[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.]
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    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.
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    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.]

                                 
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