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



 
       DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2007

                              ----------                              


                       WEDNESDAY, MARCH 15, 2006

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

                         DEPARTMENT OF DEFENSE

                         Department of the Navy

STATEMENT OF THE HONORABLE DAVID C. WINTER, SECRETARY 
            OF THE NAVY
ACCOMPANIED BY:
        ADMIRAL MICHAEL G. MULLEN, CHIEF OF NAVAL OPERATIONS
        GENERAL MICHAEL W. HAGEE, COMMANDANT, MARINE CORPS

                OPENING STATEMENT OF SENATOR TED STEVENS

    Senator Stevens. My apologies, gentlemen. I had a visit 
from one of the youth commissions in my State, that had a few 
questions. I hope you've got the answers. We're pleased to 
welcome the Secretary of the Navy, the Chief of Naval 
Operations, and the Commandant of the Marine Corps today, to 
discuss the fiscal year 2007 budget.
    Secretary Winter, Admiral Mullen, this is your first 
appearance before the subcommittee and the co-chairman and I, 
and our whole subcommittee welcome both of you.
    The Department of the Navy budget request for fiscal year 
2007 is $127.3 billion. Approximately $4.4 billion above the 
level we provided last year, excluding supplementals.
    We look forward to hearing about your priorities for these 
funds, and about the current status of the Navy and the Marine 
Corps, and we're also interested in the recent four structure 
changes, such as stand up of the new Marine Corps Special 
Operations Command, and the new Riverine Force. We hope you 
will share with us some of the challenges facing the Navy and 
Marine Corps team. And such as the need to reconstitute the 
force after returning from operations in the war theatre.
    As always, your statements will appear in the record in 
full, as though read. Let me turn to other Members here, to see 
if they have any opening statements.
    Mr. Chairman.

                 STATEMENT OF SENATOR DANIEL K. INOUYE

    Senator Inouye. I thank you very much, Mr. Chairman and 
gentlemen. I join my chairman in showing our appreciation that 
you've joined us today to testify before this subcommittee. Mr. 
Secretary and Admiral Mullen, we welcome you for your first 
appearance before this subcommittee and General Hagee, it's 
always good to see you. Sir, welcome back.
    Mr. Secretary, you and your military partners present a 
shared vision for the Navy and Marine Corps. One that seeks to 
modernize your forces while bringing the marines and Navy into 
a closer and more efficient partnership. Admiral, we recognize 
your requirement to modernize the fleet, to ensure that we do 
not continue to reduce the number of ships.
    General Hagee, we also see the need to rebuild our marine 
forces as they return to duty from Iraq. We hope to learn today 
how you will balance these modernization goals, while still 
providing sufficient funding to steam your ships, train your 
pilots, support the quality of life programs, such as military 
healthcare that are very vital to retention.
    Mr. Chairman, as you are aware, this is a challenging 
period for our military forces. They are being called upon 
increasingly to serve in harm's way. At the same time, the 
Defense Department has adopted policies which either reduce 
their forces, or increase commitments within the same force 
structure. We know these policies could strain our marines and 
Navy if they are not implemented with great care.
    Gentlemen, this is a tough assignment. We appreciate that 
you've joined us today and look forward to the meaningful 
discussion on balancing the needs of our maritime forces within 
budget limits.
    Thank you, very much. Mr. Chairman.
    Senator Stevens. Chairman of the full Committee.

     PREPARED STATEMENTS OF SENATORS THAD COCHRAN AND CONRAD BURNS

    Senator Cochran. Mr. Chairman, I'll be glad to put a 
statement in the record. Thank you very much.
    Senator Stevens. Senator Burns.
    Senator Burns. Same with me, Mr. Chairman. I think we want 
to hear from the witnesses today.
    [The statements follow:]

               Prepared Statement of Senator Thad Cochran

    Mr. Chairman, I am pleased to welcome Secretary Winter, 
Admiral Mullen, and General Hagee to this hearing. We 
appreciate your cooperation with this committee as we review 
the requests for appropriations for the Navy and Marine Corps. 
We also appreciate the response to the needs of disaster 
victims in the Gulf Coast region in the wake of Hurricane 
Katrina. I'd also like to thank General Hagee for the Marines' 
outstanding support provided to Mississippi's 155th Separate 
Armor Brigade while they were deployed to the Anbar Province 
and attached to the Second Marine Expeditionary Force.
    I join you, Mr. Chairman, in praising the performance of 
our military forces. They reflect great credit upon our 
country. We continue to keep them in our prayers as they 
maintain their legacy of sacrifice and service.
                                ------                                


               Prepared Statement of Senator Conrad Burns

    Thank you, Mr. Chairman. Secretary Winter, Admiral Mullen, 
General Hagee.
    First of all, I want to congratulate you for the tremendous 
service that your sailors and Marines are providing to win this 
war on terror. Our sailors and Marines are deployed all over 
the world. These great Americans are carrying the weight for 
our nation.
    In fact the future of the Middle East rests in the battle 
tested hands of your young men and women who now serve all over 
the world. We have a unique opportunity to bring stability to 
an area of the world that has not known peace in generations. 
This opportunity will not come again. We must do everything we 
can to ensure that our courageous men and women have the tools 
they need to succeed around the world.

    Senator Stevens. Mr. Secretary, we're pleased to have your 
statement.
    Mr. Winter. The Chairman, Senator Inouye, members of the 
subcommittee----
    Senator Stevens. Can you pull that mic back toward you a 
little bit, Mr. Secretary? Thank you.
    Mr. Winter. Thank you for the opportunity you've given the 
Navy and Marine Corps team to appear before this subcommittee. 
But before I start, I would like to express my deepest sympathy 
to Senator Inouye and his family on behalf of the entire 
Department of the Navy. Sir, you have our deepest sympathies.
    Now today, I'm joined by Admiral Mullen and General Hagee, 
and I could not ask for better, more honorable teammates. It is 
a true pleasure to work with them. Now each of us has provided 
a statement to this subcommittee and I appreciate the inclusion 
of those statements into the record.
    These documents outline in detail, this Department's 
priorities. Our top priorities are clear. We must prosecute the 
global war on terror today, while deterring potential 
adversaries and reset the force for tomorrow.
    Mr. Chairman, let me be blunt: We are a nation at war. 
Support for sailors and marines in the Iraqi theatre 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.
    I am now in my third month as Secretary. 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 
5th 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 process from Falluja 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 have 
thought possible. I was truly struck by their genuine 
enthusiasm and professionalism, and humbled by their 
achievement.
    It is difficult to describe the feeling one gets, for 
example, after meeting a team of four marines in Al Taqaddum, 
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. But 
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 other 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 subcommittee for its strong 
support for the Navy and marines. 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 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.

                           PREPARED STATEMENT

    Thank you, Mr. Chairman. I look forward to your questions.
    [The statement follows:]
            Prepared Statement of Honorable 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. And, 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 (GWOT). 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. Far-sighted 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 GWOT. 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 
(USCENTCOM) in various missions ashore, requiring boots on the ground. 
Missions were performed by 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 towards 
transformation and modernization. Funding technologies and weapons 
systems that will enable naval forces to enlarge their contributions to 
GWOT 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 
service members, 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 re-enlistment 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 6 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 GWOT:
  --The Marine Corps Special Operations Command (MARSOC) will enhance 
        interoperability, and provide greater flexibility and increased 
        capability to conduct irregular warfare.
  --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.
  --The Expeditionary Security Force will increase the effectiveness of 
        shipborne security and maritime interdiction operations by 
        supporting intercept and boarding capabilities in every CSG/
        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.
  --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, fourteen ships will be delivered to the Navy that 
include: four Amphibious Transport Dock ships (LPD)--(Hurricane Katrina 
impact may delay two ships to fiscal year 2008), three Dry Cargo and 
Ammunition ships (T-AKE), three Guided-Missile Destroyers (DDG), one 
Amphibious Assault ship (LHD), one Attack submarine (SSN), and one 
Oceanographic Survey ship (T-AGS). Also, the first of its class 
Littoral Combat Ship (LCS) will be delivered, built in less than two 
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 155 mm 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 Joint Strike Fighter (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 2,660 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 IED 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 February 15, 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 GWOT 
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 GWOT, 
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 of 2006.
    Improve Surge Capability.--The GWOT 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/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 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, USS ABRAHAM LINCOLN (CVN 
72), USS 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 USNS 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. USS BATAAN (LHD 5), 
conducting training exercises in the area, was first to respond. USS 
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. USS 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 
USNS 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 GWOT 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 USMC 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:
  --``Sea Swap'' rotational crews for smaller ships.
  --Decommissioning of older, manpower intensive platforms.
  --Improved use of technology to reduce shipboard manning and shorten 
        training pipelines.
  --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 GWOT, 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 three subordinate elements with an authorized strength 
of 2,600 Marines and Sailors. The current plan calls for 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 
Explosive Ordnance Disposal (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 C4ISR 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. USS 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 GWOT 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 USS 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 USS 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).--USS SAN 
        ANTONIO (LPD 17) was commissioned on January 14, 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 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 October 23, 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 a Marine Expeditionary Brigade, 
        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 Initial Operating Capability (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, USS 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 to154 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 SOF 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 JUCAV unmanned aircraft. 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 STOVL (Short Take-Off/Vertical Landing) version, while the Navy 
will purchase a follow-on CV (Aircraft Carrier) 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 OPEVAL in 2005 and 
will reach its Initial Operating Capability (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 GWOT 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 Initial Operating Capability (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 Marine Air-Ground Task Force (MAGTF) and the Joint Task 
Force (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. Initial Operating 
Capability (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 4 
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 (UAV).--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. Initial Operating Capability 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 & Control (C) variant. An additional five 
SDD vehicles are undergoing extensive Reliability, Availability and 
Maintainability testing to grow vehicle reliability in support of LRIP. 
Certain operational assessment phases will occur three 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. Special Operations Command 
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 six-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 & 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 war fighting 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, the 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 the Congress for its 
continued support of and confidence in the United States Navy and the 
United States Marine Corps.
                                 ______
                                 
           Biographical Sketch of Honorable Donald C. Winter
    Donald C. Winter is the 74th Secretary of the Navy, sworn into 
office on January 3, 2006. As Secretary of the Navy, Dr. Winter leads 
America's Navy and Marine Corps Team and is responsible for an annual 
budget in excess of $125 billion and almost 900,000 people.
    Prior to joining the administration of President George W. Bush, 
Dr. Winter served as a corporate vice president and president of 
Northrop Grumman's Mission Systems sector. In that position he oversaw 
operation of the business and its 18,000 employees, providing 
information technology systems and services; systems engineering and 
analysis; systems development and integration; scientific, engineering, 
and technical services; and enterprise management services. Dr. Winter 
also served on the company's corporate policy council.
    Previously, Dr. Winter served as president and CEO of TRW Systems; 
vice president and deputy general manager for group development of 
TRW's Space & Electronics business; and vice president and general 
manager of the defense systems division of TRW. From 1980 to 1982, he 
was with the Defense Advanced Research Projects Agency as program 
manager for space acquisition, tracking, and pointing programs.
    The Secretary of the Navy is responsible for all the affairs of the 
Department of the Navy, including recruiting, organizing, supplying, 
equipping, training, mobilizing, and demobilizing. The Secretary also 
oversees the construction, outfitting, and repair of naval ships, 
equipment and facilities. The office is also responsible for the 
formulation and implementation of naval policies and programs that are 
consistent with the national security policies and objectives 
established by the President and the Secretary of Defense. The 
Department of the Navy consists of two uniformed Services: the United 
States Navy and the United States Marine Corps.
    Dr. Winter earned a bachelor's degree (with highest distinction) in 
physics from the University of Rochester in 1969. He received a 
master's degree and a doctorate in physics from the University of 
Michigan in 1970 and 1972, respectively. He is a 1979 graduate of the 
USC Management Policy Institute, a 1987 graduate of the UCLA Executive 
Program, and a 1991 graduate of the Harvard University Program for 
Senior Executives in National and International Security. In 2002, he 
was elected a member of the National Academy of Engineering.

    Senator Stevens. Thank you. Admiral, do you have a 
statement?
    Admiral Mullen. Yes, sir. Mr. Chairman, Senator Inouye, 
Chairman Cochran, and distinguished members of this 
subcommittee, I thank you, as well, for the opportunity to 
appear before you today.
    Senator Inouye, if I may sir, on behalf of the United 
States Navy, allow me to extend to you my deepest and most 
heartfelt sympathies for the loss of your wife Maggie. Please 
know that Deborah and I, as well as all sailors everywhere, 
keep you and your family in our thoughts and prayers. Her loss 
is this Nation's loss.
    Mr. Chairman, I'm honored to appear here as a part of the 
Navy and Marine Corps leadership team, and it truly is a team.
    General Hagee and I have known each other a very long time, 
all the way back to our days together at the Naval Academy. 
He's a friend, a mentor, someone I would gladly call shipmate, 
and I feel honored to have this chance to serve so closely with 
him again.
    I'm also honored to be here alongside our new Secretary. 
Secretary Winter has certainly hit the deckplates running, as 
we like to say, and has already made a lasting impression on 
our Navy men and women. We are better for his leadership.
    Mr. Chairman, I'd like to leave you with three thoughts 
this morning. First, your Navy's actively engaged across the 
globe. More than 100 of your ships and submarines, and over 
36,000 sailors are forward deployed right now. More than half 
those men and women--some 22,000--are serving in the Central 
Command theatre, and half of that number are on the ground in 
combat and combat support roles.
    I too, have traveled much of these first 8 months as CNO, 
spending time with sailors at sea and ashore as well as their 
families. I've seen them take the fight to the enemies of 
freedom on the streets of Baghdad, the waters of the Arabian 
Gulf, and in the Horn of Africa, watched them build base camps 
in the vast open stretches of western Iraq, and stand watch 
over the sources of that country's burgeoning economy.
    I stood next to them at the demilitarized zone (DMZ) in 
Korea, listened to them encourage one another as they rebuild 
cities and towns devastated by natural disasters overseas, and 
here, on our own gulf coast, and pinned medals on the chests of 
doctors and corpsmen who risked life and limb to save the lives 
and limbs of others.
    Your sailors are chasing pirates, flying ground support 
missions from carriers and finding and apprehending terrorist 
leadership, while training our allies to do the same.
    They will be pitching in even more. A Navy admiral takes 
command of the detainee operation in Guantanamo Bay this month. 
We will soon take command of the Joint Task Force in the Horn 
of Africa. Naval officers will soon lead 6 of the 12 U.S. led 
Provincial Reconstruction Teams in Afghanistan.
    There's incredible talent in our Navy. Our sailors have 
character and resolve and hold themselves and their shipmates 
to high standards. I'm enormously proud of them and their 
families, and grateful for their service at this critical time 
in our history, and they are ready.
    Second, we know we must work hard to stay ready. During my 
confirmation hearing last April, I identified three challenges 
facing our Navy: I need to sustain combat readiness, the need 
to build the right force for the future, and the need to 
transform our manpower and personnel system.
    Everything I've seen these last 8 months has only convinced 
me further that sea power in this century is taking on a whole 
new meaning, and that these are exactly the right priorities.
    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 Quadrennial 
Defense Review (QDR) itself, helps provide that balance. It 
funds a continued increase in investment over the future years 
defense plan and boosts procurement by over $2 billion over the 
last year, supporting the development of more capable and more 
efficient technologies, funds our operation and maintenance 
accounts, and through pay raises and other incentives helps us 
to attract and retain that wonderful talent of which I spoke.
    Our long-range ship building plan submitted with this 
budget, likewise strikes a balance between near- and long-term 
requirements. The fleet today stands at 281 ships--not enough 
in my view to deliver the joint warfighting capabilities the 
combatant commanders will need over the course of this long 
war.
    Our plan, centered on 11 aircraft carriers with a fleet of 
about 313 ships, affordably meets these needs for the good of 
the Navy, for the good of the Nation and for the good of our 
allies and partners.
    We get a good start in 2007, building 7 new ships across 
five classes--3 of them new classes, I might add, while moving 
the count up to 285.
    And that brings me to point number three, Mr. Chairman. 
Only through your support and the continued, longstanding 
support of this subcommittee and the Congress can we really 
succeed.
    In this very month of March back in 1794 Congress 
authorized the construction of six new frigates. It was a risky 
vote. Longer and broader than traditional frigates, the ships 
design by Joshua Humphries featured an oddly angled hull 
curving inward from the waterline, unusually flush decks, and 
several feet of extra beam. Critics deemed them ungainly. And 
yet they shone against the French in 1799, the Barbary pirates 
in 1804, and the British in the war of 1812. They ushered in a 
new age of fighting sail.
    The greatest of them, the U.S.S. Constitution--moored today 
in Boston--remains our oldest commissioned warship and a symbol 
of both America's independence and her ingenuity.
    The new warships we intend to build with your support, 
DD(X), CVN-21, Virginia-class attack submarine, and the 
Freedom-class littoral combat ships, will likewise usher in a 
new era of sea power and advance America's heritage of 
ingenuity in defense of liberty.

                           PREPARED STATEMENT

    I thank you again for that support, for your time today, 
and for your commitment to the men and women of the United 
States Navy. They and their families are the best I've ever 
seen.
    On their behalf, I stand ready to answer your questions.
    [The statement follows:]
            Prepared Statement of Admiral Michael G. Mullen
    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 of 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 six months, I 
have visited our Fleet, have observed numerous operations at home and 
overseas, participated in the comprehensive Quadrennial Defense Review, 
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, 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 USNS 
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.
    USS 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 USS 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. USS 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.
    And 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.'' And 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.'' And 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. And 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 
CENTCOM 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 USNS 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 two 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 five 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:
  --Re-affirms 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.

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

                             Navy's VISION
    Americans secure at home and abroad; sea and air lanes open and 
free for the peaceful, productive movement of international commerce; 
enduring national and international naval relationships that remain 
strong and true; steadily deepening cooperation among the maritime 
forces of emerging partner nations; and a combat-ready Navy--forward-
deployed, rotational and surge capable--large enough, agile enough, and 
lethal enough to deter any threat and defeat any foe in support of the 
Joint Force.

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

                          sustaining readiness
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.




                                Figure 1

    While numbers vary slightly with daily operations, on February 15, 
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 six aircraft 
carriers, seven 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 February 15, 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. 95 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, 
inter-agency, 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.
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, shaping, and 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, 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 
decision makers, 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 Fleet Response Plan is the maintenance, training, and 
operational framework through which the Navy meets global Combatant 
Commander demand signals for traditional (e.g., GWOT, 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 Fleet Response Plan 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 Fleet Response Plan 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 Fleet Response Plan with 
sustainable Sea Basing, intelligently and selectively applied Sea Swap, 
and a Forward Deployed Naval Force.
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 GWOT, 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 Fleet Response 
Plan (FRP) is an on-going 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 
six-months 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--USS GONZALEZ (DDG 66), USS 
LABOON (DDG 58), and USS 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 USS GEORGE WASHINGTON (CVN 73) replace the USS 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 
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 GWOT 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 C4I 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.
                       building the future force
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 TACAIR assets to meet irregular and conventional Joint warfighting 
requirements.
    Sea Basing 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 Sea Basing 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, inter-netted 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. And 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.
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.
            
            
                                Figure 2

    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 
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.
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 Intelligence Surveillance and 
Reconnaissance (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 Theater Ballistic Missile Defense (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 fifty-
five 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, USS 
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 USS 
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; 
and 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. 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, 155 mm round, 
LRLAP will provide all- weather fires capability out to 83nm. 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 IOC in 2019. CG(X) will bring to sea 
significant warfighting capabilities.
    LCS.--Navy will commission the first Littoral Combat Ship, USS 
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); and Seaframe and mission package acquisition 
strategies that provide for spiral design.
    LPD 17.--The lead ship of the class, USS SAN ANTONIO (LPD 17) was 
commissioned on January 14th, 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 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, Inter-
Service 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 life.
    Naval Aviation modernization efforts continue with the F/A-18A/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 (OA) 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, C4I suites, and combat systems.
    Cruiser (Mod).--AEGIS Cruiser Modification improves war-fighting 
capability through enhanced self defense (CIWS Block 1B, Evolved Sea 
Sparrow Missile (ESSM)), expanded information sharing and collaborative 
engagement (Cooperative Engagement Capability--CEC), improved littoral 
ASW 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, 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 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 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 war fighting needs of 
the Navy, Marine Corps, Air Force and eight other countries. The JSF 
program pillars are range, lethality, survivability, supportability, 
and affordability. The United States, United Kingdom, 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 and Landing (STOVL). Department of Navy procurement is 
expected to be 680 aircraft.
    The JSF aircraft carrier (CV) variant is projected to exceed its 
required 600NM combat radius, and the STOVL variant is projected to 
exceed its required 450NM 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 FLIR (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 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 C4I 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, electro-magnetic 
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 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, an 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 C4I 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 (GMHD).--GHMD provides a high 
altitude, high endurance UAV capability seven 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 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 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 schedule 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 C4I and battlefield management 
capabilities to support the Littoral Combat Ship (LCS) core mission 
areas of ASW, Mine Warfare (MIW), and anti-surface warfare (ASUW). Fire 
Scout is currently in Engineering and Manufacturing Development (EMD).
    Tactical Control System (TCS).--The Tactical Control System (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 C4I. 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 Littoral Combat Ship 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, 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.
                    developing 21st century leaders
Taking a Fix
    The men and women of the United States Navy--active, reserve and 
civilian--are the lifeblood and heart of the Service. And 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.



                                Figure 3

    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 synch 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). 
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 
inter-service 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, non-traditional 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. The 
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 
two 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.
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 war fighting 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.
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 five 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 a Concept of 
Operations (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 
ten 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 work force.
    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 service members 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 five 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 have 
chosen or have been 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, 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 Department of 
Defense.
    Family Advocacy.--Navy Family Advocacy Program (FAP) has led the 
way among the Services and the Department of Defense 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 
Operation IRAQI FREEDOM and Operation ENDURING FREEDOM 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 Operations 
Iraqi Freedom and Enduring Freedom, 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 the 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--5VM (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 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 Foreign 
Area Officers (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 
GWOT, 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 December 14-15, 2005. 42 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 (GWOT) 
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, Inter-agency, and international military 
partnerships. NPS provides specialized programs that support U.S. 
national security priorities and the Combatant Commanders, including 
counter-terrorism, 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.
                               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 the 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 the 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.
                                 ______
                                 
            Biographical Sketch of Admiral Michael G. Mullen
    A native of Los Angeles, Calif., Admiral Mullen graduated from the 
U.S. Naval Academy in 1968. He has served in Allied, Joint and Navy 
positions, overseas and in both the Atlantic and Pacific Fleets.
    As a junior officer, he served in various leadership positions 
aboard USS Collett (DD 730), USS Blandy (DD 943), USS Fox (CG 33) and 
USS Sterett (CG 31). Adm. Mullen commanded three ships: USS Noxubee 
(AOG 56), USS Goldsborough (DDG 20), and USS Yorktown (CG 48). As a 
Flag Officer, he commanded Cruiser-Destroyer Group Two and the George 
Washington Battle Group. Adm. Mullen's last command at sea was as 
Commander, U.S. Second Fleet/Commander, NATO Striking Fleet Atlantic.
    Ashore, Adm. Mullen served as Company Officer and Executive 
Assistant to the Commandant of Midshipmen at the U.S. Naval Academy. He 
also served in the Bureau of Naval Personnel as Director, Surface 
Officer Distribution and in the Office of the Secretary of Defense on 
the staff of the Director, Operational Test and Evaluation. On the 
Chief of Naval Operations' staff, Adm. Mullen served as Deputy Director 
and Director of Surface Warfare; Deputy Chief of Naval Operations for 
Resources, Requirements, and Assessments (N8); and as the 32nd Vice 
Chief of Naval Operations.
    Adm. Mullen graduated from the Naval Postgraduate School in 
Monterey, Calif., with a Master of Science degree in Operations 
Research. He is also a graduate of the Advanced Management Program at 
the Harvard Business School.
    Adm. Mullen's most recent operational assignment was Commander, 
Joint Force Command Naples/Commander, U.S. Naval Forces Europe. Based 
in Naples, Italy, he had operational responsibility for NATO missions 
in the Balkans, Iraq, and the Mediterranean as well as providing 
overall command, operational control, and coordination of U.S. naval 
forces in the European Command area of responsibility.
    Admiral Mullen became the 28th Chief of Naval Operations on July 
22, 2005.

    Senator Stevens. Thank you very much, Admiral. General 
Hagee, do you have a statement, sir?
    General Hagee. Sir, I do. Mr. Chairman, Senator Inouye, 
Chairman Cochran, others members of this distinguished 
subcommittee, good morning.
    Senator Inouye, like the Secretary of the Navy and the 
Chief of Naval Operations, on behalf of all marines I would 
like to extend our most heartfelt condolences and sympathies on 
the loss of your wife Maggie, and assure you that our thoughts 
and prayers are with you during this time.
    It's my privilege to be here with my shipmate and good 
friend, the CNO, Admiral Mike Mullen. As he mentioned, we've 
known each other for some time, since 1964, and we actually 
like each other--since 1964, and it does in fact make a 
difference.
    And I'm also happy to be here with our new Secretary of the 
Navy, to report on the state of your Marine Corps.
    Sixty-one years ago today, there was a slight pause in the 
battle for Iwo Jima. The flag raising on Mount Suribachi had 
occurred just a few days earlier, but had seemed a distant 
memory to the marines on the island. As Lieutenant General 
Howlin Mad Smith and the leadership of the 5th Amphibious Corps 
peered down from the Motoyama Plateau, they contemplated the 
scope of hardships 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 in our preparedness for the unknown battles which 
await us in this long war against yet, another determined and 
lethal foe.
    Marines executing this war today know they're well 
equipped, well trained, well led, and have the backing of the 
American people and their Congress. They and their families 
also know 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.
    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've 
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 pre-deployment training 
at Twentynine Palms, Ridgeport, California and Yuma, Arizona to 
better prepare our units for the nontraditional environment.
    Finally on February 24, we activated the Marine Corps 
Forces Special Operations Command (SOCOM), which will add about 
2,600 marines to SOCOM, increasing its capacity and capability. 
With over one-third of our operating forces deployed, we retain 
the ability to rapidly respond to additional contingencies as 
they rise.
    This Nation invests tremendous capital in its naval forces 
and this past year, these forces responded across the spectrum 
of conflict, from Iraq 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 a 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 past year has 
been challenging, but successful. Thanks to the dedication of 
your marines and your continued support of our recruit 
advertising and re-enlistment 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 mentioned in previous testimony, the current 
operational tempo and environment are significantly degrading 
the service life 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 
unforeseen 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.

                           PREPARED STATEMENT

    I firmly believe that the most dangerous weapons system on 
any battlefield is a well armed, well educated U.S. marine and 
with your continued support, this will not change.
    I look forward to answering your questions.
    [The statement follows:]
             Prepared Statement of General Michael W. Hagee
    Chairman Stevens, Senator Inouye, distinguished members of the 
Subcommittee, 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 
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.
                              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 four 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 four 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 servicemen 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.
       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 
lifetimes' worth of wear stemming from vehicle mileage, operating 
hours, and harsh environmental conditions.



                                Figure 1

    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 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 in 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) is essential to address ``Reset the 
Force'' and wartime contingency costs since our annual baseline budget 
procurement averages approximately $1.5-$2.0 billion.



                                Figure 2

    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.
                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. Secondly, 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 February 24, 
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, QDR 
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 September 28, 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 of 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 HIMARS systems (18 to one 
artillery battalion of the active component, 18 to one 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 120 mm 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. Initial operational capability 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/improvised 
explosive devices. 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 re-designated 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 
Improvised Explosive Device. Thanks to your support, we completed the 
installation of the Marine Armor Kits (MAK) 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 vehicle. 
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 OIF. This system is an additive capability 
that integrates with existing armor systems. We procured 4,500 QG 
systems with initial delivery beginning in 1st 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 two 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 improvised explosive devices 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 are all are 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 seven-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 five years and has been 
a leader in the Department of Defense 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.
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 non-commissioned 
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 thirteen 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 (MOS') 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 fiscal year 2006 National Defense Authorization Act. 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 Department of Defense 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 (MCCS) 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 service members 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 (MFW), 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 Department of Defense 
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, 
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 Department of 
Defense 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.
                        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 USS 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 counter-insurgency 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 improvised explosive devices, 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 non-
commissioned 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 GWOT 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 Defense Department 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 forty 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 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 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 
CONUS-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 
non-developmental item (NDI). 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 JTF Katrina, providing high-speed 
delivery of supplies, equipment, and personnel to ships and ports along 
the U.S. Gulf Coast.




                             HSV 2 (SWIFT)

    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 ten 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 TacAir 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 four 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).



                                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 MAGTF and 
Joint force to project and sustain forces ashore from a sea-based 
center of operations in support of EMW, 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 (AAV) 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 three 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.
                               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.

                   NAVY EXPEDITIONARY COMBAT COMMAND

    Senator Stevens. Thank you very much, gentlemen. Let me 
start out with you Mr. Secretary. And unless there are 
objections, we'll have a 10 minute round for each Senator.
    There's funding requested for the Navy Expeditionary Combat 
Command in the 2006 supplemental, but there's no money in the 
2007 budget. Can you tell us why? What is the strategy? This is 
for you Mr. Secretary. I think it is a basic question of the 
Secretary and Admiral Mullen, too, this is a strange 
circumstance. Why should we put money in the supplemental if 
it's not going to be funded in the 2007 budget?
    Mr. Winter. Admiral, could you help on this one?
    Admiral Mullen. Mr. Chairman, I'll have to get back to you. 
I'm not aware that it is not funded in the 2007 budget.
    Senator Stevens. That's my information, I could be wrong.
    Admiral Mullen. My understanding was we had money in that. 
The idea in the 2006 supplemental was to get it moving as 
rapidly as possible and we started to fund it in 2007.
    Senator Stevens. All right. Thank you very much.
    [The information follows:]

    The Navy requested funding in the DON fiscal year 2006 Emergency 
Wartime Supplemental submission for the Riverine Force ($73.1 million); 
the Maritime Civil Affairs Group ($6.4 million); the Expeditionary 
Training Team ($2.5 million); the Maritime Security Force ($6.5 
million); Inshore Boat Units, which are components of the Naval Coastal 
Warfare community ($16.5 million); and the NECC Headquarters ($2.5 
million). The primary rationale for the funding requested in the fiscal 
year 2006 supplemental for the new components of the NECC is that the 
final decision to establish the NECC and the aforementioned components 
was not made until after the submission of the regular fiscal year 2007 
budget.
    The following summarizes all of the efforts currently in motion and 
planned to fund the Riverine Force (Riverine Group ONE [headquarters] 
and three deployable Riverine Squadrons) in the OPN, WPN, OMN and PANMC 
appropriations. The first Squadron-level operational deployment to the 
U.S. Central Command Area of Responsibility is scheduled for March 
2007. Principal rationale behind requesting procurement funding on an 
accelerated timeline is due to the relatively long delivery projections 
for much of the equipment required by the deploying Riverine Squadrons 
(in many cases delivery forecasts are 12 months or longer, subsequent 
to contract/contract option award).
  --Fiscal Year 2006 Below Threshold Reprogramming.--$7.47 million to 
        begin equipping Riverine Squadron ONE (RIVRON ONE). Fleet 
        Forces Command is also providing OMN funding from existing 
        resources in fiscal year 2006 to support the establishment of 
        RIVRON ONE and the Riverine Group ONE headquarters on an 
        accelerated timeline.
  --Fiscal Year 2006 Above Threshold Reprogramming.--$17.34 million to 
        continue equipping RIVRON ONE, less combatant craft, which the 
        Marine Corps will ``loan'' RIVRON ONE for initial training and 
        the March 2007 deployment. With one exception, funding will 
        ``pay back'' other Navy programs from which required equipment 
        for RIVRON ONE is being redirected.
  --Fiscal Year 2006 DON Emergency Wartime Supplemental Request.--$73.1 
        million to equip RIVRONs TWO and THREE, commands scheduled to 
        sustain the aforementioned initial operational deployment in 
        November 2007 and July 2008, respectively.
  --Fiscal Year 2007 President's Budget.--$22.31 million initially 
        intended to begin establishment of one modestly sized riverine 
        unit. This baseline concept was superceded by a more robust 
        Riverine Force concept subsequent to submission of the PRESBUD. 
        Currently, fiscal year 2007 funding would be used to sustain 
        the Force being stood up in fiscal year 2006.

                       SPECIAL OPERATIONS FORCES

    Senator Stevens. Secretary Winter, in the Quadrennial 
Defense Review there was significant emphasis on increasing the 
Special Forces Operations capabilities including Navy SEALs, 
and additional naval personnel to train foreign units, and a 
new Marine Corps Special Operations component. Will those 
activities require an increase in the Navy's end strength in 
2007?
    Mr. Winter. Sir, I believe that the end strength 
considerations associated with the Navy and the Navy SEALs have 
been factored into the proposed end strength into 2007 of 
340,700 for the active component and that includes, to my 
understanding, the factoring in of the additional SEALs that 
are required.
    Senator Stevens. General Hagee, this new Marine Corps 
Special Operations component, will it be under the control of 
the Special Operations Command or under your control?
    General Hagee. Sir, from an operational standpoint, of 
course it's under the control of the Combatant Commander or 
Special Operations Commander General Brown. I am responsible 
for the training, equipping of traditional types of equipment, 
not the Special Operations equipment and the training of those 
marines before they go down there, like we are for any 
Combatant Commander, sir.
    Senator Stevens. And Admiral Mullen, it is my information 
that this is going to require an increased level of Navy SEAL 
team force levels. Are you going to be able to do that type of 
specific recruiting to meet the Navy SEALs without sacrificing 
the level of training for the Command as a whole?
    I'm looking at this QDR and my staff has looked at it and 
compared it to the budgets. Have we got the funding in this 
budget to meet the goals of the Quadrennial Defense Review?
    Admiral Mullen. We initiated the funding in the 2007 
budget, but we clearly don't have it. I mean, we've got 
additional work to generate both the funding, and refine the 
steps, and the program builds from 2008 on out--2007 was the 
beginning.
    As far as the SEALs, Mr. Chairman, our concern they are--as 
the Secretary said--they are taking into consideration their 
end strength increase is taken into consideration in the 
overall decrease of the Navy's end strength.
    That said, last year for example, we graduated about 170 or 
175 SEALs from basic underwater demolition school (BUDS) and we 
need to generate the kind of numbers we're talking about in the 
future. We need to get that number up above 200.
    We have taken some steps both at the recruiting and in boot 
camp to ensure that those who are desirous of going are better 
prepared. We're working pretty hard in terms of making sure 
those who want to do this and are qualified can get through the 
training. But in no way, shape, or form is there any intent to 
decrease the quality.

                           MENTAL HEALTH CARE

    Senator Stevens. Let me ask two more questions. One is, we 
know there's going to be an amendment offered to the 
supplemental that Chairman Cochran is managing dealing with 
additional funds for the Veterans Administration and for the 
Department to meet the mental health concerns.
    Researchers at Walter Reed Army Medical Center surveying 
soldiers, sailors, airmen, and marines found that 19 percent 
reported mental health concerns. Now that's potentially a large 
problem not only for the Armed Forces, but for the veterans 
health care system.
    Are you adequately funded in the 2007 bill to meet that, or 
do we need to add money that we're going to be asked to add for 
the care of these veterans?
    Mr. Secretary, have you discussed this?
    Mr. Winter. Sir, I've not discussed this at this level of 
detail. CNO, do you have a view on this?
    Admiral Mullen. Mr. Chairman, I would really have to get 
back to you on whether we're adequately funded. I will say that 
from the Navy's perspective, this is an issue we are aware of 
and we are working literally from the field back into the 
hospitals and back into the support mechanisms, that we have--
not just in the hospitals, but also at our fleet and family 
support centers. That is something we are very much aware of.
    The adequacy of the funding to support that, I would just 
have to--I'm comfortable we can do that in the near term. 
Whether we've got it laid in for the long term, I just don't 
know. I would have to get back to you on it.
    [The information follows:]

    Navy Medicine can and will continue to meet the demand for 
mental health services required by our fighting Marines and 
Sailors. We have identified the need for an additional $11.4 
million in the 2006 GWOT supplemental to support the Post 
Deployment Health Re-Assessment (PDHRA) of returning Sailors 
and Marines, active and reserve component. If Congress passes 
this supplemental request and our current fiscal year 2007 
budget request we will have adequate funding for this 
initiative and for our mental health requirements throughout 
fiscal year 2007.

    Senator Stevens. Well I have to tell you, we don't have 
long term. We're going to have to face this very soon when we 
get back. Chairman Cochran can maybe tell us when.
    That's one of the issues that worries me a little--the 
amendment to add substantial monies to the supplement for the 
mental health care. So I hope you can get back to us as soon as 
possible.

                                 MV-22

    General Hagee, about the problems of additional funds for 
V-22 aircraft as replacement for the CH-46. That money is not 
in the supplemental that was forwarded to us. And it's my 
understanding that this is really a problem. I sent you a 
letter, and you responded to it, and I thank you for that. Have 
you discussed this with the Department and should we consider 
increasing the 2006 level--I mean the 2007 level, to meet these 
V-22 requirements?
    General Hagee. Sir, we have. As you know, we've identified 
the MV-22 to replace those four 46s we have lost. We put that 
in the supplemental. It was deferred to next year--to 2007, if 
in fact we have those funds. We could have executed in 2006, 
but if we get the funds in 2007 we can execute in 2007.
    If you ask me, what I would prefer to do? I would prefer to 
execute it in 2006, but I also understand the fiscal 
environment in which we are in.
    Senator Stevens. You didn't get any money out of the so-
called bridge funds for 2006 for the V-22?
    General Hagee. Not for aircraft replacement. No, sir.
    Senator Stevens. What's the timing as far as the rate of 
production now? Is it declining?
    General Hagee. No, sir. In fact, as you know, it went 
through a successful Defense Acquisition Board. The rate that 
we had planned a couple of years ago, has in fact been reduced. 
But we're going to produce 9 this year and the plan is to 
produce 14 next year.
    Senator Stevens. These are actually going to be used to 
replace equipment that was lost or destroyed in the war zones 
of Iraq and Afghanistan, right?
    General Hagee. Yes, sir. Any 46--and we have lost four of 
those so far, or any CH-53 Delta will be replaced by a MV-22.
    Senator Stevens. Thank you very much. Senator Inouye.

                             STEAMING DAYS

    Senator Inouye. Mr. Secretary, traditionally for the past 
several years, the Navy has had about 51 steaming days per 
quarter. Add to this the fact that announcements have been made 
indicating your intention to increase Navy presence in the 
Pacific, which would increase steaming days.
    Taking these two things into consideration, don't you think 
that a budget request, requesting 36 steaming days in a quarter 
is taking a huge risk?
    Mr. Winter. Sir, there clearly is a risk assumption 
associated with that. I will note however, that we have 
ensured, taking the proper steps to be sure that the pre-
deployment, the readiness part of the steaming, the operations 
and maintenance are funded at the full level to ensure that 
we're able to maintain the readiness of the fleet, relative to 
the operational deployment. This is a matter we're going to 
have to track very carefully in terms of the ongoing 
activities, as well as the conduct of phase zero activities 
that may be dealt with outside of the area of responsibility 
(AOR). It is a matter we're going to continue to track and we 
will watch very closely.
    CNO, if you want to add to that.
    Admiral Mullen. Senator, clearly it's a calculated risk. We 
have funded the surge capability from both a training and a 
readiness standpoint in order to be able to deploy and meet 
requirements.
    These are deployed steaming days which would move from 51 
to 36 and we have been at 51 steaming days for a significantly 
long period of time. It is something I have no desire to return 
to, what I call the readiness bathtub, that we've filled in 
recent years, and that we will watch this very carefully. And 
if we have to, we'll have to move money around in order to fund 
it to meet the need for the steaming days deployed.
    The deployed days are going to be the same. In other words, 
the ships will still be overseas deployed. It's a question of 
managing that risk. I actually expect to get some of that 
returned. Some of those steaming days have, over the last 
couple of years, been tied to supplemental funds. I'm not 
looking for that, but that has happened in the last couple of 
years. So it is an account we just have to manage very, very 
carefully.
    Senator Inouye. So as far as you're concerned, it is a risk 
that you can live with?
    Admiral Mullen. Yes, sir. At this point in time, it is.
    Senator Inouye. What about the 2 percent increase in 
deferred maintenance?
    Admiral Mullen. Again, that is relatively small at this 
particular point in time. I'm anxious to not return to a large 
amount of deferred maintenance and we'll watch this. I actually 
have some deferred in 2006, as well as in 2007 and I have no 
desire to return to where we were before and have to watch it 
literally maintenance availability by maintenance availability 
to ensure that we don't return to that. And I may have to move 
resources around to do that, but we are.
    The other thing we've done, Senator, is we've worked hard 
to do maintenance differently than we have in the past and to 
operate much more efficiently than we have in the past, and 
we've put an extraordinary amount of money in readiness in the 
last several years, and I'm anxious to keep pressure on those 
accounts to make sure we're spending effectively, as well as 
efficiently.

                       MARINE CORPS END STRENGTH

    Senator Inouye. General Hagee, you're now operating at an 
end strength of 179,000 marines, with the hope of reaching 
181,000 by the end of this fiscal year. In addition, as the 
chairman noted, you're going to have 2,600 assigned to special 
operations.
    In your professional military judgment, what level of end 
strength is required to fulfill the current and future missions 
of your Corps? And I say this because, recently in a statement 
you said 180,000 is about right.
    General Hagee. Sir, thank you for that question. You are 
right. We are currently authorized today 179,000. The program 
budget pays for 175,000. The additional marines authorized by 
the Congress are funded by the supplemental. In addition as you 
know, the title 10 allows us to go about 3 percent above our 
authorized level during times of war. And so, we're at about 
180,000 marines right now.
    I believe based on the current operational tempo and 
training tempo that that is about right for us right now. The 
last review that we had on structuring the Marine Corps was in 
2003 and several things have changed since that time.
    You've mentioned that we have stood up the Marine Special 
Operations Command. There's a significant review of our major 
war plans that are undergoing, as I said, review. And we're 
also--the QDR report came out, which is shifting it from--re-
balancing probably is a better word--from traditional to 
irregular and so, in order to look at all of that, I have stood 
up a capabilities assessment group.
    It's been going for just over about 1\1/2\ weeks. It is 
headed by Major General Steve Johnson who just returned from 
Iraq, and they're going to report out late spring--early summer 
on what the Marine Corps should look like from a structure 
standpoint and the end strength to support that both now and 
into the future.
    I would like to comment, if I could, just a little bit on 
Marine Special Operations Command (MARSOC). There are 2,600 
marines that will ultimately end up underneath SOCOM. Three 
major muscle movements. One of them is a foreign military 
training unit which we stood up last year in the Marine Corps 
and we're going to move that to SOCOM.
    It's where it should be. It's for an internal defense. We 
will not reconstitute that inside the Marine Corps. We're going 
to take our Maritime Special Purpose Force which currently 
trains up with the Marine Expeditionary Unit, goes out with the 
Marine Expeditionary Unit, and operates with them. We're going 
to take that force and transfer that to SOCOM. They are still 
going to train up with and deploy with the Marine Expeditionary 
Unit.
    However in theatre, they will be under the operational 
control of the Theatre Special Operations Commander. We will 
not reconstitute that force. We're going and the final 
capability set, we're going to give to SOCOM, are some signals 
intelligence (SIGINT) capability, fire support coordination 
capability, intelligence (INTEL) capability. Those capabilities 
we will have to reconstitute inside the Marine Corps.

                        RECRUITING AND RETENTION

    Senator Inouye. Thank you very much. Admiral, although you 
seem to be meeting overall recruitment goals, we note with some 
concern your problems with recruiting women and minorities. And 
second, doctors and nurses, the SEALs, and lower re-enlistments 
in the first quarter of the fiscal year.
    If there is anything that you feel that this subcommittee 
can do to help you in this matter, because I think we've got to 
meet our goals, I hope you will let us know.
    Admiral Mullen. Yes, sir. Overall from a recruiting 
standpoint and both the recruiting and a retention level, we 
are meeting our goals. We've had extraordinary retention for 
the last--since really--since 2000 and the retention numbers 
even this year are very good. As is our recruiting, there are 
some aches on the Reserve side for Seabees and medical where we 
have not met our goals for a significant period of time and 
we're anxious to get that incentivized correctly.
    And we're working on that as well from the diversity aspect 
of it. It's a priority for me as a chief to make sure we have 
this right. Our overall balance in the force is really pretty 
good, with the exception of senior flag officers in both women 
and minorities in terms of percentages.
    That's a priority for me to get right in the future and to 
do that, I need to certainly do that at the base so that we 
have, many years from now, an opportunity. There are 
opportunities to make sure that we reflect this country. It is 
a very important issue for me and one that I pay a lot of 
personal attention to. And so I appreciate your offer. And if 
there is, I certainly will let you know.
    Senator Inouye. Thank you very much, Admiral. Thank you, 
Mr. Chairman. Chairman Cochran.

                          SUPPLEMENTAL REQUEST

    Senator Cochran. Mr. Chairman, thank you very much. Thank 
you for being here, Mr. Secretary, General Hagee, Admiral 
Mullen, to discuss the budget request for the Navy and Marine 
Corps for the next fiscal year. The supplemental has provided 
part of the request that the Navy and Marine Corps says it 
needs to repair and replace equipment and other items in your 
inventory.
    I wonder, taking the supplemental request and looking at 
the request for this next fiscal year, do you think, Mr. 
Secretary, that you have enough funds to carry out the missions 
you expect the Navy and Marine Corps to be required to carry 
out?
    Mr. Winter. Senator, within the ground rules we've been 
given, which is to say that the incremental cost of operations 
associated with the conflict to be included in the supplemental 
and not into the base budget, we do believe that we have 
adequately provided for the needs of the Navy and Marine Corps 
for the next year.
    Senator Cochran. General Hagee, the Marine Corps is asking 
in the supplemental for approximately $3.2 billion to repair or 
replace ground vehicles, Humvees, and other equipment that has 
been damaged or lost in Iraq and Afghanistan. How will you deal 
with the remaining unfunded requirements in ground equipment to 
complete for example, resetting the aviation assets that have 
been depleted.
    General Hagee. Sir, thank you for that question. What we 
did is, last year we drew a line and we looked at October 1, 
2005, and we said, what will it cost to reset the Marine Corps 
as of October 1, 2005? And we came up with $11.7 billion.
    If we had that and the industrial base could execute it, we 
would be just where we should be as far as capabilities and 
capacities in the Marine Corps. And that's what we have called 
our reset and we submitted that as part of the supplemental. We 
got a portion of that for 2006. The rest that's over here is a 
recommendation for 2006. The rest is then deferred to 2007.
    We could not, even if we got the $11.7 billion, we couldn't 
execute it in 2006. Industry could not execute it in 2006. We 
believe we could execute about $6 billion of that. I think $5.1 
billion in 2006 and the balance is in 2007.
    Then there's a cost of war. And the cost of war for 2006, 
as I mentioned in my opening statement, is about $5.3 billion. 
And as long as the war goes on that will continue if we get 
that funding, then there will not be another requirement for a 
reset once we obligate and execute those $11.7 billion.

                           SHIPBUILDING PLAN

    Senator Cochran. Thank you very much. Admiral Mullen, 
looking at the long-range ship building plan for the Navy, we 
had the tragedy of Hurricane Katrina, as you know, that struck 
the gulf coast of our State and we have a major ship building 
firm located in the Pascagoula area. What impact is that going 
to have on your requirements, or the budget submission that you 
have presented for Navy ship building?
    Admiral Mullen. The long-range ship building plan in great 
part depends on the shipyard. Actually all of our shipyards, 
but certainly the shipyard in Mississippi as well. And so 
clearly as I've structured the long-range ship building plan, 
put the plan, submitted it to you this year. My goal is to 
create a strategic alliance between the Hill, the Navy, the 
Department, and industry. And a viable industry is a very 
important aspect of this.
    What I'm trying to do is submit a plan that is stabilized, 
doesn't change year to year, so that industry can make 
investments to deliver ships which we can control their cost. 
And all of us have work to do in that area.
    So the viability of that shipyard is very key in terms of 
the future of building the ship plan for the Navy and for the 
Nation.

                         LPD-17 AMPHIBIOUS SHIP

    Senator Cochran. One of the responsibilities there at that 
yard, I understand includes the LPD-17 amphibious ship. We 
appreciate the fact that that's an important part of our 
State's economy and we're very proud of the good work that has 
been done there. Particularly, in mobilizing a workforce that 
have been dispersed and preoccupied with just trying to stay 
alive and keep families together in the aftermath of that 
hurricane. But I think they seem to be back working. I think I 
heard 12,000 employees available and dependable for work every 
day there.
    I noticed the fiscal year 2006 submissions, Mr. Secretary, 
shows that the ship plan for fiscal year 2007 has been pushed 
into 2008. But it is also listed as part of the Navy's unfunded 
requirements list.
    So I'm wondering, it would seem that it would be 
appropriate to fund something that is on the unfunded 
requirements list, rather than push it into the next fiscal 
year. What is the problem?
    Mr. Winter. Well sir, that was a move that was made 
recognizing that by dealing with the advanced procurement, we 
were able to actually buy the last of those Amphibious 
Transport Docks (LPD), in I believe the 2008 time period, 
without impacting the actual delivery of that particular ship.
    At the same time obviously, if we could pay for that 
earlier, it would provide additional headroom in the out-years. 
This is something we clearly want to do. It is a matter of 
providing an appropriate allocation of the resources in the 
time period we're discussing.
    Senator Cochran. General Hagee, I remember last year we 
talked about how many amphibious ships the Marine Corps needed 
and how many would you like to have to support Marine Corps 
operations. I believe you said you would like to have 10 LPD-
17s. Is this still something that you think would be helpful 
and satisfy the Marine Corp's strategic lift requirements?
    General Hagee. Sir, you know I'm an infantry man, you never 
have enough information and I'm a marine, you never have enough 
amphibious shipping. I would love to have 10 LPDs. I understand 
the fiscal environment that we are in. I think there's--as I 
testified last year, there's a risk with nine. But that's a 
risk that I believe that we can take.
    Senator Cochran. Thank you very much, Mr. Chairman. Thank 
you all for your cooperation and your great performance of 
duty.
    Senator Stevens. Thank you, Senator. Senator Burns.
    Senator Burns. Thank you very much, Mr. Chairman and 
welcome all of you to this hearing this morning.

                   MARINE CORPS EQUIPMENT REPLACEMENT

    General Hagee, could you give me an assessment right now on 
replacement equipment and modernization of equipment? I know it 
changes everyday and our losses, could you give me kind of 
assessment of how we're replacing, and how we're modernizing?
    General Hagee. Yes, sir. Probably the best example is with 
our maritime pre-positioning squadrons. As you know, we have 
three of those squadrons. Each one of the squadrons has the 
ground equipment and the sustainment for a brigade of 15,000 
marines--a lot of equipment.
    Last year at this time, two of those squadrons were down 
below 35 percent availability of equipment because it was gone 
and it was in Iraq. Because of the support that we have 
received on supplemental funding, today two of those squadrons 
are just about at 100 percent and the one remaining squadron is 
up around 90 percent. The equipment is actually on order. The 
money has been obligated, we're just waiting for it to come in. 
So the supplemental funding has improved our readiness 
significantly.
    The CNO talked about the bathtub. We used a lot of 
equipment. As you know, the rules said in the first 2 years of 
supplementals, we could not use it or at least, not very much 
of it for procurement. Last year we were able to do that and 
we're starting to fill that bathtub up.

                          MARINE CORPS RESERVE

    Senator Burns. Tell me about your Reserves and the 
equipping of the Reserves, and are they ready for deployment 
should they be needed?
    General Hagee. I've been in the Marine Corps for 38 years. 
I've never seen a more ready, battle hardened Marine Corps than 
we have today, both regular and Reserve. Ninety-seven percent 
of our selected Marine Corps Reserve units have been activated. 
And over 70 percent of those individuals who have been 
activated have in fact, served in either Iraq and Afghanistan. 
They are ready to deploy.
    Now we have taken equipment and we have pushed it to Iraq, 
and we have pushed it to Afghanistan--exactly where it is 
needed. They have sufficient equipment back here to train. If 
we had to mobilize all of them, we would have to draw down our 
preposition stocks again.
    Senator Burns. When you deploy your Reserves, when you call 
your Reserves up, are they blended into regular units or are 
they a unit unto themselves?
    General Hagee. They are a unit unto themselves, sir. If 
they're called up as an infantry battalion or an artillery 
battalion, in some cases if we call a debt or a detachment, it 
could in fact blend into another unit.
    Senator Burns. That's the reason I asked those questions, 
is because of I can see a depletion of those Reserve units not 
having the necessary equipment to actually be combat ready 
whenever they are called up.
    In other words, do they have to be retooled or does new 
equipment have to be issued? Because I know there's been a draw 
down in the equipment at the Reserve level.
    General Hagee. Yes, sir. That is correct and I say, 
especially for the major end items for the personal gear we're 
fine. On the major end items, we would have to take some of 
those out of pre-positioned stocks, if in fact we called up 
everyone.

                        MARINE CORPS RECRUITMENT

    Senator Burns. Your recruitment--tell me how your 
recruiting is going. Now I know you're going to send some of 
your personnel into Special Ops, do you plan to replace those 
numbers back into your regular ranks?
    General Hagee. We won't replace all of the capabilities in 
the regular ranks. The classic example is the Foreign Military 
Training Unit which we stood up in the Marine Corps last year. 
It's about 400 marines. It's a capability that the Nation will 
continue to have, but it will be under SOCOM. We will not 
reconstitute that under the Marine Corps.

                         MARINE CORPS TRAINING

    Senator Burns. I appreciate that because I'm mostly 
concerned you know, from my background. I'm concerned about the 
people on the ground and in your training. I don't think the 
American people really understand how 9/11 changed our lives 
and how we look at the world now at a different kind of an 
enemy than we did, say in the cold war era, or in the past.
    You're training, especially boot camp. Now I know at one 
time that Marine Corps Recruiting Depot (MCRD) San Diego was 
talked about to go on the base realignment and closure (BRAC) 
and move all boot camp and primary training to boot training to 
Parris Island. I understand now, that you need both units in 
your operation now, is that correct?
    General Hagee. That is correct, sir.
    Senator Burns. And when I talk about training now, it takes 
on a different kind of training. In other words, the psychology 
of training has not changed in the Marine Corps. I congratulate 
you for that, but also, to deal with an enemy that we've never 
been able, or never ever seen before. And I'm wondering if the 
wing of the hearts and minds of wherever we travel is now a 
part of your boot camp training, or is a part of your Infantry 
Training Regiment (ITR).
    General Hagee. It's a part of our--what we call now, our 
school of infantry which was the old ITR. It is absolutely a 
part of that, sir, and as I mentioned in my opening statement--
--
    Senator Burns. I hated to date myself.
    General Hagee [continuing]. The same thing, the same tough 
hard training. Where we have made the most significant change 
is in Twentynine Palms. As you know, we use to do the combined 
arms exercise out there, which is an industrial war type of 
exercise, coordinating artillery, and aircraft fires. We have 
changed that to where it is in a regular battlefield now.
    We have a couple of mock Arab villages--really quite large. 
We have role players that are actually Iraqi's speaking Arabic, 
that populate these villages when we're doing training out 
there. The marines learn how to interact with them, how to deal 
with IEDs. So we have significantly changed the training that a 
unit experiences before it goes over.
    Senator Burns. Well I'm one of these and due to the 
leadership of our chairman and ranking member on this 
subcommittee for their vision and insight, because I still 
believe our success around the world, the best Ambassadors we 
have is the warrior that is on the ground and their ability to 
deal with the people that they run into, new cultures, new 
languages, new everything.
    And being able and having the versatility as a person, as 
an individual, to deal with those changes. And so I 
congratulate you on that and I just know that the young people 
that we encounter when we're in the service and we're abroad, 
the effect that we have on them is the future of this country. 
Because the impressions our warriors make on them, will last 
them for a lifetime and that is winning the hearts of the 
future and I congratulate you on that also and I yield back my 
time.

                    SERVICE MEMBERS' ABSENTEE VOTES

    Oh, there's one other question. We're concerned a little 
bit about it's an election year and I'm up. But new ways of 
making sure that our men and women can vote absentee, we've 
been looking at different systems in our office and have been 
in contact with your offices.
    I wish you would take a look at that for us, and to make 
sure that our men and women who serve in uniform, especially 
abroad, do not lose their voice in Government. And we've been 
working on that and I would hope that you would visit with us 
just a little bit in our offices, because there's a couple of 
plans out there that we think could facilitate and to make sure 
that they do not lose their voice in their government. Because 
I think it is very important and I thank the chairman and I 
yield my time.
    Senator Stevens. Thank you very much. Pardon us, we're 
discussing another subcommittee's ability to meet this 
afternoon. We have a series of votes.

                   UNMANNED COMBAT AIR VEHICLE (UCAV)

    Admiral, during the coming recess we're going to go out and 
take a look at the predator development ground out in Nevada 
and we understand you're thinking about developing unmanned 
combat aircraft now, and the Defense Advance Research Projects 
Agency (DARPA) has been involved in the whole subject in the 
past.
    You're requesting $239 million in fiscal 2007 and tell us, 
between 2007 and 2011 that this unmanned combat air vehicle 
will request funds in excess of $1.8 billion. Now are you 
satisfied that this is right for the Navy to separate off from 
the joint program that's been going on in the past?
    We've had a joint program for unmanned combat aircraft for 
all the services and now, it looks like you're going to go it 
alone, tell us why?
    Admiral Mullen. Sir, the intention is not to go it alone. 
It was really to take what was the joint program, move this 
$1.8 billion to focus on the unmanned carrier suitability piece 
of this which was also part of that joint program. But it was 
not as clean a part per se.
    Both General Mosley and I are very committed to the joint 
outcome of this--of what was going on in this joint program. 
General Mosley and his--also has a significant portion of that 
money. I believe the other half of what was almost a $4 billion 
program across the time line you described and we have pledged 
to each other, to ensure that as this evolves we share the 
technologies and the developments, and down the road come back 
together.
    So I have great confidence in that for us, the unmanned 
piece, as I've said, is the carrier piece. As I come in as 
Service Chief, I'm anxious to do more unmanned work, not just 
on the carrier side but other unmanned developments which are 
all ongoing. I just have not had a chance to get at those 
myself and intend to spend a fair amount of time on that in the 
2008 program.
    Senator Stevens. Well respectfully, Admiral, I don't think 
anyone in any group has been more supportive of the unmanned 
research program than this subcommittee. As a matter of fact, 
we initiated it as an add-on one year.
    Even the Air Force wasn't interested in it. But now, 
everybody's interested in it. But we have an ongoing program. 
It is a joint program at a time when money is so tight. Why 
should we split off $1.8 billion and give it to you to 
duplicate what's being done in a joint program?
    The joint program will still be going on and I understand 
some of the problems we've had in the past about the structure 
of the landing gear and everything else for carrier landings, 
but this should not be that much different for an unmanned 
combat aircraft.
    I seriously questioned--this whole thing is just going up 
like this--I questioned whether we need to duplicate another 
program and split this off and have different personnel, 
different costs. Why can't you keep up with the joint program?
    Admiral Mullen. We believe that the outcome of this 
decision was a better outcome than that, which was coming from 
the joint program at the time. The combined output, and it also 
included where we were. Not just with the Air Force, but 
obviously where we were with DARPA.
    Senator Stevens. But if you get a separate program, why 
doesn't the marines, or why doesn't the Army? The Air Force 
already has the major program. I asked the Coast Guard to look 
at unmanned aircraft for the purpose of exploring the maritime 
boundary. We asked Intelligence, the immigration people to look 
at unmanned aircraft for the purpose of exploring or 
maintaining our surveillance of our borders.
    Why don't we just add a national program, instead of all of 
these separate offices that cost money? And I will tell you we 
are losing support up here because of redundancy of programs. 
And I urge you to go back and think that one over. I think the 
whole budget has to be thought over from the point of view of 
what's necessary now?
    We went over and saw the movement of bases from Germany 
into Italy--wonderful plan. But why does it have to be done 
now? A half million dollars for one base, three-quarters of a 
million dollars for another--excuse me, half a billion dollars 
for one base, three-quarters for another one. Now, moving them 
now, at time when we're at war, why should you separate to a 
different program now?
    I'm being too hard on you, I know. But that unmanned combat 
air vehicle for you, won't enter the fleet until 2018. These 
gentleman and I won't be here in 2018.
    We are anxious in making sure that the budgets for the next 
4 or 5--10 years, we hope to be here maybe that long--will meet 
the needs of the people in the services. I think we're causing 
expenses out into the future that are unnecessary and we ought 
to have one program for the Department of Defense on unmanned 
aircraft and I urge you to consider it.
    Do you have anything further, Senator?

                             WAR DEFINITION

    Senator Inouye. One short question. In recent times, in 
many discussions and debates, we hear two phrases, big war, 
small war. Can any one of you tell me what you consider a big 
war, and what is considered a small war?
    For example, more specifically, is Iraq a big war? Is 
Afghanistan a big war? Was the Battle of Panama considered a 
small war? I would like to know what we're discussing.
    General Hagee. I think from a little bit, obviously it 
depends upon who you are. Lance Corporal Hagee, it's a big war, 
regardless of what it is, because he's up there, he's out 
front.
    I think regardless of whether it's the Battle of Falluja or 
whether it's World War II, as you know very well, I think at a 
higher level it's the impact throughout the world and it's the 
amount of resources.
    I would suggest that Iraq and Afghanistan--really Iraq 
right now, are a subset of the long war, which is a war against 
radical fundamentalism throughout the world. The focus right 
now is in Iraq and we're expending, as you know very well, 
Senator, quite a bit of resources over there. And so, I would 
call that a big conflict. Yes, sir.
    Admiral Mullen. Sir, I would chime in basically the same 
way. I think it is tied to sustainment, it is tied to 
resources, it's tied to the kind of combat capability you have 
to deliver over that extended period of time.
    We've certainly got war plans for major conflicts. So in 
that context, at least I think about a big war along those 
lines. I think, at least as I listen to your example, what 
happened in Panama, I would certainly put it in the small 
category.
    We probably have a tendency to think more along the lines 
of both time, capabilities, sustainment, and risk in other 
parts of the world when you are involved in a big way, 
somewhere else. And so I'm consistent with what Mike is saying 
here. I'm comfortable with that description.
    Senator Inouye. Thank you.
    Senator Stevens. Senator Cochran, do you have anything 
further?
    Senator Cochran. I have no further questions.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Stevens. Gentlemen, thank you for your testimony. 
We appreciate you being here today and we thank you all for 
your distinguished service to the Nation and the work that all 
of the armed services people under your command do. We're proud 
of them and want to support them as much as possible.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
                 Questions Submitted to David C. Winter
               Questions Submitted by Senator Ted Stevens
         navy expeditionary combat command global war on terror
    Question. In January 2006, the Navy stood up a Navy Expeditionary 
Combat Command designed to provide forces that operate in an 
expeditionary environment, and to relieve other forces in the Global 
War on Terror.
    The Command plans to establish three Riverine Squadrons. The first 
Squadron will deploy to Iraq in March 2007 to relieve a company of 
Marines.
    Funding to equip two Riverine Squadrons was requested in the fiscal 
year 2006 Supplemental. The House denied the requested funding citing 
an incomplete concept of operations and the lack of validated equipment 
requirements. As a result, the Navy is considering reducing the number 
of Riverine Squadrons in the near term.
    The 2006 Quadrennial Defense Review (QDR) endorsed the concept of 
the Navy Expeditionary Combat Command.
    In accordance with the Quadrennial Defense Review, the Navy is 
standing up a new Expeditionary Combat Command. What role will this 
Command and its components play in the Global War on Terror (GWOT)?
    Answer. The mission of Navy Expeditionary Combat Command (NECC) is 
to man, train and equip Navy forces to operate in an expeditionary 
environment and to provide the full spectrum of capabilities within its 
assigned forces to extend the Joint Force Maritime Component 
Commander's (JFMCC) tactical and operational reach near coastlines, 
inshore and the riparian environment. NECC will become a force 
multiplier to GWOT by:
  --Aligning current force structure under a single command;
  --Creating a process for irregular warfare development;
  --Capitalizing on synergies of current expeditionary forces; and
  --Task organizing force packages and reducing force closure time.
    When fully implemented, NECC will merge the following existing and 
developing capabilities: Explosive Ordnance Disposal, Cargo Handling, 
Coastal Warfare, Mobile Diving and Salvage, Navy Construction Force, 
Expeditionary Logistics Support Group, Riverine Force, Maritime Civil 
Affairs Group, Expeditionary Combat Readiness Center, Expeditionary 
Training Team, and Expeditionary Security Force.
          navy expeditionary combat command equipping strategy
    Question. Funding for the Navy Expeditionary Combat Command (NECC) 
has been requested in the fiscal year 2006 Supplemental, but not in the 
regular fiscal year 2007 budget. What is the equipping strategy for the 
Navy Expeditionary Combat Command?
    Answer. The Navy requested funding in the DON fiscal year 2006 
Emergency Wartime Supplemental submission for the Riverine Force ($73.1 
million); the Maritime Civil Affairs Group ($6.4 million); the 
Expeditionary Training Team ($2.5 million); the Maritime Security Force 
($6.5 million); Inshore Boat Units, which are components of the Naval 
Coastal Warfare community ($16.5 million); and the NECC Headquarters 
($2.5 million). The primary rationale for the funding requested in the 
fiscal year 2006 Supplemental for the new components of the NECC is 
that the final decision to establish the NECC and the aforementioned 
components was not made until after the submission of the regular 
fiscal year 2007 budget.
    The following summarizes all of the efforts currently in motion and 
planned to fund the Riverine Force (Riverine Group ONE [headquarters] 
and three deployable Riverine Squadrons) in the OPN, WPN, OMN and PANMC 
appropriations. The first Squadron-level operational deployment to the 
U.S. Central Command Area of Responsibility is scheduled for March 
2007. Principal rationale behind requesting procurement funding on an 
accelerated timeline is due to the relatively long delivery projections 
for much of the equipment required by the deploying Riverine Squadrons 
(in many cases delivery forecasts are 12 months or longer, subsequent 
to contract/contract option award).
  --Fiscal Year 2006 Below Threshold Reprogramming.--$7.47 million to 
        begin equipping Riverine Squadron ONE (RIVRON ONE). Fleet 
        Forces Command is also providing OMN funding from existing 
        resources in fiscal year 2006 to support the establishment of 
        RIVRON ONE and the Riverine Group ONE headquarters on an 
        accelerated timeline.
  --Fiscal Year 2006 Above Threshold Reprogramming.--$17.34 million to 
        continue equipping RIVRON ONE, less combatant craft, which the 
        Marine Corps will ``loan'' RIVRON ONE for initial training and 
        the March 2007 deployment. With one exception, funding will 
        ``pay back'' other Navy programs from which required equipment 
        for RIVRON ONE is being redirected.
  --Fiscal Year 2006 DON Emergency Wartime Supplemental Request.--$73.1 
        million to equip RIVRONs TWO and THREE, commands scheduled to 
        sustain the aforementioned initial operational deployment in 
        November 2007 and July 2008, respectively.
  --Fiscal Year 2007 President's Budget.--$22.31 million initially 
        intended to begin establishment of one modestly sized riverine 
        unit. This baseline concept was superceded by a more robust 
        Riverine Force concept subsequent to submission of the PRESBUD. 
        Currently, fiscal year 2007 funding would be used to sustain 
        the Force being stood up in fiscal year 2006.
                      seals effect on end strength
    Question. The 2006 Quadrennial Defense Review (QDR) addresses a 
significant increase to our nation's Special Operations Forces' (SOF) 
capabilities which will include additional Navy SEALS and additional 
Navy personnel to train foreign military units, and a new Marine Corps 
Special Operations Component.
    Will the Department of the Navy increase its end strength to stand 
up these additional units?
    Answer. The Department of the Navy will not need to increase 
overall end strength to meet the growth of SOF. While aggregate Navy 
strength may be decreasing, Navy's overall force shaping provides for 
growth in certain manpower specialties, including SOF. The Navy has 
already established a specific 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, but 
prudently, implement QDR-directed growth increases in SOF and SOF 
supporting communities. This growth is based upon combatant commander 
requirements (U.S. Special Operations Command), as well as the ability 
to fully train, equip, and deliver SEALs and Special Warfare Combat 
Craft crewmen to the fleet.
    The establishment of the Marine Special Operations Command (MARSOC) 
will be accomplished within the current 175,000 Marine Corps end 
strength funded in the fiscal year 2007 President's budget. It should 
be noted that several of the functions performed by the Marines 
assigned to MARSOC (e.g., Foreign Military Training) will, in the 
future, continue to be performed by those Marines, as a component of 
SOCOM, without affecting the end strength requirements of the Marine 
Corps. Furthermore, the Commandant of the Marine Corps has directed the 
creation of a Capabilities Assessment Group (CAG) to ensure the proper 
incorporation of QDR guidance and will look for efficiencies and 
changes within the Marine Corps to enable end strength to be stabilized 
at the QDR level of 175,000. The Group will report its recommendations 
this summer.
                                 ______
                                 
            Questions Submitted by Senator Pete V. Domenici
                       water purification program
    Question. Mr. Secretary, the Office of Naval Research (ONR) is 
working on a water desalination program in southern New Mexico. The 
goal of this program is to study techniques in reverse osmosis that 
will lead to the production of a transportable water purification unit. 
In turn, these units would be used by Marines engaged in humanitarian 
and disaster relief efforts. They would also help meet the water 
demands of our expeditionary war fighters.
    As a long-time supporter of this program, I was proud to hear of 
ONR's success in this area, with one water purification system being 
transported to Alaska last year to provide fresh water for the Coast 
Guard, and two units being deployed to Mississippi in the aftermath of 
Hurricane Katrina to provide pure water for relief workers.
    Can you tell us a little about these missions and the value of the 
Expeditionary Unit Water Purification (EUWP) program?
    Answer. While the project has no formally designated phases, the 
following activities will be supported during the fourth year that 
congressional enhancements were received. The two EUWP Generation I 
(GEN I) systems, 100,000 gallon per day technology demonstrators, are 
currently located at the U.S. Navy Facilities Engineering Support 
Center, Pt. Hueneme, California, and the Tularosa Basin National 
Desalination Research Facility, Alamogordo, New Mexico. While under 
going testing and data collection, both GEN I systems were requested to 
support Hurricane Katrina relief efforts. The first GEN I was 
positioned near the Biloxi Regional Medical Center to provide potable 
water using water from the Gulf of Mexico as source water. The second 
GEN I was positioned at the Pascagoula Port to provide a Carnival 
Cruise ship a source of potable water. Mission Assignment#DOD-23, 
assigned by NORTHCOM was supported from September 9, 2005 through 
October 19, 2005.
    Question. What are the next goals of this program?
    Answer. A critical effort in the fiscal year 2006 plan is to put 
the Generation I systems through a third party validation program. The 
two selected programs both reside within the Environmental Protection 
Agency (EPA) and are called Environmental Technology Verification (ETV) 
program and Technology Testing and Evaluation Program (TTEP). TTEP is 
an outgrowth of the EPA's successful and internationally recognized ETV 
program. TTEP rigorously tests technologies against a wide range of 
performance characteristics, requirements or specifications. ETV test 
plans are used after being modified to meet homeland security 
requirements.
    The current plan also includes the effort of extending the 
development of science and technology in areas that will increase the 
output of water purification facilities while holding costs constant or 
at a reduced cost. While enhancing ``through-put'' is one of the 
principal objectives, no specific plans have been made to demonstrate 
this technology on a 500,000 gallon per day (gpd) demonstration model. 
Existing plans are to integrate and evaluate promising technology 
achieved, by conceptually designing them into a 300,000 gpd engineering 
prototype model. This effort, designated as Generation II (GEN II) is 
on schedule. On March 8, 2006, a kickoff meeting (Contract Award) was 
held at Pt. Hueneme, California to start the fabrication of the Naval 
Sea Systems Feasibility Demonstrator. The preliminary design of the GEN 
II is suitable for consideration as a replacement for large amphibious 
ship water purification system(s).
    Another part of the fiscal year 2006 plan is to award second year 
options to the promising performers who were selected last year in 
response to Office of Naval Research's, (joint with NASA), Broad Agency 
Announcement (BAA) 05-005 titled, ``Science and Technology in Water 
Desalination and Purification''. Also the EUWP program plans to 
initiate the commercialization (scaling up) of selected technologies 
from BAA 03-011; same title as mentioned above.
    Question. What further successes do you foresee with fiscal year 
2007 funding for this program?
    Answer. All efforts initiated to date will be completed with the 
fiscal year 2006 funding provided.
    Question. Does the Department of Defense have the authority it 
needs to transfer this technology to the public sector?
    Answer. The Expeditionary Unit Water Purification program brought 
together the expertise of many organizations, to include other 
Department of Defense (DOD) Services, Federal Agencies, International 
Partners, and private contractors to ensure the success of this effort. 
The participation of the Bureau of Reclamation (BOR) with their 
extensive background in water use and reclamation is expected to assist 
in the smooth transfer of beneficial desalination technology to the 
civilian desalination market through the direction of test and 
evaluation activities, and the coordination of test results with 
industry. The BOR is a recognized leader in desalination and water 
purification research, both domestically and internationally, and is a 
principle conduit to both the consumer and most suppliers. It is 
expected that the promising technology(s) provided by the EUWP program 
will be utilized by the BOR and the DOD Services.
    Question. What can Congress do to help the Office of Naval Research 
(ONR) make this research and technology more readily available 
commercially?
    Answer. Through the foresight of the Congress in funding this 
effort, ONR has had the opportunity to develop the Expeditionary Unit 
Water Purification program to be useful in a variety of situations, 
such as the disaster of Hurricane Katrina. However, at this time 
additional resources are not required for this program.
                     navy high energy laser testing
    Question. The High Energy Laser Systems Test Facility at White 
Sands Missile Range has allowed for much development and demonstration 
of High Energy Laser Weapon programs. It is my understanding that the 
high energy laser testing by the Navy at this facility has met with a 
number of recent successes.
    Can you describe some of these successes for us?
    Answer. The High Energy Laser--Low Aspect Target Tracking (HEL-
LATT) program was created to determine requirements and develop tools 
to support tracking and laser aim point maintenance for the shipboard 
high-energy laser weapon system.
    In fiscal year 2005, ONR funded the completion of the integration 
of new hardware and evaluation of the optical tracking system to 
perform laser aim point maintenance. The objectives of HEL-LATT have 
been to adapt a well-proven AIM-algorithm aided by an appropriate set 
of modern sensors on the Sea Lite Beam Director (SLBD) for precision 
aim point tracking. The potential tracking and aim point solution is 
based on Advanced Tactical Anti-Air technology. SLBD is employing the 
adapted algorithm and its new sensors for a sub-sonic shoot down. SLBD 
is to acquire and track maneuvering targets against the sky, against a 
transitional sky to mountain and finally against the mountain 
backgrounds.
    In an initial series of dynamic tests using the software and track 
processors, high G maneuvering targets against the sky background have 
been tracked in nine out of ten passes, and the laser quality aim point 
was maintained for impressive durations.
    During the past two years, the HEL-LATT program has added three 
passive IR sensors for precision tracking to support the Sea Lite Beam 
Director (SLBD). These are:
  --Mid-Wave Infrared (MWIR) sensor to Automatic Aimpoint Selection and 
        Maintenance (AuASAM) telescope for target acquisition from a 
        Radar handover. This sensor has twice the field-of-view of the 
        Forward-Looking Infrared (FLIR) and has greatly improved 
        sensitivity (Noise equivalent delta Temperature that is 250 
        times lower). This sensor allows the SLBD to acquire a target 
        between 15 to 20 kilometers against a mountain background; the 
        FLIR requires a range of less than 5km to perform this mission.
  --Long-Wave Infrared (LWIR) sensor in the Hot Spot Tracker (HST) port 
        to provide fine tracking during a Mid-Infrared Advanced 
        Chemical Laser (MIRACL) with jitter of a few micro-radians.
  --MWIR sensor in the HST port to improve target lethality during a 
        MIRACL.
    Question. What would fiscal year 2007 funding for High Energy Laser 
Testing allow you to achieve?
    Answer. The PB07 request did not include any funds for this 
purpose. Additional resources could be used for additional tracking 
tests in the presence of a high energy laser beam, and pursuit of 
upgrades to improve tracking algorithms.
    Question. What do you need from White Sands Missile Range and/or 
New Mexico in order to achieve these goals?
    Answer. Missile range time and personnel at WSMR to perform and 
finish the testing.
                      magdalena ridge observatory
    Question. The Magdalena Ridge Observatory project is an 
international scientific collaboration that involves the Office of 
Naval Research. The observatory will house a 2.4 meter diameter 
telescope and an array of optical/infrared telescopes.
    What is the value of these telescopes to the Navy and the 
Department of Defense as a whole?
    Answer. The military value derives from development of new 
technologies for implementation of the Navy's Prototype Optical 
Interferometer (NPOI), currently providing operational data to the 
United States Naval Observatory. These technologies, such as the 
coupling of adaptive optics with optical interferometry, will increase 
the sensitivity of ground-based interferometers to improve their use 
for accurate star catalogs for navigation and precise timekeeping, and 
for space object monitoring and identification.
    The 2.4 meter telescope will have rapid tracking capability that 
will allow it to slew to any target and acquire data within one minute 
of receipt of notice. The telescope is situated to enable tracking of 
missiles launched from White Sands Missile Range.
    Question. When is this project scheduled to be complete?
    Answer. The single 2.4 meter telescope delivery is on schedule and 
first light is projected in early fiscal year 2007. The delivery of the 
first of the unit telescopes for the interferometer array is scheduled 
for late fiscal year 2007 with the final unit telescope delivery in 
fiscal year 2009.
                         long wavelength array
    Question. The Long Wavelength Array project includes the Naval 
Research Laboratory and will build a very large aperture radio 
astronomy telescope designed to study the electromagnetic spectrum in 
the areas of astrophysics and space physics. Such an instrument would 
keep the United States on track with instruments being built in Europe, 
Australia, and China.
    What is fiscal year 2006 funding for this project being used for?
    Answer. Initially, fiscal year 2006 funding will be used to define 
the system requirements for the array including dipole array antennas 
and detectors and overall array dimensions. Development of a prototype 
dipole antenna will be carried out and funds will be used to begin site 
preparation for the ultimate long wavelength array.
    Question. What will the project accomplish in the scope of national 
defense and security efforts?
    Answer. The Long Wavelength Array (LWA) will provide unprecedented 
spatial and temporal ionospheric imaging; it will provide unique data 
on the structure of Solar Coronal Mass Ejections (CMEs) for an improved 
understanding of space weather effects including geomagnetic storm 
prediction. This research will help provide improved ionospheric models 
which can affect GPS, communications and targeting systems, geolocation 
of tactical emitters, imaging by space-based radars, satellite 
communications, and over-the-horizon radars.
                                 ______
                                 
            Questions Submitted by Senator Daniel K. Inouye
                           c-130 cancellation
    Question. Secretary Winter, you are undoubtedly aware of the 
controversy over last year's C-130 cancellation and restoration. As a 
former businessman, can you assure the Committee that the new approach 
makes sense and will meet the Marine's requirements for KC-130s?
    Answer. 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. A study has just been initiated by OSD (PA&E) to 
examine alternative business cases: refurbishment of F and R model KC-
130 aircraft versus additional new buys of KC-130Js. The Department of 
the Navy will work with PA&E while monitoring KC-130 OPTEMPO and 
availability of F and R model aircraft for refurbishment while being 
mindful of the value of avoiding a production break in the KC-130J 
line. The Department of the Navy views this as a likely fiscal year 
2009 budget issue.
                   shipbuilding and operations costs
    Question. Secretary Winter, the Navy is under significant fiscal 
constraints given the high cost of shipbuilding, yet its operating cost 
requirements are not decreasing. How are you planning on alleviating 
some of this pressure?
    Answer. Management of the cost of Navy's shipbuilding program is a 
priority to me. In this context I use the term shipbuilding in a 
holistic way--the hull, mechanical, and electrical (HME) systems plus 
the weapons, C4ISR, and other systems that give the ship its combat 
power.
    The Department of the Navy is actively working with our partners in 
industry and with the Congress to alleviate the cost pressure on 
shipbuilding. We must recognize the need to build a Fleet with the 
capabilities our nation needs at a cost that is sustainable across 
time.
    The Department is responsible for recommending to Congress 
shipbuilding 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 cost of $13.4 billion (in fiscal year 2005 
dollars) each year to achieve that plan. The Department is also 
responsible for controlling shipbuilding 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, our civilian and 
uniformed leadership will need to work side-by-side in this endeavor, 
at all levels of program management and execution, to ensure the 
Department gets the maximum combat value for every dollar invested.
    The Department will also work alongside industry to identify a 
model that supports a viable business base through construction and 
integration of highly capable ships 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 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 interests.
    The Department will also work closely with Congress to ensure 
funding and a funding profile that supports execution of the 30 Year 
Shipbuilding Plan. Stability in funding at an average of $13.4 billion 
per year (in fiscal year 2005 dollars) is the sine quo non of achieving 
the plan, as it provides the stabilized business base necessary for 
industry to confidently plan for the future and it provides industry 
acceptable risk to implement the changes discussed above.
    In addition to their contribution to shipbuilding, the Navy is 
working several additional initiatives to reduce cost in the areas of 
operations and maintenance. These measures include a ship maintenance 
process called SHIPMAIN, used for maintenance process improvement, a 
revitalized Energy Conservation Program (ENCON), and implementation of 
continuous process improvement at Naval Sea Systems Command (NAVSEA) 
and Naval Air Systems Command (NAVAIR).
  --SHIPMAIN aligns the modernization of surface ships and aircraft 
        carriers into a cohesive, single process. The process combines 
        all modernization information into a single database, Navy Data 
        Environment (NDE). Initial baselining of the modernization 
        database in support of SHIPMAIN avoided nearly $200 million in 
        costs across the FYDP. The SHIPMAIN process also administers 
        Multi-Ship Multi-Option (MSMO) contracts allowing longer terms 
        for the execution agent. MSMO contracts create a stabilized 
        workload for Private Industry, which allows a more stabilized 
        workforce, thus reducing cost.
  --The Energy Conservation Program includes a centralized ENCON 
        website that provides training, guidance, and historical data 
        that Ship Commanding Officers and Engineering Department 
        personnel use to assist in reducing energy costs. The ENCON 
        program includes on-site and VTC training for ship and squadron 
        personnel, and a compilation of the Navy Energy Usage Reporting 
        System (NEURS) data. Operational target incentives are paid by 
        Type Commanders to ships and aircraft squadrons who use less 
        fuel during operations. Another part of ENCON develops and 
        validates shipboard performance of mature energy saving 
        systems/components. This program reduces energy costs for a 
        relatively minor investment.
  --Navy must transform the way it does business within its systems 
        commands to dramatically cut costs. This means improving 
        throughput, reducing new product development cycles, enhancing 
        personnel development, and preserving fundamental values. Both 
        NAVAIR and NAVSEA are aggressively adopting a culture of 
        continuous process improvement with a standardized, disciplined 
        approach that includes industry-recognized best practices of 
        Lean, Six Sigma, and Theory of Constraints; with prioritized 
        application of these methodologies to the right value streams.
     funding for recruiting and retention incentives, bonuses and 
                              advertising
    Question. Secretary Winter, both the Navy and Marine Corps rely on 
supplemental funding to augment recruiting and retention incentives, 
bonuses, and advertising.
    Knowing that the recruiting and retention challenges will continue, 
what is your plan to fund these programs?
    Answer. Funding for recruiting, retention, bonuses and advertising 
requirements to include new missions such as the Marine Corps Special 
Operations Command and the Navy Riverine Force, will be included in the 
baseline budget requests to Congress. However, variations in the 
manpower environment and extraordinary demands for critical skills make 
it impossible to anticipate these costs with complete accuracy. Given 
the uncertainty of the impact of the Global War on Terror (GWOT) on 
recruiting new Servicemembers and retaining existing Servicemembers, 
costs for recruiting and retention incentives, bonuses, and additional 
advertising may be submitted for consideration in future GWOT 
Supplemental Budgets, if circumstances warrant.
    There are unique challenges and stresses on recruitment and 
retention precipitated by the GWOT, particularly with respect to SEALs 
and Medical personnel whose communities are very heavily utilized to 
support the Global War on Terror. To address these challenges, we have 
intensified our efforts to recruit and retain SEALS and Medical 
personnel. Examples of these efforts include raising the enlistment and 
reenlistment bonus and restoring active component recruiters along with 
funding the associated O&MN support costs.
           basic allowance for housing (bah) budget shortfall
    Question. Secretary Winter, the Navy is facing a $150 million 
shortfall in fiscal year 2006 as a result of the increased rates for 
the basic allowance for housing.
    How is the Navy planning on addressing this shortfall and how can 
they be prevented in the future?
    Answer. There is a shortfall in the Military Personnel, Navy (MPN) 
account attributable to higher than expected BAH rates, which became 
effective in January of this year. The Department of the Navy has 
experienced higher than CONUS wide average BAH increases, due to higher 
costs in our fleet concentration areas compared to other Service 
locations. This shortfall was exacerbated by inclusion of military 
personnel accounts in the across-the-board rescission and other funding 
reductions. To offset these reductions, Navy is considering 
reprogramming from other appropriations as well as reducing certain 
expenditures within the MPN account. For example, Navy is delaying 
shore-to-shore moves of 3,788 Sailors and accepting early voluntary 
separations among some enlisted personnel, consistent with force 
shaping plans.
    To prevent similar shortfalls in future budgets, the Departments of 
the Navy and Defense are working closely on more accurate predictions 
and budgeting. Navy has developed, and is using, more sophisticated 
modeling scenarios to track the changing demographics of our force. The 
Department of Defense, in conjunction with the Runzheimer survey team, 
is making progress on instituting Service-specific rates for projecting 
and budgeting BAH, rather than using a single average rate-of-increase 
for all Services.
                                 ______
                                 
            Questions Submitted to Admiral Michael G. Mullen
               Questions Submitted by Senator Ted Stevens
                 declining budget and the 313 ship navy
    Question. Admiral Mullen has proposed a shipbuilding strategy to 
increase the size of the fleet from 281 ships to 313 ships during the 
next five years.
    The Navy estimates that executing the 313-ship proposal would 
require an annual average of $13.4 billion for new ship construction. 
The current request for ship construction is $11.5 billion.
    However, the Congressional Budget Office (CBO) and the 
Congressional Research Service (CRS) both estimate that the 
shipbuilding strategy will require $18 to $20 billion per year, or 
about 37 percent more. This is primarily due to rising ship costs and 
poor Navy cost estimates.
    We cannot sustain the current level of Defense spending. I 
anticipate flattening or declining budgets over the next few years. 
Under these budget conditions, how likely is it that the Navy will be 
able to increase funding for construction of new ships to achieve your 
new 313-ship plan?
    Answer. It is my intention to invest the funds, within the Navy's 
topline budget, needed to support the 30 year shipbuilding plan 
presented to Congress.
    The Navy is making internal resource allocation decisions necessary 
to quickly increase the shipbuilding account to approximately $13.4 
billion and to maintain that level of funding annually (adjusted for 
inflation). We believe that by strictly controlling requirements and 
holding ourselves to a stable ship construction plan, our shipbuilding, 
current personnel and readiness requirements can be balanced and 
sustained in the face of flattening budgets. This strategy becomes more 
difficult in the face of declining budgets.
                             313 ship plan
    Question. To fund the 313-ship plan, does the Navy plan to reduce 
other procurement programs?
    Answer. We believe the shipbuilding plan is affordable and 
executable, but it is going to take discipline and a commitment to 
controlling requirements and costs. Navy will look carefully at all 
other procurement accounts and I expect some to be reduced or moved to 
the right. The SCN budget is balanced with all other Navy procurement 
accounts so that all are adequately funded to sustain near-term 
operational readiness and prepare for an uncertain but potentially 
dangerous future.
    The 30-year shipbuilding plan and the requested resources to 
procure it reflect the Navy's commitment to stabilize the industrial 
base while still achieving the appropriate balance of affordability and 
capability in all ship classes.
    Question. What assumptions does the Navy make about its ability to 
control personnel and operation and maintenance spending?
    Answer. We recognize the pressures that personnel expenditures and 
operation and maintenance spending place on the Navy's procurement 
accounts. The Navy has made the assumptions that Operations and 
Maintenance accounts will remain flat for the foreseeable future and 
Military Personnel accounts will show zero net growth in light of 
rising health care costs and anticipated reductions in end strength. We 
are working diligently to balance near-term readiness, personnel 
requirements, and our procurement accounts.
                  unmanned combat air vehicles (ucav)
    Question. The Department of Defense (DOD) has been thinking about 
developing an unmanned combat aircraft for years. In 1999, the Air 
Force and the Defense Advanced Research Project Agency (DARPA) awarded 
contracts to begin research for capability.
    In December 2004, the DOD decided to move the program from DARPA to 
a joint Air Force and Navy program office. However, in January 2006 the 
decision was changed and now the Navy and Air Force are pursuing 
separate programs to develop unmanned air vehicles.
    The Navy is requesting $239 million for fiscal year 2007. 
Investment over the fiscal year 2007 through fiscal year 2011 period 
will exceed $1.8 billion.
    Are you satisfied that separating the Navy and Air Force programs 
is the best way to proceed in developing unmanned combat aircraft known 
as UCAV?
    Answer. I believe there is enormous value in joint programs but in 
this particular case the Navy requirements are unique enough to warrant 
a separate program from the Air Force. The 2005 Quadrennial Defense 
Review (QDR) recommended restructuring the Joint Unmanned Combat Air 
System (J-UCAS) program to better focus limited resources on developing 
and fielding future unmanned warfighting capabilities.
    Initial Navy Unmanned Combat Aircraft System (Navy UCAS) program 
efforts will be specifically tailored to develop the technologies 
required for carrier-based operations, leading to a carrier 
demonstration in fiscal year 2011. The results of this demonstration 
will inform a decision to develop a low-observable, carrier-based, 
penetrating surveillance/strike platform capable of operating in a high 
threat environment.
    The Navy UCAS program will leverage the technology developed in the 
J-UCAS program to date, and future advancements developed in other DOD 
programs.
    Question. What was the problem with the joint program?
    Answer. The joint program wasn't able to address the unique 
requirements of a carrier-based, Navy Unmanned Combat Aircraft System 
(Navy UCAS). The 2005 Quadrennial Defense Review (QDR) recommended 
restructuring the Joint Unmanned Combat Air System (J-UCAS) program to 
better focus limited resources on developing and fielding future 
unmanned warfighting capabilities, not because of a problem with the 
Joint program.
    Navy is committed to sharing technology developments from the UCAS 
program with the Air Force and other DOD entities to facilitate 
efficient development of complementary unmanned capabilities that meet 
Naval and Joint requirements.
    Question. The current plan won't see Unmanned Combat Air Vehicles 
entering the fleet until 2018. Does this schedule meet the needs of the 
Navy for persistent intelligence, surveillance and reconnaissance?
    Answer. Campaign analysis has shown a need for persistent, 
penetrating ISR capability in the 2015 timeframe. The Navy will 
continue to rely on our stand-off ISR capability and accept some 
warfighting risk until Navy UCAS reaches IOC. At IOC, Navy UCAS will 
provide a carrier-based, low-observable platform able to penetrate the 
battle space and provide persistent intelligence, surveillance and 
reconnaissance.
    Question. What equipment will the UCAV replace?
    Answer. The Navy Unmanned Combat Air System (Navy UCAS) will not 
replace, but rather complement the capabilities of current and future 
Naval aircraft. It will fill gaps identified in the JROC validated 
Joint Strike Enabler Initial Capabilities Document.
                            seal recruiting
    Question. Does the Navy believe that it can increase its recruiting 
for the additional Navy SEALS without sacrificing quality standards or 
sacrificing the quality of the training?
    Answer. The Navy believes it can maintain the high training 
standards and caliber of its SEAL forces in this time of growth.
    To this end, the Navy will ensure recruiting and accession efforts 
target only those individuals most capable of completing the rigorous 
Basic Underwater Demolition/SEAL (BUD/s) training and contributing to 
the most challenging combat operations.
    BUD/s has the capacity to train over 900 enlisted SEAL candidates 
per year. BUD/s maintains definable and objective standards of 
performance for SEAL selection and training. These combat-proven 
standards will not be compromised as the Navy increases its SEAL 
operator inventory.
    Through a collaborative effort between Navy Recruiting Command and 
Naval Special Warfare Command, we have implemented several new 
initiatives to enhance our selection, monitoring and mentoring of SEAL 
candidates. These initiatives include:
  --Increasing the yearly goal for enlisted SEAL recruits by 27 
        percent;
  --Increasing financial incentives for successful SEAL recruits by 
        over 100 percent;
  --Hiring former SEALs to focus recruiting efforts on the proper 
        candidate pool, and to test, educate and mentor SEAL recruits 
        for success in the Basic Underwater Demolition School (BUD/s).
  --Establishing a specific SEAL monthly recruiting goal for each Navy 
        Recruiting District (NRD) in addition to the aggregated 
        national goal.
  --Designating a SEAL coordinator at each NRD to mentor all SEAL 
        recruits in the Delayed Entry Program (DEP). This is expected 
        to reduce attrition from the DEP and to help motivate 
        prospective SEALS to physically and mentally condition 
        themselves for the challenges they will face when they come on 
        active duty.
  --Establishing a requirement for NRD Commanders to report weekly to 
        Commander, Navy Recruiting Command, on the status of SEAL DEP 
        personnel.
    These measures are intended to increase the number of men who 
successfully complete SEAL selection and training without sacrificing 
the Navy's high standards.
                                 ______
                                 
            Questions Submitted by Senator Daniel K. Inouye
                       sea-based missile defense
    Question. Admiral Mullen, one of the most successful aspects of our 
nation's missile defense program has been the Navy's sea-based missile 
defense program. I am told that six of the seven tests of this system 
have been successful. In the Pacific, we face several potential missile 
threats. Can you update the Committee on your plans to deploy the sea-
based missile defense program and the role you see for its use in both 
Western Pacific and Hawaii.
    Answer. The Navy is collaborating with the Missile Defense Agency 
(MDA) to develop and field a sea-based missile defense program.
    By the end of calendar year 2007 we will have modified seven 
destroyers to track ballistic missiles and seven destroyers and three 
cruisers to both track ballistic missiles and engage them with SM-3 
missiles. All of these ships are based in the Pacific. Two Pearl 
Harbor-based AEGIS cruisers are capable of firing this new missile--
Lake Erie (CG 70) and Port Royal (CG 73). The San Diego-based AEGIS 
cruiser, U.S.S. Shiloh (CG 67), is currently being so modified and will 
be shifting homeports to the Western Pacific later this year. As the 
Navy continues to develop enhanced missile defense capabilities, we 
will work closely with MDA to develop the most effective operational 
concepts for their use in support of Combatant Commanders and national 
security objectives.
           pacific missile range facility (pmrf) performance
    Question. Admiral Mullen, as you know testing of the AEGIS system 
is done in Hawaii at the Pacific Missile Range Facility. Are you 
pleased with the way these tests have been conducted?
    Answer. We are very pleased with the test and evaluation (T&E) 
capabilities PMRF provides to the AEGIS ballistic missile defense 
program and the RDT&E community. We remain committed to using PMRF as 
our primary test range for AEGIS BMD and the future testing of SM-6.
    We conducted four key T&E events at PMRF during fiscal year 2005, 
including one successful AEGIS Ballistic Missile Defense (BMD) test 
critical to the Navy's development and fielding of a ship-based BMD 
system. Three additional tests have been planned for fiscal year 2006 
at PMRF.
                       restore private shipyards
    Question. Admiral Mullen, the supplemental request includes more 
than $1 billion to restore private shipyards damaged by Hurricane 
Katrina. I have been advised that there may be a problem because 
insurance claims are in dispute. In the meantime, damages aren't being 
repaired. The longer the shipyards aren't fixed, the more it will cost 
the Navy to build its ships.
    Could the Navy pay to fix the infrastructure today and be 
reimbursed from the shipyards after the claims were adjudicated?
    Answer. The Supplemental Section of the fiscal year 2006 DOD 
Appropriations Act appropriated money to pay portions of the 
shipbuilding costs related to Hurricane Katrina. There is no current 
legal or regulatory authority for the Navy to pay costs that are 
actually or potentially covered by a shipyard's private insurance 
policies. However, the Navy believes such payment would set a very 
dangerous precedent for the future. The Navy's position is that it is 
not liable for any costs covered by private insurance. The Navy would 
therefore incur only those costs that were already allocable, allowable 
and reasonable under existing cost accounting principles and contract 
terms and would return as much of the Supplemental funds as possible to 
the Treasury. Consistent with this Navy position, the Conference Report 
language accompanying the Hurricane Katrina funding (Defense 
Appropriations Conference Report 109-359) specifies that the Navy will 
submit a report to Congress certifying that the increased costs to 
contractor funded programs are ``. . . not subject to reimbursement by 
any third party (e.g., FEMA or private insurer) . . .'' The Navy 
provided this certification to the Defense Committees on February 28, 
2006. The costs to fix shipyard infrastructure are subject to 
reimbursement by private insurance, even though the amount is likely to 
be a subject of litigation. Therefore, absent specific statutory 
authority to do so, the Navy is prohibited from using appropriated 
funds to reimburse a shipyard for these private costs.
                          health benefit costs
    Question. Admiral Mullen, the health benefits provided to our 
military and their families have proven to be a useful recruiting and 
retention tool. The Department of Defense is proposing new enrollment 
fees and pharmacy co-pays to address the rising costs of providing 
these benefits. While the majority of these increases affect retired 
personnel, all service members and their families will have new 
pharmacy co-pays.
    Do you foresee this having a negative effect on your service 
members and their families?
    Answer. I am committed to maintaining the quality of our health 
care for our service members and their families, but I also think it is 
reasonable to assume that any rise in out-of-pocket expenses--in any 
Navy program or benefit--will be negatively perceived by some members 
and their families.
    The effect this perception has on recruiting or retention behavior 
is difficult to predict, as such behavior hinges on many factors. 
However, I expect the impact of increasing the cost of pharmacy co-pay 
to be small on our Sailors and their families. Active duty members and 
their families may continue to obtain prescriptions at military 
treatment facilities at no personal expense. Family members may also 
use the TRICARE Mail Order Program with reduced co-pays for generic 
drugs. If, however, the family member chooses to use a retail pharmacy, 
there would be an increase in the co-pay charge.
          health benefit cost--affect on recruiting/retention
    Question. Admiral Mullen, do you believe these benefits will have a 
substantial affect on recruiting and retention?
    Answer. Recruiting and retention behavior depends upon a great many 
factors and is often difficult to predict, but I do not believe that 
increasing the pharmacy co-pay share for active members and their 
families will have a significant negative impact on recruiting or 
retention.
    The health benefits we deliver will not diminish. Indeed, the 
proposed increase in co-pay fees only serve to ensure that our health 
care system remains the gold standard that it is today. Active duty 
members and their families may continue to obtain prescriptions at 
military treatment facilities at no personal expense. Family members 
may also use the TRICARE Mail Order Program with reduced co-pays for 
generic drugs. If, however, the family member chooses to use a retail 
pharmacy, there would be an increase in the co-pay.
    Historical responses to Navy surveys indicate that our medical and 
dental benefits are one of the primary reasons for staying in the Navy 
among junior and senior Sailors alike. I am committed to making sure 
they remain such an incentive. I do not believe that restoring TRICARE 
enrollment cost sharing proportions, for retirees, to their 1995 levels 
will have a significant negative impact on retention when considered in 
the broader context of the excellent medical and dental benefits 
offered.
                                 ______
                                 
            Questions Submitted to General Michael W. Hagee
               Questions Submitted by Senator Ted Stevens
                    cost estimate to reset the force
    Question. Continuing operations in Iraq and Afghanistan have taken 
their toll on Marine Corps equipment.
    As a result, Supplemental requests include significant funding for 
equipment reset. Funding for Marine Corps procurement in Supplementals 
is typically two to three times higher than in the regular budget.
    For example, in fiscal year 2005, Congress provided $3.7 billion to 
reset Marine Corps equipment. In fiscal year 2006, Congress provided 
$2.1 billion in a ``bridge fund'' attached to the regular Defense 
Appropriations bill for that purpose. The fiscal year 2006 Supplemental 
requests $3.3 billion for Marine Corps reset.
    The Marine Corps estimates that after approval of the fiscal year 
2006 Supplemental request, it will have a remaining reset bill of $6.5 
billion.
    Resetting equipment is a major challenge for the Marine Corps.
    What is the Marine Corps' strategy for reconstituting equipment 
over the long-term? Is there a cost estimate for reset over the next 
few years?
    Answer. Last summer we evaluated the impact or Operations Iraqi 
Freedom and Enduring Freedom on the entire Marine Corps inventory. 
Using October 1, 2005 as a cut off date, we assessed what would be 
required to ``reset the force'', i.e., restore the Marine Corps to the 
readiness it enjoyed before Operations Iraqi Freedom and Enduring 
Freedom. We took a comprehensive approach that accounted for the 
material condition of equipment in use in the theater of operations, 
the need to restock our prepositioning sites (afloat and ashore), the 
need to replace equipment that had been ``borrowed'' from home 
stations/CONUS-based forces and the requirement to support Iraqi 
Training Teams. The resultant reset cost is the amount of money 
required to reset the force as of October 1, 2005.
    We estimate this total cost to be $11.7 billion. We believe that we 
could execute this funding in two years and have phased our 
supplemental requests accordingly. We cannot execute the entire amount 
in one year due to industrial base limitations. When the resultant 
equipment is delivered, the readiness ``bathtub'' caused by the war 
would be filled.
    We will identify all costs (fuel, personnel, ammunition, spares, 
attrition losses, etc.) incurred after October 1, 2005 in our annual 
Cost-of-War request.
    The Title IX Bridge Supplemental provided $4.4 billion: $2.8 
billion for cost of war and $1.6 billion to reset the force. The 
current Supplemental request before the Congress is for $6 billion: 
$2.5 billion for cost of war and $3.5 billion to reset the force. Our 
total fiscal year 2006 Supplemental request is thus $10.4 billion: $5.3 
billion for the cost of war, which includes $3.6 billion for 
operational costs and $1.7 billion to replace destroyed equipment, and 
$5.1 billion to reset the force.
    Given approval of the current Supplemental request, the Marine 
Corps will need an additional $6.6 billion to complete resetting the 
force, which we will continue to seek through supplemental funding.
             supplemental funding and usmc equipment reset
    Question. How long do you plan to pursue Supplemental funding to 
reset Marine Corps equipment? When will you transition the costs for 
reset into the regular defense budget?
    Answer. The Marine Corps requirement to reset the force is $11.7 
billion. We believe that we could execute this funding in two years and 
have phased our supplemental requests accordingly. We cannot execute 
the entire amount in one year due to industrial base limitations. The 
Title IX Bridge Supplemental provided $4.4 billion: $2.8 billion for 
cost of war and $1.6 billion to reset the force. The current 
Supplemental request before the Congress is for $6 billion: $2.5 
billion for cost of war and $3.5 billion to reset the force. Our total 
fiscal year 2006 Supplemental request is thus $10.4 billion: $5.3 
billion for the cost of war, which includes $3.6 billion for 
operational costs and $1.7 billion to replace destroyed equipment, and 
$5.1 billion to reset the force.
    Given approval of the current Supplemental request, the Marine 
Corps will need an additional $6.6 billion to complete resetting the 
force. Since we plan to pursue supplemental funding for the remainder 
of our $11.7 billion total reset requirement, reset costs will not 
transition into the regular defense budget.
                              mv-22 osprey
    Question. The V-22 Osprey program has completed final operational 
testing and is authorized to enter full rate production.
    The fiscal year 2007 budget request includes $1.3 billion for 
procurement of V-22 Ospreys. The request funds the purchase of 14 
aircraft.
    The current supplemental request does not include funding for V-
22s. However, General Hagee advocated for funding in the supplemental 
to replace Marine Corps helicopters destroyed and damaged in Iraq and 
Afghanistan. His request was denied by OMB. In the attached letter, 
General Hagee asked for your support for this program in the 
supplemental.
    The V-22 Osprey will replace CH-46E and CH-53D helicopters. Both 
legacy assets are no longer in production and are experiencing 
significant wear and tear in support of the war.
    The V-22 Osprey program has completed final operational testing and 
is authorized to enter full rate production. As you know, I have long 
supported this cutting-edge aircraft.
    Could you provide us a program update and describe how the aircraft 
is performing?
    Answer. The MV-22 Osprey is performing very well; the program has 
flown over 15,000 flight hours since May 2002. The first CH-46 squadron 
(HMM-263) stood down on June 3, 2005 to begin transitioning from the 
Sea Knight to the Osprey. VMM-263 was re-designated as a MV-22 squadron 
on March 3, 2006 at a ceremony at MCAS New River, North Carolina.
    To date 29 Block A aircraft have been delivered and are being used 
to conduct training at VMMT-204 and fleet operational testing at VMX-22 
at MCAS New River. Additionally, 3 Block B aircraft, the deployable 
configuration, have been delivered to VMX-22 for operational evaluation 
and subsequent transfer to VMM-263. VMM-263 will deploy to combat next 
year. The MV-22 will provide the Marines and Sailors who ride in them 
the most capable and survivable assault aircraft available.
                     supplemental funding for v-22
    Question. Why is no funding included in supplemental for V-22s? 
Considering the declining inventory of helicopters the V-22 replaces 
and the wear and tear they are experiencing after four year of combat, 
should V-22s be included in the supplemental?
    Answer. The Marine Corps top unfunded aviation supplemental 
requirement is the MV-22. The Marine Corps has lost a total of 23 
helicopters in support of the war, to include four CH-46s. The only 
active Marine Corps helicopter production line capable of replacing the 
40-year-old CH-46 is the MV-22.
    While it is our intent to field two 12-plane MV-22 squadrons per 
year with the first deployment to Iraq in 2007, budgetary restrictions 
have limited the rate of buy to less than what is needed to smoothly 
transition the force and replace combat losses. Although 15 aircraft 
were originally planned for fiscal year-06, funds were only made 
available for 9 aircraft in the Presidents budget. The MV-22 
operational inventory will not meet the required number of aircraft to 
fulfill our transition plan until fiscal year 2012 with the current 
program of record. Only additional aircraft procurement in fiscal year 
2006-2008 can sufficiently address this shortfall.
    Based upon near-term industrial production constraints, the Marine 
Corps requested $230 million in fiscal year 2006 Supplemental funding 
for the MV-22 Program: $215 million to fully fund three new MV-22 Block 
B aircraft, and $15 million in non-recurring engineering to determine 
the requirements needed to modify eight existing Low-Rate Initial 
Production aircraft into an operational configuration. This request was 
deferred until 2007. Funding of this request is crucial to the success 
of our Marines in both the near and long term.
                marine corps special operations command
    Question. Will the Marine Corps maintain any control over the new 
Marine Corps Special Operations Component, or will this new unit be 
under the exclusive control of the Special Operations Command?
    Answer. Marine Corps Forces Special Operations Command (MARSOC) is 
assigned to and will be under the operational control of USSOCOM. 
USSOCOM will execute its title 10 service authorities over Special 
Operations Forces, relating to MARSOC.
    The Marine Corps will continue to be responsible for the 
traditional training and equipping of Marines before they attach to 
SOCOM.
                                 ______
                                 
            Questions Submitted by Senator Daniel K. Inouye
                       kc-130 inventory objective
    Question. General Hagee, last year in a move related to the 
termination of the C-130 line, the Marine Corps purchase in 2006 was 
first increased to 12, then reduced by DOD when it decided to continue 
production into the future. This year, the request would purchase only 
4 KC-130s.
    Does this new plan make sense and will it allow you to meet your 
inventory objective?
    Answer. 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 Corps requirement. Our 
Unfunded Programs List includes a request for $678.7 million to provide 
funding for an additional 8 aircraft in fiscal year 2007 and advance 
procurement for 9 additional aircraft in fiscal year 2008, which would 
allow us to meet our inventory objective.
                     selective reenlistment bonuses
    Question. General Hagee, like other Services, the Marine Corps 
relies heavily on bonuses and other incentives to meet recruiting and 
retention goals. As of January 2006, the Marines have obligated more 
than the appropriated level for selective reenlistment bonuses, and are 
relying on supplemental funds to carry it through the year.
    Could you explain why the fiscal year 2007 budget request also 
underfunds this program from its anticipated expenditures by $30 
million?
    Answer. The Marine Corps' Selective Reenlistment Bonus (SRB) 
expenditures have increased as a result of the Global War on Terrorism 
(GWOT). The fiscal year 2007 budget request for the SRB program is 
based on peacetime requirements supporting an end strength of 175,000. 
SRB requirements above the peace time level in fiscal year 2007 will 
continue to be paid out of supplemental funding as a result of the 
Global War on Terror.
                        reserve health benefits
    Question. General Hagee, many of our colleagues continue advocating 
for increased health benefits for our reservists and their families.
    Is it your impression that there is an unmet need for increased 
benefits?
    Answer. The Marine Corps greatly appreciates the efforts of 
Congress to expand health benefits for our Reserve Marines. However, at 
this time, we do not see a requirement for any additional increases. We 
are currently working with DOD on the development of the implementation 
policy to support the increases offered to TRICARE Reserve Select in 
the fiscal year 2006 NDAA. As I'm sure you are aware, the mechanics of 
implementing and administering the various rules and regulations 
associated with all health benefit programs are very complex. 
Therefore, it is our belief that we should give these programs some 
time to develop and allow us to obtain some data on their impact before 
adding any new benefits or provisions.

                          SUBCOMMITTEE RECESS

    Senator Stevens. This subcommittee will reconvene on 
Tuesday, March 28 to hear from the Department of the Army. The 
subcommittee will stand in recess until that time. Thank you 
very much.
    [Whereupon, at 11:15 a.m., Wednesday, March 15, the 
subcommittee was recessed, to reconvene at 2:30 p.m., Tuesday, 
March 28.]
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