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



 
       DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2007

                              ----------                              


                         TUESDAY, MARCH 7, 2006

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 2:38 p.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Ted Stevens (chairman) presiding.
    Present: Senator Stevens.

                         DEPARTMENT OF DEFENSE

STATEMENT OF HON. TINA JONAS, UNDER SECRETARY OF 
            DEFENSE (COMPTROLLER)
ACCOMPANIED BY VICE ADMIRAL MARTY CHANIK, DIRECTOR OF FORCE STRUCTURE, 
            ASSESSMENTS AND RESOURCES, JOINT CHIEFS OF STAFF


                opening statement of senator ted stevens


    Senator Stevens. I am sorry to be a little bit late. We 
have several conferences going on at the same time. Our co-
chairman has indicated he cannot be with us now. But I do 
welcome you here, Ms. Jonas, with your colleagues. I understand 
you are joined by Admiral Marty Chanik from the Joint Chiefs. 
Admiral, you are the Director of Force Structure, is that 
right?
    Admiral Chanik. Yes, sir, the J-8 on the Joint Staff, which 
is Director of Force Structure Assessments and Resources.
    Senator Stevens. Thank you. Well, it is good to have you 
both here and we look forward to your testimony. I am sorry 
that we have these conflicting things going on right now. There 
are conferences going on, caucuses on the questions of lobbying 
and the basic problems that we face as far as rule changes in 
those areas.
    As we meet here, our men and women remain engaged in 
critical missions. We just had a whole series of briefings 
about the budget aspects of defense and I think we all know 
that you have $67.5 billion for defense activities on this 
bill. That is a 6 percent increase as I understand it for this 
year. Included in that is $423.2 billion for Department of 
Defense (DOD) programs under the purview of our subcommittee.


                           prepared statement


    We will make your statements part of the record completely 
as well as Senator Inouye's in the record, and hopefully we 
will be joined by others.
    [The statement follows:]

             Prepared Statement of Senator Daniel K. Inouye

    Mr. Chairman, it is indeed a pleasure for me to join you 
once again as we begin our oversight hearings of the fiscal 
year 2007 defense budget. For the sake of those who are here 
today, I want to point out that this is the twenty-sixth year 
that Senator Stevens has served the Defense Subcommittee as 
either its chairman or ranking member.
    His record of accomplishment during this period is 
unmatched. His knowledge of defense matters remains 
unparalleled elsewhere in the Congress. His dedication to the 
men and women in the military is inspirational. And, his 
fairness to members on both sides of the aisle is a model that 
all of us should emulate.
    So, Mr. Chairman I just want to reiterate what a pleasure 
it is for me to be able to join you once again as we formulate 
the subcommittee's recommendations for defense spending in the 
coming year.
    The budget request before this subcommittee is $422.6 
billion, an increase of $23.8 billion--not including 
supplemental funding for wars and natural disasters.
    It includes small percentage increases for our military pay 
and health care programs, and relatively large increases for 
procurement and day to day operations.
    I find it curious that a major emphasis in this year's 
request is to try to rein in personnel and health care programs 
at a time when the Defense Department is having such a 
difficult time encouraging young people to join the military.
    I also find it interesting that the Defense Department has 
decided to terminate the C-17 program when we are flying the 
wings off of our airlift fleet in the gulf. This is even more 
surprising when one learns that airlift is the Air Force's top 
unfunded priority this year.
    So to, I was surprised to learn that DOD planned to 
eliminate the second engine supplier for the Joint Strike 
Fighter after we have invested more than $1 billion to ensure 
we would have competitive pricing in what is expected to be a 
multi-thousand aircraft program.
    I hope to learn more about these subjects, and the DOD 
recommendations today.
    Finally, Mr. Chairman, I want to join you in welcoming our 
witnesses here today. Ms. Jonas and Admiral Chanik we 
appreciate all that you do for the nation in your current 
positions. We understand the challenges that you face in trying 
to meet our nation's military needs with limited resources. The 
chairman and I and this subcommittee face the same challenge as 
we prepare our committee's recommendations. We thank you for 
being here today, and look forward to your testimony.

    Senator Stevens. I am really quite interested in the 
conversation we are going to have today because we have talked 
about it a little bit on a personal basis, Ms. Jonas, but the 
sustainability of these budgets is beginning to worry me 
considerably.
    Would you like to summarize your statement? We have all the 
time in the afternoon, so I am not setting a limitation on any 
time. The whole statement, though, is in the record as though 
read.


                           summary statement


    Ms. Jonas. Thank you very much, Mr. Chairman. I will just 
hit a few highlights of the budget if I might. We thank you for 
having us here today. I thank you for the opportunity to 
discuss the President's fiscal year 2007 budget request for the 
Department of Defense, and I would also like to thank this 
subcommittee for their strong support of the men and women of 
America's armed forces and their families.
    So let me just briefly summarize. The President's fiscal 
year 2007 budget request is $439.3 billion. This is a 7 percent 
increase over the 2006 enacted level of $410.8 billion. This 
subcommittee has jurisdiction over $422.6 billion, which 
includes operation and maintenance, procurement, research and 
development, and military personnel.
    The budget supports the President's 2005 national security 
strategy and the long war against terrorist extremists and the 
findings and recommendations of the 2006 Quadrennial Defense 
Review (QDR). The budget is aligned with the QDR, the strategic 
priorities, and invests in capabilities and forces the Nation 
needs to prevail in irregular warfare operations, to defend the 
homeland, and to maintain America's military superiority. Of 
course, this budget supports strongly our men and women in 
uniform and their families.
    In the area of prevailing in irregular warfare operations, 
the budget substantially increases the size and capabilities of 
the special operations forces. We invest $5.1 billion in 2007 
and $28.7 billion over the fiscal year 2007 to 2011 program 
period. Some highlights in that area include an additional 
14,000 special operations forces (SOF). That is a growth of 
4,000 forces in fiscal year 2007. In addition, we add SOF 
battalions, we increase funds for the Marine Corps Special 
Operations Command, and we establish a Special Operations 
Forces Unmanned Aerial Vehicle Squadron, and we increase the 
number of Navy SEAL teams as well.
    In addition, we are increasing our joint combat power and 
the budget provides $6.6 billion in 2007 and $40.6 billion over 
the program period to complete the conversion of 48 regular 
Army brigades to 70 modular brigade combat teams. We also 
continue the modernization and integration of ground forces. 
The Future Combat System is fully funded in this budget, $3.7 
billion in the fiscal year 2007 period.
    In addition, because understanding the nature of the battle 
space on a minute to minute basis is critical to the success of 
our forces, the budget provides $1.7 billion in fiscal year 
2007 and $11.6 billion over the program for unmanned aerial 
vehicles to increase our intelligence-gathering capabilities 
and enable persistent real-time intelligence.
    In addition, we equip our forces with language and cultural 
skills that they need for the 21st century mission, and the 
budget highlights an investment of $181 million for fiscal year 
2007 to expand our language training for both general and 
special operations forces.
    The budget also invests significantly in defending the 
homeland against 21st century threats, including global terror 
networks and rising states with nuclear weapons. The budget 
provides $1.7 billion to develop countermeasures against 
advanced biological and other weapons and to tag, track, and 
locate and render-safe nuclear weapons.
    The budget also includes $10.4 billion in fiscal year 2007 
to produce and field additional ground-based and sea-based 
interceptors to defend against intercontinental and theater 
ballistic missiles, and $900 million in 2007 and about $9.3 
billion over the program to dramatically increase and extend 
satellite communications capabilities to our deployed forces 
around the world.
    In addition, we want to maintain our military superiority 
and our ability to deter or defeat conventional forces of other 
nations, and the Department maintains a robust procurement 
program. The budget invests $84.2 billion in 2007. Just as a 
point of reference, this is twice what it was in 1995, so that 
is an important area of investment for us. This includes funds 
to improve our joint air support capability, maintain and 
improve joint air dominance, and improve our maritime 
capabilities, including $4.7 billion to purchase additional 
aircraft, such as the Apache, the Chinook, Blackhawk 
helicopters, and the V-22 Osprey.
    We include $10.4 billion over the 2007 period to acquire 
more capable weapon systems also, such as the F-22, the F/A-E 
and F, and the first procurement, notably, of the Joint Strike 
Fighter in this budget.
    In the shipbuilding area, we provide $11.2 billion in 
fiscal year 2007. This includes seven ships, two DD(X) 
destroyers, two littoral combat ships, one Virginia class 
submarine, one amphibious assault ship, and the logistics ship, 
the T-AKE. So that is an important feature also of our 
investment program.
    Importantly, I would like to focus also on what we are 
doing for our service members and their families, because 
everything we do depends on their success and their dedication 
and skill. So in the area of military pay, the budget provides 
2.2 percent over the enacted level of 2006. But importantly, we 
also include for certain enlisted, senior enlisted members, 
$263 million in this budget to provide them additional 
increases over the 2.2 percent increase. So for example, an E-5 
with 8 to 12 years of service might receive 2.5 percent in 
addition to the 2.2 percent. So that is an important piece. 
Certain warrant officers would receive as much as an 8.3 
percent increase. So it is very important here.
    We also increase the basic allowance for housing to ensure 
no out-of-pocket housing costs for military families living off 
base. An average rate of 5.9 percent will be experienced by 
most family members.
    As many of you know, we have spoken about health care over 
the past years and our budget provides $39 billion to provide 
health care for our military personnel and families. That 
includes the personnel and infrastructure associated with 
providing care. Of that portion, $21 billion is associated with 
the defense health program, which is a $1 billion increase over 
the 2006 level.
    We are very concerned about this area because over the last 
5 years our military health care costs have nearly doubled, 
going from $19 billion in 2001 to $37 billion enacted in 2006. 
Unless action is taken to address this rising cost, the current 
program is projected to increase to $50 billion by 2011 and 
would go to $64 billion by 2015.
    So we are very concerned about these and we have proposed 
in this budget an increase to the fee structure and cost share. 
When the TRICARE program was established by Congress there were 
certain cost shares established. In 1995, as Congress 
established the program 73 percent of the cost was paid by the 
Department of Defense and 27 percent of the cost of the care 
was provided by the beneficiary. Today those cost shares have 
gone to 88 percent for the Department of Defense and 12 percent 
for the beneficiary.
    So the budget is proposing to make some slight increases to 
that cost share for beneficiary. I do have also with me Dr. 
Bill Winkenwerder if there are further questions on that in 
testimony.
    So, Mr. Chairman, we appreciate your support of this 
budget. We believe the budget sustains the President's 
commitment to defend the United States, especially against 
catastrophic terrorism, and provides for the security of the 
American people. It continues his strong support of service 
members and their families and it supports the continued shift 
in emphasis away from static posture and forces of the last 
century to highly mobile expeditionary forces needed to prevail 
against adversaries ahead.
    As you know, sir, we also have in front of the Congress a 
$65.3 billion supplemental, and I know that is not the subject 
of today's hearing, but we would be happy to answer questions 
on that as well.


                           prepared statement


    So thank you, sir, for your support and the subcommittee 
for its support of our men and women in uniform.
    [The statement follows:]
                  Prepared Statement of Tina W. Jonas
    Mr. Chairman, members of the Committee, thank you for the 
opportunity to discuss President Bush's fiscal year 2007 budget request 
for the Department of Defense.
    I would like to begin by saying thank you to the Committee for your 
continued strong support for the men and women of America's Armed 
Forces and their families. I will briefly summarize some of the more 
important elements of the request.
    The President's fiscal year 2007 budget request for the Department 
of Defense is $439.3 billion. This is a seven percent increase over the 
fiscal year 2006 enacted level of $410.8 billion.
    This Committee has jurisdiction over $422.6 billion, which includes 
operation and maintenance, procurement, research and development, and 
military personnel.
    The budget supports the President's 2005 National Security 
Strategy, the long war against terrorist extremists, and the findings 
and recommendations of the 2006 Quadrennial Defense Review (QDR).
                          strategic priorities
    Like the QDR, the fiscal year 2007 budget supports the Department's 
continued shift in emphasis--away from the static posture and forces of 
the last century to the highly mobile and expeditionary forces needed 
to prevail against any adversary in the years ahead.
    The budget is aligned with the QDR's strategic priorities and 
invests in the capabilities and forces the Nation needs to:
  --Prevail in irregular warfare operations, including wars of long 
        duration, like the global war on terror;
  --Defend the homeland, especially against catastrophic terrorism and 
        other advanced threats;
  --Maintain America's military superiority, to ensure our ability to 
        deter or defeat threats from other nation-states; and
  --Continue the Department's strong support of our military men and 
        women and their families.
                prevail in irregular warfare operations
    To prevail in irregular warfare operations, the fiscal year 2007 
budget substantially increases the size and capabilities of Special 
Operations Forces, investing $5.1 billion in fiscal year 2007 and $28.7 
billion over the fiscal year 2007 to 2011 program to:
  --Fund an additional 14,000 Special Operations Forces (Special 
        Operations Forces will expand from 50,000 in fiscal year 2006 
        to 64,000 by fiscal year 2011. This is a growth of 4,000 in 
        fiscal year 2007);
  --Increase the number of SOF battalions by 33 percent (Active duty 
        battalions will grow from 15 to 20 by fiscal year 2012);
  --Fund a new Marine Corps Special Operations Command;
  --Establish a SOF Unmanned Aerial Vehicle Squadron; and
  --Increase the number of Navy SEAL teams to provide added maritime 
        capability.
    To increase Joint combat power, the budget provides $6.6 billion in 
fiscal year 2007 and $40.6 billion over the program, to complete 
conversion of 48 regular Army brigades to 70 modular Brigade Combat 
Teams.
    To continue the modernization and integration of ground forces, and 
produce a swifter, smarter, and more lethal force, the budget provides 
$3.7 billion in fiscal year 2007 and $22.4 billion over the program for 
the Future Combat System.
    Understanding the nature of the battle space on a minute-to-minute 
basis is critical to the success of our forces. The budget provides 
$1.7 billion in fiscal year 2007 and $11.6 billion over the program for 
unmanned aerial vehicles to increase U.S. intelligence-gathering 
capabilities and enable persistent, real-time intelligence--24 hours a 
day, seven days a week.
    In addition, to equip our forces with the language and cultural 
skills they will need for 21th century missions, the budget invests 
$181 million in fiscal year 2007 and $760 million over the program to 
expand language training for both general and special operations 
forces.
                          defend the homeland
    To defend the homeland against 21st century threats, including 
global terror networks and rising states with nuclear weapons, the 
fiscal year 2007 budget provides:
  --$1.7 billion in fiscal year 2007, and $9.3 billion over the program 
        to develop countermeasures against advanced biological and 
        other weapons, and to tag, track, locate and render-safe 
        nuclear weapons;
  --$10.4 billion in fiscal year 2007 and $47.5 billion over the 
        program to produce and field additional ground and sea-based 
        interceptors to defend against intercontinental and theater 
        ballistic missiles; and
  --$0.9 billion in fiscal year 2007 and $9.3 billion over the program 
        to dramatically increase and extend satellite communications 
        capabilities to our deployed forces around the world.
                   maintain u.s. military superiority
    While the focus in the years ahead will be on irregular warfare 
operations rather than another major conventional war, the United 
States must maintain the ability to deter or defeat the conventional 
forces of other nations.
    The Department continues to maintain a robust procurement program. 
The budget invests $84.2 billion in fiscal year 2007. This is an 
increase of $8 billion over the fiscal year 2006 level.
    To improve joint air support capabilities, maintain and improve 
joint air dominance, and improve the maritime capabilities of the joint 
force, the budget invests:
  --$4.7 billion in fiscal year 2007 and $27.1 billion over the 
        program, to purchase additional Apache, Chinook, and Black Hawk 
        helicopters as well as the V-22 Osprey;
  --$10.4 billion in fiscal year 2007, and $61.3 billion over the 
        program, to acquire more capable weapons systems--such as the 
        F-22, the F/A-18 E/F, and the first procurement of the Joint 
        Strike Fighter; and
  --$11.2 billion in fiscal year 2007 and $77.5 billion over the 
        program for seven new multi-mission, multi-capable ships: two 
        Destroyers (DDX), two Littoral Combat Ships (LCS), one Virginia 
        Class Submarine (SSN), one Amphibious Assault Ship (LHA(R)), 
        and one Logistics Ship (T-AKE).
             supporting service members and their families
    Because success in everything we do depends on the skill and 
dedication of the men and women who safeguard the freedom we enjoy 
every day, the fiscal year 2007 budget continues the Department's 
strong commitment to provide a high quality of life for those who serve 
and their families.
                              military pay
    One demonstration of that commitment is military pay. Since 2001, 
basic military pay has increased 29 percent. In fiscal year 2007, basic 
pay will rise another 2.2 percent over the fiscal year 2006 level.
    That means an Army Sergeant (E-6) with 14 years of service, for 
example, will earn $779 more in fiscal year 2007 than he or she did in 
fiscal year 2006, and $8,893 more than in 2001.
    A typical Air Force captain (0-3) will earn $1,188 more in fiscal 
year 2007 than in fiscal year 2006, and $11,347 more than in fiscal 
year 2001.
    To ensure no out-of-pocket housing costs for military families 
living off-base, the budget increases the basic allowance for housing 
by an average rate of 5.9 percent.
                          military health care
    High-quality health care is another important benefit for service 
personnel and their families. The Department's health care program, 
TRICARE, provides one of the best health care coverage programs in the 
Nation.
    The budget provides $39 billion in fiscal year 2007 to provide 
health care for military personnel and their families. This includes 
$21 billion for the Defense Health Program--a $1 billion increase over 
the fiscal year 2006 enacted level.
    In fact, over the past five years, the full cost to provide 
military health care has nearly doubled--from $19 billion in fiscal 
year 2001 to $37 billion enacted in fiscal year 2006. Unless action is 
taken to address the rising cost of care, the current program is 
projected to increase to $50 billion by fiscal year 2011.
    Clearly, these rising costs cannot be sustained over the long term. 
Therefore, to place the health benefit on a sound fiscal basis for the 
long term, the Department is proposing to rebalance the share of costs 
between individuals and the government. The budget proposes to adjust 
the cost share for working-age retirees under 65. This change will not 
affect active duty service personnel and their families, except for 
minimal changes to pharmacy co-payments for family members.
    In 1995, as established by Congress, 73 percent of the cost was 
paid by the Department of Defense; 27 percent of the cost was paid by 
the beneficiary. Today, 88 percent of the cost is paid by the 
Department of Defense; and just 12 percent by the beneficiary.
    The budget proposes to gradually adjust these shares to less than 
the 1995 cost-share level.
             department of defense fiscal year 2007 budget
    The Quadrennial Defense Review is the result of an extensive, year-
long review of U.S. military capabilities and forces. The QDR 
identified strategic priorities for added investment, and the fiscal 
year 2007 budget initiates the process of funding those priorities.
    The budget sustains the President's commitment to defend the United 
States, especially against catastrophic terrorism, and provide for the 
security of the American people. It continues the Department's strong 
support of service members and their families, and it supports the 
Department of Defense's continued shift in emphasis--away from the 
static posture and forces of the last century, to the highly mobile and 
expeditionary forces needed to prevail against any adversary in the 
years ahead.
                              supplemental
    The President recently submitted a request for a fiscal year 2006 
supplemental appropriation. The Department of Defense's portion of this 
request is $65.3 billion, which will fund ongoing military operations 
in Afghanistan and Iraq, and other incremental costs of the global war 
on terror.
    The Department appreciates the Committee's prompt passage of 
previous supplemental requests, and we request your support for this 
one as well. Approval of the supplemental request will enable the 
Department to fund war-related costs for the rest of this fiscal year.

    Senator Stevens. Thank you very much.
    Admiral, do you have any comments to make?

                                 BUDGET

    Admiral Chanik. Chairman Stevens, just a couple comments 
that I will add to Ms. Jonas's if that is okay. First, sir, I 
thank you for the opportunity to be able to speak to you today 
in reference to the President's fiscal year 2007 budget request 
for the Department of Defense.
    What I will do, since Ms. Jonas has pretty much captured 
the essence of the budget, is just add a couple words. From a 
warfighter's perspective, we believe that this is a budget that 
represents a balance of near-term risk versus long-term risk, 
that the services and the Combatant Command (COCOMs) worked 
hard on to weigh current readiness, the global war on terror, 
and investments in transformational initiatives for the future 
fight.
    We think it provides a budget for the armed forces that 
allows the armed forces to be fully capable of executing our 
national military strategy and that it supports the chairman's 
priorities of winning the war on terrorism, of accelerating 
transformation, of strengthening joint warfighting, and of 
improving the quality of life for our troops and their 
families.
    As Ms. Jonas mentioned in her opening statement, we think 
it provides, continues to provide, strong support for today's 
fighting forces, that it invests in the capabilities we need to 
have to prevail in irregular warfare operations and in defense 
of the homeland.
    What I would like to underline and reemphasize, because she 
did speak to it in quite a bit of detail, are the thoughts on 
the proposal with reference to the health program. We think 
that this proposal takes some vital and important steps in 
renorming some of those fees for a superb military health care 
system. I would like to underline the fact that this affects 
those retirees under the age of 65 primarily and does not 
affect our active duty service personnel and their families. 
But as you have heard, the Chairman, the Joint Chiefs, and the 
Secretary are all behind this important proposal.
    I will close by thanking you and your subcommittee for your 
continued support to our men and women in uniform. As you are 
well aware, they are doing tremendous work around the world in 
some very difficult circumstances, and they certainly 
appreciate what you and your subcommittee and what Congress 
provides to them.
    I look forward to your questions, sir.
    Senator Stevens. Thank you both very much. I am saddened 
that I am here alone today.
    I think we will face substantial controversy when we get to 
the floor with this bill, primarily by people who want to add 
to it. I will ask you some questions about that. I think what I 
will do is, with your consent, would be just submit some of 
these questions, the ones that should be, just as matters for 
the record. I will submit them to you and ask you to respond to 
them. I do not know if Senator Inouye would have similar ones, 
but if he does we will do that.
    Ms. Jonas. Certainly.
    Senator Stevens. I am going to make a rule from now on, we 
are not going to seek answers to questions from Senators who do 
not attend the session unless there is a reason such as the 
good co-chairman has today. But I do believe more people should 
come to these hearings and should pursue their questions here 
before they present amendments on the floor.

                       END STRENGTH OF ARMY GUARD

    We heard about a recent agreement that you are going to 
fund the Army Guard at a strength of 350,000 soldiers for 2007. 
Is that in the budget? Is that amount covered by the budget?
    Ms. Jonas. Senator Stevens, what is in the budget is an 
amount for 333,000. If I can explain, that is the amount, the 
number, that they were currently at. The Congress has 
authorized 350,000. In prior years they have not made their 
number and so that has resulted in a little bit of funds 
available for other purposes and so we have reprogrammed those.
    But it is the Army's intent to fund the number that the 
Guard can reach. So we will make sure that that is done. We 
will work very closely, Mr. Chairman, with that.
    Senator Stevens. Are you going to do that through 
reprogramming, or how are we going to get to that figure?
    Ms. Jonas. In the past, sir, when we have had an overage--
and this has happened in prior years--we have reprogrammed 
funds. We did so last year when they did not reach the 350,000. 
I think there was about $347 million available. But my 
expectation is that we would work with the Army to reprogram 
funds.

                             SPECIAL FORCES

    Senator Stevens. A similar question with regard to the 
special forces capabilities. It is our understanding that there 
is going to be a significant increase in those forces 
capabilities. Are any of those capabilities funded in this 
request?
    Ms. Jonas. Yes, Mr. Chairman. As I noted in my testimony, 
we increased about 4,000, by about 4,000 in this 2007 budget 
and about 14,000----
    Senator Stevens. I heard that, but is the money in here for 
that?
    Ms. Jonas. Yes, sir. We are about $1 billion over where we 
were for special forces last year.
    Senator Stevens. You are going to increase them by 13,000 
over 5 years and there is 2,000 in this year's budget?
    Ms. Jonas. We are increasing the number by 4,000 in fiscal 
year 2007 and 14,000 over the program period, sir.

                            COSTS OF THE WAR

    Senator Stevens. We have discussed the problem of 
sustainability and I mentioned that. Now, it is our 
understanding, my staff tells me, that this bill before us now 
funds military operations at the current level, which is 
roughly $6.8 billion a month as we understand it, for the 
global war on terror. If that is correct, are we not looking at 
a supplemental just going in for that portion of this 
operation, these operations of the Department?
    Ms. Jonas. Mr. Chairman, the request before the Congress 
right now for the supplemental, the DOD portion of it, which 
excludes the intelligence funding, is $65.3 billion. So the 
rate that you are discussing, the $6.8 billion what is referred 
to as a burn rate, was what we had for the prior year, for 
fiscal year 2005. We expect there to be some increase due to 
increases in fuel costs. Our personnel are going to be a little 
bit more expensive because of the addition of death benefits, 
for example. There also is a little bit of inflation.
    In addition, we have costs for reset, what we call reset 
and reconstitution. So it will be a little bit higher than $6.8 
billion, we expect, in fiscal year 2006.
    Senator Stevens. I am told again by my staff that there is 
some sort of an amendment that we are going to look at which 
deals with a bridge, a $50 billion bridge. Bridges, I do not 
like to talk about bridges, coming from where I come from. But 
this one is from A to B.
    Why do you need a bridge in addition to this bill?
    Ms. Jonas. The bridge fund or the request for fiscal year 
2007--we have got in front of you a 2006 supplemental and what 
the administration is proposing for 2007 is an additional 
bridge fund of $50 billion. We will provide----
    Senator Stevens. $50 billion?
    Ms. Jonas. For 2007, sir.
    Senator Stevens. Will that be the supplemental for 2007?
    Ms. Jonas. It will be, yes, sir, a portion. We do not know 
exactly how much we are going to need, but the administration 
wanted to make sure, so that it could count against the overall 
budget concerns of the Congress, that we would at least have 
some of that counted for deficit projection purposes.
    Senator Stevens. How soon do you need the 2006 funding?
    Ms. Jonas. Mr. Chairman, we believe that we need those 
funds by the end of April, no later. We do not have sufficient 
operation and maintenance (O&M) dollars to get us through May.
    Senator Stevens. The supplemental that there was a hearing 
on this morning, we have got a hearing every day this week, I 
think, that is for 2006, right?
    Ms. Jonas. That is correct, sir.
    Senator Stevens. Are we going to include any portion of the 
2007 bridge in that one?
    Ms. Jonas. No, sir.
    Senator Stevens. Do we expect that, though, to come in 
before the end of this fiscal year, to have a bridge to 2007?
    Ms. Jonas. That is our expectation, sir.
    Senator Stevens. And am I led to believe that is $25 
billion?
    Ms. Jonas. $50 billion.
    Senator Stevens. No, you have got that $50 billion already, 
do you not?
    Ms. Jonas. Sir, we have $50 billion from the prior--
actually, we have $45 billion from your prior action, so the 
bridge supplemental that you recently approved and we are 
executing.
    Senator Stevens. That is for 2006?
    Ms. Jonas. Yes. And so in addition to that, we are asking 
for the $65.3 billion which is before you now for fiscal year 
2006.
    Senator Stevens. You are anticipating $50 billion for 2007?
    Ms. Jonas. Correct, sir.
    Senator Stevens. When are we going to start folding these 
into the regular bill?
    Ms. Jonas. Mr. Chairman, I will answer that in the way that 
the Secretary has. He is fully open to doing it either way. The 
concern that many of us have is that we cannot provide the type 
of detail that is normally wanted by the Congress. For example, 
when we develop the request before you we actually plug in the 
deployment orders into our cost modeling, so that provides a 
level of exactness that you cannot get with some of the types 
of projections on the $50 billion.
    But I certainly understand your concerns, Mr. Chairman. I 
know the Secretary does. But that would really be something 
that needs to be worked out, I think, between the congressional 
leadership and the Office of Management and Budget with respect 
to the use of supplementals.
    Senator Stevens. Well, I am concerned because some of the 
things that are in the regular bill for 2007 are related to the 
war on terror, are they not?
    Ms. Jonas. Yes, sir.
    Senator Stevens. And the $50 billion is exclusively, 
theoretically, for the war on terror?
    Ms. Jonas. Yes, sir.
    Senator Stevens. But when we were in Iraq and we went out 
to Fallujah and we saw the trucks that were there being up-
armored, that money was paid for out of the supplemental, 
right?
    Ms. Jonas. Yes, sir.
    Senator Stevens. But it was really a routine matter that is 
going to go on all over the Department, but just those in Iraq 
were paid for out of the supplemental?
    Ms. Jonas. I would have to get to your specific, at what 
you were looking at specifically. But we have equipment that--
--
    Senator Stevens. I am just using that as an example.
    Ms. Jonas. Yes, sir.
    Senator Stevens. I think these things blend--we think we 
are controlling expenses, but up here we have got a feather 
pillow that just goes wherever you want to put it and it does 
not make any difference what we try to do to try to get some 
control over some of these expenses.
    Ms. Jonas. Yes, sir. We try to the best that we can to 
track what is spent in theater. We do have reporting to the 
Congress that we provide. As a general matter, the overhaul and 
the wear and tear on the equipment that is being used in 
theater is being funded or rehabbed out of supplemental funds. 
Maybe Marty wants to talk to this a bit, but we are doing the 
best we can to try to give the Congress some clarity on that, 
sir.

                              CONTRACTING

    Senator Stevens. Well, who makes the decision when to out-
source an activity? Admiral?
    Admiral Chanik. Yes, sir. Can you clarify that question? I 
am not sure I have exactly what you mean when you talk about 
out-sourcing activity.
    Senator Stevens. They have got enormous contracts over 
there, food servicing, repair of vehicles, so many different 
things that we saw. Who makes the decision that those things 
cannot be done by people in uniform in the regular course of 
appropriations?
    Admiral Chanik. Sir, I will have to get back to you to see 
exactly who does that. That certainly is the commander in 
theater and his staff that is going to work through those 
issues and determine the best way to provide the requirements 
to support the soldiers, the sailors, airmen, marines on the 
ground. So they will work through that staff. They certainly 
have multiple regulations they comply with to go through that.
    But who exactly in that chain in the logistics side, we can 
certainly provide that for you if you would like, sir.
    [The information follows:]

    When determining outsourcing needs, the combatant commander 
allows Service components to create outsourced logistical 
support in their respectively assigned areas, consistent with 
Service regulations and authorities. Service components then 
develop and tailor outsourcing initiatives in their respective 
areas of responsibility (AORs). For example, there are more 
than 40,000 contractors in the U.S. Central Command (USCENTCOM) 
AOR performing functions in the combat support and combat 
service support arenas. Specific support functions currently 
contracted under the Logistics Civil Augmentation Program 
(LOGCAP) include: (1) Theater Transportation Mission; (2) Corps 
Logistical Service Support; (3) Army Oil Analysis Program; (4) 
Embassy Support, Baghdad; (5) Test Measurements Diagnostic 
Equipment; (6) Base Operations for U.S. Personnel; and (7) 
Subsistence (Dining Facilities operation).

    Senator Stevens. We are getting more and more questions, as 
I said to Ms. Jonas, from Members of the Senate about the out-
sourcing and who makes the decision and who decides what the 
level of commitment will be and where does that money come 
from. I really think you are going to have to help us get some 
details here on how these decisions are made and what level of 
control there is over out-sourcing as compared to the control 
we have over regular expenditures through the Department's 
normal procedures.
    Admiral Chanik. Yes, sir. We can certainly do that. I can 
assure you that in theater when they look at the alternatives 
of how to supply a particular capability, whether it is out-
sourced or whether it is organic to the forces in theater, they 
will look at that and determine what is the best way to achieve 
what they need to achieve in the time that they have to do that 
at the best cost. They will have a certain set of rules to go 
through that. But we can get you more detail, sir, and provide 
that to you.
    [The information follows:]

    The combatant commander allows Service components to create 
outsourced logistical support in their respectively assigned 
countries. Service components then develop and tailor 
outsourcing initiatives in their respective areas of 
responsibility consistent with Service regulations and 
authorities. Specifically, outsourcing initiatives are 
regulated by set guidelines. These regulations include: (1) 10 
USC 129a, which authorizes the Secretary of Defense to use 
civilian contracting if it is financially beneficial and 
consistent with military requirements; (2) Department of 
Defense Directive 1100.4, ``Guidance for Manpower Management'', 
which directs that assigned missions shall be accomplished 
using the least costly mix of personnel (military/civilian/
contractor) consistent with military requirements; (3) 
Department of Defense Instruction 3020.37, ``Continuation of 
Essential DOD Contractor Services During Crises'', which states 
that DOD components shall rely on the most effective mix of the 
total force, cost, and other factors, including contract 
resources necessary to fulfill assigned missions; and (4) Army 
Regulation 700-137, which established policies, 
responsibilities, and procedures for the implementation of the 
Logistics Civil Augmentation Program (LOGCAP). The LOGCAP 
objective is to preplan for the use of civilian contractors to 
perform selected services in wartime to augment Army forces.

                          FUNDING FOR VETERANS

    Senator Stevens. One of the questions we have been asked so 
far or told so far is going to be raised is the adequacy of 
funding for veterans under this bill. I am told there will be 
an amendment to add funds for veterans. What funding is already 
in this bill that covers veterans activities?
    Ms. Jonas. The Department of Veterans Affairs does provide 
the funding for that. I am unaware of any funding in the 
supplemental for that. We can certainly get back to you for the 
record, sir.
    [The information follows:]

    The Department of Veterans Affairs provides the funding for 
veterans benefits.
    The fiscal year 2007 President's Budget request for the 
Department of Defense does not include any funding for veterans 
benefits. However, the Defense portion of the President's 
fiscal year 2006 supplemental appropriations request for 
ongoing military and intelligence operations in support of 
Operation Iraqi Freedom, Operation Enduring Freedom, and 
selected other international activities does include about $0.9 
billion in funds to reimburse the Department of Veterans 
Affairs for casualty and disability benefits. These funds are 
included in the amounts requested for the Department's military 
personnel appropriations and include $0.4 billion for 
reimbursement of Servicemembers' Group Life Insurance (SGLI) 
claims and $0.5 billion for reimbursement for claims associated 
with the SGLI Traumatic Injury Protection program proposed by 
the President and enacted as part of Emergency Supplemental 
Appropriations Act for Defense, the Global War on Terror, and 
Tsunami Relief, 2005 (Public Law 109-13).

    Senator Stevens. We understand that, but I understand that 
this bill will be the target of additions for funding of 
veterans, particularly those that are coming out of this 
current involvement in Iraq. Is there any money for veterans in 
the supplemental to your knowledge?
    Ms. Jonas. Sir, I would have to get back to you for the 
record. Not to my knowledge, sir.

                          FUNDING FLEXIBILITY

    Senator Stevens. I am told that the services have expressed 
concerns about the lack of flexibility to fund emerging 
requirements or cash flow for combat operations if the basic 
allowance for housing and facilities, sustainment, restoration, 
and modernization funding are pro-rated in the Military Quality 
of Life and Veterans Affairs appropriations bill. As you know, 
this comes about because of the separation in the House now.
    Is there a problem there? Can you give us your assessment 
of the impact of this change in terms of the operations of the 
Department?
    Ms. Jonas. Certainly, Mr. Chairman, it will change the way 
we have to work with the Congress and it may limit our ability 
to transfer funds between certain accounts. For example, the 
sustainment accounts we will not be able to access for 
reprogramming or cash flowing purposes. So there are some 
limitations, but we will work carefully with the Congress to 
make sure that we can meet the requirements. But it does cause 
some constraints that we have not experienced in the past and 
will limit our flexibility to a degree.
    Senator Stevens. I will submit the balance of that 
question, then. That is really a technical question as I see 
it. I do not know how we are going to get through--this is the 
first year when that separation is going to take place.
    We did have to make a reduction overall on the bill last 
year of a 1 percent reduction. Have you determined how that 
impacts your budget with regard to the various functions, such 
as military personnel?
    Ms. Jonas. Yes, Mr. Chairman. It has caused some 
difficulties in the military personnel accounts. For example, 
we are working through an issue with the Navy right now in 
trying to execute this budget. We expect to have to reprogram 
some funds. So that has caused some little bit of difficulty in 
certain accounts.
    Senator Stevens. Are those attributable to the war on 
terror or are they routine impacts on the overall bill because 
of the 1 percent?
    Ms. Jonas. My understanding is that these are routine 
impacts. You mentioned the basic allowance for housing, for 
example. Those surveys to assess how much we actually provide 
are done later in the budget year and so that has also caused a 
little bit of a difficulty for the Navy. But the 1 percent has 
caused us some issue within the baseline.
    Senator Stevens. What kind of detail do you provide--now, 
we have gone through 2005 and we had both the basic bill and 
the supplemental in 2005. Have you filed either with OMB or 
with the authorization committee an as-spent type of budget? Do 
we know how that money was actually spent?
    Ms. Jonas. Yes, sir, we do provide, I believe, to the 
committees on a routine basis--and I will have to check with my 
folks----
    Senator Stevens. I do not mean--I mean a closeout for the 
year. Can we compare how we thought the money was going to be 
spent and how it was actually spent?
    Ms. Jonas. Yes, sir. That can be done, and we do provide 
what are called 1002 accounts. It is an accounting report of 
how funds were spent, sir.
    Senator Stevens. We will submit the rest of the questions, 
Ms. Jonas and Admiral. But I have got to tell you, as I said, I 
left that budget discussion and the projections out into the 
future on how this current trend is adjusted, assuming we do 
complete our actions in Iraq and still have the war on terror. 
The presumption is that we would have a bill that would cover 
the Department's operations and we would no longer have 
supplementals; is that a reasonable assumption?

                                 COSTS

    Admiral Chanik. Yes, sir. I think we have certain costs, 
obviously, as you are well aware now, with the efforts in 
Afghanistan, the efforts in Iraq, and those bring costs 
associated with them. Once those drop off, then I think that we 
have a much better chance of getting away from supplementals.
    I would also mention to you that one of our assumptions, as 
I think you are well aware, is that as we reset and 
reconstitute the force based on all that we have done in Iraq 
and Afghanistan, that there are still some dollars associated 
with that and that we will be requesting some supplementals to 
help in that reset of the force since we cannot really quantify 
that at the moment.
    But that is something that the chiefs have brought up in 
some of their testimony, that there will be some costs directly 
attributable to what we have done in Iraq and Afghanistan, even 
when those drop down to a steady state normal operating pace.
    Senator Stevens. Well, we are going to schedule some 
discussions with the Armed Services Committee. I have the 
feeling that one of the reasons that we do not have people here 
is they really do not know what questions to ask. We are 
getting just these gross figures and gross demands and we are 
not really getting a handle on what controls there are on 
either.
    If you look at the trend line I just looked at from 2001 to 
now, the total amount for the Department is more than double 
what it was in 2001. We are lacking in the capability to assess 
the rationale for those increases and to determine whether they 
are actually necessary. I really think we are going to be in 
for some real problems, particularly on this year's amounts, 
because we are looking at the bridge amount and then we are 
looking at another supplemental for 2007 once we are in that. 
It is very difficult for us to tell people, yes, we have gone 
over these accounts and these are accounts we understand, 
because we do not have the detail to know what they are.
    Ms. Jonas. Sir, we would be happy to provide as much detail 
as this subcommittee needs to assess the request in front of 
you. I will say, as we mentioned earlier, what I am concerned 
about is the cost, the rising cost of personnel. If you think 
about what we are spending on healthcare, for example, we are 
spending $2 billion more than Germany spends for its entire 
defense budget, on healthcare.
    We have mentioned the issue of other benefits that are 
important for our families that get added. But as you look at 
why our costs have increased over time, I would suggest that in 
the personnel area that is one area.
    Certainly in the area of acquisition there are studies that 
have been undertaken on acquisition and we need to do what we 
can to control overruns, cost overruns on weapon systems. That 
is a key area.
    But you should know, with respect to accountability and 
understanding what we are doing with funds, just to give you an 
example, the Defense Contract Audit Agency reviews $320 billion 
worth of contracts annually. They do 40,000 audits annually. So 
they are just one of the audit entities that we have working in 
the Department.
    I understand your concern and the Congress' concern about 
how funds are spent, accountability for those large increases 
that you noted, and we do take it seriously and we have got 
some terrific, dedicated professionals working on that, sir.
    Senator Stevens. I look forward to some discussions because 
the real--some of the questions that are coming at us, 
particularly in the area of out-sourcing--when there is out-
sourcing, when these functions are performed by military 
personnel or by civilian personnel in the Department, there are 
guidelines and there are precedents as far as what is spent. 
When it is out-sourced, we have had questions about what is the 
level of control on a contractor spending money to do the 
functions that otherwise would have been done by the military. 
It does not appear to be within the budget that the military 
would have done the job.
    Admiral?

                               OVERSIGHT

    Admiral Chanik. Sir, the only thing I guess I can add to 
that, I think as we mentioned earlier perhaps we need to be 
able to come back or take a question for the record to give you 
more detail that you want on that. I know it is certainly an 
area that the services are very concerned about. In fact, there 
is going to be established an inspector general, an inspector 
general office, in Qatar to help in terms of oversight on some 
of these issues. So it is getting a tremendous amount of 
attention to review the rules and regulations of how these 
decisions are made and how the out-sourcing occurs.
    But I think the best thing is if we can take some questions 
for the record, sir, and we will come back with some better 
detail than that general comment.
    Senator Stevens. All right. Well, just look at it this way. 
We will have dealt with $120 billion this year for which we 
have no justification at all. It is emergency spending in 
supplementals. Those are the areas that we are going to get the 
questions on and I believe that those are the areas where 
questions ought to be raised.
    As Ms. Ashworth said, we do not have justification books on 
them, nor do we have any post-expenditure explanations that I 
know of. I think we are going to start getting questions we 
cannot answer, and once we cannot answer them we do not get a 
bill.
    So I hope that you will really consider what information we 
can have about how this money is going to be spent and what 
controls there are on its being spent, okay?
    Ms. Jonas. Absolutely, Mr. Chairman. My understanding is 
that we provide quarterly reports on the expenditure of the 
funds.
    Senator Stevens. That is in gross. We have got that. Yes, 
we have got, we spent x billion dollars.
    Ms. Jonas. Okay. I believe that we provide account-level 
detail, but we will provide this subcommittee whatever it needs 
to properly assess the proper expenditure of funds and the 
requests before you, sir.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Stevens. Again, I am sad that the other people are 
not here. We will submit the questions and will ask Senator 
Inouye if he wishes to submit any.
    Thank you very much.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
               Questions Submitted by Senator Ted Stevens
                      basic allowance for housing
    Question. The Services have expressed concern about the lack of 
flexibility to fund emergent requirements or to cash flow combat 
operations if Basic Allowance for Housing and Facilities Sustainment, 
Restoration and Modernization funding are appropriated in the Military 
Quality of Life and Veterans Affairs Appropriations bill for fiscal 
year 2007. Please explain the impact this change will have on budget 
execution with the Department?
    Answer. The reorganization of the Department of Defense (DOD) and 
the Military Construction Appropriations Bills poses significant 
financial management challenges for the Department. As proposed, the 
reorganization moves the following programs out of the DOD 
Appropriations Bill into a new Military Quality of Life and Veterans 
Affairs Bill:
  --Facilities Sustainment, Restoration and Modernization (FSRM) 
        (Currently, generally funded as part of the Services' 
        Operations and Maintenance appropriations.)
  --Defense Health Program (DHP)
  --Environmental Programs (Currently funded in transfer accounts; most 
        of the funds are transferred to the Services' Operations and 
        Maintenance accounts for execution.)
  --Basic Allowance for Housing (BAH)
    Splitting the Operation and Maintenance and Military Personnel 
appropriations into two bills: creates suboptimal tradeoffs within each 
of the separate bills; constrains the Department's ability to react to 
emergent execution requirements; and adds additional administrative 
burdens on both DOD and congressional staffs.
    The Military Construction Appropriations Bill does not include 
general transfer authority. Year of execution cost increases for BAH or 
medical care would require the Department to submit supplemental 
appropriations requests to the Congress.
    At a minimum, DOD must have the authority to: transfer funds 
between and among the appropriations included in the final Acts; 
increase DOD's General Transfer Authority; and transfer from/to the 
Foreign Currency Fluctuation appropriations to offset foreign currency 
losses resulting from a decline in the market value of the U.S. dollar.
    Providing authority to transfer funds between and among the 
appropriations included in the final Acts and increasing DOD's General 
Transfer Authority, will help mitigate, but not solve issues 1 and 2 
above. For example:
  --DOD Contingency Operations.--The new bill structure will make it 
        more difficult to finance contingency operations, such as 
        Operation Iraqi Freedom and Operation Enduring Freedom, because 
        historically Commanders use Facilities Sustainment, Repair and 
        Modernization (FSRM) funding to cash flow critical war fighter 
        needs until a supplemental is received.
      During fiscal year 2005, the Department cash flowed significant 
        percentage of the FSRM funds to finance operational 
        requirements. Any delay in enactment of the supplemental will 
        make it more difficult to execute the Global War on Terror 
        (GWOT).
  --BAH.--Annual funding of BAH fluctuates based on a number of 
        factors, including the number of military personnel, grade 
        structure, dependency rates and the availability of military 
        housing. In addition, to provide Service members with the most 
        accurate allowance possible, BAH rates are set outside of the 
        budget cycle.
    --At present, due to the large size of the military personnel 
            appropriations (over $100 billion), the Department has 
            managed BAH fluctuations within the current appropriation 
            structure.
    --If transfer authority between appropriations and across 
            appropriations Acts is not provided, DOD would have to seek 
            supplemental funds to avoid any pay problems for our 
            military members and their families.
    --Even if transfer authority is provided, DOD would need to 
            formally reprogram funds causing delays and possible pay 
            problems if shortfalls are realized late in the year. It 
            also increases the risk of pay errors due to payment of 
            military personnel from duplicative accounting 
            infrastructure required for BAH and other military 
            compensation.
    --None of the current military pay and accounting systems has the 
            functionality to properly pay the BAH from a separate 
            account. Time to make the changes depends on the system and 
            the complexity of the change. At a minimum, it will require 
            6 months from the time when all requirements are known.
    Question. I understand that rate changes in Basic Allowance for 
Housing have caused significant bills for the Services, particularly 
the Navy. Can you explain how the Department would fund these 
requirements if Basic Allowance for Housing is funded in the Military 
Quality of Life and Veterans Affairs Appropriations bill?
    Answer. The current unfunded fiscal year 2006 estimate for the BAH 
program is over $800 million. This is due to both an increase in 
inflation after the fiscal year 2006 President's Budget was submitted, 
and the impact of congressional reductions in fiscal year 2006.
    How the Department would fund these requirements depends on the 
flexibility provided in the law for reprogramming funds. In the past, 
BAH shortfalls have often been financed from within the military 
personnel appropriations due to variances in force level execution (the 
number of personnel, or the mix of personnel by officer/enlisted and by 
grade).
    If flexibility is provided to reprogram between the Defense 
Appropriations Bill and the Military Quality of Life Appropriations 
Bill, the Department would more than likely reprogram resources from 
the military personnel appropriations; if additional resources are 
required, other programs would be considered. If there is no 
flexibility to reprogram from outside the Military Quality of Life and 
Veterans Affairs Appropriations bill, and general transfer authority is 
provided to reprogram resources among Quality of Life accounts, then 
Facilities Sustainment, Restoration and Modernization (FSRM) funding 
would likely be the source. If no general transfer authority is 
provided, the Department would be forced to submit a supplemental 
appropriations request.
    Even if transfer authority between appropriations and across 
appropriations acts is provided, the proposed realignment would require 
the Department to formally reprogram funds causing delays and possible 
pay problems if shortfalls are realized late in the year.
                                 ______
                                 
              Questions Submitted by Senator Thad Cochran
                            corrosion costs
    Question. Since the return on investment is so great and the annual 
costs of corrosion so high, why is the Department of Defense reducing 
this budget and recommending only $13 million for the corrosion 
prevention and control?
    Answer. The Department of Defense agrees that significant funding 
for corrosion prevention and mitigation is warranted. The Congressional 
mandate manifested in 10 U.S.C. 2228 requiring the corrosion prevention 
and mitigation program has illuminated the problem and drawn the 
attention of a much wider audience throughout DOD. However, we must be 
judicious in determining the size of the investment. The Global War on 
Terrorism, international and national disasters, and other high 
priority competing programs have severely stretched the DOD budget. The 
DOD Corrosion Prevention and Control Strategic Plan, our long term 
strategy, depicts an integrated approach in preventing and mitigating 
corrosion of DOD's weapons systems and infrastructures. This approach 
entails R&D training; outreach and communications; specifications, 
standards and qualification processes; policy and requirements; 
facilities; and cost of corrosion and other metrics. Funding specific 
projects with high and measurable ROIs is just one of the several 
approaches identified in our Strategic Plan to combat corrosion. 
Therefore, the current level of investment is appropriate as we 
continue to validate the projected return on the $27 million investment 
in the fiscal year 2005 and the $14 million investment in the DOD 
Corrosion Program. It is critical to our continued success to show 
quantitatively and objectively that the projected cost avoidance 
associated with our corrosion projects is real and demonstrable. We 
plan to continue supporting science and technology investment in 
corrosion understanding and prevention technologies to maintain a 
supply of transitionable research products for current and future 
forces.
    Question. Can we expect to see an increase in corrosion funding in 
the future, so we can take advantage of potential savings?
    Answer. We will evaluate the results of the cost of corrosion 
baseline study and the results of funded corrosion prevention and 
control projects with other Department requirements. The Under 
Secretary of Defense (Acquisition, Technology and Logistics) is 
evaluating the requirements in consideration for the next budget cycle.

                          SUBCOMMITTEE RECESS

    Senator Stevens. If there is nothing further, the 
subcommittee will stand in recess.
    [Whereupon, at 3:19 p.m., Tuesday, March 7, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]
