    tactical vests and with small arms protective insert (SAPI)
    plates fore and aft, and obviously with a helmet. We have
    learned. We have increased the protection provided by the SAPI
    plate. We have added side armor. We have added groin
    protection. We have added throat protection. We have reduced
    the weight of the helmet and now they have a lightweight
    helmet.
        There is a tension, there is a balance between encasing the
    individual to where he cannot do his job and giving him enough
    protection to where he is protected and he or she can
    accomplish that particular mission, and we are constantly
    trying to balance that.
        I think in the future we need to look at new technologies
    to reduce the weight of the equipment that we are asking these
    marines and soldiers to carry right now. But right now I am
    very happy with the personal protection that we have provided
    to those marines. But we are not looking back. We are trying to
    determine where the next threat will come from and how to use
    technology better.
        Chairman Warner. Your armored vehicles which you are
    operating?
        General Hagee. Yes, sir. As far as the Humvees are
    concerned, we are a mixed fleet right now. We have the M-1114,
    which is the factory-produced up-armored Humvee, and we have
    the Marine Armor Kit (MAK), which is just about as good as the
    up-armored Humvee except for undercarriage protection. By July
    we will have a full 1114 up-armored fleet. The MAK vehicles
    that we are using right now are actually quite good and we have
    already offered some of them to the Army, if they need to
    supplement their fleet.
        As far as the 7-ton truck is concerned, the medium tactical
    vehicle replacement (MTVR) we are armoring that, with a Marine
    Armor System (MAS). We have close to 900 of those vehicles
    armored, and that is the requirement there, in theater by May
    of this year.
        Chairman Warner. Thank you very much.
        Colleagues, I ask those questions because each of us are
    getting so much mail, and understandably, from concerned
    people, particularly among the retirees. I heard from my
    colleagues who a half century ago I served with in the Marine
    Corps, very concerned about it. I am going to have your answer
    reproduced and send it back to a number of very important
    inquiries that I have received.
        Thank you very much.
        General Hagee. Yes, sir.
        Chairman Warner. Senator Levin.
        Senator Levin. Thank you, Mr. Chairman.
        First, General Hagee, the recently released QDR proposes
    that the Marine Corps end strength be stabilized at 175,000
    Active-Duty personnel. I believe you stated that you believe
    that the Marine Corps' end strength probably needs to be at
    180,000 marines and you are launching your own study to
    reexamine the issue. Where are you on this? Is it your current
    assessment that 175,000 will do the job and allow you to meet
    all of your assigned missions, or do you feel it likely that
    you are going to need 180,000?
        General Hagee. Sir, based on the battlefield the way it
    looks today, the current environment, both the operational
    environment and training environments, I believe we need around
    180,000 marines.
        I would like to step through just a little bit of how we
    got to where we are. We are funded, our baseline program is
    175,000. Congress authorized an additional 4,000 over the past
    couple of years, with funding to come from supplementals. The
    law also allows us to go 3 percent above the authorized level
    in times of war, once again the difference between paid by
    supplementals.
        That is approximately where we are right now, at about
    180,000. Our last Marine Corps structure review was in 2003.
    Several significant things have changed since then or really
    happened since then. One, our major war plans are undergoing an
    extensive review. Two, of course the QDR was issued. Just last
    month, we stood up MARSOC, which will ultimately have 2,600
    marines.
        So with those changes and after discussions with the
    Secretary of Defense, I stood up a capability assessment group.
    They are working right now. They are headed by Major Steve
    Johnson, who just returned from a year in Iraq. He was the
    senior marine in al-Anbar Province. They are going to report
    out late spring, early summer on the capabilities and
    capacities that the Marine Corps could provide to the joint
    force commander.
        Senator Levin. In this respect, though, the recently-issued
    QDR did not reflect your current view; is that accurate?
        General Hagee. That is correct.
        Senator Levin. On reset funding, you have made reference to
    the need to repair and replace Marine Corps equipment that has
    been either destroyed or damaged or used to its life
    expectancy. You indicate, I think, that your current reset
    requirement is $11.7 billion?
        General Hagee. That is correct, sir.
        Senator Levin. How much of that is covered in the 2006 and
    2007 request?
        General Hagee. $5.1 billion is covered in the current
    supplemental request for 2006. The balance of that was deferred
    to 2007 and the bulk of that deferment was because of execution
    problems. Industry just could not--we could not obligate and
    execute it in the year.
        Senator Levin. Are you able to obligate or execute more
    than $5.1 billion?
        General Hagee. Yes, sir, we are.
        Senator Levin. How much more?
        General Hagee. Probably around $1 billion.
        Senator Levin. So that is basically an unmet requirement
    right now?
        General Hagee. Yes, sir. We could execute it, but, as I
    said, it has been deferred to 2007.
        Senator Levin. Right. Okay, that is something we obviously
    will want to take a good look at. I think one of the highest
    duties we have is to fulfill that requirement and to do it on
    time. Thank you as always for your direct answers.
        Admiral Mullen, the 2007 budget request funds a level of 36
    steaming days per quarter for deployed ships, which is below
    the Navy's goal of 51 days per quarter. First of all, do you
    agree with that decision to reduce the steaming days? How would
    this reduction in the availability of deployed ships affect the
    regional combatant commanders' ability to execute their
    missions?
        Admiral Mullen. Yes, sir. Clearly I support what we
    submitted from a budget standpoint with respect to the
    readiness, and I made a conscious decision to take the
    resources from deployed steaming days. What sometimes is not as
    clear is that we have invested a lot of resources in the last
    several years in our readiness accounts and we now routinely
    sustain the availability of delivering six carrier striking
    groups within 30 days.
        We did not in any way, shape, or form touch the ability to
    sustain or surge and sustain that requirement. We made a
    conscious decision to hold that investment steady so that we
    can respond should we be called to.
        Clearly, we need to work our way through those deployed
    steaming days, some of which it has happened in the last couple
    years that there will be supplemental funds which will be
    supplied tied to unanticipated requirements that will add to
    that. Last year it was about 4 or 5 days. Then should the
    requirement and the combatant commanders' demand deem it
    necessary in terms of operations, I would be put in a position
    to have to adjust resources and execution to meet that
    requirement.
        Senator Levin. Does the 2006 supplemental contain
    additional steaming days?
        Admiral Mullen. Yes, sir, some is in the request. But this
    was not ``go get it in the supplemental.'' The consistency of
    request with respect to the supplemental has been those
    operations which we anticipate will be tied specifically to the
    war, as opposed to anything that would be normal.
        Senator Levin. Is the goal of 51 steaming days per quarter
    changed?
        Admiral Mullen. No, sir, it is still there.
        Senator Levin. It is not going to be met?
        Admiral Mullen. Under the current budget as it sits right
    now, no, sir. Clearly the deployed days, those days in theater
    will not change. What will change will be days at sea. The
    other piece that is starting to come into discussion is the
    fact that there will be important engagement opportunities in
    places around the world that will not require steaming,
    basically at-sea days as we engage with our partners and future
    partners around the world.
        Senator Levin. What effect is there on readiness from this
    proposed----
        Admiral Mullen. From an overall readiness standpoint, it
    goes back to training, we have not affected the training, we
    have not affected the preparation or the overall readiness per
    se.
        Senator Levin. Did the combatant commanders concur in this
    decision?
        Admiral Mullen. I did not actively seek their concurrence,
    although they have concurred in the budget, I guess is how I
    would put it.
        Senator Levin. General Hagee, do you have any underfunded
    or unfunded force protection items?
        General Hagee. Unfunded force protection items? No, sir.
        Senator Levin. Mr. Secretary, let me ask you about the
    recent press articles relative to the number of sexual assault
    allegations at the Naval Academy. Apparently it has risen
    sharply over the last 4 years, despite the June 2005 report of
    the Defense Task Force on Sexual Harassment and Violence at the
    Service Academies. We at this committee, as a matter of fact,
    have obtained very strong commitments to take appropriate
    action in order to overcome hostile attitudes and illegal and
    inappropriate actions towards women.
        What actions are you taking now to overcome these actions?
        Secretary Winter. Sir, there were a number of actions that
    are being taken by the Superintendent and the Commandant to
    improve the overall environment at the academy. This is an area
    that concerns me greatly. It is an area where we need to
    continue to maintain a very high degree of focus and attention.
    It encompasses a number of aspects, including educational
    efforts as well as support to victims.
        The whole Sexual Assault and Victim Intervention (SAVI)
    program has been established to ensure that we are able to deal
    with such cases in an appropriate manner. We have pushed to get
    increased reporting rates and to some extent we are not sure
    how much of the increase is representative of a greater
    flexibility or a greater willingness, if you will, on the part
    of victims to report those incidents and how much of that has
    to do with the actual increases in incidents at the academy.
        This is something that we will continue to take a look at
    very aggressively. It is an area that I have reviewed already
    on several occasions and continue to look into this matter.
        Senator Levin. Let me just conclude by saying I know that
    this committee, Chairman Warner, and every committee member has
    expressed very deep feelings about these events over the last
    few years. Our committee has held a number of hearings on this
    subject.
        If you want to expand on your answer for the record, I
    think it would be welcome. Tell us what specific actions are
    under way now and what additional actions are contemplated
    relative to the academy.
        Secretary Winter. I would be pleased to do that, sir.
        [The information referred to follows:]

        Over the past few months I have made multiple trips to the Naval
    Academy and it is clear that there is a strong commitment by the
    Academy's leadership to address sexual harassment, misconduct, and
    assault prevention and response. This commitment is illustrated through
    an aggressive program of education, by dramatically increasing the
    number of females in leadership roles at the Academy, by implementing a
    tough new alcohol education and accountability program, and by holding
    midshipmen accountable for their actions while actively assisting
    victims.
        In the education area, the focus is to improve the overall culture
    within the brigade with respect to gender issues, and to prevent sexual
    harassment, misconduct, or assault. Education initiatives include
    expansion of focused prevention and response awareness training in
    multiple venues including academic classrooms, guest presentations, and
    company-level training sessions. The Academy Board of Visitors, the
    Secretary of the Navy Executive Steering Group, and Senior Leadership
    have been analyzing feedback from midshipmen, parents, faculty, and
    alumni surveys in order to adjust the curriculum and keep it current.
    Additionally, national experts and the Academy's leadership are
    conducting a review of the academic curriculum to increase the focus on
    leadership, ethics, and gender issues while developing evaluation
    measures to assess progress across each of the issues.
        Over the past several years, the Academy's leadership, with the
    full support of the Navy's leadership, has undertaken an active program
    to increasing the number of female role models at the Academy with
    fleet experience. Currently, with a student body comprised of 17.6
    percent female midshipmen, 29 percent of the Academy's officer staff
    are women. This talent pool of professionals serves as mentors and
    advisors for both male and female midshipmen.
        In the last month, the Academy's leadership has implemented a very
    aggressive and forward-looking alcohol education and accountability
    program. This forceful approach to what is often a causal factor to
    sexual harassment, misconduct, or assault is a key element of the
    holistic approach to address these issues. The program sets very
    specific expectations for the midshipmen with respect to alcohol use
    and holds them accountable if they violate the regulations. The range
    of options to address violations goes from counseling, to medical
    treatment, to punishment that can include discharge from the Academy.
    The Academy's leadership has demonstrated that it does not tolerate
    sexual harassment, misconduct, or assault. They aggressively
    investigate charges and hold midshipmen accountable for their actions
    in accordance with regulations and the Uniform Code of Military
    Justice. Additionally, the Academy has an aggressive Sexual Assault and
    Victim Intervention program with educators and victim advocates
    throughout the Academy's chain of command, from the superintendent's
    office to the company level in the brigade of midshipmen.
        Lastly, any effort designed at instilling dignity and respect into
    midshipmen must build a culture of honor and personal integrity that
    the midshipmen can carry to the fleet and the Fleet Marine Force. The
    Brigade Honor System, and recent changes to the execution of this
    system, increasingly empowers midshipmen to discuss, train, and respond
    to honor violations in a more personal manner in order to develop and
    refine their leadership skills across the wide array of challenges
    facing today's young officers.
        I absolutely share your commitment to ensure that all sailors and
    marines serve in a workplace free from racial, ethnic, religious, and
    gender discrimination and in an environment where honor, courage, and
    commitment are embraced and revered. I am convinced that the Academy,
    through the above initiatives, is moving in the right direction but I
    also recognize that this is a process of continuous improvement. I
    assure the committee that I will be actively engaged to ensure
    improvement does occur.

        Senator Levin. Thank you, Mr. Chairman.
        Chairman Warner. I would only add to my colleague's
    observations, he is quite correct, but when we had a serious
    problem with the Air Force Academy I think the committee as a
    whole authorized me as chairman to say we have a zero tolerance
    on this issue. Repeat: zero tolerance. Unless the military
    departments come to grips on that basis, then we in Congress
    will exercise every right we have under the Constitution,
    because there are specific directives under the Constitution to
    Congress with respect to the care and treatment of the
    uniformed people.
        Senator McCain.
        Senator McCain. Thank you, Mr. Chairman.
        Mr. Secretary, I would just like to add my corroboration to
    the comments made by Senator Levin and Senator Warner. I think
    maybe you ought to get down to the Naval Academy pretty quick
    and find out what is going on. I have the highest regard for
    the Superintendent and the personnel who are in charge down
    there, but there is an obvious problem and, unfortunately, as
    Senator Warner mentioned, we have seen this in the other
    service academies and we need to stop it quickly. So I urge
    your personal involvement along with Admiral Mullen.
        General Hagee, how is marine enlistment and reenlistment?
        General Hagee. Sir, we are doing very well in both areas.
    As far as recruitment is concerned, we are about 101, 102
    percent through the end of February. We are entering the most
    difficult months--February, March, April, and May--and all of
    our projections show that we are going to make our number this
    year, and not only are we going to make our number, but we are
    recruiting really high quality young men and women into the
    Marine Corps.
        Senator McCain. Retention?
        General Hagee. On retention, we are about 86 percent of our
    fiscal year 2006 goal today. We also have a very good military
    occupational skill match, so we are retaining the right
    individuals. We are very optimistic that we are going to make
    our goal just like we did last year. Actually, last year we
    went over slightly. I would not be surprised to see us go over
    slightly this year.
        Senator McCain. Reenlistment is highest in the combat
    areas?
        General Hagee. It is, sir.
        Senator McCain. Remarkable, is it not?
        General Hagee. Yes, sir.
        Senator McCain. Admiral Mullen, I understand you have
    provided us with a very detailed plan for the Navy. Ultimately
    you see a sustained 313-ship Navy, 11 aircraft carriers, 62
    Arleigh Burke destroyers, 7 DD(X)s, 19, et cetera. There are
    reports from the Congressional Research Service (CRS) and CBO
    that it will cost $20 billion a year in order to maintain that
    313-ship Navy. Yet the Navy estimates $14 billion a year. How
    do you account for the differential there?
        Admiral Mullen. The analysis that we did--I took that on
    when I came back here to look at that first and looked at the
    last 20 years of shipbuilding in terms of the amount of the
    investment, and in 2005 dollars it comes out to about $11
    billion. To look at getting to 313, with validated assumptions
    about inflation and cost growth, I estimate that it is about
    another $2.5 billion. So my estimate is $13.5 billion. You said
    $14 billion, but $13.5 billion in 2005 dollars throughout.
        That is really, I believe, within reach. We have worked
    with CRS and the other analysts who have criticized this and
    actually narrowed our differences in terms of assumptions, and
    there were some assumptions that were different that get to
    that level, and I do not concur with some of those. At the same
    time, I recognize that affordability is a real challenge. I
    have to control costs in these major accounts. I am committed
    to doing that.
        The goal initially was to get a plan on the Hill to try to
    stabilize, have a number, everybody understand it, establish a
    relationship with the Hill, a strategic relationship with the
    Hill and with the industry, so that we are all on the same page
    and we can move forward.
        Senator McCain. Let me tell you, the major thrust of this
    committee for a while now is going to be procurement costs. The
    escalation in procurement costs, if it in any way approximates
    what it has been over the last 5 to 10 years, there is not a
    snowball's chance in Gila Bend, Arizona, that we are going to
    be able to maintain this 313-ship Navy at $14 billion a year.
    It is not going to happen.
        So I would be glad to look at your cost estimates as far as
    inflation is concerned. I never thought I would live so long as
    to see a destroyer that cost $2 or $3 billion, CVN at $13-plus
    billion each. These are staggering numbers, Admiral.
        Admiral Mullen. Yes, sir.
        Senator McCain. You have to also take into consideration
    that if history proves any guide, and it does, that you see
    cycles of increased defense spending and decreased defense
    spending. So I would like to see some kind of assurance that we
    are getting the inflation associated with procurement under
    control. Then, in all due respect, your numbers will be a lot
    more credible to me, because the past 10 to 15 years the cost
    escalation has been astronomical.
        You know what is frustrating is that the people that build
    these weapons systems will come and say: ``Well, it was not any
    fault of ours; it was the Navy or Army or Air Force
    requirements for technological changes.'' Stop the
    technological changes, stop.
        Admiral Mullen. I have given that guidance.
        Senator McCain. Fire somebody that did not plan on the
    technological changes that somehow increased the costs of a
    Future Combat System from $90 billion to $130 billion, and we
    have not seen the first piece of equipment yet.
        So procurement is going to be, and is actually, one of the
    major focus of this committee's deliberations. I do not know
    how we impose cost controls, but I know that you will never see
    a 313-ship Navy if these inflations in costs that have taken
    place over the last 10 years prevail, and that saddens me
    because I am old enough to remember when we were going to have
    the 600-ship Navy, as my dear friend the former Secretary of
    the Navy knows.
        So I cannot emphasize enough getting these cost escalations
    under control. Frankly, the other thing I worry about: We
    always take care of the high end, the JSFs and the F-22s and
    all of the very expensive pieces of equipment. When you look at
    the threat today, we may not be doing enough at the low end of
    the threat, which does not benefit defense contractors nearly
    as much as the high end does. So I think we ought to look at
    that as well.
        Secretary Winter, please, I want to allow you to respond.
        Secretary Winter. I am committed to that. I recognize if it
    keeps going like it is going we will never get there. That is
    why I put the plan here and to control those costs is goal one
    inside these programs.
        Senator McCain. Again, I hate it when old people recall
    golden days of yesteryear, but the fact is that during the
    1980s we had fixed cost contracts. Now we seem to have done
    away with fixed--you are leaving in the middle of this
    diatribe? [Laughter.]
        Chairman Warner. There is a small problem with the floor,
    in case you have not heard.
        Senator McCain. You hurt my feelings, Mr. Chairman. I will
    get the tape for you.
        So, Admiral, you see my point. Mr. Secretary, you see my
    point. Really, I do not know why we have had to get away from
    fixed cost contracts. I do not get it. So if I had a very, very
    high priority--and I know you do, I know you do. But I would
    hate for us to not be able to afford what we need just because
    the cost escalations associated would not allow us to procure
    enough of this equipment to get the job done. All of us
    appreciate how thin our forces are spread today.
        So I would be glad to hear any answer. Mr. Secretary, I
    would be glad if you would like to make a response.
        Secretary Winter. Yes, if you could, sir.
        Senator McCain. First, we should shut down the Electric
    Boat Company, is the first thing, Senator Lieberman.
    [Laughter.]
        Senator Lieberman. You meant Newport News, did you not?
    [Laughter.]
        Secretary Winter. Sir, as a former systems engineer and
    program manager of large activities, one of the experiences
    that I took from that is that critical to any cost containment
    activity is getting real control over the requirements process
    and the configuration management process. It is because of this
    that I have been really encouraged by what I have seen at the
    CNO's direction within the Operational Navy (OPNAV) staff in
    terms of the standup of the Naval Characteristics Board. I am
    personally working with the OPNAV staff, as well as with the
    research, development, and acquisition (RDA) staff, to be able
    to evolve that board into one which has the power to really
    control the requirements process.
        I think if we do that we will go a long way to being able
    to provide some real stability in the overall shipbuilding
    processes here. That is one part of what we have to do.
        There are also a number of elements that the contractors
    are going to have to do in terms of making the appropriate
    investments, in terms of the capital plant, investments in the
    workforce, and investments in the processes. Part of what I
    have taken on is to make sure that we communicate to the
    industrial base our expectations in those regards.
        Senator McCain [presiding]. Also you call in some smart
    people as to what the threat is and figure out whether we are
    addressing the low end of the threat as well as the high end of
    the threat.
        Just one more question, Mr. Secretary. Last week we heard
    testimony from the Air Force concerning the decision to cancel
    the JSF alternate engine contract, leaving just one source,
    Pratt and Whitney, to provide engines for the entire life cycle
    of the JSF. When the Chief of Staff of the Air Force was asked
    why the decision was made to terminate the F136 JSF alternate
    engine program, he answered that the Navy did the analysis,
    they could not afford it, and so Navy asked that the alternate
    engine program be terminated. Is that your version of events?
        Secretary Winter. Sir, I am not in a position to comment on
    the specifics of the process that went on last year before I
    came into this office. But I will say that in conversations
    with both Navy and Air Force personnel within the building
    there does appear to be a common view that this is a reasonable
    risk to take, that the maturity of the----
        Senator McCain. Yes, but my question is was it the Navy
    that made the decision?
        Secretary Winter. I am not----
        Senator McCain. Go back and look and find out.
        Secretary Winter. Yes, sir. We will get back to you on
    that.
        Senator McCain. Give me a written answer as to whether it
    was the Navy that made the decision that drove the process
    here.
        [The information referred to follows:]

        Air Force and Navy participated in a number of reviews during the
    fiscal year 2007 budget formulation process where the benefits, risks,
    and costs of maintaining the F136 alternate engine were considered. The
    proposal to cancel the Joint Strike Fighter alternate engine originated
    in Navy, was not objected to by Air Force, and was approved by the
    Department of Defense incident to the submission of the fiscal year
    2007 budget.

        Admiral Mullen. I can comment on that, sir.
        Senator McCain. Go ahead, Admiral.
        Admiral Mullen. It was not the Navy. It was a joint
    decision. I think Secretary Wynne's comment, if I read it
    correctly in the paper, that it was proposed by Navy may have
    been accurate. This has been something we have been considering
    in the two Services, not just this cycle, but in previous
    cycles, and we think that from a risk standpoint it is low. We
    are trying to recapitalize. It is not an insignificant amount
    of money, and the analysis that underpins this in my view
    supports the decision.
        So I considered it to be a joint decision.
        Senator McCain. I do not want to drag this out, but you run
    the risk of a noncompetitive situation, number one. Number two,
    we never should have assured our allies and friends, the
    British, that they would be part of this effort, and it is
    going to cost us in our relations with the British. They are
    taking this very hard. These are the people that are helping us
    in Iraq and whose young people are fighting and dying, and they
    feel with some justification that they were very badly misled
    on this issue, particularly their investment in the JSF.
        So I would like to look into this a little further. Again,
    you run the risk if there is only one game in town, you are
    either going to impose cost controls on it or costs are going
    to run out of control. So it is a risky business, I think,
    particularly given the history we have in the development of
    aircraft engines.
        I thank the witnesses. Senator Lieberman of Electric Boat
    Company. [Laughter.]
        Senator Lieberman. Thank you, Mr. Chairman, for that
    unsolicited and unwelcome plug.
        I was about to say that I agree with what Senator McCain
    said about the focus that we need on acquisition costs. I
    talked in my opening statement about the fact that we have too
    few ships and submarines in the Navy and we have to help you
    get up to that 313 you want. There is a gap in funding that
    Senator McCain's questions pointed out.
        I appreciated, Admiral Mullen, that you said that basically
    by your numbers, comparing the $11.1 billion you have given now
    and the $13.5 billion you think you need, that we are still
    about $2.5 billion short in helping you achieve the goal of a
    313-ship and submarine Navy in 5 years. I think we ought to try
    the best we can on this committee to close that gap.
        The other side of it obviously is acquisition costs and
    what we can do to bring them down. I do want to certify for the
    record for my friend from Arizona that I have been to Gila
    Bend, Arizona. It is a very hot place, so snowballs do not
    stand much of a chance there. I think that is exactly the
    point.
        I do want to focus a bit on the submarine program.
    Obviously it is of great not only concern but pride to us in
    eastern Connecticut and western Rhode Island.
        Senator Reed. All of Rhode Island.
        Senator Lieberman. All of Rhode Island, that is true. It is
    a small State, but there are those of us who love it. The same
    is true of Connecticut.
        We have now 56 attack subs in our fleet. The QDR states a
    minimum force requirement of 48. Am I right Admiral?
        Admiral Mullen. Yes, sir.
        Senator Lieberman. Maybe people will say the combatant
    commanders always ask for more, as much as they could possibly
    use. But their requests are up, a total of something like 70
    attack subs. We are on a program now to build one attack sub
    every year until 2012 and I fear that you are being squeezed
    into this because we are not giving you enough resources.
        At that rate, as I look at the charts that the Navy itself
    has prepared, at one a year in 2018 we go to 46 subs in the
    fleet. I think you know that a bunch of us here would like to
    see if we can get to two a year, which by your proposal, the
    Navy's current proposal, occurs in 2012, earlier than that,
    optimally in 2009.
        Incidentally, in regard to Electric Boat (EB), we are proud
    of the fact that EB really has achieved great efficiencies and
    of course maintained high quality in production of submarines.
    I know you have set a goal here to take the cost of the
    Virginia class submarine from $2.5 billion down to $2 billion.
    I am real proud that the folks at EB have not said no to that.
    In fact, they have pretty much said: We think we can do it, but
    we need two submarines a year to achieve those numbers.
        I hope we can work together on that to achieve both the
    cost savings you want and to keep our submarine fleet at the
    numbers it needs to be, particularly as the Chinese grow their
    fleet of submarines and get more sophisticated.
        The question is a subpart of this and it is an immediate
    crisis. For the first time in over 40 years, there is no new
    submarine design on the drawing boards and current design
    programs are near completion. The effect of this is a pressure
    on EB, which is the center of design and engineering for the
    submarine fleet, to begin to lay off engineers and designers.
    They have announced that almost half of their design and
    engineering force will be laid off by 2008 unless something
    happens.
        My first question is, is that threat to the submarine
    industrial base of concern to you? Secretary Winter, maybe I
    will start with you on this one.
        Secretary Winter. Certainly, sir. This is an area of great
    concern. There are certain unique aspects, obviously, of
    nuclear submarine design and construction that we need to be
    concerned about maintaining for the long-term. I am very
    concerned, not only in the immediate future, but out in the out
    years, if you will, making sure that we have the ability to do
    the design work that is going to be needed for a variety of
    submarine activities, whether they are missile-capable
    submarines or fast attacks.
        To that end, this is an area that I am spending a good bit
    of time looking into. I want to understand better the critical
    skills that really are needed, that are unique here to the
    nuclear submarine business, that need to be preserved. I need
    to understand the various options that exist to be able to
    preserve those critical skills, how we can deal with that
    through design modifications, updates, and the investments that
    we are making right now in the Virginia class and to improve
    the cost efficiency of the production process.
        I need to be comfortable that we are dealing with this not
    only in the short-term, but in the long-term. This is an area
    where I have started an interaction with the folks at EB, and
    intend to continue it on over the next several weeks, and
    already have set up several meetings with the leadership there
    and also with the corporate leadership, to make sure that we
    are communicating effectively and that the Navy's interests are
    well-understood.
        Senator Lieberman. I appreciate that very much. Obviously,
    your own background prepares you well to deal with these kinds
    of questions and I look forward to working with you on it and
    seeing if there is a way. Obviously, if we move to two
    submarines earlier that creates more work. But there may be
    other ways to take advantage in a really productive way of this
    extraordinary and unique capacity that we have, and not lose
    it, because we are going to need it again.
        Admiral Mullen, let me ask about the other part of our
    center of submarine excellence, and that is the submarine base.
    As you well know, the Base Realignment and Closure (BRAC)
    process was a near-death experience for Submarine Base New
    London. But, praise the lord and the BRAC Commission, we are
    alive, and we want to stay well. We think that is good for the
    Navy and good for the Nation's security.
        Recently you announced a decision to meet the 60-40
    Pacific-Atlantic recommended split in the submarine fleet to
    move three subs from New London. I must tell you that around
    the area there is a concern--I want to give you a chance to
    respond to it--that this reflects that, though the BRAC
    Commission overturned the Navy's recommendation to close
    Submarine Base New London, in some sense you are not valuing
    Submarine Base New London and that it may be squeezed as time
    goes on.
        I want to give you this opportunity to just speak a little
    bit about the place you see Submarine Base New London having in
    the Navy in the years and years ahead.
        Admiral Mullen. New London is a critical base to us and, as
    you have described it and I agree with you, it is the center of
    excellence for submarine warfare and for our submarine force.
    As we previously discussed, the decision to move the submarines
    off the east coast was one we looked at throughout the QDR and
    really I believe that focus on the Pacific with what we have
    and what potentially could be there in the future, is the right
    focus.
        Clearly, and you have specifically spoken about the
    submarine threat, the potential, the submarine build, if you
    will, that the Chinese are on right now and the need to be able
    to respond to that. It is just the physical dimensions of the
    Pacific, the long legs, the kinds of capability that needs to
    be there, and that is why we went to 60-40.
        But the commitment to New London and the commitment to that
    as a base is unwavering from me as the Chief, and it will be in
    the future. This is not about what BRAC looked at or what BRAC
    did any more. It is about where we are and what we need to
    commit to for the future. That is exactly where I am.
        Senator Lieberman. I appreciate that very much.
        Is it reasonable for Submarine Base New London and the area
    to have some optimism about the future homeporting of
    additional attack submarines?
        Admiral Mullen. Yes, sir, I think it is reasonable. There
    are expectations that the Virginias will be on the east coast,
    that the Virginias that are commissioned, will be homeported
    there, for much the same kind of reason that you and I talked
    about with the SSN-21. All located in the same place, there are
    great efficiencies tied to that. So expectations are clearly in
    that direction.
        Senator, if I could just speak briefly to the two
    submarines a year.
        Senator Lieberman. Yes.
        Admiral Mullen. I am well aware that this plan has been
    initiated. One of my concerns as we generate the plan and try
    to create the stability is that we start to unravel it. I am
    committed to two submarines a year. We built them at a great
    number. We are not going to build them at the same kind of
    number, which is fundamentally why the size of the force is
    reduced.
        I face this issue on the cruiser-destroyer side down the
    road as well, when we start decommissioning cruisers that we
    built at a larger number and we will have to replace most
    likely at a smaller number.
        So I am anxious to get to two a year. Were I to go to two a
    year starting literally in 2007 to get to the 2009, that would
    generate a $6 to $7 billion movement inside my program, which
    would potentially destabilize what we have right now. What I
    will commit to you is in my review this year I will look at
    doing it as early as I possibly can. But I do not want to raise
    false hopes that I think I can move that to 2010 or 2009 at
    this particular point in time.
        That is just where I am. Clearly I will carry out the will
    of Congress and the will of the people should it be determined.
    That is what I have decided I am going to do. But that is the
    instability.
        To Senator McCain's comments, I am anxious to take the Navy
    off the table in this discussion because we change
    requirements, because we have to have the next best widget on
    whatever it is. When I am convinced that Virginia in particular
    is as close as it can be--and I will work my way through that
    to get to this $2 billion. I need to be that, but I have been
    very clear that $2.1 billion is not going to work for me. I
    have drawn that line to get at the kinds of cost control issues
    that we are all trying to achieve here.
        Senator Lieberman [presiding]. Fair enough. We will
    continue the discussion about how soon we get to two a year.
    But I want to thank you for your reassurance on Submarine Base
    New London and I will take it back home with me.
        What an honor it is--it makes me feel as if I am in the
    other committee we are on--to turn the chair over to Senator
    Collins.
        Senator Collins [presiding]. Thank you. It is a great honor
    to be temporarily chair of the Senate Armed Services Committee.
    I want to assure my friend and colleague from Connecticut that
    that is good news for submarines, it is good news for
    destroyers, it is good news for shipbuilding in general.
    General, in case you are concerned, I also take care of the
    Marines.
        General Hagee. I was getting concerned.
        Senator Collins. I think we are going to be fine on all
    fronts.
        Senator McCain jokingly said that he is old enough to
    remember when we were talking about a 600-ship Navy. But in
    fact it was not that long ago. I certainly remember it, and in
    fact the naval fleet has shrunk by more than 50 percent in the
    past 15 years, to just 281 ships today. That is an issue of
    great concern to me, to many members of this committee, and to
    Congress.
        So, Admiral Mullen, I want to start my comments by
    commending you for your impressive effort to produce a
    consensus shipbuilding plan for the future that calls for a
    313-ship fleet. I am also pleased to see that the QDR
    recognizes and endorses the need for a larger naval fleet.
        I am concerned, however, about the funding issue because,
    as my colleagues have talked about, we really should be funding
    shipbuilding at $13.5 billion a year and I want to help you get
    to that goal. Senator McCain brought up the cost growth in a
    lot of procurements and indeed we have seen cost growth. But is
    not the instability and lack of predictability in funding a
    major contributor to cost growth? What the shipbuilders tell me
    is if they cannot plan the work effectively or if we have
    uneconomical procurement rates, whether it is in submarines or
    destroyers, that drives up the cost. Would you agree with that,
    Admiral Mullen?
        Admiral Mullen. Yes, ma'am, I would. I think that is part
    of the goal of trying to stabilize the account, invest in it
    every year, get to--we are at $9.7 billion in new construction
    this year--the $13.5 billion. I am now in a position for the
    most part as the Chief to be able to put the money in from the
    Navy's perspective and hold it there. I think that is really
    important, so that the shipbuilders can plan in the future and
    will take their money and invest in efficiencies that they know
    will be there because there is going to be a plan and it will
    not change year to year.
        So I understand that and am very much committed to that.
    That is part of this discussion about taking the instability
    the Navy has created in recent years off the table. Controlling
    the costs, as the Secretary has described, is also mandatory,
    and putting us in a position where I seek threshold values in
    capabilities as opposed to objective values in capabilities,
    because objective values are very difficult to achieve, very
    expensive, or almost unachievable, yet we can put enormous
    resources to them.
        So it is that kind of cost avoidance and oversight of what
    we are doing with our resources that is different than what we
    have had in the past in the Pentagon.
        Senator Collins. Secretary Winter, we have discussed this
    issue numerous times also and I know you understand very well
    the need for a predictable funding stream and that if we have
    that it will help lower costs. But it also is important because
    it helps us maintain a skilled industrial base. If we have to
    keep letting designers and construction people go and then hire
    them back later, that increases training costs and also leads
    to questions about whether we can sustain the capability to
    meet future threats as well.
        That leads me to bring up an issue that affects not only
    Bath Iron Works in my State, but also the Portsmouth Naval
    Shipyard in Kittery. Again, when we look, when we project to
    the future, we see workloads that go up and down, cause
    layoffs, and then hiring people back. It is an inefficient way
    to operate.
        What do you think we can do to try to smooth out the
    workload so that we can have more efficiencies and lower costs?
        Secretary Winter. Senator, I think there are two elements
    that I would really want to focus on here right now, one of
    which is to further the CNO's construct of laying out a plan
    and sticking to it. I think this is very important. I think
    that if we communicate to the industrial base what the
    expectations are and can in fact affect those, so that we can
    in fact do what we say we are going to do, then I think it is
    reasonable to expect the industrial base to make the
    investments that are necessary in the physical plant, in the
    processes, and in the people to make sure that we have the
    capability that we want, not only now but in the future.
        In a similar sense in terms of the public yards, one of the
    things that I have asked for is a more structured process
    associated with the selection of yards, the work allocation
    function, if you will. It is just, if you will, my predilection
    or my preference for formalized processes for these things, and
    I have asked that that process be established. I expect that
    they will be getting back to me shortly within the next month
    or two.
        I hope that when we go through that process we will have a
    mechanism of decisionmaking and communication which will help
    both the public sector and the private sector as well to
    understand what they can expect in terms of future activities
    at these various facilities.
        Senator Collins. I think those are excellent efforts and I
    look forward to continuing to work with you on that issue. I
    would also encourage the Navy in deciding the allocation of
    workload at our four public yards to always keep in mind the
    fact that the Portsmouth Naval Shipyard has the most efficient
    low-cost record. The Maine and New Hampshire delegation last
    year produced for you a suggested way to even out the workload.
    Actually, it was produced originally for your predecessor. We
    have updated it this year and shared that document with you. So
    we hope to hear back from you on that as well.
        Admiral Mullen, in the time that I have remaining I want to
    talk a little more about the DD(X). There has been a lot of
    criticism or suggestions that there are too many bells and
    whistles, if you will, on the DD(X) that have driven up the
    cost. Certainly I believe that there is a point where you
    simply have to draw the line and say we have the cutting edge
    technology we need and we cannot keep trying to get that
    marginal improvement at a large cost.
        But in fact, a lot of the increased technologies that are
    on the DD(X) are absolutely essential. The Marines are counting
    on the increased firepower. We know that its stealthier design
    is critical. An important aspect of the DD(X), an advantage
    that has not been discussed that much, is it allows for a
    dramatically reduced crew size, and that in the long run
    reduces the life cycle cost.
        So could you comment for the committee and for the record
    on the technological advances that the DD(X) offers?
        Admiral Mullen. Yes, ma'am. I think DD(X) is a tremendously
    important and critical investment for future ships, not just
    destroyers but for future ships in the United States Navy.
    There are significant warfighting capabilities it brings. You
    mentioned the fires piece, but it will bring great capability
    in air defense, great capability in undersea warfare, with the
    investment in technologies that are going into that.
        It will be a much more integrated ship than any ship we
    have fielded to date. As you said, it will have a reduced crew.
    One of the things that gets lost in the discussion about DD(X)
    is that because of the reduced crew and other investments, the
    life cycle costs for this ship versus others are significantly
    lower. Sometimes we have a tendency here to just focus on what
    it costs to get it out the door. I am dealing with life cycle
    costs of many platforms that were not considered many years ago
    on a regular basis. I want to try to minimize those for my
    reliefs down the road, and DD(X) will take steps, significant
    steps, in that direction.
        The crew is dramatically smaller. The technical investments
    in the kind of computer networks that it has, the kinds of
    stealth technologies that it will bring, all of that does not
    just benefit DD(X); it will benefit investments in future
    amphibious ships, investments in CVN-21, and investments in our
    submarine force. I am seeing more and more of that across all
    of the platforms that we are investing in.
        So it is a vital investment, not just because we need
    another destroyer, but really for shipbuilding. It is the
    research and development base in the ship world that we did not
    have 10 years ago.
        Senator Collins. Thank you very much.
        Senator Akaka.
        Senator Akaka. Thank you very much, Madam Chairman.
        Mr. Secretary, according to your testimony, winning the
    global war on terrorism is the Navy's number one strategic
    priority. Toward that end, I see that the Navy has taken on a
    number of operations designed to enhance homeland security. I
    have asked questions about Pacific Command (PACOM) and also
    Northern Command (NORTHCOM) in regard to Hawaii and homeland
    security. I know the Navy and the military have played a huge
    part in that kind of security.
        My question to you, Mr. Secretary, is how does the Navy
    plan to balance its manpower requirements for homeland defense
    and its more conventional operations, as has been discussed,
    during this time of force reductions? Do you envision a more
    expanded role for the Navy Reserve in that regard?
        Secretary Winter. Senator, we are in fact adjusting the
    Navy to be able to play a more extensive role in terms of the
    global war on terror. When you take a look at the expeditionary
    security aspects that we are dealing with around the world
    right now, everything from riverine forces to maritime security
    activities, visit, boarding, and search and seizure efforts,
    focused to some extent in the Persian Gulf right now, but all
    being prepared to support those on a worldwide basis, that is
    an ongoing effort that we are going to have to continue to look
    at in terms of ensuring that we are able to deal with the broad
    spectrum of threats that may come at us, not just in the
    currently defined area of responsibility (AOR) in Iraq and
    Afghanistan, but on a worldwide basis.
        This is an aspect that is going to continue to receive a
    lot of attention and continue to evolve as Fleet Forces Command
    evolves the overall capabilities that they are in a position to
    provide to the various combatant commanders (COCOMs).
        CNO, would you care to comment further on that?
        Admiral Mullen. Thank you, Mr. Secretary.
        Just a brief comment, Senator Akaka. We are gradually
    reducing our numbers and my next--we talked about 313 ships. I
    have about 357,000 sailors on Active-Duty right now, and my
    next challenge in terms of numbers is to determine the right
    end strength for the United States Navy. I am comfortable that
    we are coming down about 10,000 per year. The 2007 budget is
    the fourth year, so we will have come down from about 380,000
    to 340,000 over these 4 years.
        But I am not going to go any lower until I understand fully
    the number that is required and I expect to be able to defend
    that in the 2008 budget a year from now.
        We are heavily invested within the capability I think we
    have already in the United States Navy in homeland defense,
    certainly the expansion to riverine, the kinds of investment
    with our sister Service, the Coast Guard. I have here just a
    very small brochure that talks about the Navy and the Coast
    Guard together that Tom Collins and I just signed, and it
    refers to the national fleet, which is not a new idea. It was
    originally signed in the 1990s, but it is updated, and it is
    very much committed.
        [The information referred to follows:]

        Admiral Mullen. The President's National Strategy for
    Maritime Security, which he signed last year, is the
    overarching directive for us to support the requirements in the
    maritime domain. So I am very encouraged by that. We are
    working very closely with the Coast Guard and leveraging each
    other to get this right for the future, to increase what we
    call the maritime domain awareness that we have to have both
    here and overseas.
        Senator Akaka. In the maritime domain, the Navy Reserve of
    course will be playing a part.
        Secretary Winter. Yes, sir.
        Senator Akaka. Can you comment on that?
        Secretary Winter. The Navy Reserve is becoming--I believe
    we started a couple years ago the more complete integration of
    the Active and the Reserve Forces inside the Navy. Admiral John
    Cotton, who leads the Reserve part of my Navy, is very active
    to make this integration happen as quickly as possible, to
    support the fleet, what I call the fleet concentration areas in
    these missions, and to move into support for the global war on
    terror.
        Our Navy Reserves are in Afghanistan. They are in Iraq,
    they are on the Horn of Africa. They are in Guantanamo Bay.
    They are doing all these new missions as well, and I could not
    do it without them.
        Senator Akaka. Admiral Mullen, for nearly 100 years now
    Pearl Harbor Navy Shipyard has been supporting our Nation's
    defense and the Navy has been an integral part of the community
    of Hawaii and has served so well. The shipyard continues to see
    that our Navy ships and submarine forces are fit to fight.
        How does Pearl Harbor Navy Shipyard fit into the Navy's
    future plans? Given the DOD's plans to build up the military's
    presence in the Asian Pacific region, do you foresee an
    expanded role as a forward repair facility for Pearl Harbor?
        Admiral Mullen. Senator, as you and I have discussed
    before, Hawaii is a very special place for me. I have lived out
    there. I have actually commanded a ship out there which went
    through the shipyard, and recently I was reminded again because
    I was out there for the December 7 celebration of what a
    special place it is and how supportive the people of Hawaii are
    to all of our Services, not just the Navy. But it is a special
    place indeed for the Navy.
        Consistent with the strategic shift towards the Pacific, I
    cannot help but think that the future importance of all of our
    assets in the Pacific is not just validated, but becomes more
    critical. That shipyard is a key piece to that. But not unlike
    some of the other things that we are talking about, cost
    control is really a concern for me. It is a concern everywhere.
    It is not just in shipbuilding. There were discussions here
    earlier about how much of the overall budget was allocated to
    defense. But I am trying to work very hard to control costs
    across the full spectrum of everything that the Navy is
    involved in, and cost controls in the shipyards are very
    important as well.
        I am anxious to see all my shipyards work in that
    direction, including Pearl Harbor. Senator Collins talked
    earlier about the best value, the most effective, the most
    efficient kind of thing. I am anxious to have all of us move in
    that direction.
        But as far as vitality for the future, importance for the
    future, I think the shipyard will continue to be.
        Senator Akaka. Admiral, I have a final question. I
    understand the Navy is still reviewing the possibilities of
    forward homeporting an aircraft carrier in Hawaii. How
    imperative do you feel that it is to have a carrier homeported,
    given the DOD shift in emphasis to the Pacific region, and what
    are the potential negative outcomes of continuing not to have a
    carrier homeported in the Pacific, particularly with regard to
    the Navy's potential response time in an emerging crisis out in
    that area?
        Admiral Mullen. The QDR supported, as I am sure you are
    aware, Senator, having six operational aircraft carriers in the
    Pacific. I am very committed to that. The issue of where they
    will live is not uncontroversial, nor is it a critical decision
    that needs to be made. We have, as I know you are aware, we
    have submitted a budget for 2007 which recommends 11 aircraft
    carriers for the future. The decision on all things aircraft
    carriers, the decisions will come in time, if you will, in
    terms of where they will live. But the focus and the outcome
    within, certainly within the Future Years Defense Program
    (FYDP), within the next 4 or 5 years, we will have six
    operational carriers in the Pacific. I am confident of that.
    Inside that, obviously, we still have a determination of where
    they will live.
        That said, putting an aircraft carrier in Hawaii and an air
    wing is not an inexpensive investment. Several billion dollars
    is what it would take, and I am back to the tension of
    investment for the future and how do I best place my resources.
    In the end, I think that decision will be made based on
    strategic imperatives as best we understand them at the time.
        Senator Akaka. Thank you very much. Thank you for your
    responses.
        Senator Talent [presiding]. Admiral, I have one question
    for you and then one for you and the Secretary. The committee
    has received, of course, your unfunded priorities list and the
    list includes items that range from a few million dollars to
    over a billion. I want to make certain that we understand the
    relative priority of the list. Is the list in the right
    priority order? If not, what would be your top unfunded
    priority?
        Admiral Mullen. My top unfunded priority--and the list is
    focused on areas that are, I believe, particularly critical.
    But my top priority would be for recapitalization in ships and
    airplanes. That is my biggest challenge and that would be the
    top priority if I rolled that list up.
        Senator Talent. So for example, moving up the landing
    platform dock (LPD) would be a priority for you?
        Admiral Mullen. If you made me pick a line item to put it
    on top, the LPD would help me most, and the F-18s would
    probably be next.
        Senator Talent. That is a good segue for me. I think, Mr.
    Secretary, you and the Admiral know that I am concerned about
    whether we have a sufficient number of F-18s to smoothly
    transition to JSF. I am concerned whether there is a shortfall
    being caused by the higher usage rates on the older As and the
    Cs because of the war and whether the size of the shortfall and
    the procurement cost to avoid major cuts in the air wing force
    structure is dependent on when the Navy determines that the As
    and Cs are at the end of their service life.
        So is there an update on the magnitude of a potential
    shortfall and what is the time line for making decisions to
    make sure we avoid any operational impact?
        Admiral Mullen. There is no update. I think the number that
    you have, Senator, is 46 F-18s and I have no update. I am
    embarking on the same kind of review I did in shipbuilding now
    in aviation to understand what capabilities we need to deliver,
    how many airplanes of what kind it is going to take to do that,
    and when that would occur.
        Part of that is obviously the evaluation of this shortfall.
    What I am concerned about, though, is I need the JSF. I need it
    for its stealth, I need it for its range, I need it for its
    payload in the future. That is where this finds me is in a
    situation--and I need JSF on its current schedule.
        What I worry about is getting into a cycle where I start
    buying more F-18s, therefore I need fewer JSF, therefore JSF
    costs more, therefore I buy fewer, and I end up far below what
    I need with that aircraft. So I have to seek a balance here and
    I do not know what that--I need to come back and tell you
    after, really after this program build, on exactly my
    assessment of that situation, particularly from a warfighting
    standpoint. That is what is really driving me here, combined
    with I have to consider the affordability issue.
        So that is where I am as we speak. It is a big concern and
    the answer at this point for me is not, do not just go buy more
    F-18s. I just do not know if that is exactly the right answer.
    Some more, yes, but within the affordability piece and with the
    critical path being I have to get to that JSF.
        Senator Talent. Fair enough. In other words, the
    accelerated depreciation, if you will, is causing some need for
    attrition aircraft, but right now you are not in a position to
    determine that, especially since you are looking not just at
    short-term operational impact, but the long-term affordability
    of JSF?
        Admiral Mullen. Yes, sir. We are working our way through,
    are there ways to make the F-18s more viable longer? That
    assessment is ongoing right now in terms of whether that is
    possible. It is a high priority issue for us and to some degree
    it is work in progress and I owe you more answers on that as I
    understand it better.
        Senator Talent. I want you to comment, Mr. Secretary, but
    it is a high priority. When we have crashes, we have a high
    priority. I cannot think of a thing that is higher.
        Secretary Winter. With the crashes I have two concerns, one
    of which is obviously the very unfortunate nature of those
    crashes and what we can do in the near term to try to get to a
    better safety record. This is a very high priority for me and
    we are putting a lot of attention on it.
        The other thing I am trying to understand in this is what
    is this telling us about the life-limiting characteristics of
    this airframe? Are there other mechanisms that we need to
    employ to be able to extend the life? Are there additional part
    inspections, replacements? What do we need to do? That is an
    ongoing investigation right now.
        Senator Talent. All fair enough. I want to thank all three
    of you for your service at a particularly crucial time for the
    security of the country. I am grateful that you are willing and
    able at working through all these difficult decisions.
        Thank you, Mr. Chairman.
        Chairman Warner [presiding]. Thank you very much, Senator.
        We will now go to another round of questions. I regret my
    absence, but I am working on something that is fairly critical.
    This is critical also, so I apologize. I just have to balance
    the timing of situations.
        I asked Senator McCain to go into the engine issue and I
    understand that he did that, this announcement by the
    Department to drop the second General Electric (GE)/Rolls-Royce
    engine after just having signed a $2.8 billion contract to
    continue it. I must say I have grave concerns, and consequently
    I initiated the steps to have this committee hold two extensive
    hearings at a time when we have more hearings than we have time
    for. But we are going to do it because of the importance of the
    possibility of perhaps as many as 3,000 of these aircraft being
    put into the inventories around the world.
        When I was privileged to be Secretary of the Navy, we had
    problems with the F-14 engine. I do not know if anybody around
    here remembers that besides myself. Fortunately, we were able
    to work our way through that. I have seated behind me--I do not
    know whether he is still here or not--a naval aviator who used
    to fly the F-14. He made in his tours of duty four carrier
    landings with just one engine going in that plane.
        Now, all of this is to say that, given the extreme
    importance of this aircraft not only to the United States but
    to our allies--and in the consultations I have had with the
    allies I feel that somehow they may not have been full
    participants in the decision to drop this engine. So I am going
    to give them the opportunity to express their views and that is
    scheduled, as I said, for next week.
        But the concept of a standdown of aircraft--all of us have
    seen where airplanes simply develop problems with their engine
    or other components and they have to standdown the fleet of
    aircraft, and that is a safety and operational measure. But it
    is important that those steps be taken, and to think that we
    would worldwide have to standdown up to 3,000 planes at some
    time to work on an engine problem--it just seems to me that a
    significant part of the inventory of 3,000 should be with the
    other engine so that they can remain operational in the event
    there is a problem with the first engines.
        Lastly, our relationships with our allies abroad are so
    important now as this industrial base in America continues to
    shrink because of the downsizing of our military over a period
    of 2 decades now, that we have to make sure that our partners
    overseas perceive that we are listening to them, working with
    them, taking into consideration their views in those matters
    where we are trying to jointly do programs. So enough said on
    that point.
        Admiral, the question before the Senate here is this United
    Arab Emirates (UAE) contract to manage some of our ports. I do
    not want you to get into the politics or the questions of the
    security of the ports, but this is a contract which has global
    ramifications, ramifications to our diplomacy abroad, our
    economic viability as a partner to work transactions with a
    number of nations, some of which want to come to our country,
    invest money, others that want to do joint contracts.
        I just think that this thing has to be handled in a very
    careful manner to show that we are treating the UAE as a full
    operating partner. The President has said they are a vital
    ally. In all the analysis that I have and indeed in
    consultations with senior military officers, it has been
    reaffirmed that they are a vital ally.
        But the Navy, in particular, has relied upon the UAE port
    facilities to take our carriers and a number of other ships,
    which they have been doing. I am told that possibly in the last
    calendar year there have been as many as over 500 ship visits.
    I hope I am not going over the same things that my good friend
    went over or maybe he did not touch on this. He was on the
    engine.
        But we have to get your professional judgment as to the
    ability to conduct these ship visits and conduct them in a
    manner where the ships are safe from terrorist attacks in their
    ports, where the sailors that go inland for whatever purpose as
    they disembark the ships for periods of time before reembarking
    and going out--just give us your military perspective of what
    the UAE has given and how the UAE ties into Qatar, where
    CENTCOM has its headquarters, Bahrain, another nation where the
    Navy--way back when I was Secretary we put in some of the
    facilities to care for our ships and now it is expanded--and of
    course with Kuwait.
        We cannot look at the UAE in isolation as it relates to our
    overall dependence really on their support in conducting
    operations in Afghanistan and Iraq. Equally important is to
    look into the future. In the war on terrorism it is essential
    that we strengthen in every way our ability to forward project
    our forces, our infrastructure, to deter terrorism in every
    instance we possibly can, and if deterrence fails then we have
    to resort to force of arms.
        We do need, in my judgment, these forward areas,
    particularly in the Gulf region. We need these four nations
    aligned with us in this war on terrorism.
        I just wondered if you would have a few professional
    observations. Step back from the politics. I do not want you
    involved in that. Just what is your professional view with
    regard to the importance of these, say, four nations in our
    current operations and the future operations as you foresee
    them on the war on terror?
        Admiral Mullen. Senator, I learned as a young naval officer
    that having allies around the world has always been critical,
    and places that we can go and engage. Certainly, in that part
    of the world and to speak specifically of Bahrain, where we
    have had naval forces there since the late 1940s and they have
    been a very important friend of ours for a long period of time.
    In my experience, and this is really my personal experience in
    recent years, having the access to a port like Jebel-ali, where
    our aircraft carriers go--and many other ships go there--and I
    think that is an accurate number that you cited. We have had
    many ship visits there.
        Chairman Warner. To the UAE?
        Admiral Mullen. To Jebel-ali in the UAE.
        We also use another port, Al-Fujeira. We have for years,
    and they have been very supportive.
        Chairman Warner. That is in the UAE?
        Admiral Mullen. That is in the UAE. In particular, our
    Military Sealift Command ships in and out of Al-Fujeira. So
    having that and support from other countries clearly that are
    in that region, Qatar and Kuwait, are all very important in my
    experience in terms of creating the kind of opportunities that
    we need to create in order to engage in whatever activity we
    think is important, and as you suggested certainly to support
    the global war on terror.
        Specifically with respect to UAE, they have been, again
    from my perspective, a good ally in that region from the Navy's
    standpoint for many years.
        Chairman Warner. I thank you, Admiral. I certainly
    associate myself with your views, and I am hopeful that this
    matter can be resolved in such a way that there is no injury to
    our relationships present and long-term in that region.
        I am going to yield to Senator Reed. You have not had an
    opportunity.
        Senator Reed. Thank you very much, Mr. Chairman.
        Thank you, gentlemen, not only for your testimony this
    morning, but for your service to the Nation. Both Admiral
    Mullen and General Hagee, that goes back to 1964 as plebes?
        General Hagee. As plebes, yes, sir.
        Senator Reed. So I cannot do the math, but it is
    impressive.
        General Hagee, some of this might have been covered. I
    apologize for my absence periodically. But what level of
    funding did you request for the most recent supplemental for
    the Marine Corps?
        General Hagee. We have covered it a little bit. We need
    $11.7 billion total.
        Senator Reed. For the reset?
        General Hagee. For the reset. What came over here was $5.1
    billion. As I testified to Mr. Levin, we could execute $6.1
    billion in this fiscal year.
        Senator Reed. Let me just be clear. This roughly $12
    billion is for reset of Marine Corps equipment principally?
    That is what your need is in the supplemental?
        General Hagee. That is correct, sir. The cost of war would
    be in addition to that and we project the cost of war for this
    fiscal year to be about $5.3 billion.
        Senator Reed. Just again, I want to get an understanding.
    This year you have an $11 billion bill for reset of equipment,
    and then you have an additional delta for personnel cost of
    war, operations tempo, et cetera. Are those costs fully covered
    in the supplemental or what are you missing in terms of
    personnel costs and equipment costs?
        General Hagee. Cost of war is completely covered in the
    supplemental. Out of the $11.7 billion, $5.1 billion is
    covered, the balance being deferred to fiscal year 2007.
        Senator Reed. What is the annual rate of accumulating these
    costs for equipment? Next year, if your operations are as
    intensive in Iraq and Afghanistan, you are going to incur
    costs. What are these costs?
        General Hagee. My sense is, Senator, that our burn rate
    right now is about $300 million a month, cost of war. Assuming
    that that does not change one way or the other, we will have
    somewhere around $5 billion next year in cost of war.
        Our total cost for reset right now is, as you said, just
    about $12 billion. Unless something significant happens, I do
    not see that going up significantly. Let me give you an example
    of what we are doing with some of those----
        Senator Reed. Is that an annual cost?
        General Hagee. No, sir. That is a total cost today to reset
    the Marine Corps, $12 billion.
        Senator Reed. Let me try and again to understand it. I
    guess the appropriate question would be, how much are you
    building up in this unfunded account? You say you can execute
    $6 billion this year. You have $5 billion. So roughly you have
    about $6 billion that is not being funded this year and that
    gets rolled forward. Next year, if you have $5 billion again
    how much more would you roll forward?
        In other words, are you going to keep going forward with $6
    billion a year unfunded?
        General Hagee. No, sir. No, sir.
        Senator Reed. Does it go up or down?
        General Hagee. My sense is it will stay just about where it
    is.
        Senator Reed. So, at this point, we are looking at an
    indefinite obligation of $6 billion. It is a contingency. We
    know it is there. We have to fund it eventually, and it is not
    funded; is that accurate?
        General Hagee. Accurate, but I think there needs to be a
    footnote there. Even if we had the $11.7 billion this year, we
    could not execute it.
        Senator Reed. I understand that. But I am saying we are
    looking at a hole that, if we do not keep putting supplementals
    up, if we do not keep funding at a level, and this is a rather
    robust level of funding, at some point the Marine Corps is
    going to have to go and look within its own budget lines to
    cover these costs?
        General Hagee. That is correct, sir.
        Senator Reed. Thank you.
        Senator Levin. Senator Reed, are you leaving that subject?
        Senator Reed. Yes, I am. Go ahead. I will yield.
        Senator Levin. If you do not mind, if you would yield just
    for two questions just to finish that subject, because we got
    into it with General Hagee before.
        I do not think you were here when he also said that it is
    not executable this year. He does acknowledge that about a
    billion dollars of that $7 billion is executable this year, but
    not in the supplemental.
        General Hagee. It is not in the current supplemental. It is
    deferred to next year, yes, sir.
        Senator Levin. Right. It is deferred, although it could be
    executed if the money were there.
        General Hagee. It could be executed this year.
        Senator Levin. That is one thing, just to finish.
        But there is one other question that you are probing. I
    would like to understand it myself. If the war ended tomorrow
    and if we brought home all the troops tomorrow, you still have
    $12 billion in reset costs, right?
        General Hagee. Yes, sir, that is correct.
        Senator Levin. But the war is not going to end tomorrow. So
    I am trying to understand what Senator Reed was going after.
    Since the war is not going to end tomorrow and there is going
    to be additional damage and wear to equipment, why would not
    that $12 billion go up? That is what I am trying to understand
    and I think what Senator Reed was getting after.
        General Hagee. I probably did not express it very well. It
    will not in my opinion. Unless the environment changes
    significantly, it will not go up dramatically. As I testified
    earlier, last year at this time we had two of our three
    maritime prepositioning squadrons down very low. That is
    because in the first couple of years of supplementals the rule
    set was that we could not use it for procurement. However, over
    the last 2 years we have been able to use it for procurement
    and so we have completely refitted one maritime prepositioning
    squadron, we are in the process of refitting another one.
        I do not see us using those right now, based upon how I see
    the future. So the total reset of $11.7 billion, which is a
    large amount, yes. Will we continue to expend equipment over
    there? Yes, sir, we will. Will it be as dramatic as it has been
    over the past couple of years? No. Because the rules are such
    now that we can use the money for procurement, we do not have
    this big bow wave in front of us.
        Senator Levin. It is in the regular budget. Your reset
    costs are now in your regular budget request?
        General Hagee. Not from the war.
        Senator Levin. I am not going to interrupt Senator Reed any
    longer, but I still do not understand how that $12 billion does
    not grow. It may grow at a slower rate.
        General Hagee. It will grow at a slower rate. It will grow
    at a slower rate.
        Senator Reed. Again, I asked the question because it is
    kind of difficult, given the supplemental appropriations,
    bridge funds. But my sense is that we know if you stopped
    everything now you would have a $12 billion reset cost.
        General Hagee. Yes, sir.
        Senator Reed. We have applied $5 billion in the
    supplemental, got it down roughly to about $6 billion. Are you
    assuming that next year, if the war goes on, you get another $5
    billion? Is that part of your assumption?
        General Hagee. I am assuming with the war going on we would
    get cost of war----
        Senator Reed. Reset costs?
        General Hagee.--and reset costs, yes, sir.
        Senator Reed. So I think implicit in this is that every
    year you are assuming $5 billion, so the delta, the missing
    money, is this $6 billion that is not funded today. It is
    catch-up.
        General Hagee. It is catch-up, but, as I said, the reset
    cost will go down because we have $12 billion right now. It
    will be another $6 billion because we have a bow wave. But
    there will not be another $6 billion on top of that.
        Senator Reed. Thank you.
        Let me ask another, related question. That is, in previous
    supplemental funding has the timeliness in the release of these
    funds to the Marine Corps fully supported your needs? Are there
    checks in the mail that you need to get in your hands?
        General Hagee. The timeliness has presented us some
    challenge, sir. If I could just speak to this year----
        Senator Reed. Yes, sir.
        General Hagee. We will run out of bridge supplemental
    somewhere around the end or the middle of April. We can forward
    fund for about 30 days and if the full supplemental is not
    passed by that time then we will have some significant
    challenges.
        Senator Reed. Let me change this topic slightly,
    Commandant. The Secretary of Defense directed the Marine Corps
    to establish a component under special operations, and I think
    this is obviously a logical effort, given the threats that we
    face today in the world. But there are some issues, I think.
        MARSOC, as I understand it, was activated last month. We
    all know it takes a long time to create a force, to grow it, to
    develop it. How many marines do you currently have at MARSOC?
        General Hagee. Currently right now, probably a couple
    hundred.
        Senator Reed. A couple hundred.
        General Hagee. That is close.
        Senator Reed. What is the projected planning, fully
    operational?
        General Hagee. Around 2,500 to 2,600.
        Senator Reed. How long do you think it will take to get to
    that?
        General Hagee. My sense is that we will be very close in
    fiscal year 2008, maybe into fiscal year 2009.
        Senator Reed. We have had discussions all morning long
    about end strength. Are these marines accounted for in that end
    strength number? Are you going to have to take these marines
    out of your hide from maneuver units and deployable units to
    fill this?
        General Hagee. Sir, a combination of capabilities. One
    example where we would not replace the marines, in other words
    reconstitute that capability, would be our foreign military
    training unit. We stood that up last year. These are teams of
    marines that can go and train foreign militaries at the
    tactical level. We are taking that capability and moving that
    down to SOCOM. They can work with their Green Berets down
    there. We will not reconstitute that capability.
        With other capabilities like signals intelligence and
    intelligence analysts, we will have to reconstitute those
    capabilities.
        Senator Reed. Very good.
        With respect to embassies, do you have increased force
    protection requirements that will require you to put more
    marines there? Again, are these marines in your budget any
    place?
        General Hagee. The marines in the embassy are paid for by
    the State Department.
        Senator Reed. So you are fine in that regard?
        General Hagee. Yes, sir.
        Senator Reed. My time is expiring, but I do not want to
    discriminate in favor of the Marine Corps and against the Navy,
    so I will ask the CNO a few questions too. Mr. Secretary and
    Admiral Mullen, the Navy has been on a downward slope in terms
    of end strength. Authorized strength has really been
    significantly reduced from 2003 to 2006, by about 23,000
    sailors.
        Now you are looking at taking reservists out of the end
    strength numbers and it raises the question, I think, whether
    this at some point will impact on the Navy's ability to
    operate. So can you comment, Admiral, in terms of naval end
    strength?
        Admiral Mullen. Yes, sir, and it is a fair question. The
    2007 budget is the fourth year of roughly 10,000 a year. 2007 I
    think has 12,000 in it. I am comfortable with the gradual
    decline from what was 382,000 down to about 340,000-342,000. If
    you looked in my program in the out years, it is flat at
    336,500.
        As I said when I testified for confirmation, I have three
    things I am focused on: keeping the readiness up, getting the
    balanced fleet built in the fleet for the future, and the third
    piece is the right manpower and personnel strategy. So over the
    course of the next 12 months, what I need to determine on the
    Active and the Reserve side is what is the right number.
        We are coming down from a Reserve Force as well to about
    58,000. At least that is the target right now. But what we
    request doing internal to Navy is looking at this from a
    capabilities standpoint and literally what are the numbers that
    we need. Before I come down any further on either of those
    marks, I have to really understand that.
        So my goal is to be able to sit here a year from now,
    determine the number, and then defend it specifically because
    of the capabilities that we have. That is where we are in the
    process.
        Senator Reed. One final question, Admiral Mullen, and that
    is the supplemental--and you might have covered this before--
    does it meet all your needs and is there a shortfall that you
    requested in the supplemental and were denied, or you would
    have wished you could have gotten in even if it was not an
    explicit request?
        Admiral Mullen. Sir, the supplemental, which for Navy is
    about $7.5 billion and as we have tried to do each year, it
    focuses on what we see out there. From that standpoint, it
    supports where we are going.
        But not unlike the discussion that you just had with the
    Commandant, for us--and it goes to Senator Talent's question as
    well about F-18s--I am looking internally at where clearly we
    need to recapitalize in the future based on some of the high
    usage items that I have, in addition to items which are wearing
    out, like P-3s, and how I make that work in the future.
        That is not embedded in the supplemental, but it is
    something I am pressing inside the Navy right now and want to
    look at for the future.
        Senator Reed. Would you also agree with the Commandant with
    respect to potential cash flow problems if the supplemental
    does not----
        Admiral Mullen. For me it is later in the year. I am in
    August as opposed to March-April.
        Senator Reed. I am going to wait until Senator Levin or
    Senator Warner returns. They might have additional questions.
    But let me ask this question. I was out in Iraq my seventh time
    about a month ago, and visited two provincial reconstruction
    teams (PRTs) out of the three in Mosul and al-Hillah. I am
    interested in your comments, Admiral Mullen, that now the Navy
    is going to lead these teams that are going forward, or at
    least some of these teams, which I think is a wise use of
    resources.
        But there is an issue, I think, that is appearing with
    respect to the security of these teams by DOD. Are you involved
    with that? I mean, there is some question of whether the
    military is going to provide force protection, or whether it is
    private security contractors or whether it is just still up in
    the air. Without good security, these PRTs will be inhibited.
    So could you comment on that?
        Admiral Mullen. Sir, I have not been involved in the
    security aspects of the 12 U.S. PRTs in Afghanistan.
        Senator Reed. Oh, I am sorry. Forgive me.
        Admiral Mullen. That is a commitment to basically pitch in
    there. But there also is a selfish motive here. I am sending
    some of my best people into those jobs and I think that we will
    learn as an institution a great deal, not just about what is
    going on now, but about the future. So from that standpoint
    that is a really important piece here.
        We are working through--as I talked earlier--about the
    number of sailors who are on the ground in Iraq and in other
    places, and we have worked through and, to the great credit of
    both the Army and the Marine Corps, but particularly the Army,
    has worked hard to help us train those people before they get
    ready to go in--train and equip them so that they have what
    they need going in there. So I am not specifically involved in
    the PRTs in Iraq.
        Senator Reed. Thank you very much and thank you for that
    clarification. I must say, when I was visiting there, my 43rd
    Military Police Brigade of the National Guard is in charge of
    the facility and when they showed me the chart, which became
    more purple with each month going forward with Navy and Air
    Force operating under the command of an Army military police
    brigade, I will confirm your testimony.
        Thank you very much, gentlemen.
        Chairman Warner [presiding]. Senator Levin.
        Senator Levin. Thank you.
        Secretary Winter, I want to raise with you the issue of
    incremental funding of our ships. The 2007 shipbuilding request
    for DD(X)s includes incremental funding to build two lead ships
    in the same year. Now, there are two problems with this. One is
    the incremental approach problem, which is a bad precedent
    generally. We have tried to avoid it. We have made a rare
    exception, but it creates a lot of budgeting problems
    downstream. It commits future year budgets in ways that we have
    tried to avoid. That is number one.
        But number two is the history of having problems when you
    have the first ships built simultaneously and you cannot get
    the advantage of learning from the first lead ship. There is
    experience with that. When we last built more than one ship of
    a class in the first year of production, which was in 1970, we
    ordered three SSN-688 attack submarines. Two shipyards
    experienced major difficulties in starting the program. The
    Navy had to pay for those difficulties several times over.
        Now, why are you proposing to use incremental funding for
    these two combatants, number one? Number two, why do you want
    to undertake the risk of not having the advantage of learning
    from the first ships' shipbuilding?
        Secretary Winter. Senator, if I could answer those in
    inverse order perhaps, because the question of the dual lead
    ships really leads us to the question of how to fund the dual
    lead ships. There are two factors that really have to be
    balanced here, one of which is associated with the ability to
    capture lessons learned from a first lead ship into the second
    ship being built in a second yard, versus the advantages
    associated with the competitive factors that occur when you
    have two yards both building a ship of a given class being able
    to engage in competition, which for a program of record of
    seven ships is going to result in one yard at least building
    one more ship than the other yard. So there is a significant
    competitive factor there that we are able to take advantage of
    by having the two yards operating on an even keel, if you will,
    where both of them are proceeding at a constant pace from a
    given start.
        This situation is a bit different, I believe, from the 688
    class in the sense that both yards are involved in the design
    activity and there has been extensive effort put in to ensure
    that the data communication between the two yards is maintained
    during the design process and will be maintained during the
    construction process.
        Further, I will tell you that in the attempts that I have
    made to try to see the cost savings as we go from a first lead
    ship to a second ship cross-yard, in other words a first lead
    ship in one yard and the second ship in another yard, I cannot
    find a good story there that says that there is a significant
    savings associated with having that second ship in the second
    yard trail the first ship.
        So that gives us the question of how much savings we would
    really get from going to a staggered start, absent the
    competitive factors. The competitive factors are what we are
    banking on right now to try to drive the cost of this ship
    down. That is something that we really want to see happen. We
    want to see the two yards motivated to make the investments in
    terms of the capital, in terms of the process improvements, and
    in terms of the personnel that are going to be engaged in
    building these ships.
        Once we get to that point of saying that we would like to
    go to a dual lead ship approach, the question then becomes one
    of how do we avoid perturbing the budget, the Shipbuilding and
    Conversion, Navy (SCN) account, in a material way, given the
    significant costs that would be incurred without incremental
    funding. Quite frankly, that is the reason why we went to the
    split funding concept. It was to even out the account over the
    2 years. We do not view this as a precedent-setting activity
    and we do recognize that such activities should be engaged in
    only in rare exceptions.
        Senator Levin. I do not know how you avoid setting a
    precedent, I have to tell you. You can say it is not a
    precedent, but I do not know why it will not be cited as a
    precedent in the future. So I am glad you are taking the
    position it is not going to be considered one, but I do not see
    how you prevent the obvious from happening.
        Secretary Winter, the Navy has proposed to replace nuclear
    warheads with conventional warheads on two D5 Trident sea-
    launched ballistic missiles on at least some and possibly all
    of the 14 Trident submarines. Now, this creates some real arms
    control issues because of the ambiguity which is going to exist
    as to whether or not a missile is a conventional missile or a
    nuclear missile.
        We have avoided those kind of ambiguities in the past, but
    when you are talking about missiles rather than airplanes,
    since an airplane is recallable and a missile is not, you are
    talking about a very potentially dangerous situation. Have you
    consulted with the arms control experts both in the DOD and at
    State on the Strategic Arms Reduction Treaty implications of
    this proposal?
        Secretary Winter. I have not, sir. I believe this is an
    issue that is properly the responsibility of Strategic Command
    (STRATCOM) and would respectfully request that any further
    discussions along these lines include STRATCOM, and preferably
    in a closed session.
        Senator Levin. Just a couple more questions. Admiral, the
    Navy has a Joint Unmanned Combat Air System which is underway.
    Now, how is that going to be affected by the Air Force's
    program cancellation?
        Admiral Mullen. We mutually agreed to moving forward in
    these programs as they exist in the 2007 budget. I have spoken
    with General Moseley about this. First of all, the Navy is
    committed to get this unmanned system right for the future in
    terms of the carrier capability, and General Moseley has
    committed in our discussions to certainly share from a joint
    perspective his development as it matures over time.
        Senator Levin. Thank you.
        Secretary Winter, there have been some continuing cost
    problems with the program to buy new utility helicopters and
    attack helicopters to replace the existing fleet of those
    systems. There have been some problems with the cost, as I have
    indicated. Have those problems been successfully addressed?
        Secretary Winter. Senator, I am not satisfied that we have
    addressed those problems adequately. There is an ongoing 30-day
    study being conducted under the auspices of the Assistant
    Secretary for Research, Development, and Acquisition. That is
    taking a look at both the extent to which the current
    contractor has been able to address the issues that you have
    raised as well as taking a look at programmatic alternatives.
        Senator Levin. Will you you keep us informed?
        Secretary Winter. Most definitely, sir.
        Senator Levin. Finally, General, there are a number of
    Marine acquisition programs which saw a decrease in the 2007
    budget request as to what was programmed in the FYDP in 2006
    for 2007. That was probably confusing the way I stated it, but
    it was expected that there would be more money for these
    acquisition programs just last year than turns out now to be
    the case in the 2007 budget request.
        The High Mobility Rocket System was programmed last year
    for $213 million in 2007, but now the budget request for 2007
    asks for about one-quarter of what we said that program was
    going to be funded at just last year. So can you comment on
    what the reason is for the reduction? Is it higher priority
    programs and, if so, what are those higher priorities?
        General Hagee. It is really balancing the entire program
    against the fiscal environment. Senator, we have to make
    choices all the time on priorities. I am not sure that I can
    identify one program as higher priority than the other. Given
    the money that was available and the fiscal environment, we
    feel comfortable with the budget that was submitted over here.
        Senator Levin. Thank you.
        Thank you, Mr. Chairman.
        Chairman Warner. Thank you, Senator Levin.
        On the question of IEDs, in 2003 the Army created the IED
    Task Force in recognition of this growing threat and I think
    they did some very fine work. Subsequently, because of the
    seriousness and the depth of this problem, I wrote to the
    Secretary of Defense and suggested that this office be enlarged
    and upgraded in rank, and I think pretty much at the same time
    he was considering that proposition and it was done. I commend
    the Secretary of Defense for that step.
        But I am just concerned now that it has expanded to a four-
    star rank, and I commend the officer who came back from
    retirement to take that on. I do not want to see the valuable
    contributions that have been made by the Marine Corps and the
    Navy throughout this process in any way be given less than full
    opportunity to go on. I note with interest that the Office of
    Naval Research (ONR) will spend $15 million per year from 2006
    to 2011 on long-term IED work. In addition, the Naval Research
    Laboratory (NRL), an organization I was privileged to be in a
    half century ago, is reportedly investing $15 million from 2005
    to 2007 in long-term IED projects. Now, those are two of the
    Navy's finest and most able organizations. I know that the
    Marine Corps has its own organization down at Quantico that is
    working on this.
        I am just going to ask that both of our senior officers
    under the supervision of our distinguished new Secretary, watch
    this situation and make sure that the Navy and the Marines
    continue to have input into this situation. Have you made any
    judgment thus far with the new four-star office as to whether
    you are still considered partners in this?
        General Hagee. Yes, sir, we absolutely are. I have had
    several conversations with General Meigs.
        Chairman Warner. He is the new four-star?
        General Hagee. He is the new four-star. I knew him
    previously.
        Chairman Warner. Technically, he is an old four-star that
    has come back to regain his position.
        General Hagee. But he still has the energy of a second
    lieutenant.
        Chairman Warner. Yes, I know.
        General Hagee. He is the right individual for that job.
        We are continuing to go forward looking at various
    technological solutions. We are coordinating very closely with
    his task force and I have talked with him several times since
    he came on board. So I can give you my assurance that we are
    going to do that, plus we are going to coordinate with him.
        Chairman Warner. CNO?
        Admiral Mullen. Sir, I have Seabees doing combat duty and
    providing protection--not just Seabees that are being
    convoyed--and have been very engaged to make sure that we have
    the right training, the right gear, et cetera.
        I mentioned earlier from a technical standpoint we have
    some of the leads in the country on explosives. You have
    mentioned NRL and ONR as examples. I have a one-star who is
    assigned to the technical lead of this. I spent a fair amount
    of time personally when I was there with Joint Task Force (JTF)
    Troy, which is the task force in Iraq that is overseeing this,
    and General Meigs was the first person I met with when I got
    back. So this is killing our people and I am indebted.
        Chairman Warner. Thank you very much.
        Mr. Secretary, I hope that you find time to monitor this
    program in your capacity.
        Secretary Winter. Most definitely, sir. This is an area of
    extreme importance and interest. It is an area that I focused
    on on my trip over to Iraq. It is an area that I really do
    believe needs some very good focused attention and systems
    engineering. This is a complex problem with multiple parts.
        Chairman Warner. They draw on your background.
        Secretary Winter. Yes, sir.
        Chairman Warner. That has been your life's work, systems
    engineering.
        Secretary Winter. Most definitely, sir. I appreciate the
    opportunity to engage on this and I have been trying to make
    sure that we are bringing the proper experts into the area, not
    just in terms of the specific technical disciplines and areas
    of specialty, but also the overall integration of those
    activities into an appropriate response.
        Chairman Warner. Thank you. Thank you, gentlemen.
        Last, the riverine force. Yesterday I told the Deputy
    Secretary of Defense, Gordon England, of my pleasure to see
    that the Naval Expeditionary Combat Command is being formed,
    29,000 sailors strong, which includes the riverine force.
    Admiral Mullen, could you describe your vision for this
    requirement and how it originated and what you see its future
    to be? I am very pleased and supportive of it.
        Admiral Mullen. I think it is a very important capability
    that we need to develop for the future. Also, as an
    organization it will capture the 30,000 sailors or so that we
    have in existence--the Seabees, our explosives personnel, and
    our security personnel. Pre-September 11 we had about 1,000
    master-at-arms, security force personnel, in the Navy. We now
    have over 10,000. We did not have an organization that was
    solely focused on these kinds of capabilities and so that is
    one of the reasons we stood that up.
        We have embedded in that this new riverine force which we
    are developing and will develop over the next couple of years--
    3 squadrons at 12 boats per squadron. We think that is really
    important. Senator McCain talked of being in close to shore and
    having littoral ships in addition to the LCS, having forces
    which will make a difference in the future, not just to fight
    but to engage in places around the world.
        So I am excited about this. We actually will relieve the
    Marines in the security of Haditha Dam in Iraq north of Baghdad
    1 year from this month. We are committed to that. That will be
    the first mission that we execute with this squadron. To be
    fair--I would like to say it was my idea--it was Vern Clark's
    idea. I liked it. He showed it to me when I got here. I liked
    it, and he sent out the execution order, if you will, and it is
    a concept for which I am fully on board.
        Chairman Warner. I am delighted that it was Admiral Clark,
    who was a most distinguished CNO. I enjoyed my work with him
    over the years. He began the focus with the littoral concept
    with the new littoral ships, because he recognized that
    terrorism has no boundaries and very often no state
    sponsorship. We have to have small, highly-trained units to
    take them on wherever we find them.
        Gentlemen, I have thoroughly enjoyed this hearing. I
    apologize for the intermittent periods I had to deal with
    another problem. But I wish you well.
        Senator Levin, do you have anything to say?
        Senator Levin. No, thank you.
        Chairman Warner. Thank you very much. The hearing is
    concluded.
        [Questions for the record with answers supplied follow:]
                   Questions Submitted by Senator John Warner
                    forward basing attack submarines in guam
        1. Senator Warner. Admiral Mullen, the Navy has announced that it
    will focus 60 percent of the attack submarine force on operations in
    the Pacific, and the recent force structure study makes aggressive
    assumptions regarding Guam-based submarines in determining the size of
    the submarine force. What is the Navy's plan for basing additional
    attack submarines in Guam?
        Admiral Mullen. The Navy plans to homeport three attack submarines
    in Guam. Presently, two attack submarines, the U.S.S. City of Corpus
    Christi (SSN 705) and U.S.S. Houston (SSN 713) are homeported in Guam.
    The U.S.S. Buffalo (SSN 715) will shift her homeport to Guam in fiscal
    year 2007. The Navy's Force Structure Assessment assumed three attack
    submarines were homeported in Guam. This is a sufficient number to meet
    both warfighting and peacetime presence requirements.

        2. Senator Warner. Admiral Mullen, what assessments are being
    conducted to address vulnerabilities, facilities, and quality-of-
    service to support additional forward-based submarines?
        Admiral Mullen. The Navy is in the process of developing a global
    submarine infrastructure plan (GSIP) covering the next 25 years.
    Embedded within the GSIP are assessments that address facilities, force
    protection, and quality of service for the submarine force worldwide.
    All submarine homeports, ports of call, maintenance and repair
    facilities, and crew swap locations will be included in the plan. The
    GSIP will enable the Navy to better manage the submarine force ashore
    infrastructure both at home and at forward bases for years to come.

                         marine corps lift requirements
        3. Senator Warner. Admiral Mullen and General Hagee, the last
    Marine Corps lift study dates to the 1990s, and defined a forcible
    entry requirement to support three marine expeditionary brigades
    (MEBs)--subsequently ``fiscally constrained'' to two and a half
    brigades. The Navy's program for the past decade has called for 12
    expeditionary strike groups (ESGs) with sufficient warfighting
    capability and survivability features to ``storm the door,'' to provide
    this lift. Today's plan reduces to nine ESGs while bolstering sea-based
    forces.
        Significant changes have occurred to the ships, the assault craft,
    the force structure, and the operating concepts since the last
    definitive lift study, however, the lift requirement does not appear to
    have changed. Does the Department plan to update this lift study to
    define forcible entry requirements for the expeditionary force, or does
    the reduction from 12 to 9 expeditionary groups represent an unfunded
    requirement?
        Admiral Mullen. The Department of the Navy (DON) Lift II study to
    which you refer was done against a range of specific threats, and is
    dated. Since that study was completed, DON has continually evaluated
    total lift requirements for the expeditionary force for forcible entry,
    as well as lesser missions accomplished by forward presence forces.
    There is currently no plan to update the DON Lift II study. The maximum
    requirement for forcible entry is seen today as being 2.0 MEBs. This
    reduced lift requirement, as well as the demand for forward presence,
    is currently being met with the present inventory of 34 amphibious
    ships and does not represent an unfunded requirement. The current
    shipbuilding plan will also support these requirements.
        General Hagee. Building upon the DON Lift II study, the Navy and
    Marine Corps are jointly conducting a seabasing capabilities study to:

             1. Inform U.S. Navy (USN) and U.S. Marine Corps (USMC) force
            structure and force posture requirements for seabasing upon
            current force structure decisions, and identify necessary
            supporting requirements through the 2024 timeframe.
             2. Inform USMC and USN program objective memorandum (POM)
            decisions on force development and investment regarding
            seabasing well beyond the Future Years Defense Program (FYDP)
            (up through the 2024 timeframe).
             3. Integrate joint capabilities and requirements, where
            applicable, identified in the seabasing joint integrating
            concept (JIC) capabilities-based assessment process.

        This study will be conducted within the context of OA-06, the
    seabasing JIC, and other related studies/concepts, and will be based
    initially on a designated force structure and posture for amphibious
    and prepositioning ships through 2024. After analysis of the baseline
    force structure and posture, the study will explore alternative force
    postures, concepts of operations (CONOPs) and other possible solutions
    to address the gaps or excesses, within the constraints of the baseline
    force structure.
        Based on the Strategic Planning Guidance and the National Defense
    Strategy, the current force-sizing construct requires the capability to
    respond to two swiftly defeat the efforts (SDTE), each of which
    requires a MEB size force. One of these crises may become a decisively
    defeat campaign, bringing our most powerful force, the Marine
    Expeditionary Force, to bear, for highly capable, lethal, mobile and
    sustained operations. In support of joint forcible entry operations,
    the Marine Corps requires 30 operationally available amphibious ships,
    of which 10 must be operationally available big-deck aviation-capable
    ships to support two MEB assault echelon (AE). In reference to the ESG
    discussion in the question above, 30 operationally available amphibious
    ships can form 10 ESGs. The Marine Corps does not have an ESG unfunded
    requirement.

                                   seabasing
        4. Senator Warner. Admiral Mullen and General Hagee, the seabase
    has long been an element of the Navy's SeaPower 21 vision, and has
    emerged in this FYDP as one of the centerpieces of the future force.
    The seabase is essentially a high-order expeditionary ``system-of-
    systems''. How is the Department structured to manage the development
    and procurement of the seabase to ensure the range of end-to-end
    capabilities are fully integrated and also support joint operations?
        Admiral Mullen. The Deputy Chief of Naval Operations for
    Integration of Capabilities and Resources determines warfighting
    capability requirements, including those associated with joint
    seabasing, using the Navy capability development process. This process
    involves rigorous analysis driven by Strategic Planning Guidance. This
    organization integrates and prioritizes these requirements to ensure
    that naval capabilities are developed, as well as ensuring joint issues
    are addressed.
        The Navy is also sponsoring the Seabasing JIC through the Joint
    Capabilities Integration and Development System (JCIDS) process to
    ensure platforms associated with the seabasing concept are developed in
    a joint, integrated context. Maritime Prepositioning Force (Future) and
    programs such as the Joint High Speed Vessel, the Joint High Speed
    Ship, and the Joint Modular Intermodal Containers, each at various
    stages of development within JCIDS, are examples of our efforts to
    ensure seabase joint interoperability.
        General Hagee. The Marine Corps has established a Joint and
    External Matters Department at the Pentagon and a Seabasing Integration
    Division (SBID) located at Quantico, Virginia, under the auspices of
    the Deputy Commandant for Combat Development and Integration to meet
    these requirements. Their functions consist of:
        Joint and External Matters Division (Pentagon):

             Support the Deputy Commandant for Combat Development and
            Integration (DC, CD&I).
             Represent DC, CDI on the Headquarters, Marine Corps (HQMC)
            staff, the Office of the Chief of Naval Operations (OPNAV)
            staff, the Army and Air Force staffs, the Joint and Office of
            the Secretary of Defense (OSD) staffs in matters related to the
            development of operational concepts and required combat
            capabilities for the Marine Corps.
             Facilitate, coordinate, and synchronize Marine Corps CONOPs
            and combat development activities with the joint, naval, and
            inter-Service combat development processes.
             Ensure proper consideration of Marine Corps CONOPs,
            requirements, and capabilities in the development of joint,
            naval, and inter-Service combat capabilities.
             Support the Assistant Commandant of the Marine Corps (ACMC)
            in his capacity as the Marine Corps representative to the Joint
            Requirements Oversight council (JROC).

        Seabasing Integration Division (Quantico, Virginia):

             Ensure Marine Corps amphibious program requirements and
            capabilities are effectively communicated and coordinated with
            the OPNAV staff and platform program managers. To this end, the
            SBID maintains engagement with the OPNAV resource sponsors and
            platform program managers to support and influence all JCIDS-
            related working groups, analyses, and documents. In support of
            this goal, SBID effectively communicates Marine Corps
            amphibious requirements in public and private venues that range
            from local briefs to visiting international officers to
            congressional staff and three/four star level officers within
            the Department of Defense (DOD) and DON.
             Develop future Marine Corps seabasing warfighting
            requirements and collaborate with naval capabilities
            development process Seapower 21 pillars (Sea Strike, Seabasing,
            Sea Shield, and ForceNet) to ensure OPNAV resource sponsors
            understand and accurately convey those requirements to
            appropriate platform program managers.
             Represent the Deputy Commandant for Combat Development and
            Integration on all seabasing-related joint doctrinal matters,
            including amphibious warfare ships, prepositioning ships, and
            other craft/connectors.
             Ensure the Marine Corps is appropriately supported by the
            Navy's Long-Term Plan for Shipbuilding (30-year plan) and is
            capable of accomplishing title 10 mandated amphibious
            warfighting functions.
             Represent the Marine Corps in OSD, joint, naval, combatant
            commanders, and operating forces fora in development,
            experimentation, and refinement of Marine Corps Seabasing
            capabilities.
             Integrate future and evolving seabasing concepts with
            identified capabilities, requirements, and supporting programs
            to synchronize Marine Corps initiatives and shape naval and
            joint seabasing-related initiatives within the JCIDS process.
             Coordinate with OPNAV resource sponsors and platform program
            managers to support JCIDS-required functional area/needs/
            solution analyses (FAA/FNA/FSA), and initial capabilities
            document (ICD), Capability Development Document, and Capability
            Production Document development.

                              fleet response plan
        5. Senator Warner. Admiral Mullen, the Navy's future force
    structure relies heavily upon the effectiveness of the Fleet Response
    Plan (FRP). This initiative has shown great promise, but as reported by
    the Government Accountability Office (GAO) in November 2005, there are
    concerns regarding the management plan governing the FRP. How does the
    Navy plan to address the GAO's concerns; specifically, to establish
    readiness goals for the FRP, and to regularly stress test (``no
    notice'' evolutions) and evaluate the FRP to ensure readiness for surge
    and surge-sustained operations?
        Admiral Mullen. The Navy has reviewed the GAO report and concurs
    with most of the findings. Specifically, the Navy is in the process of
    developing guidance, performance measures, and a methodology to
    determine FRP efficiencies to provide the properly sized and trained
    force to meet mission tasking. We continue to expand the FRP to include
    all Navy forces in order to adapt the concept to meet the challenges
    associated with the war on terror and global maritime security issues.
        The Navy intends to create adaptive and dynamic force packages that
    can be scaled in size and level of training to meet operational demand
    across the spectrum of conflict.
        Under this construct, for example, if a force of two or three ships
    and embarked detachments is required for low risk missions, those ships
    or detachments would train to the specific levels of proficiency
    required, vice conducting a fully integrated workup. Our ``high end''
    forces, carrier and ESGs, would still train to the level of proficiency
    needed to conduct major combat operations.
        The Navy disagrees with the GAO report's recommendation to conduct
    no notice surges to test the construct. The Navy has already monitored
    all ``surged'' forces in the last 18 months and captured critical
    lessons learned, including those related to the FRP response to
    hurricanes on the Gulf Coast. Additional ``no notice'' surges to prove
    the operational construct would compete with operating funds needed to
    respond to crisis or real-world tasking. That having been said, I
    remain committed to ensuring a ``surge capable,'' rotational, flexible
    yet unpredictable Navy that applies flexible force packages to achieve
    desired effects through the world.
                                     ______

                   Questions Submitted by Senator John McCain
                               acquisition reform
        6. Senator McCain. Secretary Winter, one of the recommendations of
    the recently released Defense Acquisition Program Assessment (DAPA)
    report is to establish a new acquisition command lead by a four-star
    general or flag officer for each Service, who would report to the
    Service Chief and Senior Acquisition Executive of the military
    department. What are your thoughts regarding the recommendations of the
    DAPA panel, especially on the recommendation to create this new general
    or flag officer position?
        Secretary Winter. The Office of the Secretary of Defense (OSD) is
    currently evaluating the DAPA panel recommendations in conjunction with
    the Quadrennial Defense Review (QDR) recommendations. The Navy and the
    other Services are supporting OSD in this process.
        In enacting acquisition reform, we should ensure that any changes
    to the current law not create undesirable side effects, such as a more
    cumbersome bureaucracy, higher costs, or longer development and
    procurement times. Furthermore, it is my belief that within the current
    structure, there are a number of changes that may be made to promote
    the collaboration of senior uniform leadership and acquisition
    officials in efforts to control requirements, provide stable resources,
    and expand the use of specific contract incentives to produce the best
    value for the taxpayer. These changes should be explored as a first
    step towards acquisition reform.

        7. Senator McCain. Secretary Winter, Dr. John Hamre of the Center
    for Strategic and International Studies advocates for the Service
    Chiefs to have a greater role in the acquisition process. The Service
    Chiefs now have responsibility for the budgets and requirements
    generation process; how will adding the Service Chiefs into the
    acquisition process control costs and reduce delays?
        Secretary Winter. The Service Chiefs must work with the acquisition
    community to ensure stability of funding, controlled requirements
    growth, and an optimum investment strategy.
        This collaboration of senior uniform leadership and acquisition
    officials in the effort to control requirements, provide stable
    resources, and expand the use of specific contract incentives will
    produce the best value for the taxpayer.
        It is my belief that within the current structure, there is
    opportunity to significantly enhance the involvement of the Service
    Chiefs in the acquisition process.

        8. Senator McCain. Secretary Winter, what are your impressions on
    the DAPA panel recommendation to fix the service acquisition executive
    at a two-term 10-year position?
        Secretary Winter. It has become difficult to recruit leaders of the
    appropriate experience and proven performance to serve in acquisition
    positions within the DOD. It is very unusual in the private sector for
    senior executives to spend 10 years in any position due to the impact
    on future career options.
        Uncertainties due to the changing of administrations and the
    generally lower compensation for these positions serve to further
    increase the recruiting challenge and would make such a term
    unattractive. While a 10-year position may seem to offer improved
    stability to the acquisition process, my experience leads me to believe
    individuals would be either unwilling or unable to agree to remain for
    such a long term of service in these demanding positions given personal
    considerations and other competitive pressures.

        9. Senator McCain. Admiral Mullen and General Hagee, the QDR stated
    that the DOD focused on delivering needed capabilities to the joint
    force more rapidly by fashioning a more effective acquisition system
    and associated set of processes. One of the DAPA recommendations is to
    integrate the combatant commanders (COCOM) more fully into the
    acquisition process. What are your thoughts regarding the increased
    role of COCOM in the acquisition process?
        Admiral Mullen. I believe the Services must respond to the
    capability and capacity demand signals generated by the COCOM and their
    component commands. It is therefore vital that feedback from the COCOMs
    be considered in our planning, programming, budget, and execution
    process. I do not see this representing as much an ``increased role''
    in the process as perhaps a need for the Services to be more attentive
    and responsive to COCOM input.
        General Hagee. We absolutely want input from the regional COCOMs to
    help inform our decisionmaking. We also use the strategic underpinning
    for our future from the administration, Congress, the DOD, and other
    Government agencies to inform and help shape our decisions. But
    ultimately, we must fulfill our obligation to our Nation to provide a
    Corps of Marines that is ready to perform COCOMs assigned missions in
    any region of the globe.
        As a Service, we are responsible to support multiple COCOMs. We
    have embraced the Defense Department's transformation program by
    transitioning from requirements based planning to ``capabilities based
    planning'' utilizing a top down approach starting with DOD guidance (to
    include strategic planning guidance and joint planning guidance) and
    integrating the needs of our COCOMs into our combat development process
    through their respective integrated priority lists (IPLs).
        Our recently revised combat development process emphasizes the need
    to ``map'' our current and future capabilities development activities
    to both the joint fight (supporting COCOMs requirements) and our title
    10 responsibilities with respect to manning, training, and equipping
    our Corps to be most ready when the Nation is least ready. In doing so,
    we can readily tie national strategies, joint war plan requirements
    (articulated by the COCOMs), and our Service requirements to materiel/
    nonmateriel solutions with respect to our acquisition and combat
    development activities. Although indirectly involved in Service
    acquisition activities, our Nation's COCOMs have great influence in
    guiding and providing input to our combat development activities.

        10. Senator McCain. Admiral Mullen and General Hagee, what are your
    recommendations of how the Department should develop and address joint
    requirements?
        Admiral Mullen. I believe that the JROC and the JCIDS process
    adequately address the development of joint warfighting capabilities
    for the Services. Additionally, with the ongoing development of tier
    one and tier two joint capability areas (JCAs), the Services will have
    a common language to compare capabilities across the DOD enterprise. By
    using capability based planning and JCAs, the Services are better able
    to identify capability gaps and redundancies for the joint warfighter.
    Based upon strategic guidance that identifies where we must reduce risk
    and where we are prepared to accept risk, the Joint Chiefs and the JROC
    are now better able to compare capabilities for final validation across
    the Services prior to seeking a material solution via the acquisition
    process.
        I have also established the Naval Capabilities Board (NCB) and the
    Resource Requirements Review Board (R3B) to ensure senior Navy
    leadership has early and full visibility into future capabilities
    requirements, as well as the resources necessary to provide them. We
    will use these tools to resolve cross-enterprise issues and ensure that
    new capabilities are ``born joint'' at an affordable cost.
        General Hagee. The Marine Corps has embraced the JCIDS, which was
    developed through collaboration between the Joint Staff, the Services,
    and OSD, to facilitate identification and development of joint
    warfighting requirements. This capabilities-based construct enables
    joint force planning in an uncertain environment and identifies the
    broad set of capabilities that will be required to address the
    challenges of the 21st century. Additionally JCIDS employs a
    synchronized, collaborative, and integrated approach involving senior
    leadership, including the Secretary of Defense, earlier in the joint
    warfighting capabilities decisionmaking process. Though JCIDS is
    relatively new, the impact is already evident in areas such as command
    and control systems and in our current effort to jointly define
    requirements for the Joint Light Tactical Vehicle as the replacement
    for the High Mobility Multipurpose Wheeled Vehicle (HMMWV). The Marine
    Corps also utilizes the Army/Marine Corps Board, established in October
    2003, to develop and resolve issues and policies of mutual interest to
    include the development and harmonization of requirements and
    acquisition programs.
        Considered a national capability, the development of seabasing
    requirements is inherently joint; and is not envisioned as a strictly
    naval solution. All seabasing programs in various stages of development
    by the DON are joint in nature. The Maritime Prepositioning Force
    (Future) program is the next generation in naval afloat prepositioning
    capability and this capability will also support at-sea arrival and
    throughput of selected joint forces, as well as enable joint command
    and control at sea. The Joint Maritime Assault Connector, Joint High
    Speed Vessel, and Joint High Speed Sealift programs are currently in
    development with the Army. Each of the concepts of employment for these
    seabasing platforms has been integrated with the Seabasing JIC, which
    has been approved by the Joint Chiefs of Staff. Additionally, the Navy/
    Marine Corps team has already demonstrated interoperability with joint/
    coalition forces and other agencies during Operation Enduring Freedom
    and Tsunami relief, and most recently during the hurricane Katrina
    relief effort. For these reasons, we see seabasing as both a present
    and future capability that will continue to evolve as concepts and
    technologies mature.

        11. Senator McCain. Secretary Winter, defense acquisition is
    cyclical and history shows that we are heading toward a periodic trough
    in defense spending. Acquisition reform is critical as well as the need
    to make hard choices concerning major weapon system procurement. This
    committee has expressed concern that even with the increase in defense
    spending during this administration, there will not be enough money to
    pay for the four dozen or so weapon systems currently under
    development. In the QDR it appears that we have avoided making some of
    the hard choices that we will inevitably have to face. CVN-21 is $13+
    billion each, DDX is $3+ billion each, new attack submarines are $2+
    billion each, and Littoral Combat Ship (LCS) is over $300 million
    each--the list goes on and on. During the downward cycle of defense
    spending--there will be a procurement bow wave--when difficult budget
    decisions have to be made because there are not enough funds for every
    program in the budget and the FYDP. As fewer defense dollars squeeze
    naval programs, what is going to be on the chopping block?
        Secretary Winter. The DON's fiscal year 2007 budget submission
    reflects the resources we believe necessary to pace the range of
    security challenges we face in the 21st century. The careful analysis
    of the QDR provided the Department with a transformation roadmap for
    our future.
        In our budget, we have requested funding to sustain and expand our
    capabilities as part of the joint force consistent with the QDR. The
    Navy and Marine Corps' FYDP provides for a diverse set of capabilities
    ranging from blue water to green and brown water. The Department is
    committed to transforming to a capabilities set that ensures its
    ability to establish superiority across the entire spectrum of maritime
    environments.
        It remains an imperative for the Chief of Naval Operations (CNO),
    the Commandant, and I to exert the discipline and commitment necessary
    to reduce acquisition costs. We are actively working with our partners
    in industry and Congress to alleviate the cost pressure on many of our
    acquisition programs, including shipbuilding. We must recognize the
    need to build a Navy and Marine Corps with the capabilities our Nation
    needs at a cost that is sustainable over time.
        Should we have to make programmatic trades to accomplish our
    transformation, we will target for reduction programs that only
    marginally increase our advantages against traditional challenges,
    marginally improve existing capabilities in non-traditional areas, or
    that do not contribute to the development of a joint, net-centric
    force.

        12. Senator McCain. Secretary Winter, how do you intend to keep
    industry involved and doing its part to keep cost in check?
        Secretary Winter. The health of the defense and commercial
    industrial base is critical to our Nation's national security. My
    intent is to clearly communicate to industry our future acquisition
    plans, actively work to control requirements growth, and provide the
    stability of resources to allow our industry partners to develop the
    business case for their corporate investment strategies.
        To control costs, we will encourage investments in new
    manufacturing technologies through such programs as Capital
    Expenditure, and work with industry to identify improvements to their
    facilities and industrial processes to reduce manufacturing costs.
    Expanding the use of specific contract incentives is critical to
    achieving the goal of motivating industry investments in their
    workforce, future technology, and cost performance on current programs.

        13. Senator McCain. Secretary Winter, what specific changes do you
    recommend in the area of acquisition reform, to ensure that we can get
    the best equipment at the best price for the taxpayer?
        Secretary Winter. Improving the DON's acquisition performance is a
    priority for me.
        As acquisition reform is considered, care must be taken to ensure
    changes to current law do not create undesirable side effects. It is
    also my belief that within current structure, there exists sufficient
    flexibility and authority for the Department's senior civilian and
    uniformed leadership to collaborate in efforts to control requirements,
    provide stable resources, and expand the use of specific contract
    incentives to produce the best value for the taxpayer.
        Within existing law, the Department is actively working with our
    partners in industry and with Congress to alleviate the cost pressure
    on many of our acquisition programs, including shipbuilding. We must
    recognize the need to build a Navy and Marine Corps with the
    capabilities our Nation needs at a cost that is sustainable across
    time.
        The Department is responsible for recommending to Congress
    requirements and capabilities such that stable funding can be planned
    and provided for industry across the FYDP. The Department is off to a
    good start with the analysis that underpins the recently submitted 30
    Year Shipbuilding Plan, a plan that identifies a Navy of 313 ships at
    an average annual cost of $13.4 billion (in fiscal year 2005 dollars)
    to achieve that plan. We need to extend that level of analysis to
    aviation and other key program areas as well.
        The Department is also responsible for controlling requirements/
    capabilities: both in new programs and in programs already in
    production. This is an area where, clearly, we must do better--and it
    will take strong leadership on the part of both the senior civilian and
    uniformed leadership to curb the Department's appetite for increased
    requirements/capabilities. Within the Department, we must improve the
    ties between the CNO and Assistant Secretary of the Navy (Research,
    Development, and Acquisition) throughout the course of the acquisition
    cycle to ensure an optimum investment strategy and stability of
    requirements. To this end, the CNO has already reconstituted the Naval
    Characteristics Board to oversee requirements changes in our platforms
    and systems.
        The Department will support industry by developing incentives for
    construction and integration of platforms at low rates of production.
    The Department will work with industry to motivate and implement
    rigorous process improvements such as Lean Six Sigma, investments in
    capital improvements and technology that support low rates of
    production of high capability systems, and workforce investments which
    will ensure the composition of skill sets within the industry. Finally,
    the Department will tailor contracts and business arrangements with
    industry to motivate these desired behaviors that are in the national
    interest.

        14. Senator McCain. Secretary Winter, Admiral Mullen, and General
    Hagee, fixed-price contracts shift the risk to the contractor and
    incentivize the contractor to increase the reliability of the system
    components. What can the Navy and Marine Corps do to return to more
    common use of fixed-price contracts?
        Secretary Winter. Fixed price contracts are appropriate contracting
    vehicles when the risks and unknowns have been reduced to acceptable
    levels, and therefore when those fixed prices will properly motivate
    effective contractor performance. In this regard, the Department's
    efforts to rapidly stabilize and hold to requirements will facilitate a
    quicker shift to fixed-price and cost-incentive contracts.
        In the shipbuilding arena, our practice is to use cost-
    reimbursement contracts for the lead ship of a class, and usually the
    first production ship, allowing the design to mature and the
    configuration to stabilize before shifting to fixed-price type
    contracts for the rest of the class.
        In the sustainment arena, the Navy and Marine Corps are using
    fixed-price contracts for performance-based logistics with excellent
    results; in this context, contractors are motivated to increase
    component reliability, since doing so leads to greater profitability.
    We are sharing best practices and lessons learned through our ``Virtual
    Systems Command'' across all our lines of business.
        In some circumstances, fixed-price contracts have the unintended
    consequence of providing an incentive to the contractor to manufacture
    systems with the lowest cost components available, or taking other
    shortcuts to reduce cost. It is the responsibility of the Department to
    ensure we are getting the requisite quality and maximum effect for each
    dollar spent and do not prematurely impose a fixed-price contract.
        Admiral Mullen. I believe fixed-price contracts are appropriate
    contracting vehicles when the risks and unknowns have been reduced to
    acceptable levels, and therefore when those fixed prices will properly
    motivate effective contractor performance. In this regard, the Navy's
    efforts to rapidly stabilize and adhere to requirements will facilitate
    a quicker shift to fixed-price and cost-incentive contracts.
        In the shipbuilding arena, our practice is to use cost-
    reimbursement contracts for the lead ship of a class, and usually the
    first production ship, allowing the design to mature and the
    configuration to stabilize before shifting to fixed-price type
    contracts for the rest of the class.
        In the sustainment arena, the Navy and Marine Corps are using
    fixed-price contracts for performance-based logistics with excellent
    results; in this context, contractors are motivated to increase
    component reliability, since doing so leads to greater profitability.
    We are sharing best practices and lessons learned through our ``Virtual
    Systems Command'' across all our lines of business.
        In some circumstances, fixed-price contracts have the unintended
    consequence of providing an incentive to the contractor to manufacture
    systems with the lowest cost components available, or take other
    shortcuts to reduce cost. It is the responsibility of the Department to
    ensure we are getting the requisite quality and maximum effect for each
    dollar spent.
        General Hagee. Fixed-price contracts provide for a price that is
    not subject to any adjustment on the basis of the contractor's cost
    experience in performing the contract. The fixed price contracts place
    upon the contractor maximum risk and full responsibility for all costs
    and resulting profit or loss. Fixed price contracts provide maximum
    incentive for the contractor to control costs and perform effectively
    and impose a minimum administrative burden upon the contracting
    parties. While this serves as a cost incentive, different incentives
    can be used for parameters other than cost, such as schedule or
    performance incentives.
        It has been a common practice to use fixed-price contracts with
    total system responsibility clauses in production contracts for many
    years. Specifically included are aircraft and shipbuilding contracts
    along with the Marine Corps Expeditionary Fighting Vehicle (EFV)
    program. However, the reliability parameters need to be built into the
    contract through the specification and warranty.
        Historically, Marine Corps contracting officers have utilized firm
    fixed price and fixed price incentive contracts for all but research
    and development (R&D) contracts. Contracting officers utilize the
    expertise of the program management personnel during the procurement
    planning phase to identify and develop risk assessment scenarios.
    Factors discussed in developing these scenarios include: price
    competition, price analysis, cost analysis, type and complexity of the
    requirement, urgency of the requirement, period of performance,
    contractor's technical capability and financial responsibility,
    adequacy of the contractor's accounting system, concurrent contracts,
    extent and nature of proposed subcontracting, and acquisition history.
    A return to more fixed price contracts for weapon systems can work with
    proper planning and risk assessment conducted by the acquisition team.
    Industry teaming and insight as well as use of the proper incentives
    will help to ensure the warfighter's needs are met at a cost that is
    fair and reasonable while minimizing the overall risk to the
    Government.

        15. Senator McCain. Secretary Winter, in the 2006 Defense
    Authorization Law, Congress instructed the Pentagon to report on every
    program that costs at least 50 percent more than initial projections.
    The provision was designed to tie programs to their original cost
    estimates, rather than updated cost and schedule baselines. The
    Pentagon has been allowed to change its baseline without invoking the
    penalty. How do you plan to implement this new amendment with regard to
    Nunn-McCurdy violations?
        Secretary Winter. The Navy has implemented the full intent of the
    National Defense Authorization Act for Fiscal Year 2006. On April 7,
    2006, the Navy reported in the Selected Acquisition Reports information
    regarding these unit cost increases.
        Details of the increases were provided for four programs that fall
    within the 30-50 percent significant cost growth category.
        Notification was provided for seven programs that fall in the 50
    percent and greater critical cost growth category with the intent of
    following up with additional details of these increases later this
    year.
        Henceforth, the Navy will report on all Nunn-McCurdy categories.
    These include: 30 and 50 percent breach of initial program baselines
    and 15 and 25 percent breach of the current program baseline.

        16. Senator McCain. Secretary Winter, what will be the effect to
    Navy and Marine Corps programs currently in the budget?
        Secretary Winter. The amendment affects 11 Navy programs in this
    year's budget.
        Four programs showed unit cost increases between 30 and 50 percent:
    EFV, F/A-18 ElF, MH-60S, and the SSN 774.
        Seven programs have unit cost increases in excess of 50 percent: H-
    1 Upgrades, JSOW--Baseline/Blu-108, LPD 17, MH-60R, T45TS, Trident II
    Missile, and the V-22.
        Future Selected Acquisition Reports will provide appropriate
    notification to Congress explaining the unit cost increases for these
    programs in accordance with provisions in the National Defense
    Authorization Act for Fiscal Year 2006. The President's fiscal year
    2007 budget already accounts for these revised estimates.

                                 313-ship navy
        17. Senator McCain. Admiral Mullen, in a letter to the House of
    Representatives dated December 16, 2005, the Congressional Budget
    Office (CBO) estimated the Navy will need to spend an average of $20
    billion per year on new ship construction in order to achieve a 313-
    ship fleet in 2035. If nuclear refuelings of aircraft carriers and
    submarines are included, the price per year increases to $21 billion. A
    Congressional Research Service (CRS) report dated January 25, 2006,
    states that the Navy estimates it will cost only $14 billion per year--
    a $6 billion difference between what the CBO says it will cost and what
    the Navy says it will cost.
        You have provided us with a very detailed plan for the Navy as it
    evolves over the next 3 years. Ultimately you see a sustained 313-ship
    Navy with 11 aircraft carriers, 62 Arleigh Burke destroyers, 7 DD(X)s,
    19 CG(X)s, 66 submarines, and 55 LCSs. What remains undetermined
    however is how much it is going to cost. There are reports from CRS and
    CBO that it will cost $20 billion per year while the press reports that
    the Navy estimates it will cost $14 billion. What do you project the
    Navy will need to spend to achieve a sustained 313-ship Navy?
        Admiral Mullen. The Navy has determined that the average annual
    investment necessary to sustain the 313-ship force structure is
    approximately $13.4 billion in fiscal year 2005 dollars ($14.4 billion
    in fiscal year 2007 dollars).

        18. Senator McCain. Admiral Mullen, what are you going to do to
    control the huge cost increases that we always see in shipbuilding
    programs?
        Admiral Mullen. I have instituted the NCB, in conjunction with the
    R3B, that are chartered specifically to review requirements and key
    performance parameters (KPPs) that are the cost drivers in ship,
    aircraft, and weapons procurements to control shipbuilding cost growth.
    The NCB/R3B will assess the Navy mission set that a given platform is
    being procured to address with a view toward the cost implications of
    the requirements driven by that mission set and the relative efficacy
    of a given option in addressing those requirements. The bottom line is
    that cost must be considered and ``more is better'' is not an option
    for determining need. The process of Analysis of Alternatives will be
    subjected to NCB/R3B review before the decisions are made that drive
    front-end costs to ensure that the program being pursued is not just
    effective against the mission for which it is designed, but also that
    the program is ultimately affordable within the constrains envision for
    the Navy's future budget. Finally, the NCB/R3B will review any changes
    to programs currently in production to ensure the investment required
    to make the change is worth the resource commitment associated with
    that decision. The objective is to ensure ``requirements creep'' does
    not take an affordable program into the realm of the unaffordable.

                              joint strike fighter
        19. Senator McCain. Secretary Winter, this committee heard
    testimony from the Air Force concerning the decision to cancel the
    Joint Strike Fighter (JSF) alternate engine contract leaving just one-
    source--Pratt & Whitney--to provide engines for the entire life cycle
    of the JSF. When the Chief of Staff of the Air Force, General Moseley,
    was asked why the decision was made to terminate the F136 JSF alternate
    engine program, he answered that the Navy did the analysis, could not
    afford it, and asked that the alternate engine program be terminated.
    Is this an accurate description of the chain of events leading up to
    the cancellation of the JSF alternate engine program?
        Secretary Winter. Air Force and Navy participated in a number of
    venues during the fiscal year 2007 budget formulation process where the
    benefits, risks, and costs of maintaining the F136 alternate engine
    were considered. The proposal to cancel the JSF alternate engine
    originated in Navy, was not objected to by Air Force, and was approved
    by the DOD incident to the submission of the fiscal year 2007 budget.

        20. Senator McCain. Secretary Winter, with regard to keeping costs
    down through competition, are you comfortable with having a future with
    only one company capable of delivering a fighter aircraft engine?
        Secretary Winter. In supporting this decision, I considered three
    types of risk: development, cost, and production.
        The F135 engine development is on track and is meeting expectations
    with almost 5,000 hours completed. It is being produced using the same
    engineering and manufacturing processes as the F119 engine, which is
    performing reliably after roughly 18,000 flight hours. There is limited
    development risk.
        Cost analysis showed that the investment for a second engine source
    is $2.4 billion, perhaps higher, and will not yield program cost
    savings. Splitting the buy between two competitors will also increase
    production and support costs. Office of Secretary of Defense (Program
    Analysis and Evaluation (OSD(PA&E)) analysis suggests that more than a
    15-percent cost savings is needed to recover the investment associated
    with the F136 development. The Program Management Advisory Group (PMAG)
    assessments concluded that savings of 16 percent to 22 percent would be
    required to recover the investment to develop the F136. Additional
    savings would be required to recover the added costs associated with
    two suppliers. The F-16 program suggests that at best a 5- to 10-
    percent cost savings may be achieved through competition. It is
    therefore unlikely any savings from competition will offset the
    investment.
        Also, with two sources, neither would experience full learning
    curve benefits and unit costs would increase approximately $1 million
    per engine.
        The Department also assessed that the F135 engine supplier can meet
    increased production demands. The F-22 and F/A-18E/F rely on a single
    source engine supplier. Additionally, the 2002 PMAG assessment
    concluded that operational risk was low to the warfighter with a sole
    engine supplier.

        21. Senator McCain. Secretary Winter, were there any studies done
    to determine what the cost per engine purchased would be over the
    complete life cycle of the aircraft, to include operation and support
    costs?
        Secretary Winter. Yes. The PMAG conducted engine assessments in
    1998 and 2002. Operation and support costs were considered as part of
    that assessment.

        22. Senator McCain. Secretary Winter, what will the cost per engine
    be if the alternate engine program is kept in place?
        Secretary Winter. With two sources, neither would experience full
    learning curve benefits and unit costs would increase approximately $1
    million. With planned procurement of approximately 3,000 engines
    including spares, for the 2,443 DOD aircraft quantity, projected
    propulsion unit costs for conventional take-off and landing (CTOL)
    carrier variant (CV) and short take-off, vertical landing (STOVL) would
    be approximately $7 million and $14 million, respectively (BY02).

        23. Senator McCain. Secretary Winter, would you please inform the
    Department that we are dissatisfied with the February 27, 2006,
    response and we reiterate our original request of February 16, 2006,
    that the information be produced as to the complete analysis supporting
    the decision to terminate the F136 alternate engine program?
        Secretary Winter. I have informed Secretary England of your opinion
    that his February 27, 2006, response on the F136 alternate engine
    decision is inadequate.

                 fa-18 hornet--joint strike fighter transition
        24. Senator McCain. Admiral Mullen, there has been discussion
    concerning the future health of naval aviation in terms of the number
    of F/A-18s and the potential shortfall you will be dealing with just to
    get to the planned initial operational capability (IOC) of the JSF.
    There is also some concern that the planned IOC of 2010 for the JSF may
    slide to a later date thus exacerbating the Hornet shortfall problem.
    Do you share these concerns?
        Admiral Mullen. Ensuring JSF achieves timely IOC is of considerable
    concern to me. Based on a JSF IOC of 2013, the Navy anticipates a
    shortfall of 10 legacy Hornets by 2011 that increases to a shortfall of
    48 by 2018. A delay in the IOC of the JSF could exacerbate this
    situation. A service life assessment program (SLAP) on the legacy
    Hornet is ongoing, with results to be released in December 2007.

        25. Senator McCain. Admiral Mullen, are we buying enough Hornets to
    make it to the JSF era?
        Admiral Mullen. Based upon current information available regarding
    the JSF's IOC and the legacy Hornets' predicted service life, I believe
    the 460 Super Hornets in the program of record are the correct number
    of aircraft needed for the Navy to transition to the JSF era without a
    loss of capability. A SLAP to evaluate legacy Hornets is ongoing and
    the results are scheduled for release in December 2007. If the SLAP
    indicates a shortfall through obsolescence, or the JSF IOC is
    significantly delayed, the Navy could consider purchasing additional
    Super Hornets to mitigate the shortfall.

        26. Senator McCain. Admiral Mullen, what is the shortfall -- how
    many Hornets?
        Admiral Mullen. Based on current analysis the Navy anticipates a
    shortfall of 10 legacy Hornet aircraft in 2011 that increases to 48
    aircraft by 2018. A SLAP is currently being conducted and the results
    are scheduled for release in December 2007. Based on more accurate data
    the SLAP may indicate a different shortfall in the number of legacy
    Hornets than currently anticipated.

        27. Senator McCain. Admiral Mullen, do you plan to buy more Hornets
    to bridge this gap or do you have some other plan to make up for this
    shortfall?
        Admiral Mullen. Based upon current information available regarding
    the JSF's IOC and the legacy Hornets' predicted service life, I believe
    the 460 Super Hornets in the program of record are sufficient for the
    Navy to transition to the JSF without a loss of combat capability. A
    SLAP to evaluate legacy Hornets is ongoing and the results are
    scheduled for release in December 2007.

                               aircraft carriers
        28. Senator McCain. Admiral Mullen, how many air wings do you see
    as necessary now that we have retired the U.S.S. Kennedy and accepted
    11 carriers as our required number?
        Admiral Mullen. While it is my recommendation that the U.S.S.
    Kennedy be retired this year, legislation has not yet been passed to
    accomplish this. With your help, I hope the U.S.S. Kennedy will indeed
    be retired by year's end. The Navy needs 10 air wings to meet the
    demands of the COCOM and our warfighting requirements. The aircraft
    carrier U.S.S. Kennedy will remain in commission until such time that
    legislation is passed removing the prohibition to retire her.

        29. Senator McCain. Admiral Mullen, considering the FRP and the
    prolonged requirement that our sailors increase their operational
    tempo, spend more time away from homes, and deploy more frequently than
    in the past--when there was not a surge requirement--is now really the
    appropriate time to decrease the number of carriers and subsequently
    the number of air wings that fly on and off our carriers?
        Admiral Mullen. I am confident that an 11 carrier force, supported
    by 10 air wings (the Navy does not plan a reduction in the number of
    air wings with the retirement of the U.S.S. Kennedy, CV-67), can meet
    COCOM requirements while maintaining a 6 + 1 surge capability--six
    carriers available within 30 days with an additional carrier available
    within 90 days. Based on extensive analysis, the QDR reached this same
    conclusion. The longer we delay the decommissioning of CV-67, the more
    money we are diverting from urgent operational and procurement
    requirements.

        30. Senator McCain. Admiral Mullen, aren't we once again going to
    be asking our people to do more with less?
        Admiral Mullen. I intend to sustain a 2.0 turn-around ratio (6
    months deployed, 1 year at home) for our ships and sailors. This will
    be accomplished through the FRP which is designed to increase the time
    platforms are available for deployment, not the time sailors are
    deployed. While longer deployments may periodically be unavoidable,
    particularly in times of crisis, the Navy will always strive to ensure
    that the interests of sailors and their families are balanced with
    national security requirements.

                        emergency supplemental spending
        31. Senator McCain. Secretary Winter, a major issue in the
    congressional debate on funding continuing military operations and
    reconstruction in Iraq and Afghanistan is whether military and
    peacekeeping operations should be funded with supplemental requests or
    via the regular authorization and appropriation process. Last year,
    this committee urged the DOD to include the costs of current and future
    operations in Iraq and Afghanistan in the DOD's regular
    appropriations--arguing that these are now ongoing operations that
    should be planned for and funded in the annual defense budget. It is a
    responsibility of this committee to exercise oversight in the normal
    authorization process at the beginning of the budget debate. During the
    last 2 years this committee has provided for limited authorization in
    bridge supplemental requests in the defense authorization bill. The DOD
    assesses the incremental cost of Operation Iraqi Freedom at
    approximately $4.4 billion a month and Operation Enduring Freedom in
    Afghanistan at $800 million a month. As General Pace has appropriately
    stated in his testimony, ``[w]e are in a long war.'' Do you think
    supplemental appropriations are the best vehicle for the Navy for
    funding this long war?
        Secretary Winter. Given the uncertain operating tempo and shifting
    roles and responsibilities as troop rotations and mission assignments
    change, a short timeframe between developing global war on terrorism
    estimates and appropriation enactment is very desirable, and consistent
    with the policies of the Department. This approach allows the most
    recent strength levels and operational tempo (OPTEMPO) estimates for
    each Service to be utilized. Budgeting for war-related incremental
    costs 2 years in advance of the requirement would not be the best
    vehicle for financing the global war on terrorism. Of the mechanisms we
    have today, these incremental costs of conducting the war are better
    funded through supplemental appropriations.

        32. Senator McCain. Secretary Winter, I notice you have asked for
    additional F/A-18s in the supplemental appropriations request. Why
    didn't you fund these aircraft in the normal budget process?
        Secretary Winter. To date, no F/A-18s have been requested in the
    supplemental.

                            navy tanker requirements
        33. Senator McCain. Admiral Mullen and General Hagee, I understand
    that any future Air Force tanker will have to have boom capability. The
    boom system is required to refuel all of our large transport and bomber
    aircraft. We also know that Navy and Marine Corps aircraft as well as
    our allies and coalition partners will always require probe and drogue
    systems. Under the failed Boeing 767 tanker lease program, e-mails
    among the Air Force leadership revealed a plan to build the first 100
    tankers without drogue systems. I would guess that decision would not
    have sat well with the Navy leadership. Would you ensure that it is a
    naval requirement that any future tanker program should have drogue
    systems on all tanker aircraft?
        Admiral Mullen. As our operations become increasingly joint and
    integrated, I believe it is a critical requirement for any new tanker
    program to have both boom and probe and drogue capabilities. This dual
    capability is essential for flexible joint operations and has been
    accepted as a KPP for the next tanker aircraft. We remain confident
    that this requirement will be filled.
        General Hagee. As part of the Joint Capabilities Integration and
    Development System, the Marine Corps participates in the JROC, which
    reviews all joint DOD requirements for acquisition programs. The
    purpose of this council is to ensure that the requirements of all
    Services, including those of our allies, are considered in the
    development process.
        The USAF is in the process of recapitalizing its KC-135 fleet and
    is continuing requirements and acquisition planning for a Replacement
    Tanker Aircraft (RTA). One of the KPP thresholds for the RTA is to have
    both a boom and a drogue system permanently installed on the aircraft.
    The RTA is planned to be able to refuel boom or drogue on the same
    mission.

        34. Senator McCain. Admiral Mullen and General Hagee, I understand
    the Navy has contracted for commercial aerial refueling with Omega Air.
    Several years ago, this committee heard testimony from Vice Admiral
    McCabe, who reported that this was a fantastically successful contract.
    Does commercial aerial refueling through Omega Air continue to
    successfully meet Navy requirements?
        Admiral Mullen. Commercial aerial refueling through Omega Air does
    continue to meet Navy requirements. Last year, Omega Air supported a
    number of Navy exercises and training evolutions on both coasts. Omega
    provides dependable and realistic training for our flight crews,
    thereby freeing Air Force tankers for use in higher priority
    operations.
        General Hagee. The Navy does have a contract with Omega Air which
    was established during December 2001 and is due to be recompeted this
    year. The tanker is utilized to extend aircraft ``on-station'' time for
    training sorties and during major exercises such as Joint Task Force
    Exercise. It has also been used to refuel Navy and Marine Corps
    aircraft enroute to and from these exercises when tactical or strategic
    tanker assets are not available.
        I cannot speak for Navy requirements, but the limited amount of
    time that the USMC has utilized this asset it has provided important
    air refueling training, exercise support, and transcontinental aerial
    refueling capability.

        35. Senator McCain. Admiral Mullen and General Hagee, would you
    recommend expanding the contract to provide a greater commercial air
    refueling capability?
        Admiral Mullen. Omega Air provides a valuable service by offering
    commercial air refueling of Navy aircraft during training. I am
    satisfied with the current level of support the Navy receives from
    Omega Air and do not recommend expanding the Navy-Omega Air contract at
    this time. If, in the future, the fleet's requirements call for
    increased air refueling capability, I would support examining a
    commercial option to provide it.
        General Hagee. The Omega Air contract is currently funded by Navy
    flight hour funds. The Marine Corps utilizes approximately 8-9 percent
    of the annual Navy flight hours contracted with Omega Air tanker
    services for nontactical aerial refueling. If funding was made
    available to expand this contract, the Marines would certainly take
    advantage of this increased capability. However, the current
    President's budget reflects the best balance of resources and
    requirements.

                                 special forces
        36. Senator McCain. Admiral Mullen, the QDR calls for a significant
    increase in Special Operations Forces (SOF) capability and capacity:
    ``U.S. Special Operations Command (USSOCOM) will establish the Marine
    Special Operations Command (MARSOC). The Navy will support a USSOCOM
    increase in sea/air/land team manning and will develop a riverine
    warfare capability.'' The QDR recognizes an important need for the
    increase of SOF personnel and their capability. It is unclear if the
    Navy will get the resources required for this very important area. Will
    funding for a new MARSOC and riverine warfare squadron come out of the
    Navy's budget thus reducing the ability to fund naval aviation and ship
    procurement?
        Admiral Mullen. Funding for the MARSOC will not come out of the
    Navy's budget. Although the Navy's budget will fund the establishment
    of a riverine warfare capability, this cost is not expected to reduce
    the Navy's ability to fund naval aviation or ship procurement.

        37. Senator McCain. Admiral Mullen, are resources being diverted
    from some other area of DOD to fund this aggressive, yet needed
    increase in our SOF capabilities?
        Admiral Mullen. While aggregate Navy strength may be decreasing,
    the Navy's force shaping plan provides for growth in certain manpower
    specialties, including SOF, without requiring that resources be
    diverted from other areas of DOD. Specifically, the Navy has
    established a plan that will add over 650 personnel (above a fiscal
    year 2004 baseline) to the Navy's SOF communities through fiscal year
    2008, and is developing plans to rapidly, yet prudently, implement QDR-
    directed growth in SOF and SOF supporting communities.

                               reserve components
        38. Senator McCain. Secretary Winter and Admiral Mullen, several
    recommendations in the QDR with regard to Reserve and Guard personnel
    policies cause me some concern. For example, the QDR recommends:

             1. Increasing Presidential Reserve call-up from 270 to 365
            days.
             2. Seeking legislation to improve access to Guard and Reserve
            in support of civil authorities.
             3. Seeking legislative relief of Presidential Reserve call-up
            statute to activate reservists for natural disasters.
             4. Developing Reserve units that train more intensively and
            require shorter notice for deployment.

        We are already hearing from many reservists and their employers
    about deployments which are neither periodic nor predictable. Are these
    policies in the best interests of our total force?
        Secretary Winter. These QDR initiatives are in the best interests
    of our national defense as they enhance the warfighting capability of
    our total force. Responding to the threats posed by terrorism requires
    a Reserve component (RC) that is adaptive, flexible, and ready to fight
    our Nation's wars. Balancing the need for an agile and accessible force
    with a predictable and periodic OPTEMPO is the challenge for Navy/
    Marine Corps leadership.
        Justification for these policy initiatives follows:

             A. Increasing Presidential Reserve Call-Up Authority from 270
            to 365 days

        The operational rotation cycles currently used by the United States
    Navy and Marine Corps relative to deployments for their Active and
    Reserve components vary from 6 (Navy)/7 (Marine) to 12 months ``boots
    on the ground.'' These are the most efficient and effective length for
    tours of duty. Expanding the maximum duration to 365 days will
    facilitate greater ``boots on the ground'' time for RC. It will allow
    for effective and efficient pre-deployment training and post-deployment
    deactivation.
        As our Reserve component changes from a strategic to an operational
    Reserve, we must increase accessibility of our reservists. Increasing
    Presidential Reserve Call-Up Authority in title 10, section 12304 to
    365 days will provide more critical skill sets for the supported
    command during a national emergency. This increased authority would
    allow the Services to meet emerging requirements with fewer rotations
    of recalled service members.

             B. Improving access to, and competencies of, Guard and Reserve
            in support of civil authorities and natural disasters
            (Initiatives (2) and (3), above)

        Hurricane Katrina revealed once again that the heart and soul of
    our national response to such crises is our Guard and Reserve. They are
    especially suited for these nontraditional missions because of their
    unique and diverse skill sets. More importantly, they live in the
    communities impacted by such events. These important roles, supporting
    homeland defense/homeland security and providing humanitarian
    assistance/disaster relief, require legislation to improve access to
    the Reserves. Improved access by civil authorities will enable a
    stronger response by the DOD and our Nation.

             C. Develop Reserve units that train more intensely and require
            shorter notice for deployment

        Today's RC is a critical component of the Total Force. As such, the
    RC must be responsive to the changing demand signals sent by COCOMs who
    require rapidly deployable, flexible warfighting capabilities.
        Navy initiatives such as Active Reserve Integration (ARI) allow
    Active component (AC) and RC to work side-by-side in support of 21 JCAs
    and to do so seamlessly. This enables an RC that is trained and ready
    in fleet compatible equipment, systems, and functions. Navy reservists
    are ready, relevant, and fully integrated. Recent examples include
    forward-deployed helicopter combat support detachments comprised of
    integrated AC and RC warfighters.
        The Marine Corps Reserve units are able to promptly and efficiently
    activate. They can deploy from their Reserve training centers and
    report to their gaining force commander within 5 to 7 days from
    activation. Individual mobilization augmentees are prepared to report
    to their respective commands/staffs within 72 hours of notification.
    Under the continuum of service umbrella, the Marine Corps has been
    working with OSD on one of its innovative force management initiatives
    known as ``Variable Participation of Reservists at Unit Level (VPR-
    U).'' VPR-U anticipates capitalizing on volunteerism to provide trained
    units that offer a predictable, rapid response capability, without
    requiring an initial involuntary mobilization authority. The Marine
    Corps expects possible testing and evaluation with one or more units in
    the future. Further development of the VPR-U concept may increase
    predictability to the warfighter, the individual marine, and his/her
    family and employer.
        We recognize the impact of supporting the global war on terror and
    day-to-day operational requirements upon our reservists, their
    families, and their employers. We are committed to supporting our
    citizen sailors/marines as they answer our Nation's call to arms in
    this long war of our generation.
        Admiral Mullen. These QDR initiatives are in the best interests of
    our national defense as they enhance the warfighting capability of our
    total force. The transnational, asymmetric threats posed by terrorism
    require an RC that is adaptive, flexible, and ready to fight our
    Nation's wars. Balancing the need for an agile and accessible force
    with a predictable and periodic OPTEMPO is the challenge for Navy
    leadership. We recognize the impact of supporting the global war on
    terror and day-to-day operational requirements upon our reservists,
    their families, and their employers. We are committed to supporting our
    citizen sailors as they answer our Nation's call to arms in this long
    war of our generation.

             Increasing Presidential Reserve Call-Up Authority from 270 to
            365 days

        As our Reserve component changes from a strategic to an operational
    Reserve, we must increase the accessibility of our reservists.
    Increasing Presidential Reserve Call-Up Authority in title 10, section
    12304 to 365 days will provide more critical skill sets for the
    supported command during a national emergency while allowing for more
    effective pre-deployment training and post-deployment deactivation.
    Further, this increased authority would allow the Navy to meet emerging
    requirements with fewer rotations of recalled sailors.

             Seeks legislation to improve access to Guard and Reserve in
            support of civil authorities and natural disasters (Initiatives
            (2) and (3))

        Hurricane Katrina revealed once again the value of our Guard and
    Reserve in responding to natural disasters. Supporting homeland
    defense/homeland security and providing humanitarian assistance/
    disaster relief are important roles for the RC that must be enabled by
    legislation. These nontraditional missions are especially suited for
    the Guard and Reserve because of the diverse skill sets resident within
    these organizations. More importantly, our guardsmen and reservists
    live in the communities impacted by such events. The Navy Reserve will
    remain a ``ready and relevant'' contributor to civil authorities and
    disaster relief efforts.

             Develop Reserve units that train more intensely and require
            shorter notice for deployment

        As previously stated, today's RC is a critical component of the
    total force. As such, the RC must be responsive to the changing demand
    signals sent by COCOMs who require rapidly deployable, flexible
    warfighting capabilities. Initiatives such as ARI allow AC and RC to
    work side-by-side in support of 21 JCAs and to do so seamlessly. They
    enable an RC that is trained and ready in fleet compatible equipment,
    systems, and functions. This ARI training is more effective and
    efficient, and has resulted in a Navy Reserve that is ready, relevant,
    and fully integrated. Recent examples include forward-deployed
    helicopter combat support detachments comprised of integrated AC and RC
    warfighters.
                                     ______

                Questions Submitted by Senator Susan M. Collins
                               dd(x) requirements
        39. Senator Collins. Admiral Mullen, due to Office of Management
    and Budget-imposed budget cuts and not military analysis, last year's
    Navy budget request slashed production of the DD(X) over the next 6
    years from 12 to 5. This year's budget also requests only 5 DD(X)s--
    even though the former Chief of Naval Operations, Admiral Clark, stated
    to me before this committee that the requirement for DD(X) destroyers
    is unchanged at 12. During a hearing on February 10 last year, I asked
    Admiral Clark how the fiscal year 2006 budget called for five DD(X)
    destroyers to be constructed instead of the 12 because I was mystified
    at how the requirement could suddenly have dropped to less than half.
    Admiral Clark clarified the requirement for the DD(X) by stating: ``My
    view (for) DD(X) is somewhere around a dozen ships. So the requirement
    has not stopped at five. The real key, I think, to your question is
    this: is it an affordability issue or did I change the requirement? I
    did not change the requirement. It is an affordability issue.'' Your
    proposed 313-ship fleet includes a requirement for a total of 88
    cruisers and destroyers--7 DD(X)s, 19 CG(X)s), and 62 older Arleigh
    Burke class Aegis destroyers. Assuming a 35-year average life for
    cruisers and destroyers, maintaining a force of 88 cruisers and
    destroyers over the long run would require steady-state procurement
    rate of about 2.5 ships per year. This dramatic cut in DD(X)
    procurement rates, however, will impact the size of our major surface
    combatant fleet far into the future. A prospective DD(X) build rate of
    one ship per year also impacts economies of scale and contributes to
    increased program costs. I remain concerned that we're not building as
    many DD(X)s as previously planned and as many as are necessary in order
    to achieve the stated military requirement. Do you agree that increased
    ship procurement rates and predictability lead to efficiencies, reduced
    costs, and help to maintain a steady workload for a stable and highly-
    skilled industrial base?
        Admiral Mullen. I agree that maintaining a stable, predictable
    shipbuilding plan is a key ingredient in achieving maximum shipbuilding
    efficiencies, cost savings, and a skilled workforce. The fiscal year
    2007 President's budget request demonstrates a renewed commitment to
    maintaining stability in the shipbuilding accounts and Navy expects to
    continue this trend as we execute our 2007 Comprehensive Plan for the
    Construction of Naval Vessels.

        40. Senator Collins. Admiral Mullen, how can Congress and industry
    work with you to increase procurement rates of major surface
    combatants?
        Admiral Mullen. I am grateful for all the support you and your
    colleagues in Congress continue to provide to the Navy's shipbuilding
    program, and I am encouraged by the progress being made by American
    shipyards in controlling costs. The Navy is committed to taking steps
    to help continue this trend. There are a few key areas in which the
    Navy, Congress, and industry can work together to help industry achieve
    the greatest possible efficiency.
        First, the Navy must continue its commitment to providing stability
    in future shipbuilding plans, programs, and budgets. Industry should
    have a reasonable expectation of what work will be available for
    competition and position themselves accordingly.
        Second, the Navy needs to continue to enter into contracts that
    encourage and incentivize industry to make the capital improvements
    required to sustain their world-class status.
        Third, we are encouraging our Nation's two military shipbuilding
    corporations to work more closely together. In addition, we are
    considering options to economize the purchase of components across ship
    classes. To achieve these potential savings, the Navy and Congress
    would need to address control over the line item appropriations process
    and the visibility into costs.
        Lastly, the Navy will continue to transition programs away from
    cost-reimbursement type contracts to fixed-price contracts as early in
    a program as practical. A fixed-price environment provides industry the
    best incentive for cost-reducing improvements.

        41. Senator Collins. Admiral Mullen, are you optimistic that your
    shipbuilding plan, combined with the commitment of our shipbuilders,
    will help lower the costs for ships?
        Admiral Mullen. I am confident that if we stay the course on the
    long range shipbuilding plan and control our appetite for requirements
    growth we can provide the stability and predictability our partners in
    industry need to reduce the costs for ships over time.
                                     ______

                   Questions Submitted by Senator Carl Levin
                  conventional sea-launched ballistic missiles
        42. Senator Levin. Secretary Winter, the Navy has proposed to
    replace nuclear warheads with conventional warheads on two D-5 Trident
    sea-launched ballistic missiles on some, and possibly all, of the 14
    Trident submarines. Each Trident submarine carries 24 D-5 missiles. The
    production schedule for D-5 missiles provided just enough missiles to
    meet the nuclear mission. Would additional missiles have to be
    manufactured? If the answer is yes, how many additional missiles would
    have to be manufactured and how much would that cost?
        Secretary Winter. No, additional missiles do not have to be
    manufactured. The Navy is not requesting any increase in the Trident II
    (DS) missile inventory. The proposed plan will provide two missiles for
    each of the SSBNs with the capability for conventional warheads.
        Other than the change to the warhead, very little modification to
    the missile or onboard system is required for this program. Only minor
    changes to the missile guidance system and shipboard fire control
    system will be necessary. Testing will be accomplished in conjunction
    with ongoing commanders follow-on operational test flights. The current
    and projected DS missile inventory is sufficient to field this new
    capability.

                                    tricare
        43. Senator Levin. Admiral Mullen and General Hagee, do you support
    the proposals in the budget to increase TRICARE premiums and
    deductibles for working-age military retirees?
        Admiral Mullen. Yes, I fully support these modest increases to
    copays designed to maintain TRICARE as a gold standard healthcare
    system while reestablishing a more appropriate cost-sharing balance
    between beneficiaries and the Government. I align myself with General
    Pace and the other Joint Chiefs in recommending the renorming of
    premium costs for the first time since 1995.
        General Hagee. Unfortunately, health care costs continue to outpace
    funding support. In order to maintain the benefit at its current level
    for our military, family members, and retirees, we need to look at
    additional funding sources to include reasonable premium and deductible
    costs for our retirees.

        44. Senator Levin. Admiral Mullen and General Hagee, why do you
    feel these steps are necessary?
        Admiral Mullen. I align myself with General Pace and the rest of
    the Joint Chiefs in my desire to ensure our Active-Duty servicemembers
    and retirees remain the beneficiaries of this ``gold standard'' of
    health care.
        As I indicated in my written statement, DOD health care costs have
    doubled from $19 billion in 2001 to just over $37 billion in the 2006
    budget. Yet, since 1995 when Congress enacted the TRICARE program, the
    premiums have not changed. The net effect is increased pressure on
    other Navy accounts to meet DOD Health Care obligations.
        The Joint Chiefs have met many times on this subject and our
    unanimous recommendation to Congress is that you renorm the cost of the
    premiums to the 1995 levels.
        This revised plan provides excellent health care coverage at very
    reasonable cost to the individual member. More importantly, renorming
    premium costs sustains this excellent program for the foreseeable
    future for Active-Duty and retired.
        General Hagee. DOD provides the finest health care in the world to
    our military, family members, and retirees. It is a commitment that is
    highly important to them and one we will sustain. It has become an
    urgent issue as we are now seeing that, without adjustment of fees,
    this superb benefit will continue to require financing that is growing
    at a rate that has far outstripped the growth in the budgets that also
    support our current and future defense readiness: our manpower, our
    warfighting, and infrastructure investments, and the operation and
    maintenance funds to repair and maintain those investments. We look
    forward to working with Congress to finding a responsible solution to
    this issue.

                  number of lpd-17 amphibious transport docks
        45. Senator Levin. General Hagee, the Navy budget and the FYDP will
    stop LPD-17 procurement at 9 ships, before they buy the 12 ships that
    the Marine Corps has repeatedly said it needs. Do you believe that this
    is the correct decision on force structure?
        General Hagee. Limiting the LPD-17 production line to nine ships
    places the Marine Corps' ability to support national security
    requirements at risk by further decrementing the MEB equipment for the
    assault echelon. The U.S.S. San Antonio, LPD-17 class of ships, is
    optimized for operational flexibility to meet Marine Air Ground Task
    Force requirements to project strike (fire and maneuver) forces from
    the sea deep into littoral land objectives. With its significantly
    enhanced survivability, habitability, and functionality, it represents
    a critical element of seabasing with a spacious well deck for
    deployment of Landing Craft, Air Cushions (LCAC) and EFV and an
    enhanced flight deck and maintenance facility for employment of MV-22,
    medium assault tiltrotors and CH-53E/K heavy lift helicopters.
    Survivability upgrades protect against mines, missiles, and surface
    attack and make it a highly capable platform for the forward deployed
    ESG/Marine Expeditionary Unit and larger forcible entry operations.
    With the LHA(R) ship design emphasis on aviation transport and strike
    fires, the well decks of the LPD-17 and existing LSD-41/49 class have
    even more importance to the rapid surface movement of EFVs deep inland
    and LCAC transport of heavy or bulky ground equipment and sustainment.
    The utility of the well deck space of this ship cannot be over
    emphasized. The well deck space of the LPD-17 provides the Marine Corps
    with the capability to employ heavy equipment across the beach through
    of the joint campaign construct.

                          medical specialty shortfalls
        46. Senator Levin. Admiral Mullen, in your prepared statement, you
    describe the Navy's successes in achieving its accession goals in
    fiscal year 2005, but identify shortfalls in accessions for Navy
    medical programs. What is the Navy doing to address the shortfalls in
    recruiting for medical programs?
        Admiral Mullen. The Navy is pursuing a number of initiatives to
    improve recruiting and retention of health professionals. One such
    recently implemented initiative is the Health Profession Loan Repayment
    Program. We are also evaluating policy actions within existing
    authority to establish critical skills accession bonuses for Medical
    Corps and Dental Corps Health Professions Scholarship Students and
    Direct Accession Dentists.
        To address shortfalls within the Nurse Corps, we have increased
    accession goals in our traditionally successful student pipeline
    programs and are considering further increases. We have found these
    programs to be a more productive source than direct accessions. We are
    also evaluating a Critical Skills Retention Bonus for this community to
    address retention shortfalls among Navy nurses at 7-9 years of
    commissioned service.
        In concert with the recommendations of the Defense Advisory
    Committee on Military Compensation and the impending Quadrennial Review
    of Military Compensation, the Navy will continue to evaluate the need
    for enhanced incentives to attract and retain personnel with critical
    health professions skills.

        47. Senator Levin. Admiral Mullen, do you need new legislative
    authority to improve recruiting of medical personnel?
        Admiral Mullen. We are not convinced that additional legislative
    authorities are required. The Navy is working first to maximize the use
    of existing authorities and to implement recruiting and retention
    incentives currently available without new legislation. If needed, we
    will offer appropriate recommendations on both policy and legislative
    initiatives to DON and Defense leadership in the coming weeks.

        48. Senator Levin. Admiral Mullen, what can we do to help you
    address this shortfall?
        Admiral Mullen. We are not convinced that additional legislative
    authorities are required. The Navy is working first to maximize the use
    of existing authorities and to implement recruiting and retention
    incentives currently available without new legislation. If needed, we
    will offer appropriate recommendations on both policy and legislative
    initiatives to DON and Defense leadership in the coming weeks.

                                foreign training
        49. Senator Levin. General Hagee, under what authority did the
    Marine Corps establish a foreign training component last year?
        General Hagee. In anticipation that the Marine Corps will be tasked
    to provide a Marine Corps function--tailored basic military and combat
    skills training, and advisor support for identified foreign military
    forces--the Marine Corps stood up a Foreign Military Training Unit
    (FMTU) organization in August 2005. However, the FMTU has not engaged
    in the training of any foreign military forces to date. When the Marine
    Corps is tasked to conduct such training of foreign military forces, it
    will be conducted under the authorities found in title 22 of the U.S.
    Code and funded accordingly.

                           navy-marine corps intranet
        50. Senator Levin. Secretary Winter, Congress was recently informed
    of transfers of nearly $75 million for the purpose of settling numerous
    claims filed by Electronic Data Systems (EDS) in connection with the
    Navy's contract for the Navy-Marine Corps Intranet (NMCI). Can you
    provide specifics on which claims were paid off using these funds?
        Secretary Winter. As part of a recent modification of the NMCI
    contract and after negotiation between EDS and the Navy, significant
    claims valued at approximately $800 million by EDS against the Navy
    were settled for $100 million. This settlement utilized $100 million of
    expired funds (fiscal year 2005 and prior), $75 million of which were
    subject of the congressional notification of reprogramming action.
        The recent modification settled all outstanding claims, all of
    which were certified, that the contractor had brought against the
    Department. These included claims by the contractor related to:

             1. Reconstitution of the Pentagon after September 11;
             2. The Department's Legacy Environment

                     a. Legacy Applications;
                     b. Dual Desktop Support;
                     c. Legacy Network Connectivity; and,
                     d. Manual Deployment of Applications;

             3. Failure to Meet Contract Minimums;
             4. Uncompensated Services (excess e-mail storage and file
            remediation);
             5. San Diego Helpdesk;
             6. Certain Lease Credits;
             7. Asbestos Remediation;
             8. Installation of Certain Fire Risers; and,
             9. Lost, Stolen, or Damaged Equipment at Millington.

        51. Senator Levin. Secretary Winter, what was the Navy's position
    on the merit of those claims?
        Secretary Winter. The Department undertook an extensive evaluation
    of the claims submitted by EDS beginning in March 2005. An
    interdisciplinary team, consisting of technical, contracting, and legal
    personnel evaluated the claims. The results of these evaluations were
    used to form the basis for the negotiation of the settlement of these
    claims. Included in the modification was a full and final release for
    all claims and potential claims arising prior to March 24, 2004.
    Settlement of these claims was in the best interests of the Department,
    avoids major potential litigation, and allows the DON and EDS to focus
    on the future performance of the contract.

        52. Senator Levin. Secretary Winter, after paying these claims,
    what is the status of any pending or future claims that could be filed
    by EDS against the Navy?
        Secretary Winter. The settlement provided the DON with a release
    for all pending claims and, with a few exceptions, for all events
    arising prior to March 24, 2006. The few reserved items were agreed to
    as reasonable items to exclude from the settlement and we anticipate
    addressing and resolving them without any further claims. Should there
    be future claims, they will be handled in accordance with the terms of
    the contract (under the newly added alternate dispute resolution
    provision) and the Contract Disputes Act.

        53. Senator Levin. Secretary Winter, what lessons has the Navy
    learned with respect to contracting for information technology services
    as a result of its dealings with NMCI and EDS?
        Secretary Winter. We have learned that we need to have a robust,
    stable requirement developed in a timely manner. While the Navy wanted
    to consolidate and standardize its desktop computing platform and
    strengthen its infrastructure, neither Navy nor EDS fully understood
    the complexity of the existing legacy network infrastructure, nor did
    they appreciate the magnitude of the legacy applications that ran on
    those networks.
        Additionally, the contract, as awarded was a commercial contract
    (FAR Part 12), and did not have a disputes resolution process.
    Therefore, unresolved issues resulted in formal claims against the
    Government.
        In order to improve future information technology procurements, the
    following have been instituted on the current contract and will be
    carried forward to the follow-on effort:

             a. Dr. Dolores Etter, Assistant Secretary of the Navy
            (Research, Development, and Acquisition), has directed that a
            course of action be developed to define future NMCI
            requirements. To this end, the DON Chief Information Officer
            (CIO) and the Deputy Chief of Naval Operations for
            Communication Networks (OPNAV N6) has initiated an effort with
            stakeholders from the Naval (USN/USMC) and joint communities to
            begin the definition of the requirements for the follow-on NMCI
            contract to commence performance in October 2010.
             b. The Assistant Secretary of the Navy with DON CIO is
            developing governance processes for applications
            standardization reduction and configuration management.
             c. Alternative disputes resolution process to resolve issues
            between Government and contractor prior to formal claims being
            initiated by the contractor.

        54. Senator Levin. Secretary Winter, I understand that the Navy and
    EDS are finalizing a modification of the NMCI contract. What are the
    purposes of this contract modification?
        Secretary Winter. On March 24, 2006, the Department executed a
    modification to the NMCI contract with EDS Corporation. This
    modification accomplished several important purposes. First, the
    Department was able to fairly and equitably settle claims brought by
    the contractor. Furthermore, the modification better aligns the
    contractor and the Department to focus both on execution of the
    contract and completion of the rollout of the network.
        The additional terms of the modification, particularly the enhanced
    end-of-contract transition planning and services provisions, will
    improve the Department's ability to conduct a full and open competition
    for the follow-on effort scheduled to commence in 2010.

        55. Senator Levin. Secretary Winter, why was the contract not
    opened up for a full recompetition with other interested potential
    contractors at this time?
        Secretary Winter. The option which the Department exercised was
    competed as part of the original competition for the NMCI contract. For
    the initial award, the DON evaluated each of the offerors' proposals,
    which included the option as part of the original source selection
    process.
        Based on an analysis conducted by two independent firms, Booz Allen
    Hamilton and the Gartner Group, it was determined that the exercise of
    the option was the most advantageous method of fulfilling the
    Government's requirements through 2010, price and other factors
    considered.
        In the longer term, Dr. Dolores Etter, Assistant Secretary of the
    Navy (Research, Development, and Acquisition), has directed that a
    course of action be developed to define future NMCI requirements. To
    this end, the DON CIO and the Deputy Chief of Naval Operations for
    Communication Networks (OPNAV N6) will initiate with stakeholders from
    the Naval (USN/USMC) and Joint communities to begin the definition of
    the requirements for the follow-on NMCI contract in 2010. This is the
    first step in the Department's preparation for the recompete in order
    to have a new contract awarded to commence performance not later than
    October 1, 2010.
                                     ______

                Questions Submitted by Senator Edward M. Kennedy
                 joint strike fighter alternate engine program
        56. Senator Kennedy. Secretary Winter, Secretary Wynne is on record
    that the Navy initiated the recommendation to cancel the second engine
    development for the JSF. What analysis has the DON conducted to support
    the recommendation to cancel competition for the JSF engine program?
        Secretary Winter. During the fiscal year 2007 budget deliberations,
    engine assessments completed by the PMAG in 1998 and 2002, initial test
    results from the F135 engine, and a 2005 OSD(PA&E) analysis were
    considered to support the recommendation to cancel the JSF Alternate
    Engine Program.
        In supporting this decision, the Department of the Navy also
    considered three types of risk: development, cost, and production.
        The F135 engine development is on track and meeting expectations
    with almost 5,000 hours completed. It is being produced using the same
    engineering and manufacturing processes as the Fl19 engine, which is
    performing reliably after roughly 18,000 flight hours. There is limited
    development risk.
        A 2005 OSD(PA&E) analysis showed that the investment cost of a
    second engine source is $2.4 billion, perhaps higher, and will not
    yield program cost savings. Additionally, splitting the buy between two
    competitors will increase production and support costs.
        The Department also assessed that the F135 engine supplier can meet
    production demands. Additionally, the 2002 PMAG assessment concluded
    that operational risk was low to the warfighter with a sole engine
    supplier. The F-22 and F/A-18E/F rely on a single source engine
    supplier.

        57. Senator Kennedy. Secretary Winter, in view of the higher power
    levels required by the STOVL variant required by the Marine Corps, what
    is the technical risk associated with a single engine development
    program?
        Secretary Winter. Performance of the F135 and F136 are similar
    since they are designed and controlled to specification levels of
    thrust. We have confidence in the reliability and performance of the
    F135 engine based on its initial test results. The F135 engine now has
    almost 5,000 test hours completed. The F135 engine is also being
    produced using the same engineering and manufacturing processes as the
    F119 engine currently installed in the F-22, which is performing
    reliably after roughly 18,000 flight hours.

        58. Senator Kennedy. Secretary Winter, what analysis was conducted
    on the impact of non-competitive sourcing on quality, service,
    acquisition, and life cycle support cost for the JSF engine program?
        Secretary Winter. During the fiscal year 2007 budget deliberations,
    the Department of the Navy considered engine assessments completed by
    the PMAG in 1998 and 2002, initial test results from the F135 engine,
    and a 2005 OSD(PA&E) analysis to support the recommendation to cancel
    the JSF Alternate Engine Program.
        These assessments suggest that a more than 15 percent cost savings
    is needed to recover the investment associated with the F136
    development. Additional savings would be required to recover the
    additional costs associated with two suppliers.
        Previous engine competitions indicate at best a 5-10-percent cost
    savings achieved. It is therefore unlikely any savings competition will
    offset the investment.
        In supporting this decision, the Department also considered
    development risk and production risk to the warfighter.
        The F135 engine development is on track and meeting expectations
    with almost 5,000 hours completed. It is being produced using the same
    engineering and manufacturing processes as the F119 engine, which is
    performing reliably after roughly 18,000 flight hours. The F-22 and F/
    A-18E/F rely on a single-source engine supplier. There is limited
    development risk.
        The Department also assessed that the F135 engine supplier can meet
    production demands. Additionally, the 2002 PMAG assessment concluded
    that operational risk was low to the warfighter with a sole engine
    supplier. The F-22 and F/A-18E/F rely on a single-source engine
    supplier.

        59. Senator Kennedy. General Hagee, as the end user for the most
    complex variant of the JSF, is the Marine Corps comfortable with the
    decision to shift to a single engine development program?
        General Hagee. The STOVL variant propulsion system as currently
    designed will meet all of its requirements per the Operational
    Requirements Document regardless of dual or single source engine
    development.

        60. Senator Kennedy. General Hagee, what analysis has satisfied the
    Marine Corps that a single engine development program for the JSF will
    deliver the capabilities you need at acceptable risk?
        General Hagee. During fiscal year 2007 budget deliberations, the
    findings of past engine assessments, along with initial test results
    from the F135 primary engine, were considered. As you are perhaps
    aware, the F135 engine is a derivative from the F119 engine that is
    currently being manufactured for the F-22.
        The F135 engine now has almost 5,000 test hours. The F135 engine is
    also being produced using the same engineering and manufacturing
    processes as the F119 engine which is performing reliably after roughly
    18,000 flight hours. Accordingly, the Department has reasonable
    confidence in the reliability of the F135 engine.
        In addition to confidence in the reliability of the F135 engine,
    DOD's analysis concluded that a second source would not yield program
    cost savings. The investment cost of developing a second source would
    not yield program cost savings. The investment cost of developing a
    second source is high, on the order of at least $2.1 billion and
    perhaps higher. Second, with two sources, neither source would
    experience full learning curve benefits. In addition to initial
    acquisition cost and reduced production rates, a second supplier also
    potentially introduces a second supply chain which could also increase
    support costs.
        In summary, while there are indeed some benefits to having a second
    engine source, those benefits are not commensurate with the increased
    costs. Accordingly, the DOD decided to terminate the F136 alternate
    engine, starting in fiscal year 2007. In an earlier correspondence to
    Senators John Warner and Carl Levin, DOD agreed to continue with the
    planned alternate engine program until this termination decision was
    fully vetted by Congress.

                               sensor technology
        61. Senator Kennedy. General Hagee, it has come to my attention
    that the Marine Corps has identified a ``gap'' in its unmanned aircraft
    systems sensor capabilities, and that the Marine Corps Warfighting Lab
    and Marine Corps Combat Development Command are actively evaluating
    advanced sensor technologies to address requirements for persistent
    intelligence, surveillance, and reconnaissance (ISR), laser
    designation, and multi-sensor payloads for counter-mine, counter-
    improvised-explosive-device (IED), and convoy protection. Could you
    provide the committee with an overview of your evolving requirements in
    this area, along with an assessment of the most urgently needed systems
    capabilities to address these requirements?
        General Hagee. Marine Corps Combat Development Command is
    developing JCIDS documentation for tier II and III unmanned aircraft
    systems (UAS) which identify the mission and related sensor capability
    gaps that were mentioned. The tier III ICD as approved by the JROC in
    December 2005. The tier II ICD is in draft form and currently
    implementing USAF Special Operations Command and Special Operations
    Command input to make it a joint document. We continue to integrate and
    coordinate with our Warfighting Lab, other Services, the research
    community, and industry to identify the best possible solutions in
    sensor technologies and to address our highest priority gaps including:
    infrared; communications relay; counter-IED signal intelligence; and
    laser pointer/designator. As our Warfighting Lab completes testing in
    new payload technologies, results will be incorporated into future
    capabilities documents leading to fielding materiel solutions.
    Background information:
        In February 2005 a consolidated Marine Corps UAS approach was
    developed (approved by the Marine Requirements Oversight Counsel
    (MROC)) for a three-tier concept.

      Tier I                                    Supports the battalion and
                                                 below
                                                Current Dragon Eye UAS
                                                 (manpackable system) and a
                                                 Defense Advanced Research
                                                 Projects Agency (DARPA)
                                                 test (ongoing)
                                                Follow-on Tier I UAS Joint
                                                 Army/USSOCOM/USMC system
      Tier II                                   Supports division/regiment/
                                                 battalion/marine
                                                 expeditionary units
                                                Current Operation Iraqi
                                                 Freedom (OIF) Information,
                                                 Surveillance, and
                                                 Reconnaissance (ISR)
                                                 services (Boeing Scan
                                                 Eagle)
                                                Follow-on compete OIF ISR
                                                 services
                                                Building joint tier II
                                                 program of record (POR)
                                                 (USMC/USAF/USN/USSOCOM)
      Tier III                                  Supports JTF/MAGTF
                                                 commanders
                                                Current POR Pioneer UAS
                                                Follow on Vertical Unmanned
                                                 Aircraft Systems (VUAS) IOC
                                                 2015
                                                JROC approved VUAS ICD
                                                 December 2005

                                  cost of war
        62. Senator Kennedy. Admiral Mullen, I noted your and General
    Hagee's comments about how the war in Iraq is wearing out equipment. In
    view of the fact that many Marine capabilities, particularly Marine
    aviation capabilities, are paid for through Navy procurement accounts,
    is the Navy receiving sufficient support in the supplemental to pay for
    the cost of the war?
        Admiral Mullen. I believe our fiscal year 2006 supplemental request
    adequately addresses cost of war shortfalls. The Navy Department's
    fiscal year 2006 Emergency Wartime Supplemental request for $10.3
    billion included $271.1 million for Navy/Marine Corps aircraft
    procurement (APN). This APN funding included new and restored aircraft
    procurement (UH-1Y and H-53 AMARC) as well as major overhaul, equipment
    replacement, and force protection expenditures.

                                h-46 replacement
        63. Senator Kennedy. Admiral Mullen, considering the cost of the
    MV-22 Osprey aircraft, will the Navy be able to buy them fast enough to
    replace the H-46 Sea Knight helos, a 40-year-old aircraft whose limited
    remaining service life is being rapidly consumed in Iraq?
        Admiral Mullen. Yes. Production of the MV-22 is being ramped up,
    and the Marine Corps intends to field two squadrons each year with
    Ospreys. The Program of Record procures 360 MV-22 aircraft through
    fiscal year 2016, with the last delivery in fiscal year 2018. It is a
    fact the H-46 is being flown at utilization rates three to four times
    their planned peacetime rate during operations in Iraq. However, we
    have and will continue to invest in H-46 sustainment to preserve this
    vital medium-lift assault support capability until we have achieved
    full operational capability with the MV-22 Osprey.

        64. Senator Kennedy. Admiral Mullen, should we be looking for an
    alternative that can be procured more rapidly to perform the missions
    currently being performed by the H-46 in Iraq?
        Admiral Mullen. No, I do not believe this is necessary or
    desirable. We have performed well over a dozen cost and operational
    effectiveness analyses of the medium-lift assault support requirement.
    In every case the MV-22 Osprey is more operationally effective and cost
    effective than any other alternative. The MV-22's combination of speed,
    payload, and range delivers unsurpassed warfighting capabilities.
        The MV-22 recently surpassed Milestone III and was approved by the
    OSD for full-rate production. The Navy is commencing the buildup to
    full rate production starting with the President's budget in 2007. The
    Navy intends to seek economies across the board with a proposed multi-
    year procurement commencing in fiscal year 2008. The first operational
    squadron is currently in training and we will field an operational
    capability in 2007.
                                     ______

               Questions Submitted by Senator Joseph I. Lieberman
                 joint strike fighter alternate engine program
        65. Senator Lieberman. Admiral Mullen, General Electric (GE) has
    delivered almost 4,000 F-18 engines, sole source. Have you ever had to
    ground the F-18 fleet due to an engine problem that would have been
    alleviated by an alternate engine?
        Admiral Mullen. There have been six events in the history of the F/
    A-18 (A through F) program that required immediate grounding of
    aircraft until corrective action was accomplished on the engine. We do
    not believe that if an alternate engine had been available, it would
    have alleviated any of these six groundings.

        66. Senator Lieberman. Admiral Mullen, given that the Pratt &
    Whitney (F135) and GE/Rolls-Royce (F136) engines are to be
    interchangeable; and that the STOVL hardware common to both engines
    limits STOVL thrust, do you see any way that the alternate engine could
    provide a thrust advantage over the primary (F135) engine?
        Admiral Mullen. The STOVL JSF would not benefit from more thrust
    even if an alternate engine could provide the additional thrust. STOVL
    flight operation is limited by two lift components: (1) lift fan torque
    and speed limits; and, (2) exhaust system loads. Because the lift fan
    thrust must equal the engine thrust to maintain aircraft balance during
    vertical lift, it is the lift fans' thrust that is the limiting factor.
    Additionally, the exhaust system's load capability is limited to the
    specification performance parameters designed to reduce the aircraft's
    overall weight.

        67. Senator Lieberman. Admiral Mullen, given the $3.5 billion
    development cost for the alternate engine and the billions of dollars
    in extra cost to manufacture and support a second engine through the
    JSF life cycle, do you have an analysis that shows that the alternate
    engine investment could be recovered or even an analysis that reflects
    a break even point? If yes, please explain.
        Admiral Mullen. Analysis indicates that the Department will be
    unable to recover its investment in an alternate engine for the JSF.
    Additionally, by using two sources we would pay a large premium on each
    engine purchased.
        During the fiscal year 2007 budget deliberations, the Department of
    the Navy considered engine assessments completed by the PMAG in 1998
    and 2002, as well as a 2005 OSD(PA&E) study. These assessments showed
    that the investment for a second engine source is approximately $2.4
    billion. To recover this investment, an alternate engine and production
    competition would need to yield an overall savings of between 15 and 22
    percent. Current estimates do not indicate any potential savings
    through an alternate engine and competitive production. Splitting the
    buy between two competitors would increase both production and support
    costs. With two sources, neither maker would experience full learning
    curve benefits and unit costs would increase by approximately $1
    million. Support costs would increase as a result of establishing two
    supply lines for spare parts and components.

        68. Senator Lieberman. Admiral Mullen, since engine reliability is
    at an all time high, wouldn't it make more sense to consider a second
    source for higher risk subsystems--such as avionics or software? If
    not, why not, and if so, why?
        Admiral Mullen. The decision to cancel the alternate engine program
    was based on affordability and risk assessment. Given the approximately
    $2.4 billion investment cost for developing the F136, analysis
    concluded that production competition would not yield a significantly
    more reliable product or cost savings. It was determined that a single
    engine supplier provides the best balance of risk and cost. Before
    considering establishing a second source for other subsystems a
    business case analysis would need to be completed to determine if the
    potential benefits of a second source are commensurate with the
    projected cost and whether or not the effort would yield program cost
    savings.

        69. Senator Lieberman. Secretary Winter, it seems to me that there
    is enough military engine business to keep GE in the military engine
    market, regardless of whether the Department continues with the
    alternate engine. If the industrial base is really an issue on this
    program, why is it that GE would voluntarily give away 40 percent of
    the work on the alternate engine to Rolls-Royce?
        Secretary Winter. I would prefer not to comment on the motivation
    for GE and Rolls-Royce to form the GE Rolls-Royce Fighter Engine Team,
    LLC, (FET). Any responses that I would offer would be speculative on my
    part and inappropriate.

        70. Senator Lieberman. Secretary Winter, it is my understanding
    that the United Kingdom associated companies supporting the JSF program
    would see close to $6 billion return on their $2 billion investment,
    regardless of whether an alternate engine would be developed. Is that
    true?
        Secretary Winter. [Deleted.]

                                  shipbuilding
        71. Senator Lieberman. Admiral Mullen, according to the CBO, if the
    Navy wants to grow to 313 ships in 5 years, it will need an average of
    $18.3 billion per year for shipbuilding, or $19.5 billion if nuclear
    refueling is included. The CBO's estimate is approximately 25 percent
    higher than the Navy's long-range fiscal plan for shipbuilding. Can you
    respond to this disparity?
        Admiral Mullen. We have reviewed the CBO analysis and have met with
    the authors of both the CBO and CRS studies. CBO and CRS used different
    assumptions and, in some cases, different methods of analysis that led
    to different computational conclusions. First, the CBO computed cost
    per ship in each class by dividing the total dollars spent on a program
    by the number of ships of that type in the build. Navy's position is
    that this incorrectly limits amortization of non-recurring engineering
    costs to production years, vice over the life of the program. This
    raises the unit cost per ship in the CBO model.
        Second, Navy's plan accounts for aggressive cost controls derived
    from stability in the shipbuilding plan, strict control of requirements
    and design configuration by Navy, and our ongoing partnership with
    industry to do their part to help control costs.
        Finally, the CBO calculations differ in the manner in which
    recapitalization is computed. Specifically, CBO estimates did not
    account for Navy's planned use of SSN-774 technologies (and hull form)
    in SSBN(X) design efforts nor the smaller payloads projected for the
    Ohio-class follow-on.

        72. Senator Lieberman. Admiral Mullen, do you dispute the CBO
    estimates?
        Admiral Mullen. The CBO estimates used a weight based costing
    mechanism which does not take into account more efficient production
    facilities, use of proven design tools, predicted market conditions, or
    disciplined acquisition strategies. In addition, I believe that our
    composite shipbuilding inflator, which relied on proprietary agreements
    between the individual yards and their supplier and union bases, most
    accurately reflects the real inflation we will see in our shipbuilding
    environment.

        73. Senator Lieberman. Admiral Mullen, is the Navy's shipbuilding
    plan too ambitious, given the budgetary demands on military pay and
    health benefits for service members and retirees?
        Admiral Mullen. No, Navy will continue to meet our security
    commitments to the American people while fully supporting the health
    care needs of our Active and Reserve members and their families,
    keeping the faith with those who stood the watch before us. We have
    already programmed SCN/NDSF funds within the FYDP to support the 30-
    year shipbuilding plan. We will accept some risk in lower priority
    procurement programs, readiness accounts, and R&D projects to meet the
    target of $13.4 billion (in fiscal year 2005 dollars).

        74. Senator Lieberman. Admiral Mullen, do the Navy's estimates for
    future shipbuilding include the cost of refueling each of the Navy's
    nuclear-powered aircraft carriers? If not, how will that affect your
    planning?
        Admiral Mullen. The Navy's estimates for future new-ship
    construction did not include the cost of refueling each of the Navy's
    nuclear-powered aircraft carriers since refueling is not considered
    new-ship construction. However, we did balance new-ship construction
    funding requirements against the entire spectrum of competing
    resources. In that context, then, we did account for the impact of the
    carrier and submarine refueling requirements. I have consistently
    stated that we need $13.4 billion in new-ship construction funding
    exclusive of the other funding requirements in the Navy. Absent a
    significant reduction in the overall resources available to the Navy, I
    believe we will be able to afford $13.4 billion in new-ship
    construction plus approximately $2 billion in annual requirements for
    refueling, non-battle force ship procurements, and outfitting/post
    delivery requirements.

        75. Senator Lieberman. Admiral Mullen, does the Navy's shipbuilding
    plan adequately support the Nation's shipbuilding industrial base?
        Admiral Mullen. Yes, the Navy's long-range shipbuilding plan
    provides a solid foundation for achieving stability in the shipbuilding
    industry. The Navy must now ensure that, to the largest extent
    possible, we stay the course as outlined in the report to Congress on
    the annual long-range plan for construction of vessels for fiscal year
    2007. Our partners in industry have frequently decried the lack of
    stability that results from yearly changes to the build plan. We must
    do our best to control these perturbations and provide a solid base
    upon which the shipyards can plan. This will, in turn, ultimately be
    more profitable for the yards while at the same time more cost-
    effective for the Navy. Finally, the Navy will seek to incentivize cost
    savings and fiscal responsibility throughout the lives of our programs,
    from design to logistics support, that should encourage the retention
    of a skilled shipbuilding workforce.

        76. Senator Lieberman. Admiral Mullen, in particular, do you think
    the plan can support enough submarine design and engineering work to
    maintain its industrial base?
        Admiral Mullen. The Navy has recognized the potential impact of
    losing a national submarine design capability, and is taking steps to
    mitigate this risk. We have commissioned RAND to study this unique
    portion of the industrial base. The RAND study is expected to conclude
    this fall. We are working closely with General Dynamic's Electric Boat
    Division and Northrop Grumman Newport News to address the 24 design
    skills that we must maintain to ensure we remain capable of designing
    nuclear-powered submarines in the future. The combined results of the
    RAND study and interaction with industry will inform us and allow us to
    make appropriate decisions for the future.
                                     ______

                    Questions Submitted by Senator Jack Reed
                 improvised explosive device manhattan project
        77. Senator Reed. Secretary Winter, how much funding are you
    requesting for the basic research IED ``Manhattan Project''?
        Secretary Winter. The Navy IED research effort requests $30 million
    in the fiscal year 2007 budget request. The counter IED request
    allocates $15 million to the Office of Naval Research and $15 million
    to the Naval Research Laboratory. The effort also includes $30 million
    per year across the FYDP for the Navy effort. This program is separate
    from the activities of the joint IED organization, and is focused on
    basic research (6.1 and 6.2). The goals of the program have been
    communicated to and coordinated with the Joint Counter IED Task Force
    through the Joint Lab Board (JLB).

        78. Senator Reed. Secretary Winter, what are the specific
    technological goals of this activity?
        Secretary Winter. The Navy's Counter IED Project under the Office
    of Naval Research is focused on basic research, with associated
    timelines of 5 years or more. This basic research will focus on
    fundamental phenomenology and technologies related to prediction,
    detection, neutralization, and mitigation of IEDs.

        79. Senator Reed. Secretary Winter, were those goals coordinated
    with the Joint IED Defeat Office?
        Secretary Winter. The goals for the Navy Counter IED Project have
    been communicated to and coordinated with the Joint Counter IED
    organization through the JLB. This board oversees joint counter-IED
    research programs to ensure unity of the science and technology (S&T)
    effort. Dr. Starnes Walker (Office of Naval Research Technical
    Director) is chairman of the JLB.

        80. Senator Reed. Secretary Winter, was the funding for these
    activities additional to the continuing core basic research work of the
    Navy or were ongoing basic research efforts curtailed to fund this
    project?
        Secretary Winter. The budget request for the Navy effort is $30
    million in fiscal year 2007 and each year over the FYDP. The dollars
    for the Navy's basic research counter-IED project were redistributed
    from across the entire S&T program without curtailing any ongoing basic
    research efforts.

                 radio frequency systems technologies research
        81. Senator Reed. Secretary Winter, the Navy's fiscal year 2007
    budget request significantly reduces Navy funding for advanced
    technology development on radio frequency (RF) systems. What was the
    reason for this reduction?
        Secretary Winter. The fiscal year 2007 budget request for RF
    systems advanced technology (PE0603271N) is reduced from fiscal year
    2006 because programs showed sufficient development to transition from
    S&T to R&D funding in preparation for acquisition. For example:

             (1) The advanced technology development efforts for Real Time
            Precision Targeting Radar, Airborne Communications Package,
            Integrated VHF/UHF/L-Band Antenna System, and Next Generation
            Submarine Buoyant Cable Antenna will complete in fiscal year
            2006.
             (2) The advanced technology development effort for Advanced
            Multifunction RF Concept (AMRFC) V1 will complete in fiscal
            year 2007.

        In addition, the funding for the advanced technology development
    efforts for High Altitude Airborne Relay and Router Package and UHF/L-
    Band Phased Array Antennas has moved from PE0603271N to PE0603235N
    (Common Picture Advanced Technology). These two technology products
    support the Future Naval Capability for Global Information Grid
    Compliant Networking, which has scope more appropriate to PE0603235N.

        82. Senator Reed. Secretary Winter, what specific programs and
    efforts are curtailed as a result of this reduction?
        Secretary Winter. No specific programs are curtailed. The reduction
    in the budget request reflects the maturing of the S&T efforts of
    several programs and their transition to acquisition programs under R&D
    funding, as well as a realignment of programs under more appropriate
    funding line numbers.
        For example, the advanced technology development efforts for Real
    Time Precision Targeting Radar, Airborne Communications Package,
    Integrated VHF/UHF/L-Band Antenna System, and Next Generation Submarine
    Buoyant Cable Antenna will complete in fiscal year 2006. The advanced
    technology development effort for AMRFC VI will complete in fiscal year
    2007.
        The funding for the advanced technology development efforts for
    High Altitude Airborne Relay and Router Package and UHF/L-Band Phased
    Array Antennas have moved from funding line PE060327IN to PE0603235N
    (Common Picture Advanced Technology). These two technology products
    support the future naval capability for global information grid
    compliant networking, which has scope more appropriate to PE0603235N.

        83. Senator Reed. Secretary Winter, what future naval capabilities
    are supported by investments in this area?
        Secretary Winter. Fiscal year 2007 investments in PE0603271N
    support the Sea Shield Future Naval Capability by developing enabling
    capabilities for multi-source ISR to the warfighter and Advanced
    Electronic Sensor Systems for missile defense through the advanced
    technology development of the following technology products: AMRFC VI,
    Electronic Attack Techniques to Counter Advanced Threats, S-Band
    Digital Array Radar I, and Shipboard Electro-Optic/Infrared Closed Loop
    Self Protection.

                navy science and technology investment strategy
        84. Senator Reed. Secretary Winter, the Naval Research Advisory
    Committee (NRAC) recently released a report titled ``S&T for Naval
    Warfare 2105-2020'' that states ``failure to change the investment
    strategy for Navy-Marine Corps S&T will make technological surprise on
    the battlefield likely--and success in executing naval missions will be
    problematic.'' The report made a series of recommendations on potential
    changes to the Navy S&T program. Have you been briefed on this report
    and its findings?
        Secretary Winter. I have reviewed the report. I have been engaged
    with Dr. Etter, the Assistant Secretary of the Navy for Research,
    Development, and Acquisition, and Dr. Tether of DARPA to evaluate ways
    in which the Navy can focus and leverage our S&T investments.

        85. Senator Reed. Secretary Winter, what steps are you taking to
    act upon the NRAC recommendations?
        Secretary Winter. The Navy S&T Corporate Board has tasked the Chief
    of Naval Research with developing an S&T strategic plan. The objective
    of the strategic plan is to ensure that S&T is focused on Navy and
    Marine Corps priorities and to determine how to invest in S&T research
    areas. The strategy is driven by the QDR, Naval Power 21, Sea Power 21,
    and Secretary of the Navy, CNO, Commandant of the Marine Corps visions.
    This guidance leads to key naval capability areas which are supported
    by our Office of Naval Research (ONR) research areas across many
    disciplines.
        ONR's S&T departments are tasked with sponsoring 6.1 through 6.3
    programs. These programs are managed to advance and transition
    technology options to the fleet and force. Research programs
    categorized as ``future naval capabilities'' and ``innovative naval
    prototypes'' have well-defined review and oversight processes. In the
    case of the Discovery and Invention (6.1 and early 6.2) programs, ONR
    developed, in fiscal year 2005, a process for evaluating programs based
    on naval impact, innovation, quality, and risk.
        The S&T strategy will map the overall S&T portfolio to the key
    naval capabilities in collaboration with DARPA and the other Services.
    Investment priorities will be set by the S&T Corporate Board to ensure
    that capabilities are supported within the S&T budget. This strategy
    will be reviewed biennially by the Naval Research Advisory Committee
    (NRAC) to maintain alignment with naval priorities. The next review
    (The NRAC Summer Studies) will take place on June 22 and 23, 2006.

                              university research
        86. Senator Reed. Secretary Winter, for over 50 years the academic
    community has played a critical role in providing the Navy with advice
    and innovative research in areas of fundamental importance to its core
    missions such as facing the challenge of the Soviet submarine fleet,
    mine warfare, subsurface communications, the new technologies of
    autonomous vehicles, and underwater acoustics. What role does the Navy
    envision for the academic community with respect to sustaining and
    enhancing its ability to perform its core mission?
        Secretary Winter. Historically, academia has been the primary
    supplier of Navy basic research. In fiscal year 2005, 54 percent of our
    basic research and 20 percent of our applied research were performed by
    universities. The intent of basic research is to further knowledge of
    the fundamental aspects of phenomena without specific applications
    towards process or products. It is research that is publishable,
    predominantly unclassified and best suited to universities. While we
    strive to maintain a broad discovery and invention (D&I) portfolio, one
    of our key criteria for selecting basic research programs is ``Navy
    relevance,'' i.e. could the knowledge contribute to the achievement of
    long-term DON strategies/goals? ONR program officers have significant
    technical expertise and are familiar with the technical communities
    that provide basic research. Their roles include seeking the best
    research available and translating Navy needs into basic research
    programs.
        ONR D&I funding supports approximately 3,000 graduate students per
    year. These are the future S&T workers who may join the naval research
    enterprise or perform Navy relevant S&T work in industry or academia.
    Universities are critical in filling the S&T pipeline with excellent
    research and with scientists and engineers. We foresee no change in the
    importance of academia's contribution to maintaining the technological
    superiority of the Navy.

                         undersea warfare technologies
        87. Senator Reed. Admiral Mullen, looking ahead 10-15 years, are
    there any types of undersea warfare technologies in which you think the
    United States will not have a clear technological lead over global
    competitors?
        Admiral Mullen. There are none. The Navy's investment in the full
    spectrum of undersea warfare technologies has resulted in an undersea
    warfare ``system of systems'' that will ensure the United States
    maintains its technological lead over any potential global competitor
    envisioned during the proposed time frame. These systems include
    submarines, surface ships, aircraft, distributed systems, unmanned
    undersea vehicles, advanced torpedoes, and acoustic and non-acoustic
    undersea detection systems.

        88. Senator Reed. Admiral Mullen, what areas are those?
        Admiral Mullen. None.

        89. Senator Reed. Admiral Mullen, what are the military threat
    implications of this?
        Admiral Mullen. None.

        90. Senator Reed. Admiral Mullen, what steps can we take now to
    avoid losing our international lead in undersea warfare technologies?
        Admiral Mullen. To maintain our technological advantage in undersea
    warfare, we must continue our investment in R&D, as well as in ISR,
    enhancing the capabilities of all the systems that contribute to
    undersea warfare, and exploring new technologies that may have undersea
    warfare potential. The Navy's balanced program of funding for advanced
    R&D, executing a stable procurement plan to help lower system costs,
    and procuring the required numbers of systems will, when coupled with
    robust training and aggressive maritime domain awareness, help to
    ensure the United States maintains its total dominance of undersea
    warfare.
                                     ______

                    Questions Submitted by Senator Evan Bayh
                        man-overboard indicator program
        91. Senator Bayh. Admiral Mullen, how many sailors or marines fall
    from ships each year who are not wearing a float coat?
        Admiral Mullen. An average of 40 sailors or marines fall overboard
    each year. All sailors or marines conducting flight deck operations are
    required to wear a life jacket or float coat as these personnel are
    considered to be at greatest risk for going over the side. The Navy
    estimates that approximately 35 percent of the 40 man-overboard
    incidents involve sailors or marines not wearing a float coat or life
    jacket. The baseline Man-Overboard Indicator (MOBI) program, which
    provides a transmitter to be worn on individual float coats and life
    jackets, will be completed on all Navy ships during fiscal year 2008.
    The Navy is currently evaluating the next generation ``one-per-person''
    MOBI concept, which does not require the transmitter to be worn on the
    float coat or life jacket. Rather, the transmitter is attached directly
    to a sailor's uniform. This will ensure that all personnel will be
    guaranteed MOBI protection regardless of whether they are wearing a
    float coat or life jacket. The ``one-per-person'' concept is currently
    being evaluated aboard U.S.S. Germantown (LSD 42).

        92. Senator Bayh. Admiral Mullen, to date, Congress has funded the
    lifesaving MOBI program. When do you plan to include this program in
    your budget?
        Admiral Mullen. All previous MOBI installations on Navy ships were
    funded through congressional support. Funding included procurement and
    installation costs of the MOBI system components, consisting of
    receivers, direction finders, antennas, connectors, and life jacket
    transmitters. Due to competing requirements, there were no MOBI funds
    included in the fiscal year 2006 or fiscal year 2007 budget. As the
    Navy develops its POM for fiscal years 2008-2013, the MOBI system will
    be considered along with all other requirements, though the
    aforementioned competing budget pressures remain.

        [Whereupon, at 12:11 p.m., the committee adjourned.]

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                      2007

                                  ----------

                            TUESDAY, MARCH 14, 2006

                                           U.S. Senate,
                                   Committee on Armed Services,
                                                        Washington, DC.

        COMBATANT COMMANDERS ON THEIR MILITARY STRATEGY AND OPERATIONAL
                                  REQUIREMENTS

        The committee met, pursuant to notice, at 9:41 a.m. in room
    SH-216, Hart Senate Office Building, Senator John Warner
    (chairman) presiding.
        Committee members present: Senators Warner, McCain, Inhofe,
    Collins, Talent, Cornyn, Levin, Akaka, Bayh, and Clinton.
        Committee staff members present: Charles S. Abell, staff
    director; and Leah C. Brewer, nominations and hearings clerk.
        Majority staff members present: William M. Caniano,
    professional staff member; Sandra E. Luff, professional staff
    member; Scott W. Stucky, general counsel; and Richard F. Walsh,
    counsel.
        Minority staff members present: Richard D. DeBobes,
    Democratic staff director; Gabriella Eisen, research assistant;
    Evelyn N. Farkas, professional staff member; Richard W.
    Fieldhouse, professional staff member; William G.P. Monahan,
    minority counsel; and Mary Louise Wagner, professional staff
    member.
        Staff assistants present: Micah H. Harris, Benjamin L.
    Rubin, and Jill L. Simodejka.
        Committee members' assistants present: Christopher J. Paul,
    assistant to Senator McCain; John A. Bonsell, assistant to
    Senator Inhofe; Mackenzie M. Eaglen, assistant to Senator
    Collins; Russell J. Thomasson, assistant to Senator Cornyn;
    Stuart C. Mallory, assistant to Senator Thune; Darcie Tokioka,
    assistant to Senator Akaka; William K. Sutey, assistant to
    Senator Bill Nelson; Todd Rosenblum, assistant to Senator Bayh;
    and Andrew Shapiro, assistant to Senator Clinton.

           OPENING STATEMENT OF SENATOR JOHN WARNER, CHAIRMAN

        Chairman Warner. Good morning, everyone. The committee
    meets today to receive the testimony from two of our most
    distinguished combatant commanders on their military strategy
    and operational requirements in review of the National Defense
    Authorization Request for Fiscal Year 2007. We welcome our
    guests. Admiral Keating is Commander, U.S. Northern Command
    (NORTHCOM); and General Craddock is Commander, U.S. Southern
    Command (SOUTHCOM). I commend each of you and those within your
    respective commands for the leadership that you provide and
    that you convey to protect our Nation and the interests of our
    allies and friends. I particularly wish to convey to the fine
    men and women in your command, as well as their families, the
    Nation's gratitude for their selfless service to maintain our
    freedom.
        Admiral Keating, it is my understanding that your wife has
    joined us today. We would be privileged to have you introduce
    her.
        Admiral Keating. It would be a pleasure, Senator, to
    introduce my wife, Wanda Lee Keating. We have stopped counting
    anniversaries. We are up in the decades. She is the proud
    mother of a Navy F-18 pilot who is in Oceana and the proud
    mother of a daughter who is married to an F-18 pilot in Oceana,
    Virginia.
        Additionally, we have Command Sergeant Major Scott Frye
    with us, Mr. Chairman. He is our senior advisor for both North
    American Aerospace Defense Command (NORAD) and NORTHCOM and he
    is a native of New Haven, Connecticut, and a rabid Huskies fan.
        Thank you for the opportunity.
        Chairman Warner. Yes, I know a few things about him.
        Mrs. Keating, we thank you for joining us. I think it is
    important that you have the opportunity to see all aspects of
    your distinguished husband's career and to give your input. My
    congratulations on that family. We will not have you here as a
    witness on the F/A-18. You are prejudiced on that one for sure.
        We recognize that the U.S. forces must be capable of
    defeating threats on distant shores and must simultaneously
    possess the capability to swiftly mitigate the consequences of
    any attack or catastrophic natural disaster on the homeland.
        Admiral Keating, with regard to the Northern Command, the
    committee is very much interested in the following: One, the
    evolution of your command as a combatant command, including any
    recommendations to improve and enhance your operational and
    situational awareness; the sufficiency of forces at your
    disposal to defend the United States from external attack and
    respond to a domestic emergency; your assessment of how best to
    employ National Guard and Reserve component forces to ensure
    unity of command as well as unity of effort; your vision of
    NORTHCOM's role in homeland defense and support of civil
    authorities, particularly in light of NORTHCOM's role in
    response to Hurricane Katrina; your efforts to protect the air,
    sea, and land approaches to the United States; and your
    assessment of the interagency synchronization as well as the
    theater security cooperation with Mexico and Canada regarding
    the critical protection of our borders.
        General Craddock, the activities of your command continue
    to make important contributions to the positive progress
    throughout Latin America and the Caribbean region. In
    SOUTHCOM's area of operations, an overwhelming majority of
    nations have made significant strides in political and economic
    development over the past 2 decades.
        Despite these developments, there remain some important
    challenges to U.S. and hemispheric stability and security.
    Yesterday during our visit you reviewed with me the number of
    elections coming up and the influence of certain nations on
    those elections. I hope you will cover that with my colleagues.
    These challenges include persistent poverty, guerrilla
    movements, drug trafficking, rising crime, gang activities, and
    the rise of radical populism in several Latin American
    countries. These matters add to the strategic importance of the
    region.
        The committee is particularly interested in your insights
    into: the political developments in Haiti and international
    support to peacekeeping operations; the activities of President
    Chavez in Venezuela and his relations with his neighbors; the
    government of President Morales in Bolivia; Colombia's struggle
    against drug trafficking and illegally armed groups and the
    courage of that nation--it has been steadfast and I hope that
    you will comment on the political stability in that area today;
    and the threat imposed by international terrorist groups,
    including al Qaeda, who have used areas of Latin America to
    advance their causes.
        Detention operations at Guantanamo Bay also remain a matter
    of great concern to this committee. In addition to the legal
    debate, the treatment of the detainees has been the focus of
    detailed international and media attention. Your assessment
    then, General, of recent reporting and an update on detention
    operations at the facility.
        Our witnesses today symbolize the global scope of the
    threats that this Nation of ours faces in the 21st century,
    both at home and abroad. We welcome you.
        [The prepared statement of Senator Warner follows:]

                   Prepared Statement by Senator John Warner

        Good morning, the committee meets today to receive testimony from
    two of our distinguished combatant commanders on their military
    strategy and operational requirements in review of the National Defense
    Authorization Request for Fiscal Year 2007.
        We welcome our distinguished witnesses: Admiral Timothy J. Keating,
    Commander, U.S. Northern Command (NORTHCOM); and General Bantz
    Craddock, Commander, U.S. Southern Command.
        I commend each of you for the leadership you provide, and ask that
    you convey to the fine men and women in your commands, as well as their
    families, the Nation's gratitude for their selfless service and
    commitment to our Nation's defense.
        I would also like to welcome a special guest to our hearing today--
    Wanda Lee Keating.
        Thank you for joining us--and thank you for all you do to support
    the family members of NORTHCOM.
        Gentlemen--we welcome your insights on developments in your
    respective commands, as well as your own assessments of the fiscal year
    2007 defense budget request.
        We recognize that U.S. forces must be capable of defeating threats
    on distant shores, and must simultaneously possess the capability to
    swiftly mitigate the consequences of an attack, or a catastrophic
    natural disaster, on the homeland.
        Admiral Keating, with regard to NORTHCOM, the committee is very
    interested in your views on:

             the evolution of NORTHCOM as a combatant command;
             the sufficiency of forces at your disposal to defend
            the United States from external attack or to respond to a
            domestic emergency;
             your assessment of how best to employ National Guard
            and Reserve component forces to ensure for--unity of command--
            as well as unity of effort;
             your vision of NORTHCOM's role in homeland defense and
            support to civil authorities particularly in light of
            NORTHCOM's role in response to Hurricane Katrina;
             your efforts to protect the air, sea, and land
            approaches to the United States; and
             your assessment of the interagency synchronization, as
            well as the theater security cooperation with Mexico and Canada
            regarding the critical protection of our borders.

        General Craddock, the activities of United States Southern Command
    continue to make important contributions to positive progress
    throughout Latin America and the Caribbean region.
        In the Southern Command's area of operations, an overwhelming
    majority of nations have made significant strides in political and
    economic development over the past few decades.
        Despite positive developments, there remain some important
    challenges to U.S. and hemispheric stability and security.
        These challenges include persistent poverty, guerrilla movements,
    drug trafficking, rising crime, gang activities, and the rise of
    radical populism in several Latin American countries. These matters
    surely add to the strategic importance of the region.
        The committee is particularly interested in your insights into:

             the political developments in Haiti and international
            support to peacekeeping operations;
             the activities of President Chavez in Venezuela and
            his relations with his neighbors;
             the government of President Morales in Bolivia;
             Colombia's struggle against drug trafficking and
            illegally armed groups; and
             the threat posed by international terrorist groups who
            have used areas of Latin America to advance their causes.

        Detention operations at Guantanamo Bay also remain a matter of
    considerable concern. In addition to the legal debate, the treatment of
    detainees has been the focus of detailed international and media
    attention.
        Your assessment of recent reporting and an update on detention
    operations at the facility will be very useful.
        Our witnesses today symbolize the global scope of the threats we
    face in the 21st century--both at home and abroad.
        Again, we welcome you here today and look forward to your
    testimony.

        Chairman Warner. Senator Levin.

                    STATEMENT OF SENATOR CARL LEVIN

        Senator Levin. Thank you, Mr. Chairman. First let me join
    you in welcoming Admiral Keating and General Craddock. We
    extend our thanks to you and to all the personnel under your
    commands for their and your service to the country. I also join
    our chairman and I know every member of this committee, in
    thanking the family members, including the special member who
    is with us here today, for their service in making your service
    possible.
        Among the important issues that I hope we can explore
    during this hearing today are: one, the lessons learned from
    the military response to Hurricane Katrina; two, intelligence
    sharing among agencies in the NORTHCOM in order to prevent
    another terrorist attack; three, North American Aerospace
    Defense Command (NORAD) and its maritime security efforts;
    four, U.S. military assistance to the government of Colombia;
    and five, the potential impact on security in the Western
    Hemisphere of political developments in Haiti, Venezuela, and
    Bolivia.
        Admiral Keating, on Friday the Subcommittee on Emerging
    Threats and Capabilities held the first hearing on homeland
    defense since Hurricane Katrina. Today's hearing is the first
    full Armed Services Committee hearing with NORTHCOM represented
    since the hurricane hit. The White House review, called ``The
    Federal Response to Hurricane Katrina Lessons Learned,''
    concluded that, ``Active-Duty military and National Guard
    operations were not coordinated.'' I hope Admiral Keating will
    tell us how NORTHCOM plans to work with the National Guard to
    integrate civil support efforts and about the contingency
    planning and exercises that the command will conduct to
    strengthen the military's ability to coordinate its assistance
    to Federal agencies.
        I also hope that we will hear, Admiral Keating, about
    changes that you intend to make to the NORAD structure and
    organization and how they might affect binational homeland
    defense cooperation with Canada.
        On intelligence, I continue to be concerned about the
    nature of the interaction between NORTHCOM and the National
    Counterterrorism Center (NCTC) and whether the command is
    receiving appropriate intelligence in a timely fashion in order
    to conduct its mission.
        General Craddock, this year is the seventh year of our
    political-military effort to help the Colombian government
    defeat indigenous narcoterrorists and to strengthen democratic
    Colombia. The Colombian government and military have made
    progress, but obstacles remain. Among them is the fact that,
    although coca eradication has increased, cultivation overall
    has increased, and the price of cocaine in the United States
    does not appear to have changed significantly. That is an
    indication that the supply has not changed significantly.
        Two years ago, SOUTHCOM asked this committee for authority
    to raise the cap or the restriction placed on the number of
    personnel supporting the Colombian military effort from 400
    military and civilian personnel respectively to 800 military
    and 600 civilian personnel. We granted the Defense Department
    authority for 2 years and this year the Department has asked us
    to renew it. Given that the greatest challenges in Colombia are
    associated with the demobilization of all narcoterrorists,
    governance, and economic development, I hope to hear from
    General Craddock about whether there is a U.S. and Colombian
    interagency strategy to govern the wise use of U.S. military
    assistance.
        Finally, like our chairman, I hope to hear from General
    Craddock regarding our operations in Guantanamo, the status of
    the various legal proceedings, including the military
    tribunals, and the assumptions that he and the Department are
    using regarding the future detainee population.
        Again, my thanks to our witnesses and thank you, Mr.
    Chairman.
        [The prepared statement of Senator Levin follows:]

                    Prepared Statement by Senator Carl Levin

        Let me join the chairman in welcoming Admiral Keating, and General
    Craddock. We extend our thanks to you, and all the personnel under your
    commands, for your service to the country. I also thank the family
    members who make your service possible.
        Among the important issues I hope we can explore during this
    hearing are: 1) the lessons learned from the military response to
    Hurricane Katrina; 2) intelligence-sharing among agencies and the
    Northern Command in order to prevent another terrorist attack; 3) North
    American Aerospace Defense Command (NORAD) and its air and maritime
    security efforts; 4) U.S. military assistance to the government of
    Colombia, and; 5) the potential impact on security in the Western
    hemisphere of political developments in Haiti, Venezuela, and Bolivia.
        Admiral Keating, on Friday the Subcommittee on Emerging Threats and
    Capabilities held the first hearing on homeland defense since Hurricane
    Katrina. Today's hearing is the first full Armed Services Committee
    hearing with Northern Command represented since the hurricane hit.
        The White House review, The Federal Response to Hurricane Katrina:
    Lessons Learned concluded that, ``Active-Duty military and National
    Guard operations were not coordinated and served two different bosses,
    one the President and the other the Governor.''
        I hope Admiral Keating will tell us how Northern Command plans to
    work with the National Guard to integrate civil support efforts, and
    about the contingency planning and exercises that the Command will
    conduct to strengthen the military's ability to coordinate its
    assistance to Federal agencies.
        I also hope to hear, Admiral Keating, about changes that you intend
    to make to the NORAD structure and organization and how they might
    affect binational homeland defense cooperation with Canada. On
    intelligence, I continue to be concerned about the nature of the
    interaction between Northern Command and the National Counterterrorism
    Center, and whether the command is receiving appropriate intelligence
    in a timely fashion in order to conduct its mission.
        General Craddock, this year is the seventh year of our political-
    military effort to help the Colombian government defeat indigenous
    narcoterrorists and strengthen democratic Colombia. The Colombian
    government and military have made progress, but obstacles remain. Among
    them, is the fact that although coca eradication has increased,
    cultivation overall has increased. The price of cocaine in the United
    States does not appear to have changed significantly.
        Two years ago, the Southern Command asked this committee for
    authority to raise the ``cap,'' or restriction, placed on the number of
    personnel supporting the Colombian military effort from 400 military
    and civilian personnel respectively to 800 military, and 600 civilian,
    personnel. We granted the Defense Department this authority for 2
    years, and this year the Department has asked us to renew it. Given
    that the greatest challenges in Colombia are associated with the
    demobilization of all narcoterrorists, governance, and economic
    development, I hope to hear from General Craddock about whether there
    is a U.S. and Colombian interagency strategy to govern the wise use of
    U.S. military assistance.
        I also hope to hear from General Craddock regarding our operations
    in Guantanamo, the status of the various legal proceedings including
    the military tribunals, and the assumptions he and the Department are
    using regarding the future detainee population.
        Thank you.

        Chairman Warner. Thank you very much, Senator Levin.
        Colleagues, we are few in number here this morning, so does
    anyone else desire to make a few opening comments? Senator
    McCain, Senator Akaka, any others? [No response.]
        Thank you very much.
        General Craddock.

       STATEMENT OF GEN BANTZ J. CRADDOCK, USA, COMMANDER, U.S.
                            SOUTHERN COMMAND

        General Craddock. Mr. Chairman, Senator Levin,
    distinguished members of the committee: Thank you for the
    opportunity to report here today on the posture of SOUTHCOM. I
    have prepared a complete written statement that I request to
    submit for the record.
        Chairman Warner. Without objection, the full text of
    statements by both witnesses will be included in the record.
        General Craddock. Thank you, sir.
        Before I begin with a short oral statement, I would just
    like to say I am pleased to be here today with my esteemed
    colleague and good friend, Admiral Tim Keating. It is indeed a
    pleasure to work with Tim on a routine, almost daily basis.
        The men and women of SOUTHCOM are doing a superb job. In
    keeping with the highest priorities of this Nation, the members
    of the command continue to ensure the forward defense of the
    United States, encourage regional partnerships, and enhance
    stability and security throughout the region. In addition,
    Joint Task Force Guantanamo operations continue in support of
    our Nation's long war against terrorism.
        Across the region, poverty, corruption, and inequality
    contribute to an increased dissatisfaction with democracy and
    free market reforms. This has been accompanied by the growing
    popularity of leaders who profess to offer an alternative
    through anti-U.S. and anti-free market rhetoric.
        We at SOUTHCOM believe the Andean region remains the
    linchpin to security and stability in Latin America and the
    Caribbean Basin. Columbia, engaged in its own long war now over
    4 decades, has shown tremendous successes in its efforts to
    increase governance and security throughout its territory.
    Additionally, Colombia has also experienced record drug
    eradications and interdictions, as well as extending government
    presence to every municipality and every department of the
    country. Continued U.S. support is essential to sustain and
    build on these gains, not only to achieve Colombia's ultimate
    victory, but also to ensure the stability of its neighboring
    countries.
        The threats facing this region did not develop overnight
    nor can they be solved overnight. Shared security problems in
    this hemisphere require shared solutions. Ungoverned spaces,
    porous borders, organized crime, and narcoterrorism pose
    enormous challenges to the freely elected leaders and often
    undermine legitimate governments.
        We at SOUTHCOM recognize that not all problems and
    solutions are military in nature. The military can often help
    to set the conditions to create a safe and secure environment,
    thus allowing agents of reform and development--the political,
    the economic, and the social programs--to improve the quality
    of life for all citizens in the region. Such an approach
    requires an integrated long-term effort.
        We at SOUTHCOM fully support the American Servicemembers
    Protection Act (ASPA). Although well-intentioned, ASPA
    continues to have unintended consequences. Eleven partner
    nations in our area of responsibility are unable to attend U.S.
    International Military Education and Training (IMET) programs.
    This loss of engagement prevents the development of long-term
    relationships with future military and civilian leaders.
        We thank the committee for your steadfast support.
    Continued congressional support for our efforts will ensure
    that this command is capable of more effective engagement with
    our regional partners.
        I thank you again for the opportunity today and I look
    forward to your questions. Thank you, Mr. Chairman.
        [The prepared statement of General Craddock follows:]

                Prepared Statement by GEN Bantz J. Craddock, USA

        Mr. Chairman, Ranking Member Levin, and distinguished members of
    the committee, thank you for the opportunity to provide an overview of
    Southern Command's area of responsibility (AOR) to include the
    challenges we face and how we are addressing them. Today, I will
    describe the regional conditions and threats affecting our partner
    nations and, thus, our own national security; how we are working with
    our partner nations to face these threats; and what we foresee for the
    region. It is primarily through nation-to-nation engagements that we
    establish regional partnerships to enhance hemispheric stability and
    security, thereby ensuring the forward defense of the United States.
        On an average day, about 4,500 men and women of the United States
    Southern Command are serving in the headquarters and throughout the
    AOR. Our men and women play a vital role in carrying out the objectives
    of U.S. Southern Command.
                               command objectives
        In keeping with the highest priority of the Nation, the U.S.
    Southern Command ensures the forward defense of the United States. We
    must protect the southern approaches to our Nation with an active
    defense against those who seek to harm this country.
        The forward defense of the U.S. can best be accomplished through
    broad cooperation with partner nations. This command must strengthen
    existing relationships and establish regional partnerships necessary to
    provide collective security across the broad spectrum of threats facing
    both the United States and peaceful nations in the region.
        Strong regional partnerships will enable Southern Command and our
    partner nations to enhance hemispheric stability and security. The
    stability and security of the U.S. and our partner nations depend upon
    our ability to work together in a mutual effort to confront and defeat
    common security challenges, such as illicit trafficking and narco-
    terrorism.
        During the past year, I have traveled extensively throughout the
    region. I am impressed by the progress being made in some areas, and
    concerned about the progress still to be made in others. I am concerned
    about what appears to be a growing instability in the region that is
    degrading the ability of governments to sustain their democratic
    processes.
        Since March 2005, there have been six presidential elections in
    this region--Honduras, Chile, Bolivia, Haiti, Costa Rica, and
    Suriname--and there will be seven more taking place by the end of 2006.
    That equates to 13 opportunities for the people of those countries to
    take one more step toward strengthening, or on the other hand,
    weakening their democratic processes. In the six elections that have
    taken place since my last testimony, all of the newly-elected leaders
    have said they will continue their cooperative relationships with the
    U.S.
        A recent article in the Economist stated that democracy's defining
    feature is ``the freedom to hire and fire your government.'' Elections
    alone are only a first step in guaranteeing secure, stable, and
    peaceful democracies. Democracies also rest upon a foundation of strong
    institutions, with checks and balances among legislative, executive,
    and judicial branches of government, which ensure basic civil liberties
    and human rights. Leaders can rise to power through democratic
    elections and then seek to undermine these same democratic processes,
    which are fragile in much of the region. An election can present an
    opportunity for those with extremist views to exploit themes of
    nationalism, patriotism, and anti-elite or anti-establishment rhetoric
    to win popular support--especially in young and vulnerable democracies.
        U.S. Southern Command's linkage to, and support for, good
    governance is manifested through our engagement opportunities. It is
    through theater security cooperation activities that Southern Command
    has been able to maintain positive military-to-military relations with
    most of the region. These sustainable relations enable us to reinforce
    professional militaries that support democratic institutions. Southern
    Command will continue to support U.S. policy and objectives in the
    region by striving to maintain good relations with our military
    counterparts as these new administrations take shape.
                             conditions and threats
        Today, Latin America is one of the least armed areas of the world,
    having no nuclear weapons, or large standing conventional forces.
    However, this region can hardly be considered benign. To the contrary,
    the insidious nature of the threats to the U.S. and our partner nations
    can be somewhat deceiving at first glance. The conditions of poverty,
    disease, corruption, social inequality, and widespread income disparity
    contribute to the growing dissatisfaction of a population that has been
    exposed to the political benefits of a democracy, but has not yet
    profited economically.
        The lack of security, stability, and in some cases, effective rule
    of law, further exacerbates the situation. Under-governed sovereign
    territory and porous borders add another dimension. All of these
    conditions create an environment that is conducive to the development
    of threats such as illicit trafficking, urban gangs, kidnapping,
    criminals, and narco-terrorists whose activities discourage licit
    commerce and undercut economic development. This, in turn, seriously
    affects the ability of legitimate governments to provide for their
    citizens.
        This permissive environment existing throughout the AOR enables
    extremist groups to maintain a presence and operate with relative
    impunity. We have seen indications of Islamic Radical Group presence
    (such as Hizballah, HAMAS, and Egyptian Islamic Gama'at) in various
    locations throughout the AOR. These members and facilitators primarily
    provide financial and logistical support to Islamic terrorist groups
    from numerous cities in the region, including the tri-border area of
    Paraguay, Brazil, and Argentina. Despite increased partner nation
    cooperation and some law enforcement action, enclaves in the region
    generally remain a refuge for terrorist support and fund-raising
    activities. History has taught us that terrorist organizations such as
    al Qaeda seek safe havens in the many ungoverned areas in this region.
    We remain concerned that members and associates in the region could
    move beyond logistical support and actually facilitate terrorist
    training camps or operations.
        Historically, the AOR has been prone to trafficking. Established
    and elusive transit routes have brought tons of cocaine to our shores
    as well as facilitated movement of special interest aliens. Document
    forgery is now an emerging problem wherein well-established networks
    are capable of producing quality forgeries and, through corrupt
    government officials, they can acquire legitimate documents. These
    document forgers or smugglers could facilitate the travel of extremist
    operatives throughout the region and into the United States.
        It is in the context of these conditions and threats that the U.S
    Southern Command works to ensure the forward defense of the United
    States in the hemisphere's four sub-regions: the Andean Ridge, Central
    America, the Caribbean, and the Southern Cone. A quick review of the
    four will reveal they all have both common and unique characteristics.
                                  andean ridge
        The Andean Ridge is the linchpin to regional stability. Nations
    within this sub-region are politically fragile, economically
    challenged, and in some instances, lack sufficient security forces to
    control their sovereign territories. Despite their vulnerabilities,
    these nations are dedicated to combating myriad social, political, and
    economic threats that transcend purely military issues.
    Colombia
        Our top priority in Colombia is the safe return of the three
    American hostages, who have now been held captive by the Revolutionary
    Armed Forces of Colombia (FARC) for over 3 years. Our efforts remain
    focused on assuring the safe return of these courageous and honorable
    men.
        The Colombian Government continues to make progress in restoring
    security and strengthening its democratic institutions. In 2003, the
    Government of Colombia implemented the Democratic Security Strategy
    intended to bring peace to its war-torn nation. In just under 3 years,
    that strategy has proven effective as measured by a precipitous drop in
    homicides to the lowest level in 18 years. Additionally, kidnappings
    are down 73 percent with an overall reduction in violent crime of 37
    percent. The number of attacks on towns by insurgents has also seen a
    major reduction of 84 percent.
        Plan Patriota is an integral part of the Government of Colombia's
    Democratic Security Strategy designed to provide safety and security
    for Colombia's citizens. Plan Patriota is a complex, multi-year
    military campaign designed to force the FARC to capitulate or enter
    negotiations on terms favorable to the Colombian government. As part of
    this campaign, the Colombian military has destroyed more than 800 FARC
    encampments, successfully forced the FARC into a defensive posture,
    denied them necessary lines of communication and logistic/resupply
    points, and reduced their strength by approximately 30 percent. Since
    2003, Plan Patriota operations have removed approximately 20 mid-level
    commanders from the battlefield. In 2005, 400 FARC combatants were
    killed in action and 445 were captured. However, FARC senior leadership
    continues to elude the Colombian military's efforts.
        Demobilization and reintegration of paramilitaries is progressing
    under Colombia's peace process with more than 16,000 Autodefensas
    Unidas de Colombia (AUC) personnel demobilized by the end of 2005. In
    addition, over 8,000 members of Colombia's three most important illegal
    armed groups have demobilized on an individual basis since the
    beginning of President Uribe's administration in 2002. Approximately
    9,000 FARC, AUC, and Ejercito de Liberacion Nacional (ELN) members have
    completed the Government of Colombia's Demobilization and Reinsertion
    Programs.
        Colombia's 2006 national budget increased by 13 percent from last
    year and expenditures allocated to defense increased by 15.6 percent or
    to about U.S. $4.5 billion. The 2006 budget allows for an increase of
    up to 26,500 members for its security forces and for the purchase of
    additional airlift. This increased defense spending emphasizes
    Colombia's commitment to fighting and winning its war.
        The problems affecting Colombia, like most countries in our AOR,
    cannot be solved solely by military means. The reduction of drug
    trafficking and narcoterrorism, and protection of its citizens' rights
    and infrastructure all require an integrated, synchronized government
    effort. An example of Colombia's civil-military approach to these
    problems has been the creation of the Center for Coordination of
    Integrated Action (Centro para la Coordinacion de Accion Integral
    (CCAI)). The CCAI is a cabinet level, interagency center directed by
    the president to establish governance in conflicted areas by developing
    economic and social programs, thereby complementing the Democratic
    Security Strategy. The key function of this interagency body is to
    extend government presence--governance--over national territory by
    planning and executing community development in the areas of security,
    health, documentation, food distribution, education, justice,
    infrastructure development, and job creation. This program is executed
    at national and local levels of government. Its goal is to transition
    short-term security gains and successes into long-term belief in, and
    support for, good governance. The CCAI is an innovative and new
    Colombian interagency initiative, which merits increased support and
    may well serve as a model for other nations to develop tailored
    approaches to better governance.
        Colombia has also been successful in its efforts to increase drug
    eradication, seizures, and air interdiction. Aerial fumigation topped
    140,000 hectares in 2005, which is higher than any previous year. Also
    in 2005, 223 metric tons of drugs were seized as part of a cooperative
    effort between Colombia and the United States. Due to an effective
    Airbridge Denial Program in 2005, illegal traffic over Colombia
    decreased by 40 percent and the illegal tracks that formerly moved all
    throughout Colombia have been mostly limited to the border areas.
        Colombia is also continuing its focus on, and progress in, the area
    of human rights. Only 2 percent of the complaints received about human
    rights or international humanitarian law violations implicated members
    of the security forces. Though progress is being made, continuing
    emphasis and effort is essential.
        While the Government of Colombia has made progress as a result of
    Plan Colombia support, its job is not over. For example, attacks
    against energy towers have increased over 100 percent and peace has yet
    to formally arrive. Continuing U.S. support is still needed to build on
    the gains already realized by Plan Colombia.
        U.S. Public Law 108-375 currently provides expanded authority to
    support a unified campaign by the Government of Colombia against
    narcotics trafficking and against activities by organizations
    designated as terrorist organizations, such as the FARC, the ELN, and
    the AUC. This law allows us to provide military assistance to, and
    share information with, the Government of Colombia in its efforts
    against organizations whose narcotics and terrorist activities are
    inextricably intertwined. The continuation of this authority is not
    only necessary for effective support of the Government of Colombia, but
    it is essential for regional security, U.S. national security, and
    reduced drug trafficking.
        In addition to the expanded authorities, the increased personnel
    cap that the U.S. Congress granted of 800 military and 600 civilians
    continues to be an important tool in our efforts to support the
    Colombian government. The highest number of U.S. military personnel in-
    country to date (supporting Plan Colombia) has been about 520. This
    flexibility is essential to sustaining the necessary level of support
    for operations in Colombia. We appreciate continued support as we do
    our best to help a country that is doing so much to help itself.
        Through the President's fiscal year 2007 authorization submission,
    the command is requesting that both expanded authority and the
    personnel cap be extended through fiscal year 2008. We anticipate
    sending such a request to you in the near future.
    Ecuador
        Ecuador remains plagued by illicit trafficking and the presence of
    FARC members who penetrate its vulnerable northern border. We are
    seeing increased illicit transiting activity across this border. This
    includes cocaine originating in Colombia and Peru, as well as the
    precursor chemicals used in its production. Because the official
    currency in Ecuador is the U.S. dollar, it is an especially attractive
    location for money laundering.
        Although our engagement with Ecuador is limited due to ASPA
    sanctions, we continue to conduct security cooperation activities
    within our authorities. In fiscal year 2005, we conducted six Medical
    Readiness Training Exercises (MEDRETEs) throughout Ecuador, treating
    almost 38,000 patients and more than 2,200 animals.
        Also, the U.S. Southern Command conducted a Humanitarian Mine
    Action Training Mission in Ecuador this year. During this mission,
    Ecuadorian deminers were trained and equipped to conduct humanitarian
    demining in the jungle.
    Peru
        Peru has seen a resurgence of coca production. In 2005, there was a
    38-percent increase in land under cultivation. There are indications
    that Sendero Luminoso, a regional terrorist organization, may be
    partnering with drug traffickers, complicating the security situation.
    The Peruvian government is working with its security forces to counter
    this threat. Additionally, Peru continues to contribute quality forces
    to the multinational peacekeeping force in Haiti. We continue to seek
    opportunities to remain engaged with our Peruvian counterparts within
    our authorities.
    Bolivia
        Bolivia is the world's third largest cultivator of coca (after
    Colombia and Peru). We have worked closely with the Bolivian military
    over several years. This past year, the U.S. military group in Bolivia
    and the command collaborated with the State Department to train
    counter-narcotics units. Today, our top priorities in Bolivia are
    combating drug trafficking and enhancing the Bolivian military's
    capability to support disaster relief and humanitarian civic action. We
    hope that the Government of Bolivia will continue its commitment to our
    mutual military engagement goals.
    Venezuela
        Although Southern Command continues to seek opportunities to work
    with the Venezuelan military, our efforts have been hindered by the
    Government of Venezuela. Our military-to-military relations have eroded
    considerably over the last 12-18 months. We will continue to seek
    opportunities to foster partnership and cooperation with the Venezuelan
    military. Additionally, we will continue to invite the Venezuelan
    military to participate in exercises, conferences, and training events.
    We believe that the politicization of the Venezuelan military is
    threatening our longstanding, fruitful military-to-military
    relationship.
        Another area of concern with regard to Venezuela is the
    government's ongoing procurement of weapons. Their buildup of military
    hardware has not been a transparent process and is a destabilizing
    factor in a region where nations are arraying themselves to confront
    transnational threats, not each other. We remain unconvinced that the
    breadth and depth of the buildup is mandated by Venezuelan concerns for
    national defense.
                                central america
        Central American governments are increasingly working together
    across the spectrum of political, military, social, and economic
    activity. The nations within this sub-region continue to dedicate
    military forces and other resources to the war on terrorism,
    peacekeeping operations, humanitarian assistance, and disaster relief.
    Central American soldiers are also participating in seven United
    Nations peacekeeping operations around the globe.
        Central America remains challenged in the context of crime. It is a
    major transshipment point for illegal trafficking, and violent, well-
    organized gangs are financed by extortion and drug trafficking. We are
    also seeing a new phenomenon in both Central America and the Caribbean
    with regards to drug traffickers. In the past, drug traffickers paid
    for logistical support, protection, et cetera in hard currency. Today,
    gangs and criminal elements who provide these services are receiving
    payment-in-kind--a cut of the drugs! Thus, drugs are now staying in-
    country, which is contributing to the increase of crime and violence in
    these sub-regions.
        To counter the threats within this sub-region, these governments
    have formed regional partnerships and are developing appropriate
    initiatives. The Central American Free Trade Agreement, CAFTA-DR, will
    expand and diversify export markets, introduce new technology, and
    bring market access and capital growth to the countries of Central
    America and the Dominican Republic. As a result, we believe it will
    strengthen the democratic institutions by promoting growth and
    increasing economic opportunities that are key to reducing poverty and
    crime.
    Conference of Central American Armed Forces (CFAC)
        We continue to strengthen our regional security cooperation efforts
    with this regional military organization. CFAC provides the U.S.
    military an opportunity to engage four Central American countries--El
    Salvador, Guatemala, Honduras, and Nicaragua--that are united in common
    efforts to address security issues shared by all nations in the region.
    These countries continue to work with the U.S. to form a multinational
    peacekeeping battalion as part of the Global Peace Operations
    Initiative (GPOI). The Presidency of CFAC rotates between the four
    nations every 2 years, with a recent transfer in December from
    Nicaragua to Guatemala. Reinforcing CFAC's role in peacekeeping, the
    Regional Training Center for Peacekeeping is being established this
    year in Guatemala. This center will not only train the staff of the
    CFAC Battalion, but also assist in training other peacekeeping units
    from the Central American region.
    El Salvador
        El Salvador is a stable, developing democracy and among our closest
    allies in Latin America. El Salvador has demonstrated its strong
    commitment to the War on Terrorism through its sixth deployment
    rotation of troops in support of Operation Iraqi Freedom (OIF). We will
    continue to work closely with the Salvadoran Armed Forces.
    Additionally, the Salvadoran government was the first to implement the
    CAFTA-DR free trade agreement.
    Guatemala
        In 2005, the military was drawn down from 27,000 to 15,000, thus
    aligning the Guatemalan military with its neighboring militaries.
    Guatemala is one of Central America's most active participants in
    peacekeeping operations, with contingents currently deployed in Haiti
    and the Congo, as well as observers and staff members in several other
    peacekeeping operations.
        The military leadership of Guatemala was also one of the first to
    embrace the U.S. Southern Command Human Rights Initiative,
    incorporating Human Rights doctrine, training, civilian control of the
    military, and effective systems for internal judicial controls as core
    competencies of their entire military force.
        I recently visited Guatemala's national park area called Laguna del
    Tigre, near the Mexican border. This protected park is largely
    unpopulated. The lack of government presence in this region and along
    the border has made it an ideal transshipment point for illicit
    trafficking running from south to north. The landscape of Laguna del
    Tigre is criss-crossed with clandestine airstrips that are used by
    planes transporting illicit cargo. In November 2005, the Guatemalan
    Government stood up an interagency task force in this National Park to
    counter the illicit activity in the area. In its short existence, the
    task force has accomplished a great deal. It has established a
    government presence in this remote region, established law and order
    for the first time, reduced illegal arms possession, destroyed
    clandestine airstrips, and successfully denied access to drug
    trafficking aircraft. This interagency approach is the first step
    towards effective integration of security with other components of good
    governance.
        Current U.S. law prohibits International Military Education and
    Training (IMET) and Foreign Military Financing (FMF) for Guatemala.
    However, Expanded-IMET for military and civilian officials is
    permitted. Expanded-IMET allows Guatemala to educate its leaders in
    human rights, broad resource management principles, principles of
    civilian control of the military as well as the principles of law and
    military justice. With Central American countries facing transnational
    threats such as trafficking in drugs, arms, and illegal aliens,
    Guatemala has worked to aggressively counter these threats. Although
    its Armed Forces are severely resource-constrained, they are continuing
    their efforts to transform and modernize. We look forward to continue
    working with Guatemala, the State Department, and Congress, so that
    when budget conditions allow, FMF and IMET can be renewed.
    Nicaragua
        Nicaragua is a transit point for illicit drugs, migrants, and arms.
    The U.S. is actively engaged with Nicaragua in conducting air and
    maritime counternarcotics operations. The Nicaraguan military
    demonstrated its commitment to democracy during the last election in
    November 2002, when it successfully guarded polling locations and
    delivered ballots to remote voting locations. The Nicaraguan Army has
    also openly stated that it wants to destroy the bulk of its man-
    portable air defense systems (MANPADS). The Army is currently awaiting
    approval from its Congress to do so.
        Nicaragua, after having ably led CFAC for 2 years, has also
    volunteered to provide a company to the CFAC Peacekeeping Battalion.
    Through the Global Peace Operation Initiative (GPOI), we are working
    with Nicaragua to help them develop their company of peacekeepers.
    Belize
        About 37 percent of cocaine bound for the U.S. transits the land,
    sea, and air space of Belize. As one countermeasure, Belize inaugurated
    its new Coast Guard on 20 November 2005. The U.S. is contributing to
    this effort with funding and training for its new force. Despite
    success in counternarcotics efforts and the establishment of a Coast
    Guard, the volume of drug trafficking continues to overwhelm Belize's
    limited resources.
        In addition to their efforts in counternarcotics, Belize is also
    posturing itself to combat other transnational threats, such as
    terrorism. In the next year, Belize will stand up a counterterrorism
    unit. The U.S. will support this effort with funding for the purchase
    of equipment. Additionally, as resources become available, Belize hopes
    to create an engineering unit that could be used to respond to natural
    disasters within their own country and throughout the region.
    Honduras
        Honduras has a gross domestic product (GDP) per capita of U.S.
    $1,050 and has an unemployment rate of 28 percent, the highest in the
    region. These high poverty and unemployment rates directly contribute
    to increasing criminal and gang activity, which has led to the public's
    primary concern of deteriorating personal security. The new government
    has pledged to address this problem by recruiting idle youth into the
    military for skills training.
        Similar to Guatemala's Laguna del Tigre Park, the ungoverned region
    of Mosquitia in Honduras is an ideal transshipment point for illicit
    trafficking. The Government of Honduras is now forming a Joint Task
    Force in Mocoron to counter the illicit activity in this region and
    U.S. Southern Command is supporting that effort through enhancements to
    Honduran military logistical and counterterrorism capabilities.
    Costa Rica
        The U.S. and Costa Rica cooperate on a wide range of issues at a
    law enforcement level through an interagency effort. Some of the areas
    in which we are cooperating are increasing trade and investment in the
    Central American region, improving narcotics interdiction, and
    upgrading law enforcement capabilities region-wide. Costa Rica is an
    important partner in the counternarcotics mission because it is in a
    high illicit trafficking zone.
    Panama
        Panama's strategic location has long defined its role in world
    affairs. The United States is working with the Government of Panama on
    a range of initiatives for secure trade and transportation, including
    security of the Panama Canal, maritime and air awareness, and
    monitoring of cargo traffic. This will aid in the interdiction of
    illicit cargo such as weapons of mass destruction and illegal drugs.
    This year, 24 countries have been invited to participate in the annual
    Panamax exercise. This exercise is focused on the maritime defense of
    the Panama Canal and has grown in scope and scenario complexity every
    year since its inception.
                                   caribbean
        The countries of the Caribbean are all democratic, with one
    exception. Economic deficiencies, infrastructure collapse, and illegal
    trafficking have challenged the ability of several of the governments
    in the region to effectively exercise sovereignty and maintain
    security, leading to considerable undergoverned space. As in other sub-
    regions, fragile democratic institutions, government corruption, gang
    activity, and unequal distribution of wealth are also prevalent here
    and pose challenges. Regional cooperation, therefore, is essential for
    effective governance in this immense maritime Caribbean Basin region,
    which forms the third border of the continental United States. As an
    example of this cooperation, several Caribbean nations are working
    together to prepare for the unique security challenges associated with
    the hosting of the World Cup of Cricket in 2007.
        The Regional Security System (RSS) is a collective security
    organization that consists of seven Eastern Caribbean island nations.
    Among other things, these nations cooperate to prevent and interdict
    illicit trafficking, control immigration, and respond to natural and
    other disasters. This organization has the potential to serve as a
    foundation upon which to build enhanced regional security cooperation.
    However, with additional resources there may be opportunities for
    increased security cooperation.
    Haiti
        Haiti's geographic position, weak institutions, and extreme poverty
    have made it a key conduit for drug traffickers who transport cocaine
    from South America to the U.S. as well as Canada and Europe.
    Contributing factors that create this environment are approximately
    1,125 miles of unprotected shoreline, numerous uncontrolled seaports,
    clandestine airstrips, a thriving contraband trade, weak democratic
    institutions, a fledging civilian police force, and a dysfunctional
    judiciary system. Following an initial decline of drug trafficking
    through small aircraft in 2004, drug trafficking has increased in 2005.
        The United Nations Stabilization Mission in Haiti (MINUSTAH) is one
    of the best examples of security cooperation in the hemisphere where
    Latin American partner nations have taken the lead of the peacekeeping
    and security efforts. The U.N. force has over 9,000 troops and law
    enforcement personnel deployed in Haiti, commanded by a Brazilian
    officer and supported by over 3,500 personnel from 10 Latin American
    countries. Recent successes have resulted in a reduction of gang
    violence, though some problem areas such as Cite Soleil, an area on the
    northwest coast of Port-au-Prince, largely remain under the control of
    various criminal elements. In addition to this ongoing work, MINUSTAH
    also provided a great deal of support to the successful general
    elections held in Haiti on 7 February.
    Dominican Republic
        The Dominican Republic shares the strategically-located island of
    Hispaniola with Haiti, a key gateway for illicit trafficking.
    Approximately eight metric tons of cocaine from South America are
    estimated to have transited through the Dominican Republic to U.S.
    markets last year.
        The Dominican Republic's Armed Forces participate fully in
    counternarcotics efforts and are a future partner in the Enduring
    Friendship maritime security initiative. Although weak governmental
    institutions remain a concern, the government has increased its efforts
    to combat corruption in recent years. Additionally, recent initiatives
    to enhance border security and military training are positive
    indications of greater future cooperative opportunities.
    Trinidad and Tobago
        Trinidad and Tobago was the site of the only Islamic revolt in the
    Western Hemisphere--the failed coup by Jamaat Al-Muslimeen in 1990, led
    by Yasin Abu Bakr. Abu Bakr remains the leader of this radical Muslim
    organization, which continues to challenge the security and stability
    of this island nation. He is currently in prison, awaiting trial on
    terrorism charges.
        To enhance Trinidad and Tobago's ability to deal with these
    terrorist threats, Southern Command sponsored the attendance of
    selected military officers to a counterterrorism course in the United
    States this year. Trinidad and Tobago also deployed an aircraft and a
    maritime vessel in support of Carib Venture, a joint counterdrug
    operation involving multiple Caribbean nations and led by the Joint
    Interagency Task Force-South.
    Suriname and Guyana
        Suriname is a former Dutch colony and Guyana is a former British
    Colony. Despite their differences Suriname and Guyana share many of the
    same conditions that lead to illicit activities and possibly threats in
    their countries. Most of the populations are concentrated in a small
    number of urban areas on the coast. The governments of these countries
    have distributed their security forces accordingly, including both
    police and military, in the urban areas, with small detachments present
    along disputed borders. The majority of the land in these nations is
    largely ungoverned, uninhabited jungle area that is extremely
    vulnerable to illicit activity. Porous borders, as well as various
    rivers with access to the Atlantic Ocean, provide passageways for
    illicit trafficking.
        With regard to humanitarian assistance, Southern Command broke
    ground on a disaster relief warehouse in Guyana in August of 2005. We
    built a similar warehouse in Suriname in 2002, and have since then
    trained disaster relief personnel on warehouse logistics and
    management. These warehouses will house prepositioned disaster relief
    material that will reduce the need for transportation of relief
    supplies in the event of a natural or other disaster.
                                 southern cone
        We continue to have good relationships with the militaries of the
    Southern Cone nations. We commend the regional cooperation efforts of
    the countries within the Southern Cone, especially in peacekeeping
    operations. These countries have invested national capital over many
    years to create and improve their training capabilities as well as
    enhance the professionalism of their military forces.
    Chile
        Chile has a major leadership role in the region. The Government of
    Chile is focused on strengthening its military relations with the U.S.
    as an element in modernizing the role of its military and establishing
    its proper place in Chilean society. The modernization and
    transformation of the military has progressed with the fielding of the
    F-16 fighter jets they purchased from the U.S. The Chilean military is
    also reducing its footprint in the country by consolidating bases and
    returning key property to civilian use. We conducted 16 security
    cooperation activities with Chile last year to address interoperability
    and anti-terrorist support team training with specific focus on force
    protection capabilities.
    Argentina
        Argentina has been a leader in the area of promoting cooperation,
    confidence, and security building measures. It is also the only major
    non-NATO ally in the region and has settled all of its boundary
    disputes with Chile. Argentina is currently working with Chile to stand
    up a combined peacekeeping brigade.
        Although we have positive military-to-military relations, I am
    concerned that in 2\1/2\ years, we have not been able to forge an
    agreement on privileges and immunities that would better support our
    military's engagement with its military by allowing U.S. forces to
    conduct exercises in Argentina. We will continue to seek future
    opportunities for engagement and hope that the Government of Argentina
    will work with us on this important matter.
        Argentina recently signed up to the Proliferation Security
    Initiative (PSI). We encourage their full participation in this
    initiative that is designed to prevent the proliferation of weapons of
    mass destruction, their delivery systems, and related materials.
    Brazil
        With its estimated 186 million inhabitants, Brazil has the largest
    population in Latin America, fifth in the world. Brazil has
    traditionally been a leader in the inter-American community by playing
    an important role in collective security efforts, as well as in
    economic cooperation in the Western Hemisphere. It is viewed by many as
    a unifier and promoter of regional stability. Brazil itself shares a
    border with all but two nations on the continent.
        The tri-border region where Brazil, Paraguay, and Argentina
    converge is a popular haven for drug traffickers, terrorists, and other
    criminals. Also, guerrilla rebels across Brazil's northwestern frontier
    with Colombia pose a potential threat to Brazil's control of its own
    territory.
        Brazil has demonstrated its military leadership in the region by
    providing the Commander of the United Nations Stabilization Mission in
    Haiti (MINUSTAH) since the inception of this mission.
    Uruguay
        Uruguay is a model for peacekeeping operations, as it has the most
    peacekeepers per capita of any country in the world. Its peacekeepers
    are very effective, and we are working with them to gain lessons
    learned.
        This past year, the Center for Hemispheric Defense Studies (CHDS)
    in cooperation with the Uruguayan Center for Strategic Studies,
    conducted a seminar on transnational security and governance. The
    Conference brought together military and civilian defense leaders from
    the U.S., Argentina, Bolivia, Brazil, Paraguay, and Uruguay and
    provided a valuable forum for discussions on security issues. In
    addition, a Center for Civil-Military Relations team led a seminar on
    Civil-Military Responses to Terrorism in Uruguay to participants from
    South America and the Caribbean.
    Paraguay
        We remain concerned with the security situation in Paraguay,
    especially in the Tri-Border Area. The Government of Paraguay
    recognizes the threats posed by ungoverned spaces in this border
    region, and is working to secure these spaces. To aid in these efforts,
    U.S. special operations units have conducted joint training with the
    Paraguayan Counter-Terrorist units, which also increased
    interoperability with U.S. counterterrorism units.
        We have also conducted numerous Medical Readiness Training
    Exercises (MEDRETEs) in Paraguay to help our medical troops train and
    to support Paraguayan medical needs.
                               facing the threats
        Against this background, the Command strives to support our partner
    nations by developing within their militaries the capabilities to
    support security, stability, and a functioning judicial system, with an
    institutional respect for human rights. While anti-Americanism is
    rising among some nations, we enjoy strong partnerships with most
    nations and share a mutual understanding that we face common threats
    that require regional solutions. We accomplish our mission through our
    Theater Security Cooperation Strategy wherein we strive to build
    capabilities within partner nations, enabling them to protect their
    citizens, strengthen democracy, and ensure economic growth. Our
    engagements are normally through a combination of operations,
    exercises, and program initiatives. These activities are the keys to
    safeguarding our security interests in the Western Hemisphere.
                                   operations
        Joint Interagency Task Force (JIATF) South: Counter-illicit
    trafficking. JIATF-South is a model of interagency and multinational
    cooperation. Its staff is dedicated to protecting America's borders
    through around-the-clock vigilance and aggressive interdiction
    operations. The underlying keys to success are the collection,
    analysis, and dissemination of all source intelligence combined with
    the necessary resources to effectively operate across the vast expanses
    of the Caribbean and Eastern Pacific. During the past 6 years, JIATF-
    South supported increasing cocaine seizures, with 2005 being a record
    all time high of 251.6 metric tons in the transit zone.
        The overarching impediment to increasing transit zone interdictions
    is the lack of resources in the area of airborne detection and
    monitoring. For every 10 suspected tracks of illicit trafficking in the
    region, JIATF-South can currently only detect 4 tracks and, of those,
    they can only intercept 2. To improve the interdiction of illicit
    traffic that threatens our borders, we must enhance our detection and
    monitoring capabilities and build partner nation capacity to interdict
    and arrest.
        Working in an environment of constrained resources, the command is
    working to improve its intelligence, surveillance, and reconnaissance
    (ISR) capabilities. We are concentrating in two areas: 1) the ability
    to deploy enough assets into the theater to support established
    requirements, and 2) incorporating the right sensors to mitigate the
    atmospheric and environmental features that are problematic for
    collection. We are also collaborating with several defense agencies,
    interagency, and coalition partners to address near- and long-term
    needs.
        Joint Task Force-Guantanamo (JTF-GTMO): Detainee Operations. JTF-
    GTMO continues to lead the command's operational efforts in the global
    war on terrorism. Trained members of al Qaeda, the Taliban, and other
    individuals associated with terrorist support networks are among the
    nearly 500 enemy combatants currently in detention. As our military
    wages the long war, JTF-GTMO operations continue to provide critical
    information regarding terrorist structures, recruiting practices,
    funding, operations, and training.
        We routinely support visits by the International Committee of the
    Red Cross (ICRC) and value their recommendations in improving the
    conduct of our detention and interrogation operations.
        The JTF-GTMO mission continues. We appreciate the support of
    Congress for improvements in infrastructure, facility security, and the
    quality of life of our service members. Additionally, we are operating
    detention and interrogation activities in full compliance with the
    Detainee Treatment Act of 2005.
        Joint Task Force-Bravo (JTF-B): Regional Contingency and
    Counternarcotics Operations. JTF-B is a forward operating base in
    Honduras and supports our partner nations in a variety of missions
    including counterdrug, search and rescue, disaster relief, and
    humanitarian assistance. Most recently, JTF-B responded with both
    disaster relief and humanitarian assistance when Guatemala was struck
    by Hurricane Stan. The rapid response and immediate assistance
    underscored the value of forward deployed forces. JTF-B had helicopters
    on the ground within 24 hours of the Guatemalan request for assistance
    and ultimately provided over 650,000 pounds of critically needed food,
    water, and supplies to remote and isolated communities under harsh
    weather and operational conditions. The familiarity of JTF-B crews and
    support personnel with the topography, communications systems, and
    movement corridors were instrumental to mission success. This was also
    demonstrated when Hurricane Beta caused loss of life, damage to housing
    and infrastructure, flooding, and displaced persons along Caribbean
    coastal areas of Honduras.
                                   exercises
        The Command conducts three types of exercises--operational, Foreign
    Military Interaction (FMI), and humanitarian. Operational exercises are
    typically restricted to U.S. involvement and are based on standing
    contingency plans. FMI exercises are multinational exercises conducted
    with partner nations throughout the region. The scenarios for these
    exercises focus on peacekeeping, humanitarian assistance/disaster
    relief, maritime interdiction, and security operations. Our
    humanitarian exercises are carried out mostly through our flagship
    series, New Horizons.
    Foreign Military Interaction Exercises (Examples):
        PANAMAX
        PANAMAX remains a premier example of regional cooperation
    demonstrated through a multi-national exercise tailored to the defense
    of the Panama Canal. PANAMAX 2005 demonstrated continued growth, both
    in scope and participation over previous years. This year, the maritime
    forces of 16 nations united as the Caribbean, Pacific, and Coastal
    multi-national forces led by Colombian, Peruvian, and Panamanian
    commanders all under the temporary operational control of a U.S.
    admiral for the duration of the exercise.
    Tradewinds
        Tradewinds is a multi-national maritime exercise designed to
    improve inter-operability for contingencies involving threats to the
    Caribbean Basin. Caribbean nations have participated in this exercise
    for 20 years demonstrating a long history of cooperation. In 2005, the
    Command converted the exercise scenarios to link it to a real world
    event--the 2007 World Cup of Cricket. This exercise is being used to
    train and prepare regional forces for a wide range of security and
    support operations for that event.
    Humanitarian Exercise (Example):
        New Horizons
        Southern Command carried out four New Horizons exercises last year,
    one each in El Salvador, Panama, Nicaragua, and Haiti. New Horizons are
    joint exercises conducted by the Command that incorporate humanitarian
    and civic assistance programs and improve the joint training readiness
    of the U.S. military engineer, medical, and combat support and combat
    service support units. Specifically, National Guardsmen and reservists
    from the following 13 States participated: Alabama, Florida, Georgia,
    Utah, Washington, Arkansas, California, Delaware, Ohio, West Virginia,
    Massachusetts, Kentucky, Mississippi. and the District of Colombia. In
    addition, Medical Readiness and Training Exercises (MEDRETEs), embedded
    in the New Horizons exercises, enabled the treatment of 236,000
    patients in 15 countries.
        New Horizons Haiti was originally planned for another location in
    2005, but Tropical Storm Jean made a compelling case to shift the
    exercise to support the greater need in this island nation. Several U.S
    military units built two school houses and an auditorium, drilled three
    water wells, produced potable water, and provided medical and casualty
    evacuation support. Collectively, the three MEDRETEs operating in
    conjunction with the New Horizons exercise supported 27,110 victims of
    Tropical Storm Jean.
                              program initiatives
    Enduring Friendship
        Enduring Friendship is an initiative that this command is
    implementing to build maritime security capabilities for partner
    nations located in high illicit trafficking lanes. It supports the
    President's Western Hemisphere Strategy, the Proliferation Security
    Initiative, the Command Theater Security Cooperation Strategy, and the
    U.S./Panama Secure Trade and Transportation Initiative.
        The fiscal year 2006 appropriation is $4 million and will be used
    to develop a common operational picture and interoperable command,
    control, communications, and intelligence (C\3\I) capabilities for
    Jamaica, the Dominican Republic, Panama, and the Bahamas. Assessments
    of all four countries were conducted in 2005 to determine the
    capabilities that each would require in order to achieve a full
    maritime interdiction capacity. A follow-on program is planned to
    develop the surface interdiction capabilities of these nations and also
    a planned expansion of the initiative to other countries in the
    trafficking lanes, e.g., selected Central American nations.
    The Global Peace Operations Initiative (GPOI)
        This initiative is currently in the planning phase for the first
    unit within the Southern Command AOR achieving full operational
    capability in fiscal year 2007. If executed as planned, this initiative
    will expand and provide new peacekeepers and peacekeeping units to
    global peacekeeping missions by the end of 2007. This could include an
    Infantry Battalion from CFAC and nine company-sized units from
    countries in the region ready to deploy in support of UN peacekeeping
    operations around the world.
    U.S. Southern Command Human Rights Initiative (HRI)
        Our HRI fosters a culture of respect for human rights within
    partner nation military forces and closes the gap between the military
    and the citizens they protect. The HRI effectively assists in the
    building of professional military forces by providing concrete
    standards and measures of effectiveness in the areas of doctrine,
    training, civilian control of the military, and effective systems for
    transparent internal judicial control. Eight regional nations either
    have implemented a human rights initiative or have committed to do so;
    they are Costa Rica, Bolivia, Guatemala, Uruguay, the Dominican
    Republic, El Salvador, Honduras, and Colombia. In 2005, CFAC signed the
    HRI Memorandum of Cooperation. Implementation of the Human Rights
    Initiative for the Caribbean and Southern Cone nations is the focus for
    fiscal years 2006 and 2007 efforts.
        Although not an initiative, an area of concern is investing limited
    resources today to ensure the best return on that investment tomorrow.
    One of the most effective resources available to me is the
    International Military Education and Training (IMET) Program. Eleven
    countries remain sanctioned under the American Servicemembers'
    Protection Act (ASPA) and are, therefore, barred from receiving IMET
    funds. As a result, in 2005, one-third of the countries in our AOR were
    unable to participate in U.S.-sponsored military education. In 2003,
    the final year of IMET before the ASPA sanctions took effect, 25
    percent (771) of the total number of students (3,128) trained from the
    AOR came from the countries that are now sanctioned. Providing
    opportunities for foreign military personnel to attend school with U.S.
    service members is essential to maintaining strong ties with our
    partner nations. Decreasing engagement opens the door for competing
    nations and outside political actors who may not share our democratic
    principles to increase interaction and influence within the region.
        It is well known that the Peoples Republic of China (PRC) has a
    long-term goal of partnering with the countries of Latin America. The
    PRC requires access to raw materials, oil, minerals, new markets, and
    diplomatic recognition. PRC imports from Latin America grew an average
    of 42 percent per year over the last 4 years. The PRC has been making
    headway into the region by using economic measures, employing
    diplomacy, building infrastructure, negotiating trade deals, and
    offering resources to cash-strapped militaries and security forces with
    no strings attached.
                                   conclusion
        The region has tremendous potential, but no single nation can
    achieve it alone. In large measure, the threats are not conventional.
    As such, the solutions cannot be conventional. Ungoverned spaces,
    porous borders, corruption, organized crime, drug trafficking, and
    narcoterrorism are demonstrating their ability to challenge freely
    elected leaders and undermine legitimate governments. These threats did
    not develop overnight nor can they be solved overnight.
        As we mentioned earlier, shared security problems in this
    hemisphere require shared solutions. We at U.S. Southern Command
    recognize that not all problems and solutions are military in nature.
    The military can help to set the conditions to create a safe and secure
    environment. The region needs other agents of reform including those
    with political, economic, and social programs that will improve the
    quality of life for all citizens in the hemisphere. An effective
    approach requires an integrated, long-term effort.
        The men and women of U.S. Southern Command are doing a superb job.
    Continued congressional support for our efforts will ensure that the
    command is capable of more effective engagement and sustained support
    for our regional partners.
        Thank you again for the opportunity to be here today and I look
    forward to your questions.

        Chairman Warner. Thank you very much.
        Admiral.
        Admiral Keating. Good morning, Senator. Chairman Warner,
    Senator Levin, and members of the committee: It's a pleasure
    for me as well to join my colleague, John Craddock, to appear
    before you. I know John joins me in expressing to the committee
    our sympathies for the passing of your colleague's wife, Mrs.
    Inouye, last night. All of us in NORTHCOM and SOUTHCOM pass our
    sympathy, sir.
        I am proud to represent the men and women of the NORTHCOM
    and NORAD, who are dedicated to defending the United States and
    the Canadian homeland against all threats. I am privileged to
    be part of this outstanding team and to report on our
    accomplishments and continued progress throughout 2005.
        At NORTHCOM we sustain 24-7 situational awareness and
    readiness to protect the United States against a range of
    threats in all domains. We continually evaluate each threat in
    terms of its capability and intent to reach and harm the United
    States. Day-to-day, we are focused on deterring, preventing,
    and defeating attacks against our homeland. We also stand ready
    to assist primary agencies in responding quickly to man-made
    and natural disasters when we are directed to do so by the
    President and the Secretary of Defense.
        To better serve our countrymen in their time of need, we
    actively coordinate with other Federal agencies, developing
    stronger working relationships with State, regional, and local
    partners. Although our civil support response received
    significant attention in 2005, be assured we remain very active
    in planning and coordinating homeland defense operations. Our
    homeland is protected from air threats primarily by the North
    American Aerospace Defense Command, a United States-Canadian
    binational command. Across the United States and Canada, armed
    fighters are on alert and fly frequently to identify and
    intercept suspect aircraft. Since the September 11, 2001, we at
    NORAD have flown more than 42,000 accident-free sorties and we
    have scrambled or diverted airborne fighters more than 2,000
    times in response to potential threats.
        To facilitate situational awareness and decisionmaking in
    the global maritime environment, NORTHCOM disseminates relevant
    vital information. Additionally, we conduct maritime operations
    to deter terrorists and prevent attacks against our homeland.
    At NORTHCOM we posture and position forces to deter and prevent
    attacks. We maintain quick response, rapid response and
    consequence management forces at appropriate alert levels to
    meet potential threats.
        Our department has a long history of supporting civil
    authorities, providing specialized skills and assets that save
    lives, reduce suffering, and restore infrastructure in the wake
    of catastrophic events. All that support is provided at the
    direction of the President or the Secretary of Defense and is
    in accordance with the National Response Plan and applicable
    laws.
        In 2005, we supported the Department of Homeland Security
    (DHS) in responding to several hurricanes, one of which of
    course was Hurricane Katrina. For Katrina we established a
    joint task force to oversee title 10 operations for that
    singularly complex civil support mission. Shortly after the
    hurricane made landfall in Louisiana and Mississippi, we were
    given authority at NORTHCOM by the Deputy Secretary of Defense
    to deploy the forces we thought necessary to save lives and
    reduce human suffering. The Department, through NORTHCOM,
    provided airborne and seaborne search and rescue forces,
    mobilization centers, airlift, ground transportation assets,
    aerial damage assessment, satellite communications,
    subsistence, water purification, mosquito abatement, medical
    support, and mortuary affairs.
        In the wake of Katrina, we have invested considerable time
    and effort in our lessons learned process. We established a web
    site where lessons learned are submitted. These observations
    then go through an extensive vetting process and after thorough
    analysis they are distributed throughout our staff and the
    interagency to determine appropriate corrective action.
        After those actions have been implemented, we then verify
    through an extensive exercise program that those lessons
    learned are in fact applied to the proper situation. We cross-
    referenced our lessons learned with recent reports, including
    the White House report, on our Nation's response to Katrina and
    we are incorporating those lessons into future operations, and
    we exercise them frequently, one significant exercise upcoming.
    An important lesson we learned pertains to unity of effort and
    unity of command and, as we are now calling it, unity of
    results.
        In February, we hosted a hurricane preparation conference
    in Colorado Springs. This conference afforded 10 adjutants
    general from the Gulf Coast States and NORTHCOM senior
    leadership the opportunity to discuss our mutual efforts to
    prepare for the 2006 hurricane season.
        NORTHCOM has initiated collaborative planning and
    preparation efforts with the adjutants general from all States
    and we are currently integrating Defense Coordinating Officers
    (DCOs) into each Federal Emergency Management Agency (FEMA)
    region. In addition, we participated in last month's meetings
    of the National Governors Association and the Adjutants General
    Association of the United States. These face-to-face meetings
    provided a forum for NORTHCOM and States' leaders to discuss
    challenges and responsibilities and to enhance our domestic
    coalition.
        A second lessons learned from Katrina relates to
    communications. We need immediate, reliable communications that
    are survivable, flexible, and interoperable with our civilian
    partners. These communications must be mobile, they should be
    secure, and they have to be both voice and data capable. We are
    currently deploying cellular-based communications systems among
    our subordinate and supporting commands, as is the DHS.
        We are working with the DHS and FEMA and the National Guard
    Bureau to develop common data sets that allow everybody on the
    net to speak the same language when referring to events or
    requesting assistance real time. We are developing, in
    combination with the Department of Defense (DOD) and FEMA, pre-
    scripted mission assignments based on capability requirements
    in both the DHS and the DOD.
        Our Air Force component is working with the United States
    Coast Guard and the National Guard Bureau on a joint search and
    rescue center for large-scale coordinated operations. We also
    participate in FEMA-hosted weekly videoteleconferences on
    logistics and supply issues.
        We continue to support law enforcement agencies in the
    United States in the war against illegal drugs and other
    transnational threats. Federal laws and policies allow us to
    assist those law enforcement agencies in their very important
    counterdrug mission and in securing our borders. We employed
    unmanned aerial systems along the southwest border, supporting
    United States Customs and Border Protection. We flew nearly
    2,000 hours of unmanned aerial systems in the past 2 years.
    These flights assisted in the detection and apprehension of
    illegal trafficking in New Mexico, Arizona, and California and
    provided valuable training for our military forces. In 2005 we
    flew nearly 2,000 manned flight hours in support of detection
    and monitoring missions along the northern and southern
    borders.
        Through the application of existing DOD technology and
    intelligence analysis, we assisted in the detection of nearly
    40 tunnels along our southern and northern borders. Joint Task
    Force North, our joint task force headquartered in El Paso,
    provides nearly five soldiers per day year-round in support of
    tunnel detection efforts.
        DOD units employ long-range surveillance systems in an
    operational setting. They refine acquisition reporting
    techniques and procedures and operate in a desert terrain and
    in all-weather conditions, all in support of law enforcement
    agencies, in conditions very similar to those they will
    encounter in Afghanistan or Iraq.
        Our homeland defense and civil support plans are the
    foundation of our ability to deter, prevent, and defeat threats
    to our Nation and to assist civil authorities when called upon
    by the Secretary of Defense or the President. We have made
    significant progress in 2005 in developing our plans and are
    committed to finalizing these documents in the coming year. We
    refine and test these plans in frequent, demanding exercises.
    Each year NORTHCOM sponsors at least 5 large-scale exercises
    and over 30 smaller exercises to test those plans.
        We integrate potential disaster scenarios such as pandemic
    influenza into our training and exercises, as we will do in our
    upcoming major exercise, Ardent Sentry. To date, over 150
    Federal, State, local, and multinational agencies and
    nongovernmental organizations have participated in our
    exercises.
        In everything we do, planning, exercising, conducting real
    world operations, we continuously hone our ability to support
    civil authorities in responding to natural disasters, while
    never losing focus on our primary mission, homeland defense.
    Our enemies should make no mistake about our resolve or our
    capabilities.
        We are grateful to the members of this committee for their
    unwavering support. We are grateful for your efforts to ensure
    our men and women in uniform have the tools they need to keep
    our Nation and the American people safe and free. I am grateful
    for your time and, like John, I look forward to your questions.
        [The prepared statement of Admiral Keating follows:]

               Prepared Statement by ADM Timothy J. Keating, USN

        Chairman Warner, Senator Levin, and members of the committee: The
    men and women of U.S. Northern Command (NORTHCOM) and North American
    Aerospace Defense Command (NORAD) are dedicated to defending the United
    States and Canadian homelands against all threats. I am privileged to
    be a part of this outstanding team. We are pleased to report on the
    accomplishments and the future direction of the two Commands.

                                    northcom

        NORTHCOM is responsible for homeland defense, sustaining
    situational awareness and readiness 24/7 to protect the United States
    against a range of symmetric and asymmetric threats in all domains.
    These global threats emanate from other combatant commanders' areas of
    responsibility, but they are consistently pointed at our homeland. We
    continually evaluate these threats as we focus on deterring, preventing
    and defeating attacks against our homeland. We also stand ready to
    assist primary agencies in responding quickly to manmade and natural
    disasters, when directed by the President or Secretary of Defense. To
    better serve Americans in their time of need, we are actively
    coordinating with other Federal agencies and developing stronger
    working relationships with National Guard, State, and local partners.
    Homeland Defense Operations
        NORTHCOM has few permanently assigned forces. Whenever mission
    requirements dictate, we request additional forces from the Secretary
    of Defense, and if approved, receive them from our force providers,
    U.S. Joint Forces Command and other combatant commands. This
    arrangement meets our operational requirements, and we work with our
    force providers to ensure we have access to forces that are trained and
    ready to deploy to meet all mission requirements.
        While our civil support missions received significant attention in
    2005, we were also very active in planning and coordinating operations
    for defense of the homeland.

             Maritime Operations. NORTHCOM conducts maritime
            operations to deter terrorists and prevent attacks against the
            United States and our allies. During the past year, we analyzed
            and disseminated to government leaders information on the
            global maritime environment to facilitate situational awareness
            and decision making. NORTHCOM pursued and effectively garnered
            national and international support and strengthened these
            partnerships to deter and disrupt terrorist activity. We also
            monitored threats of interest in the global maritime
            environment. Our Joint Force Maritime Component Commander,
            located in Norfolk, Virginia, worked closely with the U.S.
            Coast Guard to maintain maritime situational awareness through
            coordinated efforts at the sector command centers on the east
            and west coasts.
              In support of the National Strategy for Maritime Security,
            NORTHCOM hosted the Maritime Domain Awareness Implementation
            Team Working Group to provide baseline information and guidance
            to departments and agencies implementing the National Plan to
            Achieve Maritime Domain Awareness. NORTHCOM co-chairs the
            Maritime Domain Awareness Concept of Operations Working Group,
            which is responsible for writing a plan to combine the efforts
            of DOD, the Department of Homeland Security (DHS) and other
            interagency organizations.
              In partnership with U.S. Pacific Command and U.S. European
            Command, NORTHCOM is co-sponsoring the Comprehensive Maritime
            Awareness Joint Concept Technology Demonstration. This project
            is designed to demonstrate DOD's ability to coordinate
            international and interagency maritime domain awareness across
            three theaters of operation.

             Missile Defense. When directed, NORTHCOM will exercise
            operational control of the Ground-based Midcourse Defense
            System and forces, as well as all terminal defense systems
            allocated to protect the homeland. U.S. Strategic Command and
            U.S. Pacific Command support NORTHCOM with missile warning and
            queuing data. Over the last year, we conducted numerous
            capability demonstrations and exercises, significantly
            increasing confidence in our tactics, techniques, and
            procedures, as well as enhancing crew proficiency for operation
            of the Ground-based Midcourse Defense System. Continued support
            for the Command, Control, Battle Management, and Communications
            (C2BMC) System is vital; C2BMC is the lynchpin for uniting
            complex suites of sensors and weapon systems for a layered,
            integrated missile defense. NORTHCOM is ready to execute
            limited defensive operations pending direction from the
            Secretary of Defense.

             Anti-Terrorism/Force Protection. NORTHCOM has overall
            responsibility within DOD for anti-terrorism and force
            protection missions within our assigned geographic area. Our
            force protection responsibilities include assessing the threat
            and security posture at all DOD bases and installations, to
            include leased facilities. We provide overall operational
            direction for force protection assets and work through existing
            DOD elements to serve as a bridge between separate programs to
            create efficiencies and eliminate vulnerabilities. We ensure
            DOD force protection standards are applied across all
            continental United States facilities, and we advocate for the
            Services' force protection funding in the budget process.
              To address the DOD needs of force protection in North
            America, we employ the Joint Protection Enterprise Network.
            This is a web-based force protection system that permits users
            to share information in near-real time. It allows DOD users to
            post suspicious activity reports and installation Force
            Protection Conditions. The Joint Protection Enterprise Network
            supports over 1,500 users at more than 350 installations.

             Critical Infrastructure Protection. Over the past
            year, NORTHCOM has integrated Critical Infrastructure
            Protection into our overall force protection responsibilities,
            which includes an ``all hazards'' approach consistent with
            comprehensive risk management activities. Working closely with
            the Joint Staff, the military services and agencies, we are
            focused primarily on protecting critical DOD owned, leased, or
            managed facilities that lie within our geographic area of
            responsibility. We are also working with the Office of the
            Assistant Secretary of Defense for Homeland Defense and other
            interagency partners in a cooperative effort to better protect
            non-DOD critical infrastructure, including the defense
            industrial base.
             Support to Operations Iraqi Freedom and Enduring
            Freedom. NORTHCOM is prepared to support U.S. Central Command
            by protecting critical defense infrastructure and ports of
            embarkation for units deploying in support of Operations Iraqi
            Freedom and Enduring Freedom. We also provide unique training
            opportunities for units preparing for deployments to Iraq or
            Afghanistan. Coordinated by Joint Task Force North (JTF-N) at
            Fort Bliss, Texas, numerous units have been able to train in a
            desert environment while providing support to law enforcement
            agencies along our southwest border. These exercises are
            excellent preparation for the mission units will conduct
            overseas.

    Defense Support of Civil Authorities
        DOD has a long history of supporting civil authorities with
    specialized skills and assets that can rapidly stabilize and improve
    the situation in the wake of catastrophic events. All DOD support is
    provided at the direction of the President or Secretary of Defense and
    in accordance with the National Response Plan and applicable laws.
        NORTHCOM provides defense support of civil authorities primarily
    through our subordinate commands: the aforementioned JTF-N; Joint Task
    Force Civil Support at Fort Monroe, Virginia; Joint Force Headquarters
    National Capital Region at Fort McNair, Washington, DC, and Joint Task
    Force Alaska at Elmendorf Air Force Base, Alaska. In addition, the
    Army, Air Force and Marine Corps have dedicated Service Components to
    NORTHCOM. These commands include: Army North located at Fort Sam
    Houston, Texas; Air Force North located at Tyndall Air Force Base,
    Florida and Marine Forces North located in New Orleans, Louisiana. The
    Commander Fleet Forces Command, located at Naval Station Norfolk,
    Virginia is designated as the Navy's Supporting Commander to NORTHCOM.
        We support designated events with security and other specialized
    military capabilities and assist other Federal agencies, as well as
    state and local partners, in responding to catastrophic events. A
    summary of our recent civil support operations follows:

             Special Events. Over the past year, NORTHCOM supported
            the U.S. Secret Service for the President's 2006 State of the
            Union Address, a National Special Security Event, in which we
            managed unique DOD capabilities and coordinated air defense
            with NORAD. Additionally, we provided DOD assistance for the
            United Nations 60th General Assembly. Our support included
            explosive ordnance disposal teams and explosive detection dog
            teams.
             Support to Space Shuttle Flight 114. During July-
            August 2005, in support of U.S. Strategic Command, our
            deployable command and control headquarters element, Standing
            Joint Force Headquarters North, provided command and control of
            joint military forces and coordinated with NORAD, the National
            Aeronautics Space Administration and the U.S. Coast Guard to
            support space shuttle operations in the NORTHCOM area of
            responsibility.
             Hurricane Relief Operations. During 2005, NORTHCOM
            supported DHS in responding to four hurricanes. For Hurricane
            Katrina, we established Joint Task Force Katrina to oversee
            Title 10 operations for the most complex civil support mission
            in the history of the U.S. military. DOD provided Defense
            Coordinating Officers and Elements, DOD bases for mobilization
            centers, airlift, ground transportation assets, aerial damage
            assessment, satellite communications, airborne and waterborne
            search and rescue, subsistence, water purification, mosquito
            abatement and medical support.
              We are actively involved in efforts to turn lessons observed
            into lessons learned and incorporate them into future
            operations. One very important lesson we learned pertains to
            unity of effort and unity of command.
              To enhance our ability to achieve unity of effort and unity
            of command in future operations, in February 2006, NORTHCOM
            hosted a 2006 Hurricane Preparation Conference at Peterson Air
            Force Base, Colorado. The conference afforded ten adjutants
            general and the NORTHCOM senior leadership the opportunity to
            better prepare for the 2006 hurricane season. The conference
            advanced our collective ability to respond with the full
            spectrum of military capabilities in a timely manner, when
            directed.
              In addition, we participated in the recent meetings of the
            National Governors Association and the Adjutants General
            Association of the United States. These face-to-face meetings
            provided a forum for NORTHCOM and the National Guard to discuss
            challenges and responsibilities and enhance our ``domestic
            coalitions.''
              As our response to Hurricane Katrina demonstrated, commanding
            and directing 22,500 Active-Duty Forces and coordinating the
            efforts of over 50,000 state status National Guard troops
            present many challenges under any circumstance. We embrace the
            fact that the National Guard will play a pivotal role in
            disasters. We must ensure unity of effort among Active-Duty
            Forces and state status National Guard forces when assembling
            and directing a large-scale, multi-state and international
            response to a catastrophic event. We stand ready to respond as
            directed by the President or Secretary of Defense.
              Another lesson learned from our response to Hurricane Katrina
            relates to communications. We need immediate, reliable
            communications that are survivable, flexible and interoperable
            with our civilian partners. These communications must be
            mobile, secure and both voice and data capable.
             Wildland Firefighting. NORTHCOM provided Modular
            Airborne Fire Fighting System-equipped aircraft to support the
            National Interagency Fire Center in combating wildfires in
            Arizona, Colorado, Idaho, Nevada, Oregon, Utah, Washington, and
            Wyoming. Aircraft flew over 364 hours and dropped 879,000
            gallons of fire retardant in support of the U.S. Forest Service
            and Department of the Interior.
    Support to Law Enforcement Agencies
        Federal laws and policies allow us to assist law enforcement
    agencies in their counterdrug mission and in securing our borders
    against transnational threats.
        Operation Lakeview
        In support of the U.S. Border Patrol's Buffalo Sector, JTF-N
    planned and facilitated Operation Lakeview from July to September 2005.
    Designed to improve the interdiction of transnational threats in the
    maritime domain of Lake Ontario, this bi-national, multi-sensor, multi-
    agency operation expanded to include the maritime domain of Lake Erie
    and the contiguous land and air domains. This was the first JTF-N
    mission to operationalize a DOD-funded coastal defense system designed
    to provide a command, control, intelligence, surveillance and
    reconnaissance node capable of fusing multi-sensor, multi-source
    information into a common operational picture. During Operation
    Lakeview, JTF-N documented over 7,900 vessels and tracked over 300
    radar targets at any given time. This operation validated developmental
    technology, explored JTF-N capabilities in the maritime domain, opened
    lines of communication and established productive relationships among
    participants.
        Operation Western Vigilance
        In October and November 2005, JTF-N hosted a Stryker-equipped
    reconnaissance, surveillance, target acquisition squadron which
    operated on the southwest border in support of U.S. Customs and Border
    Protection. During this operation, the squadron employed the Stryker's
    intelligence, surveillance, and reconnaissance systems to detect and
    report the presence and movement of transnational threats crossing into
    the United States illegally in southern New Mexico and Arizona. The
    operation, which also included unmanned aerial systems and National
    Guard helicopters, contributed to a 60 percent increase in U.S. Customs
    and Border Protection apprehensions during the month-long operation.
        Tunnel Detection
        Applying DOD and intelligence community technology and intelligence
    analysis in support of U.S. Customs and Border Protection, JTF-N
    detected three tunnels on the southwest border with Mexico and
    confirmed the existence of one tunnel on the northern border with
    Canada. In conjunction with its homeland security and intelligence
    community partners, JTF-N continues tunnel detection efforts along the
    U.S. border.
        In 2005, NORTHCOM initiated coordination with multiple Federal
    agencies for further development of tunnel detection technology, which
    will benefit not only JTF-N and our law enforcement agency partners,
    but also U.S. Central Command in Southwest Asia.

             Unmanned Aerial System Operation. Through JTF-N,
            NORTHCOM employed unmanned aerial systems along the southwest
            border in support of U.S. Customs and Border Protection. While
            obtaining unmanned aerial system training, these flights
            assisted in the detection and apprehension of illegal
            trafficking in New Mexico and Arizona.
              NORTHCOM is engaged with the Federal Aviation Administration
            to develop airspace procedures for unmanned aerial system
            support to border control lead agencies and disaster response
            operations. While this is a complex issue, we remain confident
            that unmanned aerial systems will be safely employed in the
            National Airspace System in the near future.

    Homeland Defense and Civil Support Plans
        Our homeland defense and civil support plans are the foundation of
    our ability to deter, prevent and defeat threats to our Nation and
    assist civil authorities when called upon by the President or Secretary
    of Defense. We have made significant progress this past year in
    developing our plans and are committed to finalizing these documents in
    2006.

             National Homeland Security Plan Initiative. The
            National Response Plan outlines DOD actions for support to
            civil authorities in the event of an attack or domestic
            incident. However, there is no similar, overarching national
            level plan that specifically coordinates the pre-attack actions
            of the United States Government. We advocate the development of
            a National Homeland Security Plan to clarify the optimum
            distribution of effort among Federal agencies for prevention,
            preparation and response. A National Homeland Security Plan
            would promote unity of effort and reduce uncertainty in the
            overlap of responsibilities and capabilities between DOD and
            all homeland security partners. The National Homeland Security
            Plan concept is advocated in the 2006 Quadrennial Defense
            Review (QDR).
             CONPLAN 2002. In the past year, the Secretary of
            Defense approved Concept Plan 2002 (CONPLAN 2002-2005), our
            Nation's homeland defense plan. NORTHCOM is currently executing
            Phase I of CONPLAN 2002-2005: Sustained Deterrence. We are
            coordinating, through the interagency process, diplomatic,
            intelligence, economic, financial and law enforcement deterrent
            options.
             CONPLAN 0500. We are updating CONPLAN 0500, which is
            designed to provide a timely military response to a chemical,
            biological, radiological, nuclear or high-yield explosive
            incident in order to save lives, mitigate human suffering,
            facilitate recovery operations, support civil authorities and
            maintain confidence in the American government. As part of our
            all-hazards plan analysis, we are coordinating with DHS to
            examine state disaster response plans. This analysis will help
            our planning efforts by providing an understanding of local
            capabilities in the event of a disaster. Our planning efforts
            have a singular goal--to provide the fastest and most effective
            DOD response in support of civil authorities in times of
            crisis.

    Pandemic Influenza
        In the event of pandemic influenza, the President or Secretary of
    Defense may direct DOD to support the appointed Primary and
    Coordinating Federal Agencies leading the Nation's response. If
    requested and approved, DOD is capable of coordinating a wide array of
    medical support through our Joint Regional Medical Planners, who are
    collocated with the Defense Coordinating Officer supporting the Primary
    or Coordinating Federal Agency. DOD medical support may include: moving
    patients, distributing pharmaceuticals from the Strategic National
    Stockpile, establishing and staffing field medical facilities and
    providing medical supplies, preventive medicine assistance and lab
    support.
    Interagency Coordination
        NORTHCOM and NORAD have implemented a full spectrum interagency
    program to enhance coordination, planning, and operations. We have
    liaison officers from approximately 60 Federal and non-Federal
    agencies, U.S. and Canadian, at our headquarters in Colorado Springs.
    Working through our Joint Interagency Coordination Group, they provide
    situational awareness and an assessment of operations and plans that
    their agencies are executing in support of a contingency. This
    coordination allows us to ``lean forward'' and anticipate the
    assistance that will be requested from DOD and NORTHCOM. During
    Hurricanes Katrina and Rita, our Interagency Coordination Watch Cell
    worked around the clock supporting key resident agency representatives
    from the Federal Emergency Management Agency, the Army Corps of
    Engineers, the Transportation Security Administration, the U.S. Coast
    Guard, the U.S. Geological Survey, the Federal Aviation Administration,
    the Environmental Protection Agency and others. These representatives
    provided onsite interagency subject matter expertise and a critical
    two-way link with their parent agencies at all levels.
        In addition to operational support, our interagency representatives
    are fully immersed in the development of plans supporting our homeland
    defense and defense support of civil authorities missions. We have
    established working groups to provide interagency support for our key
    planning efforts, including CONPLAN 2002 and collaboration with
    Department of Human Health Services for Pandemic Influenza contingency
    plans. Our Earthquake Working Group is coordinating with the Federal
    Emergency Management Agency on their catastrophic planning initiative
    to be better prepared for potential earthquakes in the NORTHCOM area of
    responsibility.
        We are also working with the Departments of Transportation, Energy,
    as well as Health and Human Services to establish optimum liaison
    arrangements. DHS has placed a senior level representative at our
    headquarters and NORTHCOM has an onsite senior liaison within DHS
    headquarters.
    Intelligence Fusion and Sharing
        To understand and assess the threats our Nation faces, our
    intelligence team fuses foreign threat information that has a domestic
    nexus with domestic threat information having a foreign connection. Our
    analysts collaborate with intelligence directorates from the other
    combatant commands, the national intelligence community, and other
    Federal agencies, including the National Counterterrorism Center, the
    Defense Intelligence Agency's Joint Intelligence Task Force--Combating
    Terrorism, the Federal Bureau of Investigation, the Central
    Intelligence Agency, the National Geospatial-Intelligence Agency, the
    National Security Agency, the U.S. Coast Guard and the National Guard
    Bureau. To support our joint efforts, NORTHCOM hosts liaison officers
    from these and other national agencies and we embed our own liaison
    officers in their agencies.
        To protect Americans' civil liberties, intelligence received from
    other Federal agencies or State and local law enforcement is filtered
    through a well-established and disciplined Intelligence Oversight
    Program to ensure we receive only intelligence with a foreign terrorist
    threat nexus and then only to the extent the intelligence is relevant
    to our missions. NORTHCOM and NORAD conduct their missions within the
    operational parameters of intelligence oversight statutes and
    regulations. Through a thorough understanding of intelligence oversight
    guidance by the intelligence community, we ensure that the intelligence
    information necessary to conduct our missions is legally collected,
    analyzed and used to develop a clear picture of the threat to the
    NORTHCOM area of responsibility, while ensuring that the Constitutional
    rights of U.S. persons are protected.
        Our intelligence team is also active in our mission of providing
    support to civil authorities. NORTHCOM uses permissible intelligence
    capabilities to provide dedicated products and on-site support for
    National Special Security Events, and, most recently, disaster relief
    operations in response to hurricanes. In conjunction with the Defense
    Intelligence Agency and the National Geospatial-Intelligence Agency,
    national and tactical imagery capabilities were used to assist Federal,
    State, and local partners in determining the extent of hurricane
    damage.
    Interoperable Communications
        NORTHCOM is developing a concept to implement cellular-based
    rapidly deployable communications among NORTHCOM subordinate and
    supporting commands. Deployable cellular equipment will provide an
    autonomous infrastructure to extend communications connectivity in the
    NORTHCOM area of responsibility.
        NORTHCOM maintains the ability to share information with our
    mission partners through web-based tools. Hurricane Katrina response
    operations demonstrated the importance of sharing information outside
    the military domain and with partners that do not have access to our
    classified systems and, in many cases, do not even have access to
    unclassified .mil or .gov sites. To improve information sharing, we
    have installed a gateway between our classified network and DHS's
    Homeland Security Data Network. This gateway provides robust classified
    information sharing between the two departments. Working with our
    mission partners, we anticipate a common solution to share information
    in an unclassified environment.
        To share critical force protection information with our non-DOD
    partners, we are employing the Homeland Security Command and Control
    Advanced Concept Technology Demonstration. Through this system, we
    share information with DHS and public safety agencies providing
    emergency response to DOD facilities, bases and installations. This
    capability supports our strategy to publish common operational picture
    information to DOD, Federal, State, and local government agencies.
    Theater Security Cooperation with Canada
        Our Theater Security Cooperation program with Canada develops a
    series of contingency plans and cooperative procedures for responding
    to transnational threats and national disasters on both sides of the
    border. We have met with the commander and senior staff of Canada
    Command and are evaluating the appropriate structures to enhance U.S.-
    Canada defense cooperation.
    Theater Security Cooperation with Mexico
        NORTHCOM has made great strides in building effective relationships
    with the Mexican Armed Forces and civil agencies. Our increased
    interaction has promoted in-depth discussions on transnational security
    issues facing both countries, such as counterterrorism and counterdrug
    operations. Additionally, we have initiated discussions that have
    improved interagency coordination and facilitated an understanding of
    the consequence management plans, protocols and capabilities of both
    countries. We are currently talking with the Mexican Armed Forces about
    maritime and air security issues and are assisting them in establishing
    capabilities that support our mutual efforts in combating transnational
    threats. We are also exploring ways in which we can support the many
    security initiatives of the Security and Prosperity Partnership of
    North America Agreement that President Bush, President Fox, and Prime
    Minister Martin signed in March 2005.
    Exercises
        Each year, NORTHCOM and NORAD sponsor five large-scale exercises
    and over 30 smaller exercises. Our exercise scenarios have simulated a
    wide range of homeland defense and civil support challenges to include:
    threats from all domains, missile defense, consequence management
    operations, nuclear proliferation, protection of critical
    infrastructure, maritime interception operations, bioterrorist attacks,
    other weapons of mass destruction attacks and natural disasters. We
    also integrate potential disaster scenarios, such as pandemic
    influenza, into our training and exercises. To date, over 150 Federal,
    State, local, and multinational agencies and non-governmental
    organizations have participated in our exercises. We are working to
    increase exercise opportunities with Canada, Great Britain, Mexico, and
    other nations. Lessons learned from each exercise improve our
    operational procedures.
    Homeland Security/Defense Education Consortium
        Along with military and civilian partners, we established the
    Homeland Security/Defense Education Consortium to develop a knowledge
    and research base for homeland security and defense professionals. The
    175 participating schools in the United States, Canada, and Argentina
    seek to evolve expertise in these subject areas in the academic,
    military and corporate realms. We are grateful for the additional funds
    provided by Congress in the Fiscal Year 2006 DOD Appropriations Bill to
    support this effort.
                                     norad
        NORAD, a U.S. and Canadian bi-national command, operates an
    integrated system of alert fighters, tankers, airborne warning and
    control aircraft, as well as communications and ground-based air
    defense assets, to provide comprehensive aerospace warning and defense
    of the United States and Canada.
    Operation Noble Eagle
        NORAD defends the United States and Canada from domestic air
    threats through Operation Noble Eagle. Since September 11, 2001, NORAD
    has flown more than 42,000 accident-free sorties and scrambled or
    diverted fighters more than 2,000 times in response to potential
    threats.
    National Capital Region Integrated Air Defense System
        In 2005, NORAD made significant improvements to the air defense
    system in the National Capital Region. In January 2005, the all-weather
    Norwegian Advanced Surface to Air Missile System was integrated into
    the architecture to complement the existing air defense systems. In May
    2005, a Visual Warning System achieved Initial Operational Capability.
    This eye-safe system uses laser technology to provide a clear visual
    warning to pilots who enter restricted airspace in the National Capital
    Region. This system is expected to reach Full Operational Capability in
    mid-2006. NORAD also continues fielding the Enhanced Regional
    Situational Awareness System, an array of strategically placed video
    and infrared surface-to-air cameras and elevated Sentinel Radars
    designed to detect and identify aircraft of interest.
        In November 2005, DHS and DOD agreed to use DHS helicopters to
    assist NORAD in identifying and intercepting ``low and slow'' aircraft
    in the National Capital Region. We have continued to conduct numerous
    command-level exercises to test rules of engagement and to train
    designated authorities.
    NORAD Common Operational Picture--Tactical Data Links
        NORAD maintains a robust common operational picture of the air
    domain over the United States and Canada that allows us to perform air
    sovereignty and air defense missions while sharing air domain awareness
    with adjacent commands and interagency partners. Ongoing initiatives
    include the continued expansion of connectivity with Federal Aviation
    Administration surveillance systems and replacement of our aging battle
    control hardware.
    Deployable Homeland Area Air and Cruise Missile Defense
        NORAD has completed a concept of operations for Deployable Homeland
    Air and Cruise Missile Defense. This concept of operations that
    establishes procedures for employing highly responsive, scalable,
    integrated air defense packages designed to defend designated venues in
    coordination with intergovernmental partners, when directed by the
    President or Secretary of Defense. This effort has also been
    coordinated with the Canadian forces and the Canadian National Defence
    Headquarters.
    Wide Area Air Surveillance
        NORAD requires the capability to conduct real-time, continuous,
    all-weather, wide area air surveillance to ensure timely detection,
    identification and tracking of the full spectrum of threats, from sea
    level to 100,000 feet, within the NORAD area of operations, originating
    from aerospace, land and maritime platforms. NORAD is evaluating
    technologies that could comprise a wide area air surveillance family-
    of-systems including: Next Generation Over-the-Horizon Radar, elevated
    sensor platforms, passive coherent location systems, classified
    research and development air surveillance initiatives and other
    national capabilities.
    Federal Aviation Administration Integration
        Our partnerships with the Federal Aviation Administration and DHS
    continue to improve, ensuring our Nation's airspace is ever more
    secure. To date, 43 of 46 Federal Aviation Administration terminal/
    approach control radars have been fully integrated in NORAD's
    operations. The remaining three radars await integration, operations
    acceptance or deferment until aging radars have been replaced with a
    newer, short-range system later this year. A study to sustain our
    current radar capability, by upgrading the transmitters on the Federal
    Aviation Administration's oldest radars, is complete and the contract
    award is expected later this spring. This fiscal year the radars are
    funded on a 50/50 costing-share formula between DOD and DHS. We are
    grateful to Congress for fully funding the operations and maintenance
    accounts of both departments to support our Nation's air surveillance
    network.
    NORAD Agreement Renewal
        The NORAD Agreement will expire in May of this year. In November
    2005, the U.S. Department of State and Foreign Affairs Canada
    negotiated a draft renewal which may add a maritime warning mission,
    extends the Agreement indefinitely, and permits either nation to
    request a review of the agreement at any time. As Canada Command,
    tasked with homeland defense missions and responsibilities in Canada,
    becomes fully operational, a review of roles and missions among
    NORTHCOM, Canada Command and NORAD will be warranted.
                           bi-national planning group
        Established in December 2002, the Bi-National Planning Group is an
    independent organization formed to enhance U.S. and Canadian defenses
    and our Nations' capabilities to respond to natural and manmade
    disasters. The Bi-National Planning Group has proposed revisions to the
    Canada-U.S. Basic Defense Document, Combined Defense Plan and Civil
    Assistance Plan. Before its mandate expires in May 2006, the Bi-
    National Planning Group will issue its final report on recommendations
    to enhance United States--Canadian military cooperation.
                           quadrennial defense review
        NORTHCOM and NORAD played a prominent role in the 2006 Quadrennial
    Defense Review. We look forward to implementing the actions outlined in
    the QDR to enhance unity of effort with other Federal agencies, State
    and local governments, and Canada and Mexico to improve homeland
    defense and homeland security. These actions include:

             Creating a National Homeland Security Plan to clearly
            outline national actions to detect, deter, prevent, or if
            necessary defeat external threats and aggression.
             Developing joint command and control capabilities for
            homeland defense and civil support missions to include
            interoperable communications systems.
             Expanding training programs to accommodate strategic
            planners from other agencies while working with DHS and other
            interagency partners to design new courses on developing and
            implementing strategic-level plans for disaster assistance,
            consequence management and catastrophic events.
             Facilitating full-scope, interagency homeland
            security, homeland defense and consequence management exercises
            which leverage DOD's expertise in planning and training.
             Continuing detailed consultations with theater allies
            to address security and defense issues of common concern.
             Organizing and sponsoring homeland defense tabletop
            exercises, in which senior leaders from civilian and military
            agencies practice responses to disaster scenarios.
                                 final thoughts
        We are grateful for the committee's efforts to ensure our men and
    women in uniform continue to have the best possible equipment,
    training, and health care. To sustain world-class health benefits for
    the Active-Duty Force, retirees and their families, we urge Congress to
    support DOD's efforts to adjust TRICARE costs. We need to rebalance the
    share of health care costs between retirees and the government. If we
    do not change the current system, health care expenses will cut into
    our budgets for training, equipment and other needed investments.
        As we act to support civil authorities in responding to natural
    disasters, we will maintain focus on our primary mission of homeland
    defense. One fact remains constant--our enemies should make no mistake
    about our resolve or our capabilities. We thank the members of the
    Senate Armed Services Committee for their unwavering support of
    America's military. I look forward to your questions.

        Chairman Warner. Thank you very much, Admiral.
        If I may ask the indulgence of all, the Armed Services
    Committee is scheduled this afternoon at 2:30 to start a
    hearing regarding testimony on the Joint Strike Fighter and the
    alternate engine program. Given that the Senate has now
    informed that there will be a very long series of votes
    starting at 3:00, this necessitates moving our commencement of
    this hearing from 2:30 to the hour of 1:30. So the committee
    will meet at 1:30 here in Hart 216 for this hearing this
    afternoon.
        I would appreciate it if all would inform their Senators
    about this and other persons of interest.
        Admiral Keating, I was very impressed with your comment on
    the border security. This is a constantly evolving program and
    the Senate will be, I am told, taking up various aspects of
    this problem in the coming weeks. Can you enlighten us as to
    how you work in the intergovernmental organization or whatever
    structure is existing to deal with this problem, and I would
    hope that your voice is heard because a lot of the
    responsibility regarding enforcement could well be reposed in
    your command, depending on what plan eventually evolves; and
    also, the procedures by which you work with the individual
    States and, most particularly, the governors of those States in
    the implementation of these programs?
        Admiral Keating. Yes, sir. All departmental efforts are in
    support of law enforcement efforts. The DHS, Customs and Border
    Protection is the lead Federal agency for border security. We
    have Joint Task Force North headquartered in El Paso, Texas, by
    an Army Brigadier General, Joe Riojas. He has been there almost
    2 years. He has developed an extensive network of intelligence-
    sharing and information-sharing across the interagency. Joe has
    to go seek the support of military organizations who are going
    to deploy because of those rather unique environmental
    conditions that we enjoy along our southern border. So he will
    go get, for example, Stryker battalions from the Army or
    expeditionary units from the Marine Corps and they will bring
    with them not just personnel, but equipment.
        In addition, he has engineering battalions and some of
    these fairly high-end detection systems for seismic activity.
    Joe is extensively involved through our headquarters with the
    interagency and works closely with Secretary McHale at the DOD
    to provide the liaison to those law enforcement agencies, both
    south and north.
        Additionally, we conduct exercises. We have one ongoing, as
    Senator Cornyn knows, down in his State, and we have conducted
    three or four similar exercises over the past year, that are
    not just national but international in scope, to ensure that on
    both sides of the border our allies are aware of the efforts we
    have ongoing.
        Chairman Warner. I thought I understood you to say that he
    responsible up through to you, but what is his actual chain of
    command?
        Admiral Keating. Yes, sir. He is a direct support into
    NORTHCOM.
        Chairman Warner. Direct support, so you set this up then?
        Admiral Keating. That is correct.
        Chairman Warner. I see, and it has been established for 2
    years now or thereabouts?
        Admiral Keating. Sir, it was Joint Task Force 6 for years.
    We renamed it after legislation, as we were allowed to get a
    little more aggressive, if you will, in exploring the nexus
    between illegal immigrants and potential terrorism and
    terrorists who might come into the country. That allowed us to
    expand our mission statement slightly, so we renamed the task
    force Joint Task Force North. They have been in existence for
    years.
        Chairman Warner. I see. But ultimately you are the
    combatant commander that has that responsibility?
        Admiral Keating. Yes, sir, that is correct.
        Chairman Warner. Now, about the interrelationship with the
    governors, and taking into perspective their views and their
    needs and the utilization, if necessary, of their Guard and
    Reserve?
        Admiral Keating. Yes, sir. Through our headquarters, we,
    and Joe in particular, work with the adjutants general from the
    States along the southern and northern borders to ensure that
    we minimize seams to the best of our ability, but we want to
    eliminate a whole lot of overlap because that is inefficient.
    So those capabilities that we can provide in support of the
    adjutants general supporting their Commander in Chief, Joe
    would be our point man for that effort.
        Chairman Warner. Now, the Quadrennial Defense Review (QDR)
    highlights that U.S. forces have taken on a greater role at
    home and will likely continue to do so in support of the global
    war on terror. Likewise, I noted that one of the
    recommendations in the Federal response to Hurricane Katrina
    lessons learned published last month by the White House stated
    as follows, ``The Departments of Homeland Security and Defense
    should jointly plan for the Department of Defense's support of
    Federal response activities as well as those extraordinary
    circumstances when it is appropriate for the Department of
    Defense to lead the Federal response.''
        This raises several issues, including historical
    limitations on the Armed Forces in law enforcement, title 10
    versus title 32, and the current high tempo of operations of
    all of our Armed Forces. In your view, what does this mean for
    our Armed Forces and would this role include any necessary
    changes to the authorities that govern such a response as the
    insurrection statutes or the posse comitatus statute?
        Admiral Keating. In reverse order, Mr. Chairman, I do not
    think that it requires any change to statutory authorities that
    are resident in title 10 forces. Nothing that we have done in
    response to Katrina or any other operation nor in any
    exercises, none of this has highlighted to us the need to
    change posse comitatus.
        In the first part of your question, those forces that we
    might need in response to a significant disaster, we would work
    through the Joint Forces Command and the Services for the
    capabilities resident in Active-Duty Forces who may be
    currently in the United States. In our exercises, we have not
    yet found any situation remotely close to something that would
    require going elsewhere because the forces we would have at our
    disposal are not available. So I am satisfied that, through the
    current processes and current policy, we would have sufficient
    forces to respond even on the very high end catastrophe where
    the DOD would likely have the lead as assigned to us by the
    President.
        Chairman Warner. Thank you.
        General Craddock, as I referred in my opening statement, I
    profited from our meeting yesterday in preparation for this
    hearing, and I wonder if you would share with our colleagues
    your overview of the fragility of a number of the political
    situations in Central and South America and the role that
    certain current elected leaders of certain countries are
    playing in trying to influence those elections?
        General Craddock. Mr. Chairman, thank you. Indeed this is a
    year of elections in Latin America. I know there have been
    several elections already over the last few months, the last
    quarter of the last calendar year, two already this year, and I
    believe eight yet to go. That includes Mexico.
        In our judgment, our look at the region tells us that these
    elections are going to be pivotal in many cases, and that there
    will be potentially many external influences on the
    electorates, the constituents, and the voting public in many of
    the countries. We see, quite frankly, quite an influence from
    Venezuela in several of the elections that are yet to be held--
    for example, Peru. I think that is public information and the
    government of Peru has made that known. Nicaragua obviously has
    also been public about this.
        We see this influence of this expanding populist movement,
    if you will, this extremist populist movement, impacting on
    several of these nations that have yet to hold elections
    throughout the remainder of the year. In these fragile
    democracies, that becomes a very difficult situation. It is
    difficult enough for these fragile institutions to be able to
    work through the process of elections to convince their
    constituents that governance is a good thing and that democracy
    will yield tangible benefits in the long run. Where there are
    unstabilizing, destabilizing, chaotic external influences, it
    becomes all the more difficult to realize the benefits of
    democracy and the institutions forthwith.
        So we are watching that closely. We are concerned and we
    hope that these forces recede and that the internal democratic
    processes are strengthened and mature in these countries.
        Chairman Warner. Thank you very much. My time has
    concluded.
        Senator Levin.
        Senator Levin. Thank you, Mr. Chairman.
        Admiral Keating, you have made reference to some lessons
    learned from Hurricane Katrina and, as you know both from what
    I said this morning and from our previous conversation, the
    lack of integration between Federal and the National Guards of
    many States is of deep, deep concern, not just to me but to so
    many others, including the Senate Committee on Homeland
    Security and Governmental Affairs members who heard the
    testimony.
        You have set forth your plans to improve that integration
    here this morning. I am wondering if you have a timetable that
    you could lay out for us in terms of when you hope to have a
    fully-integrated plan in place?
        Admiral Keating. We have plans on the shelf now, Senator,
    and the National Guard adjutants general with whom we have
    dealt have copies of those plans for disaster response, Defense
    Support of Civil Authorities, and the high end chem-bio-
    radiological responses if NORTHCOM should be involved, as we
    certainly would.
        So the Theater Army Groups (TAGs) have seen that. The
    National Guard Bureau has seen those plans. I repeat, we are
    exercising to them frequently, most specifically in this
    upcoming Ardent Sentry exercise, where the State of Michigan
    will be involved, and we have been in communication with the
    Michigan Adjutant General. So across the spectrum of the
    adjutants general, the National Guard Bureau, they know what we
    have in mind. We are meeting with them much more frequently
    than we have in the past, and I am satisfied that, in terms of
    the timetable, we are on or ahead of the schedule that I would
    have laid out prior to Katrina.
        Senator Levin. Is there an ongoing effort to reach an
    agreed upon plan or, as far as you are concerned, is there now
    in place an agreed upon plan which is adequate to avoid the
    coordination problems that existed?
        Admiral Keating. There is not an agreed upon plan, Senator,
    to my knowledge.
        Senator Levin. Is there an effort made to achieve one? Is
    that a goal or is that not a goal?
        Admiral Keating. It has been the subject of a lot of
    discussion and I would put it this way. In the past, growing up
    the way I did, I would have said C2, that military term C2,
    meant command and control. Today, because of the dynamic of the
    National Guard and the NORTHCOM, DHS, and DOD, I would say it
    is not command and control; it is communication and
    coordination. That is much more important and is likely to be
    more effective, and that is the status to which the governors
    and adjutants general would more likely agree than a straight
    old-fashioned command and control notion.
        Senator Levin. But is there a plan for that kind of
    coordination?
        Admiral Keating. Yes, sir.
        Senator Levin. That is agreed upon?
        Admiral Keating. Yes, sir.
        Senator Levin. So there is in place an agreed upon plan for
    coordination which you believe is adequate to meet the failures
    of coordination that existed in Katrina?
        Admiral Keating. There is, sir.
        Senator Levin. Now, your number one unfunded priority is
    $10 million, ``to provide interoperable, survivable, versatile,
    resilient, mobile, wireless data network that incorporates
    security features,'' as you have described it here this
    morning. Given the fact that coordination and coordination
    problems were identified in the aftermath of the response to
    Katrina, why should this relatively small amount in terms of
    the budget just not be in the budget?
        Admiral Keating. Senator, since I made that, the chairman
    and I had that discussion, I am assured that inside the DOD
    there has been some recalculation and it is likely we will get
    the funding. I do not know that we have received it, but there
    are reconsiderations being made in the Department.
        Senator Levin. Will you just let us know if that happens?
        Admiral Keating. I will, sir.
        Senator Levin. Also, your fifth unfunded priority is for
    $3.5 million for interagency coordination activities which
    will, ``synchronize command activities with multiple local,
    State, Federal, and international agencies to ensure that
    NORTHCOM can synergistically respond to multiple, simultaneous
    homeland defense and civil support missions.'' The same
    question.
        Admiral Keating. The same answer.
        Senator Levin. The same answer, good enough.
        Senator Reed asked your deputy, General Inge, at last
    Friday's Emerging Threats and Capabilities Subcommittee
    hearing, and he responded that, ``the intelligence sharing is
    not as good as it needs to be,'' to use his words, but he has
    good liaison relationships and cooperation with other agencies.
        Is the NCTC fully-operational and functioning as it needs
    to in your estimation?
        Admiral Keating. I think it is fully operational, Senator,
    but we do not work in as comprehensive a fashion with them as
    we need to. I think I mentioned to you I am going to go see
    Admiral Redd tomorrow. It will be my second in a series of
    meetings with him and we are actively engaged in increasing the
    flow of information and sharing analysis. The information is
    flowing adequately. It could be better and it is going to get
    better, and Admiral Redd is committed to that, as are we. It is
    the analysis and the depth and quality of the analysis, and we
    are always working to make that better as well.
        Senator Levin. If you could keep the committee informed on
    the way those conversations are moving, I think we would all
    appreciate it.
        Admiral Keating. I will, sir.
        Senator Levin. General Craddock, in your opening statement
    you mention the negative impact of the American Servicemembers
    Protection Act on your engagement strategy. Can you elaborate a
    bit on that?
        General Craddock. Yes, Senator. The American Servicemembers
    Protection Act essentially precludes Foreign Military Financing
    (FMF) and International Military Education Training (IMET) from
    countries who have not executed an article 98 bilateral
    agreement which says they will not extradite serving or former
    U.S. officials or citizens to the International Criminal Court
    (ICC).
        This affects 11 countries in our region. Some of these
    countries are critical: Peru, Ecuador, Brazil, Bolivia. In
    several countries here, we are now losing the opportunity to
    bring their officers and their senior noncommissioned officers
    to the United States and into our schools, whether they be
    leadership schools, developmental schools, or functional
    schools. To be able to: one, learn these skills, these
    capabilities, attributes, and characteristics of the military
    profession is key; and two, to join partner and learn about the
    United States Armed Forces subordination to civilian leadership
    are essential for the good principles of democracy.
        So we are losing at that. Now, when I go throughout the
    region, the fact is FMF is gone, IMET is gone. The leaders I
    talk to, my counterparts, tell me: We really need this
    engagement. As much as we do not like to lose either, the FMF,
    it is understandable; we must have this engagement, this
    opportunity for the schooling.
        Senator Levin. Well now, do you agree with their
    assessment?
        General Craddock. I do, absolutely.
        The other part is, if we are not there and we cannot
    provide this opportunity, someone else will. Other nations are
    moving in. The People's Republic of China has made many offers
    and now we are seeing those who formerly would come to the
    United States going to China to take part and take advantage of
    their offers for this.
        Second, we are going to lose contact with a generation of
    leaders, both noncommissioned officers and officers, that we
    believe will be unhelpful in the future to us and to them,
    because as much as when they come to the United States for
    school we learn from them and they learn from us, they also
    learn from each other because they are an international cohort
    here in our classes and courses.
        So we think it is essential that we de-link IMET from this
    sanction.
        Senator Levin. Mr. Chairman, I would ask you, if you would,
    to consider sending a copy of General Craddock's testimony here
    this morning to the DOD and the Department of State and ask
    them if they would be in a position to give us some
    recommendations for amendment to that law. We know what the
    purpose of the law was, but we also are losing some important
    national security advantages as a result of its requirements.
    Those advantages were just outlined by General Craddock.
        Chairman Warner. Senator, we will do that jointly in a
    letter. I share the General's views on indeed the importance of
    this program. I have seen it for all the many years I have been
    privileged to be associated with the Department. I have seen it
    work.
        General Craddock. Thank you, sir.
        Senator Levin. It is an important program indeed and vital
    to our security. Thank you for your direct testimony on that.
        Chairman Warner. Senator McCain.
        Senator McCain. Mr. Chairman, maybe it would be appropriate
    to put that on the emergency supplemental.
        Chairman Warner. We will take into consideration that
    thought.
        Senator McCain. I agree, we have paid a very heavy price in
    countries where we have cut off these programs for various
    reasons. These relationships obviously are very vital if we are
    going to effectively conduct the war on terror. So I thank you
    for your forthrightness, General, on this issue.
        General, last December, Deputy Secretary England issued a
    memorandum directing the implementation of the detainee
    legislation that became law that the Army Field Manual (FM)
    defines the universe of permissible interrogation techniques
    and that cruel, inhumane, and degrading treatment are
    prohibited. That was Deputy Secretary England's memorandum.
        Did you receive a copy of that memo?
        General Craddock. I did, Senator.
        Senator McCain. How have you translated that memo into
    specific guidance for soldiers, military police (MPs),
    interrogators, translators, et cetera, at Guantanamo?
        General Craddock. Senator, upon receipt of the letter from
    Deputy Secretary England, I sent a letter to the joint task
    force commander at Guantanamo, Major General Jay Hood, and told
    him that he needed to comply with the Detainee Treatment Act of
    2005, as promulgated by Secretary England's letter, and asked
    that he affirm to me that he was in full compliance with the
    act and with the provisions of FM 34-52, the baseline document
    that we are still using today.
        He did so in a return letter to me. I then asked how we
    will train both the servicemembers who are at Guantanamo and
    those who will be rotating in. He has trained those in the
    detention group, the detention intelligence group, the
    interrogators, the analysts, and the linguists. He gave them
    information to use FM 34-52 as the basis to impart that
    requirement to them.
        Now, in the intervening time, last month, February, we
    realized it is broader than that. It has to extend to the
    detention operations group, which are both the internal guard
    force and external, who may be called upon in an emergency
    situation; and to administrative personnel who generally have
    duties in and about the camps. So he has expanded his teaching,
    training, if you will, on the requirements of the FM to them.
        Now, we also looked at, we are now in a rotational period,
    we are changing from the sixth rotation at Guantanamo,
    Guantanamo 6 to Guantanamo 7. That change is going to be a
    little bit different than in the past because now the Navy is
    picking up more of the operation with more guard requirements.
    So we looked at the program of instruction that has been
    provided and it did not fully include all the provisions that
    we wanted to emphasize.
        He now has to as these new forces move in, both interior
    and exterior, implement another teaching operation, chain
    teaching, if you will, a program of instruction, to make sure,
    one, that we again train FM 34-52, that we understand the
    provisions now that that is force of law, as opposed to before
    compliance with the Convention Against Torture through three
    amendments. But now it is the law of the land.
        So we are complying with the requirements of the Detainee
    Treatment Act in that fashion, both in preparatory training
    before the troops move in and then once they get on the ground.
    Quite frankly, once they arrive on the ground their focus is on
    the immediate environment and they understand the issues and
    exactly what we are telling them much better with regard to
    their obligation because it is very real, it is purposeful, and
    it is right there in front of them.
        Senator McCain. Do they have specific written instructions?
        General Craddock. We use FM 34-52 right now as the
    guideline. That is the only authority we have for the
    interrogations. There will be, obviously, no cruel, inhumane,
    degrading treatment or punishment.
        Senator McCain. But that is in the eye of the beholder. I
    think that it is important that they receive specific
    instructions, General.
        General Craddock. Senator, the manual is being rewritten.
    We are awaiting that manual, that rewrite, and I have asked the
    Department that when they rewrite that give us specifics as to
    what ``degrading treatment'' means so that there is no question
    in a soldier or sailor's mind.
        Senator McCain. Thank you.
        General Miller, who ran Guantanamo and helped set up
    operations at Abu Ghraib, we have been briefed that he failed
    to properly supervise the interrogation of Mohamed Qitani, the
    so-called 20th hijacker. Their report recommended that he be
    reprimanded, a recommendation that you declined to follow.
    Since then, General Miller has asserted his Fifth Amendment-
    Article 31 right against self-incrimination in two court-
    martial cases involving the use of dogs during interrogations.
        I do not contest General Miller's right under the
    Constitution, but do you not think that he would at least, just
    obligations as a general officer, testify at these trials,
    General Craddock?
        General Craddock. Senator, I do not presume or assume to
    know why he elected to do that. I would not want to make
    judgment or speculation. I do know that during the conduct of
    the Schmidt-Furlow investigation, he was interviewed twice.
    Once he made a sworn statement, and the second time he waived
    his Article 31 rights. I would say that beyond that, given the
    proceedings are ongoing, I would not want to pass judgment or
    make any more comments.
        What I would also say, though, is it seems to me that once
    those proceedings have culminated and the transcripts are
    reviewed as to what was said or not said as the case may be,
    that I would want to look at the transcripts to determine if
    there is any linkage back to Schmidt-Furlow that may be
    identified as a knowing or substantive misrepresentation of the
    facts in the Schmidt-Furlow. If that linkage upon review of the
    transcripts is there, then I would take under consideration
    either a reopening of the Schmidt-Furlow investigation or a new
    investigation. But at this point I do not feel I could do that.
        [The information referred to follows:]

        Senator McCain. The problem that it creates, as you well
    know, General, is the impression, because--and I do not contest
    General Miller's right to assert his constitutional rights, but
    it certainly brings some suspicion, at least in some quarters,
    that these activities were not solely conducted by low level
    personnel, and I am sure you are appreciative of that aspect of
    this issue.
        Finally, Admiral Keating, you said you have flown over
    2,000 hours in support of border operations in unmanned aerial
    vehicles (UAVs). That is not very much. As my colleagues become
    better educated on the border and the problems that we face
    down there, a virtual wall is what we need, not just building a
    wall at the cost of billions of dollars. It seems--it not
    ``seems''--I am convinced that UAVs can play a vital role,
    particularly in the trackless areas of our border, where it is
    both expensive and incredibly difficult to keep people under
    conditions of intense heat and other difficult environment.
        I am very disappointed at the lack of UAVs. I am very
    disappointed that for years we have been saying that we need
    more UAVs and there has not been very much forthcoming. I do
    not often act--I try to avoid acting parochial when I address
    these issues. But the fact is over half of the people crossing
    our border, our southern border, illegally are crossing in
    Arizona. We have one UAV, one; count them, one.
        There is a compelling argument that we need more of that
    and other technological means of detecting and apprehending
    people than we are getting today, and that failure to enforce
    our borders, for example using UAVs and other technological
    capabilities, has increased the frustration level, not only in
    Arizona but here in Congress.
        I hope you can give me a better answer than I have been
    getting as far as how rapidly we can deploy UAVs, not just in
    the Arizona-Mexico border, but our entire border, including
    Texas and New Mexico and parts of California.
        Admiral Keating. Senator, it is the DOD's role, in support
    of the DHS, to provide those assets to the best of the DOD's
    ability to do so. Two thousand hours is not as many as 4,000,
    but it is more than we were doing 4 or 5 years ago. So not to
    get caught in how much flight time is enough or how many UAVs
    are enough, we are giving those assets to the best of the
    Department's ability in support of the DHS.
        DHS is pursuing their own UAV fleet and so the principal
    Federal agency has an aggressive program under way on our own
    behalf to provide more airborne assets and those assets we can
    provide. Five soldiers per day for tunnel detection is not an
    insignificant number of forces over the course of a year. Five
    soldiers per day is what we are giving now.
        So Joe Riojas has an aggressive charter. He is very anxious
    to provide the support that he can, and to the extent that the
    Department is able to use those assets that are not otherwise
    engaged in straight DOD operations we are going to do that.
        Senator McCain. Thank you. My frustration should probably
    be directed more at the DHS and I think you make a good point.
    But we find it very frustrating that we are unable to get
    existing technology in greater numbers and greater presence on
    our border as we see a steady increase in the number of people
    who are crossing our border illegally. I thank you.
        Mr. Chairman, I thank you for your generosity with the
    time.
        Chairman Warner. Senator, the line of questioning that you
    had is directly bearing on what the Senate is going to face
    here in the next week or 2 and therefore this record will be
    important to the whole Senate.
        I will ask my colleagues to just indulge the chairman a
    minute on this question of General Miller. I had intended in
    the next round to explore the important questions initiated by
    Senator McCain, but it is not clear to me from your response to
    Senator McCain whether or not, General, you have reviewed the
    Army Inspector General (IG) report. Now, we just received a
    copy of it yesterday. You have not?
        General Craddock. I have not, Senator.
        Chairman Warner. I think that you really should go back
    over this entire matter. Like Senator McCain--General Miller
    had a perfect right under the Constitution to exercise his
    withholding of testimony under article 32. But you testified
    before this committee about your own personal findings and
    therefore, if I may say with respect, your accountability is on
    record before this committee, and I want to ensure that you are
    fully satisfied in this case.
        Eventually this committee will have General Miller seated
    in that chair. But we are going to be careful not to proceed
    until such time as the entire proceedings under the Uniform
    Code of Military Justice (UCMJ) with all defendants are
    completed, so as not to jeopardize the cases.
        I thank the committee.
        General Craddock. Thank you, Mr. Chairman.
        Chairman Warner. Senator Akaka.
        Senator Akaka. Thank you very much, Mr. Chairman.
        I want to add my welcome to our panelists, Admiral Keating
    and General Craddock. I also want to express my pride and
    thanks to all the men and women that are under your command and
    in the areas that they are in. Their working really makes our
    people feel safer in our great country.
        I wanted to in a sense change the subject. You mentioned,
    Admiral Keating, that you set to take care of disasters that
    are manmade and also natural. I am thinking of something that
    may be important, an important problem.
        As I am sure you know, the State of Hawaii is at the front
    lines for the Asian flu. As the flu continues to spread, health
    officials are paying particular attention to Hawaii. We know
    that we should not be directing our major attention to health.
    There are other parts to that that are important. According to
    some experts, the Nation's gateway to Asia--as that, Hawaii is
    the most likely site for an initial outbreak on American soil.
        My question to you is what plans has NORTHCOM made to
    protect and assist the citizens of Hawaii and our country in an
    outbreak of Asian flu?
        Admiral Keating. Senator, we have a plan on the shelf. We
    briefed the Secretary of Defense. It is a concept plan. It is
    not yet a functional plan. We are refining the various moving
    parts of it, if you will. But the concept plan encompasses all
    of those activities that we can foresee that might involve the
    DOD in support of the lead Federal agency, Health and Human
    Services (HHS).
        We have worked closely with Admiral Fallon and his staff in
    the formulation of our plan. They have a copy of our plan and
    we are going now to tabletop exercises across the interagency
    to address the specific issues, including quarantine, DOD
    medical response, distribution of medicine in the case
    sufficient human-to-human transmission is sustained. We are
    working very closely. We have a full-time officer from the
    Pacific Command (PACOM) staff in our headquarters, and I am
    satisfied that PACOM has all the information that we have at
    our headquarters as well, sir.
        Senator Akaka. That has been a concern. I am glad to hear
    from you that you have been working with PACOM on this, and it
    is not only Hawaii; it is parts of the Pacific as well that are
    concerned here.
        Admiral, as the recent controversy over the Dubai Ports
    deal continues, we also are concerned about adequate port and
    maritime security and worry about the national security
    priority as well. What is NORTHCOM doing to improve maritime
    security and what more needs to be done to increase our
    capabilities in the future?
        Admiral Keating. In the past year, Senator, the Secretary
    of Defense has approved our maritime concept of operations for
    maritime security. The principal underlying notion here is that
    we do this as far from our shores as possible. So that is, we
    rely on information and intelligence exchange with our allies
    and combatant commanders around the world so as to build an
    integrated system of systems to determine what is in the
    container, what is the ship on which the container will ride,
    and what crew is manning the ship that carries the container.
        There is the Container Security Initiative. Over 40
    countries have now signed up and in so signing they place their
    stamp of approval, if you will, their guarantee, that the
    container has been secure for 24 hours prior to its being
    loaded on the ship. The country verifies the accuracy of the
    cargo manifest for each container, and they also verify the
    accuracy of the manifest of the crew that is manning the ship.
        So there are 40 countries, including for example the
    People's Republic of China. We work very closely with the DHS,
    Customs and Border Protection, United States Coast Guard, and
    we are making tremendous progress with our commercial partners
    to make sure that the seaways remain a safe and secure manner
    for moving the 90 percent of the world's trade that travels by
    sea.
        Senator Akaka. I am glad to hear that. I am sure PACOM is
    of course working on this, as Hawaii's ports are important to
    our country and to Hawaii.
        Admiral Keating. Yes, sir. Everything we do is seamless
    between NORTHCOM and PACOM, and again we share everything we
    have, the information and intelligence we have, continuously
    with the PACOM operations center.
        Senator Akaka. Admiral, I understand that one of the
    strengths of NORTHCOM is its ability to pull forces and
    capabilities from across the DOD. I have some concerns about
    how many forces would be immediately available in the event of
    an emergency. Given the large number of units required to
    sustain the current operations tempo outside of NORTHCOM, what
    is the force availability for NORTHCOM?
        Also, what is being done to ensure that there will be an
    adequate number of forces available in case of a natural
    disaster or some other form of national emergency?
        Admiral Keating. In every exercise we have conducted so far
    and in every real world operation, most notably Katrina, there
    has not been one example where we went to Joint Forces Command
    or the Services requesting a certain capability and the
    attendant force structure that would have to fulfill that
    capability where the DOD has not been able to satisfy our
    request.
        In Katrina, it ended up being almost 23,000 Active-Duty
    soldiers, sailors, airmen, and marines working in concert with
    nearly 50,000 National Guardsmen and Air Guardsmen. So that is
    a force of 75,000 some folks responding to a fairly localized
    and extended response requirement. There are still 250 National
    Guardsmen in title 32 status who are in Louisiana helping the
    citizens of principally New Orleans get back in business, if
    you will.
        So there has been no case where I was not able to get the
    forces that I requested. We work very carefully day-to-day,
    hour-to-hour, with Joint Forces Command and the Services to
    make sure we can monitor readiness. We are able to monitor very
    carefully and specifically the readiness of specific units we
    might require as we are analyzing the threat situation and the
    current civil support situation in the United States.
        So I am satisfied, before you today, that we have the
    visibility into the readiness, we have the capability to reach
    the forces, and they will respond very quickly when we need
    them.
        Senator Akaka. Thank you for your response.
        My time has expired, Mr. Chairman.
        Senator Inhofe [presiding]. Thank you, Senator Akaka.
        General Craddock, there is no group that I think that we
    should be more concerned with than Hugo Chavez and all of his
    anti-American rhetoric and the deals he is making with China
    and with Argentina on some of the civilian use nuclear
    technology and all his anti-American rhetoric. Is there
    anything further you would like to share with us, either ideas
    of your own or the current policy with Venezuela, during the
    course of this hearing?
        General Craddock. Senator, again I think we are in
    agreement with regard to this concern and what we believe to be
    a very destabilizing influence. A couple of facts. The fact is
    that Venezuela has enormous petrodollars available and those
    dollars are available for either use in Venezuela or for use
    throughout the region. It appears that, based on what we see
    today and what we understand, more of those dollars are going
    throughout the region than they are being invested in that
    country, Venezuela, that has been a longstanding over many,
    many years great partner of the United States, great people.
        We see some infrastructure problems. We see poverty still
    far above levels. With the wealth in that country this should
    not be acceptable.
        What we see throughout the region is an unsettling
    influence with regard to the political process. I read
    somewhere recently that the fundamental principle of a
    democracy is the freedom of the people to hire and fire their
    government. What we are seeing more and more is the spread of a
    system where checks and balances, and the separation of powers,
    starts to dissolve. It starts to deconstruct, and the ability
    to fire your government is lost.
        Senator Inhofe. A lot of us at this table--not a lot of us.
    Maybe I am the only one that disagreed with a lot of the
    Guantanamo, some of the torture aspects that have been
    addressed by this committee. But I am concerned recently that I
    have seen that a lot of those who have been released from
    Guantanamo have reappeared. Are you monitoring these people or
    do you have any idea what their recidivism rate would be? Or
    are these just a few isolated cases?
        General Craddock. We do not know. What we do know are the
    numbers--and they are hard to track. We have two categories,
    transfer with conditions and release. Most we transfer with
    conditions. Now, unfortunately, there are no guarantees in
    life, and it is hard to make some of these things stay in
    enforcement once they are back in their country of origin.
        The number I have been using is 12 to 15 individuals who
    have been transferred with conditions or released have shown up
    again on the battlefield and have either been recaptured or
    killed.
        Senator Inhofe. Do you wonder how many others there are out
    there that we do not know about?
        General Craddock. Exactly, we do not know.
        Senator Inhofe. Should we maybe readdress this policy that
    we currently have if it is that many? It seems like quite a
    few.
        General Craddock. That is out of about, what we know, 265
    or so have been transferred with conditions or released and we
    know about 15 or so. There may well be others that we do not
    know about. Indeed, it is of concern and I think that as we go
    through the process for working, the State Department works the
    modalities with these nations, that that must be taken into
    consideration and there must be agreements for transfer that
    have some force behind them.
        Senator Inhofe. Admiral Keating, for so many years now I
    have been concerned about our ability to do something with a
    missile coming in. I know that in your written statement you
    mention that your command is ready to exercise operational
    control of the ground-based midcourse defense system as well as
    the terminal defense missile system. Very briefly, I would like
    to have you maybe elaborate, give us a comfort level. I do not
    have a lot of faith in our intelligence. I am the one that back
    on August 24, 1998, wrote a letter trying to determine as best
    our intelligence could tell us at that time how long it would
    be before the North Koreans would have have a multiple stage
    rocket that could reach the United States. They said between 5
    and 10 years, and 7 days later, on August 31, 1998, one was
    released.
        So in terms of what that threat is now in an open session
    and our ability, is there any comment, any more assurance you
    can give us other than what was in your written report?
        Admiral Keating. Yes, sir, I will try, Senator. There are
    missiles in the ground, about nine or so, up at Fort Greeley,
    the ground-based interceptors, in the ground at Fort Greeley
    and two down at Vandenberg. We of the NORTHCOM, if current
    policy is what is eventually signed by the President, will be
    the folks who will be authorized to launch those missiles
    against incoming threats.
        So we are training aggressively and actively with the
    Missile Defense Agency (MDA) and civilian contractors to make
    sure that we are ready to execute the operation when the
    President gives us the authority to do so. I report to the
    Secretary of Defense that we are trained, we are ready. We have
    crews at Greeley, at Shriever Air Force Base, at Peterson. I am
    involved personally in exercises on about a weekly basis, no
    notice simulations, where I would be apprised of a threat
    launch, the track of the incoming missile, and how many ground-
    based interceptors I would launch to counter that threat.
        So we are trained and we are ready to execute when the
    President so dictates. As far as tippers from whatever country
    might launch them, as you probably know in open source
    reporting, North Korea launched three very short-range surface-
    to-surface missiles about a week ago. In this session, I think
    I am okay to say we are aware of their plans to launch and we
    were aware in very short notice or short order after those
    missiles actually did launch that they had in fact launched. So
    I am more satisfied than I was 5 years ago that we have the
    systems in place to monitor countries who might intend to
    launch against us.
        Senator Inhofe. Good. That is very reassuring.
        One last thing, General Craddock. You mentioned the--I
    guess you were talking about our IMET program, that we are not
    able to get a lot of these people in training from South
    American countries. Is that mostly because of the obstacle
    imposed by article 98?
        General Craddock. Exactly.
        Senator Inhofe. We are suffering this--we have the same
    problem in several countries in Africa. I keep running into
    that. They are our allies and yet they are unwilling to be able
    to enter into that kind of an article.
        General Craddock. Yes, sir. I think there are roughly 30
    countries around the world now under article 98 sanction, if
    you will. I know 11 are in my region, several in Africa.
        Senator Inhofe. Let me tell you, Mr. Chairman, it did not
    go unnoticed that when they are unable to do it with us the
    Chinese are standing by. I cannot think of anything that is
    worse than having those people go over there and get
    indoctrinated by them. I think maybe we should address that
    because that is a very serious thing.
        How prevalent is that in terms of the Chinese bringing them
    in for training?
        General Craddock. Widespread and growing every day. We see
    more and more that military commanders, officers,
    noncommissioned officers are going to China for education and
    training. We see more and more Chinese nonlethal equipment
    showing up in the region, more representation, more Chinese
    military. So it is a growing phenomenon.
        Senator Inhofe. Thank you very much. Mr. Chairman.
        Chairman Warner [presiding]. Thank you, Senator. As you
    heard in the colloquy with Senator Levin and myself, we are
    going to pursue this, and I hope that you will join us in
    representations to our administration.
        Senator Clinton.
        Senator Clinton. Thank you very much, Mr. Chairman.
        I want to agree completely with Senator Inhofe's last
    comments. Many years ago when I was in college, I wrote a paper
    about the competition between the then-Soviet Union and the
    Chinese for military and economic influence in Africa and Latin
    America. This is like deja vu all over again, and I think we
    are neglecting our neighbors to the south in a way that is
    going to be very difficult to repair unless we begin moving
    immediately.
        It is not only the long-term contracts that are being
    entered into for natural resources. It is the building of
    relationships. It is the funding of a number of projects,
    everything from soccer fields to resort hotels. I think this is
    one of the most serious problems we face and we are not
    addressing it in any comprehensive way. We need, perhaps on
    this committee, to not only sound the alarm, but try to demand
    or suggest a much more comprehensive approach, starting with
    the undoing of the IMET restrictions, because I think that that
    has sent exactly the wrong signal and it has provided a big
    opening.
        I was encouraged when Secretary Rice seemed to at least
    signal some willingness to reconsider it when she was recently
    in Bolivia. But I hope that is on a fast track, because every
    day we do not, more and more people take off for wherever the
    Chinese facilities and training are to develop those
    relationships. The same thing is happening in Africa. When you
    have a terrible dictator like Mugabe in Zimbabwe telling little
    children in Zimbabwe they should learn Chinese because those
    are the new best friends, this is a serious threat. So I
    appreciate Senator Inhofe zeroing in on it.
        There are so many issues to discuss with the two of you and
    of course this is the most frustrating of forums because our
    time and yours is so limited, and a lot of ground has already
    been covered that I will not replow. But I just want, Admiral
    Keating, to be sure that I understand two points that were made
    before I came, and I apologize for being late.
        Is it your testimony that, with the work that is now going
    on to try to enhance coordination between DOD and Guard and
    Reserve troops in the event of natural or manmade disasters,
    that there are no suggested changes in posse comitatus?
        Admiral Keating. Yes, ma'am, that is our position.
        Senator Clinton. It would be very helpful, if that is going
    to be the position of the Department, to play out for us at
    some point, not now, some of the situations that I know we can
    run into. I have some personal experience with this and then
    some observations. The disconnect between local law enforcement
    and policing functions, especially in the middle of a crisis or
    a disaster, is sometimes so great as to undermine the
    effectiveness of the military role.
        So I would like additional information if I could.
        Admiral Keating. Yes, ma'am.
        [The information referred to follows:]

        As DOD operations in response to Hurricane Katrina demonstrated,
    title 10 and title 32 forces can work together to achieve unity of
    effort while in strict compliance with the Posse Comitatus Act.
    Specific real-world scenarios follow:

              National Guard (title 32/State Active-Duty) can provide
            security for Active-Duty Forces (title 10).

                      Title 10 forces provide trucks and drivers to
                    transport fuel, food, and medical supplies to stranded
                    motorists and hospitals. Title 32 forces provide
                    security for the trucks in the form of armed soldiers
                    and escort vehicles (title 10 forces always have the
                    inherent right of self-defense).
                      While title 10 mortuary affairs teams collect
                    bodies, title 32 forces provide security for the teams
                    and the civilian staging area.

              Title 10 forces can perform search and rescue operations
            requiring them to go house to house looking for injured people,
            with or without National Guard Forces. Title 10 forces may not
            enter a building without the consent of the building owner/
            occupant except when there are visible or audible signs
            indicating a person is in distress and/or there is a request
            for assistance. However, if they are accompanying National
            Guard Forces with law enforcement authority, the National Guard
            Forces may have the authority to conduct nonconsensual entries.

        Senator Clinton. I can go into more detail later about some
    of my concerns, but I am not against the position that we do
    not change posse comitatus. I think there are very good reasons
    for it. But I would like more information about how we are
    going to work with it, how it will in the real world function
    effectively when disaster has struck.
        General Craddock. Can I offer an example, Senator, perhaps?
        Senator Clinton. Please.
        Admiral Keating. In the case of Katrina, on the Friday
    following the storm coming ashore, General Blum reported that
    there were between 4,000 and 4,500 National Guardsmen who were
    trained in security. They were highway patrolmen or sheriffs at
    home. They came forward. In their State Active-Duty or title 32
    status, they have civilian law enforcement powers.
        So Steve Blum moved those folks forward and we brought in
    the 82nd Airborne, First Cav, elements of the 82nd First Cav,
    and 11-24 MEU. Rather than put Active-Duty soldiers in the
    situation of finding themselves perhaps in an untenable
    situation, through coordination, we put National Guardsmen and
    those local law enforcement officials that were still available
    and Active-Duty title 10 forces in the same patrols and allowed
    them to communicate back to the headquarters that the mayor and
    the governor and the adjutant general had set up after the
    hurricane.
        So by coordinating in advance and combining the assets from
    the Guard and Active-Duty Forces, we were able to instill a
    certain sense of security by the mere presence of uniformed
    forces, and within each of these patrols were folks who did
    have law enforcement capability.
        Senator Clinton. So they were essentially double-hatted, in
    effect, the ones who were in the Guard?
        Admiral Keating. Yes, ma'am.
        Senator Clinton. If they were like a police officer also in
    the Guard, they performed both functions in the patrol?
        Admiral Keating. They were empowered to perform law
    enforcement. They had the authority to perform law enforcement
    actions that were most assuredly not in the Active-Duty Forces.
    But it was a uniform, next to a uniform, next to a uniform, and
    the folks of New Orleans or wherever throughout the affected
    area simply saw uniformed forces coming, and within these
    patrols were embedded law enforcement authorities.
        It worked out just fine.
        Chairman Warner. If I might interject on my time, because I
    have spent a lot of attention to this subject and it concerns
    me. They were all wearing basically the same uniform, were they
    not?
        Admiral Keating. They were, sir.
        Chairman Warner. So if an incident occurred, only the title
    32 Guard are authorized to go up and perform law enforcement
    functions, and the 82nd Airborne or whatever title 10 forces
    simply have to step back. That could be very confusing to the
    locals. The title 10 people can only utilize force under those
    situations when they are protecting themselves, not citizens
    over there who need the protection of some law enforcement
    help.
        Admiral Keating. Mr. Chairman, for title 10 forces, to a
    large extent I think you are exactly correct, and there is the
    inherent right of self-defense. But title 10 forces, if they
    are in a situation where there is clear urgent need to respond
    to protect the lives of American citizens, they have the
    authority to take very limited and commensurate action to save
    lives and mitigate human suffering.
        Chairman Warner. And perform police functions?
        Admiral Keating. In extreme cases, yes, sir.
        Chairman Warner. Where is the definition of what is
    extreme, because I think this is a new----
        Admiral Keating. It is not clearly defined, sir.
        Chairman Warner. Senator, I join you. We are going to get
    this straightened out. I have repeatedly written to the
    Secretary of Defense urging that you have a review of this and
    as yet have not gotten back, I do not believe, all the
    responses we had hoped to receive, that they were thoroughly
    reviewed.
        If that is going to be the policy of the country and posse
    comitatus has been the law since the late 1800s, so be it. But
    in these situations you cannot predict all the scenarios. To
    have the uniformed personnel of the United States military, the
    title 10, the 82nd, whatever it is, unable to move in and help
    the citizens fend off criminals to me is an awkward situation.
        Anyway, please continue and you have your full time.
        Senator Clinton. Thank you, Mr. Chairman.
        It is a very awkward situation and there are so many
    hypothetical and real incidents that we can look to, so I hope
    we can explore that further.
        I think, Admiral Keating, you said that you are aware of
    the DHS working on a UAV project. Could you tell me a little
    more about that?
        Admiral Keating. I will tell you what I know, Senator, is
    that before 2005 the DHS had no assets of their own. They had
    no UAVs, whether Predator down to small hand-helds. I am happy,
    for the record, to give you what DHS currently has. It is my
    understanding they have purchased one Predator or at least
    leased one Predator and are in the process of obtaining several
    smaller and, if you will, less expensive unmanned aerial
    systems, is the term I am told we are supposed to use now. So
    DHS is aggressively pursuing increased capability in unmanned
    systems, and I will be delighted to send you what DHS has and
    what they are expecting to have in the next year or 2.
        Senator Clinton. I would very much like to have that
    information.
        [The information referred to follows:]

        According to the Department of Homeland Security (DHS), U.S.
    Customs and Border Protection (CBP) currently owns and operates one
    Predator B Unmanned Aerial System (UAS). It operates from Libby Army
    Airfield on Fort Huachuca, Arizona. The Predator B works with the U.S.
    Border Patrol and other CBP ground and air units in support of the CBP
    mission along the Arizona/New Mexico land border with Mexico. A second
    Predator B UAS will be delivered to CBP in the summer of 2006. This
    second UAS will also be operated from Fort Huachuca to sustain
    operational tempo along this section of the southwest border.
        The President's fiscal year 2007 budget request includes funding
    for a third UAS. The operational location of this asset will be
    dependant on the requirements of DHS, CBP, and the Security Border
    Initiative.

        Senator Clinton. Again, I just worry that we have so many
    different agencies of the government that are competing, in a
    sense, for assets and technology, and I do not know that that
    is the smartest, most cost effective way to proceed. So I would
    very much appreciate some additional information.
        If I could, Mr. Chairman, I have so many questions, but let
    me ask one last question.
        Chairman Warner. Why do you not take your time. We are all
    right. Senator Collins, you will indulge our colleague?
        Senator Collins. That is all right.
        Senator Clinton. Thank you. I do not want to take Senator
    Collins' time. She is a very busy person, chairing an important
    committee.
        We did have a lot of political reaction to the story about
    Dubai Port (DP)-World Ports and I think that much of it, at
    least from my perspective, arose because of our feelings that
    we are not yet as secure as we should be. I know Senator
    Collins' committee is working on this.
        But Admiral Keating, what is your responsibility so that,
    for example, on March 11 when the Associated Press reported a
    3-year, $75 million DHS study that found cargo containers can
    be opened secretly during shipments to add or remove items
    without alerting U.S. authorities, that there have been serious
    lapses by privacy companies at foreign and American ports and
    aboard ships and on trucks and trains that would enable
    unmanifested materials or weapons of mass destruction (WMD) to
    be introduced in the supply chain?
        Number one, are you familiar with this DHS study? Number
    two, is NORTHCOM working with DHS and the Coast Guard and the
    other agencies to try to address these findings?
        Admiral Keating. Yes, ma'am. We are aware of the report, I
    have been fortunate to have command for a year and a half, and
    the domain in which we are spending more of our time pre-
    Katrina, I will say, is the maritime domain. We have a Coast
    Guard one-star at our headquarters. DHS has a flag officer and
    now a Senior Executive Service (SES) to be their senior
    representative at our headquarters, and we are reciprocating in
    kind.
        We have direct access second by second to the very
    significant database that is maintained and shared between the
    DOD and the DHS out here in Suitland, Maryland, at the Office
    of Naval Intelligence. Folks contributing to that database are
    not just military. They are all-source, from very
    sophisticated, highly classified systems down to the manifests
    that are vouchsafed by the individual countries that I
    described, the Container Security Initiative cosignees.
        So it is an extensive, comprehensive, system of systems
    that assures me that, while there are cases to be sure as
    mentioned in the security report where the possibility exists
    for tampering with cargo or containers, the likelihood of that
    tampering being undetected, while not zero, is smaller than
    most folks would believe, I am assured that because of the
    ongoing, increasingly effective efforts and this large
    coalition of commercial, military, diplomatic, and coalition
    partners, that our security is much better than folks might be
    led to believe in open source reporting.
        Senator Clinton. Thank you, Mr. Chairman.
        Chairman Warner. Thank you very much, Senator.
        Senator Collins.
        Senator Collins. Thank you, Mr. Chairman.
        I want to follow up on the question raised by my colleague
    from New York. Admiral, I think we have a long ways to go on
    port security. The Government Accountability Office (GAO) last
    fall did a study of the container security initiative and the
    Customs Trade Partnership Against Terrorism (CT-PAT) program,
    which are the two major initiatives that we have to secure our
    ports, and found egregious deficiencies in the way that they
    were being implemented. I think the programs are very good
    ones, but they have not been sufficiently funded and they have
    been unevenly implemented, to the point where GAO found that
    17.5 percent of the high-risk cargo that had been identified as
    needing scrutiny was given further scrutiny, only 17.5 percent.
    The rest of that high-risk cargo was loaded on ships bound for
    America. So I think we have a lot of work to do in that area.
        I want to switch to Hurricane Katrina and the role of
    NORTHCOM, an issue which you and I have discussed many times,
    and you did testify in February before the Senate Committee on
    Homeland Security and Government Affairs. You mentioned in your
    testimony today that NORTHCOM is responsible for homeland
    defense, sustaining situational awareness 24-7. But one of the
    lessons that we learned from our investigation is that
    situational awareness for NORTHCOM was not very good in the
    case of Hurricane Katrina. I think the best evidence of that is
    the fact that an official of the DHS reported back to
    Washington, to headquarters, at 11 o'clock on Monday morning
    August 29 that there had been breach in the levees, but that
    information did not reach NORTHCOM until Tuesday, until 24
    hours later. Is that a correct rendition of what happened?
        Admiral Keating. Senator, I do not remember the specific
    time, but generally speaking you are correct. I think I went to
    bed, if you will, Monday night unaware of a significant levee
    issue, to the best of my ability to recall.
        Senator Collins. Of course, that was a major reason that
    the catastrophe was so devastating in New Orleans. So we have
    learned from that situation that situational awareness was not
    as good as it should be, not only at NORTHCOM but in several
    other agencies and departments.
        What are you doing specifically to improve situational
    awareness in the case of natural disasters?
        Admiral Keating. One, we are meeting with the folks with
    whom we are going to have to coordinate and communicate, as I
    described.
        Two, we are exercising in as aggressive a fashion as we can
    with the very self-same folks who would be required to respond,
    not just in the hurricane States, but in Ardent Sentry. For
    example, we have folks in Maine and in Senator Levin's State
    and in Senator McCain's State, as it happens, who are going to
    be engaged in the exercise.
        Three, we are conducting these weekly videoteleconferences,
    chaired by FEMA, not by NORTHCOM, that have a broad interagency
    representation. We are going through in a very methodical
    fashion the Katrina lessons learned and we are addressing those
    communications challenges and developing a common operational
    picture, or what other folks are calling your user-defined
    operational picture.
        We have the databases in our headquarters and in the DHS's
    operations center where information flows from all agencies who
    are involved in the situation, and we now have improved simple
    bandwidth access to and from those operations centers so that
    more folks can avail themselves of the information in a real-
    time or near-real time fashion in the event of an emergency.
        Senator Collins. One of the recommendations that the Senate
    Committee on Homeland Security and Government Affairs is
    looking at is having regionally based task forces that would
    train across the Federal Government and with State and local
    officials. NORTHCOM and the whole defense coordinating official
    potentially is a very important player. Do you think that kind
    of regional approach would help to improve preparedness and
    response?
        Admiral Keating. I do, yes, ma'am, and we are pursuing that
    program.
        Senator Collins. Admiral, another problem that became
    evident during the government's response to Hurricane Katrina
    was the limited visibility that NORTHCOM had over the movements
    of the National Guard troops into the Gulf region the week
    after landfall, and also identifying the capabilities of those
    National Guard troops. Again, we talked about this at the
    hearing before the Senate Committee on Homeland Security and
    Government Affairs.
        During the Katrina response, key decisions about the
    movement of military units, which Secretary McHale has
    described as the largest deployment of troops within the United
    States since the Civil War, were not made by NORTHCOM. Instead
    they were made by the National Guard Bureau, working with the
    State adjutants general.
        What should be the role of NORTHCOM in coordinating the
    kind of large-scale troop deployment of the type we saw in
    Katrina? I think this is an issue that we really need to sort
    out, to be more efficient, and to have better integration of
    the capabilities of National Guard troops versus Active-Duty
    troops.
        Admiral Keating. Yes, ma'am. It is an issue on which we
    have spent a significant amount of time during Katrina and
    post-Katrina: Who will be in charge of the forces responding to
    a natural or manmade disaster? On the lower end of the
    spectrum--and you get into a relative measure here, to be sure.
    But on the lower end it is clear in NORTHCOM and I think in the
    DOD that first responders, whether they be National Guard or
    local or State law enforcement agencies, sheriff's department,
    fire department, are appropriately positioned and are familiar
    with the situation and have sufficient resources to act as the
    overall commander, if you will, for the disaster response, for
    the, I will say, lower end.
        Then there comes a point where, at about the Katrina level,
    where you have significant forces coming from the National
    Guard under the Emergency Management Assistance Compact (EMAC)
    and forces flowing by direction of the President and the
    Secretary of Defense in a title 10 status. About two-to-one is
    what we had in Katrina, and there were considerations being
    made for command and control of all of those forces, and the
    President decided that he would allow the adjutants general and
    the governors to retain control of the National Guard and the
    title 10 forces would remain under the control of NORTHCOM
    through the offices of Lieutenant General Honoree as task force
    commander.
        So that in my view defines about the area, the range below
    which the Guard and State and local responders are perfectly
    capable and should command. From Katrina on up to, let us say,
    three chem-bio events throughout the country or the
    international incidents where national security may be
    jeopardized or the magnitude of the disaster is so
    comprehensive that State and local responders are simply
    overwhelmed, then the DOD should be ready to and capable of
    assuming command or at least having a major effort in
    coordinating and communicating with whatever responders are
    able to muster under the aegis of EMAC following the disaster.
        So there is a spectrum of consequence management: Katrina
    and lower, title 32 or National Guard Forces and State and
    local responders in control; Katrina as perhaps the dividing
    point higher, the DOD should be ready to, and only at the
    decision of the President of the United States, actually
    execute command and control of the consequence management.
        Senator Collins. Thank you.
        Thank you, Mr. Chairman.
        Chairman Warner. Thank you very much, Chairman Collins.
        Senator Levin and I will have brief wrap-up questions and I
    will proceed.
        Chairman Collins made reference to the maritime issues. As
    I understand it, you are examining the necessity of a maritime
    strategy, perhaps even an organization to protect the maritime
    approaches to the United States, somewhat like NORAD has done
    with the air space through the years. Am I correct in that
    assumption?
        Admiral Keating. The President signed out a directive, and
    I wrote it down. It is the Maritime Security Policy
    Coordination Committee. So it is an international committee
    examining maritime security policy. NORTHCOM is a relatively
    small player here, but we have an active role working with the
    DOD and the DHS.
        There are many other agencies involved: Commerce, Justice,
    Transportation, State. So it is a big creature, if you will.
        I do not know that we are necessarily advocating creation
    of an agency similar or an organization similar to NORAD. I
    would recommend to you that by working with the system and the
    agencies and improving the flow and sharing of information, I
    currently have sufficient authorities under the new plan signed
    by the Secretary of Defense, to ensure between the United
    States Coast Guard, Department of Transportation, Department of
    Homeland Security, Customs and Border Protection, the United
    States Navy, and the United States Marine Corps, we have
    sufficient forces to move on very short advance warning if we
    get it or no warning to put forces where they need to be to
    enhance our national security in the maritime domain.
        Chairman Warner. That helps with some clarification of
    that. But it sounds like there are so many players. Who is the
    boss?
        Admiral Keating. DHS.
        Chairman Warner. So they will be the command, is that it?
        Admiral Keating. If it is inside the 12 nautical mile
    limit, as you are well familiar. If it is beyond that----
        Chairman Warner. Go slowly. Let us get this straight. If it
    is inside the 4-mile limit----
        Admiral Keating. 12 nautical miles.
        Chairman Warner. 12 miles.
        Admiral Keating. Coast Guard, through the DHS, would be the
    lead Federal agency.
        Chairman Warner. Lead Federal agency.
        Admiral Keating. Yes, sir.
        Chairman Warner. Beyond that, you?
        Admiral Keating. United States Navy, DOD.
        Chairman Warner. Now, of course if a hostile vessel or
    platform were proceeding, it will quickly transit to 12 and get
    into the 4.
        Admiral Keating. We do it all the time, Mr. Chairman. I am
    comfortable with that.
        Chairman Warner. I just want the assurance that our ports
    are to be protected with some overall plan. Do you give that
    assurance?
        Admiral Keating. I do, sir.
        Chairman Warner. It is a workable plan in your judgment?
        Admiral Keating. It is exercised frequently and it works.
        Chairman Warner. Fine. Now, are Canada and Mexico
    participants in that?
        Admiral Keating. Yes, sir. The short answer is yes, sir,
    they are.
        [Additional information provided for the record follows:]

        Testimony did not reference the Maritime Operational Threat
    Response (MOTR) Plan, which became effective in October 2005. This plan
    sets forth the roles and responsibilities of lead and supporting
    agencies with respect to planning, preparation, and response operations
    against maritime threats.
        Maritime response is coordinated under the MOTR Plan which became
    effective in October 2005. Under the plan, the Department of Defense
    (DOD) is the lead agency for tactical response to threats from nation
    states operating in the maritime domain whether inside or outside the
    12 nautical mile limit of the territorial seas. Based on its forward-
    deployed resources and global reach, DOD is also the lead agency for
    maritime terrorist threats that occur in the forward maritime areas of
    responsibility.
        The Department of Homeland Security is the lead agency for law
    enforcement interdiction of maritime threats in waters subject to U.S.
    jurisdiction and maritime approaches and offshore waters of the
    Atlantic and Pacific Oceans, as well as the Caribbean Sea.
        The Department of Justice (DOJ), through the Federal Bureau of
    Investigations (FBI), is the lead agency for investigations of
    terrorist acts or terrorist threats by individuals or groups inside the
    United States, or directed at U.S. citizens or institutions abroad.
    Accordingly, DOJ, through the FBI, is responsible for coordinating the
    activities of other members of the law enforcement community to detect,
    prevent, preempt, and disrupt terrorist attacks against the United
    States.
        The MOTR identifies supporting roles for the Department of State,
    the Department of Energy, the Department of Transportation, the
    National Counterterrorism Center, and others. Regardless of which
    agency is predesignated as the lead, each has a responsibility to
    provide accurate and timely information to all involved agencies to
    support a fully-informed decision.
        The MOTR takes advantage of complementary authorities,
    capabilities, and capacities of all Federal agencies that have an
    interest in protecting our homeland from maritime threats. Interagency
    consultation, notification, and assessment are vital to ensure a
    coordinated response to threats against the United States and its
    interests in the maritime domain.

        Chairman Warner. All right. Shifting to you, General
    Craddock, a recent United Nations report calls for the closure
    of Guantanamo Bay detention center, now located of course in
    Cuba. The Archbishop of Canterbury recently said the United
    States' disregard of international law sends the wrong message.
    Would you like to comment on these reports and calls for the
    closing? Establish for us this morning your professional
    judgment, which I think that judgment reflects the judgment of
    the Secretary of Defense and the President, that Guantanamo
    remains a necessary facility in the war on terrorism for our
    country? So if you would cover that I would appreciate it very
    much.
        General Craddock. Thank you, Mr. Chairman. With regard to
    the report from the United Nations rapporteurs, the fact of the
    matter is they have not been there. They are using second- and
    third-hand information gained from attorneys for detainees,
    based upon information detainees have told them. So my judgment
    of that report is that it is completely erroneous. It does not
    reflect the reality of the situation.
        I think one should look at the recent visit by the
    representative from the Organization for Support and
    Cooperation in Europe (OSCE). She took a team down recently and
    visited, she did everything that was offered to the U.N.
    rapporteurs. The preliminary reports from folks who were with
    her on the delegation were very positive. One gentleman said
    that what he saw was better than anything, any prison he saw in
    Belgium.
        So I think that we have to take stock of the credibility of
    the allegations. It is one thing to have first-hand knowledge,
    to be there and see it. Now, it is general practice, other than
    the International Committee of the Red Cross, that visitors do
    not have access to detainees, for good reason, good order,
    discipline, and other maintenance and operations of the camp.
        So with regard to that U.N. report, I just deplore the fact
    that those types of reports gain credibility in the public eye.
        Chairman Warner. That is just the world in which we live,
    and they have a voice. But I want you to clearly say that this
    policy has been reviewed from the President on down by our
    government and that detention facility is judged to be needed
    and essential to the many uncertainties that face this Nation
    in the war on terrorism.
        General Craddock. Mr. Chairman, that was the second part,
    the necessity for that facility. The fact is that we have some
    dangerous people down there. They routinely will tell the
    guards, the people who work at the camp, given the opportunity
    they will inflict harm on anyone they have the chance to do
    that.
        Just for the record, from 1 September through 1 March----
        Chairman Warner. Of what years, now?
        General Craddock. 1 September 2005 to 1 March of 2006,
    about 6 months; there were 189 assaults by hunger strikers
    against either medical personnel or their guards. So this is
    not a benign environment.
        We know that there are some number of detainees who, if
    released, as we talked earlier from Senator Inhofe's question,
    will come back to fight against the coalition forces in the
    global war against terror. We know that there are some who
    still retain information and intelligence value. Now, we know
    there are some that should be returned to their countries. They
    have already been identified through the administrative review
    board. We are waiting for the modalities to be in place to do
    that.
        I think it was a State Department official who said, we
    probably do not want to do this 1 day longer than we have to. I
    would tend to agree with that. The question is when is that
    date, and I do not see it in the near future.
        Chairman Warner. So from that, I think the record should
    reflect unequivocally it is the policy of this administration,
    and one which I personally support, that we should maintain
    this facility for the indefinite future, given the
    uncertainties in the war on terrorism?
        General Craddock. Sir, that would be my judgment. I cannot
    speak for the administration policy, but I would agree with
    that, Mr. Chairman.
        Chairman Warner. I thank you very much.
        At this time, Senator Levin, I am going to ask you if you
    would chair the hearing with our colleague, Senator Bayh. You
    and I have a meeting with General Abizaid at 11:30.
        Senator Levin. [presiding]. So we will try to join you
    there in 10 minutes.
        Senator Bayh.
        Senator Bayh. I will be mercifully brief, gentlemen. Thank
    you for your service to our country, gentlemen. I just had
    three quick----
        Chairman Warner. Excuse me. I just want to thank our
    witnesses. It is a personal pleasure and indeed I am greatly
    impressed with the performance that each of you are doing in
    these important responsibilities. Thank you once again for your
    contribution and those of the men and women of the Armed Forces
    and the very significant civilian force that is associated in
    the responsibilities of your respective commands. I wish you
    both luck.
        Thank you.
        Admiral Keating. Thank you, Mr. Chairman.
        Senator Bayh. Thank you, gentlemen, for your service and
    for your presence here today. I apologize for being a little
    tardy. I hope that my questions are not redundant. If they are,
    please feel free to tell me so.
        I am interested first in the topic of the missile defense
    system that we are developing. Based upon the data that we have
    developed so far, what would--how would you characterize the
    efficacy of the system in terms of percentages of possibility.
    If there is a single missile launched against the West Coast of
    the United States, what would the chances of taking that down
    be?
        Admiral Keating. Senator, I think that the classification
    of this hearing precludes a numerical answer.
        We will get you the P-sub-K, the probability of kill, of
    single-shot and multiple-shot missiles. But I would
    characterize our capability as robust and significant and very
    healthy.
        We exercise to it frequently. You probably know, there are
    nine missiles in the ground at Greeley and two at Vandenberg.
    Those systems are exercised on a near-daily basis. When the
    President declares limited defensive operational capability, we
    are prepared as the shooter to execute the mission to defend
    our country, and I am very confident in the efficacy of that
    system. We will get you the numerical value, sir.
        [The information referred to follows:]

        [Deleted.]

        Senator Bayh. Thank you, Admiral. I appreciate that.
        Would you anticipate that the system would become more
    robust moving forward, whatever the numerical figure would be,
    that that would increase and improve with the passage of time?
        Admiral Keating. I am confident, Senator, the program that
    the MDA has and is executing and is funded will improve, will
    make even better, those shot probabilities.
        Senator Bayh. This takes into account possible
    countermeasures by any country launching it?
        Admiral Keating. It does, sir.
        Senator Bayh. Very good. Thank you.
        What about the time line for it being fully operational,
    fully deployed? Is that something we can discuss in this forum?
        Admiral Keating. I do not think so, Senator. We at
    NORTHCOM, we are ready today.
        Senator Bayh. Very good. I have come with all kinds of easy
    questions to answer.
        The final two questions I would like to explore deal with
    SOUTHCOM. How would you assess the state of the Revolutionary
    Armed Forces of Colombia (FARC) insurgency in Colombia and our
    efforts to help combat that? Are we making progress? Is it sort
    of stable? How would you characterize that?
        General Craddock. Senator, I would characterize it as
    steady progress. The operative capability of the FARC has been
    diminished considerably over the past several years. Now, the
    fact is that they have changed their tactics. They do not stand
    and fight the Colombian military. They are now into small unit
    terrorist tactics throughout the countryside. They realize that
    they cannot measure up to the main line forces fighting in the
    Joint Task Force Omega area.
        Because it is an election period, they are looking to
    conduct terrorist attacks, to interdict roads and highways, to
    attack infrastructure, pipelines, electrical pylons, to
    convince the electorate that the country is still not secure.
    So these are known, expected, anticipated attacks throughout
    the country.
        The Colombian military secured the polling places for the
    congressional elections on Sunday. Very minor disturbances, so
    it was very well done. That is an indication. There is another
    indication and that is the increase in the number of deserters
    from the FARC ranks. Just recently there was a report that 70,
    7-0, had come in. Never before had a large unit done this.
    Normally it is individual desertions. So those are indicators
    and I think they are all very positive.
        Senator Bayh. So the Colombian capability seems to be
    ramping up?
        General Craddock. Absolutely.
        Senator Bayh. The FARC seems to be becoming somewhat
    discouraged.
        General Craddock. Also, concomitant with that is the fact
    that the paramilitaries, the United Self-Defense Forces of
    Colombia (AUC), are demobilizing. So the Colombian military has
    to be very careful to watch the vacuums that could be created.
    So, if the FARC tries to move in security forces, government
    forces have to be there first. The National Liberation Army,
    the smaller insurgent group, is at the negotiating table now.
    So there are, I think, some positive signs that there may be
    some demobilization of that group also. That would leave the
    FARC. If they marshall their resources against a smaller group,
    there will be much more success faster.
        Senator Bayh. My final question has to do with Venezuela
    and what role they might be playing, not only in Colombia but
    throughout the region. How would you assess their activities
    and any destabilization that results from those activities?
        General Craddock. I think there is a destabilizing effect
    throughout the region. I think it is the export of what we now
    come to know, rightly or wrongly, as radical populism. With
    immature and unstable democracies, it is a troubling aspect.
    Left to their own designs, it is hard enough internally to
    maintain the checks and balances and the separation of powers
    and ensure that elections are all done as fairly as possible in
    that environment. With destabilizing external influences, with
    the contribution of influence in terms of funds and resources,
    it becomes even more difficult.
        Senator Bayh. Are they playing a role with the Colombian
    insurgency? Again, I know we cannot discuss classified
    information here, but there have been some published reports in
    the past to the effect that Venezuela was not being helpful
    with regard to the Colombian situation.
        General Craddock. I think the fact that there has been an
    apprehension of some high-level FARC leaders in Venezuela is
    the first indication. The second indication is that we know it
    is a porous border and that we know there are FARC columns
    operating along that border. So that is probably about as far
    as I could go in this forum, Senator.
        Senator Bayh. Gentlemen, thank you very much.
        General Craddock. Thank you.
        Senator Levin. Thank you, Senator Bayh.
        Admiral Keating, Senator Bayh asked you about the missile
    defense system. Is it true, however, that there has not been a
    single successful intercept test yet of that system?
        Admiral Keating. Senator, I do not mean to be coy, but I
    think the answer is ``it depends.'' There have been successful
    tests of parts of the system, including Navy surface to air
    missiles, including tracking by very sophisticated radar
    systems. But to the best of my knowledge, we have yet to
    conduct a test incorporating all elements of the entire system,
    where an intercept was conducted successfully. I think that is
    on the books, I will say, soon.
        Senator Levin. This year?
        Admiral Keating. Yes, sir.
        Senator Levin. Let me ask General Craddock this question.
    It goes back to the Schmidt-Furlow investigation which Senator
    McCain asked you about, and I think Senator Warner asked you
    about as well. There have been probably dozens of documents
    that were released recently which were FBI documents, which had
    less redactions than previously-disclosed documents. So that
    there is material now that is available that was not available,
    at least publicly. I do not know whether it is true whether it
    was available to Generals Schmidt and Furlow or not.
        But the FBI has re-released, in effect, dozens of documents
    with less redactions. The material that is now available is
    significant material. I want to just give you a couple of
    examples of what is now observable to our eyes, which was not
    at the time of the Schmidt-Furlow report.
        One of the documents that the FBI has now redacted less
    says that: ``Members of the Defense Intelligence Agency were
    being encouraged at times to use aggressive interrogation
    tactics at Guantanamo which are of questionable effectiveness
    and subject to uncertain interpretation based on law and
    regulation. The continued use of these techniques has the
    potential of negatively impacting future interviews by FBI
    agents as they attempt to gather intelligence.''
        Another document says the following, that: ``The
    investigators of the Department of Defense showed a detainee
    homosexual porn movies and used a strobe light in the room. We
    the FBI moved our interview to a different room. We have
    learned that those interrogators routinely identify themselves
    as FBI agents and then interrogate a detainee for 16 to 18
    hours, using tactics as described above and others--wrapping in
    an Israeli flag, constant loud music, cranking the AC down, et
    cetera. Next time a real agent''--they are talking about FBI
    agent--``tries to talk to that guy, you can imagine the
    result.''
        The bottom line is there is now significant available
    additional evidence that there were strong FBI objections to
    DOD tactics relative to detainees at Guantanamo. My question to
    you is whether or not you would take a look at these documents
    and as part of your review of this whole matter reach your own
    conclusion as to, one, whether or not Generals Schmidt and
    Furlow had access to those and that information; and number
    two, if not, whether or not the investigation should be
    reopened. Would you add that to your material?
        General Craddock. Yes, Senator. If I may comment, I would
    disagree that this is strong evidence. I would say these are
    allegations, much like the allegations that were the basis of
    the decision to investigate. We will investigate any credible
    allegation.
        Now, with regard to the former, I am not aware of that.
        Senator Levin. You are saying there was significant
    evidence before that the FBI strongly objected to the tactics
    which were being used?
        General Craddock. No, I am not saying that was evidence. I
    am saying I consider this an allegation.
        Senator Levin. I am reading from FBI e-mails.
        General Craddock. I have not seen them, sir.
        Senator Levin. That is what I am saying. Would you take a
    look at these e-mails. These are FBI e-mails.
        General Craddock. I was going to say that I do not know
    about the former. The latter, we already have directed General
    Hood to make an inquiry to determine if this is a credible
    allegation. If it is, we will investigate it. We will
    investigate any credible allegation. So we will look for these
    additional unredacted e-mails.
        As I understand, the one that you read about the
    pornographic material was an e-mail that was included in the
    original Schmidt-Furlow report, but that part of it was
    redacted and has since been unredacted. So when we took a look
    and asked, is this credible? Is this new information? Because,
    it was not in Schmidt-Furlow. Yes, it is new information. So,
    we are relooking at it.
        We will, Senator, look at any credible allegation and
    investigate it to ensure that we answer again the allegation
    truthfully.
        Senator Levin. Thank you for your willingness to do that.
    But I must say, when you say ``any credible allegation,'' these
    are contemporaneous FBI e-mails. So they are credible. It seems
    to me that is not the issue, whether they are credible or not.
    The question is whether or not they were taken into
    consideration by Generals Schmidt and Furlow. They may find
    that the FBI lied in their own contemporaneous e-mails and
    those things did not happen. But so be it, they are at least
    credible going in.
        General Craddock. Sir, I would submit to you, that they are
    allegations that may or may not be credible. Just because an
    FBI did the e-mails, you know from Schmidt-Furlow if you read
    the report, Senator, there were a lot of allegations that were
    unfounded. No one could find anyone who had knowledge of that
    other than the person who wrote that e-mail.
        Senator Levin. Whose name will not be given to us, despite
    many requests.
        Okay, but I just want to say it is one thing to say an
    allegation is credible, it is another thing to say that it
    proves to be accurate. But in terms of it being on its face a
    credible allegation does not--it seems all that is is a
    threshold statement. Of course it is credible. Whether or not
    you find it to be accurate and true as it turns out is a
    different issue.
        General Craddock. I understand.
        Senator Levin. But at any rate, so long as you are willing
    to look at the recently redacted material that is now available
    as a result of these Freedom of Information Act requests and to
    determine whether or not, based on that material, there should
    be a reopening of this investigation, that is all I can ask of
    you.
        General Craddock. We are doing that.
        Senator Levin. I appreciate your willingness to do that.
    Again, I appreciate your service, both of you, to our Nation
    and the services of those you command, and again, the services
    of your families. We cannot ever say that enough.
        Thank you both.
        This hearing is adjourned.
        [Questions for the record with answers supplied follow:]
                   Questions Submitted by Senator John McCain
                              illegal immigration
        1. Senator McCain. Admiral Keating, the Department of Defense (DOD)
    often works with local and Federal agencies to help with our ongoing
    battle against illegal immigration. Please describe what Northern
    Command (NORTHCOM) is doing to increase the cooperation and any plans
    to reinstitute the use of unmanned aerial vehicles (UAVs) in patrolling
    our southern borders.
        Admiral Keating. The Homeland Security Act of 2002 assigns the
    Secretary of Homeland Security (DHS) the responsibility for security of
    our Nation's borders. NORTHCOM's role in the border security mission is
    to provide support to civil authorities, principally DHS. We provide
    such support under chapter 18 of title 10. When DHS requests DOD's
    support, the Office of the Secretary of Defense evaluates their
    request, and as directed, NORTHCOM provides the necessary support.
        Joint Task Force North (JTF-N) is NORTHCOM's operational
    headquarters responsible for supporting law enforcement operations to
    counter the flow of drugs and other transnational threats. JTF-N's
    relationship with our interagency partners is excellent and continues
    to grow. To enhance cooperation, JTF-N regularly meets with law
    enforcement agencies to synchronize efforts to deter and prevent
    threats from entering the homeland.
        JTF-N coordinates unmanned aerial system (UAS) flight activity in
    support of law enforcement agencies. Last year, JTF-N coordinated
    approximately 2,000 hours of UAS flight activity along the southern
    U.S. border. This year however, we believe JTF-N's UAS support to U.S.
    Customs and Border Protection will be degraded unless the Federal
    Aviation Administration (FAA) grants approval for UAS operations
    outside of existing military airspace.
        Recently, the FAA restricted DOD UAS flight activity to existing
    military airspaces: Fort Huachuca, Barry M. Goldwater Ranges and Yuma
    Proving Grounds, all of which are located in Arizona. We will continue
    to coordinate with the FAA to ensure continued support to law
    enforcement border operations.

              specific guidance for implementing mccain amendment
        2. Senator McCain. General Craddock, on December 30, 2005, Deputy
    Secretary England issued a memorandum directing the implementation of
    the detainee legislation that became law this winter--that the Army
    Field Manual (FM) defines the universe of permissible interrogation
    techniques, and that cruel, inhumane, and degrading treatment are
    prohibited. As the Southern Command (SOUTHCOM) Commander, in whose area
    of responsibility Guantanamo falls, you received a copy of this memo.
    How have you translated this high-level memo into specific guidance for
    soldiers, military police, interrogators, translators, intelligence
    officers, medical personnel, et cetera at Guantanamo?
        General Craddock. As I stated in my testimony, upon receiving the
    memorandum from Deputy Secretary England, I forwarded it, on 1 January
    2006, to Major General Jay Hood, the Joint Task Force Guantanamo (JTF-
    GTMO) commander. On 2 January 2006, Major General Hood confirmed that
    JTF-GTMO was in compliance with Army FM 34-52, Intelligence
    Interrogation, and the Detainee Treatment Act. On 3 January 2006, I
    endorsed a memorandum from Major General Hood to Deputy Secretary
    England that informed Deputy Secretary England of JTF-GTMO's
    compliance. Additionally, as I previously testified, I have directed
    that all JTF-GTMO troops receive appropriate training concerning the
    treatment of detainees prior to, and again upon arrival at, Guantanamo.

        3. Senator McCain. General Craddock, have you issued directives
    with instructions?
        General Craddock. As discussed above, Major General Hood was
    directed to comply with the provisions of the Detainee Treatment Act in
    early January 2006. I will issue further guidance once DOD publishes
    two references currently under review, DOD Directive 2310.1E, The
    Department of Defense Detainee Program; and FM 2-22.3, Human
    Intelligence Collector Operations. My guidance will also incorporate
    pertinent provisions from DOD Directive 3115.09, DOD Intelligence
    Interrogations, Detainee Debriefings, and Tactical Questioning,
    published on 3 November 2005.

        4. Senator McCain. General Craddock, has the DOD developed
    regulations to implement the legislation?
        General Craddock. As discussed above, the DOD is working on the
    approval and release of DOD Directive 2310.1 E, The Department of
    Defense Detainee Program, and FM 2-22.3, Human Intelligence Collector
    Operations. Both references will implement portions of the Detainee
    Treatment Act. I have provided input on drafts of both references.

        5. Senator McCain. General Craddock, how are you communicating the
    new rules down the chain of command?
        General Craddock. As discussed above, I directed Major General Hood
    to ensure compliance with the Detainee Treatment Act and FM 34-52. I
    will provide more formal and comprehensive guidance following DOD
    approval of DOD Directive 2310.1E and FM 2-22.3.

                            miller taking the fifth
        6. Senator McCain. General Craddock, military investigators who
    briefed this Committee found that Major General Geoffrey Miller, who
    ran Guantanamo from October 2002 to March 2004 and helped set up
    operations at Abu Ghraib, failed to properly supervise the
    interrogation of Mohammad Qatani--the so-called ``20th hijacker.''
    Their report recommended that he be reprimanded, a recommendation that
    you declined to follow. Since then, General Miller has asserted his
    Fifth Amendment, Article 31 right against self-incrimination in two
    court-martial cases involving the use of dogs during interrogations. I
    do not contest General Miller's right under the Constitution, but would
    you agree that he also has a duty as an officer, especially a general
    officer, to take responsibility for his actions and orders?
        General Craddock. As I stated in my testimony, I do not presume or
    assume to know why Major General Miller invoked his Article 31 rights
    regarding court-martial charges involving actions that occurred in
    Iraq. I cannot speak for Major General Miller. As General Pace stated
    on this matter, ``(W)e expect our leaders to lead by example, but we do
    not expect them to give up their individual rights as people.''

        7. Senator McCain. General Craddock, do you believe, given
    everything we know now, only low-level personnel were responsible for
    detainee abuse at Abu Ghraib, Guantanamo Bay, in Afghanistan, and
    elsewhere?
        General Craddock. I cannot address Abu Ghraib and Afghanistan. I
    have held, and will continue to hold, those under my command
    responsible and accountable for detainee abuse. At JTF-GTMO, to date,
    there have only been a very small number of substantiated detainee
    abuse allegations during more than 4 years of operation and over 32,000
    interrogations. Given this very small and isolated number of
    substantiated abuse allegations, I believe the leadership at JTF-GTMO
    has done a remarkably good job.

        8. Senator McCain. General Craddock, do you have second thoughts
    about declining to reprimand General Miller?
        General Craddock. No. I disapproved one of the Schmidt-Furlow
    report recommendations, that Major General Miller be held accountable
    for failing to supervise the interrogation of Qahtani and be admonished
    for that failure, because the interrogation of Qahtani did not result
    in the violation of any U.S. law or policy in effect at the time, and
    the degree of supervision provided by Major General Miller did not
    warrant admonishment under the circumstances. I have received no new
    and material information or evidence since then to change my opinion.
        The evidence shows that he was not misguided in his trust, since
    there was no finding that law or policy was violated. Major General
    Miller adequately supervised the interrogation of Qahtani in that, by
    his own admission, he was aware of the most serious aspects of Qahtani'
    s interrogation: the length of interrogation sessions, the number of
    days over which it was conducted, and the length of segregation from
    other detainees.
        Additionally, I have been informed that the U.S. Army Inspector
    General (IG) has completed their investigation of the allegations
    against Major General Miller as a result of the Schmidt-Furlow
    investigation. The Army IG concluded the allegation that Major General
    Miller was derelict in the performance of his duties with respect to
    the interrogation of a high value detainee was unsubstantiated.

                 acceptable techniques in the army field manual
        9. Senator McCain. General Craddock, in the hearing before the
    Senate Armed Services Committee on July 13, 2005, you asserted that the
    following interrogation techniques are authorized by the Army FM on
    Intelligence Interrogation (FM 34-52): forcing a detainee to wear a
    woman's bra and placing underwear on his head; tying a leash to the
    subject and leading him around the room, forcing him to perform dog
    tricks; and standing naked for several minutes with female
    interrogators present. In written answers for the record, you
    reaffirmed your response, saying that these three techniques (among
    others) are authorized under the ``ego down'' or ``futility''
    approaches. In written responses to the same question pursuant to a
    hearing held the next day, the top Judge Advocates General (JAGs) from
    the DOD's various branches--including Rear Admiral McPherson, Brigadier
    General Sandkuhler, and Major General Romig--all said explicitly that
    these techniques are not permitted under FM 34-52. Please explain these
    discrepancies. How is it possible that the committee received
    diametrically opposed answers to questions posed within the space of 24
    hours on key questions related to interrogation practices?
        General Craddock. FM 34-52 provides broad guidance on a number of
    approach techniques to include ``pride and ego down'' and ``futility.''
    FM 34-52 does not specify each and every application that is authorized
    under a particular technique. In fact, FM 34-52 states: ``To every
    approach technique, there are literally hundreds of possible
    variations, each of which can be developed for a specific situation or
    source. The variations are limited only by the interrogator's
    personality, experience, ingenuity, and imagination.'' Thus, FM 34-52
    recognizes that its broadly defined approach techniques may be
    translated into any number of applications.
        The interrogation techniques described above involved the
    interrogation of one detainee, Mohamed Qahtani. Qahtani is a high value
    detainee who is believed to be al Qaeda's intended 20th highjacker for
    the September 11, 2001, terrorist attacks on our Nation. The general
    interrogation approach techniques used against Qahtani, an unlawful
    enemy combatant, were approved by the Secretary of Defense. The
    specific applications of the techniques were developed by JTF-GTMO
    interrogators and their supervisors and were designed to counter
    Qahtani's long resistance to more conventional interrogation
    techniques. The intent in using these techniques was to use legally
    permissible methods to gain intelligence from a key al Qaeda member,
    intelligence that could save lives.
        The JAGs from each Service responded to isolated questions about
    whether the techniques were ``consistent with the intent and spirit of
    the Army FM.'' These questions were different from the ones that were
    asked of me. My duty was to thoroughly review and approve the entire
    Schmidt-Furlow investigation. In doing so, I approved the
    investigation's finding that the applications of the interrogation
    techniques described in your question were authorized under FM 34-52.
    Specifically, I affirmed the Schmidt-Furlow investigation's
    determination that these techniques were ``legally permissible under
    the existing guidance'' at that time. My approval of specific factual
    findings concerning events that occurred before I took command does not
    constitute combatant commander guidance for those I presently command.
        The Schmidt-Furlow investigation determined that the creative,
    aggressive, and persistent interrogation of Qahtani ``resulted in the
    cumulative effect being degrading and abusive treatment.'' However, the
    investigation did not identify at what point the cumulative effect
    became degrading or abusive, or point to any violation of U.S. law or
    policy from the purported ``degrading and abusive'' treatment. Because
    that point was not identified, I approved the report's recommendation
    that a study be conducted of the DOD authorized interrogation
    techniques to establish a framework for evaluating their cumulative
    impact in relation to the obligation to treat detainees humanely. I
    forwarded this recommendation, along with others concerning policy
    level issues, to the DOD for further consideration.
        Finally, regarding your question on the diametrically opposing
    answers given to the committee, I cannot speak for the JAGs, nor can I
    explain the reasoning behind their opinion on this matter. I can only
    explain my actions as they apply to the specific questions directed to
    me.

        10. Senator McCain. General Craddock, which understanding was
    operative and used as guidance for our troops--yours or the JAGs'?
        General Craddock. The operative guidance at the time was U.S. law
    and policy. This included FM 34-52, as described above, and DOD
    interrogation policy, as approved by the Secretary of Defense.
        I took command of SOUTHCOM on November 9, 2004. On December 29,
    2004, I ordered the Schmidt-Furlow investigation following the ACLU's
    public posting of FBI e-mails obtained through a Freedom of Information
    Act (FOIA) request. The FBI e-mails contained allegations of the use of
    improper interrogation techniques at JTF-GTMO. The alleged events took
    place in the 2002-2003 timetrame. I was not the commander during that
    period. I am responsible for investigating credible allegations of
    detainee abuse whenever they may have occurred.
        As I was not the combatant commander during the 2002-2003
    interrogation of Qahtani, I never issued any guidance pertaining to the
    interrogation of Qahtani. My approval of specific factual findings in
    the Schmidt-Furlow investigation concerning events that occurred before
    I took command does not constitute combatant commander guidance for
    those I presently command.
        The differences between the 2002-2003 time period and the present
    at JTF-GTMO are substantial. In the aftermath of September 11, 2001,
    JTF-GTMO was striving to produce actionable intelligence, particularly
    from Qahtani and other high value detainees. Since I took command, in
    contrast to the more creative and aggressive applications of FM 34-52
    used in 2002-2003, the interrogation focus at JTF-GTMO has been on
    direct approach techniques that build rapport with the detainees.

        11. Senator McCain. General Craddock, have these discrepancies been
    resolved? If so, how?
        General Craddock. The Detainee Treatment Act mandates that
    detainees must not be ``subject to any treatment or technique of
    interrogation not authorized by and listed in the United States Army
    Field Manual on Intelligence Interrogation.'' The Detainee Treatment
    Act also restates the U.S. Government's prohibition on cruel, inhuman,
    or degrading treatment as defined through U.S. Reservations to the
    Convention Against Torture. The DOD is doing a top-to-bottom review of
    interrogation and detention operations. This has resulted in changes to
    and clarification of DOD policy. Last fall, DOD published DOD Directive
    3115.09, DOD Intelligence Interrogations, Detainee Debriefings, and
    Tactical Questioning. I anticipate that DOD Directive 2310.1E, The
    Department of Defense Detainee Program, and FM 2-22.3, Human
    Intelligence Collector Operations, will be published shortly. The FM,
    especially, will provide interrogators on the ground better clarity on
    proper versus improper interrogation techniques.
        I am committed to providing clear guidance to the men and women at
    JTF-GTMO who must carry out interrogations against al Qaeda and Taliban
    members. In this regard, I have requested that the DOD provide a
    definition of ``degrading treatment'' in both DOD Directive 2310.1E and
    FM 2-22.3.

        12. Senator McCain. General Craddock, has the resolution to these
    and any other discrepancies been communicated down the chain of
    command? If so, how?
        General Craddock. Every member of JTF-GTMO is carefully and
    repeatedly trained in the principles for treatment of detainees,
    including those interrogation techniques that are authorized by
    applicable law and directives.
        As part of pre-mobilization training prior to their arrival at
    Guantanamo, military members of the Joint Task Force are trained at
    Fort Lewis, Washington; Gulf Shores, Mississippi; and/or Fort Huachuca,
    Arizona on the applicable law, DOD Directives, the Army FM, and the
    Detainee Treatment Act.
        In addition to that training, after arrival at Guantanamo, all
    members of the Joint Task Force are trained again on the proper
    treatment of detainees, including the requirements of the Detainee
    Treatment Act during an extensive newcomers' briefing.
        Finally, to emphasize the importance of the Detainee Treatment Act,
    I have required that separate training be implemented by the chain of
    command or directors, as appropriate, to provide an annual update on
    the requirements of the Detainee Treatment Act and the applicable
    provisions of international law and DOD policy on the treatment of
    detainees. This redundant training is being provided to every person,
    including civilians and contractors who have contact with detainees,
    with duties at JTF-GTMO.
        In addition, as discussed above, we are awaiting the final approval
    of DOD references on detainee matters. Upon approval, I will issue
    further implementing guidance throughout SOUTHCOM and JTF-GTMO.
                                     ______

                  Questions Submitted by Senator Jeff Sessions
                                missile attacks
        13. Senator Sessions. Admiral Keating, I am aware that a number of
    studies are being conducted by various commands and I would very much
    like to understand your position on this particular threat to the
    homeland: What is the considered opinion of the NORTHCOM leadership and
    your primary staff planners regarding the threat to the U.S. homeland
    posed by the possibility of a terrorist missile attack launched from
    seagoing platforms off the coast of the United States?
        Admiral Keating. [Deleted.]

                               pandemic influenza
        14. Senator Sessions. Admiral Keating, I consider the potential for
    a major crisis significant and the impact on the Nation's economy and
    populace potentially severe if the interagency process is not
    thoroughly resourced and all elements of coordination and planning
    executed with a high degree of precision. I would also hope that all
    the authority you need to get or keep the process moving in order to
    reach the level of sophistication desired is in place, or if not I
    would like to know what we might consider changing in the law.
    Regarding the potential for a pandemic influenza outbreak (based upon
    avian flu or some other precursor), what is NORTHCOM's/DOD's role in
    the interagency response to such a crisis?
        Admiral Keating. DOD will support the primary and coordinating
    Federal agencies appointed by the President to lead the Nation's
    response to a flu outbreak. This support can be requested by the
    primary Federal agency or through individual States. The President or
    the Secretary of Defense would direct DOD to provide this support.
    Commander, NORTHCOM would be the supported Commander for the
    coordination of the DOD response within the continental United States
    and Alaska.
        For a widespread outbreak across the United States, Commander,
    NORTHCOM may elect to designate a Joint Force Land Component Commander,
    who would orchestrate nation-wide efforts in support of the primary
    Federal agency. NORTHCOM, in conjunction with the Services, would also
    be responsible for ensuring force health protection of DOD personnel
    within its area of responsibility.
        We have sufficient legal authorities regarding the use of military
    forces in support of civil authorities. We continue to monitor the
    global pandemic influenza situation and adapt our planning efforts to
    best meet the requirements of the American people.

        15. Senator Sessions. Admiral Keating, specifically, what is
    NORTHCOM's role in planning, allocating resources, command and control,
    deploying force packages, training and preparation for and the
    execution of interagency crisis exercises to confront a pandemic
    influenza outbreak?
        Admiral Keating. NORTHCOM has developed a concept plan [2591] for
    pandemic influenza, which outlines the command's major support
    functions in the event of a national emergency. This plan supports
    DOD's role as a supporting agency to the Department of Health and Human
    Services (HHS) for public health and medical services (Emergency
    Support Function #8) under the National Response Plan. The DHS is the
    primary agency responsible for coordinating all other activities
    associated with a pandemic. The Assistant Secretary of Defense for
    Homeland Defense, in collaboration with the Joint Staff is responsible
    for developing the DOD implementation plan for pandemic influenza.
        We are working with U.S. Joint Forces Command to identify sourcing
    options for forces to support events ranging from a small outbreak to a
    nationwide pandemic. We will align our command and control structure
    with that of the primary agency and allocate force packages
    accordingly. Our ability to defend the homeland must be preserved to
    guard against enemies who view a pandemic as an opportunity to attack.
        The command has coordinated with State, local, and interagency
    partners to train for and exercise our response to a potential
    pandemic:

              In December 2005, we attended a cabinet-level tabletop
            exercise on pandemic influenza.
              In January 2006, NORTHCOM sponsored an interagency pandemic
            influenza day and conducted an interagency exercise.
              In April 2006, we will host a State planners conference with
            the National Guard.
              In May 2006, our Ardent Sentry exercise will include
            exercising Concept Plan 2591.

        16. Senator Sessions. Admiral Keating, what shortfalls in funding
    or other resources are evident in the current stage of planning and
    what resources are needed in the future to create robust pandemic
    crisis plans?
        Admiral Keating. As directed in the Homeland Security Council
    Implementation Plan for National Strategy of Pandemic Influenza, we are
    working crisis action plans to respond to a national flu emergency. At
    this early stage, we estimate a $3 million shortfall in our fiscal year
    2007 operations and maintenance budget. Additional resources would
    allow NORTHCOM to:

              Refine concept plans to respond to requests from civil
            authorities as directed by the President and Secretary of
            Defense
              Build and integrate disease surveillance and
            characterization capabilities
              Conduct collaboration conferences with Federal, State, and
            local emergency response agencies
              Integrate DOD and civilian disease surveillance capabilities
              Develop and employ modeling and simulation tools
              Construct data warehouses that can be accessed by civilian
            agencies
              Establish communications and data links with external
            agencies, and be able to test and exercise these tools with our
            civilian partners
              Acquire the requisite contractor support to facilitate these
            actions

        NORTHCOM will continue to conduct joint planning and execution
    community reviews and obtain assessments from the Services and agencies
    regarding their capabilities to respond to a pandemic disease
    situation.
                                     ______

                   questions submitted by senator carl levin
                     ground-based midcourse defense system
        17. Senator Levin. Admiral Keating, the National Missile Defense
    Act of 1999 says it is U.S. policy to deploy an ``effective'' national
    missile defense system against limited attack. Given that the Ground-
    based Midcourse Defense System has not yet had a single successful
    intercept test, has the system demonstrated that it is currently
    ``effective''?
        Admiral Keating. [Deleted.]
        As the MDA successfully completes more flight and ground tests, we
    expect to gain more confidence in the predicted values needed to
    project the capability of the missile defense system. Currently, all
    NORTHCOM crews are trained and ready to perform the mission as directed
    by the Secretary of Defense.

        18. Senator Levin. Admiral Keating, do you believe it is important
    that the system demonstrate through testing that it is operationally
    effective before it is placed on permanent alert?
        Admiral Keating. We support the MDA's plan for testing the system.
    The success of integrated ground tests and element-level ground and
    flight test events indicates the Ballistic Missile Defense System is
    maturing. Resumption of limited defensive operations system flight
    testing by the MDA will further increase our confidence in its
    operational effectiveness. NORTHCOM is ready to assume operational
    control of the Ground-based Midcourse Defense System upon the direction
    of the Secretary of Defense, and we are fully confident in the ability
    of our crews and staff to perform the mission.

                  iranian missile threat to the united states
        19. Senator Levin. Admiral Keating, at a committee hearing on March
    7, John Negroponte, Director of National Intelligence, and Lieutenant
    General Michael Maples, Director of the Defense Intelligence Agency,
    indicated that Iran is focusing its ballistic missile efforts on
    regional missiles. They made no mention at all of an Iranian
    intercontinental ballistic missile effort. Do you agree with their
    assessment that Iran's missile efforts are regional?
        Admiral Keating. [Deleted.]

        20. Senator Levin. Admiral Keating, when do you assess it is likely
    Iran would be able to deploy an ICBM capable of reaching the United
    States?
        Admiral Keating. [Deleted.]

                      terrorist missile threat to the u.s.
        21. Senator Levin. Admiral Keating, last year you told the
    committee that you had no active intelligence that a terrorist group
    had the capability to launch a ballistic missile against the United
    States from a ship. Do you have the same assessment today?
        Admiral Keating. [Deleted.]

        22. Senator Levin. Admiral Keating, does the Intelligence Community
    judge that it is more likely that terrorists would use non-missile
    means of delivery to attack the United States than using ballistic
    missiles?
        Admiral Keating. [Deleted.]

                     cruise missile defense of the homeland
        23. Senator Levin. Admiral Keating, we hear concerns about the
    potential for adversaries to use cruise missiles to attack our
    homeland. Who is responsible for planning and executing the defense of
    the homeland against cruise missiles or other aerial threats?
        Admiral Keating. NORTHCOM is the U.S. geographic combatant command
    tasked with defending our homeland against all threats. NORTHCOM is
    working with the North American Aerospace Defense Command (NORAD) to
    address all air breathing threats to the United States. This includes
    defense against cruise missiles and other aerial threats.
        NORTHCOM is responsible for detecting, deterring and, if required,
    defeating sea-launched or ground-launched cruise missile threats prior
    to launch against targets in the Command's area of responsibility. For
    air-launched cruise missiles, NORAD is responsible for destroying both
    the airborne launch platforms and the cruise missile.
        As cruise missiles themselves are very difficult to detect once
    launched, it is preferable to deter the enemy or destroy the launch
    vehicle prior to launch. The detection of launch platforms involves
    intelligence collaboration between NORTHCOM, NORAD, and Federal
    agencies--a process that is exercised on a regular basis.

        24. Senator Levin. Admiral Keating, last year's National Defense
    Authorization Act required the DOD to prepare a plan for the defense of
    the homeland against cruise missile attack. What is the status of the
    planning for such a defense?
        Admiral Keating. In March 2006, the Joint Chiefs of Staff
    designated U.S. Strategic Command (STRATCOM) as the single integrating
    authority for cruise missile defense. The plan directed by section 905
    of the National Defense Authorization Act for Fiscal Year 2006, ``Plan
    to Defend the Homeland Against Cruise Missiles and Other Low-Altitude
    Aircraft,'' will be a collaborative effort among NORTHCOM, STRATCOM,
    NORAD, and the Joint Theater Air and Missile Defense Organization. The
    Joint Staff is the DOD overall lead for developing the plan.

                              colombia-authorities
        25. Senator Levin. General Craddock, how have you used the
    authority you received from the committee last year to increase the cap
    on military and civilian personnel? Please explain what you will do
    with the authorities you have asked the committee renew.
        General Craddock. The authority received last year from the
    committee allowed SOUTHCOM to employ sufficient forces to satisfy the
    training and technical assistance requirements critical to the success
    of Plan Colombia. While competing global resource requirements resulted
    in a lower number of personnel than would have otherwise deployed to
    Colombia, the current cap level alleviated a constraint that often
    hindered our efforts. SOUTHCOM needs the higher cap level in order to
    provide enhanced assistance in the areas of Planning, Intelligence,
    Logistics, Force Protection, Surveillance and Reconnaissance, Civil
    Affairs, Military Group Support, Command and Control, and
    Counternarcotics Training. The increased cap level has also permitted
    the Command to take advantage of time-sensitive information, surging
    numbers of personnel in support of search and rescue operations and
    high value targets.
        Extension of this authority will permit SOUTHCOM to plan for new
    initiatives to assist the Government of Colombia in combating terrorism
    as Colombia continues to exert pressure on illicit activities, gain
    control of ungoverned spaces, defeat the FARC, and prevent terrorist
    activities from dispersing into the region. New efforts that will
    require additional resources may include:

              Increased planning assistance to the Colombian military to
            support counterterrorism operations.
              Assistance to the Colombian military in improving regional
            cooperation and interoperability between the Colombian military
            and other regional security forces.
              Increased Colombian capacity to protect its critical
            infrastructure.
              Assistance in establishing schools to train partner nation
            counterterrorism forces. Increased surveillance and
            reconnaissance support.
              Establishing an alternate/additional aircraft basing option
            within Colombia to migrate assistance efforts with Colombian
            operations.
              Assistance to Colombian military to conduct full spectrum
            information operations.

                             colombia-interdiction
        26. Senator Levin. General Craddock, how do you explain the fact
    that the street price for cocaine in the United States hasn't gone up
    significantly?
        General Craddock. The Office of National Drug Control Policy
    (ONDCP) released a report in November 2005 stating the retail price of
    cocaine increased 19 percent over a 6-month period, February-September
    2005.

        27. Senator Levin. General Craddock, a November 2005 Government
    Accountability Office (GAO) report found that, according to Joint
    Interagency Task Force-South, a subordinate command under SOUTHCOM
    responsible for international drug interdiction, ``it cannot detect
    many of the known maritime cocaine movements reported in the western
    Caribbean Sea and the eastern Pacific Ocean because it cannot get ships
    or aircraft to the suspected movement in time.'' The report added that
    Joint Interagency Task Force-South officials ``expressed concern that
    continued declines in U.S. on-station ship days and on-station flight
    hours will limit their ability to monitor the transit zone and detect
    illicit drug trafficking. Is the price of cocaine linked to the
    insufficient resources for interdiction?
        General Craddock. The GAO report is correct in that we are not
    detecting an acceptable level of known maritime trafficking events. A
    review of maritime events of which we had some level of knowledge (go-
    fast and fishing vessels) in calendar year 2005, is illustrative.
        In the Eastern Pacific (EPAC), there were 164 actionable maritime
    events. Of the 164 events, 47 events were detected. Thus, of the events
    we knew about, there was a detection rate of 29 percent. Of the 47
    events that were detected, 38 were interdicted--a rate of 81 percent.
    Bottom line for the EPAC--we detect 3 of 10 known events, of the 3 we
    do detect, 80 percent of the time, they go to jail.
        The biggest challenge is detection. This process is very complex.
    Drug traffickers use a variety of decoy vessels, security vessels,
    logistic vessels, and drug-carrying vessels in an elaborate shell game,
    particularly in the EPAC. Drugs are passed among vessels as they
    transit deep into the EPAC then north towards Mexico. We do not yet
    have a persistent surface surveillance capability in support of
    maritime domain awareness requirements.
        Regarding the link between the lack of D&M resources and the price
    of cocaine on the streets of America, SOUTHCOM does not have the
    detailed data to answer the question, and defers to the ONDCP and the
    DEA. It seems logical that higher levels of interdiction will most
    likely adversely affect the drug market. I note that ONDCP released a
    report in November 2005 stating the retail price of cocaine increased
    19 percent over a 6-month period, February-September 2005. An increase
    in price can generally be linked to a decrease in supply. According to
    ONDCP, cocaine production in the Andes is decreasing, and both
    eradication and interdiction are increasing.

        28. Senator Levin. General Craddock, what remedy do you see to the
    problem identified by GAO, and what, if, anything, have you requested
    from the DOD for fiscal year 2007 for maritime drug interdiction?
        General Craddock. In preparation for the August 16, 2005, Global
    Force Management Board (GFMB), my staff submitted force requirements
    for fiscal year 2007-2009, which included maritime drug interdiction
    assets. Forces requested addressed requirements outlined in the
    SOUTHCOM counterdrug (CD) plan. Within the submission to the GFMB,
    SOUTHCOM requested the following maritime CD assets from the DOD:

             Increased surface combatant presence
             Increased submarine presence
             Increased maritime patrol aircraft flight hours per
            month
             A fleet oiler to support maritime operations and
            extend on-station time

        On August 30, 2005 my Director of Operations, BG Cambria, presented
    a brief to the Chairman of the Joint Chiefs of Staff (CJCS) tank
    regarding SOUTHCOM CD force sourcing. In that brief, we clearly
    outlined the disparity between allocated forces and validated
    requirements.
        Upon completion of the tank brief, SOUTHCOM submitted a request for
    forces (RFF) for all forces related to CD. The RFF reiterated
    requirements submitted during the August GFMB, requested fulfillment of
    all SOUTHCOM CD requirements, and articulated the requirement that U.S.
    Navy rotary wing assets be able to conduct airborne use of force. This
    submission led to a review of the fiscal year 2004 CJCS CD execute
    order (EXORD). A new CJCS CD EXORD is in staffing now, however, initial
    coordination indicates little change in allocated forces.
        Full sourcing of CD assets would allow SOUTHCOM to interdict more
    illicit narcotics and directly impact the problems identified by GAO.
        It is important to note, however, that the Joint Interagency Task
    Force--South (JIATF-S) is an interagency organization. As such, the DOD
    is not the sole resource provider for detection and monitoring, but
    rather a partner along with the U.S. Coast Guard, Customs and Border
    Protection, and allies. The level of resourcing is constantly changing
    due to competing demands for scarce assets, aging equipment, changing
    priority of national objectives, and decreasing funding streams--all of
    which affect the effort to provide adequate forces. SOUTHCOM does not
    have visibility of the out-year contributions of the other
    organizations to maritime drug interdiction.

                   colombia-demobilization of narcoterrorists
        29. Senator Levin. General Craddock, please give me your assessment
    regarding the latest reports that demobilized paramilitaries are
    infiltrating the political process.
        General Craddock. Colombia's Peace and Justice law prohibits
    demobilized paramilitary leaders from participating in politics prior
    to the completion of the demobilization process. The Colombian
    government and political parties are paying close attention to this
    issue. For example, five congressional candidates were removed from the
    list of the ``U'' party for having met with AUC leader Jorge 40 to
    design an electoral strategy for the departments of the Sierra Nevada
    region. In another instance, Mario Uribe, cousin and political ally to
    the President, dropped AUC sympathizers Congresswomen Eleonara Pineda
    and Rocia Arias from the membership in the Colombia Democratica Party.

        30. Senator Levin. General Craddock, what are the weaknesses of the
    program and how can the U.S. Government--DOD or other agencies--help?
        General Craddock. The success of the demobilization program depends
    on the Government of Colombia implementing it vigorously. The current
    program is not fully funded, which limits the scope of the program and
    impacts the amount and type of reinsertion and vocational training
    available to the demobilized fighters. The Colombians are addressing
    this concern by seeking international and private sector funding to add
    to their own contribution. The Netherlands, Sweden, Ireland, the
    Organization of American States, and other donors, including the
    European Union, are supporting the demobilization program. The U.S.
    Government (USG) has made a modest contribution thus far. The
    Departments of State and Justice and the United States Agency for
    International Development (USAID) provide the USG assistance for
    demobilization.
        Another key weakness is the program's inability to address the
    power vacuums created by demobilizing paramilitaries in certain
    strongholds without having a sufficient security force presence to
    stabilize these areas. Without a significant security force presence in
    certain areas, there is no way to prevent remaining illegal armed
    groups from establishing dominance over the population.

                                     haiti
        31. Senator Levin. General Craddock, how long do you estimate will
    the United Nations forces--military and police--have to remain in
    Haiti?
        General Craddock. United Nations Security Council Resolution 1658
    extended the mandate of MINUSTAH to maintaining a presence in Haiti, as
    contained in resolutions 1608 (2005) and 1542 (2004), until 15 August
    2006, with the intention to renew for further periods. Based on the
    weak democratic institutions, a fledging civilian police force, and a
    dysfunctional judiciary system, I estimate this effort needs to be
    long-term and well beyond the next U.N. mandate renewal--most likely
    requiring several renewals.
        We are working closely with the Department of State to review the
    current force structure and positioning of MINUSTAH with a view toward
    restructuring to better reflect current conditions and get postured for
    future development efforts.

        32. Senator Levin. General Craddock, what, if anything, is SOUTHCOM
    doing to help improve the security situation in Haiti, and to address
    the drug trafficking occurring via Haiti?
        General Craddock. We are increasing the effectiveness of the
    Haitian Coast Guard through the Foreign Military Financing (FMF -$1
    million), Foreign Military Sales (FMS -$2.7 million) and International
    Military Education and Training (IMET -$213,000). The Coast Guard is
    the only security institution we are allowed to assist since Haiti
    disbanded its Army and only has a national police force.
        The SOUTHCOM's Joint Interagency Task Force South detects and
    monitors traffickers and passes information to the Haitian Coast Guard
    to assist their interdiction efforts.

                force feedings of hunger strikers at guantanamo
        33. Senator Levin. General Craddock, does the McCain amendment
    banning cruel, inhuman, and degrading treatment of detainees apply to
    the treatment of hunger strikers at Guantanamo?
        General Craddock. Yes. The Detainee Treatment Act prohibits the
    cruel, inhuman, or degrading treatment of all detainees, including
    hunger strikers, in the custody or physical control of the U.S.
    Government.

        34. Senator Levin. General Craddock, has the military resorted to
    punitive measures against detainees in order to break the hunger
    strike?
        General Craddock. No. Punitive measures have never been used
    against detainees in order to break a hunger strike. However, engaging
    in a hunger strike is an act of indiscipline and therefore a violation
    of camp rules. As with other infractions of camp rules, hunger striking
    detainees only lose their comfort items, which are a privilege reserved
    for detainees who comply with camp rules. At no time do detainees,
    including hunger strikers, ever lose their basic issue items.

                               venezuela-nuclear
        35. Senator Levin. General Craddock, on October 3 of last year the
    Miami Herald reported that Venezuelan President Hugo Chavez stated
    during a radio address, ``Brazil has advanced in its nuclear research,
    nuclear power, and that's valid. Argentina too, and we also are
    starting to do research and in the area of nuclear energy, with
    peaceful aims of course.'' Last month, Ambassador Negroponte, Director
    of National Intelligence, told the committee that Venezuela ``is
    seeking closer economic, military, and diplomatic ties with Iran and
    North Korea.'' Yesterday's Washington Times reported on speculation
    that the Venezuelan government could be planning to provide Tehran with
    uranium for its nuclear program. Do you believe that President Chavez's
    statement about nuclear energy is just bluff and blunder, or do you
    believe there is more to it?
        General Craddock. We have no reason to disbelieve President
    Chavez's publicly stated desire to pursue nuclear energy. Venezuela did
    have a research and experimental applications reactor that was shut
    down in 1990.

        36. Senator Levin. General Craddock, what can you tell us in open
    session about his nuclear intentions, if any, and his relationship with
    North Korea and Iran, including whether your analysts believe he is
    prepared to supply Iran with uranium?
        General Craddock. Venezuela recently signed an agreement with Iran
    that provides for the exploitation of Venezuela's strategic minerals.
    This has prompted Venezuelan opposition figures to warn that President
    Chavez's government could be planning to provide Tehran with uranium
    for its nuclear program. However, in early-March 2006, President Chavez
    ridiculed those opposition statements as being part of an ``imperialist
    plan'' propagated by international news media.
        Venezuela's former representative to the International Atomic
    Energy Agency (IAEA), Leancy Clemente Lobo, publicly stated that
    studies undertaken during the past decades detected the presence of
    uranium but that officially, no progress was made in the matter. Lobo
    went on to say that tests should be done to determine the quantity of
    proven reserves in Venezuela and devise a utilization plan.
        Venezuela is deepening its relationship with both Iran and North
    Korea. President Chavez has said he fully supports Iran's nuclear
    program and Venezuela was one of three countries to vote against the
    U.N. resolution to refer Iran to the Security Council due to its
    nuclear program. Venezuela's ambassador to Iran has called its support
    of peaceful nuclear technology ``irrevocable.'' Iran has signed over 80
    agreements with President Chavez since his 1998 inauguration. Chavez
    has visited Iran four times, and the estimated value of proposed trade
    agreements between the two countries is approximately U.S. $11 billion.
        The North Korean Vice President signed a commercial cooperation
    agreement with Venezuela in September 2005. The North Korean Foreign
    Trade Minister visited Venezuela in November 2005 to sign an additional
    commercial cooperation agreement.

                                    bolivia
        37. Senator Levin. General Craddock, what is the state of our
    military-to-military relations with Bolivia, and what are your
    expectations regarding the likelihood that Bolivia will cooperate with
    U.S. counterdrug efforts?
        General Craddock. We have worked closely with the Bolivian military
    over the last several years. While the Morales administration has not
    made any official announcement of a changed policy with regard to
    military-to-military contact between our two nations, some of the
    administration's recent actions have begun to undercut our relations.
        The U.S. Embassy in La Paz indicates that Morales will be tough on
    interdiction, but will not support eradication as have past Bolivian
    administrations.
                                     ______

                Questions Submitted by Senator Edward M. Kennedy
                       restraint chair at guantanamo bay
        38. Senator Kennedy. General Craddock, recent news reports raise
    troubling questions about the use of the restraint chair in connection
    with hunger striking detainees at Guantanamo Bay. Did you approve the
    use of restraint chairs at Guantanamo? If so, how many restraint chairs
    have been obtained for use at Guantanamo Bay?
        General Craddock. The use of the restraint chair was studied by the
    Joint Medical Group and Joint Detention Group at JTF-GTMO, in
    consultation with medical experts including a forensic psychiatrist and
    a team of consultants from the Federal Bureau of Prisons. Major General
    Hood authorized the use of the restraint chair and informed me of his
    decision. To date, JTF-GTMO has obtained 25 restraint chairs, but has
    only used 6 of them.

        39. Senator Kennedy. General Craddock, how many detainees have been
    placed in a restraint chair?
        General Craddock. Twenty-nine different hunger-striking detainees
    have been safely fed utilizing the restraint chair protocol.

        40. Senator Kennedy. General Craddock, please provide a schedule
    showing the dates each detainee was placed in a restraint chair, and
    indicate how long each detainee was in the chair on each occasion, with
    an unclassified summary, if necessary.
        General Craddock. Feedings of hunger strikers utilizing the
    restraint chair began on 15 December 2005. Since that date, over 750
    feedings have been conducted for 29 different detainees utilizing the
    restraint chair protocol. Detainees fed using the restraint chair
    protocol are fed twice per day and, in accordance with established
    protocol, they remain in the chair for not more than 120 minutes. Below
    is a graph depicting the feedings in the restraint chair.

        41. Senator Kennedy. General Craddock, is there any limit on how
    many days, consecutive or not, that a detainee can be force fed in the
    restraint chair?
        General Craddock. No. Detainees are provided nutrition enterally
    until they choose to begin eating and have eaten at least three
    consecutive meals. Each hunger-striking detainee gets an opportunity to
    choose to eat before every enteral feeding. As long as a detainee
    continues to be fed enterally, the restraint chair is used to ensure
    that the detainee receives and absorbs adequate nutrition and to ensure
    the safety of the detainee and the treating medical personnel.

        42. Senator Kennedy. General Craddock, please provide the
    instructions, procedures, orders, protocols, regulations, and/or
    guidelines that are followed by personnel at Guantanamo for both
    restraint chairs and when force feeding is utilized and/or when dealing
    with hunger strikers generally.
        General Craddock. A redacted version of the JTF-GTMO Joint Medical
    Group Standard Operating Procedures for managing hunger-striking
    detainees is attached at Tab A. As the involuntary feeding of hunger-
    striking detainees is currently at issue in pending habeas litigation,
    I have been advised to provide only the redacted version at this time.

        43. Senator Kennedy. General Craddock, have any detainees been
    injured or lost consciousness for any reason while restrained in the
    chair?
        General Craddock. No. Insertion of a nasogastric tube may cause
    discomfort and, on rare occasions, can lead to some minor bleeding.
    However, no detainees have been injured by the enteral feeding process
    and no detainee has lost consciousness during the enteral feeding
    process.

        44. Senator Kennedy. General Craddock, what type of records are
    kept to track injuries, accidents, or adverse events during the forced
    feeding of detainees? Please provide a copy of those records to the
    committee.
        General Craddock. Every medical procedure, including enteral
    feeding, is carefully monitored and documented in each detainee's
    medical record. Enteral feedings are monitored from preparation of the
    detainee for the feeding through completion of the feeding and the
    post-feeding observation period. All procedures performed and the
    amount of nutrition provided are documented in each detainee's medical
    record. Any injuries, accidents, or adverse events occurring during the
    course of this entire procedure would be documented in the detainee's
    medical record.
        These medical records are protected to maintain the privacy of the
    detainees. Any requests to view detainee medical records should be
    addressed to the DOD.

        45. Senator Kennedy. General Craddock, are the personnel who treat
    the detainees for any such injuries, accidents, or adverse events the
    same personnel as those who use the restraint chairs?
        General Craddock. All enteral feedings are done by either a
    uniformed doctor or a credentialed registered nurse. These same medical
    professionals would attend to any adverse reaction to an enteral
    feeding that might occur, in order to provide the most immediate and
    effective care.

        46. Senator Kennedy. General Craddock, are the personnel who
    conduct enteral feedings in the restraint chair uniformed members of
    the Armed Forces, permanent employees of the Federal Government, or
    employees of a contractor to the Federal Government? If the force
    feeding is performed pursuant to a contract, please provide a copy of
    the contract to the committee.
        General Craddock. As stated above, all enteral feedings are done by
    either a doctor or a credentialed registered nurse. All of these
    medical professionals are uniformed members of the U.S. Armed Forces.

        47. Senator Kennedy. General Craddock, I have heard reports that
    detainees may be left to defecate and urinate on themselves while
    restrained in the chair after the feedings. Are detainees permitted to
    leave the chair after a feeding if they request, for example, to use
    the bathroom?
        General Craddock. Every detainee is alerted 30 minutes, and again
    10 minutes, in advance of a feeding and is given the opportunity and
    strongly encouraged to use the toilet before being enterally fed.
    Despite such efforts, some detainees have chosen to urinate or defecate
    on themselves during the feeding process in an attempt to subvert the
    enteral feeding. Once the enteral feeding begins, detainees are not
    permitted to leave the restraint chair until the feeding and post-
    feeding observation process is successfully completed.

        48. Senator Kennedy. General Craddock, I have also heard reports
    that detainees are fed through the nasogastric tubes until they vomit.
    Is this true?
        General Craddock. No. The amount of nutrition that is medically
    indicated and appropriate for each detainee is carefully calculated in
    advance of each feeding. The rate of flow of the nutrition is regulated
    so as to be tolerated by the detainee with minimal discomfort and
    without any adverse reaction, such as vomiting. Despite these
    precautions, on rare occasions, vomiting may occur.

        49. Senator Kennedy. General Craddock, does the feeding cease when
    a detainee vomits?
        General Craddock. Yes. A registered nurse closely monitors each
    detainee during the feeding process. If a detainee demonstrates
    intolerance of the feeding such as vomiting or abdominal pain, the
    feeding is discontinued and the detainee's problems with the feeding
    are evaluated prior to any further feeding.

        50. Senator Kennedy. General Craddock, how is the amount to be fed
    determined?
        General Craddock. The amount to be fed is carefully calculated
    based on the nutritional needs of each detainee and their individual
    body mass index.

        51. Senator Kennedy. General Craddock, I have heard reports that
    detainees claim that the tubes are inserted, removed, and reinserted in
    a manner that causes great pain. What type of training do the personnel
    who insert the tubes receive?
        General Craddock. This standard medical procedure is only conducted
    by trained, uniformed medical professionals (physicians and
    credentialed registered nurses) in a careful and compassionate manner
    using a medically appropriate protocol.

        52. Senator Kennedy. General Craddock, would the use of restraint
    chairs, enteral feeding tubes, and nasogastric tubes be consistent with
    Army Regulations, including FM 34-52, for the care and treatment of
    persons in custody?
        General Craddock. FM 34-52 provides doctrinal guidance on the
    intelligence gathering and interrogation techniques and has nothing to
    do with enteral feeding. Enteral feeding is a medical procedure,
    conducted in a safe, humane manner by trained medical professionals, to
    save the lives of the men in our custody. Enteral feeding as conducted
    at Guantanamo is consistent with DOD directives. The procedures used at
    Guantanamo, to include the use of a restraint chair, are patterned
    after procedures utilized by the United States Bureau of Prisons, with
    whom Joint Task Force officials conferred prior to establishing the
    protocols for use of the restraint chair for enteral feeding.

                                    uighurs
        53. Senator Kennedy. General Craddock, I understand that there are
    a number of ethnic Uighurs from China who are being held at Guantanamo,
    and that our government has declared that they are not enemy
    combatants, yet they continue to be held. On what basis are the Uighurs
    currently being held?
        General Craddock. There are a number of ethnic Uighurs from China
    currently being held at Guantanamo. Five of the Uighurs were determined
    to be No Longer Enemy Combatants (NLECs) as part of the Combatant
    Status Review Tribunal (CSRT) process. The remaining Uighurs were and
    still are enemy combatants. Typically, if the CSRT made a determination
    that a detainee was a NLEC, the detainee would be returned to his
    native country. The five NLEC Uighurs are being detained at Guantanamo,
    pending the outcome of diplomatic efforts to release them to an
    appropriate country.

        54. Senator Kennedy. General Craddock, what current efforts are
    being made to repatriate them or to find a safe haven in a third
    country?
        General Craddock. The Department of State is responsible for
    finding a third country willing to take the NLECs.

        55. Senator Kennedy. General Craddock, how long will they be held
    if efforts to repatriate them or find them another place to go are
    unsuccessful?
        General Craddock. The five NLEC Uighurs will be held in a safe and
    humane manner until the Department of State arranges for their transfer
    to a third country.

        56. Senator Kennedy. General Craddock, what will you do with them
    then?
        General Craddock. As soon as directed, I will release the five
    Uighurs in accordance with arrangements made by the Department of
    State. In the interim, the five Uighur NLECs remain housed in a camp
    with a communal living arrangement, including free access to all areas
    of that camp. The camp includes an exercise/recreation yard, a bunk
    house, and activity room. The NLECs also have access to a television
    set with VCR and DVD capability, a stereo system, recreational items
    (such as soccer, volleyball, ping pong), unlimited access to a shower
    facility, air conditioning in all living areas, special food items, and
    library materials.
                                     ______

                 Questions Submitted by Senator Daniel K. Akaka
                           infrastructure protection
        57. Senator Akaka. Admiral Keating, you told us that NORTHCOM is
    working to protect non-DOD critical infrastructure such as the defense
    industrial base. The DHS is the lead Federal agency on critical
    infrastructure protection. Could you explain how you are augmenting
    DHS's role in this area?
        Admiral Keating. As a partner in interagency cooperation, we have
    supported the efforts of the Joint Staff and Assistant Secretary of
    Defense for Homeland Defense to develop DOD policy for the protection
    of DOD critical infrastructure, the defense industrial base, and non-
    DOD critical infrastructure. This support includes implementing a
    comprehensive means of identifying critical infrastructure, assessing
    its vulnerability, and planning and implementing mitigation, response,
    and remediation options. The DOD shares the results of these
    vulnerability assessments with the DHS and the States. If directed by
    the President or Secretary of Defense, NORTHCOM would protect non-DOD
    critical infrastructure in support of DHS.

                           natural disaster response
        58. Senator Akaka. Admiral Keating, I understand that one of the
    strengths of NORTHCOM is its ability to pull forces and capabilities
    from across the DOD. All the same, I have some concerns about how many
    forces would be immediately available in the event of an emergency.
    Given the large number of units required to sustain the current
    operations tempo outside of NORTHCOM, what is the force availability
    for NORTHCOM?
        Admiral Keating. We can draw from the pool of DOD forces available
    within the Continental United States (CONUS) to support civil
    authorities in an emergency. This pool includes active component forces
    from all Services, as well as a limited number of identified and
    sourced response forces such as the Chemical, Biological, Radiological,
    High-Yield Explosive Consequence Management Response Force. We would
    request specific capabilities as required to respond to any emergency.
    Although certain types of combat support and combat service support
    units are in high demand for overseas operations, we remain confident
    that sufficient capabilities remain in CONUS to support any magnitude
    of DOD humanitarian assistance and disaster relief response.
        In addition to any forces that NORTHCOM may access to support an
    emergency, the States have considerable National Guard assets that
    could be applied by the respective governors. State National Guards
    also have Emergency Management Assistance Compacts with other States to
    prearrange assistance from one State to another; these are the
    governors' Interstate Mutual Aid Compacts that facilitate sharing of
    resources, personnel, and equipment across State lines during times of
    disaster or emergency. NORTHCOM maintains situational awareness of
    National Guard employment by States, including when one State provides
    support to another.

        59. Senator Akaka. Admiral Keating, what is being done to ensure
    that there will be an adequate number of forces available in case of a
    natural disaster or some other form of national emergency?
        Admiral Keating. We have an active, integrated, layered defense
    that allows us to rapidly take operational control of military assets
    needed to protect the United States and provide support to civil
    authorities in times of crises. Active-Duty DOD forces from all
    Services within the CONUS are available to NORTHCOM to defend the
    homeland and support civil authorities in an emergency.
        NORTHCOM defends the homeland primarily through our dedicated
    Service components:

             Army North located at Fort Sam Houston, Texas
             Air Force North located at Tyndall Air Force Base,
            Florida
             Marine Forces North at New Orleans, Louisiana

        The Commander Fleet Forces Command, located at Naval Station
    Norfolk, Virginia, is designated as the Navy's Supporting Commander to
    NORTHCOM.
        We provide defense support of civil authorities primarily through
    our subordinate commands:

             Joint Task Force North at Fort Bliss, Texas
             Joint Task Force Civil Support at Fort Monroe,
            Virginia
             Joint Force Headquarters National Capital Region at
            Fort McNair, Washington, DC
             Joint Task Force Alaska at Elmendorf Air Force Base,
            Alaska

        For land domain operations, NORTHCOM postures and positions forces
    to deter and prevent attacks. Quick and rapid response forces and
    consequence management forces are maintained at appropriate alert
    levels to meet potential threats. We are prepared to execute operations
    to provide support for multiple chemical, biological, radiological,
    nuclear and high-yield explosives (CBRNE) events. An initial CBRNE
    Consequence Management Response Force (CCMRF) is postured to quickly
    respond to a CBRNE event with additional CCMRF forces for subsequent
    events identified for employment as needed.
        To defend the Nation's airspace, we have aircraft on alert
    throughout the United States based on a tiered response system. As
    threat levels intensify, we increase the number of aircraft on alert
    and on patrol.
        If the intelligence stream points to a credible threat in the
    maritime domain, we position U.S. Navy and U.S. Coast Guard assets to
    support a comprehensive and active layered defense that uses all
    elements of national power to defend the homeland. This can include air
    and surface assets assigned to NORTHCOM from any Service or location.
        DOD forces that may be needed for homeland defense and civil
    support operations are outlined in the following NORTHCOM Concept Plans
    (CONPLAN):

             CONPLAN 2002, Homeland Defense
             CONPLAN 2501, Defense Support of Civil Authorities
             CONPLAN 0500, Defense Support of Civil Authorities for
            Chemical, Biological, Radiological, Nuclear, and High-Yield
            Explosives Consequence Management Operations

        In addition to any forces that NORTHCOM may access to support an
    emergency, the States have considerable National Guard assets, such as
    WMD-Civil Support Teams, that can be applied by the respective
    governors. NORTHCOM maintains situational awareness of National Guard
    employment by States, including when one State provides support to
    another.
        In addition, we are working with the Joint Staff to gain authority
    to deploy capabilities, with minimal impact on forces, to facilitate a
    quick and flexible DOD response. For example, we would be authorized to
    deploy a Defense Coordinating Officer and Defense Coordinating Element
    to provide Defense Support of Civil Authorities in response to primary
    Federal agency requests. In addition to these authorities, we would
    also gain the ability to have select assets placed on increased alert
    levels to enable quick response to any incident. These select assets
    are those that would enhance our ability to support search and rescue
    operations.

        60. Senator Akaka. Admiral Keating, at the recent Senate Homeland
    Security and Government Affairs Committee hearings on Katrina, the
    Secretary of Homeland Security, Michael Chertoff, expressed some
    confusion regarding the relationship between PACOM and NORTHCOM. As you
    can imagine, this has raised some concerns for me regarding the ability
    of PACOM, NORTHCOM, and DHS to work together and effectively respond to
    a crisis situation in Hawaii. Even though both you and Admiral Fallon
    have assured me that the DOD is working on establishing open lines of
    communication and a clear chain of command between the DHS, PACOM, and
    NORTHCOM in the case of a natural disaster or national emergency in
    Hawaii, I am hoping to get more details on your progress. What,
    specifically, is being done to ensure there is effective interagency
    cooperation in the event of an emerging crisis?
        Admiral Keating. NORTHCOM and PACOM have permanent liaison officers
    assigned to each command who ensure that information is shared and open
    dialogue is maintained. NORTHCOM will support PACOM during times of
    crisis in the PACOM area of responsibility, including Hawaii. If a
    Joint Task Force is required to support operations in PACOM's area of
    responsibility, NORTHCOM would augment the task force as needed.
        The Hawaii State National Guard is the primary military entity that
    would respond to any natural disaster on the islands. The Governor of
    Hawaii would request DOD/PACOM's assistance when it appears resources
    for the islands are not adequate for the response.
        PACOM, NORTHCOM, and the other combatant commands participate in a
    monthly Joint Interagency Coordination Group video teleconference.
    During these meetings, issues are addressed that affect the
    relationship between DOD and State and local response agencies. PACOM
    and NORTHCOM participate in many of the same exercises, conferences,
    and workshops, and our staffs work closely together to coordinate
    actions.

        61. Senator Akaka. Admiral Keating, can you also tell me if the DOD
    is working with State and local agencies in its efforts to ensure
    effective communication and a clear chain of command?
        Admiral Keating. We have several ongoing initiatives:

             We are working with the DHS and the National Guard to
            develop common data sets that allow everyone to ``speak the
            same language'' when referring to events or requesting
            assistance real-time.
             Our deployable forward command and control element,
            Standing Joint Force Headquarters North, conducts quarterly
            State National Guard engagement meetings to ensure effective
            communications and coordination.
             Members of NORTHCOM attend State and regional
            workshops to exchange information on capabilities and emergency
            response operations.
             We participate in several State and regional exercises
            and conferences to prepare for a timely coordinated response to
            emergency situations.
                                     ______

                   Questions Submitted by Senator Bill Nelson
                                   venezuela
        62. Senator Bill Nelson. General Craddock, recently, the Miami
    Herald reported that Venezuela received its first three Russian
    helicopters. Venezuela has signed contracts with Russia for other armed
    helicopters, as well as 100,000 rifles. Why does President Chavez think
    he needs these weapons and what do you think he really plans to use
    them for?
        General Craddock. The government of Venezuela has said the 100,000
    rifles are a part of its military modernization program. It has not
    said what it plans to do with the FAL Light Assault rifles that will be
    replaced. Included in the purchase is a licensing agreement that
    authorizes Venezuela to manufacture both the rifles and ammunition.
    Venezuelan military officials have stated the helicopters will be used
    in support of rescue and evacuation missions.

        63. Senator Bill Nelson. General Craddock, Venezuela is sending
    thousands of barrels of oil daily to Cuba, propping up President
    Castro's regime and financing travel for thousands of Cuban `doctors,
    coaches, and teachers' who work in poor neighborhoods throughout Latin
    America. What is the daily dollar value of assistance that Venezuela is
    providing to Cuba through oil transfers and direct cash?
        General Craddock. Venezuelan crude oil currently sells for
    approximately U.S. $53 per barrel on the open market, but Venezuela is
    selling oil to Cuba for U.S. $27 per barrel. Therefore, Venezuela is
    providing Cuba approximately U.S. $2.44 million per day or
    approximately U.S. $891 million per year. We have no information
    regarding direct cash payments to Cuba.

    ------------------------------------------------------------------------
                   Oil equation
    ------------------------------------------------------------------------
    Real market value of oil:.................  95,000 bbd/day  $53
                                                 =  $ 5.00 million/day
    Discounted price to Cuba:.................  95,000 bbd/day  $27
                                                 = $ 2.56 million/day
                                               -----------------------------
      Total discount for oil:.................  $ 2.44 million/day
    ------------------------------------------------------------------------

                                    al qaeda
        64. Senator Bill Nelson. General Craddock, on February 21 you
    warned that ``the opportunity exists for al Qaeda to operate in the
    tri-border region''--Brazil, Paraguay, and Argentina. Have we detected
    al Qaeda or other terrorist activity in the tri-border region?
        General Craddock. [Deleted.]

                         american hostages in colombia
        65. Senator Bill Nelson. General Craddock, please tell us about the
    search for the three American hostages in Colombia. There is a report
    that remains have been located in a mass grave in Tolima. Has the
    appropriate DNA analysis been conducted on these remains and can you
    share any conclusions from these tests with the committee?
        General Craddock. Forensic evidence collected at Gaitan grave site
    did not match the DNA of the three American hostages. The search for
    the American hostages continues with the DOD collaborating with other
    U.S. Government organizations and Colombian authorities. One ongoing
    effort is a radio transmission campaign in Colombia designed to
    increase the perceived benefits to the narcoterrorists of releasing the
    hostages unharmed. We are also advertising a reward program for
    information leading to the recovery of the hostages.

        [Whereupon, at 11:35 a.m., the committee adjourned.]

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                      2007

                                  ----------

                            TUESDAY, MARCH 14, 2006

                                           U.S. Senate,
                                   Committee on Armed Services,
                                                        Washington, DC.

               JOINT STRIKE FIGHTER F136 ALTERNATE ENGINE PROGRAM

        The committee met, pursuant to notice, at 1:38 p.m. in room
    SH-216, Hart Senate Office Building, Senator John Warner
    (chairman) presiding.
        Committee members present: Senators Warner, McCain, Thune,
    and Lieberman.
        Committee staff members present: Charles S. Abell, staff
    director; Leah C. Brewer, nominations and hearings clerk; and
    John L. Quirk V, security clerk.
        Majority staff members present: Ambrose R. Hock,
    professional staff member; Gregory T. Kiley, professional staff
    member; Stanley R. O'Connor, Jr., professional staff member;
    Lynn F. Rusten, professional staff member; and Scott W. Stucky,
    general counsel.
        Minority staff members present: Creighton Greene,
    professional staff member; Bridget W. Higgins, research
    assistant; and Peter K. Levine, minority counsel.
        Staff assistants present: Micah H. Harris and Jessica L.
    Kingston
        Committee members' assistants present: Stuart C. Mallory,
    assistant to Senator Thune; Mieke Y. Eoyang, assistant to
    Senator Kennedy; and Frederick M. Downey, assistant to Senator
    Lieberman.

           OPENING STATEMENT OF SENATOR JOHN WARNER, CHAIRMAN

        Chairman Warner. The committee will come to order. I thank
    our witnesses for readjusting your schedules to comport with
    what the Senate schedule is. I've been a member of this
    institution some 28 years now, and you can never quite predict
    exactly what's going to occur, but when I was advised that we
    were going to have a minimum of six and I now hear from a
    colleague, just moments ago, it could be well up to nine
    consecutive votes beginning at 3 p.m., it was imperative that
    we move this schedule up.
        I'm also grateful for those who have come from long
    distances, particularly our friends from the United Kingdom
    (U.K.), others here that I'll recognize in Panel II, because
    it's my judgment that this is a very serious issue and it
    requires the most careful attention, fairly and objectively of
    a recent decision made by the Department of Defense (DOD) to
    suspend the research and development, and other steps, leading
    towards having a second engine for this important aircraft.
        So we meet today to receive testimony from our
    international partners, and may I underline the word partners,
    in the Joint Strike Fighter (JSF) program on the proposed
    termination of the F136 alternate engine.
        Lord Paul Drayson, Minister for Defense Procurement, and
    Sir Jock Stirrup, Chief of the Air Staff will represent the
    U.K. on the first panel today and I welcome you gentlemen and
    again, acknowledge the distances that you have traveled. But
    that conveys to any fair-minded member of this committee, and
    we're all fair-minded, the importance of the decision to your
    country, and not only your country, but to the other partners
    abroad.
        On the second panel of the hearing, representing Australia
    will be Air Commodore John Harvey and I'll introduce the
    balance of that panel when they come up.
        Several nations were not able to have representatives here
    today and they have sent statements. Denmark, Netherlands,
    Norway, and Turkey, and each of those statements will be
    incorporated in today's record in lieu of the live testimony.
        So we welcome all of our witnesses and we are here to not
    only look at the importance of the partnership, but how in the
    face of a shrinking industrial base here in America, and I
    imagine in your respective countries, a greater and greater
    degree of dependence that comes on the ability on a consortium
    of nations to get together and share again as partners, the
    responsibility for the development and the production of
    defense requirements.
        I recall when I was privileged to serve as Secretary of the
    Navy in the period of 1969 to 1974, the Department of the Navy
    at that time had 1.2 million men and women in uniform. That was
    sailors and marines. Today that's roughly the entire size of
    the Active Forces of the United States. We had some 700,000
    civilians, and we had a number of aerospace companies building
    for us all types of equipment for air, a number of ship
    builders, and on and on went the industrial base.
        Now this program, as I said, includes eight nations, in
    addition to the United States, who've pledged $4.6 billion
    towards the development costs, just the development costs, of
    the JSF. All of the parties, in my judgment, have not only a
    stake, but a voice in the successful management of this
    program. The program is the largest dollar acquisition program
    in the defense history of our Nation. It will produce a single
    engine Strike Fighter that will be used by our three Services
    and our allies for the next 30 years, with a possible program
    exceeding well over 3,000 to 4,000 aircraft worldwide.
        Historically the United States and its allies have operated
    fighter and attack aircraft manufactured in their own
    countries. That will change with this program. The JSF is
    planned to replace the F-16, the A-10, the AV-8B, the F/A-18C/
    D, the British Sea Harrier, and the GR-7. It will likely
    replace other aircraft in countries, and I'm certain they'll
    testify to that effect when they take the stand.
        By 2030, the JSF and F-22 will represent 85 percent of the
    U.S. and allied tactical air power. Close collaboration
    therefore, is mutually beneficial because it promotes the
    interoperability, the joint training, joint learning, similar
    tactics, and growing service-to-service relationships that are
    vital in the conduct of coalition operations, and indeed the
    war on terrorism.
        Joint development of the JSF could also create efficiencies
    in the production of the aircraft, and greater control over the
    costs, to reduce the fiscal burden on each of the countries.
    The DOD has proposed cutting the second engine, as I said, and
    this would be an immediate turnabout from a contract in just
    late summer to continue this program of $2 billion plus. So
    this rapid turnaround is quite perplexing, and we wish to know
    clearly, among the factors to be considered in this committee,
    the extent to which you were consulted by the United States,
    the extent to which we allowed you to participate in evaluating
    the decision to stop the two engine program and go to the
    single engine.
        There are many in this room, far better than I, able to
    address the issues of, can we ourselves tolerate situation of a
    technical flaw in the engine design, what would we do if there
    were an across-the-board standdown of this aircraft were that
    to develop? Is the entire fleet in all eight nations to be
    stood down, or is it not more advisable to have a certain
    proportion of the worldwide fleet with a different engine in
    the event of that contingency? Then you have to look at the
    possibility that relying on a single engine design, one
    producer, could increase the costs over the life of the
    program, and whether in the absence of competition, you could
    control those costs?
        I shall put the balance of my statement in the record. I
    will yield now to my distinguished colleague, Senator
    Lieberman.
        [The prepared statement of Senator Warner follows:]

                   Prepared Statement by Senator John Warner

        The committee meets today to receive testimony from our
    international partners in the Joint Strike Fighter (JSF) program on the
    proposed termination of the F136 Alternate Engine Program.
        Lord Paul Drayson, Minister for Defence Procurement; and Sir Jock
    Stirrup, Chief of the Air Staff, will represent the United Kingdom on
    the first panel of today's hearing.
        On the second panel of this hearing, representing Australia will be
    Air Commodore John Harvey, Director General, New Air Combat Capability,
    Royal Australian Air Force; and Rear Admiral Raydon Gates, Head of the
    Australian Defence Staff in Washington. Representing Italy will be
    Lieutenant General Giuseppe Bernardis, Chief of the Department for
    Armament Programs, General Secretariate for Defence and National
    Armaments; and Major General Pasquale Preziosa, Defense and Defense
    Cooperation Attache, Embassy of Italy.
        Denmark, the Netherlands, Norway, and Turkey have submitted letters
    for the record in lieu of testimony here today. Their letters will be
    included in the record of this hearing.
        We welcome all of our witnesses and the written statements of other
    nations. Our longstanding alliance relationships are of immense value
    to the United States and are critical to addressing the common security
    challenges we face today and in the future.
        As the industrial base serving America's national requirements
    diminishes in size, the United States must become more reliant upon
    other nations to meet our requirements.
        The international partnership for the JSF is one of the largest and
    most important partnerships in contemporary military history. It
    includes eight nations in addition to the United States who have
    pledged $4.6 billion toward the development costs of the JSF. All of
    the partners have a stake and a voice in the management of this
    program.
        The JSF program is the largest dollar acquisition program in DOD
    history. It will produce a single engine strike-fighter that will be
    used by our three Services and our allies for the next 30 years, with
    the possible program of over 3,000 aircraft to the United States.
        Historically, the United States and its allies have operated
    fighter and attack aircraft manufactured by their own nations. That
    will change with the JSF. The JSF is planned to replace the F-16, A-10,
    AV-8B, F/A-18C/D, the British Sea Harrier, and GR-7. It will likely
    replace other aircraft as well. By 2030, the JSF and F-22 will
    represent 85 percent of U.S. and allied tactical air power.
        Close collaboration is mutually beneficial because it promotes
    interoperability, joint training, joint learning, similar tactics, and
    growing service-to-service relationships that are vital in the conduct
    of coalition operations.
        Joint development of the JSF should also create efficiencies and
    control costs for countries seeking to develop the next generation of
    fighter aircraft.
        As our witnesses are aware, the DOD has proposed cutting from the
    program the development of the F136 Alternate Engine. An immediate turn
    around on a contract that was signed just last year. This committee is
    closely examining the matter to determine whether or not that proposal
    is in the best interest of our national security and the JSF program.
        Among the factors we must consider are: What are the risks in
    relying on a single engine design? Could we find ourselves in a
    situation where a technical flaw in the engine design could preclude
    the capability to conduct combat operations on a broad scale? The other
    important factor, of course, is cost: Would relying on a single engine
    design reduce, or increase, costs over the life of the program? While
    the upfront cost of developing one engine is lower than the cost of
    developing two engines, experience has shown us that the lack of
    competition tends to drive up costs over the life of a major weapons
    system.

        Senator Lieberman. Thank you, Mr. Chairman. I join you in
    thanking our witnesses who've come some distance and I
    appreciate that you are here. When you were talking about the
    difficulties of the Senate schedule, for the first time, one of
    my favorite Mark Twain-ism's and Twain spent, what we in
    Connecticut believe were his most literary productive years in
    Hartford, Connecticut. He said famously about weather in New
    England, that if you don't like it, wait a moment it will
    change. That's the way it is with the Senate schedule, isn't
    it? If you don't like it, wait a minute, it will change. But
    thank you for changing with us as we try to accommodate to the
    schedule.
        I do thank you all for being here. I'm particularly
    impressed by the international representation and it speaks to
    the international nature of the JSF program, which is a most
    positive element of the program.
        We have a disagreement here, and I thanked the chairman for
    providing the opportunity to air this disagreement. This is a
    disagreement among not just allies but friends, and it's in
    that spirit that I certainly intend to go forward in expressing
    my point of view today, and after in questioning the witnesses
    who have been good enough to come before us.
        The fact is, that the United States, both in the
    administrative and legislative branches, wants the JSF to be
    the first of many future defense collaborations with our allies
    abroad. So, one of the tests of our ability to do that is to
    deal with disagreements in a way that is not ultimately
    divisive.
        We share some interests here, of course. We in the United
    States and all of our international partners want the
    production of the JSF to proceed in a timely and economic
    fashion. The goal of the JSF program is to produce after all,
    the most affordable, lethal, supportable, and survivable
    aircraft in the history of warfighting.
        It is our responsibility, as Members of Congress, to
    oversee the acquisitions process of major military weapons
    systems, and to make sure that they are developed with the best
    operational performance at the lowest possible cost.
        In that regard, it seems to me that President Bush's fiscal
    year 2007 budget request to cease funding for the alternate
    engine of the JSF program is a wise decision. I understand the
    opposition of those who will testify today and I look forward
    to the dialogue back and forth.
        I do want to say historically that this is short history,
    not long history, that this decision in some sense follows on a
    major decision made a few years back when the DOD decided to
    award the single production line to Lockheed Martin. There was
    then a lot of debate about the wisdom of the approach. I do
    want to cite a RAND study in April 2001, that concluded that
    the DOD would not recoup costs through establishing a second
    production line, in that case of course, for the airframe.
        It also concluded that a winner-take-all strategy would not
    push the losing company out of the fighter aircraft business
    and some of those same factors are at work here. I recognize
    that a great British company, a great global company, Rolls-
    Royce, has partnered with General Electric to produce the
    alternate engine and of course, we have deeply valued the
    special relationship that the U.S. has with the U.K. But it is
    my understanding and my belief, that Rolls-Royce will still
    remain an important contributor to the JSF's development in its
    role as a subcontractor to Pratt & Whitney on the vertical lift
    version of the JSF and furthermore, not directly Rolls-Royce,
    but in terms of international partnership, a U.K./U.S.
    partnership, the BAE Systems and Smiths Industries, two
    additionally great British companies, will work as significant
    subcontractors for Lockheed Martin.
        I'm going to argue today that the elimination of the
    alternate engine program actually applies the principles of
    competition to keep costs down. I know that we are going to
    hear the reverse argument today, that the only way to reduce
    the price--or one of the best ways to reduce the price is by
    retaining the alternate engine program, but I believe that
    significant competition on the JSF engine has already taken
    place. In three separate contests, the engines produced by
    Pratt & Whitney have emerged as the winner.
        Since government guidelines have determined that the
    primary engine and its alternate version must be
    interchangeable, I don't understand how much is to be gained
    from further competition between these two versions. I want to
    stress the primary engine, the facts will show, has
    outperformed its competitor, and is at least 18 months ahead in
    development, and those are very important factors for all
    nations involved in the JSF program. Given those facts, it
    seems to me not to be sensible to invest an additional $1.8
    billion by the DOD on administration numbers in the alternate
    engine program. That's $1.8 billion, that members of this
    committee know, and certainly people in the Pentagon do, is
    urgently needed and can be urgently spent in support of other
    very critically necessary acquisitions by the DOD.
        As I mentioned earlier, one of the most important goals of
    our partnership internationally, is to produce the most
    powerful aircraft, at the best possible price. As our level of
    expected JSF procurement decreases, it becomes less likely that
    we will recover the substantial upfront investment in the
    alternate engine. If funding for both engines continues, I fear
    that we will double the cost of all future upgrades and
    increase logistics costs.
        Let me say for the record, what I'm sure most, if not all
    of you know, Pratt & Whitney happens to be located in the State
    of Connecticut, which I represent in Congress. I'm not
    unmindful of that, but I truly believe that the facts argue for
    the recommendation that the administration and the DOD have
    made this year, and the fact this decision has to be viewed in
    a larger context.
        Senator McCain is the chairman of the Airland Subcommittee,
    I'm privileged to be the Ranking Democrat on that subcommittee.
    We've spent a lot of time in recent years on that subcommittee
    focusing on the skyrocketing costs of military acquisition
    programs. Viewed in the context of our increasingly resource-
    constrained budget and our inability to produce major weapons
    systems in the numbers that we believe we need, part of that is
    because money is going to the war in Iraq and Afghanistan, part
    of it is because of personnel costs.
        But one way to go at this and try to produce more major
    equipment systems needed by our military, high-tech ones, is to
    push hard to reduce the costs of acquisition of each system,
    and the people in the Pentagon are doing that. In that context,
    it seems to me that the DOD's difficult, but I would say
    ultimately a sensible decision to eliminate the alternate
    engine program for the JSF to keep it an affordable program, is
    the right decision.
        We not only promised our international partners a first
    class aircraft, but we promised to deliver the product at a
    reasonable price. I think it's in the interest of all of us
    that we keep our pledge to do that, and one good way is to
    stand by the administration and DOD's recommendation in this
    regard.
        Mr. Chairman, I thank you and I look forward to the
    witnesses' testimony.
        Chairman Warner. Thank you, Senator. We're very fortunate
    on this committee to have a very accomplished and distinguished
    aviator, Senator McCain.
        Senator McCain. I'd love to hear from the witnesses, Mr.
    Chairman, thank you.
        Chairman Warner. Thank you.
        Lord Drayson.

         STATEMENT OF LORD PAUL DRAYSON, MINISTER FOR DEFENCE
                      PROCUREMENT, UNITED KINGDOM

        Mr. Drayson. Thank you, Chairman. Mr. Chairman, Ranking
    Member Levin, and members of the committee, I'm grateful to
    have the opportunity this afternoon to set out the U.K.'s
    position on participation in the JSF program. I'm fortunate to
    have with me, Air Chief Marshal Sir Jock Stirrup, Chief of the
    Air Staff, and soon to be Chief of the Defence Staff.
        I know it is unusual for a member of Her Majesty's
    Government to offer testimony to the United States Senate, and
    I welcome the opportunity to do so here, to highlight the
    importance that the U.K. attaches to JSF. It's a key component
    of our future national military capability.
        I'm conscious that my invitation to testify before this
    committee stems from your desire to hear our views about the
    F136 engine. My government's position on this is
    straightforward. The F136 is a strategically important
    collaboration between our two defense sectors, which we agree
    is a crucial factor underpinning our wider defense
    relationship.
        Cancelling this program would not only be a blow to such
    cooperation, but could also damage the commercial and military
    robustness of the JSF program. This is of crucial strategic
    importance to the future defense of our two nations we believe.
    The F136 inserts an important competitive element to the JSF
    program by providing an alternative choice for the aircraft
    engine both at initial acquisition and importantly through-life
    with all the monetary savings that this will offer us both.
        There is also the potential growth capability that the F136
    offers as a new generation engine. For these reasons and given
    the importance of the project to Rolls-Royce, as the Minister
    responsible for the U.K. defence industrial base, I would still
    wish to see funding for F136 included in the DOD program.
        One of the findings of our recent defence industrial
    strategy has been the need to pay greater attention to
    minimizing the through-life costs of equipment. Given that as a
    rule of thumb, for every dollar spent in initial acquisition, a
    further $4 are spent subsequently on support and upgrades.
        We believe the F136 engine may lead to lower through-life
    costs and deliver the best outcome for both our warfighters and
    our taxpayers. To cancel this important collaborative engine
    program has significant commercial and industrial implications.
    We need to understand why the administration has made this
    decision.
        One of the reasons I am here this week is to discuss with
    the administration the business case behind their decision to
    cancel the F136 program. As a level one partner, we expect to
    be properly consulted on decisions of this magnitude. I shall
    be following this up with the administration this week.
        Of course, the F136 decision is only part of the wider JSF
    program, and this is why I am particularly grateful for the
    opportunity to provide evidence on this issue and the JSF
    program as a whole today. U.K. defence and security policy is
    rooted in the transatlantic alliance, at the heart of which is
    the uniquely close and enduring relationship between our two
    countries.
        Our unique friendship has its roots in a shared language
    and cultural heritage. But at its most fundamental level, this
    is a relationship founded on the rock of common values and
    forged in the fire of a shared determination to defend them. We
    in the U.K. are grateful for the role that the U.S. has played
    in the past--and continues to play now in defending civilized
    values and freedom, and we are proud that you count us as and
    trust us to be your closest ally.
        At present, our Armed Forces are working together in Iraq,
    Afghanistan, and the Balkans, within the North Atlantic Treaty
    Organization (NATO), and in coalition to bring stability to
    those troubled parts of the world, and the opportunity for the
    people who live there to gain control of their own destinies.
    We stand side-by-side against the terrorists who seek to attack
    our homelands and those of others as we have seen in the
    attacks on New York, the Pentagon, London, Madrid, Bali, and
    elsewhere.
        Our aim is to ensure that future generations of the U.K.
    and U.S. service men and women can continue to stand shoulder-
    to-shoulder in pursuit of common goals. Increasingly, we
    recognize that this will depend on access to common technology.
    The British public expect us to equip our warfighters with the
    very best.
        With the increasing complexity of technology and its
    growing importance to fighting power, the ability to share
    information and technology between our two countries is ever
    more vital. This is why the U.K. freely provides technology and
    support to the United States. This has been an area in which we
    have, with the administration, expended much effort over recent
    years. I'm grateful to the committee for the leadership,
    friendship, and support that you have shown in this regard.
        Notwithstanding the slowness of progress, which has
    disappointed many on both sides of the Atlantic, we remain
    committed to working closely with you and the administration to
    resolve this problem once and for all. With the JSF entering a
    key phase over the next 12 months, 2006 is a crunch year.
        A key element of the U.K.'s defence policy is to maintain
    credible, flexible, expeditionary combat power within striking
    range of an adversary. Our carrier strike program will do just
    that. It will include two new aircraft carriers, and crucially
    the JSF. It will ensure our military have the ability to launch
    air power from both land and sea, at a time and place of our
    choosing. This will maximize our political and military freedom
    of action, even when access basing and overflight may be
    uncertain.
        JSF will be the key to our precision strike capability and
    our ability to make significant contributions to future
    coalition operations. Our ability to identify and attack high
    value, time sensitive targets will depend upon JSF's
    combination of advanced sensors and low observability.
        Interoperability with our partners will be essential and
    will depend upon the aircraft being integrated, upgraded,
    operated, and sustained efficiently and effectively by the U.K.
    JSF is a transformational military capability using
    transformational collaborative acquisition. As a model for
    international collaboration, JSF is highly innovative.
        But as well as rewards, this innovation brings challenges.
    We're determined to meet those challenges, particularly as we
    approach the production, sustainment, and follow-on development
    phases of the project. We are working with the administration
    and other partner nations towards the signature at the end of
    this year of the Memorandum of Understanding (MOU) that will
    enable these phases. It will commit the U.K. to the whole life
    of the JSF program. We must, therefore, be sure and understand
    the nature and the balance of the obligations between our
    nations consistent with the principles of the agreements on JSF
    we have signed to date. We are not asking for anything new.
        Now I fully understand that there are excellent reasons, of
    course, to protect American defense technology. However, as a
    key ally standing shoulder-to-shoulder, we do expect you to
    understand how sensitive these technology transfer issues are
    for us.
        In December we published a Defence Industrial Strategy,
    which explicitly established as U.K. government policy the
    primacy of the requirements of our armed forces in all of our
    equipment decisions. It identifies the need to ensure we have
    what we term operational sovereignty over our equipment. Put
    more succinctly, in the case of JSF, this means being able to
    fly and fight the aircraft when and where we need to.
        We have identified a number of issues that we believe will
    give the U.K. assurance of the operational sovereignty we need
    to ensure the successful operation of the JSF by the Royal Air
    Force and the Royal Navy. We need to be able to integrate the
    JSF into the British operating environment and be confident
    that we can maintain, repair, and upgrade the U.K. fleet to
    meet the through-life needs of our forces.
        Through our level one status, we have embedded our firm
    national requirements for systems and weapons into the System
    Design and Development program. However, it is the through-life
    aspects of the program that must now come into focus. Whilst
    ensuring that we maintain maximum commonality and configuration
    control with the aircraft in service with U.S. forces,
    inevitably, there will be differences in configuration driven
    by the capability needs of the U.K. user to meet emerging
    threats. The route to satisfying these requirements needs to be
    taken into account at the outset of the production,
    sustainment, and follow-on development phase of the program.
        While recent history tells us that U.K. and U.S. forces
    usually fight together, we will need to be able to fly the JSF
    alongside other coalition allies too. There also may be
    occasions when we undertake operations on a national basis, as
    we did so effectively in Sierra Leone. This means that we need
    to be able to reconfigure the JSF weapon system to meet U.K.
    specific operational threats and scenarios. We need also to be
    able to meet U.K. and international legal requirements in
    having the aircraft and its systems certified for safe use.
        At one level, this reflects the need to be satisfied on the
    very real operational and value for money considerations. Many
    of the processes will be very similar to U.S. requirements, but
    they are not identical, and to achieve the level of confidence
    that certifying authorities will require, we must be able fully
    to understand the key characteristics of the JSF system to meet
    our duty of care to the brave young men and women in uniform
    who will fly and fight the aircraft.
        To support the U.K.'s aircraft, we expect to use Team JSF,
    led by Lockheed Martin. However, due to the unique
    understanding and record of U.K. industry supporting our
    services' aircraft, we expect that Team JSF would make best use
    of its U.K. industrial partners in the support and maintenance
    solutions for JSF. But I am explicitly not here to lobby for
    their commercial interests. I am here today to present a
    baseline of military requirements and so I do not rule out that
    some elements of this requirement will have to be met using
    U.K. government and service resources and personnel.
        The U.K. joined the JSF program at a very early stage. My
    task and that of my governmental colleagues, is to give the
    British armed forces the best we can. We have already invested
    $2 billion in the system development and demonstration (SDD)
    phase of the project, a very significant proportion of our
    total equipment budget. Our whole life financial commitment to
    JSF will be many times more. That is one reason we are the only
    level one partner on the program. It confers a particular
    partnership status in the JSF program.
        The U.K. contributes also to the success of the program.
    The JSF showcases the very best of British as well as American
    technology. For instance, precision production techniques and
    technology derived from our experienced short take-off and
    vertical landing (STOVL) aircraft flight control laws and the
    STOVL lift system, are key contributors to the success of the
    JSF program.
        The key point is that the flow of technology is a two-way
    street. Collectively I hope members of the committee can agree
    that it needs to stay that way. We are discussing the issues
    with the administration, and it would not be appropriate to get
    into the detail here. Our objective is to have resolved these
    issues as soon as possible, so we have the confidence to sign
    the MOU later this year.
        Let me state our bottom line. These issues are important to
    us because they enable us to make the judgment that the
    aircraft are fit to fight, and we can send our men and women
    into action in that knowledge. This decision has to be one for
    the U.K. The British government's responsibility to our armed
    forces and their families means that this judgment can only be
    made by the U.K.
        If we do not have the information and technology needed to
    make that decision, then I shall not be able to sign the MOU. I
    recognize the consequences that that would have on the U.K.'s
    continuing participation in the program, but let me be blunt.
    We have no reason to believe that our discussions with the
    administration will not be successful. But without the
    technology transfer to give us the confidence to deliver an
    aircraft fit to fight on our terms, we will not be able to buy
    these aircraft.
        I'm spelling this out because it is so important to make
    our intentions clear. I know the British can sometimes be
    accused of understatement. This is about ensuring that the
    investment of billions of U.K. tax dollars in the JSF program
    will deliver the capabilities that we need as your ally and as
    a sovereign nation. It's about reflecting in the JSF project
    the trust and a mutual interdependence that characterizes our
    deep cooperation in each other.
        Equally sensitive areas of our bilateral joint endeavors
    demonstrate this. It is not about industrial politics. As I
    said, our dialogue with the administration on these issues
    continues. I am optimistic that we can find a way through that
    will meet our requirements for sovereign capability, while
    having in place a rigorous control regime that protects your
    national security requirements. I say this because it seems to
    me that it must if we are to live up to your recently published
    Quadrennial Defense Review (QDR), which highlights the
    closeness of our military relationship, and states it as a
    ``model for the breadth and depth of cooperation that the
    United States seeks to foster with allies and partners around
    the world.'' I say it because the evidence that we can be
    trusted to do so seems to me to be irrefutable.
        For example, we already share extremely sensitive data and
    information in other operational contexts. Today, right now,
    the lives of U.S. forces depend on information and technology
    provided by the U.K. We have a formal General Security of
    Information Agreement on a government-to-government basis. It
    works and it has teeth.
        To the extent that industry would need to be involved,
    British companies are well use to operating in compartmented
    and firewalled environments to protect classified information,
    and this is underpinned by longstanding agreements that work,
    are inspected by your security people, and have protected your
    and our vital interests for many years.
        We are approaching important decisions on JSF, where we
    will need to be assured that we will have operational
    sovereignty that we require. I hope, Mr. Chairman, that we can
    look forward to the support of your committee.
        Mr. Chairman, with you permission I would like to ask Air
    Chief Marshal Stirrup to set out his military perspective of
    our requirements.
        Chairman Warner. Permission granted.
        Mr. Drayson. Thank you, sir.
        Chairman Warner. We welcome you.

     STATEMENT OF SIR JOCK STIRRUP, CHIEF OF THE AIR STAFF, UNITED
                                KINGDOM

        Mr. Stirrup. Mr. Chairman, Senator Lieberman, members of
    the committee, I'm delighted to have this opportunity to offer
    the military perspective on the U.K.'s participation in the JSF
    program. The Minister for Defence Procurement has set out the
    strategic context and outlined the importance of JSF to our
    future force structure, to our military capability, and to our
    contribution to coalition operations with the United States and
    other allies.
        Quite simply, the JSF is central to our plans for
    projecting offensive military power over the coming decades.
    So, it is crucial that our modalities for delivering and
    sustaining this capability are robust and enduring. Crucial I
    think, for both of us. Our two nations have long had, and will
    continue to maintain, an extremely close military relationship.
    It's brought our armed forces together in a variety of
    operations throughout the last century, and most recently of
    course, in Iraq and Afghanistan.
        Our men and women have fought alongside one another.
    They've worked as close knit teams in a range of operational
    theaters, and they forge the bonds of mutual trust and respect
    that are essential if we are to work together seamlessly at all
    levels as a common force for good. Nowhere, I think, is this
    more apparent than in the domain of air power.
        Our people and our systems need to be able to mesh
    instantly and effortlessly, if we are to deliver the air power
    effects on which the success of our operations and the safety
    of our people depend and our current track record in that
    regard is evident. Our Harrier GR-7s in Afghanistan, for
    example, have played a decisive role and they've saved the
    lives of many brave young people on the ground, including U.S.
    military personnel. That's exactly how it should be. That's how
    coalitions are supposed to function. We need to be able to rely
    on one another implicitly, and we work very hard at the
    military level to ensure that we can.
        General Moseley and I have an extensive program that brings
    our people together in a range of endeavors to sustain and
    build our common understanding, and we developed that innate
    understanding of one another's strengths and weaknesses by
    working and exercising together at every level. We ensure that
    we are joined in both the conceptual and the doctrinal aspects
    of warfare and that we understand the ways in which we both
    operate. We embed people in each other's organizations at every
    level on both sides of the Atlantic. We have a highly
    successful exchange officer program and we continue to see the
    fruits of this effort on operations.
        But there are two critical aspects to the Harrier success
    in Afghanistan. First, of course, they are able to link into
    and operate with U.S. systems and U.S. people, and this
    interoperability, this capacity to work to a common
    understanding on the basis of shared knowledge, is and will
    remain a sine qua non of any effect coalition.
        But second and equally important, the Harriers must link
    into the wider U.K. system. They must be able to use the
    appropriate sensors and weapons. They must be able to integrate
    and use information from a variety of our own sources, and they
    must be able to rely on our expeditionary sustainment system
    and processes. All the multinational interoperability in the
    world would be of no avail if the Harriers could not fit into
    the U.K. military construct.
        Unfortunately, of course, we cannot design all those
    characteristics into a system from the outset, because that
    would require us to have certain knowledge of the future. We do
    our best to estimate the challenges and threats that face us,
    but as we all know, the world is a complex and dynamic place.
    If there's one thing that we can be sure of, it's that
    something will always come along that will surprise us.
        We have to be able to deal with what we did not or could
    not foresee. With this in mind, there are two key attributes
    that I consider vital to our future effectiveness: agility and
    adaptability. Agility in this context is our ability to create
    rapid effect across the spectrum of operations in a range of
    environments and circumstances.
        By adaptability, I mean our ability to respond in an
    acceptable time scale to new challenges and to seize new
    opportunities. The one allows us to create precise effects, at
    the right place and time. The other keeps us relevant and
    effective in a changing world. So, we must put these attributes
    at the heart of our carrier strike capability, and of the JSF
    around which it is built. If we do not, we will fail to achieve
    our goal. We will put at risk our ability to sustain an
    expeditionary capability that allows us to apply military and
    diplomatic pressure at an early stage of a crisis, that allows
    us to deliver strategic effect quickly and economically, and
    that allows us to minimize the constraints of basing and
    overflight issues.
        So procuring the right air system to match these
    requirements has long been uppermost in our minds. It's the
    reason for our longstanding involvement in the JSF program, and
    I'm delighted that we've been level one partners in this
    program since 2001. From the outset, we have invested
    substantially in the system design and development phase and we
    have, I believe, helped to influence and inform much of the
    critical work that has been completed to date. We've clearly
    demonstrated both our commitment to the program and our ability
    to make a significant and long-lasting contribution in many
    critical areas.
        The lift fan expertise underpinning the vertical lift
    capability of the STOVL variant of JSF is one such example. But
    as the committee will be aware, propulsion for STOVL aircraft
    is a continual challenge. We both encountered problems with AV-
    8B and Harrier GR-7 engine performance in demanding
    environments. So we need to be sure that we have an affordable
    and technically feasible growth path for the JSF engine.
        I know that all of those U.K. personnel embedded within the
    program from both the military and industry will continue to
    give their best in helping to solve the many complex challenges
    that remain as we move towards the production, sustainment, and
    follow-on development MOU signature later this year. But like
    the Harrier, our JSF will have to face two ways. Procuring a
    common system will obviously give us many interoperability
    benefits and I warmly welcome that.
        But JSF will also have to fit into the wider U.K. military
    network. It will have to work with and integrate a range of
    U.K. systems. We shall need to be able to sustain it
    effectively in a range of expeditionary environments, not least
    onboard ship. We shall need the agility and adaptability that
    we look for from our other systems. That's a requirement that,
    in my view, the program is not yet delivering.
        From a military perspective, this is something we need to
    address urgently. If we are unable to adapt and modify JSF to
    meet the unforeseen demands of an uncertain future, if we
    cannot integrate JSF into our wider systems and processes, if
    we cannot bring together sensors, weapons, and information in a
    true network approach to operations, then we will seriously
    diminish our offensive operational capability for years to
    come. We will put at unnecessary risk the lives of our young
    men and women, both British and American.
        I hope, Mr. Chairman, that you will agree that this is
    something that deserves serious attention. Thank you very much.
        Mr. Drayson. Mr. Chairman, I hope you and your committee
    now understand our position with regard to the F136 engine and
    more widely, on the JSF program. I look for your support in
    achieving three things: one, achieving the level of operational
    sovereignty that we expect; two, involvement in the decision
    making process as the only level one partner; and three, two-
    way sharing of information.
        I have been direct. But I must emphasize, we are determined
    to make a success of JSF. We were clear on the operational
    reasons for joining this program. They have not changed. We
    still want and need this aircraft.
        Thank you, Chairman.
        Chairman Warner. We thank you. I had certain expectations
    when I made the decision in consultation with my distinguished
    ranking member to have these hearings. But I must say, I'm
    greatly impressed with your statements and the breadth of
    participation of the witnesses that will follow. It shows the
    depth of sincerity of the partners in this program to make it
    work. This committee will take into careful consideration all
    of your views. I noted that you indicated, Lord Drayson, that
    you were going to remain in Washington for the purpose of
    consultation with our government, mainly the DOD. I welcome
    that.
        I welcome it strongly and I'd like to offer at this time
    the option to you and to all other nations participating in
    this program to examine the scope of today's hearing with two
    panels, and tomorrow's hearing, and to supplement the record
    with such additional views, as you so desire. Because
    particularly, if you're going to do further consultation with
    our government, I'm certain--I'm hopeful that will be fruitful
    in such a way that you will be free to communicate to the
    committee your impressions and such assurances as you received,
    and the degree to which those assurances affect this specific
    decision of the one engine or two engine options.
        Just a moment on history, I love history and spend a lot of
    time on it, and I'm old enough to have remembered World War II
    quite well. Although I was just a lad of 17-18 when I was in
    the tail end of it, and in a consequential way, getting
    trained. But the relationship between Roosevelt and Churchill
    will always stand as a monumental achievement between two
    nations in the face of adversity.
        Today, I think the relationship between our President and
    your Prime Minister closely parallel that relationship in their
    commitments and resolve to deal firmly with this war on
    terrorism. So I think all of us that review this situation,
    should bear those historical precedents.
        Are you in a position, Lord Drayson, to tell us the degree
    to which there was some consultation, or absent consultation,
    and what you expected by way of consultation when you went into
    this agreement? Perhaps, what did you expect when you went into
    this agreement? Great Britain joined as level one partners,
    with regard to the consultation process and thus far, has that
    measured up to your expectations when you went in?
        Mr. Drayson. Chairman, as a level one partner on this
    program, we do expect to be consulted on major issues relating
    to the program. On the decision relating to the F136 engine, we
    were not consulted.
        Chairman Warner. That's clear. Are you at liberty to
    discuss with us the participation of your distinguished Prime
    Minister? My understanding is that he had communications with
    our President, and to what extent can that exchange of views
    between the two be a part of this record?
        Mr. Drayson. The Prime Minister is in regular contact with
    the President on a range of issues and I don't think it's
    appropriate for me to comment on those. However I believe I
    have made absolutely clear the position of Her Majesty's
    Government relating to this matter.
        Chairman Warner. I respect that. So there's complete unity
    between the views that you've expressed today, and that of Her
    Majesty's Government and the Prime Minister?
        Mr. Drayson. Absolutely, Chairman.
        Chairman Warner. Now, I would put this question to the
    panel and you can answer it as best you can, bearing in mind
    that tomorrow we will have a second panel that will again,
    participation from your country and others, be in regard to the
    technical aspects of this engine. Both the manufacturers will
    be represented with their top engineers and other staff. But
    what is your understanding, either Sir Stirrup, the Chief of
    Staff of Air, or yourself, that there are potential differences
    anticipated in the thrust performance between the two engines?
    That is say, the Pratt and the General Electric Rolls, and that
    the likelihood that the second engine referred to as General
    Electric Rolls, understandably coming several years behind the
    initial development of the first, will have the benefit of
    incorporating new technology and therefore would have a thrust
    quotient different and advantageous to the future operations of
    this aircraft?
        Mr. Drayson. Chairman, perhaps if I could just cover the
    key principles and then ask the Air Chief Marshal to elaborate.
    Really, we believe there are two aspects to this. One, is the
    advantage that is provided to the participants in the program
    by having two engines, in terms of being able to exert
    competitive pressure through that process. In the U.K., I think
    we have a smaller defence budget than the United States, and we
    have learned the real importance of recognizing the effect that
    a lack of competition can have on the future value for money of
    programs. One gives up that opportunity at one's peril, we
    believe. So maintaining two engines, we do believe, will
    deliver significant advantages in terms of value for money.
        But we also believe there are certain aspects relating to
    technology advantage. Senator Lieberman, you mentioned our
    objective that we have to have the most powerful aircraft, as
    you said at the best possible price. We believe that the F136
    engine, being a later generation of technology, provides the
    potential to generate a more powerful engine, which while not
    having necessarily an effect during the take-off and landing in
    STOVL mode, in level flight, it could well offer performance
    advantages, which may be important in combat.
        Chairman Warner. Might I add fuel savings, if you'd address
    that too, Air Marshal. I understood that there could be, given
    that the second engine would be somewhat more modern, a greater
    fuel efficiency.
        Mr. Stirrup. Mr. Chairman, thank you. My understanding
    certainly is that given the later development of the engine and
    the more modern technologies, there may be opportunities for
    greater thrust growth and indeed, the sorts of efficiencies
    that you mentioned. Of course as a pilot, my view is you can
    never have too much thrust. But a greater concern for me is the
    through-life cost of support of these engines, because that is
    the thing that tends to hamper us most. It's not just an issue
    of cost, it's also a question of logistic footprint, the degree
    of airlift that is required to support expedition operations.
    So, this is a mammoth issue and that's the one that is of most
    importance to me.
        The Minister has already outlined the importance of
    competitive pressure in driving towards that particular end. I
    think the only thing that I would say in addition, is that we
    have had, and have relationships with all the companies that
    are engaged in this particular debate, good relationships with
    all of them. They are great companies, but I would never bet my
    pension on promises from any of them. I would want to see
    performance actually demonstrated.
        Chairman Warner. I quite understand. Why don't you have a
    few questions, colleagues, and I'll come back.
        Senator Lieberman. Thanks very much, Mr. Chairman. Lord
    Drayson, Sir Stirrup, thanks for excellent opening statements.
    I want to say to you, Lord Drayson, that as I listen to you
    speaking about the problems with technology transfer, I'm very
    sympathetic. I've always been a strong supporter of a two-way
    street on these programs with our allies. I think the concerns
    you've stated about technology transfer are important, and are
    important for us to resolve, and I personally--and I know the
    committee under Senator Warner, looks forward to receiving
    positive reports on the negotiations that you are having of the
    production MOU.
        I thought the three points that you made at the end of your
    statement were important, too. But I must say respectfully, I
    don't believe that the alternate engine issue is inextricably
    linked to the technology transfer issue. In other words, I
    think it is a separate question. On that, I continue to be
    unconvinced that it's in any of our interests to build these
    two engines.
        I do want to say, that because I do think the two-way
    street is important, I want to stress what I mentioned at the
    outset, that Rolls-Royce will remain, assuming that the
    alternate engine program is terminated, a subcontractor to
    Pratt & Whitney on the vertical lift version of the JSF. That's
    by my understanding, a $1.2 billion contract and over $6
    billion in estimated sales. BAE and Smiths Industries, two more
    great British companies, also involved as subcontractors to
    Lockheed Martin on other components of JSF development, these
    two companies, by my understanding, will receive approximately
    $4 billion for their work. So that it looks to me like the
    British companies at this point stand to gain $5.2 billion in
    contract money, and approximately $6 billion in future sales.
    So isn't it true, therefore, that just on the involvement of
    U.K. companies that there's a pretty good amount of sharing
    going on and involvement by the U.K. companies?
        Mr. Drayson. Senator, I appreciate the comments you made
    relating to technology transfer and note the points you made in
    terms of the nature of the F136 decision, compared to these
    technology transfer issues. However, relating to the share of
    work, I would make a number of points.
        First, that the workshare on this program is completed. On
    this basis the best athlete wins. The companies that get the
    work on the program are the companies who are best at doing it
    for all participants within the program.
        Second, that our numbers are--and I will be happy, Mr.
    Chairman, to write to the committee and provide you with the
    detail of our numbers. Our numbers show that effectively this
    is a situation at present where we are in balance. Where the
    amount of investment, which we are making in the program, is
    broadly speaking, equal to the return which British companies
    are getting at this stage. Not the numbers which you referred
    to, Senator Lieberman, but I will be very happy to write to the
    committee and provide our numbers.
        [The information referred to follows:]

        Senator Lieberman. I would welcome that and are we on the
    same page with regard to the British government and the
    government's investment in the JSF program, which I understand
    to be $2 billion?
        Mr. Drayson. That is correct.
        Senator Lieberman. So that you would say that in the $5.2
    billion, that I am overstating----
        Mr. Drayson. Yes. Our understanding is that we would be
    receiving approximately $2 billion.
        Senator Lieberman. I agree with what you said, these are
    not gifts. In other words, the selection of the Rolls-Royce to
    do some of the work on the vertical lift version,
    subcontracting it to Pratt & Whitney is made on a basis of
    merits seems to be--and Smiths Industries, but my broader point
    here, is that is exactly what's happened, though I know it's an
    unpleasant result from the U.K. side with regard to the engine
    decision, that Pratt & Whitney has won the competitions thus
    far, and that we are facing an economic problem here on this
    side which affects, as I mentioned in my opening statement, our
    general ability to afford to acquire the military systems we
    need.
        Let me ask this question. At this point, I would say it's
    uncertain whether the U.S. Government will recover the money
    invested in the JSF alternate engine. If the recommendation of
    the administration, the Pentagon, to terminate the alternate
    engine program is overturned, would the U.K. be willing to help
    fund the budget shortfall to develop the F136 alternate engine?
        Mr. Drayson. Senator, there is no specific element relating
    to the engine in the British commitment to this program. Our
    commitment of $2 billion to the SDD phase of the program was on
    the basis of there being a two engine approach to it. There
    isn't, therefore, an element specifically related to the engine
    within it. I would stress that our interest in the two engine
    approach is our belief that having a two engine approach will
    drive improved value for money for all parties and it will
    provide a competitive element through this process, which will
    drive down the acquisition costs and the through-life costs.
        I think the experience that both of our countries have had
    relating to aircraft engines over the years highlights the very
    important issues which we need to learn from. Therefore, we
    believe it really is a key pillar of the JSF program, which
    emphasizes the affordability. The fact that this is a program,
    which as you say Senator Lieberman, expects to be producing
    more than 3,000 aircraft only strengthens the point.
        Senator Lieberman. Right.
        Mr. Drayson. One would imagine that this is a program which
    would be able to sustain a two engine approach.
        Senator Lieberman. Let me mention in that regard, that this
    is not a unique decision that the Pentagon has made. General
    Electric is the prime contractor in the alternate engine
    partnering with Rolls-Royce.
        I do want to say, in terms of defense industrial base, that
    the fact is that General Electric is today the world's largest
    aircraft engine manufacturer. By the last look I had, enjoying
    about one half of the world's aircraft engine market. But
    there's an interesting decision that we've made, which affects
    General Electric and not Rolls-Royce, which is General Electric
    will produce 4,000 fighter engines for the FA-18 without any
    competition. So, this decision to have a single engine contract
    for the JSF has some precedent, and if I'm not mistaken and you
    may correct me, that some of the great British air programs
    like the Harrier, or the Tornados, Euro Fighters are in fact
    single engine programs?
        Mr. Drayson. Yes Senator, that is correct. There are
    precedents, as you've mentioned, of single engine programs both
    for British fighters and for the American one that you
    mentioned. However, last summer a decision was taken to go for
    it on a two engine approach. My point really, is that given
    that we have the option to go forward on a two engine approach,
    we really need to understand the business case. Whereby, it
    makes sense to change that strategy and go for a single engine
    approach, because of the lessons which we have learned. In the
    past, many programs in our experience in the U.K., having a
    smaller budget, we have been faced with making hard decisions
    where we haven't been able to have the choice, which we would
    have otherwise like to have had. We've had to manage that, and
    we have learned how to do it successfully in partnership. I am
    not saying that a single approach cannot be managed well.
        I am saying, in a situation where we are talking about more
    than 3,000 aircraft, is this not an approach where the two
    engine supply strategy is not just feasible, but is actually in
    all of our interests.
        Senator Lieberman. What I believe--and we'll hear tomorrow
    morning what the Pentagon is saying to us, notwithstanding the
    number of planes that will be purchased under this JSF program,
    but considering the other considerable pressures on the
    acquisition budget at the Pentagon, that this is one where they
    don't believe it's the sensible choice to go for the second
    engine. If there were limitless resources, obviously it would
    always be a good thing to do. But I think that the savings that
    they've identified are considerable.
        The Pratt engine has done very well in all of the
    evaluations that have been done, and even with regard to the
    thrust factor that we talked about. I appreciated, Lord
    Drayson, what you said, because of the particular construction
    and unique characteristics the ability for that extra thrust
    factor to be used in the vertical lift is going to be
    questionable, and the potential to use it to have it once in
    the air is potential. Again, I would say is it worth the extra
    money, that we have a lot of very urgent uses for--to put it in
    there just for the potential of a possible extra thrust factor
    in the air.
        I suppose in the fairness of exploring all possibilities,
    Lord Drayson, I would ask you this, if in light of your support
    for competition here, would you consider on behalf of the U.K.,
    buying a Pratt & Whitney engine for the JSF aircraft that you
    purchase?
        Mr. Drayson. We have set out in our defence industrial
    strategy, Senator, that we put the defence needs of our armed
    forces first. So, we would look at that decision in the context
    of what our forces need and we would make a decision on that
    basis.
        Senator Lieberman. Thank you. Thank you, both. Thanks, Mr.
    Chairman. My time is beyond up.
        Chairman Warner. Thank you. For the benefit of the
    committee and our witnesses, Senator McCain has another
    engagement, therefore he will submit questions for the record
    and we will send them to you promptly. Senator Kennedy,
    likewise, had hoped to be here. But he's engaged before another
    committee, and he will submit his statement and questions. My
    understanding is he's highly in support of--for the General
    Electric Rolls concept of the two engines. We hope to close out
    this record by March 17, so that gives you some time within
    which to answer.
        [The prepared statement of Senator Kennedy follows:]

                Prepared Statement by Senator Edward M. Kennedy

        Mr. Chairman, I commend you for holding this hearing to review the
    DOD's decision to cancel completion for the JSF. The DOD says the
    decisions will achieve savings of $1.8 billion over the next 5 years,
    but estimates suggest that the savings from competition could be as
    much as ten times that amount. So the economics of the decision are far
    from clear.
        Annual costs are important, but we also need to assess the overall
    value of the engine program and the policy implications of its
    cancellation. The life cycle costs to support these engines are well in
    excess of $50 billion, and some estimates run upwards of $100 billion.
    It's hard to imagine we would support a $50 or $100 billion program
    without competition.
        I take issue with a number of points in the Pentagon's analysis in
    support of the cancellation decision. Our experience from the ``Great
    Engine War'' for F-15 and F-16 engines shows that competition brings
    real value to military in terms of reliability and improved
    performance, and to the Nation in terms of overall savings.
        This decision also raises other questions about the viability of
    the industrial base. The JSF will be the largest acquisition of fighter
    aircraft for the future. It is designed with the needs of all four
    Services in mind. No other program will result in such a sizable demand
    for large military aircraft engines over such a long period of time.
        If we cancel the competition, we are essentially creating a winner-
    take-all monopoly, not just for the JSF, but for any future fighter
    aircraft engine. Over time, we'll be reducing our industrial base to a
    single supplier. We need to consider the long-term effects on the
    industry and our national security, not just the $1.8 billion that will
    be saved over the next 5 years. We need to reverse this shortsighted
    decision--the sooner the better.

        Chairman Warner. A question to the Air Marshal: I mentioned
    in my opening statement reference to standdowns. For those that
    are following the hearing that might not have a total
    familiarity, it's when there is a malperformance of an engine
    and in the interest of safety, not only to the aviators, but
    all in the proximity of the operation of an aircraft, those
    planes are ordered to be stood down until the engineers and
    others determine what the fault may be, and how best to correct
    it.
        Would you address that issue? Not only from the standpoint
    of the engineering, but also, if there's but one engine in the
    entire worldwide fleet, certainly among the eight partners,
    does that pose a problem, Air Marshal?
        Mr. Stirrup. Mr. Chairman, it certainly does, and we have
    experienced exactly that situation in the Royal Air Force,
    where there have been technical issues with certain engines and
    for a period of time those engines have been unavailable and
    therefore, since our approach----
        Chairman Warner. Excuse me, the engines on them--you mean,
    the aircraft was unavailable?
        Mr. Stirrup. The engines were unavailable and therefore, of
    course----
        Chairman Warner. Oh, they didn't work in the aircraft?
        Mr. Stirrup. In the aircraft, yes. That has caused us some
    serious difficulties in the past. There is no doubt about it.
    Of course, the larger the size of the fleet, the larger the
    proportion of your total capability that is tied up in one
    particular resource, then the more the impact is likely to be.
        Chairman Warner. That's true. One of my colleagues asked a
    very basic question, he's quite interested in these hearings.
    He said, if you put the Pratt & Whitney engine in an aircraft,
    and you're somewhere in the world where there's not a spare
    Pratt & Whitney engine, and the second engine, i.e. the General
    Electric Rolls, is available, could you pull the Pratt out and
    replace it with the General Electric Rolls engine? Is it one-
    size-fits-all? The other one tucked right in, and away she
    goes. What's the interchangeability between the two engines? In
    terms of one being substituted for the other in the same
    airframe?
        Mr. Stirrup. Mr. Chairman, I don't have the technical data
    to be able to answer that question. But what I would say, if I
    may, is that that, for me, isn't the issue. The issue is, if we
    have Pratt engines, they better be supportable wherever we are,
    and there better be spare Pratt engines wherever we are.
    Otherwise, we cannot operate effectively on an expeditionary
    basis. So, whichever company supplies our engines, they need to
    be able to support them wherever and whenever we need them.
        Chairman Warner. I think that is a--as you used a phrase
    and I understood it, sine qua non. That is the sine qua non of
    any aircraft and its ability to be fully maintained wherever it
    operates.
        At this point in time, I must suspend this first panel
    because I want to accord the opportunity to the second panel
    and we're about to start a considerable vote. Votarama, is what
    we call it.
        This is a document submitted by Pratt & Whitney. Tomorrow
    I'm sure they will submit it for the record, but it reflects--
    it's called a U.K. Investment, U.K. Payback. Lord Drayson,
    would you have an opportunity to put in the record your
    interpretation of this, and would you reflect on what you
    believe is the accuracy, or inaccuracy, of this representation?
        Mr. Drayson. I'd be very happy to do that, Mr. Chairman.
        [Below is the Pratt & Whitney document. Please refer to the
    U.K.'s response to Senator Lieberman regarding Chairman
    Warner's request on previous pages.]
        [The information referred to follows:]

        Chairman Warner. Fine, and I assume this entire document
    will be made available tomorrow, such that you can have an
    opportunity to address other parts of it.
        Thank you very much. I was greatly impressed by your
    statements. You've served your nation well.
        Mr. Drayson. Thank you, sir.
        Senator Lieberman. Thank you, both. You didn't convince me
    on the engine question, but I have great admiration for both of
    you, and great devotion to our alliance. Thank you.
        Chairman Warner. You have an open mind.
        Senator Lieberman. Always open mind. Unconvinced at this
    moment.
        Chairman Warner. Thank you. If the second panel would
    kindly proceed towards the dais.
        On the second panel of this hearing, representing
    Australia, will be Air Commodore John Harvey, Director General,
    New Air Combat Capability, Royal Australian Air Force; and Rear
    Admiral Raydon W. Gates, Head of the Australian Defence Staff
    in Washington. Representing Italy, will be Lieutenant General
    Giuseppe Bernardis, Chief of the Department of Armament
    Programs, General Secretary for Defence and National Armaments;
    and Major General Pasquale Preziosa, Defense and Defense
    Cooperation Attache, Italy.
        Gentleman, how should we proceed? I expect Italy has a
    little seniority by virtue of its several 1,000 year history.
    [Laughter]
        Mr. Gates. We are but a young nation.
        Chairman Warner. You're proud of it, too. So, may we have
    our distinguished witnesses from Italy lead off?

     STATEMENT OF LIEUTENANT GENERAL GIUSEPPE BERNARDIS, CHIEF OF
    DEPARTMENT FOR ARMAMENT PROGRAMS, SECRETARIATE FOR DEFENCE AND
                       NATIONAL ARMAMENTS, ITALY

        Mr. Bernardis. Thank you, Mr. Chairman.
        Chairman Warner. Your full statements will be admitted into
    the record.
        Mr. Bernardis. Thank you, sir. Honorable Mr. Chairman and
    Senator Lieberman, let me take the opportunity to thank you and
    the committee for giving Italy a chance to speak about this
    important matter, and for taking the time to hear an opinion
    from a staunch ally and a determined JSF partner, that invested
    more than $1 billion in the phase.
        Italy believes that the second engine issue has two
    different dimensions, the operational, programmatic and the
    industrial one. For the first one, Italy believes that having a
    second engine may be an important addressing technical factor.
    But it is also a programmatic addressing factor, if there are
    enough resources, or if the development of the second engine
    can be completed without delays and cost increases to the
    overall program.
        As far as the industrial dimension is concerned, Italy
    thinks that this should be a U.S. decision only, and the
    Italian Ministry of Defence will adhere to it. Presently, Italy
    doesn't have an official propulsion system acquisition strategy
    determined yet for the JSF, since we are still evaluating
    different alternatives and we are engaged to a dual fleet
    acquisition program, both for STOVL and conventional take-off
    engines for the Navy and the Air Force. But we can affirm, that
    if the second engine can in any way jeopardize the overall
    integrity of the program, and can add threats to its costs and
    schedule, and threaten the overall program affordability, then
    we have a strong concern.
        As far as the overall JSF program is concerned, Italy
    considers our participation to the program so far, a success.
    We believe the JSF has a very solid technical foundation. Even
    if we recognized that some issues still can arise in the
    future, we have the utmost confidence in the JSF program
    leadership, and in Lockheed Martin's managing, and will manage
    the execution of the program.
        We hope affordability will remain one of the most important
    pillars of the program, because that's where we see possible
    future threats to the program itself. The stability of the
    program, in our opinion, relies on consistent budget allocation
    and a consistent number of assets to be produced, operated, and
    sustained worldwide.
        Industrially speaking, provided that the agreement is in
    place now will come into effect, we are content with the
    overall involvement of the Italian industries in the program,
    even if there is still room for the improvement and more could
    be done, especially in terms of technology transfer, and we
    have to obtain involvement of our niche industry in
    strategically important areas.
        The negotiation for the production sustainment and follow-
    on development that Italy is facing now is a very important
    commitment for the next 14 plus years, and we are confident
    that Italy will be able to join the next phase of the program,
    and the affordability as I said before, is a key parameter for
    the decision.
        This concludes my segment and I am ready for follow-up
    questions.
        Chairman Warner. Thank you, General. Would you have further
    comments?
        Mr. Preziosa. No thanks, Mr. Chairman.
        Chairman Warner. Thank you, very much. Australia.

    STATEMENT OF REAR ADMIRAL RAYDON W. GATES AO, CSM, HEAD OF THE
            AUSTRALIAN DEFENCE STAFF (WASHINGTON), AUSTRALIA

        Mr. Gates. Thank you, Mr. Chairman. Senator Warner and
    Senator Lieberman. It is a great honor to represent my
    government and accept your invitation to attend and present to
    your committee today. I am Rear Admiral Raydon Gates, I'm Head
    of the Australian Defence Staff here in Washington, and with me
    is Air Commodore John Harvey, Director General of the New Air
    Combat Capability Project, and he's based in Canberra
    Australia.
        Australia and the United States have a long and close
    relationship based on our shared values and belief. We have
    stood shoulder-to-shoulder in every major conflict in this and
    the previous century. As I speak, as you're aware, both our
    countries' men and women are fighting side-by-side in both Iraq
    and Afghanistan today.
        With this strength of this relationship, Australia has made
    a number of important strategic decisions designed to enhance
    our capacity to be an effective coalition partner with the
    United States. The most significant of these is our decision to
    join as a partner in the JSF program.
        The JSF program is of immense importance to Australia. It
    will be our largest ever defence acquisition and will represent
    a major element of our defence capability for a period of 30
    years or more. As such, the JSF will be a major part of our
    ability to defend Australia and to contribute to further
    coalition operations.
        I would like to congratulate the United States DOD and the
    JSF project office on progress on the project to date, and to
    the extent to which they have integrated the eight
    international partners into the program.
        You have asked for a response to the following three issues
    in relationship to the program: our assessment of the
    desirability of developing an alternate engine; whether and how
    the Australian Government was consulted regarding the United
    States DOD proposal; and any other matter relating to
    international cooperation on the JSF.
        In terms of developing an alternate engine for the JSF,
    Australia sees potential benefits in terms of cost competition,
    technological development, and operational flexibility. That
    said, our highest priority for the JSF program is to achieve
    its cost schedule and capability targets.
        We would not want to see funding for the alternate engine
    threaten those targets, and we would not propose making a
    contribution to retain the development of the alternate engine.
        Affordability is a key project goal, and essential for us
    to acquire the number of aircraft we need. Schedule is
    critical, because we need to replace our aging F-111 and F/A-18
    aircraft. Should the United States Services decide that
    withdrawing funding support for the F136 engine is the only way
    to preserve current JSF schedule capability and cost, then we
    understand that decision.
        If there is to be a single engine, however, it will be
    essential for the United States Government to maintain pressure
    on Pratt & Whitney to ensure their single source supplier
    position resulting does not lead to cost increase, both in
    terms of production and sustainment. In fact, we would look to
    see real cost savings as a result of increased production
    numbers and simplified support arrangements. We would also look
    to the United States Government to ensure Pratt & Whitney make
    the program schedule requirements, and not just work to
    optimize their own outcomes.
        Before I outline the consultation of the alternate engine
    in particular, I thought it might be helpful to outline our
    view on the principles for consultation in the JSF program
    generally. As a partnered nation, we take a close interest in
    decisions that would affect program costs, schedule, and
    capability, as they would have a direct impact on the
    capability that Australia wants from the program.
        We also pay close attention to the issues that have a
    significant impact on Australian industry involvement, as we
    aim to become an integral part of the global supply chain and
    support base for the aircraft.
        Were an aspect of the program that has significant
    Australian industry participation to be considered for change,
    we would wish to have visibility of and participation in the
    decisionmaking. To achieve our aims as a partner we need, and
    to date have received, ongoing visibility of major program
    issues. Moving from these general principles to the specific
    issue of the proposed cancellation of the F136 engine, in 2003,
    the JSF program executive officer requested our input as to the
    desirability of a second JSF engine in the context of the
    United States JSF budget deliberations. We advised the project
    officer of our view that, as outlined earlier, we saw benefits
    in developing an alternate engine, but not at the expense of
    the overall program cost, schedule, and capability targets.
        Chairman Warner. What was the date, time, group of that
    exchange?
        Mr. Gates. That was in 2003.
        Mr. Harvey. Mr. Chairman, I could check the exact timing
    and get back to you.
        [The information referred to follows:]

        General John `Jack' Hudson, JSF program executive officer,
    requested partner input relating to the necessity for developing two
    engines at the JSF Executive Committee No 2 meeting held in London 01
    Oct 2002. Australia had not yet joined the program at this stage and
    was attending the meeting as an `observer', recognising that Australia
    was likely to join the JSF program later that month. Australian records
    show that an action item was recorded at the meeting that requested
    National Deputies provide national input on the perceived value of a
    second source engine to the project.
        In 2003, Australia attended the 7-8 Apr 03 JSF Chief Executive
    Officer Conference as a Level 3 Partner in the JSF Program. Australian
    records show that, at this conference, General John `Jack' Hudson,
    discussed his intention to slip the General Electric engine program by
    2 years in response to U.S. budget changes. He indicated that he
    thought this decision would have least impact on the ability of the
    program to meet Strategic Operations Division commitments. He indicated
    that the JSF Project Office would be studying a number of options to
    recover the 2-year slip and restore delivery of the General Electric
    engine to 2011. Funding was later restored and the General Electric
    engine program continued on the planned schedule.

        Chairman Warner. Would you once again, I think it's an
    important part of your testimony, repeat it so I can get it
    clearly in mind?
        Mr. Gates. In 2003, the JSF program executive officer
    requested our input as to the desirability of a second JSF
    engine in the context of the United States JSF budget
    deliberations of that time. We advised the project officer of
    our view, as outlined earlier, we saw benefits in developing an
    alternate engine, but not at the expense of overall program
    cost, schedule, and capability targets.
        Aside from this input, we were not specifically consulted
    regarding the recent United States Air Force and United States
    Navy proposals to remove funding from the alternate engine. We
    do, however, acknowledge the need for the JSF program executive
    officer to make decisions necessary to achieve the program
    targets.
        Chairman Warner. Thank you, very much.
        Mr. Gates. I just have a little more.
        Chairman Warner. Air Commodore, we thank you. You've
    traveled all the way from Australia for this purpose.
        Mr. Gates. Thank you very much, Mr. Chairman.
        Chairman Warner. Thank you. That adds to us a very
    significant signal of the intensity of your feeling about this
    decision that's before us, so please proceed.
        Mr. Gates. Well, I'll just go a little bit further.
        Chairman Warner. Oh, I beg your pardon. I interrupted
    before you had completed.
        Mr. Gates. I was pausing for effect there.
        Chairman Warner. I beg your pardon? [Laughter.]
        Mr. Gates. I was pausing for effect.
        Senator Lieberman. A dramatic pause. [Laughter.]
        Mr. Gates. A dramatic pause.
        Senator Lieberman. It was.
        Chairman Warner. Pull that microphone up a little closer to
    you, so the folks in the back can hear.
        Mr. Gates. I'm not sure they'll want to. [Laughter.] That
    said, I'll continue. I appreciate the opportunity to now
    address some other matters that you asked about relating to the
    cooperation of the JSF program.
        Australia joined the JSF program in late 2002, with the
    expectation that the JSF would mature to replace Australia's
    fleet of F-111s and F-18 aircraft. Australia's primary reasons
    for entering into the system development and demonstration
    phase of the JSF program were to obtain information, to assist
    JSF capability, to prepare for in-country JSF sustainment as
    part of the JSF global sustainment system, and to provide
    opportunities for the Australian aerospace industry and
    research organizations.
        Given its importance to Australia prior to joining the
    program, the Australian Minister for Defence and the United
    States Secretary of Defense exchanged letters that outlined
    Australia's expectations over the life of the program. The
    letters confirmed that cooperation would provide mutual
    benefits to the United States and Australia through improved
    interoperability for aircraft coalition operations for
    provisions of a highly-capable aircraft, enhanced industry
    capacity and capability, particularly in support of the JSF air
    system, and increased collaboration in science and technology.
        It is acknowledged that to achieve these mutual benefits,
    both the Australian Defence Organization and Australian
    industry would require timely access to relevant JSF technology
    and data. Timely access to technology and data is also
    essential for successful coalition operations, including our
    ongoing cooperation in Afghanistan and Iraq.
        Australia understands and accepts the United States' need
    to prevent the transfer of its technology, where such a
    transfer could threaten its capability edge. We appreciate that
    disclosure policies and the International Traffic in Arms
    Regulations (ITAR) are two key mechanisms used by the United
    States to achieve this objective.
        In protecting technology, Australia, like the United
    States, strongly supports and participates in international
    regulatory regimes designed to counter weapon proliferation.
    Australia, like the United States, applies strict export
    controls to defense and dual-use technologies.
        In the JSF program, for example, Australia and the United
    States are like-minded in seeking these same outcomes focused
    on enhanced interoperability through technology sharing with a
    rigorous regulatory environment. In all these activities,
    Australia relies on sufficient and timely access to United
    States technology and data is to meet our operational and
    sustainment needs. Technology flow is not just from the United
    States. Australia aerospace industry is small, but we have
    capabilities that can and are continuing to contribute to the
    program.
        Experience has shown, however, that the United States'
    disclosure policies and ITAR regime can restrict needed sharing
    of technology and data, even though Australia has an excellent
    record in protecting United States technology. Overly
    restrictive access to United States technology could have
    numerous negative consequences for both of us, including:
    forcing Australia to acquire systems elsewhere; threatening
    interoperability; limiting the operational capability of
    Australian forces alongside the United States forces; and
    reducing the level of cooperative technology development
    between our governments and industries.
        Currently, United States----
        Chairman Warner. Let me interrupt. You were referring to a
    letter, will you make that whole letter available to the
    committee?
        Mr. Gates. We can. That's the letters between the Minister
    for Defence and Secretary of Defense.
        Chairman Warner. Yes, and that can become a public
    document?
        Mr. Harvey. I believe we can do that, Mr. Chairman.
        Mr. Gates. We'll certainly attempt to do that.
        Chairman Warner. Thank you. I think it would be helpful.
    Did that letter contain elsewhere, in any of the provisions, a
    reference to the possibility of not going forward with the two
    engine program?
        Mr. Gates. This letter was written in 2002.
        Mr. Harvey. So, it was late 2002. Mr. Chairman, I believe
    it didn't get down to that level of specificity in the letter.
        Chairman Warner. All right, thank you.
        [The information referred to follows:]

        Mr. Gates. Current United States export controls often have
    the unintended consequence of preventing Australian companies
    from being able to discuss technology or related matters with
    United States companies in sufficient depth, or to obtain
    export licenses in sufficient time to meet United States prime
    contractors schedules. This limits the ability of the program
    to deliver best value.
        Best value for the program as a whole can only be achieved
    if there is a genuine level playing field, one that gives
    partner nations' bidders the same time and data resources to
    complete bids. Guaranteed access to necessary JSF data and
    technology to allow Australia to operate and support the JSF
    will be required before we join the next phase of the project.
        There's been much good work done in the context of the
    cooperative JSF program to streamline access to necessary
    technology and data. But more work needs to be done. We need to
    work together to further improve these mechanisms to make the
    program a success, while continuing to protect the United
    States' capability edge.
        Mr. Chairman, in conclusion I would like to stress that
    Australia is a very strong supporter of the JSF program. We are
    relying on the JSF as a key element of our future defense
    capability, both for the defense of Australia and to contribute
    to future coalition operations. We would not want to see any
    lessening of support for the project in the United States that
    would threaten its cost, schedule, or capability targets. We
    also seek ongoing visibility of any major proposed changes that
    would effect those targets.
        We again congratulate the United States DOD on the success
    that has been achieved in the JSF program to date, both in
    terms of technical achievement and the way in which
    international cooperation has been advanced. Let me stress our
    ongoing success in terms of operations and cooperative
    projects, such as the JSF, are subject to timely access to
    necessary technology and data.
        We look forward to working with the United States to
    continue to improve access to these critical areas to make the
    JSF program a great success. Thank you.
        Chairman Warner. Commodore?
        Mr. Harvey. I have nothing to add. Mr. Chairman, we look
    forward to your questions, if you have any.
        Chairman Warner. Well, you've traveled a long way to
    participate. I would be quite interested, and I'll lead off, as
    to your views as to the person who will be ultimately
    responsible and your successors for the operation of these
    aircraft once they become available. Do you feel that your
    country had a choice to decide between the Pratt and the Rolls
    General Electric engine originally?
        Mr. Harvey. I don't believe we had a choice as such, as I
    said, we were consulted in 2003, and we made the point at the
    time, we saw a lot of benefits in an alternate engine. We saw
    the cost, schedule, and capability targets of the project as
    key, and we respect the right for the project manager to make
    the decisions required for that.
        Chairman Warner. But as a nation, as you learn more about
    the second engine, and assuming it comes online and in
    production, then you'd have the opportunity to make a choice
    between the two, is that correct?
        Mr. Harvey. Correct. If we saw that there were two engines,
    there would be benefits for Australia, although with a fairly
    small fleet, we wouldn't necessarily go for two engines,
    however, there are benefits in a choice.
        Chairman Warner. In other words, you would equip your fleet
    entirely with one model, but you'd at least have the option to
    select the model you wish.
        Mr. Harvey. That's true. We would welcome the option to
    choose. However, we may or may not go with two. It depends on
    basically, the business case at the time and the design of the
    JSF is such that they are meant to be fully interchangeable.
    Roll one out, roll the other in.
        Chairman Warner. That was my understanding. I posed that
    question earlier. We have a trite phrase, ``one-size-fits-
    all.'' In other words, you can roll one in and roll the other
    one out quite easily. So, that gives a major benefit wherever
    the aircraft is operating in the world, depending on
    maintenance problems.
        But the standdown, again, as an operator, do you feel it's
    advantageous that the aircraft, assuming that 4,000 to 5,000 of
    these aircraft exist in various parts of the world, and some
    are involved in contingency operations requiring immediate use
    of the aircraft, that if you had a standdown, you could fall
    back on other aircraft that have a different engine than the
    one that was stood down. Could this have some operational
    benefits to fighting whatever contingency you are engaged in?
        Mr. Harvey. Yes, Mr. Chairman, we do see benefits in that.
    But as I say, overall our priority is to get the aircraft up
    and flying, so we can replace our aging aircraft now.
        Chairman Warner. Surely. Competition, do you have any
    views, either of you, as to whether competition results in cost
    savings? For instance, here's a rather interesting book, ``The
    Air Force and the Great Engine War,'' it's a history, a chapter
    in our country where we experienced much the same problem. In
    that period, we experienced cost savings from having
    competition for the engines that were available for different
    types of aircraft at that time.
        As we view it from this perspective, and tomorrow witnesses
    will answer the question I'll ask of them, ``if General
    Electric and Rolls do not remain in this program and win a
    second engine, what's the likelihood that they would remain
    with an industrial base? Such that if a follow-on aircraft with
    some other military engine were needed, would they be capable
    of developing one, or would they just as soon get out of the
    military business and go into just the civilian side?'' Do you
    have any views on that?
        Mr. Harvey. Mr. Chairman, I think from the Australian point
    of view, that's largely a decision for the U.S. and their
    strategic base. We're not a large aerospace industry, we
    certainly haven't produced our own engines, so we rely on
    largely what the U.S. does.
        Mr. Gates. We've already stressed, if I may, Mr. Chairman?
        Chairman Warner. Yes, go ahead.
        Mr. Gates. Of course, that--as I said in my statement,
    we're expecting that if it does come down to just the one
    engine, that the cost saving that is advertised is realized and
    the sole source is not allowed to expand as being the sole
    source.
        Chairman Warner. No, I think that the motivation of the
    Secretary of Defense and others was to invoke a cost saving by
    going to the one engine, and this committee is simply trying to
    examine what are the ramifications.
        Number one, is our ability as a partner to continue with
    other nations of the world when I think testimony thus far has
    shown there wasn't quite the degree of consultation that you
    envisioned at the time eight nations signed up.
        Second, it's a question of this enormous fleet of aircraft,
    up to 5,000, is it to be dependent only on one engine and one
    engine manufacturer for parts and all other types of things.
    Given the life of aircraft today, the information has been
    brought to my attention is that a single airframe if it
    continues to be as successful as we hoped we'll have at least
    two, a second engine, replacing the first, and possibly as the
    chart has shown me, a half an engine. In other words, some
    aircraft will require a third, others won't depending on the
    extent of the use. So, we're looking at one of the biggest,
    single contracts, if not the biggest, in contemporary history
    of military procurement. I suppose it comes down to the lessons
    of the past. Isn't it wise to have competition which has been
    proven to have been effective in the two engine program? I'll
    yield to you for a question or two.
        Senator Lieberman. Thanks, Mr. Chairman. I know that time
    is running, the vote has been called. Really, the question I
    think before us, in one sense could be this: competition is
    generally good, but the question is, can we afford it here?
    Will the second engine program affect what you gentlemen from
    Italy and Australia have made clear, is of paramount importance
    to you, which is the affordability and schedule of delivery of
    this program?
        Chairman Warner has raised a couple of important questions.
    His question of the standdown and both panels of witnesses have
    raised a question about the capacity of Pratt & Whitney, if in
    fact the single engine decision holds to basically service a
    global fleet. I'm going to leave that to the representatives of
    Pratt & Whitney who are coming tomorrow, but I think it's an
    important question to have asked.
        I want to say that as I've listened to the two panels
    here--first, let me thank you both as representatives of your
    nation's militaries for the extraordinary cooperation and
    really, partnership that you have had with the United States
    military. I want you to know particularly in the case of Iraq
    and Afghanistan, where I know it's not--shall I say with
    senatorial understatement--universally popular in either of
    your countries, or any of your countries in fact, the three.
    Really, the American people appreciate your steadfastness, and
    I think we will look back on this and feel--we have difficult
    days right ahead, but they will look back and feel that we did
    something critically important to the security of the world and
    certainly of the nations involved here today, in the future.
    So, I thank you for that.
        So I am--very interestingly in both panels, the
    representatives of the U.K., Italy, and Australia, I hear a
    strong unified voice of concern, complaint, even grievance
    about the question of technology transfer. I think you're
    right, and I think we ought to do everything we can to get over
    that, because you're such good allies, and it's in our
    interests. We're in a global world, and it's just a policy that
    has to mature with the world and with the importance of our
    alliance.
        But I don't hear the same uniformity of attitude toward
    this question of a single engine, or two engines. I was
    actually going to ask this panel this question, and in some
    sense, you've answered it, which is, if you had to choose
    between preserving the alternate engine program and maintaining
    program cost and schedule, what would be your preference? I
    believe I've heard you both say that if you had that choice,
    you'd go with the single engine and the program cost and
    schedule as it's been pledged to you. Am I right, General
    Bernardis?
        Mr. Bernardis. Yes, Senator Lieberman. The paramount for us
    now is to have a program running. We are in a crucial phase of
    the program right now.
        Senator Lieberman. Right.
        Mr. Bernardis. We have to face the new MOU for production
    and sustainment and this has to be decided by our Parliament
    this year, and we have to give evidence that the program is
    still what it was meant in the beginning.
        This program was born to counteract the famous Augustine
    Law, which was made for the U.S. market and that law said that
    continuing at the pace where they were at the time, the U.S.
    budget, which is quite different from our budget, could have
    afforded for the U.S. just one fighter per year. Obviously this
    is a paradox but we don't want to get into a position where we
    are facing a program which is not sustainable.
        The reason why we are inside the JSF program is first of
    all, because we are, as I've said, a staunch ally of the U.S.
    and we want to be interoperable with the U.S., as we are right
    now in the Balkans, in Afghanistan, and in Iraq. But in the
    same level, we put the possibility to have an affordable
    program.
        The affordable program is coming out of a program which is
    on time, on schedule, within the assigned budget. Right now,
    all the programs are effected by runaway costs of budgets. We
    don't want this with this program.
        If the two engine solution would provide the affordable
    program, that's extremely fine with us. We would like to have
    that, because we recognize the opportunities that two engine
    solutions are given. But if that solution is against this
    situation, we cannot support that if we have to put more money
    in front of that, because we will never be able to get approval
    for that.
        Senator Lieberman. I fear that's exactly what the
    consequence would be. I know we're really running out of time.
    Admiral, if you would just give me a second.
        Mr. Gates. Very short then, Senator Lieberman, is that I
    echo the thoughts of our Italian friends.
        Chairman Warner. We're not hearing you very clearly.
        Mr. Gates. Is that for us as well, it is exactly the same.
    This is going to be a major buy for us, it's going to be a
    major part of our capability across the Australian Defence
    Force, and we are at risk at the moment with any delay on the
    project for our aging F-111s and F/A-18s. So for us, the second
    engine, if it comes along, would be of benefit as we've already
    discussed here. But more important for us, is really hitting
    that cost schedule and present targets.
        Senator Lieberman. I thank you both. Look, my concern is if
    we go with the second engine and the DOD is right about the
    $1.8 billion, knowing the pressure they're under, it's going to
    be taken out of some other part of the JSF program, and that's
    going to cause delay.
        Thank you both, very much.
        Chairman Warner. I don't know that we can leap to that
    conclusion, it's certainly an option.
        Senator Lieberman. I'm prepared to. [Laughter.]
        Chairman Warner. Yes, I know you are. [Laughter.]
        But anyway, the point is, tomorrow's testimony hopefully
    can establish with some clarity that if we go to the two engine
    program, and based on history in this country and I think in
    your countries also, competition controls cost. There's a
    strong case to be made that that savings through competition
    can more than pay for going forward with the second engine, as
    was contracted this summer by our country to go forward. We
    signed a contract. Within 3 or 4 months, we've seen a complete
    turnaround, 180 reversal.
        Thank you very much for your participation, and your
    understanding of the interoperability of the U.S. Senate, or
    lack of thereof. But I think we've had adequate time for all.
        Senator Lieberman. Thank you, Senator.
        Chairman Warner. I look forward to tomorrow's hearing, 9:30
    a.m. this room, tomorrow, and I look forward to seeing you, my
    friend.
        We are adjourned.
        [Additional information follows:]

        [Questions for the record with answers supplied follow:]
                   Questions Submitted by Senator John McCain
        1. Senator McCain. Lord Drayson, the Joint Strike Fighter (JSF)
    program is a multilateral, multinational program. There appears to have
    been a unilateral decision made on the part of the U.S. Department of
    Defense concerning the JSF alternate engine. What is also a concern is
    whether or not a business case analysis supports such a decision.
    Competition over the life of the JSF program and the cost savings it
    would provide should be considered as well as the innovation that is a
    by-product of competition. If unforeseen problems should arise in the
    future it should be determined if an alternative would limit the risk
    of grounding the worldwide JSF fleet. Has the business case analysis
    that supports the cancellation of the JSF alternate engine been made
    available to you?
        Lord Drayson. No.

        2. Senator McCain. Lord Drayson, does the business case analysis
    support the decision to cancel the alternate engine?
        Lord Drayson. I have not seen the business case.

        3. Senator McCain. Lord Drayson and Sir Stirrup, have either of you
    been provided this information?
        Lord Drayson. No.
        Sir Stirrup. No.

        4. Senator McCain. Lord Drayson, the JSF program has been
    experiencing friction for some time with its international partners
    over workshare and technology transfer. Please provide your concerns on
    the matter of technology transfer as well as the access you have been
    granted versus what you require as our leading partner in the JSF
    program.
        Lord Drayson. Through our Level 1 status in the JSF programme, we
    have embedded our firm national requirements into the System Design and
    Development phase of the programme. We are now negotiating the through
    life aspects of the programme and we will need to be assured that we
    will have the operational sovereignty that we require.

        [Whereupon at 3:25 p.m. the committee adjourned.]

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                      2007

                                  ----------

                           WEDNESDAY, MARCH 15, 2006

                                           U.S. Senate,
                                   Committee on Armed Services,
                                                         Washington DC.

       TO CONTINUE TO RECEIVE TESTIMONY ON THE JOINT STRIKE FIGHTER F136
                            ALTERNATE ENGINE PROGRAM

        The committee met, pursuant to notice, at 9:42 a.m. in room
    SH-216, Hart Senate Office Building, Senator John Warner
    (chairman) presiding.
        Committee members present: Senators Warner, Inhofe,
    Collins, Talent, Thune, Kennedy, Lieberman, Bayh, and Clinton.
        Committee staff members present: Charles S. Abell, staff
    director; and Leah C. Brewer, nominations and hearings clerk.
        Majority staff member present: Stanley R. O'Connor Jr.,
    professional staff member.
        Minority staff members: Jonathan D. Clark, minority
    counsel; Gabriella Eisen, research assistant; Creighton Greene,
    professional staff member; and Bridget W. Higgins, research
    assistant.
        Staff assistants present: Michah H. Harris, Jessica L.
    Kingston, and Jill Simodejka.
        Committee members' assistants present: John Bonsell,
    assistant to Senator Inhofe; Arch Galloway II, assistant to
    Senator Sessions; Mackenzie M. Eaglen, assistant to Senator
    Collins; Mieke Y. Eoyang, assistant to Senator Kennedy;
    Frederick M. Downey, assistant to Senator Lieberman; Robert J.
    Ehrich, assistant to Senator Bayh; and Andrew Shapiro,
    assistant to Senator Clinton.

           OPENING STATEMENT OF SENATOR JOHN WARNER, CHAIRMAN

        Chairman Warner. Good morning. I apologize for getting off
    to a somewhat late start. Senator Lieberman and I had another
    meeting this morning that we had to attend to, but now we are
    underway. I'll just make a few short remarks here.
        The committee meets this morning to have a second session
    on what we here in the Senate deem to be a very important
    issue. We'll receive testimony from the Deputy Secretary of
    Defense, Vice Chief of Naval Operations, the Vice Chief of
    Staff of the Air Force, the Assistant Commandant of the Marine
    Corps, and from our Joint Strike Fighter (JSF) engine industry
    teams on the proposed termination of the F136 alternate engine
    program. We welcome you Secretary England and your team that
    has joined you.
        On the second panel of this hearing will be Scott Donnelly,
    President and Chief Executive Officer (CEO) of General Electric
    (GE) Aviation; James Guyette, President and CEO of Rolls-Royce
    North America; Louis Chenevert, President and Chief Operating
    Officer of United Technologies Corporation, the parent company
    of Pratt & Whitney; and Lloyd Newton, Executive Vice President,
    Military Engines, Pratt & Whitney.
        At yesterday's hearing, we heard from our international
    partners that if the actions taken by the Department of Defense
    (DOD) to terminate the F136 alternate engine were to be
    reversed by congressional action, that action may pose a risk
    to JSF schedule and cost. Delays in schedule and increased
    costs are clearly unacceptable for the eight nations that have
    pledged $4.6 billion toward the development of the JSF. Some of
    these countries expect the contractor to lower the unit cost
    based on increased volume of sales if a decision to sole-source
    production is made. They also expect the United States
    Government to control costs as well. The United States
    Government has somewhat of a checkered record on controlling
    costs in a noncompetitive environment. That fact is well
    understood by this committee. Competition really is the driving
    issue as to why Congress (on the Senate side) feels we should
    have a very full and extensive record to take to, first, the
    Committee on Armed Services and then to the Senate floor as it
    relates to this program.
        This program potentially is the largest, I repeat, the
    largest acquisition program in terms of funding dollars in the
    history of the DOD. It will produce a plane that will be used
    by our three Services and our allies for at least 30 years with
    an expected delivery of approximately 2,600 aircraft to the
    United States and the United Kingdom (U.K.) and upwards of
    2,000 aircraft for our international allies and our friends.
        Historically, the U.S. and our allies have operated a wide
    variety of fighter and attack aircraft. If one particular
    aircraft were to be grounded for an unforeseen problem, there
    were other aircraft with similar capabilities to fill that
    void. That could change under JSF. The JSF is planned to
    replace several aircraft types as part of a tactical aviation
    neck-down strategy. By 2030, the JSF and the F-22 will
    represent 85 percent of U.S. and allied tactical air power. You
    need to keep in mind during the course of today's hearing that
    relying on a single engine design in this scenario presents an
    unprecedented vulnerability. A single technical engine flaw,
    either early in the life of the engine or its later stages,
    could preclude the capability to conduct combat operations due
    to what would likely be a standdown. Controlling cost is also a
    significant concern without clear competition when a single
    engine manufacturer will have the total responsibility.
        In considering the total number of JSF aircraft to be
    built, the total propulsion procurement cost alone may exceed
    $100 billion. Failure to control cost over the life cycle of
    the aircraft would prove devastating to our national security.
    This is a case that was clearly made yesterday by international
    partners from the U.K.; a competitive environment is essential,
    in the judgment of many of us, to the Government's ability to
    control cost, especially in a program of the magnitude of the
    JSF.
        So the essence of this is trying to determine with the
    absence of a second manufacturer, can we control costs, can we
    have the time-honored, historical, Great Engine War; can we get
    competition and containment of cost? Some of us believe that if
    we do have this competition it will result in a savings that
    would more than overcome the projected cost of continuing both
    engine manufacturers. So with that I turn it over to my
    colleague.
        [The prepared statement of Senator Warner follows:]

                   Prepared Statement by Senator John Warner

        The committee meets today to receive the testimony of the Deputy
    Secretary of Defense, the Vice Chief of Naval Operations, the Vice
    Chief of Staff of the Air Force, the Assistant Commandant of the Marine
    Corps, and from our Joint Strike Fighter (JSF) Program engine industry
    teams on the proposed termination of the F136 Alternate Engine Program.
        We welcome Secretary England, Admiral Willard, General Corley, and
    General Magnus to the first panel of today's hearing.
        On the second panel of this hearing will be Scott Donnelly,
    President and Chief Executive Officer (CEO) of General Electric
    Aviation; James Guyette, President and CEO of Rolls-Royce North
    America, Inc.; Louis Chenevert, President and Chief Operating Officer
    of United Technologies Corporation, the parent company of Pratt &
    Whitney; and Lloyd Newton, Executive Vice President Military Engines,
    Pratt & Whitney.
        We welcome all of our witnesses today.
        In yesterday's JSF hearing, we heard from our international
    partners that if the actions taken by the Department of Defense to
    terminate the F136 alternate engine were to be reversed by
    congressional action, that action may pose a risk to JSF schedule and
    cost. Delays in schedule and increased cost are clearly unacceptable
    for the eight nations that have pledged $4.6 billion toward the
    development of the JSF. Some of these countries expect the contractor
    to lower the unit cost based on the increased volume of sales if a
    decision to sole-source production is made. They also expect the United
    States Government to control costs as well. But the United States
    Government, I'm sorry to say, has a very poor record of controlling
    cost in a non-competitive environment. A fact that is well understood
    by this committee.
        The JSF program is the largest acquisition program, in terms of
    funding, in Department of Defense history. It will produce a strike
    fighter that will be used by our three Services and allies for at least
    the next 30 years, with an expected delivery of approximately 2,600
    aircraft to the United States and the United Kingdom, and upwards of
    another 2,000 aircraft for our international allies and friends.
        Historically, the United States and our allies have operated a wide
    variety of fighter and attack aircraft. If one particular aircraft were
    to be grounded for an unforeseen problem, there were other aircraft
    with similar capabilities to fill the void. That will change with the
    JSF. The JSF is planned to replace several aircraft types as part of a
    tactical aviation neck-down strategy. By 2030, the JSF and F-22 will
    represent 85 percent of U.S. and allied tactical air power.
        We need to keep that in mind during the course of today's hearing.
    Relying on a single engine design in this scenario presents an
    unprecedented vulnerability. A single technical engine flaw either
    early on in the life of an engine, or in its latter stages, could
    preclude the capability to conduct combat operations on a broad scale.
    Controlling cost is also a significant concern when relying on a single
    engine manufacturer. When considering the total number of JSF aircraft
    to be built, the total propulsion procurement cost alone may well
    exceed $100 billion.
        Failure to control cost over the life cycle of the aircraft would
    prove devastating to our national security--a case that was clearly
    made yesterday by our international partners from the United Kingdom. A
    competitive environment is essential to the Government's ability to
    control costs, especially in a program of the magnitude of the JSF. In
    fact, the Department of Defense has acquisition guidance that mandates
    competition on major programs. Competition promotes the rapid
    development of ideas, fosters innovation, and ensures technological
    advancement.
        Remarkably, there has not been a JSF engine competition--not in
    system development and demonstration or production. That is why
    Congress has mandated an engine competition for the past 10 years with
    an investment to date of $1.3 billion. Congress made this decision
    based on the well documented benefits attained from the Great Engine
    War of the late 1970s and early 1980s, a competition between Pratt &
    Whitney and General Electric to provide engines for the F-15 and F-16
    that resulted in lower acquisition costs for engines, better
    responsiveness from the contractors, but most importantly, better
    readiness for the warfighter.
        I was around during the Great Engine War and recall vividly the
    benefits which it brought to F-15s, F-16s, and particularly F-14s. That
    is why I feel our discussions here today bear such importance. The U.S.
    Air Force has documented acquisition savings from the Great Engine War
    at 21 percent and life-cycle cost savings, which includes acquisition,
    operations, and support costs, at 16 percent. In today's Great Engine
    War, savings in excess $10 billion over the life cycle of the JSF are
    entirely possible.
        The Department's decision to terminate the F136 engine has the
    appearance of seeking near-term savings at the expense of budgetary
    control through competitive processes over the long term, and fails to
    take into account the risk associated with a sole-source provider of
    engines over the 30 plus year life-cycle of the JSF program, a
    potential cost increase to the taxpayer and our allies that may far
    exceed the $2.0 billion saved over the system development and
    demonstration phase of the program.
        I thank you for your presence here today before the committee and
    we look forward to your testimony.

        Chairman Warner. Senator Lieberman.
        Senator Lieberman. Thanks very much, Mr. Chairman. Thanks
    to you and I would say to Senator Levin for affording me the
    opportunity to sit as the ranking member on these very
    important hearings and thanks for the characteristically
    thoughtful way in which you've conducted these hearings. We've
    reached out to people, not only from the U.S., but yesterday
    from around the world.
        I view these hearings on the Pentagon's and
    administration's recommendation to have a single engine source
    for the JSF program in the larger context of the growing
    concern about the cost of military acquisitions. I know that
    this is felt in the Pentagon and I think you all know that this
    is felt increasingly here on this committee. We are worried not
    just by the overall size of the military budget, but really
    more to the point that increasingly military decisions are
    being made for largely budgetary reasons. One of the driving
    impulses that causes that to happen is the enormous
    skyrocketing cost of some of our major acquisition systems, and
    we're working hard.
        I've been working with Senator McCain as his ranking member
    on the Airland Subcommittee which he chairs to focus in on ways
    we can reform the acquisitions process. It's been a focus of
    Chairman Warner and Senator Levin here on the full committee
    and we just have to find ways to save money so we can frankly
    build more systems. We're not building enough for any of the
    Services as far as I'm concerned.
        In that sense, you've come before us with a tough decision.
    You've said let's have a single engine instead of a double
    engine for the JSF. You see an immediate almost $2 billion
    savings. That's $2 billion that can go a long way to some good
    use within the DOD. I think the argument that you've made to us
    makes sense. Incidentally, this is not a unique decision. The
    JSF airframe has been single-sourced to Lockheed. By example,
    the F/A-18 engine contract has been given to GE to produce--
    what, 4,000--a very large number of engines and I think a
    judgment is being made here that competition can sometimes be
    good but in a resource-constrained environment it may well be
    that the best we could do in terms of affordability is have a
    single source on a multi-year contract and obviously for the
    Pentagon to be real tough in keeping that single source
    contractor's cost down.
        I want to share with you, just very briefly, my reaction to
    the testimony yesterday. We had leaders of the military from
    the U.K., Italy, and Australia--three great allies. I was
    struck by what they clearly all agreed on, gentlemen.
        Secretary England, they're not happy with technology
    transfer. This may not surprise you, on this program or a host
    of other programs. They were united in that and I really think
    these are three great allies. We ought to try to stretch a
    little bit to see if we can come to a meeting of the minds.
    Their reactions on this single engine for the JSF in which each
    of those three nations has invested money was more diverse. The
    U.K. clearly is upset about it and would like to see GE/Rolls-
    Royce be the second engine source. Our friends from Italy and
    Australia had a much more ambivalent attitude, in my opinion,
    and they said about as clearly as they could have if the choice
    is between two engine sources, and affordability and
    timeliness, that is keeping the JSF program on schedule, they
    go for the single engine and affordability and timeliness. I
    think that's a very important message to have heard and more
    diverse, frankly, than I thought we might hear from those three
    allies.
        We were left within my mind with two big questions that
    they and others (and the chairman has just said them) and to
    the extent that you're able and the representatives of Pratt &
    Whitney, the single source selectee right now, I think have to
    answer today. One is, is Pratt prepared to respond in the case
    of the kind of stand down that Chairman Warner has talked
    about, being just a single source of the engines as opposed to
    having two. The second is price stability. What's the Pentagon
    prepared to do? What terms is Pratt willing to accept? Not that
    we're going to negotiate it here this morning, but
    understanding that one of the reasons to go to the single
    engine is to keep the price stable and save money overall. So
    this is an important hearing. I thank you all for being here
    and, again, Mr. Chairman, I thank you for your very fair
    leadership.
        Chairman Warner. Thank you, Senator. I'd ask the indulgence
    of the panel, we have two colleagues on the committee, both of
    them are heavily engaged in other matters elsewhere today and
    I'd like to depart from our normal procedure and allow Senator
    Kennedy to make an opening statement and ask a question or two
    to be followed by Senator Collins who will make a brief opening
    statement then ask a question and then we'll proceed.
        Senator Kennedy.
        Senator Kennedy. Mr. Chairman, thank you very much. As the
    chairman has said, as we're finding out here, we have the
    markups on immigration legislation in the Judiciary Committee,
    and a very important health bill in our health committee and
    our Nation's priorities over there on the budget consideration
    and we're meeting this evening in terms of pension and pension
    reform. So there's a lot going on. But this is enormously
    important and I'm very grateful to Chairman Warner, Senator
    Lieberman, and Senator Collins for letting me just make a brief
    comment, and maybe ask a question. I want to welcome you,
    Secretary England. I have enjoyed working with you over a
    period of years. I thank all of our panel for being here this
    morning.
        In the comments that have been made by both Chairman Warner
    and Senator Lieberman, a number of points have been raised and
    I would just hope that we would be able to give consideration
    to these points both in this committee and also from the panel,
    and that is with the issue of cost savings--the $1.8 billion in
    savings. I think we're looking at what is going to be the
    nature of the savings with real competition as we move on down
    the line. We have seen historically when we had the competition
    with the Great Engine War between the F-15 and the F-16, we had
    very important results in terms of military value, reliability,
    improved performance, and also overall savings. So I think
    there is a case that has to be made that these savings, the
    $1.8 billion, are really going to be more significant than you
    would have if there was real competition. Some have estimated
    that the savings with real competition could be 8 to 10 times
    that amount. We will try and find out about that.
        We also are looking at obviously the life cycle of the
    whole system. When you look at the life cycle of the whole
    system in terms of these engines, we're talking in excess of
    $50 billion, some have estimated up to $100 billion. So it's
    difficult to imagine a program that is potentially as costly in
    terms of life cycle, $50 to $100 billion, which doesn't have
    any competition. Competition, in terms of the engine,
    competition in terms of life cycle, competition looking at the
    history of competitions in fighter engines which have resulted
    both in savings, greater reliability, and greater performance
    in terms of the military. I think the industrial base is
    something that we're constantly dealing with in a range of
    different kinds of issues whether looking at submarines or
    whether we're looking at aircraft engines or whether we're
    looking at building ships, this is something that we have to do
    to be concerned about. I don't think I know of any other
    program that the military is involved in that will result in
    such a sizable demand for large military engines over a longer
    period of time. It's really unique in that respect. So you have
    the largest multi-Service program life cycle cost on this,
    competitive cost, which we have to give consideration to as
    well.
        Now, if we cancel the competition, essentially creating the
    winner take all, not just for the JSF but for any future
    aircraft engine, we have to look at this, I think, in
    relationship to any future aircraft engine. Because over time
    we'll be reducing the ultimate industrial base really to one
    supplier and we need to consider the long-term effects on the
    industry and our national security for the $1.8 billion to be
    saved over the next 5 years. I think when you add up all of
    these kinds of concerns, I reach the decision that really
    questions the value for that pathway.
        Mr. Chairman, I really have just one question, if I could
    ask the Secretary? Last week the Secretary of the Navy was here
    testifying on the DD(X) acquisition strategy and how it was
    based on maintaining the competitive pressure. Now you're
    telling us that competitive pressures will not bring us the
    savings on the JSF engine. So I'm just wondering if you could
    reconcile these for me?
        Secretary England. Senator, I can. First, early on when
    there were three competitors for the JSF, there were three
    different companies, McDonald Aircraft, Lockheed Martin, and
    Boeing. At that time in that competition all three companies
    had selected the Pratt & Whitney engine. So there was an
    opportunity early on in the competition. We do generally have
    competition but at some point when we no longer get the
    benefits of competition, that is when it costs us rather than
    providing benefits, and I would say that it's not beneficial
    for the Federal Government to pursue competition if indeed it's
    going to increase costs and we will discuss this in more detail
    in the hearing.
        But the fact of the matter is all of our analysis shows
    that we never recover the cost of this program. The savings are
    $1.8 billion. The cost is $2.4 billion over the Future Years
    Defense Program (FYDP). If you project that forward we conclude
    that in the most optimistic case we would not save any money
    until 2025 and in a realistic case we never recover that cost
    much less the cost of a separate supply chain and all the
    issues associated with having the second engine. So I think as
    Senator Lieberman said, we have a single airplane with lots of
    parts provided by a single manufacturer.
        My judgment is that it is much better to apply that money
    to make sure that we have the most reliable and best engine we
    can, rather than spending money on two different engines. My
    conclusion is that we would not have nearly as good a product
    if we did that as opposed to concentrating on one engine.
    Again, as we've been pointed out, we have single engines on a
    number of our airplanes today so we will have a opportunity I
    know to discuss this in more length but from strictly a cost
    point of view, our data indicates that it is not cost
    advantageous to the Government to have a second engine.
        Senator Kennedy. Just finally on this, when was this, how
    many years ago was that competition?
        Secretary England. That started in 1995, I believe,
    Senator.
        Senator Kennedy. So we're looking at the competition from
    10 years ago?
        Secretary England. That's correct.
        Senator Kennedy. That's some period ago and a lot has
    transpired since that time.
        Mr. Chairman, thanks very much. If I could submit some
    questions for the record?
        Chairman Warner. Yes, the record will remain open.
        Senator Kennedy. I appreciate your courtesy as always and
    also Senator Lieberman's.
        Chairman Warner. The record will remain open until March 17
    because these two hearings will develop a lot of interest in
    this issue and we want to make certain that Congress can profit
    from all those who have a knowledge about how best to go
    forward.
        Our distinguished Senator is here, Senator Collins.
        Senator Collins. Thank you, Mr. Chairman. I do very much
    appreciate the opportunity to make some opening comments. I'll
    withhold my questions until the panel has a chance to present
    its testimony.
        To me the key issue here is the impact on the industrial
    base. In the case last year when the Navy proposed a one
    shipyard strategy for the DD(X), the result would have been the
    permanent closure of one of the shipyards so we would have seen
    the industrial base shrink in a way that would have been very
    detrimental to future competition and to our national security.
    I'm pleased that we were able to prevail in blocking that
    proposal.
        So the question for me here is, what is the impact on the
    two suppliers if we go forward with the multi-year single
    source? My initial review indicates that the supplier that
    would not be chosen still has ample business and will be able
    to keep producing jet engines, first, for the military under
    contracts and for a vibrant commercial market so that we're not
    looking at a reduction in the industrial base or the loss of a
    key company that is a potential future supplier to the
    military. So I think it's a very different situation than the
    one that we looked at last year but I think the question of
    what is the impact on the industrial base is the same. That is
    the question that I look forward to exploring with both panels
    today. Thank you, Mr. Chairman.
        Chairman Warner. Thank you, Senator. We'll hear from the
    witnesses on this issue but I likewise have that concern and I
    think that the GE/Rolls-Royce team will tell you that there is
    quite a bit of difference between the civilian engine and the
    military engine and to keep their teams together for what may
    never occur in the future as another opportunity is problematic
    but I'll let them address the issue.
        Senator Lieberman, you raised an important issue which was
    covered yesterday, that is technology transfer. Mr. Secretary,
    we will look at it in the context of this hearing but it's an
    issue on which I would like to bring the components together
    for this committee. I have to say that it is an issue that's
    constantly brought to the attention of Congress by various
    nations who are working to help us establish for our own
    arsenal of weaponry all of the best equipment we can find and
    we, as my colleague from Maine just said, are faced with a
    shrinking industrial base and more and more we have to rely on
    our foreign partners for their expertise and their
    participation. So one of the issues that I hope you'll address
    this morning is the procedure by which this decision was made
    and presumably consultation with our partners. That issue was
    raised yesterday. So I think we'll proceed now to receive your
    direct testimony, Mr. Secretary.

       STATEMENT OF HON. GORDON R. ENGLAND, DEPUTY SECRETARY OF
                                DEFENSE

        Secretary England. Chairman Warner, Senator Lieberman,
    Senator Kennedy, Senator Collins, it is always a delight to be
    with you and I thank you for the opportunity. This is an
    important subject to be discussed. It is a judgment call
    frankly. I mean, it's based on data. We do not know the future
    but it is based on data and analysis and the best judgment of
    the team at the Pentagon including all of our military Service
    people, and I'm pleased to have the Vice Chiefs with me today.
    Each is a distinguished combat pilot so they bring a lot of
    credentials to this discussion today. Also with us is Admiral
    Enewold who runs the entire JSF program and is here to provide
    any particular data we may need as part of this discussion.
        I would like to put this in context just a little bit.
    First of all, last year we did----
        Chairman Warner. Excuse me, Mr. Secretary. We'll be happy
    to bring the Admiral up and get a seat right at the table for
    him. We don't want him to be reticent.
        Secretary England. That would be fine. He'd like to do
    that.
        Chairman Warner. All right. Just pull up a chair there and
    join us at the table.
        Secretary England. Thank you. Last year as part of JSF we
    looked at all three variants, that is, did we need all three
    variants because this is a cost constrained environment,
    frankly. We looked at every single product in the DOD as part
    of the Quadrennial Defense Review (QDR) and will continue to do
    so as we go forward. As part of that review we concluded that
    we would keep all three variants and, in a large respect, the
    short take-off vertical landing (STOVL) version which is
    required by the British government, recognizing the interest
    and the desire of our great friends, the U.K., for that
    airplane and that was a factor in our decision.
        That said, it's a lot of commitment of money for that
    particular version but we are now committed to that. When we
    come down to the competition, when we look at the estimated
    cost of the program across the FYDP is $2.4 billion. There are
    no savings by our analysis until 2025 and that is based on a
    minimum of at least a 15 percent savings through competition
    and I don't believe we've ever achieved that in any competition
    in the past, particularly with engines. So we do not see
    realistically that we save any money on this program through
    competition. Most importantly, frankly there's only so much
    money available in the program and this money is not in the
    budget and if we now need to fund this program, the money will
    come right out of the JSF program.
        The end result that if we are required to fund another
    engine program, it will impact the basic program and will end
    up delaying and putting the basic program at risk. So this is
    not just free money for the program. We have to make judgment
    decisions in terms of the risk to the program and the benefit
    to the program and we judge that it was more beneficial in this
    regard to fully fund the JSF program itself and in addition as
    part of the QDR we are frankly trying to shift emphasis across
    the DOD. That requires that we make some hard choices in the
    budgeting process and that means as part of those hard choices
    that includes either terminating or modifying less effective or
    lower priority programs. So this was a hard choice but
    nonetheless, as part of the QDR we are increasing funding for
    our Special Operation Forces, we're doing more in biomedical
    countermeasures, for example. We also have demands in terms
    that we do need a submarine force of a specific size, we do
    need surface ships, we do need helicopters, we need other
    capability, and our objective is to balance across the entire
    DOD and get the right balance in terms of cost, risk, and
    benefit. So we've had extensive discussions in this regard.
        Now, regarding the Great Engine Wars. The Great Engine War
    between Pratt & Whitney and GE, the book that you pointed out,
    in the early 1980s frankly served a very valuable purpose by
    generating competition and it was one of the catalysts I would
    say for many of the magnificent achievements we've had by the
    engine industry.
        But at this point if you look at where we are with our
    engine programs, the F-16, the single engine mishap rate has
    dropped from 10 per 100,000 hours to 1 per 100,000 hours. The
    F119 engine from the F-22, which is the forerunner of this
    engine, (there is a high degree of commonality between those
    engines) in 12 years has had 42,000 hours of ground and flight
    testing and 16,000 hours of operational time with no engine
    related losses and no groundings due to engine related
    problems. So, based on the testing also of the primary Pratt &
    Whitney engine, we would conclude that we have a very reliable
    engine--a technology we can count on.
        As Senator Kennedy said, 10 years have passed since the
    original competition between the three companies but also many
    technological advances have been made in that period of time.
    Southwest Airlines has had one engine shutdown in 177,000
    flight hours. That's like once every 50 years or so (and that
    happens to be a GE engine, by the way) so while it is
    commercial, nonetheless it does point out the continuing
    reliability improvements that we have today with our engine
    fleet.
        So these are hard decisions that we are making as part of
    the QDR but again our fiduciary responsibility to this Congress
    and the American people is to make the hard choices to get the
    best balance of risk, cost, and benefit for the taxpayers
    dollars and for the United States military.
        Our conclusion of this analysis is that it is not money
    well-spent to have a second engine on the JSF.
        It is a judgment call, Mr. Chairman, but I will tell you my
    great concern here is that if we need to fund this, if Congress
    decides we need to fund this program, it will directly impact
    the JSF program and I do not believe that is beneficial for any
    of the countries involved. No country will benefit, including
    the United States military, if we end up impacting the
    fundamental JSF program to have a second engine. In my
    judgment, that would be a very bad decision for America.
        [The prepared statement of Secretary England follows:]

                   Prepared Statement by Hon. Gordon England

                                ``hard choices''

        Chairman Warner, Senator Levin, and members of the committee, thank
    you for the opportunity to discuss the Department of Defense's decision
    to cancel the Joint Strike Fighter (JSF) F136 engine, as part of the
    President's fiscal year 2007 budget submission.
        With me today are the Vice Chiefs of the Air Force, Navy, and
    Marines. Each of these Services will be operating the JSF. Each of
    these individuals is a distinguished combat aviator--General Corley,
    Admiral Willard, and General Magnus. We are prepared to answer any
    questions you may have.
        The F-35 JSF--our next-generation strike fighter--is an important
    program. It is designed to be lethal, supportable, survivable, and
    hopefully affordable. All three versions were supported by the 2006
    Quadrennial Defense Review (QDR) as necessary to meet the security
    challenges of the 21st century, by being adaptable to different
    operating environments and threats. Adaptability and flexibility, in
    the face of greater strategic uncertainty than ever before, are
    critical parts of the Department's strategic approach.
        The JSF also supports the Department's strategic vision to bolster
    international partnerships. Victory in the long war and against other
    threats to our Nation requires international unity of purpose, and the
    ability to integrate our efforts with those of our international
    partners. JSF gives us a good opportunity to share interoperable
    capabilities with key partners around the globe.
        As part of the QDR process, and based on analysis and in-depth
    discussion among senior civilian and military leaders, the Department
    decided to continue to produce all three JSF variants--conventional
    take-off and landing (CTOL), short take-off, vertical landing (STOVL),
    and carrier variant (CV). We did this to maintain as wide a range of
    options as possible, and to address the interests of our international
    partners. In particular, we recognized the interest of our British
    allies in the STOVL variant and its importance to their future defense
    program.
        The pros and cons of a competitive engine strategy were analyzed.
    The Department concluded that having a second JSF engine would not
    yield net cost savings through competition. Development costs of the
    second engine program are estimated to be, at a minimum, $2.4 billion
    through the future years' defense program (FYDP). In the most
    optimistic projection, savings in production would not begin to accrue
    until 2025. In the most realistic scenario, savings are never achieved,
    regardless of program time.
        It can certainly be argued that a second engine reduces the
    program's engine failure risk, but the Department has found that to be
    an acceptable risk.
        Here, it is useful to consider the history of the alternate engine
    debate. In the 1970s, engine reliability was much lower than it is
    today. As late as December 1990, the Air Force's B-1 fleet stood down
    for 3 months due to an engine defect. However, reliability and safety
    factors have increased 10-fold in last 30 years. Today, for the Air
    Force's F-16, the single engine mishap rate has dropped from 10 per
    100,000 hours to 1 per 100,000 hours. This same reliability increase is
    found in the civilian airline industry where Southwest Airlines now
    experiences only 1 engine shutdown per 177,000 flight hours. Put
    another way, one of their aircraft must fly for 53 years before
    experiencing one in-flight shutdown.
        The ``Great Engine War'' between Pratt & Whitney and General
    Electric, in the early 1980s, served its purpose at the time by
    generating competition, and it was one of the catalysts for the
    incredible achievements of the engine industry's unprecedented
    accomplishments. While there were benefits to engine competition in the
    past, recent experience with engine development for the F-22A and F/A-
    18 E/F indicates that sole-source risks are modest and acceptable. In
    over 12 years, the F119 engine found in the F-22A has amassed more than
    42,000 hours in ground and flight-testing, and another 16,000 hours of
    operational time. With zero F-22A engine-related losses and no
    groundings due to engine-related problems, the F119 engine marks a
    significant improvement over legacy fighter engine programs like those
    that prompted the ``Great Engine War.''
        The F135 engine will benefit from a 70-percent commonality with the
    superb F119 engine. Moreover, the F119 is projected to have accrued
    800,000 hours by F135 initial operational capability (IOC). The data
    from that program will be used to improve the F135 in terms of design,
    repair, and supportability. Indeed, for the F135 propulsion system, a
    30- to 50-percent improvement in reliability and safety is predicted,
    compared to the F119, which is already the most successful jet fighter
    engine in the Department's history.
        The Department has concluded that while it would be nice to have a
    second engine, it is not necessary and not affordable. As a general
    matter, applying resources to a specific problem is usually more timely
    and effective than diverting funding to a redundant solution.
        In the 2006 QDR, the Department laid out a future strategic vision
    to meet the new and broader array of threats to the Nation. This vision
    calls for a shift of emphasis, and making that shift forces hard
    decisions in the budgeting process. It requires the Department to
    carefully consider capabilities versus cost and, if necessary, to
    terminate or modify less effective and lower priority programs in order
    to be able to afford the new capabilities required.
        The Department began this process in the President's fiscal year
    2007 budget submission. The Department's senior civilian and military
    leadership determined, for example, that to defeat terrorist networks,
    it is necessary to fund the largest increase to Special Operations
    Forces since Vietnam. Another example is that the Department determined
    that in order to strengthen homeland defense and hedge against
    technological surprises, a substantial investment in broad-spectrum
    medical countermeasures against advanced bio-terror agents is
    necessary.
        Making these investments required some hard choices. The fiscal
    year 2007 President's budget submittal contains some ``leading edge''
    hard choices from the QDR. Most of the hard work, to align the defense
    program with the strategic direction of the QDR, will continue into
    fiscal year 2008, fiscal year 2009, and forward.
        I would also remind the committee that each contractor team that
    bid on the JSF selected the current Pratt & Whitney engine design. The
    alternate engine was directed by Congress, and the Department has been
    fully compliant with that direction until it became evident that the
    cost risk benefit was no longer advantageous. Continuing with that
    second engine would lead the Department down the classical procurement
    path of delays and spreading out the costs over time. Without the
    ability to adjust procurement to meet defense needs, the Department
    will be mired in the status quo at a time when it needs to be flexible
    and dynamic.
        Today, I am asking you to join the Department of Defense in making
    the hard choices we have to make, to implement the strategic vision of
    the QDR. A few days ago, the chairman of the Senate Budget Committee,
    Senator Judd Gregg, summarized our situation quite clearly: ``We must
    also recognize that there is no such thing as an unlimited budget--
    difficult choices must be made.''
        To meet the security challenges of the 21st century, maintaining
    the status quo is not an option. The QDR is a great start, but its
    vision can only be achieved with the support of Congress to adjust
    programs and funding. Writing about the challenges the founders of our
    Nation faced, David Hackett Fischer said that ``the history of a free
    people is the history of hard choices''. It was true then, and it's
    true today.
        Thank you again for your interest in our programs, and your
    unwavering, strong support of our men and women in uniform--they are
    remarkable. I look forward to your questions.

        Chairman Warner. Thank you, Mr. Secretary. We're going to
    ask the indulgence of the panel again. Another one of our
    valued colleagues has arrived with other commitments elsewhere.
    Senator Clinton, if you would like to proceed with your opening
    comments and a question or so, we're happy to accommodate you.
        Senator Clinton. Thank you very much, Mr. Chairman. I
    appreciate your courtesies. It's a very busy day, obviously,
    here in the Senate. Thank you, gentlemen. Thank you all for
    being here.
        Secretary England, I'm as interested in the process as the
    outcome because one of the things we've tried to do in the
    committee is begin what is a very arduous task of trying to
    figure out ways we can streamline some of the procurement and
    acquisition processes. There has been testimony about the
    decision but let me ask you, what examples can you point to as
    to where sole sourcing has been the optimal solution for a
    comparably large project?
        Secretary England. I would think in just about every case
    we end up with sole sourcing on most of our products. For
    example, we have one source on submarines. We have one source
    on aircraft carriers. We have one source on the F-18. We
    actually have one source on the JSF. There's only one source.
    We have one source in a lot of our products. Typically there is
    a competition depending on the circumstance early on. In this
    case that decision was made in 1995 when all three of the
    competitors went forward with the Pratt & Whitney engine. So
    the Pratt & Whitney engine is a carrier literally from 1995 but
    I would say of the basic program itself, we competed the JSF
    program, and at that time, three companies competed.
    Ultimately, one was selected, all three competed with the Pratt
    & Whitney engine, and the selection made Lockheed Martin the
    winner of the JSF program with the Pratt & Whitney engine, and
    it was then frankly directed by Congress that we enter into
    another engine program.
        So we have been through that process, in my judgment, we've
    made those decisions, and now it's a question of, do we bring
    in another engine manufacturer? Our judgment is that is not a
    wise decision in terms of cost, reliability, or benefit to the
    program.
        Senator Clinton. One of the things that I'm concerned about
    is the impact on the industrial base of these sole sourcing
    contracts because as you look over the horizon about the
    threats to our Nation, to our military, maintaining redundant
    capability and capacity is an issue. At least it is an issue
    for me trying to figure how we can maintain production and
    manufacturing capacity, and I worry that you just put this
    particular issue aside that we are hollowing out our industrial
    base and I think that's something that at least should give us
    pause.
        I also realized looking at what was said yesterday that
    this was a joint project with GE and Rolls-Royce, and the U.K.
    Minister of Defense for Procurement said there had not been any
    consultation with the U.K. until after the fact when they were
    informed. That also concerns me because I think that we want to
    encourage defense cooperation between the United States and our
    closest allies.
        In fact, the JSF has been held out as an example of that
    cooperation. But apparently there wasn't any confirmation. Or
    can you confirm what the committee heard yesterday that there
    was no consultation with our partners on this decision?
        Secretary England. That's correct, Senator, and frankly I
    believe that's the right decision. This is an engine literally
    being paid for by the United States Government. I will tell
    you, given the choice, I think anybody if they can get
    something for nothing they'll take it. I understand that
    exactly so I would think that certainly there's interest in
    having the second engine because people benefit. There's
    industrial benefit from countries and companies, I understand
    that. So, no, we did not consult with the countries
    specifically although they were part of the QDR, so they were
    an integral part as a member of the team but we did not have
    separate discussions in this regard because frankly this is an
    issue about a defense budget. This was not a question of their
    defense, it was a question on money we spend and it is a
    question of tradeoffs in terms of how we spend that money. So
    within our defense budget if we decide to spend this then we
    don't buy something else. We don't buy a ship or we don't buy a
    helicopter, we don't buy something else and we also have many
    requirements as part of the QDR still to be addressed. We have
    not yet fully addressed the QDR so there are a lot of actual
    items and issues still to be addressed that will need to be
    funded and we will prioritize and try to balance that
    portfolio.
        I believe frankly that a decision needs to be made in the
    DOD and while our friends and allies are very close and we
    share a lot with them, at the end of the day, this is our cost
    decision.
        Chairman Warner. Would the Senator yield, not to take away
    any of your time, because I was going to proceed on this line
    of questioning myself. But I'm astounded at your comment. They
    were designated as level one partners. Now, the word
    partnership to me has a certain meaning which indicates
    participatory management of some degree and they also
    contributed a good deal towards the dollar cost of the research
    and development (R&D) for that engine--Great Britain did. Was
    it understood when you put the consortium together that we had
    unilateral authority to proceed to make judgment calls of this
    magnitude without any consultation with a entity, i.e., Great
    Britain, designated as a level one partner?
        Secretary England. Senator, this engine is in the program
    because Congress decided to have this engine in the program.
    This is not a fundamental, technical decision for the JSF
    program. I want to be as straightforward as I can on this. This
    is a program that's a redundant engine. It is a second engine.
    It's not the primary. The primary engine and the system being
    developed, the STOVL will meet all of its requirements and
    deliver to the British Government. This is an additional cost
    to the program, and in fact this cost in the FYDP is more than
    the complete amount of money that's being paid for by the U.K.
    So their contribution to the program is $2 billion. Just across
    the FYDP this is $2.4 billion for this program so, they are
    great friends and great allies and they're going to get a
    magnificent airplane if they decide to buy the basic STOVL
    airplane. But this is $2.4 billion that we will not spend on
    other equipment or delay this program and in my judgment that
    is our decision to make.
        Chairman Warner. I'll return to this line of questioning
    and I'll direct your attention to the August contract that
    you've let for this second engine, some $2 billion, to explain
    how this quick change of judgment was. Please continue with
    your full line of questions, Senator.
        Senator Clinton. Mr. Chairman, I just wanted to conclude by
    again asking the Secretary just to explain for me on his
    response to the argument made yesterday by GE along with some
    documents that were submitted for the record by GE and Rolls-
    Royce that an engine competition would not only lead to greater
    flexibility but would actually be more cost effective and they
    attached a matrix that suggested an engine competition would
    reduce the cost of the engine by 10 percent over the life of
    the program. I would just be curious, Mr. Secretary, if you've
    reviewed this analysis and what your response to the arguments
    made in it would be?
        Secretary England. I haven't looked at that analysis;
    however, Senator, in our analysis if you save 10 percent of the
    cost across the program then it still costs us more money. In
    other words, that does not save money. You never recover the
    savings; that is, you never recover the cost at a 10 percent
    recurring cost savings. So I haven't looked at their particular
    analysis but if the analysis is 10 percent my conclusion would
    be it will not end up with net savings for the program.
        Senator Clinton. Mr. Chairman, just for the record, if we
    could get a specific response from the Department to the
    arguments made in this analysis, I think that would be helpful.
    Because, again, I'm interested in streamlining our process,
    being smart, being competitive where it appears that
    competition is in our best interest, having a manufacturing
    capacity that actually operates here in our country on our soil
    which I think is important. So I would appreciate, Mr.
    Chairman, if we could get a response to this particular
    analysis.
        [The information referred to follows:]

        As Deputy Secretary England testified before the Senate Armed
    Services Committee on March 15, 2006, the Defense Department examined
    the case for a second engine supplier for the Joint Strike Fighter
    (JSF) and judged that at this point in development the cost of
    competition outweighs the benefits. This conclusion turned on two key
    factors: we do not expect net savings from competition and we have
    strong confidence in the performance and reliability of the Pratt &
    Whitney F135 engine. Scott Donnelly, President and CEO of General
    Electric-Aviation, devoted most of his remarks to the topic of cost
    savings, so the discussion below will focus on cost.
        The National Defense Authorization Act for Fiscal Year 2008 called
    for the development of a second engine for the JSF. The original JSF
    program did not make provision for a second engine supplier, consistent
    with the F-22A and F-18E/F programs, but congressional interest was
    strong in creating two suppliers. Prior to that time there was
    opportunity for competition when McDonnell Aircraft, Lockheed Martin,
    and the Boeing Corporation competed for the JSF award, but all three
    companies made an early selection of the Pratt & Whitney engine for use
    in their prototypes.
        Mr. Donnelly's testimony discussed a range of cost savings based on
    assumptions associated with the number of JSF engines and engine
    ``equivalents'' produced, the cost of those engines/equivalents, and
    the reduction in production cost (10 percent and 20 percent) due to
    competition. Based on his assumptions, Mr. Donnelly indicated savings
    from competition could be $5 billion to $16 billion for worldwide JSF
    procurement.
        Based on our past experience and basic economic principles of
    production we do not expect net savings from JSF engine competition.
    The 10 and 20 percent cost reduction figures cited in the testimony arc
    difficult to support empirically. While competition can have a
    dampening effect on production costs, there are other factors that tend
    to increase production costs when you split a given production quantity
    between two contractors. This is due to a reduced advantage from
    ``learning curve'' effects (whereby costs decrease as a company
    produces more units) and from ``rate effects'' (whereby fixed costs are
    spread over production units). Our experience with the F404 engine in
    early-model F/A-18s illustrates the point: the average unit costs of
    this engine did not decrease after competition was introduced.
        Any discussion on the number of JSF engines and engine
    ``equivalents'' should make clear the distinction between the engines
    that would be bought in a competitive environment and the engine
    '`equivalents'' (based on spare parts) that would not be procured
    competitively, since GE spare parts would not be used in Pratt &
    Whitney engines and vice versa. Applying production cost reductions
    only to engines procured in a competitive environment would markedly
    change the cost savings figures cited in the testimony.
        Finally, another clarification to the testimony is the need to
    consider not only production costs but also the investment cost of
    developing a second engine source. With the second supplier for JSF
    engines this investment cost is high--at least $2.4 billion in the case
    of the F136. This initial investment cost (which must be paid upfront)
    must be recouped by production cost reductions over a long period of
    time in order to eventually achieve net savings in the program.
        Furthermore, in addition to acquisition cost considerations, a
    second supplier introduces a second supply chain for maintenance and
    repair, which increases lifetime support costs. In some cases,
    maintaining two engine types complicates scheduling, particularly when
    all aircraft in a unit must be equipped with the same engine because
    carrying two sets of spare parts is problematic or not feasible.
        The Department reviewed the rationale for a second engine supplier
    in 1998 and again in 2002. While both reviews noted some benefits to
    maintaining two engines, neither review concluded that adding a second
    engine supplier would yield substantial cost savings. A 2002 RAND
    study, Military Jet Engine Acquisition, reached a similar conclusion.
    The RAND analysis found little evidence that engine competition during
    the Great Engine War of the 1980s and 1990s had generated significant
    net R&D or procurement savings.
        In summary, the question of whether to fund a second supplier for
    JSF engines is a difficult decision, but the Department believes the
    facts and the logic of the case weigh towards a single supplier--
    especially given the range of risks we must mitigate across the entire
    Department of Defense program. Investing substantial amounts of money
    to create JSF engine competition that is unlikely to result in net cost
    savings is not an effective use of taxpayer dollars.

        Chairman Warner. Without objection that'll be done. I thank
    the distinguished colleague from New York for finding an
    opportunity----
        Secretary England. Thank you, Senator, we will provide the
    date. We appreciate your comments here. We do have a common
    objective and thank you.
        Chairman Warner. Now, Mr. Secretary, you have completed
    your direct testimony. Do you desire to have the other
    witnesses at the table provide direct testimony?
        Secretary England. They are available either for comment or
    to answer any specific questions.
        Chairman Warner. I'll leave that to your discretion. We're
    perfectly willing to proceed as you so desire. Do you wish to
    have the admiral say a few words?
        Secretary England. No, I would say everyone with me today
    is prepared to answer any question you may have, Senator,
    anyone at the table rather than just a statement, but they are
    available. By the way, I do want to say that as part of the QDR
    process there is unanimous agreement on this decision. That is
    the military fully concurs in this, all the Services, the Vice
    Chiefs who are distinguished pilots who will fly or have flown
    in the past and also the Chairman of the Joint Chiefs agrees
    with this decision.
        So this is a decision that is unanimous across the DOD,
    both civilian and military leadership, and they're here to
    provide any clarity they can for the committee.
        Chairman Warner. Could you go back and address the contract
    that was let in August 2005 and the series of steps that led to
    the decision to go forward with that contract and then what was
    the swift reversal of 180 degrees to go away from that decision
    to the budget problem?
        Admiral Enewold. Senator, I'd be glad to answer that.
    Thanks for the question.
        I'm the program director for the JSF. Last year, not as
    part of this 2007 submission, the discussion of the need and
    utility of the F136 was contested, not contested but discussed
    in the Department. Frankly we went to several reviews and the
    decision was made that we would go forward.
        Chairman Warner. Let's get a few date/time groups of this
    decision process.
        Admiral Enewold. Sure.
        Chairman Warner. As best you can reconstruct it and you can
    go back in the record and change dates if you can't give me a
    precise date.
        Admiral Enewold. I can give you within a month or so and
    I'll provide those as we go. In the October 2004 timeframe we
    were discussing what we would do with the alternate engine in
    advance of the contract award within the Department. At the
    time, Secretary Wynne, who was the Acting Secretary for
    Acquisition, Technology, and Logistics (AT&L), said that he
    believed that it was the right action to continue on with the
    F136 to provide Congress time to discuss the alternatives and
    so the decision at that time was to proceed with a transition
    contract which we were in at the time on the F136 and
    ultimately award the F136 SDD contract in August 2005 because
    we wanted to make sure that we didn't preempt Congress' ability
    to fully and openly discuss the program. After that, and as
    part of the QDR which was frankly outside the program, the
    decision this last year was reviewed as part of the QDR and I
    think the Vice Chiefs and the Secretary could address that
    more. The discussion was really one of, what is the priority of
    the F136 in the overall defense budget? In December, we were
    notified that they wanted to take the fiscal year 2007 and
    outfunding for the program in order to pay for other
    priorities.
        Chairman Warner. Had you been asked for any analysis to be
    submitted as a part of the QDR process or you just woke up some
    morning and there's a buck slip on your desk that says goodbye
    program?
        Admiral Enewold. Yes, sir. There actually have been two
    program management advisory groups that have occurred in the
    last 6 years and they both concluded there were both benefits
    militarily and operationally for the second engine. Both of
    those reviews concluded, however, that it's a great idea if you
    can afford it.
        Chairman Warner. Can you show me and provide for the record
    some written documentation, ``it's a great idea if you can
    afford it''?
        Admiral Enewold. I believe so, sir.
        Chairman Warner. I hope so.
        Admiral Enewold. Yes, sir.
        Secretary England. Senator, we have the data. We're happy
    to provide all the studies and analysis, everything that's
    happened in the past on this particular issue.
        [The information referred to follows:]

        In December 1997, the Assistant Secretary of the Navy directed the
    establishment of the Program Manager's Advisory Group (PMAG). The PMAG
    was directed to ``thoroughly review the technical and programmatic
    issues of the alternate engine program, determine its costs and
    benefits, and report the findings.'' They reviewed the rationale for a
    second engine supplier and reported the initial findings in 1998. The
    PMAG conducted a follow-up study in 2002 that was primarily focused on
    the break-even cost analysis.
        The PMAGs concluded that the primary value of an engine competition
    was foreign partner participation, reduced risk of single point
    failure, and maintaining the engine manufacturing industrial base.
    While both reviews noted some benefits to maintaining two engines,
    neither review concluded that adding a second engine supplier would
    significantly reduce development risk or yield substantial cost
    savings.
        The PMAG analysis is provided in two attachments. The first one
    titled ``Admiral Dyer Presentation 1-12-98'' is the original PMAG
    analysis done in 1998. The second one titled ``PMAG Cost v4 2'' is the
    updated version with the cost analysis.
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        Chairman Warner. But it is perplexing. The total contract
    award in August was what? Or was it August or early September?
        Admiral Enewold. The actual award is dated in August. The
    total contract value is $2.4 billion.
        Chairman Warner. You don't lightly make a $2.4 billion
    decision in August to have a reversal in probably less than 90
    days.
        Secretary England. Senator, we were in the process, if I
    can interrupt----
        Chairman Warner. You're not interrupting, you're providing
    statements for the record.
        Secretary England. Thank you. Senator, last year we were
    working the QDR and when we got into I would say the August,
    September, October time period but mind you we were doing the
    2007 budget in parallel with the QDR. As we moved along in the
    QDR, we were then looking to see how we could accommodate as
    much of this shift in emphasis in the QDR because we knew that
    we needed to shift emphasis for the U.S. military.
        So then we started looking at the funding available,
    programs, and the amount of shifting we needed to do and at
    that time we started looking across our portfolio of programs
    again to balance the cost, risk, and benefit of all these
    programs across the portfolio. So the first time it was looked
    at as part of the QDR in terms of the dollar impact of this was
    probably in about the September time period. I don't know
    exactly, but about that period of time, so we were
    progressively looking across programs and this was one of the
    programs we looked at. We had looked at all three variants of
    this airplane. Frankly I had some hope that there were other
    ways that we could satisfy the requirement for air power than
    develop three different versions of the airplane. We concluded
    we needed all three versions of the airplane but we also
    concluded at that time while we needed all three versions we
    did not need a second engine and there was a lot of discussion.
    People made presentations, discussions, data reviewing past
    histories, et cetera. So this was an outcome of I would say a
    very thoughtful, deliberative process and it arrived at the
    best decision we could in terms of the total portfolio of
    programs, the cost of those programs, and the benefit and the
    risk associated with them.
        Chairman Warner. I will return to this line of questioning.
    I don't want to dominate it here. Please proceed with yours.
        Senator Lieberman. Thanks, Mr. Chairman, and thanks, Mr.
    Secretary and witnesses. It seems to me, Admiral, that you said
    something that we have to remember and that you said it
    colloquially but two engines suppliers is a great idea if you
    can afford it. But the obvious judgment was that we can't
    afford it and I presume on the other side I know this from what
    testimony you've offered, Secretary England, that obviously if
    you felt there was operational risk associated with one engine
    you'd go ahead with the two. Am I right?
        In other words, you've reached a judgment militarily and
    operationally that the single engine program does not involve
    risks that would cause you to want to go for the two.
        Secretary England. That's correct. Let me put that in the
    light of the people who are going to fly the airplane, what if
    I have them answer the question for you, Senator?
        Senator Lieberman. Okay.
        Admiral Willard. Sir, that's correct. When we look at both
    engines, the many years of competition that resulted in the
    decision that we ultimately made, the advances in engineering
    that were discussed earlier, and the degree of confidence and
    reliability evidence not only in the F-22 variant that has a
    great deal in common with the F135----
        Senator Lieberman. Excuse me for interrupting but I take
    what you mean there is that we have the F119 engine on the F-
    22. That's a Pratt & Whitney engine which has performed well
    and is a kind of forerunner to the engine for the JSF.
        Admiral Willard. Yes, sir. It has performed extremely well
    and has about 70 percent or so of engineering in common with
    the F135. Our level of confidence in the F135 is entirely
    within the risk guidelines that you allude to.
        Senator Lieberman. Incidentally, and I believe Secretary
    England mentioned this, but just in terms of single-source
    engine programs, the experience with the GE single-source
    engine of the F/A-18 has been similarly positive, has it not?
        Secretary England. Yes, it has, Senator. We're very
    satisfied with that engine program. It has performed well in
    the F/A-18 and we do not have an alternate engine for the F/A-
    18.
        Senator Lieberman. Incidentally, I asked Lord Drayson from
    the U.K. yesterday about some of their air programs and they're
    all single-engine, the Harriers, Toronados, Eurofighter, and
    part of the answer I think was that they couldn't afford a two-
    engine program but neither can we anymore.
        In terms of the risk, I want to ask you to respond to the
    concern that has been expressed which is that part of the risk
    in pursuing a single engine for the JSF is due to the threat of
    grounding, the nightmare scenario of grounding the entire fleet
    if there was a serious design or operational problem and if
    there were two engine makers then that's less likely to occur.
    But I know you consider that and give me your evaluation of
    that.
        Secretary England. Senator, first of all, the F119 which is
    the forerunner of the F135 as you commented, has over 42,000
    hours and we've never had a grounding, haven't had injury
    related losses so----
        Senator Lieberman. Never?
        Secretary England. That's the data I have, that's correct.
        Senator Lieberman. I believe that's true.
        Secretary England. So also I will tell you my judgment
    based on my technical background and running a lot of complex
    programs myself before government, I will tell you that in my
    judgment you want to concentrate on the product, that is invest
    your money, your talent, and your energy on making the product
    work and not go to a redundancy because that detracts in terms
    of money and concentration, both management talent and
    technical talent.
        So in my judgment you will get far better performance if
    you concentrate on the single product at hand. You have a
    single supply chain, you have a single type of maintenance, you
    don't even have to have people worried about two different
    types of maintenance. There are some benefits to having the two
    engines but there are also disadvantages. There are supply
    chain issues, there are a lot of added cost issues, training
    issues, manuals, all the things that go with this which we
    actually have not factored in. The 2025 analysis is factored
    in, based on the investment cost not the cost of maintaining
    this over the life of the program and that's another cost and
    it does add another dimension to a program which in my judgment
    is not beneficial to the program. So, while there are benefits,
    there are also negatives to this.
        Senator Lieberman. General Corley and General Magnus, if
    you'd respond, too, on your Service's evaluation of whether
    there's any risk that you worry about in going with the single
    engine for the JSF.
        General Corley. Excellent question, Senator. When we
    continued this----
        Chairman Warner. Pull your mike up, please. Thank you very
    much.
        General Corley. --examination into an alternative engine--
    --
        Chairman Warner. General, can you kindly bring your mike up
    and speak because there are a lot of people in the back who for
    one reason or another want to hear this.
        General Corley. It was a continuing examination on this,
    not just one time slice. That examination really centered on
    technical risk as well as cost benefit. In my mind on technical
    risk, we wanted to ensure that we were doing the right thing
    from a safety standpoint as well as from a reliability
    standpoint.
        Senator Lieberman. Right.
        General Corley. That's why this extensive examination and
    how we have progressed through history where we reduce the
    overall single engine losses of the F-16 by an order of
    magnitude from 10 down to 1, speaking to the safety, bringing
    us forward to where we are today on the F119 engine, and the
    fact that there's 70 percent commonality of that turbo
    machinery with this anticipated at the F135 engine that's in
    the JSF, and the fact that it is anticipated to be 50 percent
    potentially even more reliable.
        So from accepting technical risk, looking at reliability,
    and looking at safety, we felt well-grounded on that decision.
    We have not fully examined cost benefit in the past because
    we've looked solely at the cost of an engine. When we began to
    aggregate that up and look at other costs as Secretary England
    has commented, we have other unintended costs that we never
    anticipated. We have to recruit and then retain two airmen,
    each with a specialty on a different engine. We have to look
    toward two different logistics and supply systems. We have to
    look at unique test equipment across two different engines. All
    of those costs also become additive. If we wind up with fleets
    of aircraft that have different engines then we lose
    flexibility in terms of where they are based because where they
    need to be supported.
        So from a cost benefit and from a technical standpoint, we
    unanimously agreed that this was the right decision.
        From looking at the large engine population inside of our
    Service, and I'm sure General Magnus will comment here, we have
    about 18,000 to 20,000 engines, and it's roughly 50 to 55
    percent GE, and about 40 to 45 percent Pratt & Whitney. We have
    engines in bombers, engines in trainers, engines in
    helicopters, and engines in fighters, just as Admiral Willard
    has talked about engines in his as well.
        So, sir, from my standpoint that's the examination that we
    collectively went through both inside the Air Force and with
    the Department.
        Senator Lieberman. General, thanks for that very
    informative and reassuring answer.
        General Magnus.
        General Magnus. Senator, thank you very much. Mr. Chairman
    and Senators, I'll just start off by reminding us of comments
    made by Senator Lieberman about concerns over inadequate
    quantities of all weapons systems that we're able to procure
    because of the rising cost as well as the fact that it is
    rising unfortunately sometimes faster than the defense budget
    is rising as well as other costs, and the remarks made by the
    Deputy Secretary of Defense about risk, cost, and benefit. Now
    to answer your question directly, I'll do it in terms of
    benefit, cost, and risk to the Marine Corps and I think I
    completely share the comments of my military colleagues as well
    as the Deputy Secretary and Admiral Enewold.
        In terms of military benefits we're concerned about
    performance, reliability, and maintainability of engines. As a
    small Service that's very expeditionary and leaning forward
    with our partners in the Navy and the Air Force on efficiencies
    in logistics and supply management, we have a proven record
    with existing single engine aircraft and single engine
    manufacturers as providers. We think the military will benefit
    once we are confident in the performance of the engine and the
    other attributes that I'll talk to next. We are very
    comfortable that this program is on the right track with its
    primary engine.
        Let me go to something that's not normal for the Marine
    Corps, but the industrial base, because I have a little bit of
    experience in acquisition. I'll defer to Admiral Enewold on the
    true expertise, but our concern--I believe Senator Clinton had
    mentioned earlier about industrial base concerns--is that we
    have a tremendous reliability from the three engines that are
    associated in this program as of today. Pratt & Whitney, GE,
    and Rolls-Royce will still be making tactical engines for the
    military so this is not like one of these would go away,
    although certainly the consideration here is whether there
    would be two manufacturers for this particular aircraft engine.
        In terms of cost, this is a big concern for the Marine
    Corps because the Navy and the Marine Corps are literally
    together sharing the nonrecurring as well the recurring costs
    of this program and we are very much concerned about the
    affordability of the fleet that we need for the sailors and
    marines to be able to go to sea in peace and go to war, as well
    as the cost of the many different aircraft. We do not see any
    significant near-term or long-term savings associated with this
    investment of over $2 billion.
        Of course, that's important because if there were
    significant savings one way or the other, then that gives you a
    chance to see what would be your next investment you would make
    either with the savings or the cost avoidance. We are concerned
    about other impacts, of course, because if we have to absorb
    the cost, any cost increases in any program and in particular
    any cost increases in the JSF program, will be offset by moving
    money from other things and as Senator Lieberman said, we are
    already having difficulty with the annual rate in any given
    line, many critical lines are not at the rates we would like
    which also affects their cost so it has a kind of a perverse
    relationship.
        But lastly the risk thing is the main thing and the reason
    why you do make these nonrecurring investments. Engines
    nowadays as we said earlier and particularly the core of the
    engines are very reliable. It's not that we don't have engine
    problems but engine problems are normally associated with
    accessories and other functions. This engine, the primary
    engine, is a derivative of the F119 and has a very solid track
    record to date. Again, particularly in aircraft like the F-18
    where we fly with GE engines and like the Harrier that we fly
    with Rolls-Royce engines, we have a proven track record of
    dealing with the inevitable problems you will have over the
    life of an aircraft with problems in the components of the
    weapons system, but the engines, particularly their cores, are
    increasingly reliable.
        We're concerned about the risk of stretching the initial
    operational capability (IOC) of the JSF. The Marine Corps
    already took a somewhat controversial and very significant risk
    by literally skipping a generation of aircraft as we decided
    not to team with the Navy on the F-18 E/F Super Hornet, a
    tremendous aircraft, but we decided that we would defer
    recapitalizing our Hornets, our F-18As, our F-18Cs, our two-
    seat F-18Bs, and we would defer recapitalizing our Harriers
    including their training aircraft and we have literally skipped
    that generation almost to unacceptable risks right now. Right
    now the IOC of the JSF has already slid from fiscal year 2010
    to fiscal year 2012. We don't have a hot production line for
    any of our aircraft right now, so we don't have another
    aircraft weapon system alternative and should the increasing
    cost of JSF further slide this program to the right, we are
    already experiencing, in still safe aircraft, limitations to
    the fatigue life on the aircraft and so that is a significant
    concern of ours.
        The replacement of our Hornets and our Harriers with a
    single aircraft with as much as possible single major
    components of the weapon system, gives the attributes that my
    colleagues and the Deputy talked about previously about a
    single training system, single supply chain, and logistic
    management and, therefore, we see all of the benefits of the
    program as is being recommended now and we are concerned
    particularly about the risks of absorbing these costs and
    further stretching the rubber band on Marine tactical air
    (TACAIR).
        Senator Lieberman. General Magnus, thanks again. Very
    strong answer and I appreciate that all the Vice Chiefs have
    made very clear here that--and, of course, you're representing
    the men and women who are going to fly these planes--that
    there's no risk that you see from the single engine decision,
    you wouldn't accept a risk, but the second is really an
    interesting point and it's the point that the Italian and
    Australian military leaders yesterday were concerned about,
    which is that if we go with the second engine it's going to
    cost money and that money is going to come out of other parts
    of the JSF program and that's going to cause at least delay if
    not increase in cost, probably both, but the delay then creates
    a separate risk of its own which you've testified to. Thank
    you, Mr. Chairman.
        Chairman Warner. Thank you very much.
        Senator Inhofe.
        Senator Inhofe. Could I get a clarification because I, you
    may have had a clarification, I just missed it, but as far as
    the 1996 mandate that came from the defense authorization bill,
    my memory served me that it was a mandate for a second, an
    alternate engine, but I'm hearing now that maybe instead of
    that it was merely language that directed the engine
    competition and all the DOD would have to do is report back.
    Now, could you or maybe Charlie Abell or someone clarify
    exactly what it was in 1996 bill that we----
        Chairman Warner. Thank you, Senator. I have it all right
    here and as soon as, I don't want to preempt all the senators
    here, but this is the first time the Senate authorizing
    committee recommended the two engines. They said proceed to the
    manufacture of all jet engines for three Services' future
    aircraft without any additional competition is not likely to be
    cost effective. Then here's the record in the conference
    committee directly that there be two engines made. So I will go
    into that in some detail.
        Senator Inhofe. Okay. That's fine.
        Chairman Warner. Clearly, I'm not so sure you don't have to
    have an amendment to our law to underpin this decision.
        Senator Inhofe. Let me get out of that. I just came from
    the Readiness and Management Support Subcommittee hearing. I'm
    going to be going back to that but one of the things that
    concerns me most, and General Magnus you were talking about, if
    something happens and we have to take this out, if the cost has
    to be absorbed in the JSF program what it would do to that
    program, and I agree wholeheartedly with that. But just as bad
    is if they took it from someplace else in the defense budget
    because I came from the Readiness and Management Support
    Subcommittee hearing, and I'll tell you, Secretary England, we
    can't afford to cut anything more whether it comes out of the
    Army or the Navy or the Air Force so it would be equally bad if
    that has to be absorbed. I may be the only member who came to
    this without a dog in this fight. I just came to learn as I
    told you, Secretary England, and I haven't learned that much so
    far, but what I have learned is this: Drawing from my own
    experience, you go back historically and look at back during
    the reciprocating engine days halfway through, well, all the
    way through World War II, the whole idea of having a twin
    engine plane at that time was that the engines were not
    reliable, they'd drop out. In general aviation when the turbine
    engine came along they quit that concept of having twin engine
    airplanes because the reliability of one turbine engine was
    greater than two reciprocating engines. Now if you take that
    forward it's even much more so.
        I found it very interesting, Secretary England, and I'm
    reading right now from your printed script. I don't think you
    actually stated this but if you'll take over the last 10 years
    the reliability of the F16 it was 10 per 100,000 hours in 1996
    or prior to that time and now it's 1 per 100,000 hours. So the
    reliability's increased 10-fold, is that correct? Am I
    interpreting that right?
        Secretary England. That's correct, Senator.
        Senator Inhofe. When I look at this, it just seems to me
    that the reliability has reached a point now where if it's
    going to be $1.8 billion or $2.4 billion it doesn't really
    matter too much to me, we just can't squeeze it out of any
    place that I know of in the entire defense budget, let alone in
    the JSF program.
        So I want to continue to listen to this but that would be
    my decision right now. All these whether it's Pratt & Whitney,
    GE, or Rolls-Royce, they're all reliable, and probably the same
    level of reliability. In this particular case, if we can save
    it by having just the one without the backup I'd want to do
    that for purely fiscal reasons because I don't see that risk is
    there at all that even is measurable.
        Secretary England. Senator, we would certainly agree with
    your conclusion. Thank you, sir.
        Senator Inhofe. Thank you, Mr. Chairman.
        Chairman Warner. Thank you, Senator, and might the record
    reflect the number of hours that you have piloted planes? I'd
    say you speak from some experience.
        Senator Inhofe. I just passed through 10,000, yes.
        Chairman Warner. Ten thousand, so he's quite a modest man,
    but is the Senator also aware that the committee understands
    the F119 engine undergoing tests at Arnold Engineering
    Development Center in October last year had a low pressure
    turbine blade liberate causing a Class A mishap? So I'm going
    to bring that back to the General from the Air Force here who
    speaks that we've reached the ultimate of perfection in our
    engineering. Senator Collins.
        Senator Collins. Thank you, Mr. Chairman. I want to go back
    to the issue of the industrial base which many of you have
    touched on in your discussions. Both Pratt & Whitney and GE are
    terrific companies that contribute greatly to the strength of
    our military and obviously I think everyone wants to see those
    two companies continue to contribute to our industrial base and
    to the strength of our Armed Forces.
        Secretary England, I guess I will address this question to
    you but you can feel free to hand it off if you wish. Given the
    premise that we need a strong Pratt & Whitney and we need a
    strong GE, without the JSF alternative engine work, does GE
    have a sufficient volume of workload to remain a viable and
    important contributor to our military tactical engine business?
        Secretary England. First let me say, Senator Collins, your
    first comment about they're both magnificent companies and I
    want to second what you said in that regard about both the
    companies because they both do build us excellent products and
    we're proud to have them as our suppliers.
        The question is probably better directed frankly to the
    manufacturers themselves, although I guess in my own judgment,
    there will be jet engine programs for a long time, both
    commercial and military, of great variety and while engines for
    fighter airplanes are indeed different in terms of numbers of
    cycles and core temperature, my own judgment is GE will not go
    out of this business if they're not the second engine. Now,
    they may reach that conclusion because business people can
    decide on what their business prospects are.
        My own judgment is I would not expect them to do that. I
    would expect that there are still long-term opportunities in
    the marketplace that I would hope they would not walk away from
    but, of course, that's a business decision they would have. But
    my judgment would be that you will still have Rolls-Royce in
    the business, you'll still have GE in the business, you'll
    still have Pratt & Whitney in the business, because there is
    still a big business out there. So that's my judgment. If I was
    putting on my industrial hat, I would think that would be a
    major decision to walk away from this kind of a market frankly
    but, again, that's a decision I think you'll need to ask the
    next panel.
        Senator Collins. I will, but, General Corley, I think you
    had some statistics in response to your exchange with Senator
    Lieberman about the percentage of engines manufactured by GE
    versus Pratt & Whitney. Could you elaborate on that and provide
    us with that information again?
        General Corley. Certainly, and we'll be happy to provide
    these for the record as well. As we look across the GE and the
    Pratt & Whitney total engine population, this is all
    applications from our trainers, our helicopters, our bombers,
    and our fighters as of today. This is just an approximate
    number. We have about 10,300 GE engines which represent about
    56 percent of the engines in the United State Air Force. We
    have about 7,800 or so Pratt & Whitney engines or about 43, 44
    percent of the U.S. Air Force engines and engine applications.
    That's what we have in our inventory today. Does that help?
        Senator Collins. It does indeed. Thank you for that
    assessment and that data.
        [The information referred to follows:]

        General Electric (GE) and Pratt & Whitney (PW) currently account
    for approximately 18,421 engines in the U.S. Air Force/Foreign Military
    Sales (USAF/FMS) countries with GE representing 57 percent and PW 43
    percent of these engines.
        Comparison information on GE and PW engine populations:
        GE/PW Total Engine Population (all applications)

             Total GE engines: 10,540 (57.2 percent)
             Total PW engines: 7,881 (42.8 percent)
             Total USAF/FMS engines: 18,421

        Note: Above data is based on legacy aircraft engines and does not
    include any JSF engine projections.

        Senator Collins. Secretary England, the other issue that
    has come up repeatedly here is the impact on our foreign
    partners. It's my understanding that regardless of what action
    Congress takes with regard to the alternate engine program, the
    U.K. and Rolls-Royce specifically will still play a role in the
    JSF program, is that correct?
        Because when you listen to some of the arguments, you would
    think that if we go the route that the Pentagon is recommending
    somehow the U.K. and Rolls-Royce are going to be out of the
    picture altogether and I don't think that's accurate. Could you
    elaborate on that issue?
        Secretary England. Senator, I'd be happy to, but Rolls-
    Royce is part of the Pratt & Whitney team so they do provide
    the lift fan engine for the STOVL so at a minimum they have
    that which is by the way very technically difficult so that is
    a very significant problem that they have that is part of the
    program and so they are part of the fundamental program.
        The one comment I would make, by the way, that hasn't been
    brought up much, if I can, Senator, make a comment here. There
    are industrial benefits to companies and countries to have an
    alternate engine because other engines that we've made in other
    places other than the primary engines, so there would be a lot
    of industrial benefits and benefits in different countries. I
    understand that I just don't feel that we in the United States
    of America should pay for those benefits when it doesn't
    provide any fundamental technical value to the product itself.
        Frankly we are not in the business of providing industrial
    benefits around the world. Our job is to provide the best
    product we can for the U.S. military. Now, if other countries
    and companies care to participate in that second engine and pay
    for it, I think that's fine. But that's not, I don't believe,
    the obligation of the United States of America to do that.
        Senator Collins. Admiral.
        Admiral Enewold. Yes, ma'am, the Rolls participation in the
    F135 propulsion system are significant. They are in charge of
    lift system components for the STOVL, one of their primary arms
    of expertise since they were heritage Harrier propulsion
    people.
        They are responsible for the lift fan, roll post, aft
    nozzle, and if you calculated by their work share in the F135
    it's between 20 and 25 percent of the overall F135 effort.
        Senator Collins. Thank you. I think that's a very important
    point that's been learned in this debate.
        Admiral, one final question for you: is the Pentagon
    satisfied with the performance of Pratt & Whitney to date in
    the development of this engine?
        Admiral Enewold. Thank you, ma'am, for asking. We are very
    pleased with Pratt's performance and the engine performance. In
    fact, we just finished the accelerated mission testing on the
    F135 in preparation for our first flight clearance for this
    summer's or this fall's flight. But I should say that I'm
    equally pleased with the GE performance on the team. So the
    answer is both engine teams have been performing well.
        Senator Collins. Thank you.
        Chairman Warner. Are you finished with your questions?
        Senator Collins. Yes, thank you.
        Chairman Warner. We'll continue with the questions up here.
    Secretary England, cleverly you're making the case that
    Congress in its infinite wisdom if it decides to keep the
    second engine going that we're restricted to the funding from
    the JSF account. We can go anywhere we want and get that money
    to put it back in this program. Are you not in agreement with
    that?
        Secretary England. Absolutely. Congress can decide----
        Chairman Warner. You bet.
        Secretary England. Absolutely.
        Chairman Warner. Let's take off the table that what we
    might do would begin to disturb the continuity of this program
    and further delay all kinds of things----
        Secretary England. But you would defer or delay something
    else. Senator, I just need to comment here. Again, this is a
    congressionally-mandated QDR and the Nation needs to move in a
    new direction, shifting emphasis because of the new threats to
    America, so we have accommodated some of that new direction in
    the 2005 President's budget submittal to Congress. We have not
    yet addressed that so there will be intense pressure across the
    board on all of our programs as we shift from one area to
    another so we will have intense pressure.
        Frankly, we do not have $2.4 billion available. In the
    meantime we're also getting pressure for a lot of other things
    from health care, other things, and some of them
    congressionally mandated. So there isn't money to just do this.
    We have already been through a priority review of our programs
    and this did not reach the priority level to be funded in terms
    of, again, our risk and benefit and cost.
        So certainly, we understand that Congress ultimately
    decides where the money is spent but my judgment is we are
    better keeping the money we have funded in the JSF program. I
    would not want to disrupt another program for redundant
    capability. I believe that if this is a decision then it should
    be the program and ultimately it will have an impact. If
    there's no impact for the money then it's easy to address.
        Chairman Warner. I'm listening to you but do want to go
    back to the basic fundamentals of the separation of powers of
    Congress and the executive branch. Congress has throughout my
    28 years here in this chair modified significantly DOD
    decisions, and had we not done that we may as well just take
    out a big rubber stamp and keep stamping everything you send
    over. I feel strongly about this question.
        I have the whole record here of what Congress has said
    about this program over a period of years. Let me just read the
    following: ``Further, the committee believes supporting
    competitive propulsion programs would help reduce risks and
    lead to higher competence in achieving more affordable life
    cycle costs. The committee fears that the current approach may
    lead to selecting one power plant manufacturer prematurely.
    Therefore, the committee directs the Secretary to evaluate at
    least two propulsion concepts from competing engine companies
    as a part of the full scale, full thrust aircraft
    demonstrators.''
        Secretary England. Senator, I do not disagree but I do have
    to push back and tell you that it is the technical and program
    judgment and the military officers who fly these airplanes that
    the second engine is not required, that there is no longer a
    risk issue that justifies this level of expenditure.
        Chairman Warner. Well, the engine----
        Secretary England. Obviously we will do whatever Congress
    directs.
        Chairman Warner. I understand that.
        Secretary England. But we're trying to give you our best
    judgment and analysis so that you can make an informed
    decision.
        Chairman Warner. The engine hasn't flown yet has it?
        Secretary England. No, sir. It will fly here very shortly
    but the similar engine in terms of 70 percent content is flying
    today on the F-22. So we do have at least a legacy of
    development history for the engine.
        Chairman Warner. Let's talk about that F-22 engine. Am I
    correct that they had a Class A failure in it?
        General Corley. Senator, this was a risk assessment and I
    wish that I could assure you or my other Service colleagues
    here could assure you that we would achieve perfection but I
    doubt that we ever will.
        Chairman Warner. No, and I don't think so.
        General Corley. However, Senator, when we look at the
    ground testing of that engine as you described on an engine
    stand, 11,600 hours.
        Chairman Warner. Designate the engine you're talking about
    now.
        General Corley. This is the F119 engine, sir, which we've
    had remarkable enhancements in terms of technology, safety, and
    reliability. Out of the 11,600 plus hours on the ground, an
    additional 14,600 hours of, if you will, development testing
    while airborne plus another 16,000 plus hours of actual
    operations, there have been zero F-22 engine-related losses and
    no groundings. We did, Senator, have one blade liberated in
    ground testing out of those 42,000 almost 43,000 hours worth of
    flying.
        Chairman Warner. Was that judged to be, and it could easily
    have been, a material flaw or was it an engineering problem or
    combination?
        General Corley. Senator, I don't know, and I would like to
    take that for the record, if I could, sir, to get you exactly
    what was the cause and what, of course, would be the proposed
    fix at that time.
        Chairman Warner. All right. I think that's very helpful for
    the record.
        [The information referred to follows:]

        The liberated blade incident during ground testing in October 2005
    was the result of a design flaw that could not have been identified
    when the blade was originally designed in 1994. The F-22 F119 ground
    test engine experienced a low pressure turbine (LPT) blade failure
    while being run at the Arnold Engineering & Development Center as part
    of the Air Force Aircraft Engine Component Improvement Program. The
    engine was undergoing ``Accelerated Maturation Testing,'' in which
    engines are subjected to accelerated testing to better understand and
    forecast how the engine will operate and be maintained in the field.
    During this type of evaluation, an entire lifetime of engine operation
    is simulated in a few months of intensive testing. LPT blades in the
    incident engine had been run for approximately 3,200 total accumulated
    cycles (TACs) (full life is 4,350 TACs). LPT blade sets from two
    previous ground test engines were run to full life without failure.
        The Air Force investigated this mishap and concluded that the root
    cause was an LPT blade fracture due to higher than anticipated
    stresses. These stresses were not identified with state-of-the-art
    design tools in use when this blade was designed in 1994. However, when
    today's improved design models were applied to this area, the high
    stresses were revealed. There is no immediate impact to the operational
    F-22 engine fleet, which currently averages approximately 700 TACs. A
    fleet management plan is being developed to assure timely and effective
    resolution of this issue. In the short term, inspection techniques are
    being developed to detect these specific cracks and spare LPT blades
    are being purchased to support early replacement, if required. For the
    long term, a redesign of the LPT blade is currently in work. Final
    fleet management options are to be coordinated with Air Combat Command
    in late summer 2006.
        This is a manageable issue and we are moving out smartly. Finding
    and fixing this issue in a test environment, well ahead of the
    operational fleet, is a testament to the robust test and development
    process in place by the Air Force and Pratt & Whitney.

        Chairman Warner. Why don't you take a question or two,
    Senator Lieberman.
        Senator Lieberman. Mr. Chairman, I don't really have any
    more questions. I think that in the information that you read
    from the narrative of one of the bills that we passed, DOD was
    asked to make an evaluation and they've come back to us now
    with an evaluation of the benefits and costs of two engines as
    opposed to one and made a very strong argument today. I believe
    that we save money and we assume no unacceptable risk. That's,
    again, from the Vice Chiefs of the Services whose personnel
    will be flying these planes.
        Also that there is another cost here and it would be great
    if this were I think you said free money or extra money but if
    we go to the second engine it's going to come out of somewhere.
    These are tough decisions and I understand if you happen to be
    on the side that hasn't won as I've been a few times, more than
    a few times, it's not pleasant but we're pressing you and we're
    going to continue to press you to keep the cost of these
    acquisition programs down so we can buy more for the men and
    women of our military. You've given us your best judgment here
    and I, for one, accept it.
        I guess I would ask one final question and it's the one
    that's been hanging, and it is important to ask you. We touched
    on it a bit and it was raised yesterday which is what within
    the system gives you confidence that when you're dealing with a
    single engine producer you will not have an unnecessary or an
    otherwise unlikely increase in cost because you've only got the
    one producer?
        Obviously you've had some history with single engine
    programs in the past but what kind of encouragement can you
    give us on that?
        Secretary England. By the Federal Acquisition Regulations
    (FARs) we have complete visibility into all the costs,
    everything associated with the company's cost buildup of the
    engine so we have all their costs to date, we have all their
    costs in the future, we get insight into all their
    subcontractor cost, piece part cost, reliability data, all that
    is available to the Government, Senator, so we have complete
    visibility into every aspect of the engine manufacture.
        Senator Lieberman. So you don't think that because there's
    one engine manufacturer as opposed to two, and therefore no
    competition, that we're going to end up paying more?
        Secretary England. Again, Senator, our analysis and all of
    our background says if you look at the cost of this program, we
    never recover the cost. We will not recover this cost over the
    life of this program. That's our analysis. It would take an
    extraordinary savings for this to be a break-even and, again,
    the analysis I have does not even consider all the cost
    associated with separate maintenance facilities----
        Senator Lieberman. Right.
        Secretary England. --as General Corley pointed out, there
    are a lot of other complications in this rather than just
    developing the engine itself.
        Senator Lieberman. Thank you.
        Secretary England. So it's not a cost decision, it would
    have to be on some other basis and we don't see any other basis
    for that decision, Senator.
        Senator Lieberman. Thank you very much. Thanks, Mr.
    Chairman.
        Chairman Warner. To pick up on that, my distinguished
    colleague, I fully accept that you'll have total transparency
    in every step of the cost structure of this engine but from
    time to time you're going to issue periodic contracts to buy
    more engines, won't you? It will be a sequential buy?
        Secretary England. Yes, we do that today with GE.
        Chairman Warner. Suppose Pratt & Whitney suddenly pushes
    back from the table and says okay those are our costs but maybe
    we want a bigger profit or something like that----
        Secretary England. Well, they don't----
        Chairman Warner. Go buy your engine somewhere else, Mr.
    Secretary, they might tell you. You don't meet our needs and
    requirements.
        Secretary England. Senator, it turns out GE doesn't do that
    on the F-18 program because at the end of the day there are
    still pressures, they still want the business. There are
    competitive pressures, there's other companies out there.
    People do not get a free ride on Government contracts. They
    always have the pressure of the marketplace and that continues.
    Again, the airplane itself is, ``sole-source.'' That is, once
    you win the competition, there's one manufacturer of this
    airplane. There's one manufacturer of the submarines. There's
    one manufacturer of our carriers.
        Chairman Warner. I understand. I did spend a little time in
    your seat, to be exact, 5 years, 4 months, and 3 days, went
    through the acquisition of the S-3 and the F-14. I can go
    through them. I do know that. But I've also seen push back and
    we're on the brink of making a decision without any precedent,
    $100 billion to one manufacturer over a period of maybe a
    quarter of a century, and I think Congress better really roll
    back every page and look at it carefully because guess who's
    going to pay the bills? Long after I'm gone, someone else is
    going to be here.
        Secretary England. Senator, but we have one manufacturer
    for the JSF itself, we have one manufacturer, spread a
    different--but one primary manufacturer.
        Chairman Warner. I understand that.
        Secretary England. We have one manufacturer. We have one
    manufacturer of our carriers, we have one manufacturer of our
    submarines, yet those costs do not just balloon. There's
    rationale.
        Chairman Warner. Get back to the submarines. It seems to me
    that Groton and Newport News could each build a submarine if
    they so desire so I'm not sure there's one----
        Secretary England. But it's defined by law to be between
    the two so there's really only one.
        Chairman Warner. We structured that contract right here at
    this table years ago.
        Secretary England. I understand.
        Chairman Warner. But I mean it's pushed back, and you also
    at one time when you were Secretary of the Navy wanted a single
    manufacturer of a certain class of ships and our colleague down
    here to my recollection kind of pushed back on that, am I
    correct on that?
        Senator Collins. That's correct.
        Chairman Warner. Correct. So there is some history to these
    various things.
        Secretary England. Could I ask Admiral Willard to comment
    just a minute on this?
        Admiral Willard. Senator Warner, this may be a small point
    but I think it gets to both your and Senator Lieberman's
    questions and that is it's not as if the F135 and F136 engines
    have not undergone some degree of competition already. The
    authorization language to introduce the second engine was 11
    years ago and what we've derived in terms of efficiencies in
    the F135 I might argue have been partially at least a result of
    that competition. So the benefits of the competition one might
    argue have been taken and that at the end game will inevitably
    impact cost and efficiency so these engines have been competing
    over years to this point and we're picking now the one that has
    the maturity and level of confidence that we believe will pay
    off in the JSF.
        Chairman Warner. Why did you let the contract for $2.8
    billion just 6 or 8 months ago?
        Admiral Willard. Sir, I think independent of the judgments
    that we were making in QDR and post-QDR there was an
    acquisition process that was already in play and they were
    making various milestones and their dates with all of the
    considerations that go into when a contract should be or
    shouldn't be let. That again was not necessarily our focus in
    QDR, our focus was trying to view the reshaping of----
        Chairman Warner. Your focus was trying to carry out the
    mandate of Congress and you were doing quite well. We're not
    here as a debating society, we're here to just collect facts as
    best we can. Senator Collins, do you have additional questions?
        Senator Collins. The only additional request I would have,
    Mr. Chairman, for this panel is to ask the other Service Chiefs
    to provide the comparable information that General Corley
    provided to me on the number of GE versus Pratt & Whitney
    engines. That would be helpful in our assessment of the
    implications for the industrial base. Thank you, Mr. Chairman.
        Chairman Warner. Thank you very much. We have a second
    panel but there are one or two questions I'd like to bring to
    your attention. My colleagues, my able staff says that neither
    engine has flown so it seems to me that competition ended
    pretty early on.
        Secretary England, in reading your statement we noted the
    absence of any reference on how the Department would control
    cost on the Pratt & Whitney engine in a noncompetitive
    environment over 30 years. I think possibly you said that you
    have all the facts and figures that you need to determine
    whether the costs are not being properly controlled.
        Secretary England. We have insight, Senator.
        Chairman Warner. Yes.
        Secretary England. We have insight into all the costs in
    the program and we audit those costs and so we know supplier
    cost et cetera.
        Chairman Warner. We're looking now at page 8 of your
    presentation, did you all submit this, am I correct here?
    Break-even analysis?
        Secretary England. Oh, yes, sir. That was in response I
    believe to a letter from Senator McCain and that was a response
    to his letter, Senator.
        [The information referred to follows:]

        Chairman Warner. Yes, and we'll put that in the record. At
    this point we're going to have to turn to the second panel. We
    will provide for our witnesses a series of questions but I want
    to return to one which I had intended to initiate in my first
    round of questions but I yielded to our colleague from New
    York, and that is, what does ``level one partner'' mean in this
    in terms of voice, management, and decisionmaking in the
    program?
        Admiral Enewold. Thank you, Senator. As the committee
    understands it, we have three levels of international partners
    in the program. The U.K. is a level one partner and the biggest
    contributor to the SDD program at $2 billion. Part and parcel
    to that contribution and designation is a high level of
    involvement in the program office and participation in
    leadership forums. Being a partner also gives priority on the
    production line, and the U.K. is also a signatory on the
    Operational Requirements Document (ORD).
        Chairman Warner. Did they contribute to the R&D, as is my
    understanding of this engine?
        Admiral Enewold. To the total program. The engine is not,
    neither engine is called out as a unique piece of the program.
    The money's not allocated.
        Chairman Warner. Cash goes in and is allocated by the
    program office but they are a contributor because I think the
    record of this morning reflects several comments to the effect
    that the U.S. is paying for it all. That's not correct.
        Admiral Enewold. No, the U.S. is paying 90 percent of the
    total development cost, the partners have about 10 percent of
    the development cost.
        Chairman Warner. Right.
        Admiral Enewold. So they are part and parcel to the program
    and as a level one partner they are afforded involvement in the
    program. Right now embedded within the program office I have 15
    to 20 U.K. Navy and Air Force officers that are functioning
    members of my integrated product teams.
        In the governance structure they are full members of the
    senior warfighting group that discusses the operational trades
    we make. They are full members of a configuration steering
    board that talks about changes that are upcoming within the
    program. They participate in the what we call the CEO
    conference at the highest level where the Service Secretaries
    and their Chiefs come and we discuss the status of the program
    semi-annually. So they are well embedded into the program and
    its execution.
        Chairman Warner. Then how do you account for the
    distinguished witness that we had before us yesterday who has
    the overall responsibility for acquisition for the U.K. simply
    saying in a polite way there was no consultation on this issue
    with us?
        Admiral Enewold. From within the program office, first of
    all, what I just outlined----
        Chairman Warner. I understand. I listened to it. I have it
    all.
        Admiral Enewold. Sir, what happened outside the program
    office and in the QDR is where the decision on the F136 was
    made. Specifically by Department policy and direction I am not
    allowed to tell the partners what's coming up in the
    President's budget so that we don't preempt the President's
    submission to Congress.
        So that's where I think the demarcation of what I can
    release to the partners financially and what I can't is made.
        Chairman Warner. Mr. Secretary, I believe the shrinking
    industrial environment we have in this country we have to
    maintain the best of relationships and I don't think it's for
    Congress to try and engineer how you deal with these partners,
    but I must say that was a riveting bit of testimony we received
    yesterday and we will further think about it. I just have to
    say the industrial base situation is serious. We have to rely
    on our partners overseas to complement what skills we have in
    this country.
        I just repeat by history, my dear friend, and we are good
    friends, when I was privileged to be Secretary of the Navy the
    total force structure of the Department of the Navy was about
    1.2 million sailors and marines, and some 700,000 civilians.
    Your total force of all the Services today is a fraction here
    or there above that so I just mention that for the order of the
    magnitude of this scaling down.
        When we put out bids for aircraft we had four or five major
    producers that could build our airplanes and our engines so
    it's an entirely different world and I think we have to guard
    very carefully the relationships that we have with our allies
    abroad as they participate in programs of this nature.
        Secretary England. Senator, I will tell you, we have
    extraordinarily close and cooperative relationships with our
    friends and allies. We work extraordinarily at this. They are
    great, great friends and allies, we know that. We go to great
    lengths to strengthen those bonds. We will continue to do so. I
    believe this is the closest relationship we've probably ever
    had, particularly with the United Kingdom, Australia, and all
    our friends and allies, but we do have these very special
    relationships.
        Yesterday the question came up and you raised it about
    technology transfer. That is a subject we have to have
    separately. I will tell you there is great, great technology
    transfer on this program. There are a couple of items which we
    cannot discuss here but we will need to have a separate
    discussion with you but I can assure you we have very close
    relationships. I've talked to my counterpart in the United
    Kingdom. Our agreement is that by the beginning of June we will
    close out all these issues regarding technology transfer. We're
    working to do that in good faith but there are some issues,
    serious issues that need to be discussed and we can have a
    private conversation with you in that regard. But I can assure
    you, these are great friends, great allies of America and the
    DOD. We fight together, we use each other's equipment, and we
    will continue to strengthen those bonds. I understand there are
    some issues on this particular program but they're ones we need
    to discuss separately, Senator.
        Chairman Warner. Fine. We'll have that opportunity.
        Senator Lieberman. Mr. Chairman, if I could say a very last
    word. I appreciate what you've said. My impression from the
    testimony yesterday from the U.K., Italy, and Australia was
    that they were certainly more unified and I would say generally
    more intense in their feelings about the technology transfer
    question than about whether there were one or two engines on
    the JSF.
        The second thing I would like to say in terms of the
    industrial base and global industrial base as we heard
    testimony on yesterday, on the JSF as, Admiral, you know with
    more detail than I do, just taking the example of the U.K.
    because obviously Rolls-Royce is a partner with GE on the
    second engine and we've talked about that if you put together
    Rolls-Royce, BAE, and Smith's Industries they're right now
    contracted for over $5.5 billion worth of business where
    British companies with billions more in sales potential here so
    I think with this program, it's not fair probably to compare
    the $2 billion they're putting in with what their industry is
    getting out, but the program is contributing to the global
    allied industrial defense base in a very significant way. Thank
    you.
        Chairman Warner. That raises a question I'll direct to
    General Corley. You mentioned that there would have to be
    literally two sets of trained personnel certainly in the
    maintenance side to have both engines in the inventory. My
    understanding is that these engines were to be interchangeable.
    In other words, if an aircraft were flying with a Pratt engine
    and you had to have a stand-down or it was in a location where
    maybe a replacement Pratt wasn't available that the other GE/
    Rolls engine could be plugged right into the cavity and off she
    goes. Now, that's an oversimplification of a very complicated
    thing, but can you enlighten us on that?
        General Corley. Certainly, Senator. Let me give it a try
    this way. You are correct in saying that the form and the fit
    between both this F135 engine and the proposed F136 engine
    would fit in the same cavity and essentially the plumbing or
    the hookups would be the same, but I think it's also fair to
    say that internally there would still be differences to the
    engines themselves. For example, fan, turbo machinery, and the
    like, so a difference in terms of what level, what would be
    required to maintain and to continue to operate throughout the
    life of the engine, sir.
        Chairman Warner. All right. I accept that. Gentlemen, thank
    you very much. We'll now proceed to take a 2-minute break and
    have the next panel come out. [Break.]
        Thank you, gentlemen. We'll now resume with our second
    panel of very distinguished witnesses. We'll have Scott
    Donnelly, President and CEO of GE Aviation; James Guyette--is
    that----
        Mr. Guyette. Guyette, yes.
        Chairman Warner. Guyette--pretty close, President and CEO
    of Rolls-Royce North America; Louis Chenevert, is that
    correct--thank you--President and Chief Operating Officer of
    United Technologies and the parent company of Pratt & Whitney;
    and Lloyd Newton--we know you as general, but if you want Mr.,
    we'll give it to you.
        General Newton. Either one, sir, that's fine.
        Chairman Warner. I'll bet you would--Executive Vice
    President of Military Engines, Pratt & Whitney. Nice to see you
    again, General.
        General Newton. Thank you, sir.
        Chairman Warner. The last time was under circumstances
    which are memorable.
        General Newton. Sir, I prefer not to do that one again
    until I'm there. [Laughter.]
        Chairman Warner. No, I know. I don't think you'll volunteer
    for another one of those. [Laughter.]
        General Newton. No, sir.
        Chairman Warner. Fine, and I understand that we'll accord
    to our GE/Rolls consortium the opportunity to go first. Is that
    agreeable among you? Please proceed as you wish.

     STATEMENT OF SCOTT C. DONNELLY, PRESIDENT AND CEO, GE AVIATION

        Mr. Donnelly. Thank you, Mr. Chairman, members of the
    committee. I do have a prepared statement that will be put into
    the record.
        Chairman Warner. We'll put all those in the record, but I'm
    not in any way trying to squeeze you down. We have the time to
    hear you through, and you were able to have the benefit of the
    earlier hearing. You, I think, sat through it.
        Mr. Donnelly. Yes, sir, absolutely.
        Chairman Warner. So, there are some statements made, which
    seems to me that the Secretary said that should be properly
    addressed to you, but nevertheless, they gave opinions.
        Mr. Donnelly. We'd be very happy to address those in the
    questions and answers.
        Thank you for this opportunity to appear before the
    committee to share our views on the desirability of continuing
    the development of competing engines for the JSF program. I am
    Scott Donnelly, President and CEO of GE Aviation, and I'm
    accompanied by Jim Guyette, President and CEO of Rolls-Royce
    North America. We are pleased to jointly present this statement
    to you.
        GE and Rolls-Royce have formed a 60/40 partnership to
    develop and produce the F136 engine for the JSF. We have
    brought together the best talent from the United States and the
    United Kingdom to develop and produce this engine. We believe
    our partnership is a shining example of transatlantic
    cooperation. If our program is continued, the F136 will compete
    head-to-head with the Pratt & Whitney F135 engine for the honor
    to power the JSF. These two engines will be the most powerful,
    capable, and technologically advanced fighter engines ever
    produced.
        Chairman Warner. May I suggest that you slow your pace down
    a little bit because this is not the greatest audio system in
    this room.
        Mr. Donnelly. Very well.
        Chairman Warner. We have a number of persons not the least
    of which are the Senators here who want to hear carefully what
    you're saying. So, if you could pace yourself a little bit.
        Mr. Donnelly. Very well, Mr. Chairman.
        Simply put, we are here to seek your continued support for
    this competition. The JSF program will be the largest aircraft
    procurement program in the history of the DOD. It is a single
    engine aircraft that will be used by the Air Force, Navy,
    Marines, and several international partners, including the U.K.
    It will have conventional, carrier-based, and STOVL variants
    and over time, will replace the F-16, the F-18, the A-10, and
    the AV-8B fleets.
        Pratt & Whitney was initially chosen as the sole-engine
    supplier for the JSF based on its earlier competitive selection
    to power the F-22. That engine, the F119, has since been
    modified and adapted to JSF requirements and is called the
    F135. In 1995, Congress added $7 million to the DOD budget and
    directed the establishment of a second engine source for the
    JSF, the F136.
        For the past 10 years, Congress has strongly supported the
    JSF engine competition, citing the demonstrated benefits of
    competition resulting from the original Great Engine War.
        As you'll recall, Mr. Chairman, the Great Engine War pitted
    the Pratt & Whitney F100 against the GE F110. The F110 was
    initially competitively selected to power the new F-14s and F-
    16s and also to re-engine older F-14s. Until recently, only
    Pratt & Whitney's F100 has powered F-15s. However, in 2002,
    Korea selected GE to power its fleet of F-15s, and in 2005, GE
    was also selected to power Singapore's F-15s. Meanwhile, in
    recent years, Pratt & Whitney has won their fair share of
    engine competitions worldwide.
        The point I'm making is that 20 years after the Great
    Engine War, all of the competitive benefits--reduced
    operational risks, better performance, increased readiness,
    enhanced contractor responsiveness, and lower costs continue to
    endure because customers have a competitive choice of engines
    and are not captive to a single engine supplier, as was the
    case in the 1970s and early 1980s prior to the so-called Great
    Engine War.
        An excellent history of this competition is detailed in
    Robert Drewes' book, The Air Force and the Great Engine War,
    and it has been chronicled in several other publications as
    well.
        Mr. Chairman, with this background, let's get to the
    purpose of your hearing today. Is it wise to terminate this
    second Great Engine War and rely on a sole-engine supplier for
    a single-engine aircraft to do multiple missions for multiple
    Services and multiple nations? Is it wise to become dependent
    on only one engine supplier and then hand over a volume of
    engine business that will reach tens of billions of dollars? Is
    it smart to put all your eggs in one basket, knowing this is a
    course of action that can't be easily rectified later? We
    believe the answer to these questions is a resounding no. This
    is a rare instance in defense procurement with not only a
    compelling operational case for continued competition, but also
    a compelling business case. Through the enduring value of
    competition, sufficient savings will be generated from a
    competitive JSF engine procurement that will more than offset
    the cost of completing the F136 engine development.
        Attached to our full statement is a matrix that places a
    rough order of magnitude on the money to be spent on engines
    and spare parts over the life of the JSF program. This is the
    attachment we have, I think, that's turned in. Of course, all
    analyses are assumptions dependent, and we have not attempted
    to predict a precise figure. That is not necessarily to make
    our point. Rather, we show a broad range of numbers based on
    potential aircraft procured and the number of engines bought
    per aircraft and the price per engine.
        The take-away from this matrix, Mr. Chairman, is that the
    potential revenues generated from the sale of engines and parts
    associated with the JSF program are huge. With competition,
    there is a chance to contain these revenues near the lower left
    hand of the matrix. Without competition, the revenues will
    trend upward and to the right hand of the matrix. One of the
    main lessons learned from the original Great Engine War is that
    costs are lowered through vigorous head-to-head competition. We
    are confident a second Great Engine War will yield similar
    results.
        Mr. Chairman, we are convinced there is a sufficient volume
    of engine business to justify continuing the engine
    competition--both for critical operational and business
    purposes. The warfighter will be assured of the security that
    comes with not being dependent on a single engine source, and
    competition will drive costs down.
        In closing, we have one final point. We have been on the
    F136 journey for 10 years, and Congress has appropriated nearly
    $1.3 billion to date to support that program. We were awarded a
    $2.4 billion SDD contract in August 2005. Our engine
    development is on schedule and slightly under cost.
        If we can complete our journey, the F136 will be a
    formidable competitor to the F135 in both price and
    performance, and our engine industrial base will remain robust,
    resilient, and capable of responding in a competitive way to
    all current and future requirements. If our program is
    terminated, our highly skilled GE and Rolls-Royce team will be
    disbanded, $1.3 billion will have been wasted, and the United
    States, the United Kingdom, and our allies will be dependent on
    a single engine supplier to meet the challenging requirements
    for high-performance fighter engines. We submit to you that
    that is not a good thing. We respectfully request your
    continued support for this Great Engine War.
        Thank you again for giving us this opportunity to share our
    views with your committee.
        Chairman Warner. Thank you very much.
        Mr. Guyette.

     STATEMENT OF JAMES M. GUYETTE, PRESIDENT AND CEO, ROLLS-ROYCE
                                AVIATION

        Mr. Guyette. Good morning, Mr. Chairman and Senator
    Lieberman. First, thank you for the opportunity to express my
    views on this strategic, and I would like to underscore the
    word ``strategic,'' global program in its importance to the
    U.S. military and our partners around the world. Now, my
    business career has all been involved in aviation--design
    requirements, performance requirements, aircraft acquisition,
    aircraft operations, aircraft maintenance and engineering,
    aircraft life cycle cost, and most recently, propulsion.
        In my view, the JSF acquisition strategy was brilliant. A
    common base airframe for the Air Force, Navy, and Marines. A
    very, very bloody airframe competition among Boeing, McDonald
    Douglas, Northrop Grumman, and Lockheed Martin. Replacing four
    current fleet types with a single JSF, bringing our allies into
    the program very early on, and allowing our allies to invest
    not just money, but also invest technology. The U.K. alone
    invested $2 billion and became a full partner. This program is
    the finest example of transatlantic cooperation and technology
    transfer.
        However, there was a flaw. We had the largest propulsion
    production program in DOD history and no real competition and
    the attendant developmental and operational risks. We
    vigorously competed the airframes. We did not vigorously
    compete engines. Now, Congress did cure this flaw 10 years ago
    by funding for the F136. The GE company invited Rolls-Royce
    into the program, not out of benevolence, I can assure you, but
    because we could bring some unique technology, which would
    provide a superior product. The GE and Rolls-Royce fighter
    engine team has been very motivated. We kind of feel like Avis.
    We're number two, and we're trying very, very hard. So, we've
    worked hard, and we have performed. We have done exceedingly
    well. We are on schedule, and we're under cost.
        In December 2004, Presidential Budget Decision 753
    confirmed the need for an alternate engine with all of the
    benefits that it brings. Last August, the need for competition
    was confirmed again with a $2.4 billion SDD contract. So,
    what's changed in the last few months? Less risk? Less cost
    savings? I don't think so.
        In my view, it was a shortsighted budget decision, an easy
    take now, pushing consequences into future years. So, we can
    eliminate $1.8 billion in near-term costs and forego something
    in the neighborhood of $16 billion in financial benefits and
    forego the other benefits of competition. It's pay me now, or
    pay me a lot more later on.
        To kill the F136 is to abandon 10 years of very thoughtful
    investment. In my business experience, monopoly has never
    provided the customer with best value ever. As a nation, we
    have a choice--monopoly or competition--monopoly or the next
    Great Engine War. As my British colleagues are so fond of
    saying, pennywise, pound foolish. Thank you, Mr. Chairman.
        [The joint prepared statement of Mr. Donnelly and Mr.
    Guyette follows:]

       Joint Prepared Statement by Scott C. Donnelly and James M. Guyette
        Mr. Chairman, Senator Levin, members of the committee--thank you
    for this opportunity to appear before the committee to share our views
    on the desirability of continuing the development of competing engines
    for the Joint Strike Fighter (JSF) program. I'm Scott Donnelly,
    President and Chief Executive Officer (CEO) of General Electric (GE)
    Aviation; and I'm Jim Guyette, President and CEO of Rolls-Royce North
    America. We are pleased to jointly present this statement to you.
        As you may know, GE and Rolls-Royce have formed a 60/40 partnership
    to develop and produce the F136 engine for the JSF. We have brought
    together the best talent from the United States and the United Kingdom
    to develop and produce the GE/Rolls-Royce F136 engine. We believe our
    partnership is a shining example of transatlantic cooperation. If our
    program is continued, the F136 will compete head-to-head with the Pratt
    & Whitney (P&W) F135 engine for the honor to power the JSF. These two
    engines will be the most powerful, capable, and technologically
    advanced fighter engines ever produced.
        Mr. Chairman, simply put, we are here to seek your continued
    support for this competition. The JSF program will be the largest
    aircraft procurement program in the history of the Department of
    Defense. It is a single engine aircraft that will be used by the Air
    Force, Navy, Marines, and several international partners, including the
    U.K. It will have conventional, carrier-based, and short take-off
    vertical-landing variants and over time, will replace the F-16, F-18,
    A-10, and AV-8B fleets.
        P&W was initially chosen as the sole-engine supplier for JSF based
    on its earlier competitive selection to power the F-22. That engine,
    the F119, has since been modified and adapted to JSF requirements and
    is called the F135. In 1995, Congress added $7 million to the DOD
    budget and directed the establishment of a second engine source for the
    JSF. Today, that engine, first known as the ``Alternate Engine'' and
    then as the ``Interchangeable Engine,'' is now designated the F136
    engine. Attached is a chronological history of the F136 program
    (Attachment 1).

        For the past 10 years, Congress has included language and/or
    additional funding strongly supporting a JSF engine competition, citing
    the demonstrated benefits of competition resulting from the original
    ``Great Engine War.'' That much-heralded competition had its roots in
    the late 1970s and early 1980s when P&W was the only supplier for high-
    performance fighter engines. During that time period, DOD experienced
    significant problems with P&W TF30-powered F-14s and P&W F100-powered
    F-15s and F-16s. Over a 2-year period, Congress added $41 million to
    the Navy budget to begin a TF30 replacement program. When the Navy
    failed to spend the $41 million, and when problems with the F100
    worsened, the money was shifted to the Air Force to develop an engine
    to compete with the F100. That engine, a derivative of the GE F101
    engine for the B-1 bomber, was ultimately designated the F110.
        Beginning in the 1980s, the ``Great Engine War'' pitted the F100
    against the F110. The F110 was initially selected for new F-14s and F-
    16s and also to re-engine older F-14s. Until recently, only P&W's F100
    has powered F-15s. However, in 2002, Korea selected GE to power its
    fleet of F-15s, and in 2005, GE was also selected to power Singapore's
    F-15s. Meanwhile, in recent years, P&W has also won their fair share of
    engine competitions worldwide. After 20 years of the ``Great Engine
    War,'' all of the competitive benefits (reduced operational risks,
    better performance, increased readiness, enhanced contractor
    responsiveness, lower costs, etc.) continue to endure because our
    customers have a competitive choice for engines and are not captive to
    a single engine supplier as was the case in the early 1970s and 1980s.
        An excellent history of this competition is detailed in Robert W.
    Drewes' book ``The Air Force and the Great Engine War.'' Drewes notes
    that the ``Great Engine War'' was not initiated to achieve cost
    savings. In fact, it was expected to actually cost more money to bring
    on a second supplier to address significant operational problems and to
    obtain better reliability, durability, and supportability. The
    competition established unprecedented levels of engine durability,
    reliability, operability, and supportability for large, high-thrust
    fighter engines. Surprisingly, the competition achieved this at a
    significantly lower cost of engine ownership. The Air Force estimated--
    over the purchase of the first 1,800 engines--that it achieved
    approximately 20 percent cost savings over what the program would have
    cost with a sole-engine provider.
        Mr. Chairman, with this background, let's get to the purpose of
    your hearing today. Is it wise to terminate this second ``Great Engine
    War,'' and rely on a sole engine supplier for a single-engine aircraft
    to do multiple missions for multiple Services and multiple nations? Is
    it wise to become dependent upon only one engine supplier and then hand
    over a volume of engine business that will reach tens of billions of
    dollars? Is it smart to put all your eggs in one basket, knowing this
    is a course of action that can't easily be rectified later? We believe
    the answer to these questions is a resounding ``NO.'' This is a rare
    instance in defense procurement with not only a compelling operational
    case for continued competition, but also a compelling business case.
    Through the enduring value of competition, sufficient savings will be
    generated from a competitive JSF engine procurement that will more than
    offset the cost of completing the F136 engine development.
        Attachment 2 of our statement is a matrix that places a rough order
    of magnitude on the money to be spent on engines and spare parts over
    the life of the JSF program. All analyses are assumption dependent and
    we have not attempted to predict a precise figure--that is not
    necessary to make our point. Rather, we show a broad range of numbers
    based on potential aircraft procured, the number of engines bought per
    aircraft, and the price per engine. To produce the matrix, we selected
    the current aircraft program of record (3,176 total of which 2,443 are
    U.S. only), while assuming an initial spares level of 15 percent. These
    assumptions yield an initial engine buy for JSF aircraft of
    approximately 3,652 (worldwide)/2,809 (U.S.).

        As an example only, if we assume that over the operating life of a
    JSF engine, the spare parts consumed will equal an additional 1.5
    ``equivalent'' engines, then the total number of engines and equivalent
    engines bought will be approximately 2.5x (3652/2809) = 9130/7022
    engines. Further, assume the price of a F135 engine to be equal to the
    current selling price of the F119 (the F135 is based on the F119 and is
    about 10 percent higher in thrust), which is about $9 million per
    engine. In this example, the money spent on engines for the total JSF
    program of record will be $82 billion/$63 billion. If we assume that
    competition between two engine sources would reduce these costs by 10
    percent, a savings on the order of $8 billion/$6 billion will result.
    For the original ``Great Engine War,'' the savings through engine
    competition was on the order of 20 percent. Such a figure on the JSF
    would yield $16 billion/$12 billion in savings.
        Mr. Chairman, let's acknowledge that someone will surely challenge
    our assumptions on engine price, or spare parts usage, or aircraft
    procurement levels, etc. Using lower numbers, such as an engine price
    of $7 million and spares usage of one equivalent engine per JSF
    procured, yields total revenues of $51 billion/$39 billion. A 10
    percent savings from competition produces total savings of $5 billion/
    $3.9 billion. Again, large savings that more than offset the investment
    needed to complete the F136 development.
        The take-away from this matrix, Mr. Chairman, is that the potential
    revenues generated from the sale of engines and spare parts associated
    with the JSF program are huge! With competition, there is a chance to
    contain those revenues near the lower left hand corner of the matrix.
    Without competition, the revenues will trend upward and to the right of
    the matrix. One of the main lessons that was learned from the original
    ``Great Engine War'' is that costs are lowered through vigorous head-
    to-head competition. We are confident a second ``Great Engine War''
    will yield similar results.
        Mr. Chairman, we are convinced there is a sufficient volume of
    engine business to justify continuing the engine competition--both for
    critical operational and for business considerations. The warfighter
    will be assured of the security that comes with not being dependent on
    a single engine source i.e., less risk, better performance, higher
    readiness, more technology infusion, enhanced contractor responsiveness
    . . . and competition will drive down costs.
        In closing, we have one final point. We have been on the F136
    journey for 10 years and Congress has appropriated nearly $1.3 billion
    to date to support the program. We were awarded a $2.4 billion system
    development and demonstration contract in August 2005. Our engine
    development is on schedule and slightly under cost. Our GE and Rolls-
    Royce partnership is strong. We will require approximately $2 billion
    in additional appropriations, including about $400 million in fiscal
    year 2007, and it will take about 6 more years to complete the F136
    development and be ready for production. If we can complete our
    journey, the F136 engine will be a formidable competitor to the F135,
    in both price and performance, and our engine industrial base will
    remain robust, resilient, and capable of responding in a competitive
    way to all current and future requirements. If our program is
    terminated, our highly skilled GE/Rolls-Royce team will be disbanded,
    $1.3 billion will have been wasted, and the United States, the United
    Kingdom, and our allies will depend upon only one engine supplier to
    meet the challenging requirements for high-performance fighter engines.
    We submit to you that this is not a good thing. We respectfully request
    your continued support for this second ``great engine war.''
        Thank you again for giving us the opportunity to share our views on
    this very important issue.

        Chairman Warner. Thank you. Would you please proceed as you
    desire between your two witnesses?

      STATEMENT OF LOUIS CHENEVERT, PRESIDENT AND CHIEF OPERATING
       OFFICER, UNITED TECHNOLOGIES CORPORATION, PRATT & WHITNEY

        Mr. Chenevert. Thank you, Mr. Chairman.
        On behalf of United Technologies Corporation and Pratt &
    Whitney, I thank Chairman Warner, Senator Lieberman, and
    members of the committee for giving me the opportunity to
    testify today. I'm pleased to be joined this morning by General
    (retired) Lloyd Newton.
        My purpose today is to assure the committee that the
    administration's decision to eliminate funding for the
    alternate engine for the JSF is operationally and economically
    sound. I also assure you that Pratt & Whitney is committed to
    meeting our military customers' needs as we jointly support our
    service men, women, and allies around the world. We believe the
    Pentagon's wish to use the $1.8 billion a second engine would
    cost over the next 5 years for higher priority items deserves
    your support.
        The source of my confidence in making this statement, Mr.
    Chairman, is Pratt & Whitney's F135 engine.
        In December 2005, we delivered the world's most powerful
    tactical fighter engine to Lockheed Martin ahead of schedule.
    We have already logged more than 4,500 ground test hours on
    nine test engines and are on track to support the first flight
    of the JSF later this year.
        The Pratt & Whitney JSF engine is a derivative of the
    engine on the F-22 Raptor. By the time the JSF is operational,
    the main or core portion of these engines will have accumulated
    more than 800,000 flight hours.
        The F135 has passed every test and met every milestone, and
    we are committed to maintaining that flawless record of
    performance and support to our customer.
        In my testimony today, I will address four areas relevant
    to the JSF alternate engine decision: The U.S. industrial base
    for fighter engines, operational readiness, the additional
    costs associated with an alternate engine program, and
    international participation to this program.
        The impetus for an alternate engine was the need to ensure
    the health of the U.S. industrial base for manufacturing
    tactical fighter engines. At the time, an argument was put
    forth that if there were no alternative engine for the JSF, the
    U.S. would be left with only one tactical fighter engine
    manufacturer.
        Mr. Chairman, I respectfully submit that there is no such
    thing as the fighter engine business per se--just the engine
    business. I don't mean that building an engine for an F-18 or
    for a F-22 doesn't require specialized skills and technology,
    but the basic tools, the technology, materials, and processes
    used in large turbine military and commercial engines have
    become very closely aligned over the years. The engineering and
    manufacturing workforce can readily move from commercial
    programs to military programs and vice-versa, as can the supply
    base.
        Today, GE is the world's largest jet engine manufacturer,
    and it is likely to continue to be so for the foreseeable
    future, as my chart shows. If you look at the area in blue,
    that is the GE install base of engines as we go forward in
    2015, where the red part is the Pratt & Whitney install base of
    commercial and military engines. GE has produced more than
    4,300 sole-source engines for the F-18 and will continue to
    produce these tactical fighter engines until at least 2012. GE
    has also been the sole-source production of more than 12,000
    T700 engines for Black Hawk and Apache helicopters and will
    continue to be the sole-source for the next 15 years.
        Our company, through Sikorsky actually, buys Black Hawk and
    Sea Hawk engines and builds them on an ongoing basis for the
    next 15 years with sole-source GE engines. That doesn't take
    into account the other engine development programs in which GE
    will participate, such as those for UAVs and the next
    generation long-range strike fighter. Rolls-Royce, too, has a
    healthy backlog and has been selected as the sole source for
    engines on C-130J and the V-22.
        The second area that has been discussed is operational
    readiness. This argument basically translates as develop a
    second engine in case something goes wrong with the first one.
    Given unlimited funds, that would be good logic. Everyone would
    want to have a backup version of just about anything just in
    case.
        But there are no backup engines for the GE-powered F-18 or
    Black Hawk aircraft, the Rolls-Royce-powered V-22 or C-130 or,
    for a matter of fact, the Pratt & Whitney F-22 or C-17. For
    that matter, there are no alternate suppliers for flight
    controls, ejection seats, or avionics. All these mission-
    critical systems on fighter jets are sole-source.
        We don't require these because resources are limited. When
    resources are limited, the wise course is to conduct a risk
    assessment. Where you determine the risk level is unacceptable,
    you find the resources for a redundant system. Where it's not,
    you hold a competition to make sure the one supplier you do
    choose is the best one.
        That's exactly what happened. Pratt & Whitney competed
    head-to-head against GE in 1991, and we were awarded the
    engineering and manufacturing development program for the F119
    engine. That program was the source of the derivative engine
    for the JSF selected by Boeing and Lockheed Martin for their
    concept demonstrators, and they flew those concept
    demonstrators for 100 hours a piece. Why? Because it was the
    right combination of performance, development cost, and
    operational risk--factors even more valid today than in the
    past.
        The readiness question really boils down to one of engine
    reliability, and the good news, Mr. Chairman, is that all
    engines--and I mean GE engines, Rolls engines, and Pratt &
    Whitney engines have become far more reliable. Partnering with
    our customers and industry, we have seen advances in
    manufacturing processes, materials, design tools, fleet
    management, predictive maintenance, and risk management tools.
    Many of these advancements have been championed by our
    customers and have greatly improved engine reliability and
    reduced safety-related incident rates by a factor of 10 over
    the last 30 years.
        The U.S. Air Force's data demonstrates this. Single engine
    fighter aircraft Class A mishap rates have been reduced from 10
    per 100,000 hours of flight to 1 per 100,000 hours of flight,
    and we show this on chart number two, which shows the great
    progress made in fleet reliability over the last 30 years.
        Mr. Chairman, we've heard a lot of comparisons to the F-16
    and the F-14 programs, but this situation is fundamentally
    different. Over 20 years ago, Congress funded an alternate
    engine at the request of the customer--that is, the DOD. Now,
    the customer believes one engine is sufficient to meet its
    needs and has laid out more pressing uses for the $1.8 billion
    a second engine would cost over the next 5 years.
        A third area under discussion today is the idea that a
    second engine will save taxpayers' money. This argument asserts
    that where there is competition, cost savings follow
    automatically. Mr. Chairman, I believe it is likely that a
    second engine for the JSF will save American taxpayers little
    or any money. It is certain, however, that an alternate engine
    will add billions to the overall program cost, which may
    ultimately translate to fewer aircraft for the Services and
    international partners.
        I believe the additional costs associated with a second
    engine will outweigh any savings and will be impossible to
    recover over the life of the program. This is a situation,
    after all, in which the Government is not only doing the
    buying, but also paying twice for product development. If the
    Government opts to split the purchase between two suppliers,
    neither supplier will be able to deliver maximum savings from
    economies of scale. A split buy will also double the
    Government's support costs over the next 30 years over its
    product life cycle. In a situation like this, costs will mount
    rapidly and quickly overtake the savings. Here is our analysis
    of the additional cost factors: Completion of the SDD program
    for the second engine in 2013 will cost at least $2.4 billion;
    sustaining engineering and component improvement for a second
    engine will each add hundreds of millions to a billion dollars
    over the life of the program; and as I said before, splitting
    the buy of engines will also depress economies of scale for
    each manufacturer. As a result, the production cost for engines
    could increase. This is confirmed by the Government's cost
    model for the JSF program; and finally, doing a mid-life
    upgrade on a alternate engine will add additional costs.
        All totaled, the increase in cost to qualify and support an
    alternate engine is between $4 to $6 billion.
        Competition may be effective to obtain the best price in
    situations where costs are unknown. However, since F135 costs
    are disclosed to the Government, it is hard to imagine
    significant savings from competition in this case.
        The cost disclosure requirement is an important factor. It
    provides built-in protection against a single-source provider
    raising prices to unreasonable levels. Under our contract, cost
    and pricing data are fully disclosed to the Government and are
    audited on a regular basis. Moreover, the Government sets the
    pricing targets, and our profit is related directly to meeting
    these targets. It is our full expectation that the F135
    production contract will have similar cost management
    incentives.
        Finally, Mr. Chairman, members of the committee have often
    expressed concern for our international partners on the JSF and
    an interest in their meaningful participation to this program.
    We fully understand the importance of the international
    coalition, and I'm proud to tell you that Pratt & Whitney has
    teamed up with more than 40 companies from all eight partner
    countries, and this is our chart three, showing the different
    partners that we've signed up with in several countries on best
    value. These companies are providing technology, manufacturing
    capability, and the overall best value to the JSF and the
    partner countries.
        On the F135 program, our single largest teammate, in fact,
    is Rolls-Royce. In December 2001, we signed a contract with
    Rolls-Royce, now worth more than $1 billion, for the
    development of lift components for the vertical lift variant.
    This past January, we signed a memorandum of understanding
    (MOU) to continue our teaming relationship into the production
    and sustainment phase of the JSF program. That work is expected
    to earn Rolls-Royce many additional billions over the life of
    the program.
        The truth is, Rolls-Royce will be a winner with billions of
    dollars of JSF business whether there is an alternate engine or
    not, and so will others in the U.K., including BAE Systems,
    which has been awarded a significant share of the airframe
    work. This will be a substantial return on the United Kingdom's
    initial $2 billion investment.
        Mr. Chairman, for our part, I can assure you that Pratt &
    Whitney will remain dedicated to achieving the objectives of
    the administration and Congress and provide an engine whose
    reliability and performance will be unsurpassed. Our total
    commitment is to meet the needs of our military customers as we
    jointly support our service men and women and allies around the
    world. We believe the administration's decision will save
    taxpayers' money, maintain the Nation's industrial base,
    enhance fleet operational readiness, and ensure participation
    by international partners. We urge you to support the
    administration on this important question.
        Thank you, and I welcome the opportunity to answer your
    questions, Mr. Chairman.
        [The prepared statement of Mr. Chenevert follows:]

                     Prepared Statement by Louis Chenevert

        On behalf of United Technologies Corporation and Pratt & Whitney
    (P&W), I thank Chairman Warner, Senator Levin, and members of the
    committee for giving me the opportunity to testify today.
        My purpose today is to assure the committee that the
    administration's decision to eliminate funding for the alternate engine
    for the Joint Strike Fighter (JSF) is, operationally and economically,
    a sound and secure one. I also assure you that P&W is committed to
    meeting our military customer's needs as we jointly support our service
    men, women, and allies around the world. We believe the Pentagon's
    wish, to use the $1.8 billion a second engine would have cost over the
    next 5 years for higher priority items, deserves your support.
        The source of my confidence in making this statement, Mr. Chairman,
    is P&W's F135 engine.
        In December 2005, we delivered the world's most powerful tactical
    fighter engine to Lockheed Martin, ahead of schedule. It is now
    installed in the first flight test aircraft. We have already logged
    more than 4,700 ground test hours on nine test engines, and are on
    track to support the first flight of the JSF later this year.
        The P&W JSF engine is a derivative of the engine for the F-22
    Raptor. By the time the JSF is operational, the main or core portion of
    these engines will have accumulated more than 800,000 flight hours,
    which will ensure reliable operation.
        The F135 has passed every test and met every milestone, and we are
    committed to maintaining that flawless record of performance and
    support to our customer.
        In my testimony today, I will address four areas relevant to the
    Joint Strike Fighter alternate engine decision:

             the U.S. industrial base for fighter engines,
             operational readiness,
             the additional costs associated with an alternate
            engine program, and
             international participation in the program.
                                industrial base
        The impetus for an alternate engine was the need to ensure the
    health of the U.S. industrial base for manufacturing tactical fighter
    engines. At the time, an argument was put forth that if there were no
    alternative engine for the JSF, the U.S. would be left with only one
    tactical fighter engine manufacturer.
        Mr. Chairman, I respectfully submit that there is no such thing as
    the fighter engine business per se--just the engine business. I don't
    mean that building an engine for an F-18 or an F-22 doesn't require
    specialized skills and technology. But the basic tools, technology,
    materials, and processes used in large turbine military and commercial
    engines have become closely aligned over the years. The engineering and
    manufacturing workforce can readily move from commercial programs to
    military programs and vice-versa, as can the supply base.
        Today, General Electric (GE) is the world's largest jet engine
    manufacturer, and it is likely to continue to be so for the foreseeable
    future. GE has produced more than 4,300 sole-source engines for the F-
    18 and will continue to produce these tactical fighter engines until at
    least 2012. GE has also been the sole production source of more than
    12,000 T700 engines for Black Hawk and Apache helicopters, and will
    continue to be the sole source for the next 15 years. That doesn't take
    into account the other engine development programs in which GE will
    participate, such as those for unmanned aerial vehicles and the next
    generation long-range strike aircraft. Rolls-Royce, too, has a healthy
    backlog of orders, and has been selected as the sole source for engines
    on the C-130J and the V-22.
                             operational readiness
        The second area that has been discussed is operational readiness.
    This argument basically translates as ``develop a second engine in case
    something goes wrong with the first one.'' Given unlimited funds, that
    would be good logic. Everyone would want a backup version of just about
    anything--just in case.
        But there are no backup engines for the GE-powered F-18 or Black
    Hawk, the Rolls-Royce-powered V-22 or C-130 or the P&W-powered F-22 or
    C-17. For that matter, there are no alternate suppliers for flight
    controls, ejection seats, or avionics--all these mission-critical
    systems on fighter jets are sole source.
        We don't require these because resources are limited. When
    resources are limited, the wise course is to conduct a risk assessment.
    Where you determine the risk level is unacceptable, you find the
    resources for a redundant system. Where it's not, you hold a
    competition to make sure the one supplier you do choose is the best
    one.
        That's exactly what did happen. P&W did compete head-to-head
    against GE in 1991, and we were awarded the engineering and
    manufacturing development (EMD) program for the F119 engine. That
    program was the source of the derivative engine for the JSF selected by
    both Boeing and Lockheed Martin for their concept demonstrators. Why?
    Because it was the right combination of performance, development cost,
    and operational risk--factors even more valid today than in the past.
        The readiness question really boils down to one of engine
    reliability, and the good news, Mr. Chairman, is that all engines--and
    I mean GE engines, Rolls-Royce engines, and P&W engines--have become
    far more reliable in recent years. Partnering with our customers and
    industry, we have seen advances in manufacturing processes, materials,
    design tools, fleet management, predictive maintenance, and risk
    management tools. Many of these advancements have been championed by
    our customer, and have greatly improved engine reliability and reduced
    safety-related incident rates by a factor of 10 over the last 30 years.
        The U.S. Air Force's data demonstrates this. Single engine fighter
    aircraft class A mishap rates have been reduced from 10 per 100,000
    hours to less than 1 per 100,000 hours in that time period.
        In this context, Mr. Chairman, we've heard a lot of comparisons to
    the F-16 and the F-14 programs. But, this situation is fundamentally
    different. Over 20 years ago, Congress funded an alternative engine at
    the request of the customer--that is, the Defense Department. Now the
    Department believes one engine is sufficient to meet its needs, and has
    laid out more pressing uses for the $1.8 billion a second engine would
    cost over the next 5 years.
                                additional costs
        A third area under discussion today is the idea that a second
    engine will save taxpayers' money. This argument asserts that where
    there is competition, cost savings follow automatically. But, Mr.
    Chairman, it is unlikely that a second engine for the JSF will save
    American taxpayers a penny. It is certain, however, that an alternate
    engine will add billions to the overall program cost, which may
    ultimately translate to fewer aircraft for the Services and
    international partners.
        The additional costs associated with a second engine will outweigh
    any savings, and will be impossible to recover over the life of the
    program. This is a situation, after all, in which the Government is not
    only doing the buying, but also paying twice for product development.
    If the Government opts to split the purchase between two suppliers,
    neither will be able to deliver maximum savings from economies of
    scale. A split buy will also double the Government's support costs over
    the 30-year product life cycle. In a situation like this, costs will
    mount rapidly and quickly overtake savings.
        Here is our analysis of the additional cost factors:

             Completion of the System Development and Demonstration
            program for the second engine in 2013 will cost at least $2.4
            billion.
             Sustaining engineering and component improvement of a
            second engine will each add hundreds of millions to a $1
            billion over the life of the program.
             Splitting the buy of engines will also depress
            economies of scale for each manufacturer. As a result, the
            production cost for engines will increase. This is confirmed by
            the Government cost model for the JSF program.
             Finally, doing a mid-life upgrade on an additional
            engine will add additional costs.

        All totaled, the increase in cost to qualify and support an
    alternate engine is between $4 and $6 billion.
        Competition may be effective to obtain the best price in situations
    where costs are unknown. However, since F135 costs are disclosed to the
    Government, it is hard to imagine significant savings from competition
    in this case.
        The cost disclosure requirement is an important factor. It provides
    built-in protection against a single-source provider raising prices to
    unreasonable levels. Under our contract, cost and pricing data are
    fully disclosed to the Government and are audited on a regular basis.
    Moreover, the Government sets the pricing targets and our profit is
    related directly to meeting these targets. It is our full expectation
    that the F135 production contract will have similar cost management
    incentives.
                          international participation
        Finally, Mr. Chairman, members of the committee have often
    expressed concern for our international partners on the JSF, and an
    interest in their meaningful participation in the program. We fully
    understand the importance of the international coalition, and I'm proud
    to tell you that P&W has teamed up with more than 40 companies from all
    eight partner countries. These companies are providing technology,
    manufacturing capability, and the overall best value to the JSF and the
    partner countries.
        On the F135 program, our single largest teammate, in fact, is
    Rolls-Royce. In December 2001, we signed a contract with Rolls-Royce
    now worth more than $1 billion for the development of lift components
    for the short take-off, vertical landing (STOVL) variant. This past
    January we signed a memorandum of understanding to continue our teaming
    relationship into the production and sustainment phase of the JSF
    program. That work is expected to earn Rolls-Royce many additional
    billions over the life of the program.
        The truth is, Rolls-Royce will be a winner--with billions of
    dollars of JSF business--whether there is an alternate engine or not.
    So will others in the U.K, including BAE Systems, which has been
    awarded a significant share of the airframe work. This will be a
    substantial return on the United Kingdom's initial $2 billion
    investment.
        For our part, I can assure you that P&W will remain dedicated to
    achieving the objectives of the administration and Congress and provide
    an engine whose reliability and performance will be unsurpassed. Our
    total commitment is to meet the needs of our military customers as we
    jointly support our service men, women, and allies around the world. We
    believe the administration's decision will save taxpayers money,
    maintain the Nation's industrial base, enhance fleet operational
    readiness, and ensure participation by our international partners. We
    urge you to support the administration on this important question.
        Thank you. I welcome the opportunity to answer your questions.

        Chairman Warner. General?
        General Newton. No, sir.
        Chairman Warner. We'll proceed with some questions.
    Repeatedly, I think the first panel and you again have
    mentioned the fact that there are several categories of U.S.
    aircraft in operation today where there's just one engine. You
    cited the C-17 and certain of the F-18s. Is that correct?
        Mr. Chenevert. The F-18, the helicopter, the Apaches, and--
    --
        Chairman Warner. Yes, all right, but just stop to think. Of
    the C-17, we're looking at a total buy of 180 planes. Maybe
    total them all together, 1,000 planes. This is 5,000 aircraft.
    I can't seem to get that point across--5,000. This isn't 180 C-
    17s, and the people came up as if you all have reached the
    penultimate of all technology--perfection, never going to be a
    flaw. I'm just not accepting those premises. The magnitude of
    this contract is gargantuan, and it seems that it is a function
    of this committee to make certain that all the facts are known
    before all 100 Senators have to cast their vote on this. That's
    what troubles me here. It's not that you all haven't done a
    brilliant job in all of this business, but I tell you, this is
    a big, big gamble we're taking, and I think we better look at
    it very carefully.
        Now, a lot's been said about GE. The chart's gone, but I
    guess you had a chance to look at them. Are you going to stay
    in the single engine business? You have to keep your current
    fleet of engines, the spare parts, and whatever, but are you
    going to keep that engineering design team there? In other
    words, can America look if there were a problem with this
    engine down the road, if the Pentagon came trotting at the
    door, hat in hand, said please go back and restart this
    program, let's take a look at the second engine because we're
    experiencing unforeseen problems?
        Mr. Donnelly. I think, Mr. Chairman, this issue of
    industrial base is a very good question, and I don't think
    anybody's ever said that GE's going to just shut up shop and go
    home if they're not part of this contract. We're proud of the
    fact that we're a very viable and successful concern with
    respect to commercial engines. We obviously continue to stay in
    that business and are very successful in that business. We have
    plenty of opportunities in the military side with respect to
    use of that technology for cargo and tankers. We have a very
    successful helicopter program. All those things will continue.
    Certainly, we will continue to do everything to support the
    installed base and the fleet that we have out there today that
    powers a number of different variants of military fighter
    aircraft.
        But the fact of the matter is, there's only one fighter
    engine program--now or in the foreseeable future, and that is
    the JSF program. So, if we are not included in the JSF program,
    it's not a question--I guess Secretary England referenced
    earlier of a business decision. There's not a business. There's
    only one airplane, and if you're not on that airplane, then
    you're not in the fighter engine business.
        So, certainly we'd continue production and spare part
    support of our existing fighter aircraft, but we would
    absolutely disband that program. We have plenty of programs in
    the commercial world. Our guys would be quite happy to pick up
    a lot of technical talent that would come out of the program
    and apply it to other programs--both military and commercial.
    If the Government came back and said it was a bad decision, and
    it turns out that we do want to have an alternative engine for
    that airplane, you're talking about--is the ability there to
    reconstitute the program? Absolutely. We'll get the technical
    talent. We'll rebuild the team.
        But frankly, you'll start back where we were. These are
    programs that, whether we all like it or not, are 10 to 15 year
    programs. So, the program would be disbanded. There is no other
    fighter engine program to give us a rationale to keep such a
    team in place. Absolutely we could reconfigure it.
        Chairman Warner. What magnitude of personnel are we talking
    about? Is this going to result in a lot of layoffs, or are you
    just going to transfer the military people on JSF into the
    civilian, and they quietly integrate and go on about their
    business?
        Mr. Donnelly. You're always going to have some layoff and
    some restructuring of the program. This is a team today, I
    think, between GE and Rolls-Royce that represents about 750
    engineers and scientists that are participating in the
    development phase of this program. Certainly, a number of those
    people would end up in some of our commercial engine programs
    or international military programs that we have going on today,
    our helicopter programs, things like that.
        But certainly, there's going to be an impact in terms of
    the total number of people that are employed when you take out
    a couple billion' worth of program dollars.
        Chairman Warner. I remember when I had the privilege of
    working on this in the Department. We used to have charts
    showing benchmarks in the development of any program,
    milestones, and a lot of other things. Supposing Congress were
    to continue the funding for this program for just another
    fiscal year--and my understanding is that would take about $400
    million to keep it alive.
        Mr. Donnelly. That's right.
        Chairman Warner. Will there, in that time, be scheduled
    benchmarks which can really solidify the decision process has
    to go to one or two engines? I can think of one benchmark, and
    that is the scheduled first flight of this engine into the air,
    which is this fall. Is that correct? That's a very significant
    benchmark--will it fly? You put it up there and drive it around
    and subject it to whatever envelope of tests in the initial
    phases. I don't know how much stress you put on the engine and
    so forth. Maybe you can amplify that. In other words, if we're
    sitting here a year from today, and we're faced with the
    decision do we go another year, how much will be learned in
    this year that would help dictate a clear and more precise
    decision for the future?
        Mr. Donnelly. There's no question that every year that goes
    by, the teams are continuing to work very hard and pursue and
    accomplish milestones every year. So, you'll see additional
    hours of ground testing in the case of our----
        Chairman Warner. Are you ground testing? Are you that far
    yet with your----
        Mr. Donnelly. Absolutely.
        Chairman Warner. How many hours have you got on yours?
        Mr. Donnelly. There's about 200.
        Chairman Warner. Two hundred hours. They have thousands of
    hours.
        Mr. Donnelly. Sure. There's about a 3-year difference in
    the program.
        Chairman Warner. Oh, I understand. So, in other words,
    yours is just cranked up and putting along on 200 hours.
        Mr. Donnelly. Absolutely. It's a very important milestone
    to achieve that point.
        Chairman Warner. You just have to run it, and that's for
    sure.
        Mr. Donnelly. Absolutely.
        Chairman Warner. But can you help me at all as to what
    might happen in the next 12 months?
        Mr. Donnelly. Sure, we'll continue to demonstrate the
    milestones, including extensive continuation of the test
    program. So, we'll have a lot of data by the time a year from
    now comes in terms of the performance of the engine. Obviously,
    the same is true for the Pratt & Whitney engine. They're going
    to go through first flight testings. So, these are major
    milestones for the programs that are going to give important--
    --
        Chairman Warner. They're going to through the first flight
    tests. It's hard for Congress, if we lurch in and out of these
    things, to have the extraordinary vast factual base that you
    possess, but I'm just trying to put it in place. Next year,
    Senator McCain, who's a great aviator, will be sitting in this
    seat, hopefully. What will be before him to determine whether
    or not we push it 1 more year, assuming we can get it another
    year?
        Mr. Donnelly. We could go back and put information before
    you that gives explicitly what milestones will be accomplished
    in the next year of performance.
        Chairman Warner. How many more years of testing before you
    move into the operational evaluation?
        Mr. Donnelly. Our first flight test is in 2010, so we're 4
    years from having first flight, which is, as we say, about 3
    years behind where the Pratt & Whitney program has been.
        Chairman Warner. We will have had the first flight on the
    Pratt engine?
        Mr. Donnelly. That's correct.
        Chairman Warner. I'll ask Pratt. Do you feel that, if we're
    to keep the program going a year, are there any benchmarks
    which would, in your judgment, make stronger your case to be
    the single engine?
        Mr. Chenevert. I believe right now, Mr. Chairman, our focus
    is solely on delivering a superb engine for the first flight
    test. The engine's now loaded to the aircraft, and we're
    eagerly awaiting first flight. As I listened to Secretary
    England this morning, my concern is that any slippage to the
    program, if there is a funding issue, becomes detrimental to
    our success long-term.
        Chairman Warner. Senator Lieberman.
        Senator Lieberman. Thanks, Mr. Chairman. Thanks, gentlemen,
    for very helpful testimony. I must say that, in listening and
    thinking about where we are, you represent three great
    companies, and I appreciated the directness of your response,
    Mr. Donnelly, to the chairman's question. There's enough
    aircraft engine business in the world, military and commercial.
    These companies are going to continue to be in existence and be
    successful.
        On the record, GE has the largest share of the engine
    market. Now, I know that can change over time, but my own
    conclusion about the industrial base in this case is that these
    are three strong companies.
        I want to just refer back to the Great Engine War of the
    past and the one that we're being urged to continue now. There
    is some disagreement about the result of that Great Engine War.
    I think you know that. I know that there is a report put out by
    the Brookings Institute under a so-called Pilling Report, which
    actually says that in the long run, the competition did not
    save money, but I want to set that aside a minute and go to a
    question that's based on something that Admiral Willard, the
    Vice Chief of Naval Operations, asked today. I'm going to ask
    you this, Mr. Chenevert or General Newton. It was an
    interesting point, which is that, in fact, there has been a
    competition for the engine for the JSF, and we've paid for it.
    The Government has paid for it. It's the result of that
    competition that has been part of the DOD recommendation to go
    sole source for all the reasons stated by the first panel with
    the Pratt & Whitney engine. So, Mr. Chenevert or General
    Newton, can you describe the results of the testing between the
    Pratt & Whitney and GE/Rolls-Royce engines that has occurred so
    far?
        General Newton. Let me try that. Senator, thanks very much
    for that question. As was mentioned by the earlier panel, and
    we can certainly attest to that, there was this, as we put it,
    head-to-head competition between GE and Pratt & Whitney. GE had
    what we call the F120, and we had the F119 at that time. The
    F119 won, and that was for the JSF F-22.
        Senator Lieberman. Right.
        General Newton. As a result of that, Pratt & Whitney then
    continued to develop that through the contract which we had
    with the Government, and then came along the opportunity to
    participate in the JSF program. It was called by a different
    name at that point. As time went on, then both of us presented
    again, and the Pratt & Whitney engine was selected by the
    companies to power their aircraft so it could go through this
    initial test, and I think that was called the CDA.
        Senator Lieberman. Right.
        General Newton. So, after we came out of that and had the
    down select, as was mentioned earlier, where Lockheed and
    Boeing competed, and then Lockheed was selected, our engine
    then continued on with Lockheed, and that's where we find
    ourselves today with a significant amount of maturity and
    experience with the technologies which we are using, which I
    would say is also a quantum leap from where we were with the
    earlier F100 products.
        Senator Lieberman. I agree. Again, the engines made by all
    three of you are remarkable achievements of the industrial
    technological age, but the important point I wanted to make was
    that in some sense, you might read the DOD recommendation to go
    to a single source for the engine for the JSF as saying that
    essentially, we have achieved the cost benefits of competition
    up until this point, and now we're ready to make a decision.
        Mr. Chenevert, I want to ask you this question, you talked
    a bit about it in your opening statement, but I want to ask you
    to develop it a little bit more, and you've heard questions
    raised that obviously, one benefit of competition is that
    prices are held down. As I mentioned, Pilling would contest
    that about the earlier Great Engine War. But from your point of
    view, just develop it a little bit. Let me just state it at the
    extreme, as some people would say, that if Pratt & Whitney is
    the only source of the engines, that somehow you'd be capable
    of price gouging the DOD and the taxpayers. How do you respond
    to that?
        Mr. Chenevert. First of all, thank you, Senator, and I
    think we work very closely with our customer. Obviously, we
    leverage the supply chain aggressively. As we source these
    components, whether they are a source in the U.S. or a source
    to partner countries, there's a lot of competing that goes on
    to win the position on materials that compose the Pratt engine.
    That is all overseen, basically, through the Government
    accounting practices, and I think one thing that's very
    different as well on this program is the jointness of the
    program through the whole cycle.
        It is the first time in my career, as an example, that over
    the last several years, there has been--since 2002, I think it
    goes back--we have had the two JSF company conferences per
    year. All the key players of the industry show up. We disclose
    enormous amount of material and where we stand with the status
    of the program and sourcing with the partner countries, et
    cetera, at every meeting. This is one where our cost disclosure
    is fully open book with our Government customer, and it is
    absolutely sourced in a very competitive fashion.
        If I compare my knowledge of our own commercial engines
    versus the military engine, I would say that the cost base
    achieved on these engines is exceptional given the level of
    technology that we are pushing in these engines. So, I feel
    very confident that as we move forward--we've been in this
    business for many years, and we see a bright future. So, we
    have the advantage of working closely with our customer to make
    sure we provide him best value. That's how we win in the long-
    term.
        Senator Lieberman. So, if I hear you correctly, and I----
        Chairman Warner. Extra time. Go ahead. Take it.
        Senator Lieberman. That's all right. This is my last
    question anyway, thanks. You've talked, and the Secretary did
    earlier, about the full disclosure of all the elements of cost
    on this kind of engine, and what that really means is that if
    you started to essentially overprice to a point of making more
    profit than seemed reasonable to anybody because the Pentagon
    had no other source for the engine--what's the recourse that
    the Pentagon has?
        Mr. Chenevert. First of all, this would not happen in our
    company. United Technologies is a superb company. We won again,
    this year, the Aerospace Most Admired Company. We have several
    divisions in aerospace, it's our reputation.
        Senator Lieberman. Right.
        Mr. Chenevert. In our ethics as a company, there is not at
    all any intent of ever price gouging with the customer because
    it's not the way to operate, and you'll pay back later.
        Senator Lieberman. Pay back later because this--to put it
    more directly, the Pentagon is one of your biggest customers, I
    suppose.
        Mr. Chenevert. The Pentagon is basically 30 percent of my
    business.
        Senator Lieberman. Yes.
        Mr. Chenevert. So, this is why we operate very closely as
    partners to make sure the right outcome occurs. I can assure
    you that our company will deliver the best product,
    reliability, et cetera, but also will be very cost competitive,
    and this is the journey we're on.
        Maybe I'll just add also a little more, in this partnership
    with the customer, what's different about this product is also
    on a reliability perspective, the maturing of the F119 on the
    F-22 and then the diagnostics that are on this aircraft ensure
    that the fleet is going to be operating at a level of
    performance reliability that has been unseen before, and that's
    why I feel very confident showing up at every JSF Company
    conference representing our company and what Pratt & Whitney
    has delivered and will deliver in the future on the F-22 and on
    the JSF. The commitment is there, Senator.
        Senator Lieberman. I appreciate it very much, and I suppose
    it's also a reflection of the interweaving of this whole
    industry that Rolls-Royce is subcontracting with Pratt on parts
    of this contract that GE supplies the engines for helicopters
    made by your parent company, United Technologies, and the
    connections can go back and forth, so that the industrial base
    is strong, and we all have an interest in seeing that happen.
    Mr. Chairman, I have to move onto another session, and I'm
    late, too. I thank you for your courtesies. This has been an
    important set of hearings and very informative.
        I appreciate very much the testimony of the witnesses. What
    strikes me, just looking beyond the immediate controversy, is
    that these are going to be extraordinary aircraft. Obviously,
    the sooner, as General Magnus of the Marine Corps said, we get
    them out, the better. But these planes are going to play a
    critically important role in maintaining the advantage in the
    air of the United States of America, and I thank all of you and
    your respective companies for what you've both done on this
    program and are doing on all the other programs that matter so
    much to our national security in what continues to be,
    unfortunately, a dangerous time. Thank you very much.
        Chairman Warner. One question by me before you leave, and
    then I'm going to wrap right up, so you go ahead. If you go
    back through this book on the Great Engine War as I and others
    have done, you'll find that strikes and labor controversies
    were a major factor. When you have all of it, and their unions
    come to you, and they'll sure do it and try to get higher
    wages--that's their job, to get better wages and benefits--I
    don't know what your defense is then, it could be down in your
    vast subcontractor supply tier.
        Mr. Chenevert. Thank you, Mr. Chairman. I think today, the
    way we have sourced this program so far with the international
    countries and with the different partners around America as
    well, in many cases, we have dual sourcing on some of the
    components, which gives us a backup.
        We have multiple sites within our company that assemble
    different components of these engines, and I feel confident
    that we also have a capability for final assembly that says we
    could create redundancy, and we could eliminate some of the
    risks if we had a local strike, either at a supplier or a----
        Chairman Warner. All right. I put the question, and only
    history will answer it, and we'll just have to see. Yes, you
    want to make a comment on it?
        Mr. Donnelly. Mr. Chairman, is it possible to clarify just
    a couple of brief points?
        Chairman Warner. Yes.
        Mr. Donnelly. One around cost.
        Chairman Warner. I'm going to give you the opportunity to
    come back on as much as you wish.
        Mr. Donnelly. I think what's been stated is certainly true,
    that in the pricing issue there is full clarity that the
    Government has to your cost basis, and obviously, then the
    ability to negotiate price on top of that. However, I would
    contend that when you look at the overall cost to the
    Government, this price, this margin, is a relatively small
    percent relative to the overall cost of the system, and having
    visibility to cost is not to say it creates lower cost. The
    whole notion of competition is that we look at the cost and not
    simply represent truthfully that cost to the Government and
    negotiate these margins on top of that, but that we put our
    energy into reducing those costs. Therein lies the purpose of
    competition.
        Chairman Warner. Yes, I agree with you fully on that, and
    that'll be absent in this program. Yes, go ahead, Mr. Guyette.
        Mr. Guyette. Mr. Chairman, maybe a couple of other points
    just to----
        Chairman Warner. Take your time, gentlemen. I want to make
    a good record. This is a momentous decision for Congress to
    make.
        Mr. Guyette. I agree with you. I think it is strategic in
    and of itself, the JSF, and I think for our Nation, deciding
    whether or not we're going to have competition is strategic as
    well. I'll come to the question that you asked Mr. Donnelly at
    the beginning, which was relative to the industrial base. Would
    GE go out of the fighter engine business? If you were to apply
    that question to me, I would say to you that you, meaning the
    customer, determine the market. If you elect as the customer to
    have a monopoly for several decades, there is no market.
    Therefore, we have no business. Therefore, we will not have
    people working on these kinds of programs.
        By the way, these are our very best engineers, not the
    mediocre, the best. So, we have them focused on developing this
    high-technology, very important program. That team will be
    dispersed. What will it take to start this back up again in 10
    to 15 years, and I don't know that people really have focused
    on that point. They think that engines are interchangeable, and
    I believe someone this morning raised the issue of Southwest
    Airlines; they have one engine, and they rely on that. I'd make
    a couple of comments, having been in the business. Number one,
    this is a single engine on this airplane. Southwest Airlines
    has a multiple engine.
        Chairman Warner. The F-22 comparably has two engines.
        Mr. Guyette. Yes, sir, it does. In addition to that, you
    have a number of other things that are equally important in all
    of this, things like maturity. Now, we have heard today that
    the F119 is kind of the F135. Let's talk about the reality of
    that statement. The F119 is point designed for the F-22, which
    has its own operating environment. The F135 goes on a JSF with
    an entirely different mission, a lot of throttle----
        Chairman Warner. You're quite correct. One's an air-to-air
    basic combat. The other is a multiple strike fighter with a lot
    of differing missions, and that's one of the reasons I feel so
    strongly that the second engine might provide some advantages
    given that total change of mission profile.
        Mr. Guyette. Mr. Chairman, you're absolutely correct on
    that, and I would just continue on by saying that on the
    maturity side, I disagree with the earlier panel. I think the
    earlier panel said that the commonality between these two
    products, the F119 and the F135, was something like 70 percent.
    In our judgment, that is incorrect. We think it is more like a
    new engine than a derivative. If it were simply a derivative,
    Mr. Chairman, why would it cost somewhere in the neighborhood
    of another $4 to $5 billion to develop it when the engine that
    we're developing for this mission is costing $3.7? So, all I
    would suggest to you, Mr. Chairman, is there are a number of
    issues. The other, and most important of all, is the benefit of
    competition. It is not just in the price. It is in the product.
    It's on reliability. It's on durability. Mr. Chairman, at least
    my experience in aviation always suggests that with time, the
    end user always has another mission that you have never thought
    of, there is always new and required capability. So, I would
    simply say that I think for our Nation to move to a monopoly is
    absolutely wrong.
        Chairman Warner. I'm not going to give you my final
    analysis, but I'm certainly highly persuaded by what you have
    said, and it is what concerned me. General Newton, you're
    taking a lot of responsibilities on your shoulders for all
    those young airmen coming on in the years to come. You're
    making a decision that this is it, and I'd like to have your
    views on the varying missions of the JSF, which are a totally
    different envelope than we envisioned to be from the F-22. Am I
    not correct?
        General Newton. Sir, thanks for the opportunity because I
    wanted to respond and to share a couple of thoughts as well. I
    certainly want you to understand that we understand your
    concern in the gravity of this decision. We certainly don't
    want to try to minimize that at all. However, what we wanted to
    do is try to put some facts on the table, and let me start from
    there, and let's go back to the various missions that we were
    talking about with reference to a single-engine fighter as well
    as a dual-engine fighter or whatever, and I've done both of
    those. I've flown both the F-15, and the F-16. I've also flown
    the F-117 Stealth Fighter. I understand and can clearly say to
    you that when we develop an engine--and particularly, this
    engine that we are developing--you have the opportunity to put
    it through the normal test that is required to ensure that it
    can meet those various environments and conditions that you
    want the aircraft to fly in, and with today's tools that we are
    modeling in simulation as well as the ground tests that we are
    doing, it gives you the opportunity to determine whether this
    engine meets all of the requirements which the DOD has laid
    out. As was said earlier, we've met all of those requirements,
    and some of those, we have surpassed.
        So, this idea that this decision can't be made in a way
    where you have logical facts that allow you to make that
    decision, I have to respectfully say I disagree with.
        Chairman Warner. But talk about the missions of the JSF,
    the varied missions.
        General Newton. Sure.
        Chairman Warner. So much difference, that you have three
    models of this aircraft when you look at the proportions of the
    extraordinary precedence set by this contract, one airframe
    basically modified in a certain way to do three different
    missions--three variants of an airplane, not an inventory of
    300 or 400 aircraft, 5,000 aircraft, and we're asking eight
    international partners to join us.
        It seems to me somebody ought to buy a little insurance.
    That's what we're talking about today--a little insurance; one,
    to use proven concepts of how to hold down costs, i.e.,
    competition; and two, to have a backup engine which could, 3
    years coming behind yours, have some modifications which would
    help in one or more of the missions that these planes are to
    carry. Then, as was very astutely pointed out, there's always
    another mission that the plane will be tasked with future
    generations of young airmen.
        General Newton. Yes, sir, and I understand that very, very
    well, being in the training business, which I was in. Our young
    aviators certainly will put airplanes through the paces.
    However, let's take the F-22, for instance. We put them through
    their paces, that engine, that aircraft. All of that met all of
    those requirements. I certainly wouldn't suggest, and I don't
    think any of us can suggest that as we look into the future,
    there will not be some event that causes us concern. I think it
    happens on every air system, and it certainly happens on every
    propulsion system.
        But the way you design the engine, and the way you get the
    maturity and confidence in it, it allows you the opportunity to
    do the risk assessment and make a decision, even at the command
    level, that'll allow you to continue to operate the aircraft.
    We were talking with reference to readiness and capability
    earlier, and we were talking about how we stand down fleets.
        If you take a look back at the history, though, and look
    across large fleets of airplanes--and let's use the F-16 and
    the F-15--across the entire fleet, I think you will find that
    we have never grounded the entire fleet. On smaller fleets, we
    would certainly probably stand those down, and that's a
    commando's call so that we can make the decision prudently so
    that you can ensure that you don't lose an airplane, lose a
    pilot--those kinds of things.
        I would also go back to a point that Mr. Chenevert made,
    and that is the relationship which we have with our Service
    partners as we are developing systems today and the way that we
    are able to drive down cost with various cost models, and both
    of these new airplanes have that--on the F-22 and on the JSF.
    Pratt & Whitney is meeting that cost on both of those systems
    today, and I see those as the kinds of tools that are so
    different from years ago where we wouldn't have competition
    after the acquisition process, and this is truly what helps you
    to drive down costs.
        Chairman Warner. Your testimony is very valued, and I am in
    no position to match my modest career against yours in
    aviation. As a matter of fact, I didn't have a career to speak
    of at all in aviation. I was just a ground officer that hung
    around, and I always admired those who were behind the
    controls. So, I respect your views, but this decision is driven
    by one thing--money. I watched these admirals, and I've had a
    little experience with the good old Navy, and I saw them--the
    body language. They were coming along with that program office,
    and they were consulting with you folks. All of a sudden, a
    rollout of the QDR process beheaded them. That's as simple as
    that. Like good officers, they stood back and saluted, and that
    was the end of it.
        But Congress has a voice in this thing. I'm going to task
    you, the GE/Rolls teams, to come back, and it seems to me this
    case is hanging on the balance of what can be achieved in 1
    more year to eliminate the risks associated with not only
    competition and the engineering risks. Certainly, the first
    flight is an important milestone. It seems to me that $400
    million is a large sum of money, but it's very small in
    comparison to the magnitude of this program. Also, it seems to
    me that it would give the partners--I'm not all together sold
    on just how you all would treat it in this management. I
    thought you had a voice in it. Did you feel you had a voice in
    decisions of this magnitude?
        Mr. Guyette. No, sir.
        Chairman Warner. You didn't have a voice.
        Mr. Guyette. We had zero----
        Chairman Warner. Let's go back and stop the negatives. Tell
    me, how do you feel about the consultation process?
        Mr. Guyette. It was nonexistent, Mr. Chairman. There was no
    consultation.
        Chairman Warner. Did you anticipate that a decision of this
    magnitude would have involved a consultation process?
        Mr. Guyette. Yes, we would have, Mr. Chairman. In fact, we
    requested to meet with Secretary England, and we were unable to
    get an appointment.
        Chairman Warner. Any comments further on that, Mr.
    Donnelly?
        Mr. Donnelly. No, I think that's accurate. There were
    indications--we certainly heard that these discussions were
    underway, and we made numerous requests to meet with numerous
    officials within the Government and were denied any attempts at
    having such a meeting with the DOD.
        Chairman Warner. Very well, gentlemen. I thank you all.
    Yes, General?
        General Newton. I'm sorry, Mr. Chairman. Senator Lieberman
    mentioned the Pilling study. There are a few pages in there
    that reference the Great Engine War, and I would if at all
    possible, I'd like to have that in the record for my testimony.
        General Newton. Thank you very much.
        [The information referred to follows:]

        ``Competition in Defense Procurement,'' by Donald L. Pilling;
    Brookings Institution Press 1989; 62 pp. is retained in committee
    files.

        Mr. Donnelly. If we're going to put things in the record in
    that regard I think it'd be very interesting to note that even
    Pratt & Whitney has publicly disclosed that they believe that
    there was $3 billion saved in that Great Engine War as a result
    of the competition. [Laughter.]
        I'm happy to enter that into the record as well.
        Chairman Warner. The record stays open until March 17. All
    right. Thank you, gentlemen. The hearing is adjourned.
        [Questions for the record with answers supplied follow:]
                   Questions Submitted by Senator John Warner
                            f404 engine competition
        1. Senator Warner. Secretary England, both you and the United
    Technologies Corporation witnesses on the industry panel cited the F/A-
    18 program as a successful, non-competitive sole-source engine program.
    Didn't the Navy, in fact, conduct a leader-follower, build-to-print,
    second source engine competition for F404 production engines for the F/
    A-18 program?
        Secretary England. It is inaccurate to cite to the F/A-18 program's
    F404 engines as an example of a successful, non-competitive sole-source
    engine program, because as you have correctly pointed out, several F404
    production year buys were competed between the original and a second
    source.
        The F404 engine was initially procured via a sole-source contract
    with General Electric (GE). In the mid-1980s, the Navy established a
    second-source for the F404 engine based upon projected increased F404
    engine requirements and a belief that competition would drive down
    overall F404 program costs. After Pratt & Whitney (P&W) opened an F404
    production line to manufacture an F404 engine identical to GEs, the
    Navy split the award of its production requirements for fiscal years
    1988 and 1989 between the two companies. Only a few years after the
    program was initiated, projected F404 quantities were reduced to the
    point that maintaining two sources was no longer deemed viable. In
    1989, the Department competitively awarded 100 percent of its fiscal
    year 1990 through fiscal year 1995 F404 requirements to GE, effectively
    ending the second source program at P&W.
        Rather than being an example of a successful sole-source program,
    we believe that the history of the F404 engine program highlights some
    of the risks inherent with dual sourcing strategies. Successful dual
    sourcing requires long-term commitments and/or large production
    quantities in order to achieve savings and maintain the long-term
    viability of two production sources.

        2. Senator Warner. Secretary England, didn't P&W produce over 200
    F404 engines before the Navy terminated the program for cause due to
    procurement improprieties?
        Secretary England. P&W produced a total of 215 F404 engines before
    the Navy ended the F404 dual-source program, see response to Question
    1. The P&W F404 engine program was not terminated for cause due to
    procurement improprieties.

        3. Senator Warner. Secretary England, didn't the program get caught
    up in the so-called ``Ill Wind'' scandal?
        Secretary England. Many defense programs were caught up in the Ill
    Wind investigation, including the F404 program, due to the involvement
    of the former Assistant Secretary of the Navy for Research and
    Development, Melvyn R. Paisley.

        4. Senator Warner. Secretary England, wasn't there a large
    settlement paid by P&W?
        Secretary England. United Technologies Corporation entered into a
    plea agreement with the Government in 1992 in which the corporation
    agreed to pay a criminal fine of $2 million relating to conduct of its
    P&W division as well as its wholly owned subsidiary, Norden Systems,
    Inc. By the terms of this agreement, United Technologies Corporation
    also paid civil claims in the amount of $2.5 million and reimbursed
    investigative costs in the amount of $1.5 million.

        5. Senator Warner. Secretary England, didn't people go to jail?
        Secretary England. Yes, former Assistant Secretary of the Navy
    Melvyn R. Paisley was sentenced to prison.

        6. Senator Warner. Secretary England, wasn't there a subsequent
    counter-claim filed by P&W challenging the Navy's termination of the
    program?
        Secretary England. P&W filed claims with the Armed Services Board
    of Contract Appeals on the grounds that the Government prematurely
    ended its dual source F404 engine program.

        7. Senator Warner. Secretary England, would you please provide a
    detailed history and chronology of these events, including the amounts
    paid by P&W and the Navy to settle these claims?
        Secretary England. A detailed history and chronology of events
    related to the dual source F404 engine program can be found in
    Administrative Judge Peter D. Ting's decision in United Technologies
    Corp., Pratt & Whitney Group, Government Engines and Space Propulsion,
    ASBCA NO. 46880, 97-1 BCA 28818 (February 21, 1997), provided as
    attachment (1).
        The Government paid P&W a total of approximately $150 million in
    settlement of all F404 contract claims.
        Attachment: (1) Chronology of Events, F404 Engine Program

                competition for the joint strike fighter engine
        8. Senator Warner. Secretary England, during your appearance before
    the committee, you stated that there had been an ``engine competition''
    for the Joint Strike Fighter (JSF) program. Would you please clarify
    this for the record?
        Secretary England. The following excerpt from a DOD January 1996
    report to the congressional defense committees summarizes JSF engine
    selection history: ``. . . The Joint Advanced Strike Technology (JAST)
    Program (later renamed the JSF Program) awarded contracts to both GE
    and P&W for Concept Exploration Phase and Concept Development Phase
    efforts. Subsequently, all three JAST Program Weapon System Contractors
    independently selected either the basic, or a derivative of, the P&W
    F119 as the cruise engine for their [respective] Preferred Weapon
    System Concepts and Demonstrator aircraft. The JAST Program, therefore,
    is awarding a follow-on contract to P&W in fiscal year 1996 to provide
    hardware and engineering support as Government Furnished Equipment for
    the Weapon System Concept Demonstration efforts commencing in fiscal
    year 1997. The Department appreciates the committee's concerns about a
    competitive source for engines. The JAST Program acquisition strategy
    has provided for introduction of a second engine source during the
    production phase.''

        9. Senator Warner. Secretary England, were there formal engine
    competitions involving P&W and GE for either the prototype concept
    demonstrator aircraft phase or the subsequent system development and
    demonstration phase of the JSF program? If there were formal
    competitions, please provide the engine source selection solicitations
    and evaluation results for each of these phases of the JSF program, and
    the estimated competitive savings that resulted from these
    competitions.
        Secretary England. There were no formal Government engine
    competitions for either phase of the JSF program.

                        general electric's market share
        10. Senator Warner. Mr. Donnelly, there was considerable discussion
    in the hearing about GE exiting the large, high-thrust, military
    fighter engine business if the F136 program is cancelled. Would you
    please provide GE's position on this issue?
        Mr. Donnelly. If the F136 engine program is terminated, as the DOD
    is proposing in the fiscal year 2007 budget, GE will be forced to exit
    the high performance fighter engine business. Large combat engines
    contain unique technologies that result from the efforts of highly
    dedicated design teams. Specifically, multistage high-pressure fans,
    variable exhaust nozzles, and afterburners have no applicability in the
    commercial jet engine world. We have built up the critical design,
    systems integration techniques, manufacturing, and test skills for
    these technologies over several generations of large military combat
    engines, culminating in our current product portfolio of the F110 and
    F404/F414 families.
        All three of the platforms on which these engines are qualified (F-
    15, F-16, and F-18) are considered mature from a propulsion standpoint.
    GE is not aware of any DOD plans to require increased thrust or other
    significant performance changes on any of these engines or platforms.
    In the short-term, the F404/F414 and F110 engine families will only
    require sustaining engineering and manufacturing capabilities to
    support the existing fleets. The bulk of these engineering teams are
    now transitioning to the F136, as new design and engineering
    opportunities diminish on the legacy engine families. These teams will
    not be required and will be disbanded if the F136 is terminated.
        There is no other program, current or envisioned, that would allow
    GE to maintain this critical capability. Without these unique skills in
    place, it would take GE many years to reconstitute a team and then
    design, develop, test, and produce a new high performance fighter
    engine. If the F136 program is canceled, GE will be forced to exit the
    high performance fighter engine business and the DOD will be captive to
    a single supplier of high performance fighter engines. This situation
    last existed during the 1970s and early 1980s and led to the first
    Great Engine War. We would hope the Nation does not place itself in
    that position again.

        11. Senator Warner. Secretary England, there was considerable
    discussion in the hearing about whether or not GE would exit the high-
    thrust, fighter engine business if the F136 program is cancelled. Is
    there any DOD program other than JSF that would keep GE engaged in
    designing, developing, and producing large, high-thrust fighter engines
    (engines in the 40,000 lbs. thrust category) either now or in the near
    future? If not, given that it takes 15 years or so to design, develop,
    test, and initiate production of a new fighter engine, isn't it logical
    to conclude that the Department will become dependent on only P&W to
    provide high performance fighter engines in the future if the F136
    program is terminated?
        Secretary England. The JSF is the only DOD program that requires an
    engine in the 40,000 lb. thrust category. The decision to rely on a
    single engine supplier for the JSF program does not preclude
    competition on future engine programs.

                                engine maturity
        12. Senator Warner. Secretary England, at the hearing, you talked
    about the acceptability of the risk to the JSF program and the
    warfighter of terminating the F136 engine program. Would you please
    tell when, in terms of flying hours, a fighter engine is determined to
    have reached maturity?
        Secretary England. I am unaware of any standard definition or
    metric for determining a fighter engine's maturity for development
    decisions. There is a standard metric for fleet engine maturity, which
    says an engine has reached maturity at 50,000 flight hours.

        13. Senator Warner. Secretary England, would you also provide the
    estimated number of flying hours that will be accumulated on the F119
    engine for the F-22 before the F135 engine for the JSF goes into
    operational service and the assumptions for arriving at that flying
    hour estimate?
        Secretary England. When the first JSF aircraft is delivered in late
    2009 (September 2009), the U.S. Air Force projects approximately
    145,000 hours will be accumulated on the F119 engine for the F-22. The
    estimate is based on 336 flight hours per aircraft per year.

                         economic/cost savings analysis
        14. Senator Warner. Secretary England, during your appearance
    before the committee, you stated that the Department analyzed the
    second engine strategy and concluded that having a second engine would
    not yield a net cost savings. Your letter to Representative Rob Simmons
    dated February 27, 2006, included the specific DOD break-even analysis.
    Would you please provide the specific economic assumptions, including
    engine unit quantity and engine unit cost versus production quantity
    with and without competition, as well as the life cycle cost
    assumptions used in this specific break-even analysis for the alternate
    engine program?
        Secretary England. [Deleted.]

                            benefits of competition
        15. Senator Warner. Mr. Chenevert, during your appearance before
    the committee, you argued strongly that sole-source procurement is good
    for the JSF engine. Yet, when asked how your company would mitigate the
    impact of potential supplier strikes on engine production if you became
    the sole-source engine provider for the JSF program, I believe you
    stated, ``. . . we have multiple sources for parts. . .'' Also, I
    believe your company just began running ads in both Aviation Week and
    Flight magazines announcing your entering the business of producing
    parts for the GE/SNECMA CFM56 commercial engine. The ads state, ``You
    ask for a competitive edge. So we entered the competition.'' The tag
    line of the ad reads, ``Now you have a true choice.'' Would you please
    explain why competition is appropriate/good for those instances, but
    not appropriate/good for the JSF engine?
        Mr. Chenevert. Competition is appropriate for the JSF and the P&W
    engine was selected for both competing JSF aircraft offers. In
    reference to the statements on P&W competing for CFM56 business, P&W
    has invested in this business, not our customers, and believe we can
    make a return on that investment in a truly free market place. The DOD
    has decided that the investment in an alternate engine is not a cost
    effective investment and we support that decision. Unlike the
    commercial market place, the DOD invests in the development and
    procurement and a further competition for procurement will not provide
    any return.

                       driving down engine-related events
        16. Senator Warner. Secretary England, at the hearing, the United
    Technologies Corporation witnesses showed a chart of how engine-
    related, class A events for single engine fighter aircraft have
    decreased over time. It appeared to me that the trend dramatically
    improved with the onset of the Great Engine War competition in the
    1980s. Would you please provide your comments on the impact of
    competition in driving improvement in engine-related accidents,
    particularly for single-engine aircraft?
        Secretary England. The most well known example of competition in
    aircraft engine procurement is the Great Engine War, which began in the
    1970s as the Air Force and Navy were searching for more reliable power
    plants for the F-15, F-16, and F-14 aircraft. There is little
    disagreement that the competition created by the Great Engine War
    resulted in critical improvements in engine performance and
    reliability; however, there are significant differences between the
    circumstances of the Great Engine War and where we are today. In order
    to make accurate comparisons, it is first necessary to understand the
    context of the Great Engine War and how the lessons learned from that
    era may or may not apply to current issues.
        In the early 1970s the Services were eager to field the next
    generation of fighter aircraft to counter the Soviet air threat. In
    their rush to outperform the Soviets, a premium was placed on
    performance and power requirements (thrust to weight) rather than
    reliability and durability metrics. The Air Force's stated order of
    priority in fielding the new engine was: ``thrust, weight, everything
    else.'' The P&W F100 was selected for the F-15 and the F-16 based on
    considerable advances P&W had achieved in thrust and weight. Although
    this engine was initially well received by the Air Force, it soon
    developed stall problems and turbine failures due to the extreme
    maneuvering levels achieved by these new air frames.
        In the rush to field new engines, P&W powerplants for the F-15 and
    F-16 were only tested for 150 hours on the test-stand and 50 hours in
    the aircraft before going into production. Although these early tests
    extensively stressed time at high Mach numbers to guard against stress
    failures, they did not address the significant factors related to
    throttle movement. Gradually engineers began to better understand the
    durability issues associated with engine cycles, which are defined as
    the movement from the idle position to maximum power and then to an
    idle or intermediate position. They discovered that engine cycles are
    profoundly more important than just the accumulation of hours in
    evaluating engine life.
        When the P&W F100 engine performance problems became apparent, the
    Air Force believed P&W was financially responsible for fixing them. P&W
    thought the Air Force should pay, since P&W had provided the Air Force
    with the engine it requested. Ultimately, the Air Force redirected
    Government funds to improve the P&W engine while pursuing an alternate
    engine source with GE, thereby kicking off the Great Engine War.
        To avoid a repeat of the reliability issues experienced with the
    P&W F100, the Air Force Scientific Advisory Board proposed that engine
    usage be carefully defined at the beginning .of engine development,
    thereby increasing the importance of reliability relative to thrust and
    weight. GE used a combination of corporate, Air Force, and
    congressional funds to develop a derivative of their F101 engine used
    to power the B-1 bomber. In contrast to P&W, GE designed their new
    engine, which eventually became the F110, to the new stringent
    durability and reliability specifications required by the Air Force in
    the aftermath of the P&W dispute. It was these more stringent design
    criteria that gave GE a distinct reliability advantage over P&W as the
    Great Engine War commenced.
        Despite the initial concerns with the F100, it was still more
    reliable than engines developed for the 1950s and 1960s vintage
    aircraft such as the F-104 and F100. The chart below addresses the
    trend in single engine aircraft safety and reliability over the past
    several decades.

        In contrast to the focus on thrust and weight in 1970s fighter
    engines, reliability was a major factor in the selection of the P&W
    engine for JSF and continues to be a critical factor in the test
    program. Compared to the 200 engine test hours of the 1970s, the P&W
    engine in the JSF program has already amassed nearly 5,000 test-stand
    hours incorporating Accelerated Mission Test (AMT) profiles. These AMT
    profiles are designed to stress the engine cycles rather than just log
    operating time.
        Furthermore, over the past 30 years engine testing and design
    validation philosophy have evolved to the point that the Services have
    changed their key engine metric from hours to Total Accumulated Cycles
    (TACs). Thus, engine removals and maintenance actions are now often
    triggered on TACs, as opposed to hours. In addition to AMT mission
    execution, which primarily tests for Low Cycle Fatigue (LCF) effects,
    High Cycle Fatigue (HCF) testing has been incorporated to expose
    failure modes associated with high frequency/low amplitude effects. The
    combination of AMT and HCF testing has become the standard for testing
    propulsion systems to their limits to ensure a safe and reliable
    product.
        The lessons learned from the Great Engine War competition indicate
    that the positive trends in fighter engine reliability over the past 30
    years are the result of advanced design tools, improved manufacturing
    techniques, and a fundamental shift in engine testing and design
    validation philosophy. At issue is whether we expect competition to
    stimulate any further reliability improvements beyond the gains already
    realized from technology and testing advancements over the past several
    decades. Considering the current reliability of the F135 and its
    predecessor, the F-22's F119, fixing any problems with the original
    engine may cost far less than developing and producing a second
    engine--which might develop its own unique problems.

                            f136 milestones for cy06
        17. Senator Warner. Mr. Donnelly, during the hearing I raised the
    subject of what milestones or benchmarks would be completed during the
    current calendar year (2006) that would give this committee reason to
    recommend continuation of your system development and demonstration
    (SDD) contract for an additional year. Would you please provide this
    information along with those scheduled SDD accomplishments, beyond this
    year, which place you in a competitive position at the conclusion of
    SDD?
        Mr. Donnelly. A number of significant milestones will be achieved
    during the current calendar year that will further fortify the F136
    engine's importance to the JSF program as a robust, competitive
    solution to maximize value to the warfighter. I also attach a complete
    history of prior milestones in order to create a complete picture of
    the F136 engine. In April, the team completed the integrated baseline
    review consisting of a thorough review of technical, cost, and schedule
    elements of each major system and component in the engine. In the
    coming months, extensive design activity will take place on a
    component-by-component basis to modify the configuration tested in the
    pre-SDD phase to achieve an enhanced, optimized design that will meet
    the needs of the JSF aircraft that have evolved over the last 5 years
    of the aircraft's SDD phase. This will lead to the preliminary design
    review with the Joint Program Office (JPO). The completion of this
    significant milestone will launch the efforts for detailed component
    design culminating in the F136 critical design review next year.
        In parallel with the design efforts, additional engine and
    component testing will be conducted in 2006. Engine testing will
    continue on the short take-off/vertical landing (STOVL) engine to
    further develop the complex control system software. Component testing
    is currently underway on the combustor, afterburner, and control system
    to prove design concepts planned for the product configuration and
    reduce technical risk of the SDD full-engine testing program. Beyond
    2006, the F136 team will continue to progress on its path to design,
    test, and qualify an engine optimized for performance, safety,
    reliability, and affordability. The team will build seven product-
    configuration engines for ground testing, six for flight testing and
    one spare. The F136 engine will complete over 10,500 hours of testing
    before entering service in 2012 as a fully competitive engine for the
    JSF aircraft. The following summarizes the F136 SDD milestones,
    followed by the Joint Strike Fighter Competitive Engine Story:

    2006
        Initial Baseline Review
        STOVL Engine Testing (pre-SDD engine, 100 hours)
        Preliminary Design Review
        Component Testing

    2007
        Engine Testing (2 pre-SDD engines, 300 hours)
        Component Testing
        Initiate SDD Hardware Manufacturing
        Critical Design Review

    2008
        Build First 5 SDD Engines
        First SDD Engine Test (350 hours) Component Testing

    2009
        Extensive ground testing for flight readiness (5 engines, >1,800
    hours)
        Build initial flight test engines

    2010
        Engine Testing (5 engines, >2,000 hours ground testing)
        Delivery of 5 Flight Test Engines
        Build 2 additional SDD Engines
        Initial Flight Release
        First Flight with F136 Engine

    2011
        Engine Testing (7 engines, >3,000 hours ground testing)
        Delivery of 6th Flight Test Engine
        Continued Flight Testing

    2012
        Initial Service Release
        First Production F136 Engines Delivered
    The Joint Strike Fighter Competitive Engine Story
        In 1991, after an extensive and rigorous competitive prototype fly-
    off between Lockheed and Northrop and GE and P&W, Lockheed and P&W were
    chosen to develop and produce the F-22 fighter for the Air Force. P&W
    was awarded ``a competitively procured'' contract initially valued at
    $1.36 billion. The Air Force competitively selected the P&W F119 engine
    over the GE F120 engine using formal source selection procedures.
        In 1993, a technology program that is the forerunner to the JSF
    program is initiated. It is called the ``Joint Advanced Strike
    Technology'' (JAST) program.
        In 1994, the JAST JPO is established and four airframe teams
    (Lockheed, Boeing, McDonnell-Douglas and Northrop Grumman) began
    engaging in trade studies on future JSF aircraft concepts. This
    notional aircraft would be used by the air branches of all three
    Services and would ultimately replace the Air Force, Navy, and Marines
    Corps fleets of F-16s, F-18s, and AV-8Bs.
        In 1995, after McDonnell-Douglas and Northrop Grumman had teamed
    up, a Government conducted competition is initiated to pick two
    airframe teams to build and fly prototype aircraft. Lockheed, Boeing,
    and the McDonnell-Douglas/Northrop Grumman teams all chose the F119 as
    the propulsion system for their airframes. (The program office
    ``encouraged'' the airframers to use the F119 so that there would be
    ``commonality'' with the F-22. It is important to note, at this point,
    that, unlike the F-22 prototype fly-off, there was no formal source
    selection for the JSF engine and, in fact, the competitive fly-off that
    subsequently occurred did not involve an engine flyoff. All the
    airframe competitors used the P&W F119 engine in their proposals and
    propulsion performance was not a factor in selecting the winner of the
    fly-off.)
        Concurrently, Congress, concerned that this process will ultimately
    lead to a sole-source production award to the P&W F119, directs the DOD
    to establish a second source engine program for the JSF and adds $7
    million to the DOD fiscal year 1996 budget for this purpose. (This is a
    critical point in the discussion of the JSF engine competition. In the
    earliest phases of the JSF program, Congress, recognizing that the JSF
    program will be multi-service, multi-national and involve several
    thousand aircraft, directs the DOD to provide for a continuing engine
    competition in the production phase of the program so as not to get
    caught in the situation that existed in the 1970s and early 1980s when
    the DOD was captive to single, monopolistic supplier of high
    performance fighter engines.)
        In 1996, Lockheed and Boeing are competitively selected to build
    and fly prototype JSF aircraft. These prototype aircraft are both
    powered by the P&W F119 engine. This phase of the JSF program is called
    to the Concept Demonstration Aircraft (CDA) phase.
        Concurrently, the DOD requests $18 million in the fiscal year 1997
    budget to begin a ``Competitive Engine Program'' for the JSF. Congress
    adds $10 million to the DOD request and renames the program the
    ``Alternate Engine Program''.
        On January 23, 1997, the Naval Air Systems Command awards P&W a
    ``non-competitively procured'' $804,046,096 cost-plus-award-fee/cost-
    plus-fixed fee contract for the JSF Engine Ground and Flight
    Demonstration Program. The contract award announcement specifically
    states: ``This contract was not competitively procured.''
        Concurrently, DOD requests $20 million to continue the development
    of the ``Alternate Engine'' for the JSF. Congress adds $15 million to
    this request and requires the DOD to certify that the full funding is
    in place for the alternate engine program.
        During 1998, the CDA phase of the JSF program continues.
        Concurrently, DOD certifies that the alternate engine program is
    fully funded and requests $25 million to support the program. Congress
    adds $7.5 million to the program request and directs the DOD to
    accelerate the competition.
        During 1999, the CDA phase of the JSF program continues.
        Concurrently, DOD requests $29 million to support the alternate
    engine program. Congress adds $15 million to the request and again
    expresses strong support for competition.
        During 2000, the CDA phase of the JSF program continues.
        Concurrently, DOD requests $94 million to support the alternate
    engine program. Congress again expresses strong support for
    competition.
        In 2001, the CDA phase concludes with the selection of Lockheed
    Martin as the winner over Boeing. On October 26, 2001, Lockheed Martin
    is awarded an $18,981,928,201 cost-plus-award-fee contract for the JSF
    System Engineering and Manufacturing Development program by the Naval
    Air Systems Command. The contract award announcement specifically
    states ``This contract was competitively procured through a limited
    competition; two offers were received.'' On the same date, the Naval
    Air System Command awards P&W a ``non-competitively procured''
    $4,803,460,088 cost-plus-award-fee contract for the design,
    development, fabrication, and test of the F135 propulsion system and
    various other F135 development activities. The contract award
    announcement specifically states: ``This contract was not competitively
    procured.'' (It is important to note at this point that, contrary to
    the claims made by P&W and unlike the F-22 engine selection, there was
    no formal competition involved in the JSF engine selection in either
    the CDA or the SDD phases of the JSF program. Further, at the
    conclusion of the CDA phase of the program, a new engine development
    program is initiated for a different P&W engine referred to as the
    F135. While the F135 is similar in some respects to the F119, it is a
    different engine that requires several billion dollars to develop.)
        Concurrently, DOD requests $118 million to support the alternate
    engine program. Congress again expresses support for competition and
    adds $2.5 million to the request. The P&W engine is now designated the
    F135 and the GE engine is designated the F136.
        During 2002, the SDD phase of the JSF program continues.
    Concurrently, DOD requests $150 million to continue the development of
    the F136. Congress again expresses support for competition and adds
    $29.75 million to the request. GE and Rolls-Royce form a 60/40 limited
    partnership to develop and produce the F136.
        During 2003, the SDD phase of the JSF program continues.
        Concurrently, DOD requests $100 million to continue the development
    of the F136. Congress again expresses support for competition and adds
    $66.8 million to the budget request.
        During 2004, the SDD phase of the JSF program continues.
        Concurrently, DOD requests $231 million to continue the development
    of the F136. Congress again expresses support for competition and adds
    $3.5 million to the budget request.
        During 2005, the SDD phase of the JSF program continues.
        Concurrently, DOD requests $338 million to continue the development
    of the F136. Congress approves the request and again expresses support
    for competition. In August 2005, the F136 team is awarded a $2.4
    billion SDD contract to begin the final development phase of the F136
    program.
        In February 2006, the President's fiscal year 2007 budget request
    recommends termination of the F136 program and withdraws support for
    competition. Up to this point, $1.35 billion has been appropriated in
    support of the program.

                                               GE/R-R F136 FUNDING PROFILE
                                                [In millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                                       Congressional
                               Fiscal Year                              DOD Request         Add            Total
    ----------------------------------------------------------------------------------------------------------------
    1996............................................................                               7               7
    1997............................................................              18              10              28
    1998............................................................              20              15              35
    1999............................................................              25             7.5            32.5
    2000............................................................              29              15              44
    2001............................................................              94                              94
    2002............................................................             118             2.5           120.5
    2003............................................................             150           29.75          179.75
    2004............................................................             100            66.8           166.8
    2005............................................................             231             3.5           234.5
    2006............................................................             338                             338
    2007............................................................                               ?               ?
                                                                             1,123.0          157.05        1,280.05
    ----------------------------------------------------------------------------------------------------------------

                                     ______

                   Questions submitted by Senator John McCain
                                  competition
        18. Senator McCain. Secretary England, in your view, is the
    proposed buy of JSF engines large enough to support two competitive
    engines?
        Secretary England. We know that in order to achieve a net savings
    from competition, the development costs for the alternate source must
    be offset by the long-term savings from either lower total procurement
    costs or lower O&S costs. With respect to fighter engine competition,
    our primary experience is the Air Force's Great Engine War and the
    Navy's second source program with the F/A-18's F404. In both of these
    historical cases, neither the Air Force nor the Navy realized
    sufficient procurement savings to offset the development costs of the
    alternative engines. Consequently, we do not believe the proposed buy
    of JSF engines will yield net procurement cost savings.
        There are two reasons for this assessment: first, the investment
    cost of developing a second engine source is high--at least an
    additional $2.0 billion in the case of the F136 for the JSF. Second,
    splitting a given production quantity between two contractors often
    results in higher, rather than lower, production costs. This is due to
    a reduced advantage from ``learning curve'' effects (whereby costs
    decrease as a company produces more units) and from ``rate effects''
    (whereby fixed costs are spread over production units).
        The following charts illustrate our experience with the F404 engine
    competition in the Navy's second source program and the F100/F110
    competition in the Air Force's Great Engine War. Figure 1-1 shows
    actual F404 engine procurement costs before and during the competition.
    Unit costs of this engine did not decrease after competition was
    introduced.

        The cost of competition was understood during the Great Engine War
    when the Air Force conducted the Analysis of Alternative Procurements
    for Fighter Engines. In their congressional testimony the Air Force did
    not project any procurement savings; on the contrary, they assessed
    that a split buy would actually cost the government more than a single
    supplier.

        Historical evidence shows that competition is more likely to result
    in O&S savings than in reduced procurement costs. In the case of the
    Great Engine War, the Air Force anticipated savings from reduced O&S
    costs through more reliable engines and better contractor
    responsiveness. Although the Air Force was very specific in their
    projections, there is no empirical data that shows how much the Air
    Force actually saved in O&S costs. It is very difficult to assess that
    they achieved any savings because the estimates were based on how much
    they would save over the original ``unimproved'' P&W F100 engine. P&W
    did, in fact, invest $400 million to fix the problems and produce a
    more reliable engine while the Air Force was investing another $500
    million to develop an alternate engine.
        The current issue for the JSF alternate engine program is whether
    we expect engine competition to achieve significant reliability
    improvements beyond the gains already realized from technology and
    testing advancements over the past several decades. We must also assess
    whether we could achieve greater reliability at lower cost by investing
    in the primary engine rather than creating a second engine supplier.
    The Department believes that if we are faced with engine reliability
    problems in the future, the most practical option will likely be to fix
    or improve the capability of the primary engine rather than incurring
    the high investment cost of creating a second supplier of engines.
    Considering the reliability of modern engines in general and the
    performance of the JSF engine so far, fixing any problems with the
    original JSF engine may cost far less than developing and producing a
    second engine--which might develop its own unique problems.

        19. Senator McCain. Secretary England, in your experience, and
    expert opinion, when does competition offer a better business case than
    using a sole-source provider?
        Secretary England. Please see the answer to question 18 for this
    response.

                                    analysis
        20. Senator McCain. Secretary England, when was the analysis for
    the decision to cancel the JSF alternate engine completed?
        Secretary England. DOD has reviewed and assessed the costs and
    benefits of the alternate JSF engine several times since the
    establishment of the JSF program in the mid-1990s. During deliberations
    on the fiscal year 2007 budget, DOD considered the findings of past
    assessments, along with initial test results from the F135. The F135 is
    derived from the F119 engine used in the F-22, so experience with that
    engine was considered as well. These factors contributed to the
    judgment that the potential benefits to be gained from developing an
    alternate engine for the JSF would not justify the added development
    and operating costs. Two key factors supporting that conclusion were
    engine reliability and cost.
        Technological advances have permitted major improvements in engine
    reliability over the past several decades, thus enabling the Department
    to procure the single-engine JSF for three Services. The design of the
    F135 engine has matured after almost 5,000 test hours, and the engine
    is performing well at this stage of testing. We know that engine
    problems can arise over years of operational use, but we are confident
    that we can hedge against such risks. One mitigating factor is that the
    F135 engine was produced using the same engineering and manufacturing
    practices as the F22's F119 engine, which is performing well after
    roughly 18,000 engine flight hours. Also, if we do face reliability
    problems in the future, we believe that fixing any problems with the
    original engine will cost far less than developing and producing a
    second engine (which might develop its own unique problems). It is this
    collective knowledge and experience that guided the Department's
    decisions years ago to rely on a single engine supplier for both the F-
    22 and the F/A-18E/F.
        We do not believe that maintaining two JSF engine suppliers would
    yield cost savings, for two reasons. First, the investment cost of
    developing a second engine source is high--at least an additional $2.0
    billion in the case of the F136. Second, splitting a given production
    quantity between two contractors often results in higher, rather than
    lower, production costs. This is due to a reduced advantage from
    ``learning curve'' effects (whereby costs decrease as a company
    produces more units) and from ``rate effects'' (whereby fixed costs are
    spread over production units). Our experience with the F404 engine in
    early-model F/A-18s illustrates the point: the average unit costs of
    this engine did not decrease after competition was introduced.
        There are risks in every development program, and hard choices must
    be made as to whether to accept or reduce them. In the case of the JSF
    engine, we believe that the program office and the prime contractor
    will be able to overcome any difficulties that arise and that
    maintaining a second source for the engine would not be an effective
    use of taxpayer dollars.

        21. Senator McCain. Secretary England, when did the program
    manager's advisory group (PMAG) assessments take place?
        Secretary England. Please see the answer to question 14 for this
    response.

        22. Senator McCain. Secretary England, what were the
    recommendations of these PMAGs?
        Secretary England. Please see the answer to question 14 for this
    response.

        23. Senator McCain. Secretary England, did the Department consider
    the JSF PMAG assessments?
        Secretary England. Please see the answer to question 14 for this
    response.

        24. Senator McCain. Secretary England, what did both of the PMAGs
    conclude and recommend to the program manager with regard to the
    competitive engine program?
        Secretary England. Please see the answer to question 14 for this
    response.

        25. Senator McCain. Secretary England, did the Department do any
    other analysis either prior to or during the internal DOD 2007 budget
    deliberations, to arrive at the decision to terminate the F136 program?
    If not, why not?
        Secretary England. Please see the answer to question 20 for this
    response.

        26. Senator McCain. Secretary England, did the Department conduct a
    Defense Acquisition Board (DAB) review prior to the decision to sign
    the SDD contract?
        Secretary England. The F136 engine was addressed at the DAB review
    held on May 5, 2005. The discussions focused on the transition from
    Pre-SDD to the SDD contract. The DAB review did not discuss the merits
    of a competitive engine program, nor the possibility of canceling the
    program.

        27. Senator McCain. Secretary England, what was the consensus of
    the DAB with regard to the competitive engine program?
        Secretary England. Please see the answer to question 26 for this
    response.

        28. Senator McCain. Secretary England, the DOD guidance for
    conducting cost analyses is that the total life cycle cost of the
    system must be considered. What was considered in the analysis that
    supported the decision to cancel the JSF alternate engine?
        Secretary England. In order to achieve a net cost savings,
    competition between two engine suppliers must generate cost savings
    that exceed the investment needed to establish a second engine
    supplier. Excluding the sunk costs of developing the JSF second engine,
    competition would have to reduce procurement and/or O&S costs by $2
    billion in order to generate net savings. At issue is whether--given
    all the factors that drive costs up or down--splitting the buy between
    two suppliers will reduce costs by such a large amount.
        The 2002 break-even cost analysis focused on the amount of
    procurement savings required to offset development costs and loss of
    learning associated with a second supplier. While competition can
    provide some production cost benefit, splitting a given production
    quantity between two contractors can have the net effect of increasing
    production costs. This is due to a reduced advantage from ``learning
    curve'' effects (whereby costs decrease as a company produces more
    units) and from ``rate effects'' (whereby fixed costs are spread over
    production units). Our experience during the Great Engine War with the
    Air Force fighter engines, and subsequently with the Navy's F/A-18 F404
    engine, indicates that competition does not generate net procurement
    savings. See Table 1-1 and Figure 1-1 below.

        O&S savings are much more difficult to assess than production
    savings; however, we know several areas where O&S costs will be higher
    with two engine suppliers than with one. Most of the parts in the GE
    and P&W engines are unique, including the fans, turbines, combustors,
    and compressors. Supporting two types of engines would involve
    establishing two separate spares pipelines in the fleet and at the
    depots, providing additional training and tools for fleet maintainers,
    creating two separate depot capabilities--thereby increasing
    nonrecurring costs and recurring unit repair costs since each repair
    line would handle fewer units--and making future modifications for
    growth, reliability improvements, safety enhancements, and obsolescence
    management on two different engines.
        The main way to drive down O&S costs via competition is to
    significantly increase engine reliability. This saves O&S costs by
    reducing maintenance hours and decreasing the frequency of replacing
    parts and subsystems. Reliability was a major factor in the selection
    of the P&W engine for JSF and continues to be a critical factor in the
    test program. Engine design and testing philosophy has significantly
    evolved since the Great Engine War; compared to the 200 engine test
    hours of the 1970s, the P&W engine in the JSF program has already
    amassed nearly 5,000 test-stand hours incorporating Accelerated Mission
    Test (AMT) profiles. The AMT profiles in use today are designed to
    stress the engine cycles (defined as the movement from the idle
    position to maximum power and then to an idle or intermediate position)
    rather than just log operating time. Testing engine cycles is
    profoundly more important than the accumulation of hours and is a
    significantly more accurate measure of an engine's durability and
    reliability.
        At issue is whether we expect engine competition to achieve
    significant reliability improvements beyond the gains already realized
    from technology and testing advancements over the past several decades.
    It is likely that DOD could achieve greater reliability at lower cost
    by investing in the primary engine rather than creating a second engine
    supplier.

        29. Senator McCain. Secretary England, does the plot on slide eight
    of reference one (titled Break Even Analysis) take into consideration
    the total life cycle cost of the engine, including the costs to sustain
    the engine over its life? If not, please explain why not. [Retained in
    committee files.]
        Secretary England. Please see the answer to question 14 for this
    response.

        30. Senator McCain. Secretary England, would you agree that it is
    important to consider life-cycle costs when making a decision on the
    largest aviation program in the DOD budget over the next 2 decades? If
    not, why not?
        Secretary England. Please see the answer to question 28 for this
    response.

        31. Senator McCain. Secretary England, on page 8 of reference 1, it
    appears there are some assumptions that went into creating these
    assessments. Would you please provide the key assumptions that went
    into creating this slide? For example, what was the unit price of the
    engine, what was the total number of engines, etc. [Retained in
    committee files.]
        Secretary England. Please see the answer to question 14 for this
    response.

        32. Senator McCain. Secretary England, were sustainment costs (that
    is, operating and support costs) considered in this analysis? If not,
    why not?
        Secretary England. Please see the answer to question 28 for this
    response.

        33. Senator McCain. Secretary England, do you believe that if all
    costs projected over the life of the JSF program were included in the
    Department's analysis it might show a greater payback, thus changing
    the Department's business case conclusions? If that were the case,
    would the Department still have recommended termination of the F136
    program? If so, on what grounds?
        Secretary England. Please see the answer to question 28 for this
    response.

                                 competition ii
        34. Senator McCain. Secretary England, in your written statement
    you mention the Great Engine War of the 1980s between P&W and GE and
    you state that safety and reliability of engines have increased 10-fold
    over the past 30 years. What role did competition play in the
    innovation that led to those safety and reliability advances?
        Secretary England. Please see the answer to question 16 for this
    response.

        35. Senator McCain. Secretary England, since the JSF will be our
    primary strike fighter aircraft for the next 30 years, what role would
    competition play over that timeframe with regard to further innovation
    and improvements in safety and reliability?
        Secretary England. Please see the answer to question 16 for this
    response.

        36. Senator McCain. Secretary England, the planned production
    quantities and unit cost make the JSF engine the single largest engine
    procurement and operations and support cost program in the history of
    DOD aviation. The DOD has documented the savings that have accrued over
    the past 2 decades as a result of the first Great Engine War. It
    doesn't appear that the cost analysis presented by the Department
    considered the total life cycle cost of the engine. Why does the
    Department believe that the dynamics that created significant savings
    in the first Great Engine War are no longer applicable to the JSF
    program?
        Secretary England. Please see the answer to question 16 for this
    response.

                          f135 as a derivative of f119
        37. Senator McCain. Secretary England, in constant year dollars,
    the SDD cost of the F135 is almost double that of the F119 engine for
    the F-22. If the development and demonstration cost is almost double,
    how does the DOD justify describing the F135 as a derivative of the
    F119?
        Secretary England. In fiscal year 2002 dollars, the development
    costs for the F-22's F119 and the JSF's 135 cruise engines are $3.3
    billion and $4.3 billion respectively. There is an additional
    development cost of $1.05 billion for the lift fan and lift nozzle
    unique to the JSF STOVL variant. These STOVL components are being
    developed by Rolls-Royce and will be compatible with both the F135 and
    F136 cruise engines.
        The F119 and F135 engines share a similar core and were developed
    using similar design, manufacturing, and testing techniques. The engine
    core is the power module containing the high pressure compressor, the
    combustor, and the high pressure turbine. The core represents about 50
    percent of the overall engine and it is typically one of the most
    expensive parts to design due to the stresses placed on critical
    elements operating at extreme temperatures and pressures. The only
    significant difference between the F119 and the F135 is scale. The F119
    produces 35,000 lbs. thrust while the F135 is in the 40,000 lbs. thrust
    category.
        We expect the F135 engine to achieve comparable reliability
    performance as the F119 engine because of the similarities in the core
    and the fact that they were designed, engineered, and manufactured
    using the same processes and techniques. By most any measure, both the
    F135 and the F119 are performing very well so far. A key safety metric
    pertinent to twin engine fighters, such as the F-22, is measured by in-
    flight shut downs (IFSD). As shown in Figure 1-1, the F119 fares
    considerably better than all models of the F100, the safest fighter
    engine in the Air Force inventory today, by achieving over 18,000
    engine flight hours (EFH) before experiencing an IFSD. This is nearly
    six times greater than the most recent F100 model (F100-PW 09229).

        We recognize that fighter aircraft can develop engine related
    problems later in their service life. For example, the durability
    problems discovered in the F/A-18's GE F404 engine did not emerge until
    the aircraft had been in service for over a decade. This was well past
    the operational engine maturity milestone of 200,000 engine flight
    hours and several years after P&W had ceased production as a second
    supplier of F404 engines. Although this was a serious issue at the
    time, it neither grounded the fleet nor required a second supplier to
    rectify the problem.
        If DOD is faced with engine reliability problems in the future, the
    most practical option will likely be to fix or improve the capability
    of the primary engine rather than incurring the high investment cost of
    creating a second supplier of engines. Considering the current proven
    reliability, fixing any problems with the original engine may cost far
    less than developing and producing a second engine--which might develop
    its own unique problems.

        38. Senator McCain. Secretary England, since the F135 is so
    different from the F119, is not qualified yet, and will not see
    operational service for at least 6 years, how is it that the Department
    can characterize the engine program for JSF as being problem free and
    low risk?
        Secretary England. Please see the answer to question 37 for this
    response.

                             production disruptions
        39. Senator McCain. Secretary England, at some point, the JSF will
    be the only fighter aircraft in the fleet. What would happen if the
    sole supplier of JSF engines encountered unforeseen disruptions in
    either engine production or the ability to support those engines (e.g.
    labor dispute, terrorism, natural disaster)?
        Secretary England. The Department depends on sole suppliers for
    several large programs and understands the risks involved with sole-
    source dependency. Both the F/A-18E/F and the F-22 depend on sole
    engine sources. While disruptions such as labor disputes can be
    resolved, it is practically impossible to ensure against all unforeseen
    natural disasters or terrorists acts. The cost of reestablishing the
    F136 at some point in the future or copying the F135 in a second source
    program would most likely not exceed the cost of the current program.
    The Department regards this as an acceptable risk.

        40. Senator McCain. Secretary England, what is the DOD gameplan if
    a sole-source provider has financial trouble or has its personnel go on
    strike?
        Secretary England. Please see the answer to question number 39 for
    this response.

        41. Senator McCain. Secretary England, what steps could DOD take to
    respond to such disruptions?
        Secretary England. Please see the answer to question number 39 for
    this response.

        42. Senator McCain. Secretary England, what steps could DOD take to
    prevent such disruptions?
        Secretary England. Please see the answer to question number 39 for
    this response.

                             industrial base impact
        43. Senator McCain. Mr. Donnelly, Mr. Guyette, Mr. Chenevert, and
    Mr. Newton, if the JSF alternate engine is cancelled, what companies
    other than P&W will be able to provide large, high-thrust, fighter
    engines for the U.S. military?
        Mr. Donnelly. The only two companies in the free world that are
    capable of designing, developing, and producing large, high-thrust
    fighter engines are GE and P&W. I believe that the JSF PMAG in 2002
    also came to this conclusion. If the JSF alternate engine is canceled,
    P&W will become the sole-source supplier of large, high-thrust fighter
    engines for the U.S. military for JSF and future systems.
        Mr. Guyette. If the F136 is canceled, to my knowledge the only
    company able to provide high thrust fighter engines (above 25,000 lbs.
    thrust) would be P&W.
        Mr. Chenevert and Mr. Newton. Mr. Donnelly testified that they (GE)
    will continue to stay in the business, have plenty of military
    opportunities, they would apply the technical talent to other military
    and commercial programs, and that they would reconstitute the program,
    get the technical talent, and rebuild the team, if necessary. We
    believe Mr. Donnelly's response stated GE would be able to provide
    large, high-thrust, fighter engines.

        44. Senator McCain. Mr. Donnelly, Mr. Guyette, Mr. Chenevert, and
    Mr. Newton, do you believe that competition offers the best value for
    the American taxpayer as opposed to sole source? If not, why not?
        Mr. Donnelly. Competition will always offer the best value for the
    taxpayer. In addition to cost savings, the tangible and intangible
    benefits of competition include better contractor responsiveness, more
    infusion of technology, improved product performance, reduced
    development and production risks, and the potential for enhanced
    foreign military sales. The Great Engine War, which was begun by the
    Air Force in the 1980s, bore this out. Even P&W acknowledged the
    savings (Fort Lauderdale Sun-Sentinel, Broward Metro Edition, Business
    Section, page 1D, April 15, 2005). The benefits of that competition to
    the DOD are still being felt today.
        Mr. Guyette. The first Great Engine War has overwhelmingly proven
    that when a large fleet of fighter engines is going to be purchased and
    maintained, competition drives to best value in performance,
    reliability, improved technologies, procurement cost, and life cycle
    costs.
        Mr. Chenevert and Mr. Newton. Deputy Secretary of Defense, Gordon
    England, stated, ``We do not see realistically that we do save any
    money on this (alternate engine) program through competition.'' We
    support the Secretary's statement and we believe that the
    administrations decision to eliminate the alternate engine program will
    save taxpayers money. A best value solution was chosen, based on the
    maturity, reliability, and commonality with the engine that powers the
    F-22. This is the most cost effective propulsion system for the JSF.

        45. Senator McCain. Mr. Donnelly, Mr. Guyette, Mr. Chenevert, and
    Mr. Newton, what DOD programs, other than the JSF, do you foresee in
    the next 30 years that will require large, high-thrust, fighter
    engines?
        Mr. Donnelly. I do not see any DOD programs other than the JSF in
    the foreseeable future that will require large, high-thrust fighter
    engines. Future DOD programs being discussed today are speculative at
    best, and subject to budget and programming uncertainties. The JSF is
    the only program in the foreseeable future that can support the
    critical design and engineering teams for large, high-thrust fighter
    engines. Should the F136 program be terminated, as DOD has proposed,
    P&W will become the sole-source provider for large, high-thrust fighter
    engines both now and in the future, for both JSF and future
    applications.
        Mr. Guyette. It is always difficult to forecast the future, but
    certainly the potential for long-range strike candidates and future
    UCAV candidates to need a high-thrust combat engine exists. In my
    opinion, the likelihood is high.
        Mr. Chenevert and Mr. Newton. The Air Force has announced its
    intention to field a next generation long-range strike aircraft, which
    requires this capability. Based on history, propulsion will need to
    begin development in the near future to meet this need. Other programs
    such as the Unmanned Combat Air System (UCAS) and the Advanced Mobility
    Concept (AMC-X) may require large, high thrust, lower bypass engines
    that lend themselves to fighter engine technology attributes as well.
    Both these are in the near-term, but long-term requirements are set by
    the customer and our opinion would only be speculative.

        46. Senator McCain. Mr. Donnelly, Mr. Guyette, Mr. Chenevert, and
    Mr. Newton, do you believe that the JSF program of record is large
    enough to sustain two makers of large, high-thrust, fighter engines?
        Mr. Donnelly. The answer to the question is an unequivocal, yes.
    The Great Engine War in the 1980s produced cost savings on a
    competitive engine buy of 1,800 engines. The JSF Program Manager,
    Admiral Stephen Enewold, recently testified that there is the potential
    for 4,000-5,000 installed engines for domestic and international JSF
    purchases. When you consider these installs, plus the volume of future
    business to sustain and support these engines over the 30-40-year life
    cycle of the JSF program, the volume of business is huge, somewhere in
    the $70-$110 billion range. This is more than enough business to
    sustain two makers of these engines.
        Mr. Guyette. Based on the documented results of the first Great
    Engine War, there is no question that the program is large enough to
    sustain two makers. Internal Air Force memos in 1987 estimate that
    competition was generating procurement savings of 30 percent and
    operations and sustainment savings of 15 percent. A monopolistic, sole-
    source award will not produce such savings.
        Mr. Chenevert and Mr. Newton. DOD Deputy Secretary England
    testified that in the case of JSF, it is not necessary and not
    affordable to have a second engine supplier. If the industrial base
    would require, which it does not in this case, then perhaps the
    Department may make the investment to sustain two engine makers--at any
    cost. But again, in this case, the Department has said that sustaining
    two engine makers is not required. In fact, regardless of whether the
    alternate engine is produced, GE and Rolls-Royce will continue to
    produce military engines for the foreseeable future and have testified
    as much before the committee. If deemed necessary, any program could
    sustain two engine makers, but we feel that the underlying question is
    if sustaining two engine manufacturers is cost effective or necessary.

        47. Senator McCain. Mr. Donnelly, Mr. Guyette, Mr. Chenevert, and
    Mr. Newton, in recommending the termination of the F136 engine program,
    only one large, U.S., high-thrust, fighter engine provider would remain
    to meet DOD's needs. How will that affect the competitive industrial
    base?
        Mr. Donnelly. Termination of the F136 program would force GE to
    exit the large, high-thrust fighter engine business, leaving P&W as the
    sole-source provider of these engines for JSF and any future
    applications. Loss of GE's unique manufacturing processes will also
    affect the supplier base. This situation last existed during the 1970s
    and early 1980s, and led to the first Great Engine War. We would hope
    the U.S. does not place itself in that position again.
        Mr. Guyette. If the supplier base is only required to respond to a
    monopoly original equipment manufacturer, the competitiveness of the
    industrial base will shrink. All businesses respond better in both
    performance and cost when there are competitive choices.
        Mr. Chenevert and Mr. Newton. We disagree that only one provider
    would remain to meet DOD's needs as discussed in the response to
    question #43.

        48. Senator McCain. Mr. Donnelly, Mr. Guyette, Mr. Chenevert, and
    Mr. Newton, is there any other way to maintain a competitive industrial
    base for high-thrust, fighter engines other than the JSF program? If
    so, what is it?
        Mr. Donnelly. In GE's view, the JSF program is the only approved
    program, now and in the future, that is capable of maintaining a
    competitive industrial base for large, high-thrust fighter engines.
        Mr. Guyette. The JSF program is the only program currently needing
    such a product and able to generate a competitive industrial base.
        Mr. Chenevert and Mr. Newton. The combination of leveraging
    commercial business, research and development programs (e.g. Versatile
    Affordable Advance Turbine Engine, Tip Turbine Engine Concept,
    Integrated High Payoff Rocket Propulsion, etc. . .), production and
    improvements of existing products, and sustainment of those products is
    sufficient to maintain the capability to compete in the future.

        49. Senator McCain. Mr. Donnelly, Mr. Guyette, Mr. Chenevert, and
    Mr. Newton, how would you propose that DOD maintain the competitive
    base if the F136 program is terminated?
        Mr. Donnelly. We see no other way, presently or in the future, to
    maintain a competitive industrial base in large, high-thrust fighter
    engines if the F136 is terminated. The only way to secure enduring cost
    savings and value to DOD and the taxpayer, now and in the future, is
    through an ongoing JSF engine competition.
        Mr. Guyette. I see no way to maintain a competitive base if the
    F136 is terminated. The suggestion that cost transparency generates
    savings on a sole-source contract is simply wrong. The only thing that
    generates savings and improvements is ongoing competition.
        Mr. Chenevert and Mr. Newton. The combination of leveraging
    commercial business, research and development programs (e.g. Versatile
    Affordable Advance Turbine Engine, Tip Turbine Engine Concept,
    Integrated High Payoff Rocket Propulsion, etc. . .), production and
    improvements of existing products, and sustainment of those products is
    sufficient to maintain the capability to compete in the future.

                           production disruptions ii
        50. Senator McCain. Mr. Donnelly, Mr. Guyette, Mr. Chenevert, and
    Mr. Newton, at some point, the JSF will be the only fighter aircraft in
    the fleet. What would happen if the sole supplier of JSF engines
    encountered unforeseen disruptions in either engine production or the
    ability to support those engines (e.g. labor dispute, terrorism,
    natural disaster)?
        Mr. Donnelly. Disruptions in engine production will result in
    shortages to the aircraft production line, delaying the addition of JSF
    aircraft to the force structure. During the period of sustainment,
    disruptions in supply of engine parts will cause ``open holes,'' i.e.
    aircraft without engines, resulting in reduced pilot training, longer
    downtime in depots leading to increased maintenance costs, and reduced
    warfighting capability.
        Mr. Guyette. By my calculations, once the JSF program is fully
    implemented, over 80 percent of all U.S. TACAIR assets will be powered
    by one engine. The dramatic impact of large disruptions is easily
    imagined, such as a grounding during a time of combat. The impact of
    more routine disruptions is born by the operators and maintainers on a
    day-in/day-out basis and can be demoralizing while degrading our
    expected capability.
        Mr. Chenevert and Mr. Newton. All defense companies have the same
    potential for disruptions that require us to engage in sound planning
    practices to cover contingencies for strike, terrorism, national
    tragedy, etc. We will have the ability to meet customer requirements in
    the unlikely event of a work stoppage. The likelihood of these types of
    disruptions is further reduced because the entire content of an engine
    is not produced at any one site. P&W is not the expert on force
    structure, but contingency planning for the engine provider should not
    be all that different than for the other sole-source providers of
    aircraft, ships, or other subsystems of military products. The need to
    plan for contingencies is no different for P&W than it is for Lockheed
    Martin, the sole-source provider of tactical aircraft, or Northrop
    Grumman as a sole-source ship provider for the LPD-17, for example.

        51. Senator McCain. Mr. Donnelly, Mr. Guyette, Mr. Chenevert, and
    Mr. Newton, what do you propose DOD should do if a sole-source provider
    has financial trouble?
        Mr. Donnelly. Given the criticality of propulsion to the entire JSF
    program, severe financial troubles at a sole-source supplier would
    likely require Government assistance, possibly on a large scale.
        Mr. Guyette. If a sole-source provider of this magnitude has
    financial trouble, in my experience the U.S. Government/DOD will have
    no choice but to come to their assistance.
        Mr. Chenevert and Mr. Newton. P&W and its parent United
    Technologies are financially sound and forecast continued growth and
    solid performance.

        52. Senator McCain. Mr. Donnelly, Mr. Guyette, Mr. Chenevert, and
    Mr. Newton, what recourse will the DOD have if the personnel of a sole-
    source provider go on strike?
        Mr. Donnelly. In all probability, the contract will contain
    standard language requiring return to work upon demand of the DOD,
    however the U.S. Government has very limited ability to actually force
    unwilling workers to perform their jobs properly.
        Mr. Guyette. I believe that the potential for a strike by the maker
    of such a large number of critical products will drive the DOD to what
    are normally undesirable business practices, such as building up
    expensive and excessive levels of spare parts/modules, maintaining a
    workforce that can take over functions in the field that would normally
    be done by the civilian workforce, etc.
        Mr. Chenevert and Mr. Newton. P&W has the responsibility to meet
    our contract commitment and would be responsible to ensure disruptions
    do not impact the customer so it is not apparent that any recourse
    would be necessary in the event of a strike. There have only been two
    work disruptions at P&W's Connecticut operations in the last 45 years,
    each lasting less than 2 weeks.
        In the unlikely event of a strike threatening the national
    interest, the Government can obtain an injunction under the Taft-
    Hartley Act requiring striking employees to return to work.

        53. Senator McCain. Mr. Donnelly, Mr. Guyette, Mr. Chenevert, and
    Mr. Newton, your workers union will recognize the leverage they will
    have since they will know their company has an invaluable product that
    only they can make. What will stop them from going on strike to achieve
    their desires?
        Mr. Donnelly. GE has enjoyed a longstanding history of cooperative
    relationships with its unions during peak volume periods and industry
    downturns and has proactively worked together through these cyclical
    periods to avoid any customer disruptions. GE recognizes and respects
    the right for its unionized employees to participate in concerted
    activity per their labor agreement, which is negotiated every 3 to 4
    years. GE also maintains several non-union sites and external sources
    to off-load production in the event of any concerted activity at
    unionized sites. Finally, GE represented employees maintain a very
    competitive compensation and benefit plan and have a shared interest in
    maintaining customer satisfaction and avoiding any production
    interruptions.
        Mr. Guyette. All good companies strive to deal honestly and fairly
    with our workforces, but over several decades there is no way to
    forecast what the workforce of a monopoly might resort to in order to
    achieve their goals.
        Mr. Chenevert and Mr. Newton. Our labor force delivers the engine
    for the F-22 and C-17 and they are proud of this fact. We have enjoyed
    good labor relationships in the aerospace industry and all P&W
    employees feel a strong sense of pride in delivering to our DOD
    customers.

        54. Senator McCain. Mr. Donnelly, Mr. Guyette, Mr. Chenevert, and
    Mr. Newton, what plans do you have in place to respond to such
    disruptions?
        Mr. Donnelly. As stated above, GE has enjoyed a longstanding
    cooperative relationship with its union officials and union-represented
    employees. Nevertheless, as a prudent and customer-focused business, GE
    routinely takes steps to minimize impact on customers in the event of a
    work stoppage. Prior to national union negotiations that occur every 3
    to 4 years, GE prepares detailed contingency plans to continue to meet
    customer requirements, including continuation of operations at our non-
    union plants and distribution centers and at our global facilities.
        Mr. Guyette. We continue to dialogue with our union leadership to
    forestall disagreements and negotiate satisfactory contracts that
    benefit the taxpayer, shareholders, and workers.
        Mr. Chenevert and Mr. Newton. P&W engages in sound planning
    practices and has contingency plans, which provide us the capability to
    meet customer commitments in the unlikely event of a work stoppage.
    These plans typically contain provisions for alternate final assembly
    sites, building required inventory ahead and using alternate labor
    resources. These plans are not unlike those in place at unionized
    Government facilities.

        55. Senator McCain. Mr. Donnelly, Mr. Guyette, Mr. Chenevert, and
    Mr. Newton, what programs do you have in place to prevent such
    disruptions?
        Mr. Donnelly. For more than 30 years, GE and employee unions have
    successfully negotiated contract agreements that have been fair to
    employees and maintained competitiveness of the GE businesses. We
    participate in ongoing communications and cooperative initiatives with
    our union and non-union employees to maintain relationships and enhance
    understanding about customer requirements, product development, and the
    business goals for success. This participation occurs at all levels of
    the company to ensure that our union officials and represented
    employees stay connected throughout the year on business progress and
    market realities.
        Mr. Guyette. Same as 54.
        Mr. Chenevert and Mr. Newton. P&W engages in sound planning
    practices and have contingency plans, which provide us the capability
    to meet customer commitments in the unlikely event of a work stoppage.
    There have only been two work disruptions at P&W's Connecticut
    operations in the last 45 years, each lasting less than 2 weeks.
                                     ______

                Questions Submitted by Senator Susan M. Collins
                             industrial base impact
        56. Senator Collins. Mr. Chenevert, given my work with two
    shipyards in Maine, I fully understand and appreciate the importance of
    maintaining a highly skilled industrial base and providing workload for
    these technical and professional--and many times irreplaceable--
    employees. Are the skill sets that are required for military and
    civilian engine work similar?
        Mr. Chenevert. The tools, technology, materials, and processes have
    become closely aligned between military and commercial products, hence
    engineering personnel can readily adapt to working commercial programs
    one day and military the next.

        57. Senator Collins. Mr. Chenevert, in your manufacturing plants
    today, is it common practice to have engineers and other employees
    shift from military to commercial engine work, or vice versa?
        Mr. Chenevert. Yes, the use of standard work and processes for
    engineering dilutes the argument that one needs specific development or
    production resources on military or commercial products to remain
    viable in that sector. In fact sharing of engineering resources can be
    used to stabilize and maintain an experienced engineering workforce
    during highs and lows for specific business segments. Integrated
    production lines are also common in the engine business.
        In 2000, P&W moved its Military Engines division from West Palm
    Beach, Florida to East Hartford, Connecticut to be collocated with our
    Commercial Engine Business. We did this to capture the synergies that
    we have outlined in response to this question and it has been a
    tremendously successful transition.

        58. Senator Collins. Mr. Donnelly, if GE ultimately does not
    proceed with building the JSF alternate engine, what other military
    engine work--in addition to jet engines--would continue?
        Mr. Donnelly. GE Aviation is a strong business that consistently
    wins commercial aviation competitions around the world. Given this
    success, this business has proven its ability to develop advanced
    technologies and define products to meet or exceed the ever increasing
    demands of the customer. GE Military Systems within GE Aviation is the
    only GE business that produces ``make to specification'' items for the
    U.S. military. There are very unique technologies and design expertise
    requirements associated with large combat military engines that our
    business will no longer have a need to support if we are not
    participating in the JSF. There are no other programs existing today
    that would preserve our ability to maintain this unique skill set.
    Furthermore, from an industrial base point of view, GE's vast success
    in the commercial engine business would only serve to bolster the
    quality and success of the JSF propulsion development, as opposed to
    sole reliance on a single developer with less success in the commercial
    market.

        59. Senator Collins. Mr. Donnelly, what future military engine work
    do you foresee a chance to compete for?
        Mr. Donnelly. The JSF is the largest fighter program in history,
    and we are not aware of any other large military combat engine programs
    in the development pipeline for which we will be able to compete.
    Although the Air Force is reported to be working towards a new Long-
    Range Strike (bomber) program, the timing and funding for future
    systems such as this is problematic and uncertain. If recent history is
    a guide, economic and risk factors suggest the propulsion system chosen
    for these systems will likely be a derivative of the JSF engine.
    Without the F136 program for JSF, GE will be unable to effectively
    compete for current or future military systems requiring large, high-
    thrust engines.
                                     ______

                Questions Submitted by Senator Edward M. Kennedy
                               consulting allies
        60. Senator Kennedy. Secretary England, we all want to encourage
    defense cooperation between the United States and our closest allies.
    The JSF program has been held out as an example of such cooperation.
    However, it seems to me that real cooperation, particularly when it
    comes to important decisions such as whether to terminate the JSF
    alternate engine program, would involve close consultations, not
    notifications after the fact. At yesterday's hearing, Lord Drayson
    (U.K. Minister of Defence for Procurement) said that the U.S. had not
    consulted with the U.K. on the decision to terminate the alternate
    engine, only informing them after the fact. What message does this lack
    of consultation send to our potential partners on future cooperative
    efforts?
        Secretary England. The Department continues to focus on JSF work-
    share with international partners. This decision is important in
    keeping affordability a corner stone of the JSF program and is the
    right decision for all of the JSF partners. Rolls-Royce remains an
    integral and critical element of the JSF program, fully responsible for
    delivering the lift fan assembly for all STOVL engines as well as
    maintaining their workshare in the F135 engine.

                                    analysis
        61. Senator Kennedy. Secretary England, I read in your testimony
    that you want to avoid the development costs of the alternate engine,
    and that these costs could be, ``at a minimum, $2.4 billion through the
    FYDP.'' You also say that the Department concluded ``having a second
    JSF engine would not yield net cost savings through competition.'' On
    what basis has the Department reached this conclusion?
        Secretary England. Please see the answer to question 28 for this
    response.

        62. Senator Kennedy. Secretary England, have you done a business
    case analysis that considers total life cycle costs, or are you only
    considering development and initial procurement costs?
        Secretary England. Please see the answer to question 28 for this
    response.

        63. Senator Kennedy. Secretary England, if you didn't consider
    total life cycle costs, will you provide that analysis now? The follow-
    on operating and support costs for an engine can be substantial, and
    should be an important part of congressional deliberations on this
    matter. Please include your assumptions on the impact of competitive
    pressure on future life cycle costs.
        Secretary England. Please see the answer to question 63 for this
    response.

        64. Senator Kennedy. Secretary England, why has the Department not
    provided Congress with whatever analysis was conducted to inform your
    decision?
        Secretary England. Please see the answer to question 20 for this
    response.

        65. Senator Kennedy. Secretary England, the 2002 PMAG analysis
    provided by the Department included break-even analysis but did not
    include life-of-the-program savings analysis. Would you please provide
    life-of-the-program estimates including all anticipated foreign sales,
    and anticipated engine replacement requirements?
        Secretary England. Please see the answer to question 14 for this
    response.

                                development cost
        66. Senator Kennedy. Mr. Donnelly, the committee is aware of the
    $2.4 billion SDD funding required for F136 engine development. Would
    you please provide your estimates of the funding that will be required
    to carry the F136 into production, including sustainment costs?
        Mr. Donnelly. The fighter engine team has committed to complete the
    SDD effort for the contracted $2.4 billion and we see no impediments to
    prevent us from delivering a qualified F136 engine at the completion of
    that effort, on time, at cost. As far as additional expenses, we would
    anticipate working with the JPO to execute a low-rate initial
    production contract and other vehicles as necessary to support the
    normal introduction of the F136 to its assigned operating bases. The
    value of those contracts cannot be determined at this time, since the
    Government has not yet determined its plans for deployment of the F136.

                                  cost control
        67. Senator Kennedy. Secretary England, at the hearing, the
    Government alleged that oversight of the program would allow the
    Department to control cost increases. How will the Department ensure
    quality and performance of the P&W F135 engine in the absence of
    competitive pressures, not only for the acquisition of the engine, but
    also for spare parts and replacement engines?
        Secretary England. The development contract for the F-135 engine is
    a cost-plus-award-fee type contract. It contains objective criteria
    intended to drive down future procurement costs. The procurement
    contract will initially be cost-plus-award-fee as well, but will
    transition to a fixed-price contract, mirroring the acquisition
    strategy of the aircraft. Each of the contracts are negotiated with
    certified cost and pricing to ensure accurate, complete, and reasonable
    cost and pricing data. We have been able to control cost on previous
    sole-source engine programs for the F-22A and F/A-18E/F.

        68. Senator Kennedy. Secretary England, can you verify whether P&W
    has raised its estimated ship set cost for the F119 engine on the F-22,
    and if so, what were the current and previous cost estimates?
        Secretary England. P&W has not raised its estimated ship set cost
    for the F-22 F119 engine. In fact, engines costs have decreased about
    20 percent from the first Production Readiness Test Vehicle (PRTV)
    aircraft through the current Lot 5 aircraft on contract today.

                                                [In millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                                               Reduction from PRTV
          Quantity Firm-Fixed Price                Contract             F119 Unit Price             (Percent)
    ----------------------------------------------------------------------------------------------------------------
    6....................................  PRTV...................  $11.442................
    12...................................  PRTV 2.................   11.420................  0
    20...................................  Lot 1..................   10.853................  ^5
    26...................................  Lot 2..................   10.535................  ^8
    42...................................  Lot 3..................   10.385................  ^9
    44...................................  Lot 4..................   9.757.................  ^15
    48...................................  Lot 5..................   9.174.................  ^20
    48...................................  Lot 6..................  In negotiation.........  TBD
    40...................................  Lot 7..................  TBD....................  TBD
    40...................................  Lot 8..................  TBD....................  TBD
    40...................................  Lot 9..................  TBD....................  TBD
    ----------------------------------------------------------------------------------------------------------------

                                industrial base
        69. Senator Kennedy. Secretary England, we hear competing views
    about whether your decision to terminate development of the JSF
    alternate engine will have a significant effect on the engine
    industrial base. What have you concluded about the effect that
    cancelling the development would have on our ability to look to sources
    other than P&W for future fighter engines?
        Secretary England. Please see the answer to question number 39 for
    this response.

                             f119/f135 commonality
        70. Senator Kennedy. Secretary England, in your testimony, you said
    that the competition held for the F-22 engine (F119) was sufficient to
    meet the requirements of competition for the F-35 (F135) because there
    is a ``high degree of commonality'' between the two engines. Would you
    please provide a side-by-side comparison of the performance metrics of
    the F119 and F135 engines?
        Secretary England. The engine commonality is not based on the
    performance metrics. The F135 is a derivative of the F119 engine and is
    modified for the F-35 missions and usage. The turbomachinery is
    approximately 70 percent common with the F119 from a parts and
    manufacturing processes perspective. The engine's compressor shares the
    most common parts with F119, although part numbers will be different.
    The rest of the turbomachinery has commonality through design criteria
    and manufacturing processes.

        71. Senator Kennedy. Secretary England, would you please provide a
    detailed list of components and/or modules that are common between the
    F119 and the F135?
        Secretary England. The F135 is a derivative of the F119 engine and
    is modified for the F-35 missions and usage. The turbomachinery is
    approximately 70 percent common with the F119 from a parts and
    manufacturing processes perspective. The engine's compressor shares the
    most common parts with F119, although part numbers will be different.
    The rest of the turbomachinery has commonality through design criteria
    and manufacturing processes.

        72. Senator Kennedy. Secretary England, if the two engines have so
    much commonality, then why was it necessary to award P&W such a large,
    sole-source SDD contract to develop the F135?
        Secretary England. Please see the answer to question 37 for this
    response.

        73. Senator Kennedy. Secretary England, how many non-competitive
    SDD contracts have you awarded that have a total value of $2 billion or
    greater?
        Secretary England. Over the last 3 to 5 years, the Department has
    awarded five non-competitive contracts that exceeded $2 billion. The
    Army awarded three and the Navy awarded two. There were no such awards
    made by the Air Force.
                                     ______

               Questions Submitted by Senator Joseph I. Lieberman
                              applied significance
        74. Senator Lieberman. General Magnus, I know that the STOVL
    variant of the JSF is most important to the Marine Corps. Given that
    the P&W (F135) and GE/Rolls-Royce (F136) engines are to be
    interchangeable, and that the STOVL hardware limits STOVL thrust, do
    you see any way that the alternate engine could provide a thrust
    advantage over the primary P&W (F135) engine?
        General Magnus. No. STOVL lift fan components have been designed to
    accommodate specification levels of torque generated by the STOVL
    engine. Higher levels of torque cannot be accommodated by the lift fan
    hardware. As a result, the alternate engine cannot provide a thrust
    advantage.

        75. Senator Lieberman. Admiral Willard, General Corley, and General
    Magnus, beyond economics, it is important to determine whether a single
    engine program would impact the Services' operational capability. What
    do the Combatant Commanders (COCOMs) think about the single engine
    strategy?
        Admiral Willard. It would be inappropriate for me as a Service Vice
    Chief to attempt to articulate COCOM views of specific acquisition
    decisions. Navy remains informed by the COCOM's demand signal for
    capabilities inherent within existing designs for JSF. As a Service
    provider, Navy is confident that the current JSF with its single-source
    engine will be sufficient to meet this demand signal.
        General Corley. The Air Force has assessed the operational
    capability of the single engine program and supports the President's
    budget. We defer to the COCOMs to provide their opinion on the single
    engine program.
        General Magnus. Headquarters, Marine Corps is responsible for
    providing forces to the COCOMs that are properly organized, trained,
    and equipped. We believe that we are providing the best, most capable
    aircraft to meet the COCOM's requirement for TACAIR missions.

                                f-18 comparison
        76. Senator Lieberman. Admiral Willard, it is my understanding that
    the U.S. Navy operates the world's largest fleet of aircraft (F-18)
    powered by a single engine supplier. Would you please characterize the
    Navy's experience managing a single engine supplier?
        Admiral Willard. The following points are provided, based upon the
    F404-GE-F400/402 engine (F/A-18 A-D powerplant) and the F414-GE-400
    engine (F/A-18E/F and EA-18G powerplant) production history.

             The F404 engine, produced by GE, was originally a sole
            source, new design, based upon the F110 engine. Industrial base
            concerns and possible cost savings led the Navy to begin
            production of an identical design by a second source, P&W. P&W
            made rapid progress on the second source engine. Feeling
            competitive pressure, GE offered the Navy tremendous savings in
            return for a sole sourcing agreement. The Navy terminated P&W
            participation and awarded a sole-source agreement to GE for
            F404 engines. This engine is meeting F/A-18 A-D performance
            requirements and reliability is currently above goal.
             The GE F414 engine was designed using lessons learned
            from the F404 engine program. From the beginning, GE, in
            concert with the airframe manufacturer Boeing, was focused on
            lowering costs. Utilizing multi-year procurement and
            performance-based logistics contracts has allowed the F414
            engine to exceed fleet performance and reliability goals.

        77. Senator Lieberman. Admiral Enewold, would you please clarify
    the total planned procurement of JSF aircraft?
        Admiral Enewold. The planned procurement, for the Department of the
    Navy, of JSF is 680 aircraft. The mix of STOVL and CV variants is under
    study.

        78. Senator Lieberman. Admiral Willard, would you please provide
    the total planned procurement for the single-source, F-18 aircraft and
    the number of associated engines that are anticipated to be procured
    for this program?
        Admiral Willard. The procurement numbers are as detailed below.
    F/A-18 A-D
        GE delivered 3,469 F404 whole engines for the F/A-18 aircraft
    (United States Navy and foreign military sales). P&W delivered 215 F404
    whole engines for the F/A-18 aircraft. There were a total of 3,684 F404
    engines delivered.
    F/A-18E/F and EA-18G
        GE F414 engines are procured as whole engines (made of six modules)
    and additional modules. Aircraft procurement is 462 F/A-18E/F + 90 EA-
    18G = 552 aircraft. Two F414 engines were procured for each aircraft
    (552 x 2 = 1,104) plus 54 whole engine spares plus spare modules. The
    spares are derived from the requirement to support 6+1 deploying air
    wings + 30-day surge sustainment. Each squadron site has one spare
    whole engine (two for an aircraft carrier) and repair modules enabling
    30 days support.
    F414 Spare Modules
        Afterburner -- 30
        Combustor -- 66
        Fan -- 103
        High Pressure Compressor -- 163
        High Pressure Turbine -- 83
        High Pressure Turbine -- 104

                             reprogramming options
        79. Senator Lieberman. Secretary England, if funding for the
    alternate engine is restored, where will the $1.8 billion come from?
        Secretary England. If Congress decides to restore this $1.8
    billion, then it would need to decide how to fit in this funding, along
    with other DOD requirements, in its fiscal year 2007 DOD Appropriations
    Act.

        80. Senator Lieberman. Secretary England, if funding for the
    alternate engine is reprogrammed, what budget accounts have extra money
    for redistribution?
        Secretary England. The President's fiscal year 2007 DOD budget
    request funds our most pressing military requirements and includes no
    ``extra money for redistribution'' in any account.

                                f-16 experience
        81. Senator Lieberman. Secretary England, is there evidence to
    suggest that engine costs were lowered after a second source was
    introduced to power the F-16?
        Secretary England. F-16 engine unit prices decreased approximately
    10 percent between 1986 and 1991, during which there was competition
    between F100 and F110. However, it is unclear if this decrease was the
    result of competition or other factors such as learning curve and
    procurement quantities. Additionally, development of a second engine
    resulted in increased RDT&E expenditures. Overall, there is little
    evidence to substantiate exact savings resulting from competition.

                           industrial base influence
        82. Senator Lieberman. Mr. Donnelly, GE is the world's largest jet
    engine manufacturer with 50 percent of the world's engine market. Your
    company will produce 4,000 fighter jet engines for the F-18, without
    any competition, until at least 2013. GE also has the opportunity to
    provide engines on the UCAS. Given these facts, how can you argue that
    the cancellation of the alternate engine will put GE out of the fighter
    engine business?
        Mr. Donnelly. While GE-Aviation is a successful jet engine
    supplier, the majority of our business is for commercial jet engines.
    Of the 4,000 F-18 engines you reference, over 3,600 have already been
    delivered. It is worth noting that during the 4,000-engine run P&W did
    competitively produce approximately 400 GE-designed F404 engines, until
    their bid process became embroiled in the ``Ill Wind'' scandal. Every
    UCAS designed so far has used off-the-shelf engines or a minor
    derivative of an off-the-shelf engine. Thus, unmanned systems do not
    afford an opportunity for utilization of critical design skills. By
    adroitly reassigning design teams as new designs are completed and
    other opportunities arise, GE has been able to provide cutting edge
    combat engine designs like the F101, F404, F110, F414, YTF120, and now
    the F136 to the U.S. military for the last 30 years. With the loss of
    the opportunity to design the F136 and no other new engine designs
    required for future combat systems, our unique military design, test,
    and manufacturing teams will be disbanded and dispersed. This will
    leave all future U.S. combat systems powered by a single supplier.

        83. Senator Lieberman. Mr. Donnelly, GE currently has a number of
    development and production programs for defense and commercial
    applications (GenX for 787, GP7000 for Airbus A380, F414 for F-18G, and
    F110 for F-15) in addition to the JSF. Given the number of projects GE
    is working on in addition to JSF, how can GE claim that the elimination
    of the alternate engine will harm its engineering base?
        Mr. Donnelly. While it is true that GE has a number of commercial
    engines in the development phase, the unique skills required for high
    thrust military engines will atrophy. The design of the F414 is
    complete and production is scheduled to end in a few years. The F110
    engine line is being kept open exclusively by international customers
    (last U.S. delivery of an F110 was 4 years ago) and neither the F-15 or
    F-16 need any new propulsion designs. Large military combat engines
    require design and systems integration of several unique skills,
    including high pressure fans, augmenters, and variable exhaust nozzles.
    These are components not used in the commercial world, but are needed
    to allow military aircraft to reach supersonic speeds. As these unique
    design, manufacturing, and test teams disband and disperse,
    reconstituting them would be a time-consuming and expensive
    proposition. Mr. Bolkcom described this in his testimony to the Airland
    Subcommittee on March 28, 2006. Without the F136, GE's unique military
    design, test, and manufacturing skills will disappear.

                                  competition
        84. Senator Lieberman. Mr. Donnelly, according to your written
    statement, the matrix you referenced in your testimony is dependent
    upon a number of assumptions and is not constructed to produce precise
    figures. For example, you assume that further competition will reduce
    costs by 10 percent. But such a percentage does not take into account
    procurement costs, life cycle costs, nor increased engine reliability.
    Can you confirm that your matrix model is based upon assumptions,
    rather than updated reliability statistics on fighter engines?
        Mr. Donnelly. The business matrix that I described in my opening
    statement was intended to be a simple, accurate, and easily understood
    way to show the huge magnitude of the JSF engine business. Our matrix
    considers all the parameters in the life-cycle cost of an engine. The
    range of assumptions goes from the unprecedented procurement cost,
    reliability, and maintainability targets established by the DOD for the
    JSF engine on the lower left side of the matrix, to the more data-
    driven statistics from legacy systems on the upper right side of the
    matrix. This takes into account updated reliability statistics for
    fighter engines. We anticipated that there would be questions regarding
    our assumptions, so we structured the matrix to encompass a range of
    values for the key business parameters, such as the number of initial
    installed and spare engines, the price of the engines, and the number
    of equivalent engines bought over the life of the JSF program to
    sustain and support the engines. Depending upon the values chosen for
    these parameters, you can determine from the matrix a very precise
    answer for the total value of the business for those conditions. The
    matrix shows that for even the most conservative values for the key
    parameters (lower left comer), the volume of business is huge, greater
    than $50 billion. If you choose values for the key parameters based on
    historical precedent (upper right hand comer), the value of business is
    in excess of $110 billion.
        Contrary to your statement, the cost savings example that I cited
    does take into account procurement costs, life cycle costs, and
    increased engine reliability. We actually surveyed the Air Force data
    from the Great Engine War and found that the Air Force cited cost
    savings of 21 percent from the competition. Again, just to be
    conservative, and for the purposes of illustration only, we chose to
    show what a 10 percent competitive cost savings would produce for JSF.
    What this showed was that even at a modest savings of 10 percent, the
    savings would more than offset the costs of carrying the F136
    competitive engine in the JSF program. If we had chosen a more
    realistic savings percentage, consistent with historical precedent, the
    savings to DOD for maintaining the JSF engine competition would be
    significantly greater.
        The point of our matrix is to show that the projected volume of JSF
    engine business is huge, the competitive cost savings are significant,
    and these savings will more than offset any additional costs to retain
    the F136 engine program. In addition to these cost savings, the DOD
    will get all the traditional benefits of competition, including better
    contractor responsiveness, greater infusion of technology, reduced
    development and production risk, better performance and reliability,
    and the potential for enhanced foreign military sales.

        85. Senator Lieberman. Mr. Donnelly, the Pentagon reports that
    there are no cost savings due to further competition. How do you
    respond?
        Mr. Donnelly. We believe the Pentagon statement is inconsistent
    with prior historical precedent of savings achieved in the Great Engine
    War, and is also not based on sound life cycle cost analysis that takes
    into account the initial installed and spare engines as well as the
    volume of business associated with ongoing sustainment and support
    costs for the engines. If a life cycle cost analysis had been conducted
    in accordance with the approved DODD 5000.1 and DODI 5000.2 series
    guidance, we believe the Pentagon would have reached a different
    conclusion.

        86. Senator Lieberman. Mr. Chenevert and Mr. Newton, one of the
    arguments for reinstating funding for the alterative engine program is
    that it fosters competition. But it is my understanding that the
    Government has considerable comparative information about the P&W F135
    engine and the GE/Rolls-Royce F136 engine already available. Can you
    describe the results of the testing between the P&W and GE/Rolls-Royce
    engines?
        Mr. Chenevert and Mr. Newton. There are currently nine F135 engines
    in the development test program (five carrier variant/conventional
    takeoff and landing [CV/CTOL] and four short takeoff vertical landing
    [STOVL]). At the time of the hearing March 15th, these engines had
    accumulated 4,764 hours. As of April 24, 2006, these engines have
    accumulated a total of 5,060 hours (2,934 CV/CTOL and 2,126 STOVL), in
    addition to over 3,600 hours in the program's concept demonstration
    aircraft (CDA) phase. There have been 6,245 total endurance accelerated
    mission test (AMT) cycles to date (3,932 CV/CTOL and 2,313 STOVL). The
    CV/CTOL engine, FX634, has completed sea-level AMT. In addition, the
    first CTOL flight test engine (FTE) completed initial build and was
    delivered to Lockheed Martin Aeronautics Company (LM-Aero) in December
    2005. The F135 program is on-track to support first flight in 3rd
    quarter 2006.
        It is our understanding that the F136 has completed approximately
    200 hours of ground test on a pre-production configuration.

        87. Senator Lieberman. Mr. Chenevert, how many competitions has P&W
    won for its large fighter engines?
        Mr. Chenevert. P&W was selected through competition to power the F-
    16, F-15, F-22, and F-35. Specifically, on the JSF program, while there
    was not a Government-released request for proposal, the prime airframe
    suppliers (Lockheed Martin, McDonald Douglas, and Boeing) solicited
    engine proposals for their concept demonstration aircraft. P&W and GE
    both provided proposals. P&W was the selected engine supplier for all
    demonstrator aircraft. Often in the engine business the air system
    prime contractor will seek proposals and select sub-system suppliers.
        GE has won the competition for propulsion on the F-18, U-2, and
    F117, none of which have an alternate engine program to compete for
    production engines.

                              engine capabilities
        88. Senator Lieberman. Mr. Chenevert, do you believe the additional
    lead time given to the GE/Rolls-Royce engine will improve performance
    and thrust capability?
        Mr. Chenevert. No. The F135 and F136 engines are being designed to
    the same specification to ensure interchangeability. A feature of
    interchangeability is that an engine exchange must be transparent to
    the airframe and the pilot. The F135 has a growth plan to facilitate
    the insertion of technology improvements and will be able to meet the
    needs of the airframe as the system matures.
        The F135 has demonstrated that it meets current performance
    specification. The maturity associated with a derivative design that
    incorporates technology incrementally, through engineering changes,
    yields far less risk than a new design that has not benefited from
    operational experience.

        89. Senator Lieberman. Mr. Chenevert, has the P&W F135 engine met
    all standards within the appropriate timeframe?
        Mr. Chenevert. Both CV/CTOL and STOVL engines have demonstrated
    specification level of maximum thrust and continue with development
    testing that includes software verification, operability, endurance,
    and altitude operation. CV/CTOL initial flight release is planned for
    April 2006.

        90. Senator Lieberman. Mr. Chenevert and Mr. Newton, as I
    understand it, the P&W F135 engine is ahead of the GE/Rolls-Royce F136
    engine in development. Can you describe when the P&W engine will be
    operational, in relation to the GE/Rolls-Royce engine?
        Mr. Chenevert and Mr. Newton. P&W has delivered the first flight
    test engine and a spare engine. Production lot engines will begin
    delivery in 2008. Initial service release is schedule for 2008 and
    operational capability release (OCR) is scheduled for 2009. It is our
    understanding the F136 will not achieve OCR until 2013.

        91. Senator Lieberman. Mr. Chenevert and Mr. Newton, there has been
    some concern that the P&W F135 engine will not deliver as much thrust
    as the GE/Roll-Royce F136 engine. Is this true?
        Mr. Chenevert and Mr. Newton. The F136 is being designed to the
    same specification and must be interchangeable with the F135. The lift
    fan clutch and gearbox have been designed to the current specification
    and will not transmit more power without durability impacts. The
    exhaust nozzle and aft section of the fuselage have also been sized to
    optimize air system performance to the current specification and will
    not allow more airflow. The P&W F135 is the only engine that has
    demonstrated specification thrust.

        92. Senator Lieberman. Mr. Chenevert, if required, can the F135
    engine be designed to produce more thrust?
        Mr. Chenevert. The F135 engine has the ability to produce
    additional thrust and can take advantage of funded technology program
    insertion to incorporate this at the customers' request. P&W has a
    roadmap to increase thrust as the weapons system requires.

        93. Senator Lieberman. Mr. Chenevert, in your response to the
    question on how P&W will control prices, you commented on the use of
    redundant suppliers and sourcing parts competitively. Would you please
    clarify your remarks?
        Mr. Chenevert. P&W sources component manufacture to best value
    suppliers. We do this competitively at the start of a program and
    develop long-term agreements with these suppliers. Redundant suppliers
    are only maintained for commodity type parts due to the expense of
    development, tooling, and support associated with redundant suppliers.

        94. Senator Lieberman. Mr. Chenevert, during previous testimony, it
    was unclear if either engine has flown in a JSF. I seem to recall the
    JSF demonstrator flying. Was this aircraft powered by a P&W engine?
        Mr. Chenevert. Yes, during the CDA phase of the JSF program, the
    U.S. Government gave Lockheed Martin and Boeing authority to select an
    engine for their candidate aircraft. Both airframers selected P&W. The
    P&W solution was based on the F119 engine that was being developed for
    the F-22 aircraft. The P&W engine was the only engine to fly in both
    JSF concept demonstrator aircraft.

        95. Senator Lieberman. Mr. Chenevert, can you please explain why
    SDD cost for the F135 primary JSF engine is greater than the
    anticipated cost for the F136 alternate engine?
        Mr. Chenevert. The P&W/Rolls-Royce F135 team has responsibility for
    the total propulsion system including lift components. It also has the
    responsibility to produce significantly more engines for aircraft
    flight test support and qualification. The engine development effort
    for the other engine is a subset of the responsibility that the P&W/
    Rolls-Royce F135 team has.

        [Whereupon at 12:32 p.m. the committee adjourned.]

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                      2007

                                  ----------

                            THURSDAY, MARCH 16, 2006

                                           U.S. Senate,
                                   Committee on Armed Services,
                                                        Washington, DC.

        COMBATANT COMMANDERS ON THEIR MILITARY STRATEGY AND OPERATIONAL
                                  REQUIREMENTS

        The committee met, pursuant to notice, at 8:44 a.m. in room
    SH-216, Hart Senate Office Building, Senator John Warner
    (chairman) presiding.
        Committee members present: Senators Warner, Inhofe, Talent,
    Dole, Thune, Levin, Reed, Bayh, and Clinton.
        Committee staff members present: Charles S. Abell, staff
    director; Leah C. Brewer, nominations and hearings clerk; and
    John H. Quirk V, security clerk.
        Majority staff members present: William M. Caniano,
    professional staff member; Regina A. Dubey, professional staff
    member; Ambrose R. Hock, professional staff member; Gregory T.
    Kiley, professional staff member; Sandra E. Luff, professional
    staff member; Derek J. Maurer, professional staff member; David
    M. Morriss, Counsel; Lucian L. Niemeyer, professional staff
    member; Lynn F. Rusten, professional staff member; Sean G.
    Stackley, professional staff member; Scott W. Stucky, general
    counsel; and Richard F. Walsh, counsel.
        Minority staff members present: Richard D. DeBobes,
    Democratic staff director; Daniel J. Cox, Jr., professional
    staff member; Gabriella Eisen, research assistant; Evelyn N.
    Farkas, professional staff member; Peter K. Levine, minority
    counsel; Michael J. McCord, professional staff member; and
    William G.P. Monahan, minority counsel.
        Staff assistants present: Jessica L. Kingston and Pendred
    K. Wilson.
        Committee members' assistants present: John A. Bonsell and
    Mark Powers, assistants to Senator Inhofe; Mackenzie M. Eaglen,
    assistant to Senator Collins; Clyde A. Taylor IV, assistant to
    Senator Chambliss; Greg Gross, assistant to Senator Dole;
    Stuart C. Mallory, assistant to Senator Thune; Elizabeth King,
    assistant to Senator Reed; William K. Sutey, assistant to
    Senator Bill Nelson; Todd Rosenblum, assistant to Senator Bayh;
    and Andrew Shapiro, assistant to Senator Clinton.

                  STATEMENT OF SENATOR JAMES M. INHOFE

        Senator Inhofe. The hearing will come to order. We would
    like to ask our witnesses to assume their proper positions at
    the table. Senator Warner, our chairman, is not here yet so I
    will go ahead and read his opening statement at this time:

              ``The committee meets today to receive testimony from
            the commanders of the United States Central Command
            (CENTCOM) and the United States Special Operations
            Command (SOCOM) on the posture of U.S. forces in their
            areas of responsibility (AOR). General Abizaid and
            General Brown, we welcome you back before the committee
            and commend you for the outstanding leadership you
            continue to provide to our Nation and to our men and
            women in uniform and their remarkable families.
              ``The performance of the forces in both of your
            commands has been magnificent and heroic.''

        I would like to add mine to that also. I will be doing my
    11th trip over to the AOR and that is what I come back with
    every time, the great job that you are doing there.

              ``I thank you both of you for accommodating an
            earlier start time. We face a number of votes later on
            this morning and the hearing is very important.''

        That has been changed. Our votes I believe are going to
    start at 10:30 and then we are going to be wiped out the rest
    of the day. So that is probably good news to you guys.

              ``You and your forces are clearly at the tip of the
            spear and you have all earned our abiding respect and
            admiration and continued support. We extend our thanks
            to those who serve and our thoughts and prayers are
            with the families and friends who have had loss, been
            lost, or wounded defending liberty around the world.
              ``The situation in Iraq is still tense. As we convene
            here, the new Iraq assembly was sworn in today and we
            look to them to form a government of national unity
            that will have to make hard decisions about the way
            ahead for Iraq. There are sure to be some difficult
            days ahead, requiring more fighting and sacrifice. But
            at this critical juncture, Iraqi leaders must reach out
            across political and religious and sectarian lines and
            form a government that gives a voice to all Iraqis.
            Your insights on the situation in Iraq will be
            invaluable to the committee.
              ``Progress in Afghanistan remains positive. Despite
            remarkable advances, we must not forget that there is
            still a viable insurgency that the United States and
            Afghan forces, along with coalition North Atlantic
            Treaty Organization (NATO) partners, must stem. General
            Abizaid, your assessment of the security situation in
            Afghanistan, the counternarcotic issue, democratic
            progress, reconstruction, and the expansion of the NATO
            mission in Afghanistan are important to the committee.
              ``Secretary of State Rice said in Senate testimony
            last week: `We may face no greater challenge from a
            single country than from Iran.' Developments in Iran
            are troubling and the committee looks forward to your
            evaluation of the situation in Iran and its impact on
            the region.
              ``General Abizaid, in your very comprehensive
            statement I took great interest in your comments about
            the need for more interagency support. You said: `We
            need significantly more military personnel in the
            CENTCOM AOR with expertise in areas such as economic
            development, civil affairs, agriculture, and the law.'
            I fully agree and have spoken about this publicly. I
            have now written to each Cabinet secretary and
            requested their personal view of support they are
            providing to your operations in Iraq and Afghanistan.
              ``Detention and interrogation operations remain a
            matter of considerable concern to this committee. In
            addition to the legal debate, the treatment of
            detainees has been the focus of detailed national and
            international attention. An update on detention
            operations in your AOR will be of great interest.''

        I want to make sure that you understand that I am
    attributing that to Senator Warner, not to me.

              ``General Brown, the special operations warriors of
            the U.S. SOCOM are a premier team of American
            servicemembers whose abilities are acknowledged and
            admired worldwide. The 2006 Quadrennial Defense Review
            (QDR) report validates and continues many ongoing
            special operations initiatives and also recognizes that
            success in the global war on terrorism requires a full
            spectrum of engagements. This committee is committed to
            enhancing your capability and maintaining your high
            standards.
              ``The committee may meet in closed session
            immediately following the open session to receive
            classified testimony and to allow you to respond more
            fully to the committee's questions if necessary. This
            could very well be changed by the frequency of our
            votes at that time.
              ``Both of you and your commands have accomplished so
            much for our Nation in the 4\1/2\ years since the
            attacks on September 11, 2001. Again, gentlemen, thank
            you and your magnificent servicemembers for your
            service. We have much ground to cover today. Our Nation
            is truly fortunate to have such capable military
            officials leading our forces in these important
            commands.''

        Senator Levin.

                    STATEMENT OF SENATOR CARL LEVIN

        Senator Levin. Mr. Chairman, I join you in welcoming
    General Abizaid and General Brown. The men and women of the
    CENTCOM and the SOCOM are bearing the brunt of the dangerous
    work on which our Nation has embarked since September 11, 2001.
    We owe them and their families and their commanders a debt of
    gratitude.
        Despite 3 years of the best efforts and the heroic
    sacrifices by our military personnel, Iraq is teetering on the
    edge of the abyss. Today our forces are confronting an
    insurgency that is at least as virulent as at any time in the
    past. The prospects for a sectarian civil war are higher than
    at any time in the past. That fact is even beginning to be
    recognized by some members of the administration. U.S.
    Ambassador Khalilzad said in a press interview just a few days
    ago that ``Iraq is bleeding and moving toward civil war.''
    Those are Ambassador Khalilzad's words.
        The U.S. must use every bit of leverage that it has with
    all Iraqi factions to forestall such an occurrence. Recently I
    was joined by Senator Susan Collins and Senator Jack Reed in
    calling on President Bush to make it clear to Iraqi leaders
    that a prompt political settlement is a condition of continued
    U.S. presence in the country. Here is part of what we wrote to
    the President:

              ``We urge you to make it clear, Mr. President, to the
            Iraqis how important it is to us that they achieve a
            political settlement, form a unity government, and make
            the necessary amendments to their constitution. We
            believe it is essential that the Iraqi leaders
            understand that our continued presence is not
            unconditional and that whether they avoid all-out civil
            war and have a future as a nation is in their hands. If
            they don't seize that opportunity, we can't protect
            them or save them from themselves.''

        We concluded that:

              ``The bottom line is this: The U.S. needs to make it
            clear to Iraqi leaders that a prompt political
            settlement is not only essential to them, it is a
            condition of our continued presence.''

        Well, unfortunately President Bush sent the wrong message
    on March 13, 2006, when he said that it will take time for
    Iraqis to form a new government and that this process, in the
    President's words, ``will require patience by America.''
        The fact is that Americans have already shown extreme
    patience and are now understandably downright impatient with
    the failure of Iraqi leaders to reach a political settlement.
    Iraqi leaders do not seem to understand the reality that
    Americans do not support an unlimited, unconditional, and open-
    ended military presence in Iraq.
        The Associated Press reported on March 4, 2006, that
    following a meeting with General Abizaid, Iraqi President
    Talabani said that General Abizaid, ``assured him U.S. forces
    are ready to stay as long as we ask them, no matter what the
    period is.'' General Abizaid has assured me that that is not
    the message that he delivered, but President Talabani
    apparently chose to hear otherwise, perhaps because that has
    been the consistent message that he has heard from the United
    States administration.
        The Iraqi parliament met for the first time today. Their
    leaders have said they favor a government of national unity. If
    they do not translate their words into the political
    compromises required to put together such a government of
    national unity, then I am afraid it is probable that the
    sectarian violence will increase and the country will descend
    into civil war. If that occurs, the Iraqi security forces
    (ISFs), which the U.S. military has worked so assiduously to
    train and equip, could fracture along ethnic and sectarian
    lines and could then become part of the problem, rather than
    part of the solution.
        U.S. forces could then find themselves caught in the middle
    of a civil war which is even more intractable and less
    manageable than the current insurgency. U.S. forces could even
    find themselves in the middle of a larger Mideast war, a war
    where the Sunni Arabs in Iraq turn to neighboring Arab
    countries and the Iraqi Shiites turn to Iran, and Turkey
    intervening to forestall a Kurdish move to forcibly annex
    Kirkuk and the surrounding oil fields in an effort to create an
    independent Kurdistan.
        I would be interested in General Abizaid's reactions to my
    comments and in any event look forward to his perspective on
    the situation in Iraq and in Afghanistan. His perspective has
    never been more important than it is today. We of course look
    forward to General Brown's perspective on the SOCOM's expanded
    role and strategy for fighting the global war on terrorism, on
    the foreign training missions which SOCOM is uniquely
    authorized to conduct, and on any plans to strengthen the
    management of SOCOM's procurement programs by the command and
    by the Assistant Secretary of Defense for Special Operations
    and Low Intensity Conflict (SOLIC).
        Again, my thanks to our witnesses for their service, their
    extraordinary service in the most difficult of circumstances,
    and I thank you, Mr. Chairman.
        Senator Inhofe. Thank you, Senator Levin.
        General Abizaid and General Brown, we will recognize you at
    this time for your opening statements and, as is always the
    case, your entire statements will be made a part of the record.
    General Abizaid, you are recognized.

    STATEMENT OF GEN JOHN P. ABIZAID, USA, COMMANDER, UNITED STATES
                            CENTRAL COMMAND

        General Abizaid. Thank you, Mr. Chairman, Senator Levin,
    members of the committee. Thanks for the opportunity to be
    here. Most importantly, thanks for your continued support of
    the troops in the field. We very much appreciate it. They are
    doing a great job out there. Their sacrifice, courage, and
    professionalism are really without equal anywhere in the world.
        Their continued success depends upon your support. I am
    honored to be here today with General Brown. We live next to
    one another in Tampa and we almost never see one another. So
    General Brown, it is good to see you, and I am honored to be
    here with you. His forces are absolutely instrumental in the
    conduct of this war and the work that they do in the
    counterterrorist arena and many other areas is just absolutely
    superb.
        Over the past several years, I have spent considerable time
    in the CENTCOM theater meeting with regional leaders, their
    commanders and troops, and our commanders and troops in the
    field. Despite the dangers and difficulties there, we remain
    committed to achieving stability in Iraq and Afghanistan,
    destroying the cellular structure of al Qaeda and its allies
    wherever we find them, and protecting the flow of strategic
    resources to the global economy.
        There are just less than 200,000 American service men and
    women serving throughout the 27 countries in the CENTCOM area
    of operations (AO). The number is much reduced from the well
    over 300,000 U.S. troops that were serving there 3 years ago.
    In addition, coalition forces serving in the theater today
    number well over 30,000. Moreover, 3 years ago we were not in
    the position where we had 240,000 ISFs serving with us, nor
    were there approximately 86,000 Afghan security forces fighting
    with us against a common enemy.
        We also need to consider that today there are 70,000
    Pakistanis and nearly 20,000 Saudis who are effectively
    battling extremists on their own soil independent of our
    operations. Indeed, when you look at the theater level of
    operations going on throughout the CENTCOM AO, there is well
    over 600,000 people under arms fighting against common foes and
    dealing with common problems, all designed to defeat extremism
    in the region.
        Clearly, the struggle against extremism is not one that we
    fight alone, but it is not a fight that can be won without
    American resolve, patience, and determination. Sectarian
    tensions today, particularly in Iraq, are high. The bombings at
    Samarah have showed us how close such tensions are to the
    surface of Iraqi politics. They also show Iraqis the danger of
    allowing emotions to control the future.
        Iraq is a nation uniquely rich in natural resources and
    human capital. Both could be squandered if sectarian agendas
    are allowed to trump national common sense. In many respects,
    sectarian issues are of more concern from the security
    perspective than the insurgency. While we are still a long way
    from civil war in Iraq, it is essential for a government of
    national unity to form soon in order to continue the building
    of national institutions and ensure security.
        We anticipate that 2006 will be a year in which important
    transitions take place and accelerate across the theater. With
    our partners in the region, we will work to solidify
    counterterrorist efforts and increase the unraveling of al
    Qaeda networks. ISFs will move to the lead in counterinsurgency
    operations, NATO's International Security Assistance Force
    (ISAF) will more fully assume responsibility for security in
    Afghanistan, and the democratically elected full-term
    governments in both Iraq and Afghanistan will increasingly
    exercise sovereignty, an indicator of progress in the campaign
    that must be reflected in our operations.
        It is important to recognize that this exercise of
    sovereignty and these other transitions may create friction in
    the region. But achieving these milestones will be important.
    Whether in Iraq, Afghanistan, or other countries in the region,
    security against extremists and terrorists will ultimately be
    best provided by well trained, loyal, local forces and
    visionary, inclusive leaders. This underscores the essence of
    our broader strategy in the region, partnering with governments
    and their militaries to help them develop the capabilities and
    institutions to defeat terrorists and extremists on their own.
        While counterterrorist and counterinsurgency operations
    will continue to be the focus of U.S. military operations
    throughout 2006, our conventional capabilities will continue to
    deter potential regional adversaries, such as Iran. The year
    ahead will require patience and the harnessing of all power
    within our national capabilities--economic, diplomatic,
    political, and military. We will need the continued support of
    our coalition allies, and of course we will need the continued
    support of the people and the Congress of the United States.
        Mr. Chairman, I thank you for the great support that the
    committee has provided to our troops in the field and I stand
    ready to answer your questions.
        [The prepared statement of General Abizaid follows:]

                 Prepared Statement by GEN John P. Abizaid, USA
                 united states central command posture for 2006

                          i. introduction and overview

        United States Central Command (CENTCOM) is in the middle of a fifth
    consecutive year of sustained warfare in its area of operations (AO).
    The Command remains engaged in three principal activities: (1)
    defeating al Qaeda and associated extremist networks throughout the
    region, (2) stabilizing Iraq and Afghanistan, and (3) partnering with
    governments and their militaries in the region to help them develop the
    capabilities and institutions to defeat terrorists and extremists on
    their own. In addition, U.S. and Coalition military forces ensure the
    flow of global resources and deter hostile powers throughout the
    region. These activities are mutually reinforcing. Progress in one
    spurs momentum in others. CENTCOM forces are daily engaged in the full
    spectrum of military operations throughout a major theater of war.
    Counterinsurgency, counterterrorism, training of friendly forces, civil
    affairs and humanitarian operations are examples of the routine joint
    missions performed with great distinction by our young troops.
        Given the complexity of the region and the numerous operations in
    which we are engaged, CENTCOM is divided into three subcomponent
    commands. Combined Forces Command-Afghanistan (CFC-A) oversees U.S. and
    coalition activities in Afghanistan, parts of Pakistan and the Central
    Asian states. Multi-National Force-Iraq (MNF-I) heads our operations in
    Iraq. Combined Joint Task Force-Horn of Africa (CJTF-HOA) directs our
    efforts in Sudan, Somalia, Ethiopia, Eritrea, Djibouti, Yemen, Kenya,
    and the Seychelles. These commands employ military forces to conduct a
    variety of operations and are fully supported by our maritime, air,
    land, and special operations component commands. We continually
    reassess and adapt our command and control efforts in order to meet
    changing circumstances. We anticipate major transitions in 2006, as we
    shift the burden of counterinsurgency lead to Iraqi forces and as the
    North Atlantic Treaty Organization (NATO) assumes a more direct role in
    stability operations in Afghanistan.
        In 2005, military forces throughout the region did their part to
    put pressure on extremist networks, particularly al Qaeda and
    associated movements. Across the CENTCOM theater, regional nation
    counterterrorist cooperation and independent operations to kill and
    capture key al Qaeda leaders increased. In Iraq and Afghanistan, U.S.
    and coalition counterterrorist forces destroyed and disrupted al Qaeda
    cells and worked to deny al Qaeda operatives secure safe havens. In
    Pakistan and Saudi Arabia, local security forces experienced increasing
    success in combating their internal al Qaeda threats. While al Qaeda
    remains dangerous, the majority of nations in the region actively
    attack this terrorist group and their associated movements. These
    attacks, combined with al Qaeda's deliberate slaughter of innocent
    civilians, have made their ideology less attractive in the region than
    it was a year ago.
        In Iraq and Afghanistan, we worked closely with Iraqi and Afghan
    army and police forces in providing the security that enabled millions
    of Iraqi and Afghan citizens to take part in free elections. The
    elections of 2005 were watershed events. Not only was each a
    significant setback for the extremists and insurgents in these
    countries, but most of the security tasks during election periods were
    conducted by Iraqi and Afghan national forces, giving further
    confidence to their people that security and representative government
    are inextricably linked.
        The Iraqi elections in December were particularly important. Since
    the dictatorship of Saddam Hussein was removed in 2003, a persistent
    insurgency in Sunni Arab areas has hampered progress toward civil
    government. In December's elections, Sunnis voted in large numbers.
    While too soon to gauge the impact of this participation on the broader
    insurgency, the new government will have 4 years in which to build
    durable government institutions. Iraqi stability can be achieved
    through a combination of reliable security forces, an improving
    economy, and legitimate government. Legitimacy will in part be defined
    in terms of how Iraq's leadership manages sectarian violence. Civil
    unrest must ultimately be handled by Iraqis for Iraqis.
        Our training of Iraqi security forces over the past year produced
    significant, tangible results. Many Iraqi Army units are now in the
    lead in the counterinsurgency fight in key areas of the country. While
    large numbers of units are being equipped and trained, institutional
    building of military academies and training centers moves forward as
    well. Small teams of U.S. and coalition soldiers serve with the Iraqi
    military and many Iraqi police units, providing Iraqi forces with
    access to U.S. and coalition combat support and logistics enablers. A
    similar model exists with Afghan National Army units.
        During 2005, U.S. forces patrolled vital seaways and air space to
    ensure the continued flow of commerce in this energy-rich region of the
    world. American military presence coupled with robust military exercise
    programs, which enhance cooperation and coordination with our friends
    in the region, sent important signals to unfriendly states in the
    region such as Iran and Syria. Simultaneously, we continued to work
    with governments in the region to help them build force capabilities to
    deny our extremist enemies access to ungoverned spaces and safe havens
    from which to plan and execute terrorist strikes.
        U.S. and coalition forces also engaged in numerous humanitarian
    missions throughout the CENTCOM area of responsibility (AOR). We worked
    closely with the Pakistani military in reacting to the devastating
    earthquake there, deploying over 1,200 American military personnel who
    brought logistical and medical capabilities that saved thousands of
    lives. Throughout the Horn of Africa, we performed low cost, but much
    appreciated civil action projects, such as digging wells, building
    schools, and providing small medical and veterinary team visits to
    remote villages. Such operations deepen trust and cooperation between
    U.S. forces and the citizens of the region. When coupled with
    counterterrorist and border control training, our Joint Task Force in
    the Horn of Africa provides a stabilizing influence in a difficult,
    underresourced region. CJTF-HOA's work there makes extremist activity
    in the region more difficult.
        In 2006, we must capitalize on these successes. We will work
    closely with our partners throughout the region to continue to pressure
    the al Qaeda network, take down its operating cells, expose its
    dangerous designs and goals, and kill and capture its leaders, while
    preventing these extremists from obtaining weapons of mass destruction
    (WMD). We will accelerate moving competent Iraqi forces, both military
    and police, to take the lead in the counterinsurgency fight, while
    continuing our efforts to train these forces to perform the full range
    of military tasks required of a sovereign state. In Afghanistan,
    training of Afghan security forces will also take on added importance.
    CENTCOM will continue to transition conventional stability operations
    in Afghanistan to NATO. However, with a significant U.S. conventional
    presence in the eastern part of the country, a robust American
    counterterrorism capability throughout the entire country, and
    continued development of provincial reconstruction teams (PRTs), U.S.
    efforts in Afghanistan will remain vital to achieving stability there.
    In the Horn of Africa, we will continue to work to enable regional
    nations to strengthen their ability to resist extremist activity.
        U.S. forces will also continue to maintain an unmatched naval and
    air presence in the region that deters destabilizing activities by
    Iran, while safeguarding the region's vital links to the global
    economy. As always, we must guard against and be ready to respond to
    the potential for strategic surprise and unwelcome developments, such
    as a major terrorist strike against oil infrastructure, a closure of
    one of the region's strategic sea lanes, escalating political strife,
    or nation state expansion or support of terrorist activity. Given the
    ongoing volatility in the Middle East, the Horn of Africa, and Central
    Asia, these areas will continue to require considerable regional and
    international political, diplomatic, and military effort and focus in
    the years ahead.
        As this statement is written, there are slightly over 200,000
    American soldiers, sailors, airmen, coastguardsmen, and marines serving
    in the CENTCOM region. Coalition countries contribute an additional
    28,000 troops under CENTCOM throughout the theater--their contributions
    remain indispensable. Other international efforts, such as NATO's
    International Security Assistance Forces (ISAF) in Afghanistan, provide
    additional international military capability. Taking into account
    Afghan and Iraqi forces, which operate alongside U.S. and coalition
    forces, and Pakistani, Saudi, and other regional forces, there are over
    600,000 troops under arms engaged in combat operations in the CENTCOM
    region.
        American forces in the CENTCOM AOR operate at an exceptional
    standard of tactical and operational excellence. Their fusion of
    operations and intelligence, ability to strike with precision, global
    logistics capabilities, outstanding small unit leadership, and
    integrity and professionalism make them a formidable force without
    equal. In nearly 5 years of continuous combat, they have achieved a
    remarkable record of tactical victory in nearly every engagement.
        Our troops and their families have endured significant sacrifice
    over years of dangerous yet essential duty in the CENTCOM area. Our
    Nation has lost many of its brave citizens in these dangerous combat
    zones. Others have been grievously wounded. We honor their courage and
    determination. We are also mindful of the losses of Iraqi, Afghans, and
    the troops of our many coalition partners who fight alongside us.
        As Iraq and Afghanistan move toward stability and as we and our
    partners continue to fight against al Qaeda and its allies in the
    region, we should not underestimate the challenges ahead. We operate in
    a volatile and dangerous part of the world where extremists battle
    moderates in an ideological struggle of influence and ideas. This is
    not a clash between civilizations, but within one--the Muslim world. We
    must help the moderates succeed, while recognizing that our enemies are
    as patient as they are ruthless. The continuing support of Congress and
    the American people is essential to achieving success in the long war
    ahead.
                                  ii. mission
        U.S. CENTCOM conducts operations to attack, disrupt, and defeat
    terrorism, deter and defeat adversaries, deny access to WMD, assure
    regional access, strengthen regional stability, build the self-reliance
    of partner nations' security forces, and protect the vital interests of
    the United States within the AOR.
                           iii. nature of the region
        The CENTCOM region spans 6.5 million square miles and 27 countries
    including Iraq, Afghanistan, Iran, Egypt, the countries of the Horn of
    Africa, Jordan, Syria, Lebanon, the countries of the Arabian Peninsula,
    Pakistan, and the Central Asian states as far north as Kazakhstan. It
    incorporates a nexus of vital transportation and trade routes,
    including the Red Sea, the Northern Indian Ocean, and the Arabian Gulf.
    It is home to the strategic maritime choke points of the Suez Canal,
    the Bab el Mandeb, and the Strait of Hormuz. It encompasses the world's
    most energy-rich region--the Arabian Gulf alone accounts for 57 percent
    of the world's crude oil reserves, 28 percent of the world's oil
    production, and 41 percent of the world's natural gas reserves.
        The more than 650 million people who live in the region make up at
    least 18 major ethnic groups of many nationalities and cultures. While
    predominantly Muslim, the region is home to adherents of all of the
    world's major religions. Human civilization had its birth in this
    region, with many cities dating back thousands of years. The diverse
    peoples of the region take understandable pride in their rich culture
    and history.
        Economic, social, and political conditions vary greatly from one
    nation to another, with per capita incomes ranging from $200 to nearly
    $40,000. Many countries in the region suffer from pervasive corruption,
    low economic growth, and high unemployment that is likely to persist
    given the high proportions of young men and women relative to overall
    populations. Some governments remain hard pressed to meet popular
    demands for economic opportunity, more social services, and increased
    political participation. But in the past year, the region has also
    witnessed dramatic, if incremental, progress in some of these areas.
        Revolutions in global communications technologies and mass media
    outlets have offered many in the region hopes for greater prosperity
    and political opportunity. At the same time, the many complex
    insurgencies and extremist and terrorist groups in the region feed on
    the fear of rapid change in a dynamic world that is increasingly
    interconnected. The challenge for the people in the region is to manage
    change without resorting to organized violence and at a pace that
    promotes rather than erodes stability. The challenge for the United
    States is to help people manage change without turning to the dark
    ideologies of extremists.
                  iv. global counterterrorism and the long war
        Defeating al Qaeda and associated ideological movements will
    require significant counterterrorism cooperation among our allies and
    partners not only within the CENTCOM AOR, but throughout the globe. It
    will also require the dedication of military, intelligence, and many
    other components of national power. Our network of allies and agencies
    will eventually defeat the al Qaeda network, but we have yet to master
    the integration of national and international power to achieve success
    against this ruthless, borderless enemy. We have long experience with
    nation-state warfare. We must, in the years ahead, learn to organize
    ourselves to defeat a stateless enemy capable of delivering state-like
    destruction without having state-like vulnerabilities. Defeating such
    an enemy requires a careful study of its clearly articulated strategy
    and vision.
    A. The Nature of the Enemy
        Al Qaeda and ideologically-linked groups such as Ansar al Islam,
    the Islamic Movement of Uzbekistan, al Ittihad al Islami, Jemaah
    Islamiyah, and Ansar al Sunna represent the main enemy to long-term
    peace and stability in the CENTCOM AOR, promoting and thriving on
    instability and violence. They challenge our partners in Iraq,
    Afghanistan, Pakistan, and Saudi Arabia. They attack our friends in
    Jordan, Egypt, Turkey, Morocco, Madrid, and London. Although we have
    not experienced another attack on our homeland, the enemy that brought
    us September 11 continues to represent a clear and unambiguous threat
    to our country.
        This enemy seeks to topple local governments, establish a
    repressive and intolerant regional theocracy, and then extend its
    violence to the rest of the world. To effect such change, this enemy
    believes it must evict the United States and our coalition allies from
    the region. Masking their true intentions with propaganda, rhetoric,
    and a sophisticated use of the mass media and the internet, this enemy
    exploits regional tensions and popular grievances. Al Qaeda and its
    associated movements exhibit strategic patience and are willing to wait
    decades to achieve their goals.
        These extremists defame the religion of Islam by glorifying suicide
    bombing, by taking and beheading hostages, and by the wanton use of
    explosive devices that kill innocent people by the score. Their false
    jihad kills indiscriminately and runs contrary to any standard of moral
    conduct and behavior. The enemy's vision of the future would create a
    region-wide zone that would look like Afghanistan under the Taliban.
    Music would be banned, women ostracized, basic liberties banished, and
    soccer stadiums used for public executions. The people of the region do
    not want the future these extremists desire. The more we talk about
    this enemy, the more its bankrupt ideology will become known. But more
    important, the more that regional leaders talk about and act against
    this enemy, the less attractive it will be. Osama bin Laden and Musab
    al Zarqawi cannot represent the future of Islam.
        Al Qaeda and their allies are ruthless, giving them power beyond
    their relatively small numbers. They are masters of intimidation. Their
    depraved attacks menace entire communities and can influence the
    policies of national governments. They embrace asymmetric warfare,
    focusing their means on the innocent and defenseless. In Jordan, they
    target wedding parties. In Iraq, they murder children playing in the
    streets, doctors working in hospitals, and United Nations (U.N.)
    employees supporting Iraqi efforts to build their country. They respect
    no neutral ground.
        This enemy is linked by modern communications, expertly using the
    virtual world for recruiting, fundraising, planning, training,
    indoctrination, and proselytizing. The internet empowers these
    extremists in a way that would have been impossible a decade ago. It
    enables them to have global reach and to plan and coordinate terrorist
    operations throughout the world.
        Finally, and most important, this enemy seeks to develop or acquire
    WMD. If they could develop or acquire a chemical, biological, or
    nuclear device, they would use it. This is not a guess. This is what
    they say. Their willingness to use suicide means to deliver such a
    weapon heightens this threat. There should be no mistake about the
    stakes in this broader war against al Qaeda. The enemy must be deprived
    of time, safe haven and resources to prevent development and use of
    mass-casualty producing devices.
        Today, we have a much fuller understanding of the al Qaeda network
    than we did on September 11, 2001. It exists in the geographic realm,
    but also thrives in virtual space, constituting a global threat.
    Geographically, it seeks ungoverned spaces inside weak and failing
    states where it can establish safe havens and training sites. In these
    areas, military forces--ours or others--can have good effects. But this
    is a thinking enemy, adapting against our strengths. They have
    developed virtual safe havens. They have front companies. They employ
    facilitators and sympathetic charities that move their finances and
    enable their ideology to spread around the region. It is a secretive,
    complex network that often hides in plain sight.
        Fortunately, the vast majority of the people in the region want
    nothing to do with the perverted vision of Islam preached by al Qaeda.
    But the power and grip of the al Qaeda movement and ideology should not
    be underestimated. Communism and fascism started with relatively few,
    but deeply committed adherents, and the hate preached by al Qaeda
    resonates with young men and women of little hope. Its global reach is
    already disturbingly apparent. In 2005, they enlisted suicide bombers
    from all over the Middle East and deployed over 500 of them worldwide,
    killing thousands of innocent civilians, most of whom were Muslims.
    B. Principles of Global Counterterrorism and the Long War
        For the first time in our history, the principal enemy facing the
    United States is not another nation state--it is an ideologically-
    driven, borderless network. Such an enemy requires new thinking on how
    we organize and fight. Militarily, we will continue to kill and capture
    al Qaeda leaders, shut down training camps, destroy operational cells,
    and prevent al Qaeda and associated movements from exploiting
    ungoverned spaces. Certainly, such action requires precision targeting
    and highly sophisticated intelligence networks of our own. Nonmilitary
    measures to defeat al Qaeda will be increasingly decisive in ultimately
    bringing about the network's defeat. In order to counter its fanatical
    ideology and diminish its sources of strength, all elements of
    international and national power--diplomatic, political, economic,
    financial, the private sector--must be used to pressure the entire al
    Qaeda and associated movement network over time.
        We know the enemy's strategy and have a clearer understanding of
    how it operates. We and our friends in the region therefore have an
    opportunity to confront this enemy, adapt our tactics, techniques and
    procedures, and defeat these extremists before al Qaeda and its
    underlying ideology become mainstream. To do so, we must:

             Partner with our allies in the region to help them
            develop their own capabilities to defeat terrorists and
            extremists
             Make clear to the people of the region that we have no
            designs on their territory or resources; that we fight together
            out of respect and mutual self-benefit
             Expose the enemy's fanatical ideology and dangerous
            designs
             Provide in coordination with regional security forces
            the protective shield which enables continued political and
            economic reform and progress
             Prevent al Qaeda and associated movements from
            obtaining weapons of mass destruction
             Target, shut down, and hold liable those who finance
            extremist organizations and operations
             Evolve and broaden our coalition to more readily share
            intelligence and conduct military operations
             Develop responsive wartime authorities to invest in
            regional security forces, border security and counterterrorist
            units
             Improve our networks among our agencies, allies, and
            partner governments to coordinate and integrate all instruments
            of national power
             Invest in human capital to increase our intelligence
            capabilities, focusing on linguists, regional specialists, and
            human intelligence (HUMINT) resources
             Understand that the enemy targets our political will
            with asymmetric means and that achieving victory will be more
            about perception, will and intelligence-driven counterterrorism
            actions, than firepower, mass, maneuver, and territory
            conquered
    C. Strategic Presence
        As we implement these principles, forces should be deployed in the
    region to focus on building partner military capacity, protecting the
    flow of strategic resources, deterring hostile states, and maintaining
    regional U.S. counterterrorist capacity. It is important to understand
    that the current large conventional force posture is largely a function
    of counterinsurgency work in both Iraq and Afghanistan. As the lead for
    counterinsurgency operations shifts to Iraqis and Afghans, it is
    reasonable to assume that our conventional force levels will drop. As
    both countries stabilize and as new longer term security arrangements
    emerge, proper force levels can be determined. Regardless of the timing
    of stabilization, regional security needs will still require flexible,
    agile, and strategically located forward operating sites and security
    cooperation locations. Such locations will provide regional deterrence,
    adequate expandable infrastructure for contingency operations, and
    power projection capability for all types of forces. The Arabian Gulf,
    Central Asia, and Horn of Africa will require the reassurance that the
    strategic presence of U.S. forces brings to a volatile, vital region of
    the world.
                                    v. iraq
    A. Situation Overview
        1. Coalition Forces
        Multi-National Force-Iraq, headquartered in Baghdad, commands the
    Multi-National Corps-Iraq (MNC-I). MNC-I oversees two U.S. Army
    divisions and one U.S. Marine Expeditionary Force (MEF)--employing
    altogether 15 U.S. brigades/regimental combat teams--and three
    multinational Coalition divisions. Coalition divisions control zones in
    southern and northern Iraq. Poland and the United Kingdom (UK) lead an
    11-nation and 10-nation effort, respectively, in the south, while the
    Republic of Korea's `Zaytun Division' conducts operations from Irbil,
    in northeast Iraq. Additionally, Multi-National Security Training
    Command-Iraq (MNSTC-I) leads coalition efforts to train and equip Iraqi
    security forces (ISF). The MNSTC-I commander also serves as the
    commander of the NATO effort to train these forces and build supporting
    institutions.
        At the height of the December 2005 elections, there were
    approximately 154,000 U.S. forces and 21,000 coalition forces in Iraq.
    Significant air, naval and Special Operations Forces (SOFs) supported
    these troops from within Iraq and across the region. These numbers have
    decreased in recent months to approximately 130,000 U.S. and 19,000
    coalition troops. The most significant change in terms of troop levels
    in 2005 was the number of trained and equipped ISF. In January 2005,
    there were 127,000 total Ministry of Defense and Ministry of Interior
    security forces, or 78 battalions. About a year later, there were
    approximately 231,000 combined security forces constituting more than
    160 battalions. More important, these increasingly capable Iraqi forces
    are assuming greater responsibility for combating the insurgency.
        2. The Enemy
        Iraqi insurgents are predominantly Sunni Arab and consist of three
    major elements: Iraqi rejectionists, Saddamists, and terrorists and
    foreign fighters. These groups operate primarily in 4 of Iraq's 18
    provinces, where they receive varying levels of support from the Sunni
    population but are certainly not supported by all Sunni Arabs. Indeed,
    Sunni Arabs participate in all governmental activities and constitute a
    large number of Iraqi's security forces. These different insurgent
    groups have varying motivations but are unified in their opposition to
    U.S. and coalition presence and their refusal to accept the authority
    of the legitimate, democratically-elected government of Iraq. While
    deadly and disruptive, the insurgency is also attractive to numbers of
    unemployed Iraqi young men and criminals.
        The Iraqi rejectionists, mostly Sunni Arabs who want a return to
    their privileged status under Saddam, form the largest insurgent group.
    Their leadership is fragmented. They view themselves as an ``honorable
    resistance'' seeking to oust foreign occupation forces and unwilling to
    recognize the new-found power of groups previously excluded from
    political and economic life.
        The Saddamists are mostly former senior officials from Saddam
    Hussein's dictatorship. Their numbers are smaller than the Iraqi
    rejectionists. They seek a return to power by trying to de-legitimize
    and undermine the new Iraqi Government through a campaign of mass
    intimidation against the Sunni population. They also conduct stand-off
    attacks with improvised explosive devices (IEDs), rockets, and mortars
    against U.S. and coalition forces, Iraqi security forces, and
    government officials in an attempt to demoralize these groups. They
    exploit criminal elements to assist them with these attacks. The
    Saddamists lack broad popular support, but they harbor long-term
    designs to try to infiltrate and subvert the newly-elected government
    from within.
        The terrorists and foreign fighters are the smallest but most
    lethal group. The al Qaeda in Iraq (AQI) network, led by the terrorist
    Zarqawi, is the dominant threat within this group. AQI's objective is
    to create chaos in Iraq by inciting civil war between Sunni and Shia
    through terrorist acts such as the recent bombing of the Golden Mosque
    in Samarra. Such mayhem, they believe, will topple the elected
    government of Iraq and drive Coalition forces from the country. This
    could enable AQI to establish safe havens for Islamic extremism within
    Iraq from which to launch terrorist attacks against other moderate
    regimes in the region. Zarqawi has pledged his allegiance to Osama bin
    Laden, and the goals of AQI support bin Ladin's broader objective of
    establishing a Caliphate throughout the Middle East. AQI's network is
    well-organized and funded. Its cellular structure permits recovery and
    retention of lethality even when key Zarqawi lieutenants have been
    killed and captured.
        AQI has also established a robust network to bring suicide bombers
    into Iraq. Extremists throughout the Middle East and the suicide
    bombers themselves help finance these murderous operations. These
    suicide bombers primarily target Shia civilians. Through sophisticated
    information operations, the terrorists and foreign fighters in Iraq use
    their mass murder events, kidnappings, and beheadings to establish in
    the media the image of an Iraq in chaos with little hope of progress or
    peace. There is little popular support for these terrorists and foreign
    fighters, but their ability to intimidate entire communities enables
    them to operate from constantly shifting safe havens.
        While the main enemy forces operate primarily in the Sunni triangle
    area, potential challenges exist in both the south and north. In the
    south, radical Shia splinter groups such as Muqtada Sadr's Jaysh al
    Mahdi (JAM) could pose an armed threat to the new Iraqi Government.
    While Sadr's followers have begun to embrace the political process
    instead of violence, the JAM and other radicalized Shia elements with
    their own militias remain a latent threat to Iraqi stability. The Iraqi
    Government recognizes that such militias are long-term threats that
    need to be demobilized or incorporated into Iraq's legitimate security
    force institutions to ensure enduring national stability. In the north,
    while the Kurdish population continues to be a strong force for
    democracy and stability in Iraq, tensions over the status of Kirkuk
    could jeopardize internal stability. MNF-I will continue to assist
    efforts by the Iraqi Government to address this issue in a fair and
    equitable manner.
    B. Strategic Focus
        This past year, U.S. and coalition forces in Iraq focused on:
    training, building, and conducting operations with capable Iraqi
    security forces; providing the shield behind which political and
    economic progress can continue and legitimate government institutions
    can form and take root; and killing and capturing terrorists and
    neutralizing the insurgency. In 2006, the training and transitions with
    Iraqi security forces will continue with a focus on the Iraqi Army
    assuming the lead in counterinsurgency and stability activities and an
    enhanced effort on the Iraqi police. Our goal, which we share with the
    people of Iraq, is a country at peace with its neighbors and an ally in
    the broader war against extremism, with a representative government and
    security forces sufficient to maintain domestic order and deny Iraq as
    a safe haven for terrorists.
        Iraqis will increasingly take the lead in killing and capturing
    terrorists and neutralizing the insurgency in 2006. A key component of
    the counterinsurgency strategy in Iraq is to distinguish between those
    elements of the enemy who can be persuaded to join the political
    process and support the legitimate Government of Iraq and those who are
    irreconcilable, determined to achieve their goals only through violence
    and intimidation. The difference between Sunni participation in the
    January and December 2005 elections was significant, indicating that
    many Sunnis are beginning to identify their future with the political
    process instead of violence. Continued efforts at broadening Sunni
    reconciliation will be critical in bringing an increasing number of
    Iraqi rejectionists into the political fold.
        Such reconciliation, however, will not extend to those who do not
    recognize the legitimacy of the democratically-elected government of
    Iraq. Terrorists, foreign fighters, and Saddamists make up the majority
    of this category. They offer no positive vision for the future of Iraq,
    only chaos, the slaughter of innocents, and the desire for power. U.S.,
    coalition, and ISFs will remain on the offensive, capturing and killing
    these enemies of the new Iraq, and will continue to clear areas of
    Iraq, such as those in Tal Afar, several Syrian border towns, and towns
    in the Euphrates River valley, from which terrorists operated. Future
    infiltration of such towns will be prevented by holding these areas
    with increasingly capable ISFs, and building local economic, political,
    and security forces and institutions to advance the safety and
    opportunities of Iraqis in such regions.
        The insurgency in Iraq cannot be neutralized solely by military
    means. The political component is decisive. It allows a way for those
    willing to put down their arms to settle their differences through
    ballots, not bullets. Over the past year, U.S. and coalition forces,
    and increasingly Iraqi Army and police units, provided the security
    shield behind which political progress continued. The political
    accomplishments of the Iraqi people during 2005 were remarkable. Iraqi
    citizens, by the millions, braved threats of violence to vote for an
    interim government in January 2005. These elected representatives
    formed an interim government and ministries, and crafted a
    constitution, which was approved by the Iraqi people in a national
    referendum. Then in December over 10 million Iraqis voted again to
    elect a permanent government. All of these political milestones were
    set out in the Transitional Administrative Law, demonstrating that the
    rule of law is beginning to take hold in Iraq. When compared to our own
    political experience in forming a new republic, Iraq's political
    progress in 2005 is impressive.
        We should not underestimate the current difficulties in forming a
    new government in the midst of a disruptive insurgency, terrorist
    activity, and increased sectarian tensions. The frustrating, slow, yet
    necessary process of forming a parliamentary government must be guided
    by responsible Iraqi leaders. Reaching political compromise between
    ethnic and religious groups that have for centuries settled their
    differences through bloodshed will be difficult. Enemies of the new
    Iraq will try to derail efforts to form a government through violence
    and attempts to increase sectarian tensions as was done in the bombing
    of the Golden Mosque in Samarra. Patience will be required both in Iraq
    and the United States as attempts at political compromise take time and
    seem inconclusive. The role of U.S. and coalition troops, and more
    prominently, Iraq's security forces, will be to continue to provide the
    security that is essential for the political process to unfold and be
    successful. A successful political process is primarily in the hands of
    Iraq's newly-elected leaders who must work hard to forge a national
    unity government based on fair compromises that include all major
    ethnic and religious groups.
        Increased security will also set the conditions for continued
    reconstruction in Iraq. The infrastructure supporting the basic needs
    of Iraqis requires complete overhaul and will take years to reach the
    level of neighboring states. Nevertheless, progress has been made due
    to American, Coalition, and Iraqi efforts and resources. Over 3,600
    schools have been rehabilitated, and over 47,000 school teachers and
    administrators have been trained. Approximately 240 hospitals and more
    than 1,200 clinics have reopened. Baghdad's three sewage plants, which
    serve 80 percent of the city's population, have been rehabilitated.
    Thirteen power plants have also been rehabilitated, providing
    approximately 60 percent of power generation in Iraq. Umm Qasar's
    status as an international port has been restored with up to 80 ship
    offloads of a wide range of commodities occurring each month.
        More work needs to be done. For decades, Saddam Hussein neglected
    Iraq's infrastructure and the basic needs of the Iraqi people, while
    building lavish palaces for himself. Sabotage continues to negatively
    impact Iraq's oil industry and electricity supply. An inefficient
    economic structure, insurgents, criminals, and corruption all hamper
    progress in these areas. Enhanced Iraqi security and economic reform of
    these key infrastructure systems are absolutely necessary for
    reconstruction and economic progress in 2006.
        MNF-I's main military effort in Iraq centers around training and
    building increasingly capable and loyal Iraqi security forces. MNSTC-I
    leads this effort and over the past year, steady progress has been
    made, especially in terms of Iraqi forces' willingness and ability to
    engage in combat. A year ago there were not significant numbers of
    Iraqi battalions ready for combat. Now there are over 160 Iraqi Army
    and police battalions engaged in combat operations against the
    terrorists and insurgents. Over 70 of these are taking the lead in this
    fight, while approximately 90 are fighting alongside U.S. and coalition
    forces. Last year Iraqi operational headquarters at the brigade and
    division level did not exist, and neither did combat service support
    battalions. Now there are ten division and 35 brigade headquarters in
    the Iraqi Army as well as seven service support battalions supporting
    Iraqi combat forces. In all, there are approximately 109,000 trained
    soldiers and 124,000 police.
        More important, but more difficult to quantify, the intangibles of
    leadership, unit cohesion, and loyalty--critical elements of an
    effective military force--have improved. In 2004, some Iraqi Army and
    police units disintegrated when confronted by insurgents. Now they are
    standing, fighting, and prevailing over the enemy on the battlefield.
    They are also increasingly planning and conducting independent
    operations. Iraqi security forces are fighting and dying for their
    country, taking significantly higher casualties than our own. There is
    no shortage of Iraqis volunteering to serve their country.
        It is important to remember that American and coalition forces are
    fighting as a close team with Iraq's security forces. We have over 190
    embedded transition teams operating as an integral part of Iraqi units.
    These American and coalition forces are making essential contributions
    as they enable Iraqi battalions to receive logistical and combined arms
    support from U.S. and coalition forces. Many American and coalition
    units also have Iraqi partner units with which they conduct combined
    operations and training.
        Throughout the country, Iraq's security forces are also taking over
    their own battlespace. Currently more than 40 Iraqi Army battalions
    have assumed primary control of their own AOR, including important
    areas in Baghdad. Similarly, we have transferred authority of over a
    dozen forward operating bases to Iraqi units. As these Iraqi forces
    increasingly move to assume control over more areas of the country,
    U.S. and coalition forces will increase their focus on turning over
    more and more security responsibility at a pace appropriate to local
    conditions.
        The international community remains involved in the training of
    ISFs. Coalition members representing 18 countries are part of the NATO
    Training Mission-Iraq (NTM-I). NTM-I focuses on developing a
    professional Iraqi officer corps. The assistance of Jordan, Egypt, and
    the United Arab Emirates (UAE) continues to be noteworthy.
        Ensuring capable ISFs means more than training and equipping
    soldiers and police, it also means helping Iraqis build the
    institutions, particularly the Ministries of Defense and Interior, that
    can sustain and instill loyalty in these forces and provide the
    resources and oversight necessary to prosecute a complex
    counterinsurgency campaign. In 2006, MNSTC-I will increasingly focus on
    such efforts, working with the new leaders of these ministries to
    encourage Iraqi participation in them that is broadbased, from all
    ethnic and religious groups, and to address problems, such as
    corruption, that have plagued these ministries in the past.
        Significant progress has been made in training and building Iraq's
    security forces, but challenges remain. Like many institutions in Iraq,
    these security forces were for decades the instruments of Saddam's
    reign of terror. They existed to brutalize the people of Iraq. These
    forces are now being trained to serve the people. Such a radical change
    in mission and culture will not take place overnight. But if these
    institutions and the Iraqis who lead them are increasingly able to
    focus on serving the Iraqi national interest, the stability and
    longevity of Iraq's new democracy will be enhanced.
    C. Transitions and Timing
        The focus of U.S. and coalition military operations in Iraq has
    proceeded from invasion, to liberation, to occupation with the
    Coalition Provisional Authority, to partnership with the interim and
    transitional governments. In 2006, we will emphasize building self-
    reliance in Iraq's security forces and newly-elected government
    institutions. An essential element of achieving overall success in Iraq
    will depend on the leadership, vision, and character of Iraq's newly-
    elected government officials.
        2006 is likely to be a year of significant transition in Iraq. The
    process of moving capable Iraqi forces to the forefront of fighting the
    insurgency has already begun. In liberating Tal Afar from extremist
    control last summer, 11 Iraqi battalions and 5 U.S. Army battalions
    carried the fight. Iraqi forces also took the lead in providing
    security for the December 2005 elections and in dealing with the post-
    Samarra bombing tensions. We will work to accelerate this transition in
    2006. But shifting the balance of Iraqi forces to the forefront of the
    fight is not a simple task. If it is not done well, a security vacuum
    could develop in certain areas of the country, to be filled by
    terrorists and Saddamists. The timing of this transition should be
    dictated by sound strategy and an assessment of intangibles such as
    leadership, unit cohesion, and loyalty, not fixed timetables or other
    arbitrary deadlines.
        The same holds true for CENTCOM recommendations on determining the
    appropriate number of U.S. troops in Iraq. Our long-term strategy in
    the region will not likely be furthered by the continuing presence of a
    large U.S. military footprint in the Middle East. But our current
    strategy would be undermined by a precipitous withdrawal of U.S. forces
    from Iraq. The timing of when to reduce our forces in the region,
    therefore, becomes the crucial issue. Unexpected tensions or widespread
    violence could lead to a need for more American forces in Iraq. CENTCOM
    recommendations on the issue of troop levels to our civilian leadership
    will continue to be based on conditions on the ground in Iraq, as well
    as an assessment of how the U.S. force posture in the region bolsters
    America's national interest in the broader fight against terrorism and
    extremism. We have recently transitioned from 17 to 15 brigades in
    Iraq. To the extent U.S. forces in Iraq are further reduced during
    2006, it will be the result of our troops and Iraqi forces increasingly
    meeting their objectives.
                                vi. afghanistan
    A. Situation Overview
        1. Coalition Forces
        There are approximately 20,000 U.S. and 4,500 coalition forces from
    25 nations deployed in Afghanistan as part of Operation Enduring
    Freedom (OEF). These forces are commanded by CFC-A, headquartered in
    Kabul, which assures unity of effort with the U.S. Ambassador in Kabul
    and the NATO ISAF. Combined Joint Task Force-76 (CJTF-76) is a
    division-level subordinate command. CJTF-76 directs major and routine
    combat operations throughout Afghanistan. Linked into CJTF-76 is a
    robust special operations capability from U.S. and coalition nations.
    Additionally, NATO's ISAF contributes approximately 8,500 troops--over
    150 of whom are American. These troops are primarily located in Kabul
    and northern and western Afghanistan.
        2. The Enemy. Consistent with CENTCOM's primary goal of defeating
    al Qaeda and its allies, CFC-A maintains an intense focus on any
    indications that al Qaeda is attempting to reestablish a safe haven in
    Afghanistan. Al Qaeda senior leaders operate in Pakistan's rugged and
    isolated Federally-Administered Tribal Area (FATA) that borders eastern
    Afghanistan. In addition to al Qaeda, three insurgent groups--all with
    al Qaeda links--constitute the main enemy threat in Afghanistan: (1)
    the Taliban, (2) Haqqani Tribal Network, and (3) Hezb-i-Islami
    Gulbuddin (HIG).
        The Taliban operates primarily in the southern and eastern
    provinces and Kabul. Its core supporters, mostly Pashtun, seek its
    return to power. The Taliban has demonstrated resilience after defeats.
    They appeared tactically stronger on the battlefield this year, and
    they demonstrated an increased willingness to use suicide bomber and
    IED tactics. While the Taliban remain very unpopular in most parts of
    the country, pockets of hard-core support remain. Taliban activities
    remain clearly linked to al Qaeda funding, direction, and ideological
    thinking. The Taliban do not have the capability to exercise control
    over large areas of Afghanistan, but they are disruptive to
    reconstruction and reconciliation efforts. It is increasingly clear
    that Taliban leaders also use Pakistan's FATA to organize, plan, and
    rest. Pakistani efforts to deny this safe haven, while considerable,
    have yet to shut down this area to Taliban and al Qaeda use.
        The Haqqani Tribal Network operates primarily in eastern
    Afghanistan and the FATA region of Pakistan. Haqqani goals are limited
    primarily to obtaining autonomy in eastern Afghanistan and the FATA
    region. Although the most tactically proficient of the enemy we face in
    Afghanistan, they present a limited strategic threat.
        The HIG, while remaining dangerous, similarly presents only a
    limited strategic threat. It operates primarily in eastern Afghanistan
    and is heavily involved in illicit activities such as narcotics and
    smuggling, resembling a Mafia-like organization more than an insurgent
    movement with national goals. Nevertheless, given its historical links
    with al Qaeda, it can help facilitate al Qaeda operations in Kabul and
    eastern Afghanistan if it finds that doing so enhances its interests.
    Some HIG operatives may be considering political reconciliation.
    B. Strategic Focus
        In 2006, CFC-A will continue to focus on: killing and capturing
    terrorists and neutralizing the insurgency; providing the shield behind
    which economic and political progress can move forward and legitimate
    government institutions can form and take root; and training and
    building capable Afghan security forces. Additionally, CFC-A will work
    to ensure a smooth transition with NATO as NATO troops assume
    additional responsibilities and territory in Afghanistan and support
    counternarcotics efforts throughout the country. Our goal, which we
    share with the people of Afghanistan, is a country at peace with its
    neighbors and an ally in the broader war against terror, with a
    representative government and security forces sufficient to maintain
    domestic order and deny Afghanistan as a safe haven for terrorists.
        During the past year, CFC-A continued aggressive offensive military
    operations to kill and capture terrorists and insurgents and shut down
    the sanctuaries in which they operate. Given that the terrorists and
    insurgents that we are pursuing often operate in both Pakistan and
    Afghanistan, a key element of our strategy is deepening our cooperation
    with the Pakistani military operating on the Pakistan-Afghanistan
    border. The important work to de-legitimize Afghan warlords and disarm
    and demobilize irregular Afghan militias also continues. These efforts
    take time, rarely producing major breakthroughs, but incremental
    progress in this important area continues. U.S. and coalition forces
    dominate the battlespace and are increasingly involving Afghan National
    Army units in military operations.
        The continued insurgency in Afghanistan will not be defeated solely
    by military means. In fact, the center of gravity of CFC-A's campaign
    is decreasingly military and increasingly in the domain of governance
    and economic development. American, Coalition, and Afghan forces are
    continuing to provide the critical shield behind which progress in the
    political and economic realms can continue.
        In 2005, there was noteworthy political progress in Afghanistan.
    The citizens of Afghanistan went to the polls in September to elect a
    Parliament, which was seated on December 19. Voter turnout was over 50
    percent, with 6.2 million Afghans voting for over 5,800 national and
    provincial candidates. Extremists failed to make good on their threats
    of murder to disrupt the elections. Afghan security forces played their
    most visible and effective role to date in providing essential security
    to enable the election.
        Reconstruction remains a critical way to isolate our enemies,
    depriving them of their support base and giving Afghans hope for a
    better future. Continuing and sustained development efforts will be
    critical to overall success. The United States and our allies will
    continue to work with the Afghan Government in assisting Afghanistan in
    building the infrastructure needed for a functioning economy. The
    London Conference in January 2006 was an important step in this regard.
    More generally, PRTs, small civil-military affairs teams with civilian
    and interagency expertise, remain an important tool to achieve these
    results. This past year, CFC-A and its NATO-ISAF partners increased the
    number of PRTs to 24. Of these, 15 were directed by CFC-A, and 9 others
    operated under the authority of NATO-ISAF. Over time, Afghan PRTs will
    transform from military to civilian-led organizations, and ultimately
    become provincial development authorities of the Afghan Government.
        A key strategic interest of both Afghanistan and the United States
    is to prevent Afghanistan from becoming a terrorist safe haven again.
    The most effective long-term way to achieve this end is to enable the
    institutions of the democratically-elected Afghan Government to
    consolidate and extend their reach and legitimacy throughout the
    country. Coalition PRTs help do this by enhancing local security and
    extending the authority and visibility of the Afghan Government into
    the provinces.
        Training, building, and mentoring the Afghan National Army (ANA)
    remains a central pillar of our strategy to stabilize Afghanistan. The
    Afghan Army has suffered through 30 years of civil war, shattering the
    institutional structures of this force. Given the state of the ANA, our
    focus has been on quality--building from the ground up--not on
    quantity. There has been steady progress. The Afghan Army now numbers
    over 26,000 trained and equipped troops.
        U.S. and coalition forces support the training of fielded ANA
    battalions with Embedded Training Teams (ETT). There are over 650
    military personnel serving in ETTs. These ETTs provide training, combat
    effects, and logistics support to ANA units. Additionally, ANA forces
    are now conducting combined operations with American and coalition
    forces. Most important in terms of progress, the citizens of
    Afghanistan are beginning to view the ANA as a truly national
    institution that is both trusted and respected. The ANA played a
    critical role in providing security for the September parliamentary
    elections, extending its reach to remote villages. Its performance was
    widely applauded by senior Afghan officials, U.S. commanders in the
    field, and, most importantly, the people of Afghanistan. As the ANA is
    fielded, CFC-A will continue initiatives to help the Afghans reform
    their Ministry of Defense, the Afghan General Staff, and the ANA
    Regional Military Commands. While the progress with the Army is
    remarkable, problems with recruiting, infrastructure, and
    organizational reach need continued attention.
        Although the development of an effective Afghan National Army is
    proceeding on schedule, the Afghan National Police (ANP) force requires
    considerable work. In conjunction with Germany and other international
    parters, building a professional and competent ANP remains a top CFC-A
    priority. Over 58,000 police have been trained. However, the force is
    still hampered by irregular pay, corruption, and substandard leadership
    that is often unaccountable to a central ministry. CFC-A and the
    Department of State are focused on helping the leaders of Afghanistan
    address these problems with additional mentoring and an emphasis on
    building the institutional capacity and equipment of the police force.
    The Government of Afghanistan and the Ministry of Interior have begun
    reforms, including those that cover pay, rank structure, and curbing
    corruption. Ultimately, police provide the security backbone against
    any insurgency and criminal activity. Afghanistan is intensely tribal
    and lacks modern infrastructure. Loyal and competent police are
    essential to spreading the rule of law and good governance. A long,
    hard road is ahead to make the Afghan police what the Nation needs.
        2006 will be an important year in terms of transitioning additional
    responsibility and territory to NATO. Specifically, Stage III of the
    ISAF transition is scheduled for the late spring or summer of 2006 when
    Regional Command South (RC South) transfers to NATO command. NATO
    forces in this area will be primarily British, Canadian, and Dutch.
    They are prepared to aggressively address the threat situation in RC
    South, which remains high. CENTCOM continues to work closely with NATO
    to enable its command and control structures and to ensure a successful
    NATO transition in Afghanistan.
        Having NATO, an organization consisting of 26 of the world's most
    powerful countries, committed to Afghanistan's future is good for
    Afghanistan. NATO-ISAF is already a major contributor to Afghanistan's
    security. As NATO eventually assumes control over all conventional U.S.
    and coalition forces in Afghanistan, the United States will remain the
    single largest contributor of forces to this NATO effort, while also
    retaining a very robust counterterrorism force throughout the entire
    country. Deepening international commitment to Afghanistan's future
    will do much to assist the emerging Afghan Government and diminish al
    Qaeda's attractiveness to people in Central and South Asia.
        The production and trafficking of illegal narcotics remain a
    significant threat not only to Afghanistan's long-term stability, but
    to the stability of the entire region. The United Kingdom has the
    overall lead, and the U.S. Department of State's Bureau of
    International Narcotics and Law (INL) Enforcement leads the U.S.
    effort. A counternarcotics branch in CENTCOM's Joint Interagency
    Coordination Group (JIACG) was established to better coordinate
    Department of Defense's (DOD) support for U.S. national efforts. During
    2005, CENTCOM delivered $242 million in fiscal year 2005 DOD
    supplemental funding in support of INL programs for the Afghan police,
    border security, and Counternarcotics Police (CNPA) equipment and
    training.
        The campaign to stop narcotrafficking and eliminate poppy
    production is complex, requiring full interagency and international
    participation, particularly given the regional scope of the problem.
    The different elements of this campaign include law enforcement,
    judicial reform, poppy eradication, and alternative livelihood and
    public information programs. CENTCOM fully supports all of these
    programs. Our roles include intelligence support, helicopter transport,
    logistical and administrative assistance for counter-narcotics
    operators in country, and in extremis rescue, to include medical
    evacuations and close air support operations. Our PRTs also play a
    critical role developing viable economic alternatives to poppy
    production.
    C. Much Accomplished, Much More to Do
        Since September 2001, progress in Afghanistan has been remarkable:
    the al Qaeda safe haven in Afghanistan was eliminated and the Taliban
    removed from power; security was established for a political process in
    which the people of the country have freely elected a president and
    parliament; military units spearheaded an effort to bring the
    significant resources and expertise of the international community to
    help Afghanistan begin to address many of its longstanding problems;
    and the United States, along with our international partners and the
    Afghan Government, has begun the difficult work of helping the Afghan
    people build the institutions and infrastructure that are the key to
    the future of their country.
        Given this progress, there is still a very strong notion of
    ``consent'' in this country--the Afghan people are very appreciative of
    the help they have received from international troops, especially those
    from the United States, and there is a strong, broadbased desire for
    such troops to remain in the country. But much work needs to be done
    and progress is not guaranteed. Helping Afghans build infrastructure,
    which in many regions is nonexistent, attack endemic corruption,
    address narcotrafficking, train their Army and police, all while
    fighting an insurgency that remains patient, hidden, and dangerous, are
    tasks that will require years. As in Iraq, an essential element of
    achieving overall success will depend on the leadership, character, and
    vision of Afghanistan's elected leaders.
                         vii. horn of africa and yemen
    A. Situation Overview
        The geographic region of CJTF-HOA includes Djibouti, Ethiopia,
    Eritrea, Kenya, Sudan, Yemen, Somalia, and the Seychelles. CJTF-HOA
    conducts operations, training, and humanitarian missions to assist host
    nations to help themselves in combating terrorism, denying extremist
    groups from utilizing ungoverned space, while trying to meet the needs
    of their citizens. CJTF-HOA is supported by two other commands:
    Commander Task Force-150, a naval force which is commanded by a Dutch
    Flag officer with nine ships from seven countries, and a Joint Special
    Operations Task Force. Overall, CJTF-HOA has approximately 1,400 U.S.
    forces on the ground and over 500 coalition personnel at sea.
        The Horn of Africa is vulnerable to penetration by regional
    extremist groups, terrorist activity, and ethnic violence. Al Qaeda has
    a history of planning, training for, and conducting major terrorist
    attacks in this region, such as the bombings of U.S. Embassies in Kenya
    and Tanzania. The volatility of this region is fueled by a daunting
    list of challenges, to include extreme poverty, corruption, internal
    conflicts, border disputes, uncontrolled borders and territorial
    waters, weak internal security capabilities, natural disasters, famine,
    lack of dependable water sources, and an underdeveloped infrastructure.
    The combination of these serious challenges creates an environment that
    is ripe for exploitation by extremists and criminal organizations.
        More specifically, Somalia, a failed state in the heart of HOA, is
    a safe haven for East Africa al Qaeda associated cells. There is also
    an increasing number of piracy operations that have been planned and
    launched from Somalia. In January 2006, our naval forces seized a
    vessel in the international waters off the Somali coast engaged in
    piracy. We will continue to monitor and, when necessary, take action
    against such destabilizing activities in the region.
        Sudan remains a flashpoint of violence, particularly in the
    volatile Darfur region where over 2 million people have been displaced
    and an estimated 200,000 have been killed in the past 3 years. Ongoing
    peace talks there remain a challenge, and the potential for ungoverned
    space in Sudan to be exploited by terrorist groups is high.
    Additionally, the festering border conflict between Ethiopia and
    Eritrea has the potential to escalate into a full-scale war that would
    destabilize both of these countries, while potentially spreading
    instability throughout the HOA.
    B. Strategic and Country Focus
        As U.S. and partner forces continue to apply pressure on al Qaeda
    and associated movements in Iraq, Afghanistan, Pakistan, and other
    places, there is a likelihood that some of these extremists will
    migrate to the Horn of Africa in search of safe havens and ungoverned
    space, as they have done in the past. Working closely with U.S. Embassy
    personnel in the region, CJTF-HOA assists partner governments in
    building indigenous capacity to deny terrorists access to their
    territory. The building of indigenous capacity not only includes
    training local security and border forces, but also involves assisting
    with low-level civic projects throughout HOA such as digging wells,
    building schools and distributing books, and holding medical and
    veterinary clinics in remote villages. The capabilities gained by local
    forces from this training and the goodwill engendered by CJTF-HOA's
    numerous humanitarian operations help discredit extremist propaganda
    and bolster local desires and capabilities to defeat terrorists before
    they can become entrenched.
        Our partners in the Horn of Africa share our goal of a region that
    is stable and free from terrorist activity and violence. Many have
    played a critical role in making progress toward this goal. Kenya is
    important in this regard, playing a leadership role throughout East
    Africa. With one of Africa's most professional militaries, Kenya has
    been a critical ally in our mutual fight against terrorism in the
    region. In September 2005, Kenya hosted regional exercise Golden Spear
    2005, and in close cooperation with CENTCOM established the Disaster
    Management Center of Excellence in Nairobi. The primary focus of this
    Center of Excellence and the Golden Spear exercise is to build regional
    disaster management capacity and cooperation.
        Djibouti, where CJTF-HOA is headquartered, continues to provide
    support for U.S. military basing, training, and counter-terrorism
    operations, including maritime interdiction operations. Yemen has
    demonstrated increasing willingness to confront extremists within its
    borders. We have worked together in training Yemen's coast guard, an
    important capacity given that Yemen lies astride the critical sea lane
    chokepoint of the Bab el Mandeb. The United States is working with the
    Yemenis to develop a long-term border security strategy to better
    safeguard their territory. Ethiopia continues to work on security
    sector reform and is committed to combating terrorism and countering
    extremism within its borders. CJTF-HOA has deepened its relationship
    with Ethiopia and has reached out to Eritrea, emphasizing to both the
    importance of reducing tensions along their common border.
    C. Way Ahead: Internationalizing and Civilianizing
        In many ways, CJTF-HOA is a model for how military forces might
    operate across the wider CENTCOM region in the future--our troops are
    in a preventive, economy of force posture, training and working in
    close cooperation with local security forces to identify extremist and
    terrorist threats that might try to become more established in the
    region. In 2006, the Marine Corps will transfer authority of CJTF-HOA's
    headquarters to the Navy.
        Despite the excellent work by CJTF-HOA's troops, we continue to
    contemplate ways to increase the effectiveness of this command. One way
    is to increase international, civilian, and interagency involvement in
    CJTF-HOA's mission. Close allies such as the UK and France already
    conduct significant operations in this region. Coordinating more
    closely with these forces can enhance stability in the Horn of Africa.
    Partnering with civilian agencies for many of the humanitarian missions
    undertaken in this chronically underdeveloped region is an important
    step in building an assistance and security relationship that makes
    extremism less attractive.
       viii. theater security cooperation and other regional partnerships
        As in the Horn of Africa, CENTCOM engages other regional partners
    and encourages deepening cooperation through a variety of Theater
    Security Cooperation (TSC) programs, the pillars of which are: (1)
    Foreign Military Financing/Foreign Military Sales (FMF/FMS), (2)
    International Military Education and Training (IMET), (3) the Counter-
    Terrorism Fellowship Program (CTFP), and (4) Combined Military
    Exercises.
        FMF allocations help strengthen our relationships with such key
    states as Pakistan, Egypt, and Jordan. FMF/FMS initiatives have been
    especially important in improving the capabilities of the Pakistani
    military by providing the weapons and equipment that allow them to
    contest operating areas of terrorist and their supporters. IMET
    provides regional military personnel the opportunity to attend courses
    at U.S. military institutions while learning about human rights,
    democratic values, civilian control of the military, and the rule of
    law. The United States should welcome the opportunity to train as many
    officers in our school systems as possible. The DOD's CTFP is regarded
    as an innovative way to build a global network of counterterrorism (CT)
    experts and practitioners. It also reinforces a central pillar of
    strategy in the region--increase indigenous CT capabilities in partner
    countries. Combined military exercises enhance interoperability and
    assist our partners in developing capabilities to fight terrorism and
    extremism within their own borders. In 2005, 58 combined training
    events enhanced regional military capabilities. Certain annual
    exercises, such as Eagle Resolve in the Gulf and Golden Spear in the
    Horn of Africa, also emphasize preparedness and the need for regional
    cooperation in the event of manmade or natural disasters.
        These TSC programs merit long-term U.S. commitment. They boost
    interoperability with U.S. forces, encourage the professionalization of
    regional military forces, enhance intelligence sharing and information
    exchange, reinforce U.S. military access when required, and perhaps
    most importantly, foster the personal relationships between U.S.
    military personnel and their counterparts in partner countries that are
    central to building the trust and confidence needed between allies when
    they fight as partners against a common foe. We continue to support
    these programs as a matter of highest priority.
        Whether sourced through economic support funds, coalition support
    funds, foreign military financing, or other programs administered by
    other U.S. agencies, the U.S. assistance provided to our friends in the
    region is fundamental to building long-term security partnerships.
    Further benefits to TSC programs can be realized through congressional
    authorities and funding levels which are flexible and facilitate
    interagency cooperation.
    A. Pakistan
        Pakistan remains an enormously valuable ally in the broad struggle
    against extremists in the region. Since September 11, 2001, Pakistan
    has captured or killed more al Qaeda operatives than any other country.
    It also launched major conventional operations against al Qaeda
    strongholds. Pakistani Army offensive operations in the FATA have
    disrupted extremist activity, but they have not fully shut down al
    Qaeda safe havens along the border with Afghanistan. This is likely
    more an issue of capability than of intent.
        The Pakistani Army's deployment of additional troops along the
    border of Afghanistan prior to that country's September 2005
    parliamentary elections helped ensure that the threats of violence by
    the Taliban and al Qaeda did not disrupt these important elections.
    Pakistan continues to hunt down and capture high level al Qaeda and
    Taliban operatives, such as al Qaeda operations director Faraj al Libi
    and Taliban chief spokesman Abdul Latif Hakimi. Continued operations
    against al Qaeda and Taliban safe havens in Pakistan are in both of our
    countries' interests. We will continue to support these important
    efforts by Pakistan with intelligence sharing, security assistance, and
    military coordination.
        In October 2005, we signed a Communications Interoperability and
    Security Memorandum of Agreement which will enhance the
    interoperability of our forces. We continue to hold regular meetings
    with Pakistan's military leaders and are working to establish a core
    network of U.S. and Pakistani liaison officers among our different
    headquarters and more robust communications among our units operating
    along the Afghanistan-Pakistan border. American forces have worked very
    closely with the Pakistan military at all levels, as we assisted it in
    conducting and coordinating massive earthquake relief efforts in
    Northern Pakistan. Rapid and effective cooperation between Pakistan,
    the United States, and other coalition members in this endeavor led to
    thousands of lives being saved.
        CENTCOM will continue to work to deepen our engagement with
    Pakistan in order to defeat a common enemy. A long-term strategic
    partnership between the United States and Pakistan is central to
    defeating al Qaeda and other extremists groups which threaten the
    citizens of both of our countries.
    B. Kingdom of Saudi Arabia
        The Kingdom of Saudi Arabia remains an important friend and has
    become a key battleground in the war against al Qaeda terrorists.
    Spurred by a series of al Qaeda attacks on Saudi and Western targets in
    the Kingdom, the Saudi Government is now mobilized to hunt down and
    kill extremists within its borders. Saudi security forces have
    conducted numerous effective operations against al Qaeda cells and
    operatives. Many of the top al Qaeda leaders in Saudi Arabia have been
    killed in the past year. The organization of al Qaeda in Saudi Arabia,
    however, is down but not out. Saudi leaders are committed and have had
    excellent tactical success against our common enemy.
        CENTCOM will continue our close cooperation with Saudi security
    forces in the coming year and will continue to assist the government of
    Saudi Arabia in its battle against al Qaeda. In this regard, both the
    U.S. Military Training Mission and the Office of the Program Manager-
    Saudi Arabian National Guards (OPM-SANG) are adding counterterrorism
    training to their traditional programs of conventional military
    preparedness. Future military exercise programs will also include more
    counterterrorism efforts. We are also looking to expand conventional
    force interoperability through land force exercises between Saudi
    military forces and Army Forces Central Command (ARCENT), and through
    continued training opportunities such as the Royal Saudi Air Force
    participation in the U.S. Air Force's annual ``Red Flag'' exercise at
    Nellis Air Force Base. At higher levels of government, cooperation
    between the U.S. and Saudi Arabia is likely to be enhanced by the
    November 2005 launching of a U.S.-Saudi Strategic Dialogue by Secretary
    of State Rice and Saudi Foreign Minster Saud.
    C. Arabian Gulf States
        The Arabian Gulf states of Kuwait, Bahrain, Qatar, UAE, and Oman
    are important partners in our effort to maintain stability in the Gulf
    and in our ability to conduct operations across the region. Kuwait
    remains host to the Combined Forces Land Component Command and serves
    as the primary staging point for our forces and equipment rotating in
    and out of Iraq. Kuwait's steady support for coalition efforts in Iraq
    has been essential.
        Bahrain serves as the home to U.S. Naval Forces CENTCOM and the
    United States Fifth Fleet. The continuing development of its Counter-
    Terrorism Operations and Intelligence Center has helped several
    agencies of the Bahraini Government focus on and plan for responding to
    potential terrorist attacks. Qatar provides excellent host nation
    support to CENTCOM's Forward Headquarters and the Combined Forces Air
    Component Command's Combined Air Operations Center. They also hosted
    Eagle Resolve 05, a Gulf regional disaster management exercise, which
    proved to be an effective way to deepen regional cooperation.
        The UAE promotes regional cooperation and combat effectiveness by
    hosting air exercises at its Gulf Air Warfare Center (AWC). The AWC is
    building multilateral cohesion and air warfare interoperability among
    the Gulf countries. The Unites Arab Emirates is a valued partner in
    regional security and aggressively supports our efforts against global
    terrorist networks. Oman, perhaps the most strategically located state
    in the region, partners with U.S. forces in exercises and other
    activities that help keep global commerce flowing. We work with Oman to
    develop forces capable of controlling its extensive coastline and
    borders.
        The terrorist threat throughout the Gulf remains high. We have
    worked closely with governments and security forces in the region to
    disrupt al Qaeda's stated desire to attack the region's oil
    infrastructure. Continued investment in security cooperation programs
    and assistance improves the capabilities of allied Gulf nations,
    enables them to provide for their own security, and allows them to
    continue to provide critical contributions to Coalition activities
    throughout CENTCOM's AOR. As always, our Arabian Gulf partners and the
    United States cooperate out of mutual interest, regional stability, and
    a desire to disrupt and prevent terrorist activity.
    D. Egypt
        Egypt remains the traditional leader of the Arab world and a key
    coalition ally in the fight against extremism in the region. In 2005,
    Egypt hosted a reconciliation conference for Iraqis who sought to
    overcome ethnic and sectarian differences. Egypt continues to provide
    critical support to the Palestinian-Israeli peace process. On the
    border with Gaza, Egyptian forces have helped to preserve stability in
    the aftermath of Israel's withdrawal from the Gaza strip.
        U.S. military assistance to Egypt continues to produce positive
    results. The $1.3 billion we annually provide to Egypt for the
    procurement of U.S. equipment, together with an additional $1.2 million
    annually in IMET funding, have helped Egypt modernize and
    professionalize its armed forces and serve as a model for regional
    security and stability. In 2005, Egypt hosted the Bright Star exercise,
    the largest military exercise in the CENTCOM AOR, in which 12 nations
    and over 30,000 troops participated. Egyptian support for this
    important exercise, which emphasized interoperability, was significant.
    The Egyptian military also continued its contribution to the coalition
    effort in Afghanistan, providing an Egyptian field hospital and
    donating 16,000 AK-47s to the Afghan National Army.
        Egypt's position as protector of the Suez Canal and gateway to the
    Middle East has contributed greatly to the coalition efforts in both
    Iraq and Afghanistan. Hundreds of Suez Canal transits and thousands of
    overflights have expedited our military operations in the AOR. We look
    forward to continuing cooperation with Egypt on ways to bring stability
    to the region and continuing our strong relationship with the Egyptian
    security services. Like other nations in the region, Egypt experienced
    a series of damaging terrorist attacks in 2005. Egyptian
    counterterrorist and other security forces remain vital in working to
    defeat this common enemy.
    E. Jordan
        Jordan remains an invaluable and increasingly influential regional
    partner in the fight against extremism and in the achievement of
    regional stability. King Abdullah II is a leading voice for moderation
    and tolerance in the Arab world. The country's strategic location,
    influence, and well-developed security establishment give Jordan a
    regional voice of proportions much greater than its size would
    indicate. Jordan's highly trained and professional armed forces
    represent a positive example for other regional militaries. As economic
    reforms made in the late 1990s continue to generate respectable growth
    rates, Jordan's regional influence will increase.
        Jordan has contributed significantly to our efforts throughout the
    region. For example, Jordan hosts important training schools for Iraqi
    military forces, air traffic controllers, and aviation inspectors.
    These programs are major elements of our strategy to build competent
    and capable ISFs and may provide opportunities for broader training to
    help professionalize other regional security services.
        The November 9, 2005, Amman suicide bombings by al Qaeda that
    murdered scores of Jordanians have had a deep effect on their views of
    terrorism and al Qaeda. It is clear that our programs of military and
    economic assistance remain vital. Jordan uses our assistance to
    strengthen its economy, modernize its armed forces, and improve
    regional efforts to defeat extremism. We will continue to focus our
    security assistance with Jordan to develop its peacekeeping and Special
    Forces capabilities, and to build intelligence sharing and personnel
    exchange programs in support of CT efforts.
    F. Lebanon
        With the departure of Syria's forces from Lebanon, the country has
    an opportunity to move in the direction of greater security and
    stability. The Lebanese and international outrage over the
    assassination of Prime Minister Rafik Hariri sparked a series of
    dramatic events: massive street protests, the withdrawal of Syrian
    forces, and the election of a parliament that is no longer beholden to
    Syria. Despite these positive developments, the situation in Lebanon
    remains tense, with Syrian intelligence activity continuing. There is
    continued concern about the delays in disarming militias, such as
    Hezbollah, as called for by U.N. Security Council Resolution (UNSCR)
    1559, and the tacit acceptance by some elements of the Lebanese
    Government of Hezbollah's retention of its weapons, even as it
    participates in the political process. The continued existence of
    sectarian militias means that Lebanon remains at risk of internal
    conflict.
        It is in the interest of the United States that Lebanon be stable
    and free of Syrian influence, and that its security forces are able to
    control its borders and maintain domestic order. We have planned a
    growing security assistance program with Lebanon that can help in
    fulfilling these goals. Our IMET program trains Lebanese officers at
    U.S. military schools. In 2006, we will work to further develop our
    support for and relationship with Lebanon's security forces.
    G. Central Asian States
        The Central Asia region is undergoing significant change, with
    Kyrgyzstan and Kazakhstan completing elections this past year,
    Tajikistan and Turkmenistan remaining stable, and Uzbekistan isolating
    itself from broader engagement. In a region at the crossroads between
    Europe and Asia, the stability and further development of
    transportation and energy networks is increasingly important for global
    economic health. CENTCOM continues to work to deepen our engagement
    with the states of Central Asia, assisting the security forces in the
    region to improve border security, CT and counter-narcotics
    capabilities, as well as enhance military professionalism.
        Tajikistan, Kyrgyzstan, Kazakhstan, and Turkmenistan remain
    important partners, while our cooperation with Uzbekistan has waned in
    light of our departure from Karshi-Khanabad Airfield (K2). Kyrgyzstan's
    continued support for U.S. basing at Manas is an important part of
    sustaining operations in Afghanistan, as have been the overflight
    rights allowed by the other countries of Central Asia. Tajikistan's
    excellent support of ISAF logistics efforts has also been instrumental
    in stabilizing Afghanistan.
        Radical Islamic extremism and terrorism, the drug trade, and
    corruption threaten regional stability and challenge the governments in
    the region. CENTCOM stands ready to help these governments address
    these transnational challenges through increased training and regional
    cooperation. Organized crime and extremism from groups such as al Qaeda
    and the Islamic Movement of Uzbekistan make threats of violence and
    intimidation a real concern for many. U.S. troop presence in the
    region, whether through training exercises or at supporting bases for
    Afghanistan, helps give the people of the region confidence to resist
    such intimidation.
        With a rapidly growing economy and increasingly professional
    military, Kazakhstan continues to emerge as a leader in the region. The
    pace and scale of its military reforms have been impressive.
    Kazakhstan's engineering troops continue to perform with distinction in
    support of Operation Iraqi Freedom (OIF). CENTCOM is assisting other
    countries, such as Kyrgyzstan and Tajikistan, in undertaking programs
    of military reform designed to increase the professionalism of their
    armed forces.
        Despite its challenges, Central Asia is a region with much promise.
    The potential for significant economic growth throughout the region, to
    include Afghanistan, is substantial if the governments of the region
    maintain a focus on constructive economic and political reforms and
    stamping out corruption. Through military-to-military engagement,
    exercises, and training, we will continue to emphasize regional
    cooperation to help these countries take advantage of the growing
    opportunities in the region, and address the transnational threats that
    can undermine them. It remains important for the larger powers in the
    region to work cooperatively in Central Asia to achieve security goals.
    Nineteenth Century Great Power Games do nothing to enhance regional
    security.
                               ix. iran and syria
        While the United States cooperates as a partner with the vast
    majority of the countries in the CENTCOM AOR to combat terrorism and
    extremism and provide essential stability, Iran and Syria stand out for
    their lack of cooperation. The actions of these repressive regimes have
    consistently been contrary to achieving stability in the broader
    region.
    A. Iran
        The situation with Iran is tense, and the possibility for
    miscalculation with U.S. forces remains high. CENTCOM forces in the
    region continue to watch Iran carefully to prevent any destabilizing
    activities that contribute to internal Iraqi or Afghan frictions, or
    threaten regional stability. Iran's quest for nuclear weapons
    capability is particularly troubling. Iran seeks ``creeping normalcy''
    that will permit international acceptance of its nuclear fuel cycle,
    while buying time for potential covert nuclear activities. We believe
    that Iran's declared objective of self-sufficient nuclear fuel
    production is coupled with the ulterior goal of weapons production.
    Iran's withdrawal from the International Atomic Energy Agency's (IAEA)
    additional protocol or the NPT could decrease the timeline necessary to
    produce a weapon. A nuclear-armed Iran would dramatically increase
    instability in the region and could pressure other countries in the
    CENTCOM AOR to consider acquiring such weapons.
        Iranian-sponsored activities in Iraq continue to be unhelpful. Iran
    is pursuing a multi-track policy in Iraq, consisting of overtly
    supporting the formation of a stable, Shia Islamist-led central
    government while covertly working to diminish popular and military
    support for U.S. and coalition operations there. Additionally,
    sophisticated bomb making material from Iran has been found in IEDs in
    Iraq.
        While generally thought to be for defense, Iran continues to build
    a credible military capable of regional power projection. It has the
    largest military capability in the region and a record of aggressive
    military action in and around the Arabian Gulf. Its power projection
    capabilities stem primarily from its navy and ballistic missiles.
    Iran's military consists of over 350,000 personnel with an additional
    300,000 trained Reserve/Basij Forces that could be mobilized in times
    of crisis. The Iranian Armed Forces include two distinct, parallel
    military organizations--the Islamic Revolutionary Guards Corps (IRGC)
    and the Regular military forces. Each controls its own ground, naval,
    air, and air defense forces and equipment.
        In addition to defending against external threats, the IRGC also
    focuses on an internal security mission and is the lead Iranian agency
    for supporting terrorism. Competition between the IRGC and Regular
    forces for limited resources and competing chains of command make
    Iranian military intentions difficult to decipher. This heightens our
    concern for the potential for miscalculation with U.S. forces in the
    region.
        Iran's ground forces are arrayed across the country with the
    majority of combat power along the Iran-Iraq border. The Iranian navies
    continue their rapid growth. The IRGC Navy has been developed primarily
    for the Strait of Hormuz scenario in which Iran would attempt to
    ``internationalize'' a conflict by choking off oil exports through the
    Strait. To disperse large quantities of recently purchased small boats,
    high speed missile boats, torpedo fast attack craft, and midget
    submarines, Iran has embarked upon an expansion project for naval bases
    throughout its littoral. Asymmetric military strategies and naval force
    modernization, a key national priority, enhance Iran's capability for
    power projection in the region.
        The IRGC Air Force maintains control over most of Iran's ballistic
    missiles and rockets. The accuracy and reliability of its rocket
    systems vary, but Iran is capable of targeting all Gulf States, the
    Arabian peninsula, Israel, and U.S. and coalition forces in the region
    with little warning.
        In addition to Iran's conventional and ballistic missile
    capabilities, another lethal aspect of Iran's power projection is its
    ties to regional and global terrorism. Iran remains on the U.S. State
    Department's list of state sponsors of terrorism and provides extensive
    support to the Lebanese Hezbollah and several Palestinian rejectionist
    groups. Along with this support comes influence. Additionally, Iran's
    own intelligence elements are stationed throughout the CENTCOM AOR and
    beyond and are trained and prepared to execute terrorist attacks at the
    direction of Tehran.
        As the diplomacy surrounding Iran's quest for nuclear weapons plays
    out, CENTCOM will continue to vigilantly monitor Iran's conventional
    force posture and maintain a strong naval, air, and ground capability
    to deter Iran from attempts at further destabilizing the region.
    B. Syria
        Despite reports of stepped-up activities by Syria's security
    establishment to interdict foreign fighters moving into Iraq, Syria
    remains the central transit point for al Qaeda's foreign fighter and
    suicide bomber network, which is responsible for the deaths of
    thousands of Iraqi civilians. As a repressive authoritarian state, the
    Syrian Government has the capacity to do more to pressure the extremist
    network moving through its country. Moreover, it has done little to
    suppress the Iraqi Baathist insurgent and financial networks that
    continue to attack Iraqi Government officials, infrastructure, and
    military forces. Syrian support for Iranian meddling in Lebanon, and
    its own intelligence and intimidation activity in Lebanon, show Syria's
    establishment to be unwilling to play a constructive role in regional
    security.
        During 2005, the international community insisted that Syria fully
    cooperate in the UN investigation of the assassination of Prime
    Minister Rafik Hariri in which it appears that Syrian officials were
    complicit. Syria remains a designated state sponsor of terrorism,
    providing support to Palestinian terror groups and others. Syria also
    maintains a chemical weapons and ballistic missile capability that is
    one of the most lethal in the region. Syria's conventional forces,
    while much-deteriorated over the past decade, nevertheless represent a
    capability to interfere overtly with the security of its neighbors. As
    with Iran, CENTCOM tracks and monitors Syrian capability and retains
    sufficient combat power to deter aggressive Syrian behavior.
                          x. critical mission enablers
        Several critical mission enablers provide CENTCOM troops ways to
    enhance operational success. These include a strong coalition of
    allies, interagency coordination, intelligence, logistics, strategic
    sealift and inter- and intra-theater airlift, communications,
    personnel, flexible spending, and strategic communications.
    A. A Strong Coalition
        Our coalition partners continue to make essential contributions to
    successes throughout the region. The combined participation, efforts,
    and coordination of over 90 nations send a clear message about the
    global importance of operations against extremism and terrorism. We
    will continue to draw on our allies' substantial strengths as we
    further develop the capabilities of the Iraqi government and its
    security forces, while reshaping the coalition as the ability of the
    Iraqis to provide their own security increases. Similarly, as Afghan
    security capacity grows and NATO-ISAF's role increases, the OEF
    coalition will adapt.
        To fully optimize coalition operations, we must minimize the
    operational and informational seams between national forces, while
    increasing the flexibility of U.S. policies to reflect new and unique
    information sharing requirements, particularly with regard to
    intelligence. The United States will continue to explore ways to expand
    the scope of the coalition, further internationalizing efforts
    throughout the region while maintaining an adaptive command structure
    and force posture as international roles change. As America and our
    partners continue to pressure al Qaeda and associated extremists, it is
    important to emphasize the global scope and duration of this threat and
    endeavor to create a coalition with a long-term horizon, supported by
    U.S. and partner nation interagency organizations.
    B. Interageny Coordination
        Success against the extremists and terrorists who threaten our
    Nation requires the integration of all instruments of national power at
    all levels--tactical, operational, and strategic. At the tactical
    level, our Joint Interagency Task Forces have successfully leveraged
    national assets on successful missions to disrupt terrorists' finances
    and kill and capture terrorists and former regime leaders in Iraq. PRTs
    in Afghanistan, with representatives from the military, the State
    Department, United States Agency for International Development (USAID),
    and United States Department of Agriculture (USDA), have been critical
    to developing and expanding the capabilities of the Afghan Government,
    while similar interagency teams are beginning to operate to some extent
    in Iraq. We will continue to explore new models to better synchronize
    interagency efforts throughout the region and work to expand the
    operations and agencies in CENTCOM's Joint Interagency Coordination
    Group.
        Substantially more work, however, is needed for increased
    interagency coordination at higher levels of government and for
    insuring unity of effort. We need significantly more non-military
    personnel in the CENTCOM AOR with expertise in areas such as economic
    development, civil affairs, agriculture, and law. As the focus of
    operations in the CENTCOM theater has shifted away from sustained
    combat to counterinsurgency, security force training, and economic
    development, individuals with such expertise have become increasingly
    important. Even a small number of individuals from the State
    Department, USDA, or USAID on the ground and working closely with
    CENTCOM forces can have dramatic impacts on operations throughout the
    region. The long-term commitment of fuller interagency participation in
    the region is essential.
    C. Intelligence
        Precise intel-driven action is a central component to defeating
    insurgents and terrorists. Our ``find, fix, finish'' targeting
    equation, while the best in the world, is out of balance. We have
    plenty of ``finish'' forces, but insufficient ``find and fix'' assets
    to locate an asymmetric, hidden enemy. Intelligence, planning, and
    operations must be tightly fused together without gaps and seams to
    enable agile, decentralized friendly action. Close interaction with our
    partners from the Central Intelligence Agency, National Security
    Agency, Federal Bureau of Investigation, and other agencies has helped
    to secure timely and accurate intelligence necessary for successful
    operations. However, limitations in several of our key capabilities
    continue to pose challenges.
        A common information network that is accessible and available to
    all of our Coalition and agency partners is critical to battlefield
    success. Our experiences highlight the importance of an established
    interoperability standard for all intelligence systems that can
    function in a joint and combined environment. Solutions for this are
    hardware, software, and policy based.
        Current theater collection capabilities are insufficient to meet
    our large and growing requirements. There is a need for persistent
    surveillance which provides actionable intelligence for our forces.
    Unmanned Aerial Vehicles (UAVs) such as Predator and Global Hawk offer
    some solutions to persistent surveillance. While UAVs have transformed
    the battlespace, and the demand for their capabilities at all echelons
    is significant, we realize the need to develop an integrated
    architecture of many sensors to support operational units.
    Intelligence, surveillance, and reconnaissance (ISR) activities support
    all types of operations, to include developing targets, providing
    overwatch for convoy patrols, and monitoring main supply routes for IED
    emplacement.
        Manned aircraft are also critical to our gathering of timely and
    accurate intelligence. The U-2 aircraft has the unique capability of
    providing flexible, long-dwell coverage over large areas, making it
    indispensable for CENTCOM. Sustained moving target indicator coverage,
    primarily contributed by Joint Surveillance Target Attack Radar System
    (JSTARS), helps to shape border security operations and interdict enemy
    movements. The P-3 Maritime Patrol and Reconnaissance Aircraft are
    important in monitoring oil infrastructure security, shaping
    battlefield operations, and interdicting enemy movements in the
    maritime battlespace.
        Finally, we continue to experience a significant shortage of
    intelligence specialties such as analysts, translators, interrogators,
    and interpreters. We are working with the services to develop more of
    these specialists, but the supply is well short of demand for CENTCOM-
    identified requirements. Among other things, linguists are needed to
    fuse collected signals intelligence and HUMINT, particularly in high-
    demand languages such as Arabic, Farsi, Dari, and Pashtun.
    Counterintelligence (CI) and HUMINT specialists are needed to fully
    exploit captured operatives, foreign fighters, and documents. Investing
    now in these critical intelligence specialties, many of which take
    years to mature, will better prepare us for the long conflict ahead.
    D. Logistics
        Strategic airlift, fast sealift, prepositioned equipment sets, and
    access to bases with critical infrastructure are the key logistics
    components to operational flexibility and success for the widely
    diverse requirements across the CENTCOM AOR. The timely deployment,
    equipping, and sustainment of units engaged in combat operations remain
    our primary logistics focus.
        We continue to work with the Joint Staff, DOD, the Department of
    State, and partner nations to ensure continued access to aerial and
    seaport infrastructure necessary to facilitate the rapid and efficient
    flow of equipment, troops, and sustainment in support of ongoing and
    future operations.
        The CENTCOM Deployment and Distribution Center continues to mature
    and provides critical unit deployment and sustainment information that
    enables timely and effective distribution operations across the AOR.
    CENTCOM is working to transform and enhance its theater logistics
    infrastructure and processes to provide seamless end-to-end visibility
    for all phases of operations. Our intent is to leverage ongoing DOD-
    wide logistics transformation initiatives in order to ``right size''
    the theater logistics force.
    E. Strategic Sealift and Intra-Theater and Inter-Theater Airlift
        Strategic airlift and surge sealift capacity are essential to the
    CENTCOM strategy. Our warfighting partnership with United States
    Transportation Command (USTC) continues to provide that capability.
    Ongoing CENTCOM operations and future plans rely heavily on a rapid
    flow of forces and materiel into the theater to meet an array of
    challenging contingencies. For example, the immediate and substantial
    humanitarian response to the earthquake in Pakistan could not have
    occurred without such capabilities. In every major conflict fought in
    the AO, large numbers of troops and equipment required substantial
    airlift, sealift, and time to move.
        As of February 2006, over 2.9 million personnel and 149 million
    square feet of cargo have been transported into the CENTCOM AOR in
    support of OEF and OIF. Sealift provided by USTC's Military Sealift
    Command and its commercial partners is the primary means for the
    transportation of equipment and sustainment supplies into the AOR. C-17
    aircraft, together with the air refueling tanker fleet, form the
    backbone of the strategic airlift supporting CENTCOM operations. The C-
    17's performance and versatility, in particular, have been outstanding.
    Current sea and airlift, when linked to forward deployed equipment sets
    and pre-staged shipping give CENTCOM considerable operational
    flexibility.
    F. Communications
        Flexible, high capacity, interoperable communications systems are
    essential to operations throughout the theater. CENTCOM systems are
    pushed to their limits daily, and requirements continue to increase
    dramatically. Many of these requirements are satisfied by costly and
    vulnerable commercial services.
        Our Joint C4 architecture needs to be built from the bottom up. We
    spend significant time, energy, and money on patching together the
    different systems from separate Services. This is an inefficient way to
    leverage what should be a significant comparative advantage in decision
    making capability over the enemy. Due to a lack of common secure
    network standards for information assurance, CENTCOM uses many
    applications and systems that have proprietary standards. These
    introduce vulnerabilities into our networks. Hackers and malicious code
    activity pose a constant threat of system exploitation and data-
    exfiltration. While CENTCOM lacks adequate monitoring tools to manage
    the theater network, we have implemented numerous processes and
    procedures to mitigate network risks.
        U.S. and coalition forces depend on strategic and tactical
    satellite communications due to immature terrestrial capabilities in
    theater. Intra-theater communications are critical for sharing
    persistent surveillance and intelligence data, and total bandwidth
    requirements continue to grow at an exponential rate. However, end of
    life-cycle and ongoing degradation of Military Satellite Communications
    (MILSATCOM) constellations threaten to limit our capabilities. We need
    MILSATCOM that provides transformational capabilities to rapidly
    disseminate time-sensitive instrumented sensor technology data which
    can provide our deployed forces with reliable ``comms-on-the-move''
    capabilities regardless of location and interoperability between U.S.,
    Coalition, and host nation communication systems.
        New technology, to include new counter-IED technology, and a
    reliance on wireless systems increase the need for comprehensive
    spectrum management. We must achieve and maintain ``spectrum
    superiority'' by denying enemy access and ensuring that our systems
    operate in an interference-free environment. Because we lack automated
    capability to dynamically manage the spectrum at the tactical level, we
    must focus on training spectrum managers in all Services and equipping
    them with the right tools.
    G. Personnel
        The most important weapon in CENTCOM's arsenal is our people. The
    majority of CENTCOM forces are deployed forward in combat zones.
    Consequently, quality-of-life enhancements for deployed forces and
    families such as Combat Zone Tax Relief and Imminent Danger Pay are
    important and contribute significantly to our servicemembers' quality-
    of-life and morale. The Rest and Recuperation Leave Program continues
    to be a major success, serving over 290,000 troops to date. Special
    Leave Accrual has been important to our long-deployed servicemembers.
    The increase in the Serviceman's Group Life maximum coverage to
    $400,000 and the death gratuity increase to $100,000 for combat zone
    deaths contribute to the well-being of our service families.
        We continue to focus on policies that attract talented personnel to
    our headquarters and reward joint tours. We support full joint credit
    to qualified officers who serve a 1-year deployment to a CENTCOM joint
    task force headquarters. Additionally, to provide a more efficient
    environment for our Headquarters staff, we are working with the U.S.
    Air Force and DOD to conduct necessary refurbishment and expansion of
    our Tampa facilities.
        CENTCOM is coordinating with force providers to address high demand
    personnel requirements across the theater. As noted above, in 2006, we
    will continue to experience a significant shortage in intelligence
    specialties, linguists, and CI/HUMINT experts. Additional funding for
    contract support might meet immediate requirements in these areas.
    However, there is an enduring need for greater service school
    generation of such specially trained personnel who play a vital role in
    counterinsurgency and counterterrorist operations throughout the
    theater.
    H. Flexible Spending Authority
        CENTCOM relies on continued congressional support in providing the
    flexible legislative authorities and funding necessary to fight our
    enemies throughout the AOR. The Commander's Emergency Response Program
    (CERP) remains the most direct and effective non-kinetic tool available
    to our commanders in the counterinsurgency fight. Providing a highly
    agile means to meet immediate needs for civic cleanup, potable water
    and sanitation, and agricultural projects, CERP builds good-faith
    relationships with the Iraqi and Afghan people. For fiscal year 2005,
    $718 million in Iraq and $136 million in Afghanistan was used by U.S.
    and coalition forces to assist in reconstruction. Additional funding in
    the supplemental is necessary for this important program. At the same
    time, funding for the highly-successful DOD Rewards Program remains
    important. This program has yielded information leading to the capture
    of many terrorists and insurgents. A 400 percent increase in the number
    of rewards paid from fiscal year 2004 to fiscal year 2005 demonstrates
    strong local support for this program. Additionally, Coalition Support
    Funds (CSF) and the Section 9009 authority allowing DOD to provide
    transportation and sustainment support to selected Coalition countries
    remain essential to building and maintaining our Coalition
    partnerships.
        Continued congressional support is also needed to establish and
    maintain infrastructure and facilities throughout the theater.
    Additionally, continuation of contingency construction authority is
    essential to providing the flexibility to meet infrastructure
    requirements for our commanders.
    I. Strategic Communications
        The effective communication of CENTCOM's vision of partnership and
    a stable and secure region to a global audience remains a key mission
    enabler. Our communications strategy must be closely coordinated with
    interagency counterparts to effectively convey the United States
    Government's intentions, accomplishments, and goals. But it is also
    essential that the USG work to expose the enemy's ruthless tactics and
    dark vision for the future. Increased interagency coordination and
    resources will significantly enhance our ability to win the war of
    ideas.
                              xi. strategic issues
        The following strategic issues are highlighted because they
    significantly impact both our current and future ability to fight wars
    and defeat the terrorists and extremists who threaten our country.
    A. Counter-IED and Force Protection
        Our enemies understand that they cannot confront us face-to-face
    and survive, so they increasingly rely on IEDs and suicide bombers to
    attack our forces, our partners, and civilians. IEDs are the single
    greatest source of our casualties and remain the enemy's most effective
    weapon. They are the perfect asymmetric weapon--cheap, effective, and
    anonymous. The enemy intends to use IEDs and suicide bombers to achieve
    strategic effect, creating casualties and media impact to promote the
    perception of insecurity and erode public support for the mission. IEDs
    have proliferated and become increasingly lethal, with technology and
    tactics available on the internet. They have been used in Iraq,
    Afghanistan, Pakistan, Egypt, and Saudi Arabia.
        Force protection remains a top priority throughout CENTCOM's area,
    and American commanders in the region are aggressively engaged in
    programs to safeguard our forces, their vehicles, their bases, and
    their living areas. These programs include providing individual body
    armor to every soldier and civil service employee in Iraq and
    Afghanistan. We also continue to produce up-armored high-mobility
    multi-wheeled vehicles through the assistance of supplemental funding;
    over 10,000 such vehicles have been delivered to the Iraq theater.
    Further, we have fielded thousands of IED counter-measure devices,
    employed innovative counter-IED technologies, enhanced training, and
    focused our intelligence efforts on the IED challenge.
        While we have done much to counter the enemy's use of IEDs,
    especially in Iraq, significant work remains including much that
    resides beyond the realm of CENTCOM. The Joint IED Defeat Organization
    headed by retired General Montgomery Meigs is a good beginning to
    mobilize our country's vast resources to address this problem, but
    national efforts should build upon, not end, with this office.
    Government and private sector research and development must be
    marshaled against this threat. Such an effort is necessary to
    comprehensively counter this serious threat to our troops that will
    undoubtedly spread beyond the CENTCOM region.
    B. Contesting the Virtual World
        Much of this statement has emphasized the need to prevent al Qaeda
    and associated movements from gaining physical safe havens from which
    to conduct military training, propaganda operations, and plan future
    terrorist attacks. Whether with smart bombs or SOFs, the U.S. military
    has the capability to destroy such safe havens as long as we have
    target information on them. We and many of our partners have done this
    in Afghanistan, Iraq, and other places around the globe. That is why
    the enemy is much more reluctant to mass in physical safe havens for
    very long. Al Qaeda knows that they are vulnerable in such areas.
        But there are other safe havens used by the enemy that are truly
    safe. These are places where al Qaeda also conducts military training,
    propaganda operations, and plans for future terrorist attacks. It is
    also where they do most of their fundraising. It is the virtual world.
    This safe haven of Web sites and the internet is proliferating rapidly,
    spreading al Qaeda's hateful ideology well beyond its birthplace in the
    Middle East. Parts of Europe, for example, have now become intellectual
    hubs of extremist Islamic thought, largely because of the internet and
    lax government policies regarding extremist activities. Yet we have
    done little to contest these safe havens, even though they are at least
    as dangerous to our security as the enemy's physical sanctuaries have
    been.
        We recognize that this is a contentious matter with a variety of
    important issues at stake. CENTCOM does not advocate ``shutting down
    the internet,'' but we must recognize that failing to contest these
    virtual safe havens entails significant risk to our Nation's security
    and the security of our troops in the field. Should internet servers
    based in America be allowed to enable terrorists to show the bloody
    decapitation of an innocent American citizen to tens of thousands of
    extremists worldwide? As a government, we need to come to terms with
    the issues raised by such a question.
    C. Detainees
        An essential part of our combat operations in both Iraq and
    Afghanistan entails the need to detain enemy combatants and terrorists.
    Ultimately, detainees are best handled by host governments, but at the
    current time neither Iraq nor Afghanistan has the institutional
    capacity to accomplish such tasks. Military resources continue to be
    heavily taxed by guarding, caring for, and processing detainees.
        By following up on cases of suspected, alleged, or actual detainee
    abuse, most notable at Abu Ghraib, we continue to make improvements
    regarding detainee operations. We have expanded senior leader oversight
    across the theater, intensified training of personnel, and conducted
    frequent inspection visits. But the military has less control over the
    next steps, which involve getting key states of the region to take
    responsibility for the arrest, detention, trial, and incarceration of
    terrorists and criminals. The biggest impediment to making progress on
    the detainee issue is the lack of an institutional capacity--prisons
    and adequate justice systems based on the rule of law--to process and
    confine criminals and violent terrorists. A coordinated approach among
    United States Government and international agencies with the relevant
    expertise to accelerate efforts to help Iraq and Afghanistan build the
    legal and judicial institutions is needed. The rule of law must be
    applied in both Iraq and Afghanistan in order for successful
    counterinsurgency activities to bear fruit.
                             xii. joint warfighting
        The essence of CENTCOM's mission is joint warfighting. All
    operations are enabled by joint capabilities, as are our major
    headquarters. It is difficult to imagine fighting other than as a joint
    team. It is important that the Services increasingly train their
    soldiers, sailors, airmen, coastguardsmen, and marines in the same way
    they will fight--jointly. As CENTCOM heads toward its sixth year of
    sustained combat operations, we have had successes and setbacks, and
    have tried to learn from them. A few are worth emphasizing.

             Precision Warfare. Precision in timing and location
            are more important than firepower, mass, and maneuver. All our
            forces operate today with a degree of precision that was the
            hallmark of only our SOFs just a few years ago. Especially in
            counterinsurgency and counterterrorism campaigns, precision
            operations conducted by agile, flexible forces that can adapt
            while in contact are a key to success.
             Fusion of Intelligence and Operations. Precision
            operations are intelligence-driven. As noted above, we need to
            rebalance our ``find, fix, finish'' targeting cycle. We need to
            improve our intelligence capabilities across the spectrum,
            including ISR platforms, linguists, analysts, and CI/HUMINT
            specialists. Although we have made dramatic strides in ops-
            intel fusion, we need to continue to make advances in this
            critical area, particularly at the conventional force level.
             Joint Command and Control. We have learned that
            establishing early the appropriate command and control
            structures across the theater is a key to effective operations.
            The three Joint Task Forces in CENTCOM's theater and our five
            component commands provide the expertise for planning,
            executing, and integrating the diverse array of complex joint
            and multinational operations we conduct.
             Asymmetric Warfare and the Lack of Neutrality on the
            Battlefield. We are in an era of asymmetric warfare. What is
            less understood is that the historical idea of neutrality on
            the battlefield does not exist in the mind of the ruthless
            enemy we fight. Al Qaeda extremists target U.N.,
            nongovernmental organizations (NGOs), and aid workers, as well
            as contractors, and anyone else who does not accept their
            fanaticism. This new reality on the battlefield may require
            deeper cooperation between the NGO community and coalition
            forces. NGOs do not have to give up their neutrality, but they
            need to be mindful of the increased risks they face on the
            battlefield.
             Respect and Knowledge. Much of the broader struggle in
            the region is about respect. The vast majority of the people in
            the region want the same things that most Americans do--an
            opportunity for a better life for their families and children.
            Compared with the overall population, the number of extremists
            in the region is small, the number of terrorists even smaller.
            As emphasized throughout this statement, we are developing
            strong partnerships with the peoples and governments of the
            region to together defeat al Qaeda and associated movements. To
            bolster this strategy, we should undertake many more cultural
            and educational exchanges between Americans and citizens from
            the Middle East. The more we understand and respect each other,
            the better. We must also mobilize our country's resources, both
            military and civilian, to better understand the region and the
            extremist enemies we face. During the Cold War, the U.S.
            military had tens of thousands of experts on the Soviet Union,
            the Warsaw Pact, Russian language, and the ideology of
            communism. Today, those who know about Islam, the Middle East,
            speak Arabic, and understand al Qaeda's perverted ideology are
            far fewer in number.
             Adapting Our Cold War Structures. The essential
            ingredient for all our battlefield success is the quality of
            our young servicemembers and leaders. We must retain this force
            that enables the joint team with their flexibility,
            adaptability, and professionalism. Beyond this, however, we
            need to adapt our authorities, organizational structures,
            doctrine, training, and equipment to confront the 21st Century
            battlefield. In CENTCOM we say ``it takes a network to defeat a
            network,'' meaning that defeating al Qaeda requires us to
            rethink how we operate in Joint, interagency, and coalition
            teams. We have only begun this adaptation and it remains a
            priority for prosecuting this war effectively.
                                xiii. conclusion
        In 2006, the United States and its allies will seek to help the
    people of the CENTCOM region build upon the positive strategic
    developments that occurred in the theater during 2005. CENTCOM will
    remain fully committed to defeating extremist-inspired terrorism across
    the region. We will remain focused on helping the people and armed
    forces of Iraq and Afghanistan stabilize their countries, and providing
    assistance to Pakistan and Saudi Arabia that enables them to help
    themselves against their extremist threats. With our significant
    military capabilities throughout the region, we will work to deter Iran
    from threatening regional stability and security, and set conditions to
    continue the free flow of energy resources from the region. As always,
    we are mindful that it is the exceptional performance and courage of
    our troops in the field who make achieving these goals possible.
        With our numerous allies in the region, we are implementing a
    strategy based on partnership and shared interests to defeat al Qaeda
    and associated extremists throughout the region. Victory in this long
    war will come slowly and subtly, but we are winning. We will prevail,
    in the same way our country mobilized its vast resources, talented
    citizens, and global allies to face down the fascist and communist
    threats of the last century. The patience and support of the American
    people and Congress will be critical in bringing about this victory.

        Senator Inhofe. Thank you, General Abizaid.
        General Brown.

    STATEMENT OF GEN BRYAN D. BROWN, USA, COMMANDER, UNITED STATES
                       SPECIAL OPERATIONS COMMAND

        General Brown. Mr. Chairman, Senator Levin, distinguished
    members of the committee: It is an honor to appear before the
    committee today to report on our Nation's Special Operations
    Forces (SOFs). With your permission, Mr. Chairman, I will make
    some remarks and I have included a written posture statement
    for the record.
        It is an honor to be here with my good friend and fellow
    combatant commander General John Abizaid. I would also like to
    introduce the new SOCOM Senior Enlisted Adviser, a career
    Special Forces noncommissioned officer (NCO), Command Sergeant
    Major Tom Smith.
        This is the most dynamic and successful time in the history
    of SOFs across the spectrum of our missions. The nature of the
    enemy has changed significantly and so has United States SOCOM.
    The bottom line is SOFs are far more capable than at any time
    in their history, but not as capable as they will be as we
    continue to grow and focus on the global war on terrorism.
        Today we continue our increasingly important role of
    training, organizing, and equipping our forces as directed by
    Congress in the Nunn-Cohen Amendment and we are continuing to
    do it very well. But in addition we are also effectively
    accomplishing our global warfighting role. In the 2004 unified
    command plan, signed in March 2005, the President directed
    United States SOCOM to be the Department of Defense (DOD) lead
    combatant commander for planning, synchronizing, and, as
    directed, executing global operations against terrorist
    networks. These dual roles make SOCOM unique in the DOD.
        Simultaneously, we are managing the biggest deployment of
    SOFs in history--over 7,000 forces deployed today, with nearly
    90 percent of them in the CENTCOM AOR. For the United States
    SOCOM, that is big. The people of SOCOM are doing it all and
    they are doing it well. The proof is the great success we have
    had in CENTCOM and around the world.
        Terrorists find sanctuary in seams of societies and exploit
    ungoverned regions where nations are either unwilling or unable
    to stop terrorist activities. They are masters of information
    and are able to coordinate their efforts globally through a
    decentralized network. SOFs will continue to play an important
    role addressing security concerns in these ungoverned spaces
    and help build the capacity of our partner nations to defeat
    terrorism within their own borders.
        As this capacity builds, our partner nations will have a
    greater role in the war on terror. SOFs will work with our
    partner nations to find terrorists, disrupt and destroy their
    networks, deny them sanctuary and new recruits, and finally
    eliminate terrorism within their own borders. One area where
    this is evident is Iraq, where SOFs have selected and trained
    the Iraqi counterterrorist force (ICTF). In a little over a
    year, this force has become one of the best counterterrorist
    forces in the region. Just this month, the ICTF conducted their
    first brigade-level full mission profile hostage rescue of a
    captured Iraqi general. As in other nations, establishing and
    training effective counterterrorism forces will be critical to
    their future security.
        Since 2001 U.S. SOCOM has been the focus of at least five
    major studies, most recently the Downing Report, and have been
    mentioned in many, many more. The bottom line is they all say
    SOCOM is on the right track, supporting our troops and our
    future, that we have made impressive gains since 2001, that we
    have built the right processes, written the plans, and are
    synchronizing the DOD's global war on terrorism.
        But let me highlight: No combatant commander is waiting on
    a plan. They are all fighting al Qaeda and the terrorist
    networks around the world every day and having success. Our
    planning efforts will make it better.
        The 21st century has changed the battlefield on which we
    operate. Even the word ``battlefield'' does not necessarily
    apply. To meet the demands of the global war on terrorism,
    SOCOM, prior to the QDR, identified key areas for future growth
    in personnel and capabilities. Subsequently, the QDR validated
    our growth strategy, directed SOCOM to grow by nearly 13,000
    people, and we think in all the right areas.
        This includes five SOFs battalions, who are the key to our
    unconventional warfare capability. As highlighted in the
    Downing Report, our unconventional warfare capabilities have
    improved dramatically and we have a renewed emphasis on
    developing unconventional warfare skills for what we believe
    will in fact be a long war.
        The QDR increases also include growth in our Army Rangers,
    our Naval Special Warfare Command, significant increase in
    intelligence, surveillance, and reconnaissance capabilities,
    including signals intelligence, and the addition of a new
    Predator squadron in our Air Force Special Operations Command.
    Growth in our Theater Special Operations Commands, and dramatic
    growth in our civil affairs and psychological operations units,
    two forces that we see as critical enablers in the most
    important areas of our strategy in the global war on terror as
    they provide unique capabilities disseminating truthful
    information, helping to eliminate the underlying conditions
    that lead to terrorism.
        Three weeks ago we activated SOCOM's newest component, the
    Marine Corps Special Operations Command (MARSOC), which will
    eventually add 2,600 marines and key capabilities to SOCOM for
    the long-term global fight.
        To ensure we continue to grow well-qualified forces, keep
    the Special Operations standard, and get special operators to
    the battlefield rapidly, we have dramatically enhanced our
    training institutions. For example, prior to September 11 the
    John F. Kennedy Special Warfare Center had an average
    production of 350 Active-Duty enlisted students per year. To
    meet the critical need for SOFs in the global war on terrorism,
    Army SOCOM completely restructured the course in 2004. We added
    significant resources, increased the language requirement for
    graduation, and set a new goal of 750 students by 2006, an
    ambitious goal and one that we surpassed in 2005, graduating
    791 enlisted Green Berets, all at a higher standard of
    excellence than any previous graduates.
        This growth is vital. For the near future, aggressors would
    be foolish to take on our world-class Army, Navy, Air Force,
    and Marine Corps. Therefore they will use asymmetric warfare,
    and SOFs are your asymmetric capability. SOF-unique skills will
    be critical for the long-term fight.
        Today United States SOCOM is partnering with the unified
    combatant commanders, our allies, and the interagency to build
    a foundation for a world that will be inhospitable to
    terrorism. Our responsibilities to train, organize, and equip
    SOFs, when combined with our authorities to lead the plan for
    the global war on terrorism, make SOCOM unique.
        I want to thank you, the members of the Senate Armed
    Services Committee, for your continued support of our soldiers,
    sailors, airmen, and now marines, and our great DOD civilians
    and our SOCOM families. The support of this committee,
    including your field visits and those of your staffers, and the
    support of the Secretary of Defense help ensure United States
    SOCOM remains the world's most capable special operations
    force. I look forward to answering your questions. Thank you.
        [The prepared statement of General Brown follows:]

        Senator Inhofe. Thank you, General Brown and General
    Abizaid, for your excellent opening statements.
        Since we only have four people here--I think we probably
    will have more--we will start our rounds at 8 minutes, and
    perhaps when the chairman gets here he might want to adjust
    that.
        General Abizaid, I try to listen to criticisms here and
    then go back to my own experiences in my trips to Iraq and to
    the AOR. It seems as if I have ended up in Fallujah more than
    anyplace else. During the last election I was there with the
    ISFs a day before the scheduled election and they were voting
    so we got a lot of testimonials. I talked to a very large
    number of them and along with the marines that were responsible
    for training them.
        What I keep hearing about, not just from the marines there
    but also from the Army, is the high quality of training that
    they are able to absorb. One of them told me it is almost like
    training Americans. Of course, you do not hear that here. But
    the quality of the trained and equipped ISF seems to be really
    good, and they have a great sense of pride about their
    accomplishments and their level of training.
        Would either of you care to talk about, very briefly, the
    quality of training that they are able to assume?
        General Abizaid. Thank you, Senator Inhofe. I believe that
    the quality of the ISFs and the armed forces in particular is
    good. By regional standards it is very good. In the aftermath
    of the Samarah bombings, the Iraqi army in particular performed
    its mission in an admirable way. It gave General Casey and
    General Dempsey a lot of confidence that even under the
    greatest sense of provocation they could perform their duties
    well. They are certainly progressing. They are certainly
    stronger than they were last year, and we believe that they
    will continue to move forward.
        Currently, Senator Inhofe, that is what we call battle
    space, the area in which a commander has freedom of action, we
    have 2 Iraqi divisions, 13 brigades, and 49 battalions in
    charge of their own battle space, which is double what it was
    last year, and it did not even exist several years ago.
        That our commanders and Iraqi commanders are confident
    enough to be doing that, shows that our transitional strategy
    to shift the focus of counterinsurgency operations lead to the
    Iraqis is being successful. Now, having said that, I think it
    is very important that people understand that the confidence of
    the ISFs is derived from their confidence in their own
    government. It is so important that, as we go through this
    period of the formation of a government of national unity, they
    continue to have confidence that a legitimate government will
    emerge and move Iraq towards the stability and the prosperity
    that they know can be achieved.
        Senator Inhofe. General, I will be leaving tonight for my
    11th trip over to the AOR. When I first met this General Madhi,
    he was the brigade commander in Fallujah. He had, however, been
    a brigade commander for Saddam Hussein at one time. He hated
    Americans but then turned around and, after embedded training,
    he became one of the big fans of our troops and our abilities.
        It is my understanding that he was transferred to the
    eastern part of Baghdad and is in charge of security there.
    When I was there last, the entire eastern third of Baghdad was
    under their command in terms of providing the security. Is that
    fairly accurate today?
        General Abizaid. Parts of it are. I cannot be specific
    about where he was, compared to this time last year, but I
    think about 40 percent of Baghdad is in the hands of Iraqi
    commanders.
        Senator Inhofe. That is the point I am trying to get, not
    necessarily just that particular general.
        The other thing I would not ask you to respond to, but it
    is just an observation I got from talking to the people in the
    field over there, is that we need to get to the point where
    they have what would be equal to about 10 divisions of trained
    and equipped ISFs for them to assume their own security, which
    would be about 325,000 trained and equipped Iraqis. Right now
    we are somewhere around 200,000 as I understand.
        I will not ask you if you agree with these officers and
    enlisted people in the field, but do you think they may be
    fairly close to pretty accurate in their assessment of at what
    point they will be able to provide their own security?
        General Abizaid. The ISFs are pretty much developing along
    the time line that General Dempsey has laid out. There will
    certainly continue to be more and more Iraqi forces that secure
    more and more battle space. Obviously, we want to go from where
    Multi-National Force Iraq was in the lead for
    counterinsurgency, to Iraqi military forces and then to Iraqi
    police forces.
        Now, General Casey has emphasized the need this year to
    really concentrate on police training. Ultimately, the
    insurgency is best fought by police forces over time and it is
    our view that we have a lot of work to do in the police forces.
    That having been said, our embedded training teams with the
    Iraqis, I agree with their assessments, and I agree with
    General Dempsey's assessments, that the force has a high
    quality, a high dedication, and they have performed well. There
    are always pockets in which you have to look for improvement
    and we still need to further develop the logistics capability
    and the command and control capability of the ISFs, and
    certainly we need to help the Iraqis develop capacity within
    the Ministry of Defense and Interior in order to have effective
    command and control.
        While we have made great progress, there is still a lot of
    work to be done. I am confident that General Casey and General
    Dempsey are on the right track to turn over more and more
    counterinsurgency responsibilities to the Iraqis this year.
        Senator Inhofe. I remember General Chiarelli talking about
    the advantages of the Commanders' Emergency Response Program
    (CERP) and the fact that they can do so much more for the same
    dollar if they are able to respond immediately to the needs
    that they see in the field. Do you feel that is coming along?
    Do you think we are a little short on our funding of that
    program? Where do you think we are with that?
        General Abizaid. Sir, I looked at where we are from what
    was in the budget and the supplemental and I think it is
    sufficient to meet the needs of commanders. The commanders in
    the field use that money. It helps to reduce frictions in the
    local areas that they operate in and it gets to some of the
    tougher areas. The CERP money has been essential. We appreciate
    your funding it.
        Senator Inhofe. I wanted to talk about training and
    equipping in the Horn of Africa, but I am running out of time.
    General Brown, could you tell us where the direct entry program
    for recruits is right now?
        General Brown. Sir, it is doing well. As we continue to
    grow, we have limited it to 1,500 applicants per year. We are
    getting absolutely tremendous applicants. We fill that up every
    year. We graduate about 20 percent of those people that start.
    It is called the ``18 X-Ray'' program. We have about 445 18 X-
    Rays in the field today. They are a little younger, but as part
    of bringing them in they are assessed for their age maturity
    and capabilities before they come in. Some will have college
    degrees and, quite frankly, just want to contribute to their
    Nation and want to do it through Special Forces.
        That program has been extremely successful for us. I think
    that added to some of the bonus things we are working on to
    keep the top end guys in, continuing to work the 18 X-Ray
    program, and recruiting from the field, are going to help us
    get to the numbers as we grow these SF battalions. The 18 X-Ray
    program has been very successful.
        Senator Inhofe. That is good. Specifically, the need for
    the Marine unit in there; would you please briefly tell us what
    that is and what their functions will be?
        General Brown. Sir, the Marine Corps component brings some
    capabilities that we did not have in our force structure or
    that we did not have sufficient capacity. There are three major
    components to the Marine Corps component, brigade-size units.
    The first one brings in some human intelligence (HUMINT) teams,
    and some signals intelligence (SIGINT), or radio reconnaissance
    people. It also brings in additional logistics and
    communications. It is an enabler brigade, and those
    capabilities will be available to all of Special Operations and
    to our Marine Corps component.
        It also has foreign military training teams that have a
    basic language capability. Right now it is French. The first
    one of those will deploy next month under SOCOM. They will go
    into the Pan-Sahel of Africa. They have the capacity to do
    basic training as a foreign internal defense mission, allowing
    us to focus the Green Berets and the SEALs, on more
    counterterrorism force type training. They will go in and run
    basic training for foreign militaries.
        Senator Inhofe. That is good.
        My time has expired. General Abizaid, you said ``In the
    Horn of Africa, we will continue to work to enable regional
    nations to strengthen their ability to resist extremist
    activity.'' I was going to talk about the train and equip
    provision and also the five African brigades. I have had an
    opportunity to talk to some of the people who will be training
    those, and that will be preparing for that time. So I will have
    some questions to submit to you for the record.
        Senator Levin.
        Senator Levin. Senator Reed has to be on the floor, so I
    will yield to him.
        Senator Reed. Thank you very much, Senator Levin.
        General Brown, General Abizaid, welcome, and also welcome
    to Command Sergeant Major Smith and the extraordinary NCOs that
    you exemplify. I will see General Brown down in Tampa on
    Monday. So let me concentrate on General Abizaid.
        General Brown. Yes, sir, I look forward to it.
        Senator Reed. General Abizaid, again thank you for your
    extraordinary service to the country. Both you and General
    Brown have done a remarkable job.
        We have been hearing for more than 2 years now about the
    need to vamp up our civilian complement to military forces--the
    Agency for International Development and the State Department--
    and frankly, nothing has happened. I am beginning to question
    whether this administration is serious about winning the fight,
    because a military posture can buy time, but truly establishing
    the capacity for the Government of Iraq, truly improving the
    economy and creating a stable country requires more than just
    military force. So what do we do to get more than three
    Provincial Reconstruction Teams (PRTs) deployed in that
    country? What do we do to create a situation where the civilian
    complement to your efforts will be as robust and as effective
    as your military forces?
        General Abizaid. Senator Reed, the situation has improved
    since you and I traveled around the region together about a
    year ago. It is still not sufficient to meet the needs. I do
    not have an answer about how other agencies of the U.S.
    Government need to conduct their business, but I can tell you
    that the Department of Agriculture people, for example, in the
    field in Afghanistan, are invaluable. Every time that they have
    shown up at a PRT, they have made more gains than 20 or 30
    soldiers, just by their presence and their expertise.
        The Department of Homeland Security is sending border
    experts to give advice on how to organize the borders of a
    country like Iraq or Afghanistan, and are trying to figure out
    how to control the inflow of foreign terrorists, is absolutely
    essential and there are way too few of those people. State
    Department professionals at low levels in the PRTs are worth a
    battalion in the field. We need more of them. We welcome them.
    When they are there they do a tremendous amount of work and
    bring great capability.
        However, I think we have still not figured out how to get
    the right people in the field and we need to figure that out.
        Senator Reed. General, it was a year ago that we traveled
    together. I was there last January and just visited again about
    7 or 8 weeks ago two out of three PRTs. The progress has been
    inadequate, frankly. As I have heard yourself and others
    describe, this could be the most decisive factor at the moment.
    We have secured the terrain, and we are aggressively trying to
    preempt these insurgent groups. But unless we add the
    complement, we are just going to be presiding over chronic
    violence and chronic instability and, frankly, the American
    people are not going to tolerate that indefinitely.
        I do not know how we send this message. I appreciate the
    fact that it is out of your lane since it is State Department,
    it is National Security Council, and it is the President. We
    could lose this battle, not because we do not have military
    forces on the ground, but because we have not summoned the
    national purpose and the national forces to do that.
        There is another issue, though, that goes to PRTs that is
    more tactically oriented. There is a debate now about who is
    going to protect these forces in the field. When I was out in
    Al-Hilla, and Mosul, they are trying to get, and prefer
    frankly, American military forces. In some cases they are being
    protected by private contractors like Blackwater.
        There are reports of a debate going on in the DOD about
    whether you are going to protect these PRTs. This debate
    becomes more sensitive as the announced goal of the government
    is to turn over more territory to ISFs, which presumes of
    course taking out our military forces.
        Can you shed some light on who is going to protect these
    teams in the field?
        General Abizaid. I think it was just yesterday, we formally
    stood up the Baghdad PRT which is under the protection of U.S.
    forces. I would also say, in fairness to our colleagues that
    are in the field and are risking their lives every day, that
    when they are out there they do a great job, and that all of
    the discussions I have had with people in the other agencies of
    the U.S. Government is that they fully understand the need to
    get people out there, and I believe they are committed to doing
    that.
        That having been said, the protection of the PRTs in Iraq--
    and we are moving from the Baghdad one and then we will
    establish others as the need arises--will primarily fall
    initially to coalition forces in the numbers that seem to be
    appropriate.
        Senator Reed. When you say ``coalition,'' do you mean ISFs
    or private security guards or a combination of both?
        General Abizaid. I think it is yet to be determined,
    Senator. I know that in Baghdad, we will take a good look at it
    and make sure we understand the dynamic there. In Mosul, it has
    certainly been protected by coalition forces and a combination
    of some contractors. But the security of those PRTs needs to be
    looked at carefully and we are trying to figure it out.
        Senator Reed. Thank you. I am not trying to suggest that
    these teams are not doing great work and at risk to their
    lives. They are doing remarkable work. But we have to have more
    teams. We have to have a plan to protect them.
        We have witnessed over the last several weeks, retaliation
    and recrimination on both sides. Is it your view, that there is
    a conscious effort while this government is being formed on
    both sides to eliminate potential rivals? We witnessed last
    week 50 Sunni security people who were kidnapped by people in
    police uniforms. Is this a broad-based effort to basically kill
    everyone's opponents before they get to forming the government?
        General Abizaid. Senator Reed, I believe it is clearly a
    strategy of al Qaeda in Iraq in particular, and other groups
    associated with it, and undoubtedly some of the Shia splinter
    groups, to do everything they can to make this government fail;
    to put a wedge between Sunnis and Shias, in particular those
    who are trying to work together to form a government of
    national unity and cause that wedge to deepen the divide and
    create more violence, in the hope of propelling the country
    into civil war.
        It is very interesting to me that the attack on the Samarah
    mosque attacked a symbol and seemed to gain greater traction in
    local communities than the killings of hundreds of people that
    have been perpetrated by suicide bombers. I think there is
    clearly an assassination campaign. There is clearly an attempt
    to drive a wedge between Sunnis and Shia. There is clearly an
    attempt to drive Iraq slowly but surely into civil war, and
    this group of people, especially al Qaeda in Iraq, but also
    others on the Shia side, are starting to find some of the
    levers. In a culture where revenge takes on its own life, it is
    a difficult and dangerous course of action of which they have
    arrived.
        It is very important, and I think the Iraqis understand
    this better than anybody, that they understand what is
    happening, that they are being manipulated, and the government
    of national unity that needs to form has to recognize what the
    enemy is trying to do to them. They have to avoid it.
        The good news is the security forces held together, and
    government leaders came together. I still think we are at the
    point, clearly, where more people are trying to hold Iraq
    together than tear it apart.
        Senator Reed. Thank you very much, General. My time has
    expired.
        Thank you, Senator Levin.
        Senator Inhofe. Thank you, Senator Reed.
        Senator Dole.
        Senator Dole. Thank you, Senator Reed.
        General Abizaid, General Brown, welcome. I have great
    admiration and profound respect for your leadership, for the
    men and women who are serving under your command, who are
    making sacrifices every day for the security and the safety of
    this country. Thank you for joining us.
        General Abizaid, the drug trade in Afghanistan remains a
    serious concern, as we all know. Heroin trafficking makes up a
    large proportion of the gross domestic product of the country.
    Money is falling into the hands of the Taliban and illicit
    funding to the warlords. Of course, this can definitely
    threaten the survival of this young democracy.
        Would you review what CENTCOM is currently doing to help
    combat the drug trade in Afghanistan, and would you support
    making counternarcotics a higher priority for CENTCOM?
        General Abizaid. Senator Dole, I am of the opinion that
    counternarcotics operations are a high priority for CENTCOM. I
    personally talked to President Karzai about this on numerous
    occasions. But there are restrictions by law about the use of
    military forces in this area, and I would characterize our
    activities as being in support of robust actions by the Afghan
    national government, and other international agencies, in
    particular the British, that are in the lead in
    counternarcotics assistance to the Afghan Government.
        As a matter of fact, it is very interesting that you asked
    this question today because there is an eradication effort that
    is taking place in the Helmand Province by Afghan security
    forces with British civilian agency support, with a lot of
    support from President Karzai.
        The drug problem is a long-term problem, as we have seen in
    Colombia and other places in Central and South America in
    particular. It goes without saying that you have to have an
    eradication campaign that targets areas where people have had
    the opportunity to switch, that have had the opportunity to
    move towards an alternative livelihood. At this point still,
    the writ of the Afghan national government has not really
    extended deeply into all of the provinces. Helmand Province in
    particular is an area that we have not expended a lot of
    military effort. Now we have ISAF expansion going on down
    there. A British battalion task force will be moving into that
    area, and just by having coalition forces in that area on
    patrol will have a lot to do with interdicting some of that
    activity.
        The other thing that obviously has to be done is to get
    better control over the borders. CENTCOM works very hard on
    border security, and in training Afghan security forces to be
    more capable. So we clearly recognize that, besides the Taliban
    and al Qaeda, drugs represent a mortal danger to Afghanistan's
    development, as does President Karzai, by the way.
        Senator Dole, I want to emphasize that, like anything in
    this region, if you attack it in one country you are doomed to
    failure. You have to have a regional strategy that talks to the
    Pakistanis, that talks even to the Iranians, that talks to the
    countries to the north such as Tajikistan, Kyrgystan,
    Turkmenistan, Uzbekistan, so that you are dealing with the
    growing zone, but you are also dealing with the source and the
    transit zones. I think we have a long way to go in getting the
    regional strategy defined, aligned, and effective.
        Senator Dole. Thank you.
        Now, knowing the progress and accomplishments that have
    been made, and that continue to be made in Iraq, it has to be
    frustrating to hear accounts from our media that offer
    sometimes nothing but negativity and pessimism. To quote a
    veteran that I have a great deal of respect for, Bob Dole said:
    ``Saddam Hussein is in jail, the Taliban has been overthrown,
    50 million people in Iraq and Afghanistan now are getting a
    little taste of freedom, and other rogue leaders like Qadafi of
    Libya now know that the United States means business.''
        I just want to make sure that our servicemen and women know
    how very proud we are of them and that we fully support the
    cause of freedom and democracy. How damaging to our troops'
    morale has this often negative focus been, and what more can we
    do to ensure that the positive achievements of our troops are
    given the credit they deserve?
        General Abizaid. Senator Dole, it is very interesting to
    me. Both General Brown and I are out there a lot. I am out
    there certainly more than I am in the United States. I talk to
    the troops all the time. The troops are so focused on their
    missions, and they also hear from folks back home that are not
    the media filters, that are just people they know, that they
    feel like what they are doing is very important, that it is
    supported by the people they know and love and care about back
    home, and that they are making a historic statement about
    changing the world, and they appreciate and know that.
        I do not think they are distracted by bad news. I do not
    sense that the morale is adversely affected by it as long as
    they know that people such as yourself and people that are on
    the committee, are the leaders of our country, whatever the
    political debate may be, will support the troops in the field.
    The good news, General Brown and I were talking about it
    earlier, is you go into an airport today and a soldier in
    uniform is still thanked by our citizens. That sort of support
    is worth more to us and will counteract whatever bad news that
    may be out there in the media. They do not spend a lot of time
    watching the media. They have tough things to do and they do it
    very well.
        Senator Dole. Our military forces are without question the
    best trained in the world in traditional warfare. At the same
    time, in both Iraq and Afghanistan our men and women in uniform
    continually find themselves preoccupied with concerns like
    settling civil disputes or mediating local politics or
    supporting public utilities. Succeeding in these nontraditional
    activities is crucial, of course, to winning this global war on
    terrorism and promoting global stability.
        Beyond programs like foreign language training, and
    cultural sensitivity training, what is being done to equip our
    military personnel with the tools that they need for this
    multitasking noncombat role that they find themselves playing
    on a regular basis?
        General Brown. Thank you, Senator. First of all, for SOF, a
    lot of our forces have a language capability and that is a
    requirement, and of course we do work very hard on the cultural
    piece. I was just at the Joint Readiness Training Center 2
    nights ago, where I watched one of our units go and do some
    training. I was very impressed with the briefing I got about
    the number of Iraqi-Americans that come there to help
    contribute to the training to ensure that the troops going
    through our training centers at every level, the National
    Training Center, and the Joint Readiness Training Center, do
    get a chance to really interface with those type of problem
    sets that they will meet on the battlefield. It is so authentic
    that the Iraqi-Americans are down there to help with this
    cultural understanding. It is a very powerful program, and it
    is all based on lessons learned coming out of the field.
        Senator Dole. Thank you very much.
        Thank you.
        Senator Inhofe. Thank you, Senator Dole.
        Senator Levin.
        Senator Levin. Thank you, Mr. Chairman.
        General Abizaid, the other day our Ambassador Khalilzad
    made a statement that the problems facing Iraq are increasing
    because of the existence of sectarian and national
    polarizations and lack of trust. He said that: ``Iraq is in a
    crisis. The country is bleeding and moving toward civil war.''
        I am wondering if you agree with those sentiments.
        General Abizaid. Senator Levin, I am not going to comment
    on anything that Ambassador Khalilzad said. I will give you my
    impression about where we stand with regard to moving toward
    civil war. I think that Iraq remains a long way from civil war.
    I think that the sectarian tensions in the country are higher
    than I have seen since we started this endeavor. I believe they
    are dangerous if they cannot put zero sum politics behind them
    and move towards a government of national unity.
        Daily, General Casey and I discuss indicators about what
    would lead us to believe militarily that the country is moving
    towards a civil war and, while we see very high tensions, it is
    still not to the point where we see it moving toward civil war.
    Do we think that the situation is one that needs to be
    rectified soon? The answer is absolutely; it needs to be
    rectified by the formation of a government of national unity
    that is regarded as being legitimate by the people of Iraq.
        It is a hurdle that we have to get over relatively soon in
    order to continue moving with confidence in the building of the
    rest of the institutions of the country.
        Senator Levin. General, it was reported that after your
    meeting with Iraqi President Talabani that Talabani told the
    press that you had assured him that U.S. forces, ``are ready to
    stay as long as they ask us, no matter what the period is.''
    Now, you and I have talked about this, but what is your take on
    that conversation? Was Talibani correct in his report, if that
    is what he said to the press?
        General Abizaid. Senator Levin, I have great respect and
    admiration for Talabani. I will keep our conversation that we
    had private. He characterized it in a way that I would not
    characterize it. But I think it is clear to President Talabani,
    to most Iraqis, and certainly to this committee that the United
    States CENTCOM intends to work itself out of a job in Iraq, and
    that has been an important part of our strategy all along. You
    can see that we have gone from U.S. forces being in the lead in
    counterinsurgency to U.S. forces now concentrating very heavily
    on the training and equipping and institution-building of ISFs,
    to turn over more and more of the security tasks to Iraqis.
        It is very clear to us that Iraq will succeed best when
    Iraq is fully sovereign, in the hands of its own people, with
    reliable security forces, a building economy, and a legitimate
    government. I do not believe that we are an occupation force,
    nor do I believe that we will stay there forever, or that our
    long-term interests will necessarily cause U.S. bases to be
    there, as was mistakenly reported in some characterizations of
    a previous hearing.
        I think that we will have to maintain, over the long-term,
    a robust training and institutional relationship with the Iraqi
    armed forces in order for them to succeed, because the
    institution needs a lot of work. In terms of combat forces, I
    do not believe that there is a need for a long-term large U.S.
    presence over time, provided the government of national unity
    comes together and the security forces continue to move towards
    the effectiveness that we have seen them display so far.
        Senator Levin. If the leaders of Iraq have the impression
    that we are there without limit, without condition, and that it
    is an open-ended commitment, I think they are getting a false
    impression. That is not where the American people are. The
    American people clearly want the Iraqis to do what they need to
    do politically in order to have a chance of defeating the
    insurgency and avoid a sectarian civil war.
        That impression that Talabani has is a false impression. We
    are going to be visiting with him in the next few days and each
    of us will express our own view as to what the correct
    impression is. But that clearly is, in my judgment at least,
    not only a false impression, but it is a dangerous impression,
    because it takes the pressure off the Iraqis to put their
    political house in order.
        As the letter that Senator Reed, Senator Collins, and I
    wrote to the President said, we cannot make the Iraqis form a
    unity government. We cannot do that. We cannot decide who fills
    what positions in that government. We cannot write the
    amendments to their constitution for them. But it was our
    judgment, and we expressed it in the letter, that an Iraqi
    political settlement is not going to happen without pressure
    from the United States. That is our view.
        Do you share the view that we have to keep the pressure on
    the Iraqis to reach a political settlement; that it should be
    enough that they face a civil war; and that should be enough
    for them to try to do everything they can to avoid it? Would
    you agree that it is useful for us to keep the heat on them to
    form a government of national unity and to make the
    constitutional changes that are necessary for all the groups to
    feel that they are participants in an Iraqi nation?
        General Abizaid. It is my view that a government of
    national unity needs to emerge in order for Iraq to be
    successful.
        Senator Levin. What leverage do you see that the United
    States can apply to push the Iraqi leaders towards a national
    unity government and down the road to amend their constitution?
    How can we realistically apply leverage?
        General Abizaid. Again, Senator Levin, it is really a
    question best sent to Ambassador Khalilzad than to me. Clearly
    there is a lot that the United States does for Iraq in these
    formative periods, that the Iraqis will continue to have to
    rely upon, such as the training and building of the
    institutions of the armed forces and the people of the armed
    forces, the continued work that we are doing in the economic
    sector, the continued work that we are doing in the security
    sector, and indeed the continued work that we are doing in the
    political sector to help them work through these very difficult
    times.
        I think it is clear that the United States being the lead
    diplomatic, political, and economic organizer to help the
    Iraqis be successful is certainly recognized by them, and all
    of those represent leverage.
        Senator Levin. Do you think all of the leaders of all the
    groups recognize that?
        General Abizaid. I think they do, except for the most
    extreme groups, of course.
        Senator Levin. Ambassador Khalilzad also said recently that
    ``We cannot invest billions of dollars in security forces if
    those forces are not trusted by the Iraqi people.'' Would you
    agree with that?
        General Abizaid. The security forces must be trusted by the
    Iraqi people.
        Senator Levin. Do you agree, though, with the first half of
    that, that we cannot invest billions of dollars in security
    forces if they are not trusted?
        General Abizaid. I think that the security forces are the
    most trusted institution in Iraq now and that the investment in
    them is a good investment.
        Senator Levin. So in other words, you think that they are
    trusted now by all the Iraqi people? You think the police are
    trusted?
        General Abizaid. I think they are the most trusted--the
    army in particular I believe is the most trusted institution in
    the country. I think the police have a long way to go.
        Senator Levin. Where are we in terms of the Iraqi army
    battalions' readiness status? What is the number currently of
    Iraqi army battalions that are capable of planning, executing,
    and sustaining counterinsurgency operations with coalition
    support, at level 2?
        General Abizaid. I would have to take that question for the
    record to give you the exact number of battalions as of today.
    I would like to point out that the number that I have in my
    head is 2 divisions, 13 brigades, and 49 battalions in charge
    of their own battle space, is very significant and actually
    represents a level 2 level of capability, but also an
    independent operational capability that is starting to form. I
    think that metric is very significant. It is double what it was
    last year and it will continue to increase, provided units are
    confident that a national unity government will form.
        I will get you the numbers for the record.
        [The information referred to follows:]

        [Deleted.]

        Senator Levin. Will you submit for the record that level 2?
    I would also ask the chair that the letter that I referred to
    that I wrote with Senators Collins and Reed, be inserted in the
    record.
        Chairman Warner [presiding]. Without objection.
        [The information referred to follows:]

        Senator Levin. Thank you.
        Thank you very much, both of you. I'm sorry we have not had
    a chance to talk, General Brown. We will get to you, if there
    is a second round.
        General Brown. Yes, sir. Thank you.
        General Abizaid. I am sorry you have not had a chance to
    get to him too, Senator. [Laughter.]

               STATEMENT OF SENATOR JOHN WARNER, CHAIRMAN

        Chairman Warner. Shortly I will recognize our colleague,
    Senator Bayh. But I think Senator Levin's colloquy was a very
    important one and was carefully prepared, as he always is.
        Senator Levin. Thank you, Mr. Chairman.
        Chairman Warner. My good friend and longstanding colleague
    shared that letter with me and I said I felt at this time I
    could not join in that letter. We have honest differences of
    viewpoint. But I view the situation in Iraq as extremely
    sensitive. It changes from day to day. I think today we had, at
    least this morning, some very refreshing news about Ambassador
    Khalilzad and meetings of the leadership. Certainly on the
    early morning news he was quite positive.
        I view the situation over there as one of a balance, and
    how Congress from time to time exercises its perfect right to
    comment on this--I just urge colleagues, we all have to look at
    that balance. Perhaps we interpret it differently.
        We have gone through the period of deciding against, the
    majority voices here in Congress, any deadlines or timetables.
    We are now recognizing, as Senator Levin said, that a strong
    message has to be conveyed to the Iraqi people and to the
    elected leaders that their exercise of sovereignty does not
    indicate an unlimited time within which to exercise that right.
        We in this country are making an enormous sacrifice in life
    and limb, and it is very expensive. At the same time, they are
    a sovereign nation. My colleague used the phrase ``we cannot
    dictate,'' and he is absolutely right, nor should we even
    attempt to dictate, because if it is perceived in this balance
    that we are dictating it could begin to provide some
    encouragement for those elements that want to precipitate a
    civil war. Sadr comes to mind. He is a questionable person in
    that checkered history over there.
        Consequently, speaking for myself and carefully watching
    what our Ambassador is doing and watching what you and General
    Casey and others are doing, I feel that you are keenly aware of
    that balance and that you are in your actions every day trying
    to fine-tune just how far our country can go to send that
    message to the Iraqi elected leaders and at the same time do it
    in a manner that does not provide any encouragement to those
    that would want to try and precipitate civil strife.
        It is a sovereign nation. We through our sacrifices and
    that of the coalition forces provided that nation sovereignty.
    We gave it to them. It is theirs. Yes, I recognize, as my
    colleague said, we have to keep the heat on. But I believe it
    has to be done primarily by the executive branch through the
    President's representative, that is our Ambassador, and you
    together with your colleagues.
        We are not that far apart, Senator Levin. I guess it is
    just the refinements on how best to do it. But I am ever
    mindful of the balance.
        I just wonder, did I phrase it in a manner that is
    consistent with your----
        General Abizaid. Yes, sir.
        Chairman Warner. I will accept that ''yes, sir`` and we
    will take it right from there.
        Senator Bayh.
        Senator Levin. I never could get an answer that short. I
    just thank you for that. I am going to try again next round.
    You have given me incentive. Thank you.
        Senator Bayh. Perhaps you have set a good example for the
    members of our body, General, in your brevity.
        Thank you, Mr. Chairman. I appreciate your courtesy.
        Gentlemen, I am grateful for your service to our country. I
    would just like to second something that Senator Dole mentioned
    and, General Abizaid and General Brown, you both commented on,
    the morale of the troops. I am sure they are aware that there
    is some debate in our country about policy matters, but there
    is no division or debate about supporting our men and women in
    the field, and I hope you will take every opportunity to let
    them know that that is a strong bipartisan conviction, a
    unanimous one as far as I am aware.
        I have four quick questions. General Brown, I hope you will
    not take offense if I continue the pattern that has been
    established to date. I look forward to talking to you when our
    schedules will allow.
        General Abizaid, let me follow up on something that Senator
    Levin was getting at. I think one of the things that the
    American people are troubled by is the following: We have heard
    now for some time, at least a year or two, that the Iraqis and
    their security forces are getting better. They are more
    numerous, more capable, and they are standing up. Our troops
    levels are about the same. I think many Americans just
    intuitively conclude that if they are doing better and we are
    the same, then the security situation must be getting worse;
    otherwise we could begin the process of gradually extricating
    ourselves.
        What do you say to that kind of logic?
        General Abizaid. I know where we started. I can remember
    being on the streets of Baghdad back in April 2003 and it was
    just us and no Iraqis, and now today General Casey was telling
    me the story about the sixth Iraqi division commander that was
    assassinated in Baghdad, a very highly respected Sunni officer
    that has fought very well. He talked about the huge outpouring
    of emotion and national pride that was evident at his funeral.
        I think that that sacrifice of ISFs, the clear knowledge
    that the vast majority of the people in that country have that
    their country has to come together, the fact that they are
    taking casualties at a much greater rate than our own forces,
    is a clear indication----
        Senator Bayh. Let me summarize this a little bit
    differently. All of that is I am sure true. If they are really
    doing better, why can we not begin gradually extricating
    ourselves? The answer to that in many people's minds is, well,
    gee, the security posture must be getting worse.
        General Abizaid. Senator, if you look at our security force
    posture right now, after the elections we brought out around
    three brigades worth of combat power, and that is not an
    insignificant change. Now, the numbers do not change quite as
    much because as combat power comes out we will also increase
    the power necessary to train the troops, and so we have more
    trainers relative to combat power than we did before.
        When we pass this hurdle of a government of national unity
    that is effective emerging, we will see that we will be able to
    continue on that path over time, although I would not want to
    predict how fast.
        Senator Bayh. Let me follow up on that. That is an
    excellent point. I loved something that you said, ``Political
    compromise between ethnic and religious groups,'' your quote
    was, ``that have for centuries settled their differences
    through bloodshed will be difficult.'' When will we know
    whether the politics is coming together there or not? It seems
    to me that we are at a critical juncture here. They are forming
    a government. They are going to perhaps revisit their
    constitution. We will see whether they truly include in the
    security forces and other branches of the government all the
    ethnic and religious groups in a meaningful, not just a
    superficial way.
        Will we not know in the next few months whether this is
    trending in the right direction or not?
        General Abizaid. I think we will know.
        Senator Bayh. That is my judgment, too.
        General Abizaid. I think it is trending in the right
    direction, but I think we will definitely know a couple of
    months from now.
        Senator Bayh. We will know whether they are willing to make
    the tough compromises they have to make to make this thing work
    or not.
        General Abizaid. Senator Bayh, I know a lot of these
    people. I have been dealing in this mission a long time. I
    certainly do not know them as well as General Casey knows them.
    But these are people that are working very hard to make this
    thing work. We have put a lot of trust and confidence in them,
    but ultimately, it is the people of Iraq that have to put trust
    and confidence in them.
        They have elected a government for a 4-year period and it
    is important for that government to come together now. I think
    it is a crucial time. It is a sensitive time. The terrorists
    are trying to exploit it to their advantage. But I am confident
    that they can come through this with our help.
        Senator Bayh. I have two final questions, General. I am
    going to ask you a variation of a question I get all the time,
    and that is, knowing what you know today, would you do things
    differently? I am not going to ask you about the decision to go
    into Iraq. That is a different question altogether.
        But reading in this morning's newspaper that post-September
    11 we are adopting a more forward-leaning proactive strategy
    for dealing with the threats that face this country, it is not
    inconceivable we might face a similar situation at some point
    in the future. Looking back on it, force levels, planning for
    the aftermath, de-Baathification, what have we learned? What
    would we do differently to try and make perhaps a similar
    situation in the future have a better trajectory?
        I get asked this all the time. It is about the original
    decision, but in my gut, General, I sense that there are four
    or five things that if we had handled them differently, perhaps
    they could have been in some ways transforming. It is too late
    to go back and do them differently now. That is life. But what
    have we learned from this that we can use going forward?
        General Abizaid. I certainly think there is a lot that we
    have learned from this. We have certainly learned--and I will
    give you military lessons. We have certainly learned a lot
    about how to put together a big army quickly. I think when
    history looks on this mission and they see where we went from
    zero to where we currently are and where we are going to end
    up, that this effort of training and equipping the ISFs, and
    getting them stood up, has been breathtaking.
        On the other hand, one thing that I take as a clear warning
    and that is that you can do a lot of the training, equipping,
    and organizing, but what you also have to do is build the
    institution. Building the institution and changing the
    mentality of how the army used to be used under Saddam is a
    long-term project that is going to require a lot of continued
    activity. We need to recognize that now. I think the Iraqis
    need to recognize it. Otherwise you just cannot go down this
    road of having the army being a danger to the state. It
    requires a change in thinking and in how officers are trained.
        There are, of course, many other lessons. One great
    military lesson I think General Brown and I have learned is the
    need in this counterterrorism business to find, fix, and
    finish, and that we have to do better in the find portion. It
    is just the way things are today. You have to invest in human
    intelligence. You have to invest in the human capacity and
    capital necessary to have people that are comfortable in these
    operating areas. You have to fuse intelligence and operations
    together and not have them move together in the Cold War model
    of separate stovepipes reporting to Washington. It has to be
    fused at the lowest operational level.
        We are much better at it now than we have ever been. I
    think you see some of the results we are having against the al
    Qaeda cells around the world. This lesson is one we better not
    lose.
        The final lesson I would like to talk about, and I could
    probably talk about this longer but I will not, has to do with
    asymmetric warfare. If we think people are going to come at us
    with planes and tanks and big armies in the next 30 or 40 years
    or so, so we can destroy them, I think we are mistaken. We need
    to have conventional deterrence. Do not get me wrong. We must
    invest in asymmetric warfare, in General Brown's forces, and in
    the counter-improvised explosive device (IED) effort, not
    because of Iraq but because of the way warfare has changed and
    the way that people will react to us.
        Senator Bayh. Thank you, General. This is a longer
    discussion. I am sure you and your colleagues have just learned
    a tremendous amount that we can all benefit from going forward.
        General, there is a body of opinion in our country that
    would like to leave Iraq as soon as possible. What would happen
    in your estimation if we were to just leave within, let us say,
    3 months, 6 months, or something like that?
        General Abizaid. Certainly the country will not be ready to
    stand on its own two feet security-wise within 3 months and it
    will not be able to stand there alone without support from not
    only the United States but the rest of the international
    community in 6 months. It will be much improved in 6 months,
    provided a government of national unity comes forward, and
    troop levels in 6 months can be addressed, provided that that
    happens as well.
        It is a tough balancing act as we go from us being in the
    lead to the Iraqis being in the lead. You can imagine that that
    move has a tremendous amount of friction associated with it. If
    governance, economy, and security are all going to move
    together, then we need to get past the governance problem that
    we currently have.
        Senator Bayh. Thank you for your very thoughtful and candid
    testimony.
        Chairman Warner. Thank you, Senator.
        Senator Thune.
        Senator Thune. Thank you, Mr. Chairman. Generals, thank you
    for your service to our country and for the extraordinary job
    that you and our soldiers are doing in what is a very important
    mission in the war on terrorism. Obviously, we are all very
    interested in what is happening currently in Iraq, what the
    future holds and what our commitments there will be going
    forward.
        General Abizaid, you note that the enemy in Iraq consists
    of Sunni Arab rejectionists, Saddamists, terrorists, and
    foreign fighters. What is the common bond between these groups
    and what areas do they diverge and pursue their own goals?
        General Abizaid. The common bond is to make the current
    government fail, especially between the Saddamists that have no
    hope for reconciliation within the society because of the
    crimes that they have committed and between al Qaeda, that has
    absolutely no desire to reconcile anywhere, but just to drive
    the region into civil war, in the hope that they will be able
    to exploit their extremist ideology by that.
        That having been said, there are a lot of people that have
    been operating within the Sunni insurgency that are tired of
    fighting, that want to join the government, that want to join
    the security forces, and I think there are opportunities for
    reconciliation ahead once a government of national unity
    emerges.
        The irreconcilable wing has to be fought. They have to be
    killed and captured. On the other hand, the good people of the
    country that want to get on with their lives and participate in
    the future of their country know that they need to be part of
    both the security forces and the governance, and I think things
    are tending in that direction and will continue to do that,
    provided a legitimate government emerges, which I think it
    will.
        Senator Thune. You mentioned earlier as well that you think
    the forces that are intent on holding things together are
    greater than those that are intent on pulling things apart. Do
    you think that these various groups, the Saddamists, former
    regime elements, terrorists--what is your view in terms of
    whether or not they are succeeding in eroding support for a
    central Iraqi Government with the average Iraqi citizen?
        Do you sense that the point of view, the overall attitude
    of the average Iraqi citizen, is supportive of the government
    coming together and being formed? Or are these groups, which as
    you had just noted whose intention it is to keep the government
    from succeeding, beginning to take hold and win over some of
    the average Iraqi citizens?
        General Abizaid. Fear is a very powerful motivating factor
    and after the Samarah bombings a lot of people became very
    fearful. Before the Samarah bombings there was clear polling
    data that said people were very unhappy with al Qaeda in Iraq,
    they were very dismissive of the Saddamists living in Syria and
    other places in the Arab world sending their money in to pay
    young Iraqi kids on the streets to emplace IEDs.
        That having been said, this attack on the Samarah mosque
    really exposed some pretty deep wounds and some great fear
    between the various groups. It is my impression that the people
    of Iraq are tired of al Qaeda. We see a lot more people coming
    forward to give information about al Qaeda and we see a lot of
    people coming forward actually to fight al Qaeda independently
    in areas such as al-Anbar Province, which is pretty
    interesting.
        But the ruthlessness of these groups, and the fact that
    they are willing to execute and intimidate on a scale that
    really cannot be appreciated here in the United States, cannot
    be underestimated. It is very important that ISFs emerge, take
    control of the regions where these groups have some strength,
    and move forward. I think that is happening and I believe it
    will continue to move in that direction.
        Senator Thune. All of us here hope and pray that these
    leaders in this country--and I would echo what has been said
    already by a number of people, and that is that we have to
    continue to apply pressure on the political leadership in that
    country to be able to form a national unity government. That is
    obviously the hope and prayer of every American, because that
    is ultimately the only way that we will be able to get our
    young men and women home.
        In a worst case scenario, if the sectarian violence
    continues unabated and the situation were to devolve there
    absent the formation of that sort of government--I know you
    have responded to this before, but I am just interested in
    getting your perspective as to what role then do our troops on
    the ground have if these various factions, and ethnic and
    sectarian, begin firing at each other?
        Our guys end up being in the crossfire and obviously not
    being able to take sides. How do you see our role at that
    point?
        General Abizaid. I think what we need to do is the hard
    work that has to be done now in order to prevent the worse case
    problem from taking place. I think that with the ISFs,
    especially with the army, continuing to be confident and
    competent, proactive work being done against militias that are
    threatening the peace in key areas, whether by coalition lead
    or by ISFs lead, all these types of actions with regard to
    security need to continue and I see no reason why they cannot
    continue.
        It is also very important that all of us understand that
    General Casey's strategy is to turn over more and more of the
    security lead to Iraqi forces. He is doing that in much of the
    country and will continue to do that. We actually find that as
    ISFs take the lead that they become very effective.
        So we will back up ISFs when they get in trouble. We have
    security forces and military transition teams that are embedded
    with their forces that can help bring the enablers of American
    military power to bear on a problem. The echelonment of
    multinational forces and ISFs, of course, it is not even
    throughout the country. In some areas we are still clearly in
    the lead and it is a long ways from it changing any time soon.
    In other areas, the Iraqis are in the lead.
        But I am confident that our support of ISFs, and our giving
    them more and more responsibility for their own future, is
    exactly what they want and they will move the country in the
    right direction and we will be able to support them.
        Senator Thune. I am thinking with respect to in places like
    Sadr City, where you are supposedly seeing the infiltration of
    some of those security forces with some of the elements of the
    unsavory and those who are cooperating with, aiding and
    abetting some of the killing and the violence that is going on.
    How do we in those areas deal with--we want to turn over more
    and more, but I think the thinking is that, at least in the
    Ministry of Interior, that some of these security forces, and
    police forces in some of those key areas, are being
    infiltrated. How do we deal with that particular situation?
        We are trying to back them up. We are trying to give them a
    lead role. If these forces that are operating contrary to what
    is in the best interests of the broader majority continue to be
    successful in infiltrating some of these security forces, it
    seems to me it is awfully difficult for us to get this
    sectarian violence stopped if they have the law on their side
    too, so to speak.
        How do you see us bringing an end to that?
        General Abizaid. I think that the problem of loyalties at
    the local level in a country like Iraq is a problem that we
    have to deal with, especially with police forces where police
    are recruited locally. If you have local political leaders
    that, instead of staying within the law, decide that they will
    exercise their power through armed people or militias, that is
    certainly a very bad thing. That ultimately will not allow Iraq
    to come together the way that it needs to as a responsible
    member of the community of nations in the region.
        Moving against militias that represent a threat to
    stability is very important for the Iraqi Government. They
    recognize that.
        The other point that is so important, Senator, is that we
    cannot allow any ministry in a government of national unity
    that emerges, to use that ministry to further sectarian
    agendas. It is just so critical, especially in the Ministry of
    Defense, the Ministry of Oil, and the Ministry of the Interior.
    Clearly, there is a lot of work that needs to be done in the
    Ministry of Interior. General Casey recognizes this. We
    generally regard the police as about a year behind in terms of
    development from what we see in the army. I think that that is
    not unnatural. We have to learn to train policemen. It is easy
    for us to train soldiers. It is a different thing to train
    police.
        But we are making progress and I think we will see progress
    continue in that area. There is no doubt that there are going
    to be pockets of violence and difficulty in various parts of
    the country. But it is also wrong to believe that just because
    we see through the filter of our media here in the United
    States that there is violence everywhere in Iraq. The truth of
    the matter is in most of Iraq there is not what I would call
    sectarian violence. It tends to be local. Commanders are
    concentrating on those local areas. Iraqi forces are
    concentrating on those local areas. I think that people in Iraq
    have studied what happened to Algeria, what happened to
    Lebanon, and what happened to other countries in the region
    when they moved toward civil war, and they do not want to go
    that way.
        Senator Thune. I certainly hope you are right, and thank
    you again for the things that you are doing. We are closely
    monitoring what is happening there and are hopeful that the
    political leaders in that country will come to the correct
    conclusions. I hope that they continue to have the support of
    the majority of the Iraqi people.
        Thank you for your service and thank you for being here
    today and sharing with us your views.
        Thank you, Mr. Chairman.
        Chairman Warner. Thank you, Senator Thune. I hope that the
    replies the General gave to your very insightful questions are
    followed far beyond this hearing, because in those few
    paragraphs you summarized very clearly that picture and the
    importance of not just the initial formation of this
    government, but as it moves on, the selection of people in the
    administration for the various departments and agencies.
        I want to commend you, General. Your testimony is extremely
    important before us this morning.
        I thank you, Senator.
        In that context, General Abizaid, I listen very carefully
    to what you say, not just today but every day, and in the very
    valued opportunities where I am with others and you are
    speaking or in some of the one-to-one sessions that we have
    had. I want to take a quote out of your statement. You said,
    ``We need significantly more non-military personnel in the
    CENTCOM AOR with expertise in areas such as economic
    development, civil affairs, agriculture, and law.''
        That basic statement, you made before this committee in
    your last appearance. As a consequence, I have now written to
    every Cabinet or agency head of our government a letter, posted
    yesterday, talking about the need for that type of support. I
    will quote part of my letter:

              ``In recent months, General Peter Pace, Chairman of
            the Joint Chiefs, and General John P. Abizaid,
            Commander, United States Central Command, have
            emphasized the importance of interagency coordination
            in Iraq and Afghanistan. General Abizaid stated in his
            2006 posture statement to the Senate Armed Services
            Committee: `We need significantly more non-military
            personnel with expertise in areas such as economic
            development, civil affairs, agriculture, and law.' ''

        I further said:

            ``I commend the President for the leadership he showed
            in issuing a directive to our interagency by signing
            National Security Presidential Directive 44, titled
            `Management of Interagency Efforts Concerning
            Reconstruction and Stabilization,' dated December
            2005.''

        I intend, and I think I am joined by the members of this
    committee, to begin to try and put a little muscle behind what
    you said and get that job done. I give you full credit for
    getting that message to us repeatedly, in 2006 and now again in
    2007. Let us hope for the best, because I think the President's
    directive, which is clearly inspired by what you said--because,
    as you said this morning, we have made great progress in
    strengthening the Iraqi's army, and I think that is well
    documented and accepted by Congress now. The police is another
    issue, but it is under work.
        Even if we structure the army and hopefully eventually the
    police, the basic infrastructure which a new government has to
    deal with has to be brought along in parallel with the
    strengthening of their security forces. Do you agree with that?
        General Abizaid. Senator, I agree. I had the chance to read
    your letter. I appreciate and agree with what you say in there.
    I appreciate your support for institutionally trying to shape
    the effort to be more effective in the war zones.
        The rule of law in particular is really what this is all
    about. Insurgency will not be successful in a country where the
    rule of law applies. But in both Iraq and Afghanistan, it is
    true to say that these countries are a long way from having
    effective court systems, prison systems, and rule of law
    systems that will choke the insurgency.
        People that know how to build systems--legal systems,
    prison systems, et cetera, et cetera--better than the United
    States military need to help in this effort, and I think it is
    an area in which we are woefully behind and we have to move
    with some speed in order to help them help themselves, which is
    after all the basis of our strategy.
        Chairman Warner. Well spoken, General. This committee is
    now going to enlist in your ranks to try and help make that
    happen.
        Why do you not give us just a little status report as you
    see it from your vantage point of that infrastructure today as
    it relates to the production of oil. My understanding is it is
    about level or even having fallen off here and that is a direct
    consequence of the inability of the Iraqis to provide the
    proper security for the oil industry, transmission lines, that
    is the extraction area, the transmission of it, and the
    inability of contractors who are dealing now with their own
    security situations in trying to perform the necessary repairs
    on the energy side, also the electrical situation.
        Now, an interesting part of that electrical situation is
    that the user end of it has increased exponentially with the
    liberation of Iraq. More and more people are acquiring things
    that require the use of electrical power.
        Would you give us your perspective on how you see that
    infrastructure moving forward, or not moving forward in some
    areas?
        General Abizaid. Mr. Chairman, the infrastructure problems
    certainly exist. I think there is a misappreciation here that
    it is all centered around security. A lot of it has to do with
    corruption. Part of it has to do with other forms of
    criminality and a certain amount of it--this is not to dismiss
    the security aspect of it, by the way--has to do with the
    economic structures that are at play inside Iraq.
        With gasoline, with an official price of 65 cents a gallon
    in Iraq, you can imagine that there is a huge market to get
    some of that product to other places. You can also imagine that
    the structural problems with changing from a dictator-led
    demand economy to an economy that can link with the other very
    sophisticated economies in the region is an effort that has to
    be moved on here with the new government. I am confident the
    new government will recognize the problem and it has to be just
    like the Afghan drug problem, it has to be solved by actions
    against corruption, actions to improve security, working
    through some of the tribal issues that take place in transit
    zones. You name it, but it has to be a concentrated Iraqi
    interagency effort in order to gain the revenue from their most
    effective revenue-producing source.
        The good news about Iraq, though, is it is not just
    dependent upon oil for its revenue. It is a state that has
    great economic agricultural and other potential that needs to
    come to bear. But a lot of these, what I would call Soviet-
    style economic policies that have existed, need to be addressed
    immediately in order to get beyond this.
        So there are problems, but the capacity in both the oil
    arena and the production of electricity has increased. It is
    really a matter of delivering, and how they do that with our
    help is very important to the continued success of them being
    able to fund their own future.
        Chairman Warner. I have often thought that if the Iraqi
    people had a full appreciation for the potential of their
    nation and how if they come together and support a government
    and suppress the insurgency, that they could begin to develop
    an economy and a lifestyle not unlike that being enjoyed in the
    moderate Arab nations like the United Arab Emerites (UAE),
    Qatar, Bahrain, and Kuwait.
        To what extent do you feel they have a knowledge of how the
    rest of the moderate Arab world lives and how, because of their
    inability to move more swiftly to consolidate the gains that
    have been given to them in sovereignty, that they are just
    delaying that opportunity?
        General Abizaid. Mr. Chairman, there are a lot of very
    sophisticated Iraqis. Saddam put them in a time warp that is
    essentially a 1950s Soviet-style economy that they will have to
    work their way out of. They were certainly isolated.
        Interestingly enough, when you look at a poll of what
    government the Iraqis would most like to emulate, they picked
    as their first choice the UAE.
        Chairman Warner. That is interesting.
        General Abizaid. I found it very interesting, that they had
    a view on how life worked there, how the system worked, and how
    the rule of law worked there. I think it is actually a good
    sign that people would look at that and think that that is a
    model that could be achieved, in addition to adding the
    representational aspects of governance that the new
    democratically-elected government brings to Iraq.
        So yes, Mr. Chairman, I really believe that the Iraqis know
    what their potential is. They know what their future can be.
    But they also have difficulties getting by some of the
    sectarian problems and hatreds that have been around for a long
    time. They know they have to get by them. I am confident that
    they will. It will take a lot of leadership on their part, but
    I believe that that leadership exists.
        Chairman Warner. This may be a little out of the box,
    indeed people might say a crazy idea, but I remember in World
    War II and to some extent during Vietnam we used to do a lot of
    what we call leaflet drops. We just covered the skies with
    leaflets trickling down with pictures of the UAE and say, this
    could be your home, this could be your school, this could be
    your hospital; it is just a few miles away and you have the
    same potential in your country with its natural resources, and
    so forth.
        Maybe a little propaganda along that way might help.
        General Abizaid. Mr. Chairman, I think trying to advertise
    what is going on in Iraq is something beyond the capacity of
    the Central Command.
        Chairman Warner. That is right, I do too. But you are a man
    who has studied that region and you have dramatically said this
    morning that if they had a choice it is the UAE. Let every
    person in the street get some pictures. I do not know if it is
    in their media or television.
        General Abizaid. Mr. Chairman, I think sometimes we forget
    what really is happening in Iraq and its effect on the region.
    When I go around to the other Arab countries, they all talk
    about Iraqi politics. Why do they talk about Iraqi politics?
        Chairman Warner. It is dynamic.
        General Abizaid. There is a lot of it and it is dynamic. It
    is also setting an example that will infect the rest of the
    region ultimately.
        Chairman Warner. Lean back a minute, General, and we will
    get a hold of General Brown here, who has had a chance to be
    with us this morning.
        I always said when I have a few moments with you I am
    extremely envious of the opportunities that you have to command
    this most magnificent component of our combined military
    forces. I well remember on this committee working as a partner
    with then Senator Bill Cohen and others, and I think my
    colleague from Michigan was a part of it, to establish this
    concept and to establish it in the face of enormous resistance
    from the civilian side of the DOD in that era.
        Out of it has come an extraordinary capability and, as
    General Abizaid said, we have to begin to think about
    asymmetric warfare, and I believe that responsibility heavily
    falls upon you. Do you feel that this budget now before
    Congress fully recognizes what General Abizaid said, namely the
    shift in emphasis that we must make towards more and more
    investment in asymmetric warfare? He carefully couched his
    remarks to reflect that of course we have to maintain the
    deterrence of conventional warfare. I know Army politics and
    the armored person and the infantry and all of the politics
    that go on in the Pentagon, having experienced it myself.
        But again, this budget; are we taking a good strong step
    forward?
        General Brown. Sir, I believe we are and I think this
    budget is sufficient to take care of our first step forward as
    we launch out on what QDR changes are taking place down at
    SOCOM. I think the QDR recognized the importance of irregular
    warfare and the asymmetric capability that SOCOM brings to the
    battlefield. So in their analysis, which quite frankly
    continued some of the initiatives that we had already started,
    and then grew some of those to even greater level, I think it
    is a good step as we start to grow the capabilities of SOCOM.
        We will grow 13,000 additional personnel up through 2011,
    and we will add a sizable amount of capability.
        Chairman Warner. Address to the extent you can--much of it
    is classified, but I think the American people should have an
    exact understanding of the forces that you have in Afghanistan
    as well as the very significant contingent in Iraq and their
    operations and missions, which are in direct support--
    Afghanistan, the ISAF, that is a multi-nation force to some
    extent.
        General Brown. Yes, sir.
        Chairman Warner. The force in terms of the zone that will
    be taken over by the Americans--I think it is called Quadrant
    4. Then shift into Iraq.
        General Brown. Sir, SOFs in Iraq and Afghanistan are doing
    the full spectrum of special operations missions. We have about
    7,000 special operators deployed today. That is the biggest
    deployment in our history. Ninety percent of them are in the
    CENTCOM AOR, and most of those in the Afghanistan and Iraq AOR.
        They are doing the traditional direct action missions that
    they do, and that is the find, fix, and go after enemy targets
    as required. They are working with all of the Afghani forces,
    doing what we call our foreign internal defense mission, which
    is in fact building a foreign nation's capabilities to defend
    their own borders and find terrorists on their own, and give
    their military the capabilities they need to do those kinds of
    missions.
        Additionally, the SOFs have the unique forces of the civil
    affairs, which is our most deployed force, and our
    psychological operations forces that are working on the
    information support team in support of General Eikenberry and
    the forces in Afghanistan and in Iraq. We also have our Navy
    component. We have Navy SEALs on the ground doing some of the
    more direct action missions, and the training of some forces
    over there. Of course, all of our special operations aviation
    is supporting all of the SOFs.
        In Iraq, we have Special Forces A Team (Green Berets) out
    on the ground. Many of the battalions that go into a mission
    will take a Special Forces team as combat advisers with them.
    They will train with the Iraqi battalions in a support role, as
    General Abizaid mentioned. Additionally, we are working hard
    training the Iraqi counterterrorism force over the last year
    and it has been very successful. So we are doing the
    counterterrorism training portion of it with the Iraqi
    counterterrorism force and the 36th Commandos as they stand up
    and become more capable.
        Again on the Iraqi battlefield, our psychological
    operations forces that are producing all the information
    capability are doing a great job, and our civil affairs. We are
    to the point where we have mobilized all of our civil affairs.
        Chairman Warner. Let us talk about the families of the SOFs
    and particularly the impact on the families of the very high
    operational tempo and rotation that you have currently as a
    consequence of the extreme activity you have in both of these
    areas. Is your retention holding up? Are your families willing
    to accept these continuing separations from family members for
    long periods?
        General Brown. Sir, I think they are. Our retention is
    good. As a matter of fact, our retention is very good right
    now, thanks in part to the bonuses that folks over here helped
    us get to keep some of our more senior special operators
    around. We now have it to a manageable deployment level where
    we can give people some stability in their schedule of when
    they deploy and when they will be home. You really know when
    you are going and when you are coming back.
        Chairman Warner. We are running out of time--that is in
    your judgment working as best as it possibly can under these
    severe circumstances?
        General Brown. It is working very well. We still have some
    pockets that are a problem. I have already mentioned the civil
    affairs and some of our air crews, but overall it is working,
    Senator.
        Chairman Warner. I remember joining you that day for the
    memorial services for that large contingent you lost.
        General Brown. Yes, sir.
        Chairman Warner. I will never forget the expression of the
    wives for their lost loved ones and their total adherence to
    the doctrines of SOF as the faithful spouse remains at home.
        General Brown. Yes, sir.
        Chairman Warner. Extraordinary.
        Senator Clinton.
        Senator Clinton. Thank you very much, Mr. Chairman.
        Thank you, gentlemen. Thank you both for your service. You
    carry the lion's weight as well as the hope for success in
    these current operations and I am very grateful to you both.
        General Abizaid, there was a recent series of articles, I
    guess two so far, in the New York Times. One of the bylines was
    Bernard Trainor. In it the narrative claimed that during the
    march toward Baghdad the ground commanders wanted to stay and
    fight and wipe out the Saddam Fedayeen, but they were ordered
    to keep moving toward Baghdad.
        I would like to ask you, first, based on your information,
    is that a correct statement? Second, in hindsight are we
    dealing with the remnants of the Saddam Fedayeen in the
    Baathist part of the insurgency?
        General Abizaid. Senator Clinton, I have heard a lot about
    it. I really have not read what you are referring to, but I
    will tell you my take on the movement as the deputy commander
    up towards Baghdad. I have never regarded it as either/or.
    There were conventional force commanders that wanted to divert
    some of their combat power to the lines of communication to
    deal with the difficulties that were clear down in Nasariyah
    and other places along there before moving forward. It was a
    good debate. It was one that was pretty open, and the way that
    I remember that we solved the problem is we diverted some of
    our special forces operators along the lines of communication
    to clean up, and we felt that there was sufficient force to
    keep logistics flowing and continue the advance at the same
    time. That is what we did.
        Of course, people are always surprised that there is debate
    within military organizations, but when we are doing our
    professional activity there certainly is.
        The question about whether or not these are the same Saddam
    Fedayeen, I do not think so. I regard this Sunni insurgency, in
    particular, as a loose amalgamation of al Qaeda in Iraq,
    Saddamists, and people that I would call Sunni rejectionists
    that have taken a long time to get organized over time. I think
    that there are some indications that some of the old structure
    of the Iraqi intelligence service continues to exist within
    Iraq and has linked al Qaeda in Iraq and some Saddamist
    rejectionists that are operating out of Syria, et cetera.
        Some of those structures continue, but I have never
    regarded it as being a plan that the Iraqis had that is being
    carried out by structures that existed within the old regime. I
    think people that had expertise about terrorism from the old
    regime continue to operate against us, certainly in a much
    different ideological setting than they did during the Saddam
    era.
        Senator Clinton. Thank you, General.
        General, on March 13 President Bush said, ``Some of the
    most powerful IEDs we are seeing in Iraq today include
    components that come from Iran.'' However, at a Pentagon
    briefing on March 14 Joint Chiefs Chairman General Pace was
    asked that question: ``President Bush said the Revolutionary
    Guards and IEDs and weapons are moving across the border from
    Iran. Do you have proof that they are indeed behind this, the
    government of Iran?'' General Pace replied: ``I do not, sir.''
        General Abizaid, do you agree with President Bush? Do you
    agree with General Pace?
        General Abizaid. Senator Clinton, I know you will forgive
    me for not agreeing with either, but to give you my own
    personal opinion about what the situation is in regard to the
    Iranians. First of all, there is no doubt that there is Iranian
    intelligence activity throughout Iraq. Also, there is no doubt
    that there is Iranian intelligence activity in Afghanistan.
    There is no doubt that components of IEDs that were
    manufactured in Iran have come across the border and gotten
    into the hands of Iraqi insurgent groups and been used against
    coalition forces.
        I cannot tell you whether or not that happened with the
    orders of the Iranian government, but I can tell you that
    terrorists in northeastern Iraq use the Iranian northwestern
    border to move back and forth across the border. Is that a lack
    of capacity of the Iranian government or is that with the
    complicity of the Iranian government? I cannot answer that
    question.
        I clearly believe that the new government of Ahmadinejad is
    very ideological, has made a lot of threats, and that we need
    to look very clearly and effectively with our own intelligence
    networks to determine how this flow is moving and who has
    authorized it, if anybody. I think it is a very serious
    concern. I am not prepared to say that I know one way or the
    other.
        Senator Clinton. Would you say the same thing about the
    flow of people and weapons across the Syrian border?
        General Abizaid. I would say that the flow of foreign
    fighters across the Syrian border has decreased, and that is
    clear from our intelligence. We know that. We know that the
    Syrians have moved against the foreign fighters. Why have they?
    Because the foreign fighters represent a threat to Syria and
    they certainly do not want to have these organizations and
    groups operating within their own country that are ultimately
    going to be a threat to their own government.
        So out of self-interest, the Syrians have reacted in a way
    that has slowed the flow of foreign fighters. We have seen
    fewer foreign fighters in the country. But unfortunately, the
    foreign fighters tend to be the most dangerous because they
    will come in as suicide bombers, they will get employed in al
    Qaeda in Iraq networks, and they will cause a lot of damage. Of
    course, al Qaeda in Iraq is trying to foment the civil war that
    everyone is working so hard to prevent.
        Senator Clinton. I know that before I could get here
    Senator Levin asked a series of questions about whether or not
    Iraq was moving toward civil war. Just earlier this week the
    President announced the goal of having Iraqi forces control
    more territory than the coalition forces by the end of 2006.
    How does that goal translate into what percentage of population
    would be protected by Iraqi forces? How does it translate into
    the placement of forces, whether the forces are going to be
    integrated by that time, so that it will be representative of
    the population of Iraq and certainly not an impediment to
    stability operations because of difference in sectarian makeup
    of the population compared to the forces?
        Could you give us a little additional information about
    that, General?
        General Abizaid. Of course, General Casey has a pretty
    detailed plan that is classified, that talks about where and
    how we will hand off. I can certainly tell you that right now
    the two divisions worth, 13 brigades and 49 battalions of ISFs
    from the army that are controlling their own battle space, are
    fairly independent in those areas. We intend to increase that
    over time.
        I will have to take for the record and probably provide you
    with a classified answer on how that progresses in 2006.
        [The information referred to follows:]

        [Deleted.]

        General Abizaid. It is clearly our intention between now
    and December to increase that pace of handing over battle space
    to Iraqi units, and it will happen in those areas that are most
    ready for that to happen. For example, you look down in the
    British-controlled sector and the areas where the Australians,
    Japanese, and Italians have been working and those areas are
    pretty good. Some of them are ready to go towards police
    control, not just army control. You look up in the northern
    areas, in the Kurdish-controlled areas, and they are already in
    police control.
        In the Sunni areas, like al-Anbar Province, it is pretty
    much Multinational Forces in Iraq. It is hard to give you an
    answer that would be one size fits all. We clearly intend to
    turn over cities in particular more and more to Iraqi control,
    and it is our goal to--I think Baghdad is 30 to 40 percent
    already in the hands of ISFs. We will accelerate that process.
        Our intrusiveness in cities has been a huge complaint that
    has come from Iraqis for a long time. We look to turn over more
    and more control of those cities. In many of the cities, you
    see less American presence on the streets, which is what you
    would expect and what you would want. As a matter of fact, a
    lot of reporters that have not been in Iraq for a while who
    have returned to Baghdad say one of the most striking things
    they see there is the absence of American forces in big
    numbers, and that is by design. We intend to continue to do
    that.
        Senator Clinton. Thank you, Mr. Chairman.
        Chairman Warner. Thank you.
        Senator Levin.
        Senator Levin. Thank you, Mr. Chairman.
        General Abizaid, you were asked a question, I believe,
    about the police commandos, and as to whether or not they have
    been involved in execution-style killing of Sunnis. My question
    is a little bit different than that. It is close, but a little
    different.
        To what extent have Iraqi police commando units been
    infiltrated by the Badr Corps militia and are under their
    control? Is it a significant or a minor problem?
        General Abizaid. I think there is no doubt that there has
    been some infiltration in some areas and there may be some
    Iraqi police commandos who by day follow the orders of the
    government and by night might be doing the work of some of the
    various militia groups. We cannot tolerate that. That is not a
    successful recipe for moving Iraqi security institutions
    forward.
        The Iraqi Government knows that. They are investigating
    those areas where loyalty problems have shown up. I clearly
    believe that in those units, Iraqi security police commando
    units where General Brown's forces embedded, that we feel
    pretty confident about what they are doing and how they are
    doing it, and we intend to increase our visibility with
    trainers over time in order to help the Iraqis work their way
    through this problem.
        The problem exists. I think it is exaggerated in the media,
    but it does exist and it is a danger to the state.
        Senator Levin. Thank you.
        Sadr's Madhi Army was blamed for much of the retaliation
    against Sunni mosques and Sunnis in general after the Samarra
    mosque bombing. What role is Sadr playing with regard to the
    increasing sectarian strife?
        General Abizaid. Publicly, his role is pretty interesting.
    He has been a real international statesman and a statesman
    within the political process of Iraq. He has apparently turned
    over a new leaf. Unfortunately, his militia people that are
    loyal to him have not, in my opinion. They have been violent.
    They have taken to the streets in some areas and not cooperated
    well with the ISFs. In some areas they moved the police away
    from where they were supposed to be doing their duty and it was
    necessary for army forces to move in there and regain control.
        I think his militia is one that needs to be controlled by
    the Iraqi government. It is a danger to the state.
        Senator Levin. Is he giving them a signal that they are
    going in one direction while his public statements are very
    different? Are they doing this? What they are doing, do you
    think, with his understanding?
        General Abizaid. I cannot say that I would know that.
        Senator Levin. What happens if we have major sectarian
    violence and there are significant defections along sectarian
    lines? What are our plans then? I know we want to support the
    Iraqi army--that is what you have told us--should civil war
    break out. But if there are major defections in that
    circumstance and they are along sectarian lines, do we get
    between the major sectarian groups, which have been bolstered
    then under my hypothesis by the defections of army units, or do
    we basically stay out of it under those circumstances?
        General Abizaid. Our clear desire is for ISFs to be in the
    lead on solving sectarian issues and we are in support of those
    units. The defections that could come are not at all noticeable
    right now and I think we are a long way away from that.
        Senator Levin. So if our hopes, though, do not materialize
    and if that does happen, do we have a plan?
        General Abizaid. Senator, we always have a plan for the
    worst case, and our plan is to stick with the ISFs. We believe
    the institution will hold them together, and it is very
    important that an Iraqi national government that takes their
    loyalty and holds their loyalty emerges.
        Senator Levin. Is that the worst case?
        General Abizaid. The worst case is of course civil war.
        Senator Levin. Do we have a plan, if there is a civil war
    and if there is defection of units and the army just has so
    many defections that you basically have the civil war side
    supported by army units? Do we at least have a plan for what we
    would do in that circumstance? I will not ask you for what the
    plan is, but I just want to know that we have one.
        General Abizaid. General Casey and I talk about the worst
    case every chance we get.
        Senator Levin. Is that what you would call the worst case,
    what I just described?
        General Abizaid. I would say a civil war is the worst case,
    and I do not think we are near that.
        Senator Levin. I hope we are not, but my question is if we
    have a plan in the event that happens, and you assure me that
    there is such a plan?
        General Abizaid. There is a plan for how we would deal with
    it.
        Senator Levin. Good.
        Chairman Warner. Would you yield?
        Senator Levin. Sure.
        Chairman Warner. That is so important, that line of
    questions and your responses. Can you also give us assurances
    you have personally conveyed that through your own channels to
    the Iraqi government and to the troops, the armed forces of
    Iraq, as to exactly what they should expect if these various
    contingencies occur?
        General Abizaid. We have not conveyed exactly anything. We
    are in discussion militarily and professionally about it and we
    will continue to be discussing it with our chain of command,
    the Secretary of Defense and his boss.
        Chairman Warner. You have been very explicit, and this is
    an open hearing. So that information presumably could work its
    way back. What you said here is a very important statement.
        Do you have anything else?
        Senator Levin. I just have one question for General Brown,
    and that is: Are the Special Forces complying fully with the
    requirements of the Detainee Treatment Act that we recently
    adopted?
        General Brown. Absolutely.
        Senator Levin. For the record, can you address some of the
    questions which have been raised in the last few months
    regarding the detention of Iraqi women in U.S. custody,
    allegedly by Special Forces, allegedly being held as leverage
    to get their husbands to turn themselves in? I do not know if
    you are familiar with those reports.
        General Brown. I could not address it. We could certainly
    take it for the record and see what we could find out about it.
        [The information referred to follows:]

        With regard to your question about allegations of detaining wives
    as leverage against their husbands, only individuals who are a threat
    to security or are involved in criminal activity are detained by
    Special Operations Forces (SOFs). On occasion, females have been
    detained, to include wives, however their detention was in compliance
    with the Law of War. Under no circumstances were wives detained for the
    express purpose of compelling some action by another person.
        Let me assure you that SOFs is in complete compliance with the
    requirements of the Detainee Treatment Act and the Law of War.
    Additionally, U.S. Special Operations Command has no policies,
    doctrine, or techniques-tactics-procedures that allow detention of
    wives as leverage against their husbands. We only detain individuals
    who are a threat to security or are involved in criminal activity.

        Senator Levin. Let me give you those.
        General Brown. I do not have the details on it.
        Senator Levin. Let me give you the reports and if you could
    tell us for the record whether or not that has occurred.
    Because if so, that clearly would be, I think, a violation of
    our manual as well as Geneva Accords.
        Thank you both. We really appreciate what you do.
        Chairman Warner. Thank you very much. This hearing is
    adjourned.
        [Questions for the record with answers supplied follow:]

                 Questions Submitted by Senator Elizabeth Dole

                             counterdrug activities

        1. Senator Dole. General Abizaid, in your written testimony, you
    stated Central Command's (CENTCOM) roles in counterdrug activities
    include, among other things, intelligence support. How frequently has
    CENTCOM provided information concerning high-value drug targets to the
    Department of Justice (Drug Enforcement Agency), Department of State
    (International Narcotics and Law), and/or the Afghanistan Minister of
    Counternarcotics and how often do these targets have ties to or are
    involved with the Taliban or al Qaeda?
        General Abizaid. Annually, CENTCOM provides information on high-
    value drug targets via the Joint Staff, to support the Foreign
    Narcotics Kingpin Act. This nomination of medium and high value targets
    is utilized in the final designation of placing a narcotics kingpin on
    the U.S. Treasury Kingpin List, with the eventual goal of interrupting
    finances and assets associated with the narcotics kingpin. We do know
    that funding for al Qaeda relies upon donations, madrassas, non-
    government organizations, non-governmental organization investment
    opportunities, and criminal enterprises, possibly including narcotics.
    Al Qaeda relies upon financial banking institutions, hawalas, couriers,
    material assistance from abroad, and information technology to move
    funds into certain regions. There has been reporting of insurgents
    using the same logistical networks such as routes, safehouses, and
    crossing points as the drug traffickers to facilitate their activities,
    but there has been no clear-cut definitive link between drug
    traffickers and insurgent groups being financially linked with each
    other. This remains one of CENTCOM's key intelligence gaps.

        2. Senator Dole. General Abizaid, in your testimony you stated
    ``there are restrictions, by law, about the use of military forces'' in
    the area of counterdrug activities. The administration in its recent
    fiscal year 2006 emergency supplemental appropriations request
    specifically asked Congress to provide drug interdiction and
    counterdrug authority to the Department of Defense (DOD) to boost its
    support to the counternarcotics forces of the governments of
    Afghanistan and neighboring friendly countries. Do the authorities
    requested for counterdrug activities in Afghanistan provide you the
    capabilities to more effectively stem the tide of drug production and
    trafficking in Afghanistan, and how will these authorities be used by
    CENTCOM?
        General Abizaid. The existing authorities are sufficient to support
    CENTCOM's counternarcotic role in Afghanistan and the region. Under the
    current authorities, CENTCOM has effectively assisted the Afghan
    government in fighting narcotics production and trafficking and
    providing support to Department of State and lead United States law
    enforcement agencies for counternarcotic (CN) activities. The DOD
    requested $192.8 million in the supplemental to support this fiscal
    year's efforts. Of this, $102.9 million is for Afghanistan and will
    continue to help the Afghans build a capacity to fight the production
    and trafficking of illegal narcotics. The remainder, $89.9 million is
    for regional CN programs. These programs will help countries better
    secure their borders, provide them with communications equipment, and
    provided much needed training in detecting, tracking, and interdicting
    narcotics as they transit from Afghanistan to Europe, Asia, and beyond.

        3. Senator Dole. General Abizaid, in your testimony you pointed out
    that ``you've got to have a regional strategy . . . we've got a long
    ways to go in getting the regional strategy defined, aligned, and
    effective.'' The President in his fiscal year 2006 emergency
    supplemental appropriations request asked for $192.8 million to fund
    training, equipment, intelligence, infrastructure, and information
    operations related to the campaign against narcotics trafficking and
    narcotics-related terrorist activities. Will a strategy be in place
    before this funding is obligated and how will this funding be allocated
    and used among Afghanistan, Pakistan, Tajikistan, Krygyzstan,
    Turkmenistan, and Uzbekistan?
        General Abizaid. Current CENTCOM CN strategy is to assist the
    Afghan Government in fighting narcotics production and trafficking and
    to provide support to Department of State and lead United States law
    enforcement agencies for CN activities in Afghanistan within existing
    authorities and resources as directed by the Chairman, Joint Chiefs of
    Staff. In fiscal year 2006, Department of Defense CN supplemental
    funding request for CENTCOM is $192.8 million. Of this, $102.9 million
    is for Afghanistan and will continue to help the Afghans build a
    capacity to fight the production and trafficking of illegal narcotics.
    The remainder, $89.9 million is for regional CN programs. These
    programs will help countries better secure their borders, provide them
    with communications equipment, and provided much needed training in
    detecting, tracking, and interdicting narcotics as they transit from
    Afghanistan to Europe, Asia, and beyond.
                                     ______

                   Questions Submitted by Senator Carl Levin

                 foreign military training--shortage of forces

        4. Senator Levin. General Brown, can you characterize the
    operational and personnel tempo strain on Special Operations Forces
    (SOFs), and tell us how the personnel increases will alleviate the
    strain on them?
        General Brown. Our continuing challenge is that several specific
    areas of SOFs force structure are in high demand and the deployment
    tempo for these individuals and units is extremely high. These include
    SOFs warriors such as joint tactical air controllers; special
    operations helicopter crews; Army special forces, civil affairs (CA),
    signals intelligence operators; and Navy SEALs. The personnel increases
    will provide U.S. Special Operations Command (SOCOM) with the ability
    to train and field additional SOFs units that can be integrated into
    future force rotation plans, thus decreasing somewhat the length and/or
    frequency of unit deployments. Even so, the requirements for SOFs will
    remain high for some time to come.

        5. Senator Levin. General Brown, how will the increases bolster
    global operations, including the foreign training missions, in Colombia
    and elsewhere?
        General Brown. The programmed force increases will not only help to
    alleviate our high operations tempo; they will also increase our
    capability to prosecute the global war on terrorism through combined
    training and foreign internal defense (FID) activities with partner
    nations. The expansion of the 6th Special Operations Squadron and the
    addition of the Marine SOFs Command Foreign Military Training Units
    greatly increase the number of FID missions we can conduct. With the
    additional Army, Air Force, Marine, and Navy SOFs, we will be able to
    conduct more Joint Combined Exercises for Training and FID missions in
    Columbia and elsewhere.

                         special operations authorities

        6. Senator Levin. General Brown, on page 89 of the Quadrennial
    Defense Review (QDR) is a statement that to prevent terrorist attacks
    and disrupt terrorist networks ``the Department must be prepared to
    develop a new team of leaders and operators who are comfortable working
    in remote regions of the world, dealing with local and tribal
    communities, adapting to foreign languages and cultures and working
    with local networks to further U.S. and partner interests through
    personal engagement, persuasion and quiet influence--rather than
    through military force alone. To support this effort, new authorities
    are needed.''
        Is this statement referring to authorities for SOFs?
        General Brown. The statement refers to the entire DOD. Even though
    SOCOM is not specifically requesting any new authorities this year, the
    authorities identified within the QDR would certainly be helpful.

        7. Senator Levin. General Brown, is there any authority that
    special operators do not currently have that you plan to request in the
    near future and if so, what is it?
        General Brown. SOCOM will continue to review areas, to include
    authorities, to improve our capabilities to execute the global war on
    terrorism. One future authority might include Section 1208 funding
    authority. This authority, provided by Congress in the fiscal year 2005
    legislation, expires at the end of fiscal year 2007 and we will
    consider requesting the authority be made permanent. Another such area
    could be suspension of provisions of law that adversely affect the
    retention of senior SOFs warriors.

        training and equipping indigenous forces fighting with special
                               operations forces

        8. Senator Levin. General Brown, in the National Defense
    Authorization Act for Fiscal Year 2005, title XII, section 1208, we
    granted SOCOM authority to train and equip indigenous forces fighting
    alongside U.S. special operators. How have you used this authority, and
    to what effect?
        General Brown. We have used this authority primarily to conduct
    operational preparation of the environment. The Secretary of Defense
    has approved almost $10 million for this purpose in the CENTCOM area of
    responsibility (AOR) this year. While it is still too early to make
    definitive assessments, our initial indications are that 1208 funding
    is making a positive difference. In addition, the Secretary of Defense
    has approved $12.5 million to support operational preparation of the
    environment worldwide, but none of that funding authority has yet been
    obligated.

         special operations command--bribery and accounting allegations

        9. Senator Levin. General Brown, I understand that the Federal
    Bureau of Investigation (FBI) and the DOD are investigating allegations
    of bribery by SOCOM personnel, that the DOD Inspector General (IG) is
    also investigating other allegations of wrongdoing, and conducting an
    audit of a specific allegation that the SOCOM comptroller ``parked''
    funds for the Office of the Secretary of Defense.
        I know you recently conducted ethics training for your staff, but
    given your rapidly increasing budget [$8 billion request for fiscal
    year 2007] have you or the Assistant Secretary of Defense for Special
    Operations and Low Intensity Conflicts (ASD-SOLIC) established any new
    management procedures and/or new positions in order to strengthen the
    oversight of SOCOM's procurement accounts? If not, are such changes
    being considered?
        General Brown. The answer to your questions is two-fold: First, we
    have not established any new management policies, as we follow DOD
    procedures established by statute and regulation. Also it should be
    noted that a recent DOD IG review labeled our procurement program as
    ``phenomenal'' and the benchmark for others to follow with regards to
    maintaining internal controls.
        Second, to strengthen our procurement process further, we intend to
    increase frequency of routine audits; increase the frequency of legal
    reviews of contracting actions; obtain more independent cost estimates;
    reduce case load of individual contracting officers; increase oversight
    of foreign comparative testing program and foreign disclosure process;
    and ensure appropriate oversight and implementation of acquisition
    portion of the 1208 authority. These goals will be reached by projected
    manpower increases in the acquisition and logistics directorate to
    include hiring; warranted contracting officers; auditors; acquisition
    attorneys; foreign comparative testing specialists; foreign disclosure
    specialists; and logistics specialists.
        We cannot speak for ASD-SOLIC.

                    special operations forces--civil affairs

        10. Senator Levin. General Brown, it is my understanding that one
    element of the QDR-based plan for SOCOM is to move Reserve CA
    components from SOCOM command and put them under the command of regular
    Army units. Some operators have told my staff that the conventional
    Army officers commanding these CA components may not understand their
    special capabilities. This could have a negative impact on Reserve CA
    professional advancement, as conventional officers would write their
    fitness reports, and instead of taking advantage of their unique
    skills, might use them for conventional duties.
        Can you confirm that Reserve CA units will be placed under
    conventional Army commands? If so, how would you prevent the potential
    negative impacts I mentioned?
        General Brown. The QDR-based plan does call for the reassignment of
    the Reserve component CA force from SOCOM to the United States Army
    Reserve Command, one of the Army's major commands. Underneath the
    USARC, the United States Army CA and Psychological Operations Command
    continues to serve as the functional headquarters of the Reserve CA
    force. Under the realignment plan, SOCOM retains proponency for all CA
    forces. Thus, SOCOM continues to provide oversight for the Reserve CA
    force for force design, life cycle management, professional
    development, and training programs.
        Currently, when deployed for operations such as Operations Enduring
    Freedom and Iraqi Freedom (OEF/OIF), CA forces are placed under the
    operational control of conventional or SOF commanders, depending upon
    the mission. That does not change under the realignment plan. My
    ability to prevent misuse and negative impacts upon CA forces under the
    operational control of conventional force commanders will continue to
    depend on my ability to inform and persuade those leaders of optimum CA
    employment tactics.

                         temporary three-star position

        11. Senator Levin. General Brown, the Department recently created a
    new, temporary wartime position of Commander, Joint Special Operations
    Command (JSOC), U.S, CENTCOM, Forward. The President has designated
    this as a position of importance and responsibility authorizing the
    grade of lieutenant general. What is the relationship between this new
    command and the JSOC?
        General Brown. The ``new command'' is actually existing elements of
    the JSOC under the operational control of Commander, CENTCOM. The JSOC
    Commander is dual-hatted as Commander of JSOC and as Commander of JSOC
    forces forward.

        12. Senator Levin. General Brown, what is the relationship between
    this command and the CENTCOM's theater SOCOM?
        General Brown. Both organizations are under General Abizaid's
    command, but they have different missions. The Special Operations
    Command-Central provides command and control for all SOFs in the
    CENTCOM AOR, less this new command and designated CA units. However,
    close and constant coordination between these two headquarters happens
    daily. The two headquarters also share low-density, high-demand SOF
    assets, such as rotary wing lift.

                             information operations

        13. Senator Levin. General Abizaid and General Brown, who is
    responsible for coordinating policy regarding DOD information
    operations in Iraq and Afghanistan?
        General Abizaid and General Brown. CENTCOM and its subordinate
    commands are responsible for coordinating policy in Iraq and
    Afghanistan.

        14. Senator Levin. General Abizaid and General Brown, who is
    responsible for coordinating the implementation?
        General Abizaid and General Brown. CENTCOM and its subordinate
    commands are responsible for coordinating implementation of DOD
    information operations in Iraq and Afghanistan.

        15. Senator Levin. General Abizaid and General Brown, who is
    responsible for coordinating policy regarding DOD information
    operations globally, and who is responsible for implementing it?
        General Abizaid. U.S. Strategic Command (STRATCOM) coordinates
    policy for global information operations. CENTCOM is responsible for
    implementation of information operations in the CENTCOM AOR and
    synchronizes, coordinates, and integrates with U.S. STRATCOM on issues
    of mutual interest.
        General Brown. The U.S. STRATCOM coordinates DOD policy for global
    information operations. Their Joint Information Operations Center
    plans, integrates, and synchronizes information operations in support
    of Joint Force Commanders and serves as the DOD lead enhancing
    information operations across the Department. The Geographic Combatant
    Commands implement information operations in their theaters.

        16. Senator Levin. General Abizaid and General Brown, what is the
    appropriate role for each of your commands?
        General Abizaid. CENTCOM is responsible for planning and execution
    of theater strategic, operational, and tactical operations within its
    geographic AOR. United States SOCOM apportions trained and equipped
    forces to CENTCOM to participate in these operations under CENTCOM
    control and authorities.
        General Brown. With respect to Information Operations, the global
    war on terrorism efforts that involve multiple geographical combatant
    commands or trans-regional issues, SOCOM's role would focus on
    synchronizing the information operations of the geographic combatant
    commands. SOCOM's primary information operations focus remains with
    global war on terrorism priority and high-priority countries.
    Concerning global war on terrorism efforts, SOCOM could take the lead
    in implementing information operations capabilities in the priority and
    high-priority countries, but would probably direct the implementation
    activities of the geographic combatant commands.

                            counterdrug--afghanistan

        17. Senator Levin. General Abizaid, the March 2006 State Department
    International Narcotics Control Strategy Report asserts, ``The
    political and economic situation in Afghanistan is improving, but opium
    production and the resultant trafficking of opium and its derivatives
    still accounts for roughly one third of Afghanistan's total (combined
    licit and illicit) gross domestic product. Afghanistan's huge drug
    trade severely impacts efforts to rebuild the economy, develop a strong
    democratic government based on rule of law, and threatens regional
    stability.''
        Last January, a group of 35 non-governmental organizations wrote to
    Secretary Rice recommending that coalition forces:

              1. focus intelligence collection efforts on identifying major
            traffickers;
              2. cease all payments to traffickers; and
              3. assist in the destruction of laboratories and interdiction
            of imports of precursor chemicals and exports of narcotics.

        Are the forces under your command doing any of this?
        General Abizaid. CENTCOM has supported lead nation and lead U.S.
    Government agencies responsible for counternarcotics with intelligence
    support and has provided assistance within CENTCOM's existing means and
    capabilities to lead U.S. agencies in the destruction of laboratories
    and the export of narcotics. CENTCOM forces are not authorized to make
    payments to traffickers.

        18. Senator Levin. General Abizaid, what is the counterdrug role of
    Combined Forces Command-Alpha forces?
        General Abizaid. In 2004, the Secretary of Defense through the
    Chairman, Joint Chiefs of Staff, modified CENTCOM's mission execution
    order in Afghanistan to permit a broader authority for DOD forces to
    support CN efforts, and defined supporting tasks to the lead drug
    enforcement agencies and organizations in Afghanistan.
        When requested by a law enforcement agency, these supporting tasks
    include: providing air and ground tactical and administrative mobility
    support; providing in-extremis defensive support; providing medical and
    medical evacuation support; assisting in operational planning,
    coordination, and deconfliction of law enforcement CN missions;
    supporting CN public information programs through broad-based
    information operations support; and supporting alternative livelihoods
    programs through deconfliction, coordination, and Commander's Emergency
    Relief Program Fund expenditures. Additionally, the modification
    permits CN forces to capture or destroy drug labs, drugs, and chemicals
    discovered during the course of routine operations.

        19. Senator Levin. General Abizaid, my understanding is that the
    British will continue to have the counterdrug lead, but that the
    International Security Assistance Force (ISAF) will not take on an
    explicit counterdrug mission. Is this correct?
        General Abizaid. Under the Bonn Agreement, the British Government
    agreed to be the lead nation for the CN mission in Afghanistan. This
    agreement expired last year, but the United Kingdom has maintained the
    lead for CN security sector reform. ISAFs currently do not have an
    explicit counterdrug mission in Afghanistan because national caveats of
    engagement from several North Atlantic Treaty Organization partner
    nations will not support their forces being used in this manner.

        20. Senator Levin. General Abizaid, would you recommend a
    counterdrug mission for ISAF and if so, what would it involve?
        General Abizaid. ISAF should be very concerned with narcotics
    trafficking in Afghanistan since most of the heroin produced in the
    region is consumed in Europe. ISAF CN support would be a key enabler in
    assisting the Afghan Government to stabilize its economy, prevent
    corruption fueled by drug profits, and enhance overall security in the
    region.

      pakistan--aircraft procurement priorities: fighters or helicopters?

        21. Senator Levin. General Abizaid, in the aftermath of the October
    8, 2005, earthquake, the need for helicopters to reach the remote areas
    of Pakistan was highlighted. Helicopter support is also important to
    the Pakistani military in asserting control over areas where terrorist
    groups are operating inside Pakistan and over the border into
    Afghanistan and India. My understanding is that it is still the top
    priority of the Pakistani military to procure as many as 40 or more F-
    16 fighter aircraft from the United States via foreign assistance
    programs to bolster deterrence against the Indian military.
        However, given the immediate internal challenges posed by
    terrorists and the need for a disaster response capability, would it
    not be more important to obtain additional helicopters than to obtain
    additional fighter aircraft?
        General Abizaid. If Pakistan pursues the purchase of additional F-
    16s, CENTCOM would prefer that Pakistan use their national funds to
    procure the fighter aircraft and use their foreign military financing
    to purchase helicopters. In general, CENTCOM strongly supports an
    increased investment by the Pakistanis on items that would directly
    benefit both them and the United States in the fight against terrorism,
    such as the procurement of helicopters and associated equipment.
    Additionally, while Pakistan currently allocates 15 percent of U.S.
    grant monies ($300 million per year fiscal years 2005-2009) to global
    war on terrorism-related objectives, it should be noted that India
    remains their primary conventional concern, and India is currently
    pursuing the acquisition of up to 126 multi-role fighter aircraft.
                                     ______

                Questions Submitted by Senator Edward M. Kennedy

                               civil war in iraq

        22. Senator Kennedy. General Abizaid, Americans are concerned about
    Iraq sliding into all-out civil war, but the question is whether civil
    war has already begun.
        In December, President George Bush admitted that some had fears
    ``that Iraq could break apart and fall into a civil war,'' but said he
    didn't believe ``these fears are justified.'' Last week, the President
    twice mentioned the possibility of civil war. He acknowledged the
    situation in Iraq ``is still tense'' and that forces in Iraq seek to
    ``provoke a civil war.'' He added they are attempting ``to ignite a
    civil war'' and we can expect them to try again.
        Our Ambassador to Iraq, Zalmay Khalilzad, recently said, ``the
    potential is there'' for sectarian violence to become full-blown civil
    war. ``We have opened the Pandora's box and the question is, what is
    the way forward?''
        The Chairman of the Joint Chiefs of Staff, General Peter Pace, is
    no longer saying that the situation in Iraq is ``going very, very
    well.'' Last week he stated, ``Everything is in place if they want to
    have a civil war,'' and ``everything is also in place if they want to
    have a united, unified future.''
        Secretary of Defense Donald Rumsfeld recently revealed that the
    military has been conducting war games in the event of a civil war in
    Iraq. While he did not think there was a civil war at the present time,
    the Intelligence Community has envisioned what a Shiite-Sunni conflict
    might look like.
        What is the definition of civil war used by CENTCOM?
        General Abizaid. [Deleted.]

        23. Senator Kennedy. General Abizaid, is it the same definition as
    that used by the President, Ambassador Khalilzad, General Pace, and
    Secretary Rumsfeld? If not, what is their definition?
        General Abizaid. [Deleted.]

        24. Senator Kennedy. General Abizaid, if there is no definition,
    how do you evaluate whether our troops are engaged in civil war?
        General Abizaid. [Deleted.]

        25. Senator Kennedy. General Abizaid, are our soldiers instructed
    not to take sides in the event of a civil war?
        General Abizaid. [Deleted.]

                            role of militias in iraq

        26. Senator Kennedy. General Abizaid, there is growing recognition
    that the continued existence of militias in Iraq undermines stability
    and the prospect of success. On March 3, General Casey said, ``It will
    take a holistic effort to get at the militia issue. There are several
    aspects to it, and I do not believe that we will ultimately succeed
    until the Iraqi security forces--the police and the military--are the
    only ones in Iraq with guns.'' The Transitional Administrative Law
    banned militias, but the Constitution only bans new militias.
        Should the U.S. seek a prohibition on militias as a constitutional
    amendment during the 4-month period when the Iraqi constitution is
    reviewed?
        General Abizaid. [Deleted.]

        27. Senator Kennedy. General Abizaid, if there is no requirement
    that militias disband, how can an incentive be established to encourage
    them to do so?
        General Abizaid. [Deleted.]

                  sectarian divisions in iraqi security forces

        28. Senator Kennedy. General Abizaid, clearly, America has a strong
    interest in creating security forces that are representative of all in
    Iraq. However, the security forces that we are training do not seem to
    reflect that goal. A recent Congressional Research Service report
    states, ``with a shortage of reliable Sunni soldiers to patrol Sunni
    provinces, the U.S. and Iraqi Governments have been forced to deploy
    mostly Shiite units to Sunni towns, which has only exacerbated
    intercommunal tensions.''
        How many units of the defense or police forces include a
    significant percentage of Sunni Arabs, i.e., over 20 percent in their
    enlisted ranks, and how many are overwhelmingly Shiite or Kurdish?
        General Abizaid. [Deleted.]

        29. Senator Kennedy. General Abizaid, Stephen Biddle from the
    Council on Foreign Relations has said, ``Iraq's Sunnis perceive the
    `national' army and police force as a Shiite-Kurdish militia on
    steroids.'' He contends that building up the forces this way makes
    civil war more likely and potentially bloodier by arming and training
    the Shiites and Kurds while Sunnis are sidelined. How do you respond to
    these concerns?
        General Abizaid. [Deleted.]

        30. Senator Kennedy. General Abizaid, how concerned are you that
    Iraqi national defense and police forces will splinter along sectarian
    lines?
        General Abizaid. [Deleted.]

        31. Senator Kennedy. General Abizaid, can the Iraqi national
    defense and police forces quell a civil war?
        General Abizaid. [Deleted.]

        32. Senator Kennedy. General Abizaid, how many members of the Iraqi
    national defense and police forces are also members of militias?
        General Abizaid. [Deleted.]

        33. Senator Kennedy. General Abizaid, by and large, the attacks on
    U.S. troops in Iraq have been largely by Sunnis to date, with the
    Shiites patiently waiting for us to leave. What will we do if the
    Shiites enter the fray and start attacking our troops?
        General Abizaid. [Deleted.]

                         training iraqi security forces

        34. Senator Kennedy. General Abizaid, press reports indicate that
    the number of Iraqi battalions capable of fighting on their own,
    without American support, has declined from three, to one, to zero. Who
    is conducting these evaluations for the American Government?
        General Abizaid. [Deleted.]

        35. Senator Kennedy. General Abizaid, why is there such
    fluctuation?
        General Abizaid. [Deleted.]

        36. Senator Kennedy. General Abizaid, the administration says that
    75 percent of battle space will be under Iraqi control by the end of
    the year. What percentage of Iraq's population will be in those areas
    under Iraqi control?
        General Abizaid. [Deleted.]

                               lessons from iraq

        37. Senator Kennedy. General Abizaid, in a January opinion
    editorial, Paul Schroeder wrote of the death of his son, Marine Lance
    Corporal Edward ``Augie'' Schroeder II, in combat in Haditha, Iraq. Mr.
    Schroeder wrote: ``In our last conversation, Augie complained that the
    cost in lives to clear insurgents was ``less and less worth it,''
    because marines have to keep coming back to clear the same places.
    Marine commanders in the field say the same thing. Without sufficient
    troops, they can't hold the towns.'' Mr. Schroeder noted his son was
    killed on his fifth mission to clear Haditha.
        In your testimony you noted the lessons the military had learned
    from Iraq. Notably absent was any comment about the need to have the
    manpower necessary to control territory sufficiently to prevent
    insurgency.
        How do you respond to the assertion that American lives were lost
    because we failed to have sufficient manpower available to prevent or
    control the insurgency?
        General Abizaid. In planning a conventional war there are many
    known and measurable factors that are included in the equation. CENTCOM
    knows what to expect of U.S. forces and how to employ them to maximize
    the technological advancements that have been developed. CENTCOM also
    knows the enemy's capabilities and limitations, his weapons systems,
    and how he deploys them.
        A counterinsurgency operation is different and is described as an
    asymmetric threat, much more like a terrorist threat or an organized
    criminal element than a military operation. The battle against
    insurgency is much like fighting gang violence in the streets of our
    cities here in the U.S. Lessons learned from the Vietnam conflict
    indicate that increasing manpower is not a recipe for success. The key
    is to build Iraqi institutions that are ultimately capable of governing
    and securing their own nation.

        38. Senator Kennedy. General Abizaid, what have we learned from our
    experience in Iraq about the type and numbers of military manpower
    required to conduct a major combat operation and follow-on
    stabilization and reconstruction operations?
        General Abizaid. After action reviews and lessons learned are
    keystones of the success of the United States military and after every
    operation, detailed discussions are held concerning successes and
    failures from the tactical to the strategic level. At the tactical
    level, innovations and improvements are made continuously from how to
    counter the effects of improvised explosive devices (IEDs) to methods
    for establishment of checkpoints. The manpower required for each
    operation is reviewed during mission analysis which includes lessons
    learned from previous operations. One of the most significant lessons
    learned is the need to have not only the right number of personnel, but
    the right type of personnel. For example, a few soldiers or civilians
    who have expertise in public administration are as valuable in the
    reconstruction of municipal services as an armor battalion would be in
    conventional armored warfare.

        39. Senator Kennedy. General Abizaid, what lessons from Iraqi
    operations has the Army incorporated in doctrine?
        General Abizaid. Doctrine acts as a guide, a universal starting
    point from which we adjust or adapt to meet the current threat or
    environment and is an ongoing process. U.S. military doctrine is
    currently being refined to incorporate more decentralized execution of
    operations concerning counterinsurgency and stability and support
    operations. Additionally, operations in Iraq have focused attention on
    refining doctrine associated with interagency operations.

        40. Senator Kennedy. General Abizaid, during your testimony there
    was considerable discussion of the role of interagency partners in the
    stabilization and reconstruction of Iraq. Would you detail what
    interagency actions have been most useful, what you need more of, and
    what interagency support has been inadequate or does not work?
        General Abizaid. CENTCOM's interagency partners have provided
    invaluable assistance in the areas of threat finance, high-value
    individuals, and in countering the threat posed by IEDs. For example,
    in the area of threat finance, the Department of Treasury provides
    information that would otherwise not be obtainable by the DOD. By
    combining similar data streams from the Department of State (DOS),
    Department of Justice (DOJ), and Department of Homeland Security (DHS)
    with data obtained through various intelligence channels, Federal
    agencies have been able to dislocate and disrupt the enemy's economic
    resources both inside and outside U.S. borders.
        Likewise, CENTCOM's efforts to identify, track, and neutralize high
    value individuals are greatly enhanced by the connections CENTCOM's
    interagency partners have with the international law enforcement
    community. By leveraging this unique community, U.S. collective efforts
    complicate the enemy's efforts to cross international borders.
        In the area of IEDs, the FBI's Terrorist Explosive Device Analysis
    Center has proven exceptionally helpful. Their expertise and leading-
    edge laboratory are aiding the development of equipment and tactics,
    techniques, and procedures to defeat the devices our forces encounter
    on a daily basis.
        CENTCOM would benefit from having greater numbers of experienced
    interagency officers assigned to the theater for longer periods. The
    DOS has moved to increase to 1 year the tours of duty for its officers
    assigned to Iraq and Afghanistan.

        41. Senator Kennedy. General Abizaid, what recommendations would
    you make to improve interagency participation in stability and
    reconstruction operations?
        General Abizaid. CENTCOM would benefit from having a greater number
    of experienced interagency officers assigned to the theater for longer
    periods. Most agencies do not have a large pool of available,
    experienced officers to staff positions in difficult posts such as
    Afghanistan and Iraq. They tend to be spread very thin, trying to cover
    worldwide commitments with limited human and financial resources.

        42. Senator Kennedy. General Abizaid, when should interagency
    partners be brought into the planning to ensure effective stability and
    reconstruction operations?
        General Abizaid. Interagency coordination should begin at the
    earliest possible opportunity. CENTCOM's Joint Interagency Coordination
    Group ensures this happens by involving liaison officers at every step
    of the planning process. CENTCOM enjoys participation from the DOS,
    DHS, and Department of the Treasury, along with the FBI and the Drug
    Enforcement Administration.
                                     ______

                    Questions Submitted by Senator Jack Reed

               special operations command technology development

        43. Senator Reed. General Brown, the SOCOM science and technology
    (S&T) budget request has been decreased by $80 million with respect to
    the 2006 appropriated level. It is also $60 million below the original
    2006 SOCOM budget request. Given that your special operators are facing
    a wide new variety of threats and developing new capabilities like
    laser weapon systems and advanced networking and communications
    systems, why does it make sense to reduce funding for your innovative,
    research programs?
        General Brown. Based on the SOCOM February 2006 fiscal year 2007
    budget estimates, the SOCOM fiscal year 2006 S&T original budget
    request was for $120.125 million. The fiscal year 2006 appropriated
    budget was $175.254 million. This figure includes a $12 million
    congressional reduction to the Advanced Tactical Laser Advanced Concept
    Technology Demo (ACTD), a $7.5 million congressional reduction due to
    Special Operations Special Technology Program Growth and $76.073
    million in congressional adds.
        The U.S. SOCOM fiscal year 2007 S&T budget request was for $95.393
    million. This represented a decrease of $24 million from the original
    fiscal year 2006 request and a difference of $79.860 million from the
    fiscal year 2006 appropriated budget. The difference between the
    original fiscal year 2006 budget request and fiscal year 2007 budget
    request is due primarily to the realignment of Advanced Tactical Laser
    ACTD funds for higher command priorities as well as planned ramp downs
    in the Special Operations precision guided munitions and psychological
    operations modernization programs. The major difference between the
    fiscal year 2006 appropriated budget and the fiscal year 2007 requested
    budget is that no congressional adds have yet been applied in fiscal
    year 2007.

        44. Senator Reed. General Brown, what role do these programs play
    in SOCOM's acquisition strategy for the future?
        General Brown. The focus for SOCOM's S&T investment strategy is to
    effectively apply and invest available resources to maximize SOF
    warfighting capabilities with an eye towards the future. Our technology
    development activities are focused on a number of capability areas.
    These areas include: command and control; tagging, tracking, and
    locating; SOF Warrior lethality, survivability, and sustainability;
    power and energy; and psychological operations.
        Specific S&T programs at SOCOM include: an airborne tactical laser;
    small unmanned aerial system payloads and networking; signature
    reduction; advanced night vision devices; night vision windshields;
    psychological operations products and broadcasting mechanisms;
    unattended sensors and sensor networks; and advanced mobility concepts.

        45. Senator Reed. General Brown, what efforts are you curtailing
    and what capabilities are you risking not developing with this reduced
    request?
        General Brown. Given the competing demand across the Department,
    the fiscal year 2007 President's budget request represents a balance
    among near-term and long-term priorities. The SOCOM S&T request is
    properly prioritized and will be effectively implemented through
    increased leveraging of associated efforts of other agencies. It
    represents a balanced investment among near-term requirements and
    planning to meet future threats.

           rapid technology deployment and experimentation in theater

        46. Senator Reed. General Abizaid, a large number of technology
    development organizations, including the Army Rapid Equipping Force,
    Defense Advanced Research Projects Agency, the Office of Naval
    Research, and others are all working very hard to develop new
    technologies to support warfighters in Iraq and Afghanistan. I support
    these efforts, but am concerned that technologies are being sent over
    as prototypes for use by deployed forces without proper testing or even
    knowledge of higher level officials. I am concerned that deployed
    forces who receive these technologies are not given sufficient training
    to always make use of them, or knowledge to understand how they will
    affect other systems being used in operations (for example, understand
    how sensor networks or communications gear might interfere with other
    systems).
        Who is responsible for monitoring all of the technology
    experimentation and prototype testing that is going on in CENTCOM's
    AOR?
        General Abizaid. These activities are typically done under the
    service ``train and equip'' responsibilities. Therefore, CENTCOM does
    not centrally monitor service specific technology experimentation or
    prototype testing with the exception of Counter-Improvised Explosive
    Device (C-IED) related activities. However, the CENTCOM Resources and
    Assessment Directorate, Science and Technology Division does monitor
    joint technology experimentation and prototype testing.
        For C-IED specific technology and operations, CENTCOM has
    established a full-time C-IED Task Force under the command's Director
    of Operations. This task force works in conjunction with both the Joint
    Improvised Explosive Device Defeat Organization (JIEDDO) and the Office
    of the Secretary of Defense's Combating Terrorism Technology Task
    Force.

        47. Senator Reed. General Abizaid, is there a single inventory or
    database of all the technological demonstration and experimentation
    activities going on in theater?
        General Abizaid. There is no centrally managed overarching
    inventory or database of all technologies demonstrations and
    experimentations. This lack of a single inventory of the technologies
    has been recognized as a shortfall and is being developed by Multi-
    National Forces-Iraq and Multi-National Corps-Iraq as part of an
    overall technology deployment and insertion process in Iraq.

        48. Senator Reed. General Abizaid, how are the Services' test and
    evaluation activities and the Office of the Director of Operational
    Test and Evaluation involved in these activities?
        General Abizaid. Developmental programs such as ACTD have
    associated independent operational assessors such as the Army Test and
    Evaluation Command (ATEC) and the Air Force Operational Test and
    Evaluation Center. For C-IED technologies CENTCOM and the JIEDDO
    leverage the service testing organizations. Frequently, stateside
    testing is supplemented with an in-theater assessment prior to a
    production or fielding decision being made. A field office of ATEC
    drawn from their Operational Test Command is in Iraq. They conduct in-
    theater assessments and produce test reports for decisionmakers.
                                     ______

                 Questions Submitted by Senator Daniel K. Akaka

                            special operation forces

        49. Senator Akaka. General Brown, in your posture statement you
    contend that the Special Forces soldier is the key to SOCOM's success.
    Consequently, according to the QDR, the DOD plans to increase SOFs by
    15 percent and increase the number of Special Forces Battalions by one-
    third. I am concerned about your ability to meet these numbers when,
    even today, many of our most able soldiers are unable to complete the
    training.
        Do you anticipate having to lower the rigorous standard of
    admittance to the Special Forces? If not, how do you expect to meet
    your recruitment goals?
        General Brown. The United States Army Special Operations Command
    (USASOC) will not lower the standards for admittance to Special Forces
    (SF). USASOC analyzed its requirement for additional force structure
    and determined that 750 is the number of Active Duty Enlisted (ADE)
    graduates per year required to fill the current force and grow to meet
    QDR levels. USASOC has conducted a phased growth to ensure SOF quality
    and readiness is maintained throughout the force while growing to meet
    requirements.
        The United States Army John F. Kennedy Special Warfare Center and
    School (USAJFKSWCS) increased ADE graduation from 250 in fiscal year
    2001 to 450 in fiscal year 2003. This was due to the increase in
    numbers and standards for in-service recruits (focusing on higher
    quality soldiers) and the introduction of the Initial Accession Program
    (IAP) which allowed limited recruiting of high quality civilians
    directly into the Army specifically for SF (known as the 18X Program).
    We increased the school's capacity and instructor base in fiscal year
    2004 in order to gradually increase graduation rates from 450 to 750 by
    fiscal year 2006. That same year USAJFKSWCS refined its Special Forces
    Assessment and Selection (SFAS) Course. This, as well as the
    introduction of a ``train for success'' strategy and mindset among the
    cadre, led to a reduction in attrition for selected soldiers going
    through the follow-on Special Forces Qualification Course (SFQC). The
    increased in-service recruiting standards, IAP, increased resourcing,
    refined SFAS, and reduced attrition in SFQC allowed USAJFKSWCS to
    graduate 689 ADE in fiscal year 2004 and 789 in fiscal year 2005--thus
    reaching the 750 goal 1 year ahead of schedule.

        50. Senator Akaka. General Brown, your posture statement describes
    the SF soldier as specially assessed and selected, mature, innovative,
    regionally oriented, and culturally attuned. It seems to me an
    extensive period of training would be necessary to create a soldier
    with all of these capabilities.
        How long will it take to train each SF soldier including the time
    spent in specialized instruction, such as language training, and how
    long do you anticipate it will take before you feel you have the
    necessary number of SF soldiers to fulfill future operational
    requirements?
        General Brown. The SFQC is going through the most comprehensive
    change in its history and is more demanding than ever. The USAJFKSWCS
    is introducing more live-fire exercises; more SF common skills
    training; a more robust foreign language program; more cultural
    training; and more field-craft. The SFQC also has added a significant
    amount of classified instruction and advanced skills training relevant
    to today's operational environment. The new course design also includes
    an enhanced Survival, Evasion, Resistance, and Escape program that
    students attend earlier in the training pipeline than in the past. We
    are updating our teaching methods blending live, simulations, and
    advanced distributed learning for less lecture instruction and more
    time in practical exercises and in the field. Use of technology is also
    an important part of being able to add a significant amount of material
    to the program of instruction while decreasing the average time a
    soldier is in the training program from 63 to 48 weeks. Students are in
    training on most weekends; receive homework assignments; and provide
    instruction to peers. Adaptive Thinking and Leadership (ATL) is a
    component that prepares our SF students for the ambiguous environments
    against an asymmetrical threat they will face on the battlefield. ATL
    scenarios foster critical thinking and creative solutions. Once all
    elements of the transformed training pipeline are in place formal
    language training will occur in all phases of training to include the
    final exercise ``Robin Sage'' (the only Unconventional Warfare exercise
    in the DOD) where students work with a surrogate force in 1 of the 10
    SF target languages. The SF training pipeline transformation will be
    complete by June 2006.
        Beginning in fiscal year 2006 we expect to have the capability to
    sustain producing approximately 750 ADE graduates each year. This is
    the annual number of ADE graduates required to fill the current force
    and grow to meet QDR levels through fiscal year 2008.

                                      iran

        51. Senator Akaka. General Abizaid, as you well know, President
    Bush as well as Secretary of State Condoleezza Rice and Secretary of
    Defense Donald Rumsfeld have recently suggested that Iran is actively
    stirring up violence in Iraq and advocate taking a tougher stance
    toward Iran.
        How would a potential conflict with Iran impact the DOD's current
    operations forces and tempo?
        General Abizaid. While any additional conflict would impact the
    operations tempo of our Armed Forces, CENTCOM is quite confident that
    DOD retains sufficient forces to respond. CENTCOM currently has up to
    200,000 personnel employed in the CENTCOM AOR on any given day. This is
    less than 9 percent of the 2.26 million total military forces. Since
    the start of combat in the CENTCOM AOR, at no time has a request for
    forces been turned down. U.S. military men and women are well trained
    and highly professional. CENTCOM is confident that they can handle any
    mission given to them.

        52. Senator Akaka. General Abizaid, if troops were engaged in Iran,
    would we have forces to meet our homeland security needs in case of a
    natural disaster or national emergency?
        General Abizaid. All of the U.S. global requirements, to include
    the needs of the DHS, are taken into account by the Office of the
    Secretary of Defense when making force structure decisions and when
    troops are apportioned around the globe. In case of a natural disaster
    or national emergency, the sourcing and provisioning of U.S. troops to
    meet U.S. homeland security needs would be determined by the Secretary
    of Defense, the Joint Staff, and the U.S. Joint Forces Command, based
    on the determination of the DHS.

                               civil war in iraq

        53. Senator Akaka. General Abizaid, recently, Secretary of Defense
    Rumsfeld stated that he did not believe that the sectarian violence in
    Iraq has escalated into a civil war. All the same, there has been a
    notable increase in violence between Shiites and Sunnis in Iraq during
    the last few weeks. Do you feel that we should be making preparations
    for a U.S. response in case of an Iraqi civil war? If yes, what
    strategic shifts would need to be made by U.S. forces in Iraq?
        General Abizaid. [Deleted.]

        [Whereupon, at 10:50 a.m., the committee adjourned.]