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

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2007

                                  ----------

                            TUESDAY, MARCH 28, 2006

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

                             DEPARTMENT OF DEFENSE

                             Department of the Army

                            Office of the Secretary

    STATEMENTS OF:
            HON. FRANCIS J. HARVEY, SECRETARY OF THE ARMY
            GENERAL PETER J. SCHOOMAKER, CHIEF OF STAFF, UNITED STATES ARMY

                    OPENING STATEMENT OF SENATOR TED STEVENS

        Senator Stevens. Good afternoon, Mr. Secretary, General. We
    appreciate you bringing these young heroes to meet with us.
    We're happy to see them back, and pleased to see all of you
    here today.
        Our subcommittee today will receive testimony from the
    Secretary of the Army and the Army Chief of Staff. Secretary
    Harvey and General Schoomaker, we do welcome you back to our
    subcommittee, and I look forward to your testimony.
        As we meet today, we're still a Nation at war. Over 110,000
    Army soldiers are serving in harm's way in Afghanistan and
    Iraq. Our men and women in uniform are performing superbly
    under your challenging circumstances. And we're proud of our
    Army and are grateful for their service to the country, as I'm
    sure you are, Mr. Secretary and Commanding General.
        This appropriations cycle poses a number of important
    budgetary issues that will receive considerable debate and
    attention over the next few months. The budgetary challenges
    facing the Army include sustaining current operations,
    recruiting and retaining an All Volunteer Force, recapitalizing
    damaged and destroyed equipment, restructuring into a modular
    force, reposturing our forces around the globe, and fielding
    new technologies to the warfighter. I am told we have men and
    women in uniform in 146 nations as we speak today.
        A critical tool for addressing these issues is the Army's
    fiscal year 2007 budget proposal, which totals $111.8 billion.
    This represents a $12.7 billion increase over last year's
    enacted level. In addition, supplementals continue to increase
    Army spending accounts to pay for operations in Iraq and
    Afghanistan, as well as emerging equipment and soldier
    protection needs. The bridge supplement enacted just 3 months
    ago provided $31.1 billion for the Army. The current
    supplemental under consideration includes $34.5 billion for the
    service, and we're anticipating another supplemental request in
    the near future to help pay for operations during the first few
    months of fiscal year 2007.
        The large question is, Can we sustain this level of
    spending? History tells us we may not be able to do so.
        Mr. Secretary, General Schoomaker, the Army's going to be
    faced with many difficult choices in the near future. This
    afternoon, we're looking forward to hearing about your budget
    priorities and how you're positioning our forces for success
    today, as well as tomorrow.
        Let me turn to our co-chairman for his statement. We're
    proud and honored to have you with us.

                     STATEMENT OF SENATOR DANIEL K. INOUYE

        Senator Inouye. I thank you very much, Mr. Chairman. And I
    join you in welcoming our Secretary, as well as the Chief of
    Staff, General Schoomaker. And I wish to join my chairman in
    welcoming our heroes. Thank you very much for your service.
        Last year, we noted that the Army was in the midst of a
    period of dramatic change while simultaneously sustaining a
    high level of combat operations. We continue on this path as
    you transform the Army with new brigades, including the
    Stryker, while maintaining a large force in Iraq and
    Afghanistan. And as the chairman noted, the cost of these
    efforts, both in stress on the force and monetary resources, is
    understandably higher. One might even question whether it
    remains affordable.
        There is great concern that the pace of overseas
    operations, coupled with the upheaval of transforming the Army,
    is placing a very heavy burden on our volunteer force. We are
    concerned how these two changes will impact recruiting and
    retention, and impact the cost of maintaining this force.
        In the supplemental request presently before the
    subcommittee, we find a request for $3.4 billion to support the
    modular brigades, and an additional $5 billion requested for
    fiscal year 2007. And we have been advised that there are
    shortfalls in your fiscal year 2007 request for recruiting and
    retention activities. At the same time, there has been much
    discussion about how the National Guard fits into the Army
    plans, and whether changes in the force structure or force
    totals are advisable. So, I believe it is obvious that the
    request before the subcommittee contains controversial matters
    which require our attention.
        I'm equally positive that this subcommittee will maintain
    its strong support of the Army and the men and women in
    uniform, especially during these trying times. So, Mr.
    Chairman, I look forward to listening to our witnesses discuss
    the many challenges facing the Army.
        Thank you very much, sir.
        Senator Stevens. Well, thank you.
        Senator Bond, you have a statement?

                    STATEMENT OF SENATOR CHRISTOPHER S. BOND

        Senator Bond. Mr. Chairman, I have a lengthy statement that
    I will not give. I'll give a few highlights of it, and anybody
    who wants to, we'll have it in the record, where it can be
    read.
        [The statement follows:]

               Prepared Statement of Senator Christopher S. Bond

        Secretary Harvey, General Schoomaker, I join with Chairman Stevens
    and Senator Inouye in recognizing the tremendous responsibilities you
    have been given in leading our soldiers in a time of intense conflict
    where the stakes could not be higher for our troops or our Nation.
        I want to comment briefly on three issues that impact Army
    readiness.
        It is my understanding that the Army procurement account currently
    stands at 16 percent of the Pentagon's overall budget which is the
    lowest amount among your sister services. Resources are always scarce
    and especially so in today's environment--so tough choices remain for
    you and this committee as we sort through the Army's and the Pentagon's
    overall budget. I mention this because the Guard and reserve accounts
    are sometimes adjusted in an effort to identify savings. The problem
    arises when accounts are impacted without the full and substantive
    input of Guard and reserve leaders--your Total Force partners. I
    believe you ran into this head-on with the issue of National Guard
    force structure before the ink was even dry on the Administration's
    fiscal year 2007 budget.
        I join with my National Guard Caucus co-chair, Senator Leahy, in
    applauding you for committing to fund fully the Army National Guard at
    an end-strength of 350,000 personnel. If we learned one important
    lesson, it is that the National Guard Bureau is not the only member of
    the Total Force team. The Nation's Governors and their Adjutant's
    General also have a vital role to play in the defense of the Nation,
    both at home and abroad. If we fail to give our Guard leaders a
    substantive role in the decision making process you can rest assured
    that the Congress will hear about it and is prepared to act decisively
    when core programs are threatened.
        This morning I was advised by Lieutenant General's Blum and Vaughn
    that Army National Guard end-strength will reach 337,000 by the end of
    the month and will reach the authorized end-strength of 350,000 by this
    Christmas at the earliest and a year from now at the latest. Betting
    against the Guard's ability to achieve its fully authorized end-
    strength might be akin to betting against the George Mason University
    Patriots in this year's NCAA tournament so I'd advise you to watch the
    Guard's recruiting numbers closely so that you can ensure their
    accounts are funded in a manner commensurate with their end-strength.
        Late in December, Senator Leahy and I were successful in convincing
    our Chairman and Ranking Member to add $900 million to Guard accounts
    for homeland response related equipment. You will recall that the Guard
    was in some cases hindered from responding to all the calls it received
    for assistance--not because our Guard forces were not willing but
    because they did not have the necessary equipment. I hope, and trust,
    that the $900 million in funds the Congress added specifically for
    Guard equipment will eventually reach the right Guard accounts and ask
    that you provide my staff with an update on the status of those funds
    at your earliest convenience.
        On the topic of Army Transformation and Modernization, I am
    encouraged by the Army's insistence on sustaining the funding profile
    for Future Combat Systems. As the Congress reviews the relevance of
    specific programs and defense accounts it is imperative that Army and
    its industry partners continue to provide the Congress with updates on
    the overall status of the program to include both successes, challenges
    and failures. The level of sophistication and technology challenges
    resident within Future Combat Systems development is not without
    inherent risk. Yet failure to succeed in this endeavor is not an option
    because as we ask more from our soldiers it is imperative that we
    provide them with the most relevant, reliable and efficient materials
    for waging war on our enemies as possible. Future Combat Systems will
    translate into the decisive defeat of enemies and ensure that more of
    our soldiers return home. That is a goal worth pursuing.
        Finally, I have a question about Airlift and Logistical Support.
    The reason this is an area of concern for me is because portions of the
    C-17 are made in my home state of Missouri which is why I know
    firsthand about the issue.
        As you are fully aware, the Army is heavily dependent upon Air
    Force and the C-17 for its strategic lift. I am told that on Monday of
    last week in Iraq, C-17s achieved the millionth flying hour in
    service--which is equal to a cargo jet flying every minute of every day
    nonstop for more than 114 years. Assets like the C-17 are being used at
    170 percent of what was anticipated and they are carrying 80 percent of
    the cargo in support of the war on terror. Since September 11, 2001,
    the C-17 has flown 358,000 hours, or 59 percent more than originally
    scheduled, partly because of the wars in Afghanistan and Iraq, the Air
    Force said in an article published March 6 2006.
        With the reliance upon the C-17 so apparent I am concerned that the
    Pentagon's decision to limit the size of the C-17 fleet is premature.
    Once we close the line, Army's options for airlift will be severely
    constrained because the costs for reopening the line are prohibitive. I
    cite a Commerce Department report that projects the cost for closing
    and then reopening the line at $4.46 billion. With national security
    policy, and particularly Army and Marines forces, dependant upon the
    principles of rapid deployment and force projection we cannot afford to
    cut corners and pursue logistical airlift capabilities on the cheap.
        It was reported in the November 2005 edition of National Defense
    that ``The Army did away with the C-130 transportability requirement
    and, instead, stipulated that three FCS vehicles must fit in a C-17
    heavy lift cargo aircraft. This would allow for a 24-ton FCS.''
        The article further explains that concerns over the weight of FCS
    vehicles under development precludes them from being transported
    realistically by the smaller C-130 family of aircraft because of the
    need to ``strip down'' these vehicles so they will fit into the smaller
    C-130 aircraft. I can site other articles that mirror the concern that
    the Pentagon's plan to close down C-17 production may be woefully
    premature.
        This leads me to my first question.
        Based on the Army's dependance upon airlift for rapid mobility, the
    high usage rate of the C-17, and the ability this platform has over
    other logistical aircraft to transport the FCS family of vehicles to
    remote areas not accessible by other aircraft--are you confident that
    the Army has sufficient C-17 assets to meet its future logistical
    support needs?
        I have one additional question that regards what I understand is
    the Army's desire to outsource its lodging activities but in the
    interest of time I will submit the question for the record and ask that
    you get back to me.

        Senator Bond. Mr. Secretary and General, I join with the
    chairman and Senator Inouye and recognize the tremendous
    responsibilities you've been giving, leading our soldiers. And
    we welcome those brave men and women back who have been
    overseas. I'm proud to say that my son also has just returned,
    last month, from a year in Fallujah.
        It's my understanding that the Army procurement account
    currently stands at 16 percent of the Pentagon's overall
    budget, the lowest amount among your sister services. As
    resources are scarce, especially so in today's environment, you
    have tough choices facing you, and facing this subcommittee. I
    mention this, because the Guard and Reserve accounts are
    sometimes adjusted in an effort to identify savings. And this
    causes some problems. It causes some problems with Governors,
    with adjutants general, and with, oh, about 80 of us in the
    Senate. And I was pleased to be able to join with Senator Leahy
    and applaud you for committing to full funding of the Army
    National Guard at an end strength of 350,000 personnel. And we
    look forward to working with you on Guard issues.
        On a topic of Army transformation and modernization, I am
    encouraged by the Army's insistence on sustaining the funding
    profile for future combat systems (FCS). And it's imperative
    that the Army's industry partners continue to provide Congress
    with updates, but it is certainly a very appealing and possibly
    lifesaving effect-enhancing effort.
        Finally, about the C-17, you know--we all know how heavily
    dependent the Army is upon the Air Force and the C-17 for
    strategic lift. I'm told that, on Monday of last week in Iraq,
    C-17s achieved the millionth flying hour in service, equal to a
    cargo jet flying every minute of every day nonstop for more
    than 114 years. They're being used at about 170 percent of what
    was anticipated. They are carrying 80 percent of the cargo in
    support of the war on terror.
        With the reliance upon the C-17 so apparent, and I--as an
    amateur, as an outsider, I'm very impressed with what the C-17
    can do, but I'm concerned that the Pentagon's decision to limit
    the size of the C-17 fleet is premature. If we were to close
    the line, the Army's options for airlift would be severely
    constrained, because the costs for reopening the line are
    prohibitive, and there is no other airlift that I believe gives
    you the capacity that you have there. And I will look forward
    to asking a question about that at the appropriate time.
        Thank you.
        Senator Stevens. Thank you.
        Senator Dorgan.

                      STATEMENT OF SENATOR BYRON L. DORGAN

        Senator Dorgan. Mr. Chairman, thank you very much. Let me
    thank those who are here to testify, Secretary Harvey, General
    Schoomaker, and others.
        I do want to just mention--I don't know that I'll be able
    to stay for the entire hearing, but I do want to mention one
    issue with respect to Guard and Reserves and the length of
    deployment. I think that, you know, a substantial number of
    Guard and Reserve have been deployed in and out of the Iraq/
    Afghanistan theater. And it appears to me now that when active
    duty folks are deployed, it's generally a 12-month period. I
    think the marines, it's 7 months. But the Guard in our State,
    when they are deployed, in--generally speaking, they are gone
    16 months--by the time they leave, go through the original base
    they're going to be assigned to and then get some training,
    then sent overseas, it's about a 16-month deployment. And these
    are citizen soldiers who have jobs, homes, and families. And
    it's sort of a paradox that they would have the longest
    deployment, because the Guard and Reserve, you would expect,
    would have the shorter deployments. So, I think my expectation
    is, that's going to have, and has had, a significant impact on
    retention. And my hope is that you might address some of that.
        I want to thank you, who represent America's soldiers. I
    think all of us on this subcommittee are determined that
    whatever is necessary for them to carry out their mission and
    to meet their responsibilities, we want to provide. We in this
    country, do not ever want to be in a circumstance where we
    would ask soldiers to go abroad and then not provide them
    everything that is absolutely necessary for them to do what we
    ask them to do for our country.
        So, let me thank you and hope, on behalf of this
    subcommittee, you will thank the troops, as well.
        Mr. Chairman, thank you very much.
        Senator Stevens. Thank you.
        Mr. Secretary, we'd be pleased to have your statement. Both
    of your statements, we'll print in the record as though read.
    We leave it to you how long--how much time you take.
        Mr. Harvey. Mr. Chairman, Senator Inouye, and distinguished
    members of the subcommittee, General Schoomaker and I
    appreciate the opportunity to be here today and to offer
    testimony on the posture of the United States Army.
        America's Army is the world's preeminent land power with a
    quality force of over 1 million soldiers supported by nearly
    240,000 Department of the Army civilians. An Army of Active,
    Guard, and Reserve soldiers deployed, forward stationed
    overseas, are securing the homeland, soldiers from every State,
    soldiers from every corner of this country serving the people
    of the United States with incredible honor and distinction.
        We provided the subcommittee the 2006 Army posture
    statement as our written statement, and I would like to take
    this opportunity to briefly highlight some of the Army's key
    initiatives and programs.
        General Schoomaker will also make an oral statement at the
    conclusion of my remarks. I know that this subcommittee, like
    me, appreciates the insight and unique perspective that General
    Schoomaker provides from his distinguished career of service to
    the Nation as a soldier.
        The soldier remains the centerpiece of America's Army.
    General Schoomaker will introduce to you three of those
    soldiers, here with us today, during his remarks.
        The 2006 Army posture statement is a succinct summary of
    the Army plan, which addresses the challenges of today, while
    preparing us for those we will face tomorrow. The Army plan is
    a comprehensive, fully integrated, strategic and operational
    plan which provides the roadmap to, first, build a more capable
    and relevant Army for the 21st century through transformation
    and modernization, and, second, sustain the full range of the
    Army's current commitments, particularly fighting and winning
    the global war on terror (GWOT).

                               ARMY MODULAR FORCE

        On 9/11, the Army's operational capabilities lacked the
    breadth and depth for the long war. We appreciate the
    continuing support of the Congress as the Army shifts its
    center of gravity to provide a broader portfolio of operational
    capabilities to meet the complex challenges of the 21st century
    security environment, particularly irregular, asymmetric
    warfare. For example, we have already completed the first 2
    years of converting the operational Army to a modular brigade-
    based combat force. Our objective is 70 brigade combat teams
    (BCTs), or, as we like to call them, BCTs, and 211 support
    brigades. This is an increase of 46 percent in the number of
    BCTs over the current force. To date, we have completed the
    conversion or activation of 19 BCTs to the modular design, or
    approximately 27 percent toward the objective of 70 BCTs. In
    addition, we started the conversion or activation of another
    18.
        Even though the modular force is not complete, it has
    already increased our operational capabilities and established
    the foundation for a rotational force generation model that is
    structured, predictable, and provides more combat-ready units,
    while reducing stress on the force.
        In order to sustain the current mission and continue to
    posture for future commitments, the Army needs the full support
    of the Congress for the Army plan and the Army's request in the
    2007 Presidential budget.

                             FUTURE COMBAT SYSTEMS

        Additionally, beyond the importance of maintaining full
    funding for the modular force transformation, we also want to
    emphasize the importance of full funding for the future combat
    systems program. This is a key modernization program for the
    Army, and is really the first major ground force modernization
    effort in over four decades. Although the word ``future'' is in
    the program title, this is not a program that only exists on
    PowerPoint slides. FCS is becoming a reality today, and
    spinouts of FCS technology to the current modular forces will
    begin in 2008.
        Simply put, the FCS program is the fastest and surest way
    to modernize the Army. Furthermore, it is the only way to
    effectively modernize the Army in an integrated manner.
        The FCS program and the modular force initiative (MFI), in
    conjunction with the full spectrum of other programs in the
    area of research and development (R&D), acquisition, training,
    leadership development, advanced tactics, techniques, and
    procedures, business transformation, as well as the growth of
    the operational Army, will ensure that our overall capability
    to conduct both traditional and nontraditional operations,
    including the global war on terrorism, will continuously and
    methodically increase and improve as we go forward in the
    uncertain and unpredictable 21st century.

                              ALL VOLUNTEER FORCE

        We also need to draw your attention to the importance of
    our efforts, with your support, to sustain an All Volunteer
    Force, including recruiting, retention, and providing a quality
    of life for our soldiers that matches the quality of their
    service. This is the first time in our modern history that the
    Nation has tested the concept of an All Volunteer Force in a
    prolonged war. Full funding and support of Army programs in
    this way is critical to sustain the finest Army in the world.
        Finally, I want to emphasize that the Army plan is a total
    plan to transform the entire Army--Active, Guard, and Reserve.
    2005 reaffirmed to the people of the United States that we are
    truly an Army of one. Simply put, the Army could not perform
    full-spectrum operations without the tremendous contributions
    of the Guard and Reserve. For example, last year the Army
    National Guard had 10 brigade combat teams and a division
    headquarters serving in Iraq, Afghanistan, and the Balkans for
    at least a portion of the year. Despite this overseas
    commitment, the National Guard was still capable of responding
    with 42,000 soldiers in a little over a week to support
    Hurricane Katrina relief operations. And, I might add, there
    were still tens of thousands more Guard and Army Reserve
    soldiers available, if needed.
        Based on the insights of 9/11, homeland defense operations,
    hurricane recovery operations, and lessons learned from the
    global war on terror, the Army plan shifts the focus of the
    Reserve component from a strategic Reserve to an operational
    force and rebalances the Reserve component's force structure to
    the operational skills they need for the 21st century security
    environment. For example, in the current plan the Army National
    Guard will continue to maintain a total of 106 brigades, which
    are beginning to be transformed to the same modular design as
    the Active Army. However, we are changing the organizational
    mix of brigade combat teams and support brigades based on the
    capabilities needed to conduct both their national defense, as
    well as their State, missions. In essence, the Army National
    Guard and the Army Reserve are transforming and modernizing
    from an underresourced standby force to fully equipped, manned,
    and trained operational-ready units.
        Let me close, and give General Schoomaker an opportunity to
    address the subcommittee, by saying that I remain confident
    that with the continued strong support of the Congress,
    America's Army can accomplish its mission and reach our
    strategic goal of being relevant and ready both today and
    tomorrow.
        Thank you.
        Senator Stevens. Thank you, sir.
        [The statement follows:]

    Prepared Statement of Francis J. Harvey and General Peter J. Schoomaker
                                                     February 10, 2006.

        We have the confidence of the Nation as we continue to engage in a
    long struggle against global terrorism and the conditions that give it
    life and sustain it. Over a half-million active and reserve Soldiers
    have served overseas in the war on terrorism. More than 600,000
    Soldiers are on active duty today. Almost half of them are deployed,
    serving in 120 countries worldwide in defense of United States
    interests.
        While fighting, we are preparing Soldiers and leaders for the
    challenges that they will face. We continue to transform, to modernize,
    and to realign our global force posture. Our Army continues to evolve
    from a force dependent on divisions to deter and to wage war against
    traditional adversaries, to a force dependent on modular brigades,
    specially designed for the full range of non-traditional adversaries
    and challenges it will face.
        With the support of the President, the Congress, and the Secretary
    of Defense, we have developed and resourced a fully integrated plan to
    best serve the Nation, to deal with the challenges we will face today
    and tomorrow, and to sustain our volunteer Soldiers in this time of
    war.
        To execute this plan, we are depending upon continued Congressional
    leadership in three areas:
      --Obtaining legislative authorities to assure predictable access to
            our Army National Guard and Army Reserve Soldiers who have
            become, by necessity, our operational rather than our strategic
            reserve;
      --Expediting wartime acquisition processes needed to equip and
            protect our Soldiers; and
      --Of greatest importance, maintaining the support of the American
            people whom we serve.
        To continue to meet the needs of the Combatant Commanders and the
    Nation, the Army will require the full support of the resources
    requested in the base budget and in supplemental appropriations.
                                             Francis J. Harvey,
                                                 Secretary of the Army.
                                           Peter J. Schoomaker,
                           General, United States Army, Chief of Staff.

          PURPOSE AND ORGANIZATION OF THE 2006 ARMY POSTURE STATEMENT

        The 2006 Army Posture Statement describes how the Army is executing
    The Army Plan to meet the challenges of today and to be better prepared
    for those we will face tomorrow. Focusing on the Soldier, our
    centerpiece, the Posture Statement summarizes key implications of the
    21st century security environment. This discussion provides the context
    to examine the Army Vision to accomplish our enduring,
    constitutionally-derived mission.
        The Army Plan consists of four overarching, interrelated
    strategies, focusing on people, forces, training and infrastructure. We
    explain our initiatives, accomplishments, and compelling needs as they
    relate to each of these strategies. We describe transformation, not as
    an end in itself; but rather, how it has helped us to accomplish our
    mission and to realize our vision.
        We conclude with a discussion of risk to underscore our compelling
    needs.

        This Posture Statement is designed to serve as a primary portal to
    learn about the Army. A listing of helpful Army-related websites and a
    glossary of acronyms are also provided.
                 2006 army posture statement executive summary
        Soldiers are making enormous contributions and sacrifices while
    serving at the forefront of a long struggle of continuous, evolving
    conflict. Their presence has enabled historic elections in Afghanistan
    and Iraq, and is setting the conditions for democratic institutions to
    take hold. Our Soldiers are also preventing attacks on our Nation and
    responding to natural disasters at home and abroad, while sustaining
    the full range of America's global commitments. At the same time, to be
    ready for the challenges we face today and tomorrow, we are
    accelerating our plan to transform and modernize.
        We are executing The Army Plan to accomplish our mission and to
    realize our vision: to remain the preeminent landpower on Earth--the
    ultimate instrument of national resolve--that is both ready to meet and
    relevant to the challenges of the dangerous and complex 21st century
    security environment. Our plan consists of four overarching,
    interrelated strategies (Figure 1).

        This fully integrated plan is driving change at an unprecedented
    pace. We are becoming a more powerful, more flexible, and more
    deployable force with a broad set of capabilities to deal with the full
    spectrum of challenges we will face. Our improvements will enable our
    Soldiers to sustain the full range of global commitments which extend
    beyond today's current theaters of war. We are improving our ability to
    operate with joint and coalition partners and to perform nontraditional
    operations. We are also developing better ways to manage increasing
    demands for forces and relieve stress on Soldiers, their families, and
    civilian workers to sustain our All-Volunteer force.
        Four key ideas underpin our planning:
      --First, we remain committed to producing units that are ready for
            the challenges they will face and to overcoming years of
            underfunding prior to the events of 9/11. We have received
            unprecedented support to ``buy back'' much needed capability.
            We cannot, however, fool ourselves by maintaining large numbers
            of forces on paper that, in reality, lack the people,
            equipment, training, and support needed to accomplish the
            missions that they will be assigned. We are determined to
            support our Soldiers and their families with an improved
            quality of life that matches the high quality of service they
            perform for America.
      --Second, we recognize that intellectual change precedes physical
            change. For this reason, we are developing qualities in our
            leaders, our people, and our forces to enable them to respond
            effectively to what they will face. We describe the leaders we
            are creating as ``pentathletes,'' whose versatility and
            athleticism--qualities that reflect the essence of our Army--
            will enable them to learn and adapt in ambiguous situations in
            a constantly evolving environment. We have undertaken a major
            review of how we train, educate, assign, and develop our
            military and civilian leaders to ensure that our Soldiers are
            well-led and well-supported as they deal with complexity and
            uncertainty for the foreseeable future.
      --Third, reinforced by the American military experience of the 20th
            century, we believe that our Soldiers' effectiveness depends
            upon a national commitment to recruit, train, and support them
            properly. This commitment must be underwritten by consistent
            investment in their equipment and infrastructure. We remain
            acutely aware of fiscal constraints; however, our duty to do
            what is right for our Soldiers, their families, and the Nation
            remains firm and unwavering.
      --Fourth, we remember our position at the start of the long struggle
            in which we are engaged. After years of insufficient
            modernization investments, many of our units were underequipped
            and not immediately ready for deployment, especially in our
            reserve units. To meet Combatant Commanders' wartime needs, we
            pooled equipment from across the force to equip those Soldiers
            deploying into harm's way. This increased risk in other
            capabilities, as seen in the Army National Guard during our
            national response to Hurricanes Katrina and Rita. With help
            from the President, the Congress, and the Department of Defense
            through supplemental appropriations, we have addressed many of
            our equipment shortfalls. We still have much to accomplish to
            ensure force readiness and to mitigate risk.
        To sustain the current mission, posture for future commitments, and
    maintain risk at acceptable wartime levels, the Army needs:
      --Full funding of the Army request in the 2007 President's Budget and
            special consideration, in light of wartime demands, for
            avoiding any reductions to the Army's budget and program. In
            addition, supplemental funding is required for combat and
            contingency operations and to continue to reset, repair,
            recapitalize, and replace battle losses of equipment for
            several years beyond major deployments. Supplemental funding is
            needed to overcome the stress on equipment resulting from
            sustained combat operations in harsh environments. These
            resources will ensure that the Army is fully manned, trained,
            and equipped to achieve victory in the war on terrorism. These
            resources will also enable the Army to maintain the momentum of
            key programs, while accelerating transformation.
      --Funding to increase Army capabilities and overall capacity as well
            as support for the legislative authorities and programs needed
            to assure access to our reserve components--who, by necessity,
            have become an operational vice a strategic reserve. We must
            achieve a proper balance of capabilities and skills among our
            active and reserve forces and continue to build high-quality
            units to increase capability and ease the strain on our
            deployed Soldiers.
      --Support and funding to achieve critical recruiting and retention
            goals needed to grow operational forces. Meeting these goals
            for our active and reserve Soldiers sustains the quality and
            effectiveness of our All-Volunteer force.
      --Funding for the Future Combat Systems (FCS) program--to enhance
            current force capabilities today with ``spin outs'' of
            available technology--and accelerate more than 300 other
            modernization programs. Our most critical investment program,
            FCS will be the Army's first major modernization in over 30
            years and will better prepare and protect Soldiers for current
            and future threats. These capabilities will directly benefit
            our active and reserve components, all United Statesground
            forces, and our allies that support ground campaigns.
      --Full funding to maintain momentum in building a rotational pool of
            70 Brigade Combat Teams (BCTs) and more than 200 modular
            Support Brigades and headquarters. Already well under way, our
            transformation to become a fully modular force is preparing our
            Soldiers to conduct sustained operations of the type we see
            today. In addition, our transformation is increasing the depth
            and breadth of our capabilities to prepare our Soldiers for
            tomorrow's challenges, particularly as we evolve to maintain
            overseas presence with rotational units.
      --Full funding for Army installations and support to execute a
            carefully synchronized plan to achieve a new global basing
            posture, while fulfilling the requirements of the National
            Military Strategy. This plan will make full use of the
            resources currently apportioned and projected to be recouped
            through consolidation and closings. Unanticipated costs
            associated with environmental remediation, renovation,
            construction, and other areas, may require additional resources
            in future years (a situation that will require continuous
            reevaluation). Full funding and continued support for Army
            installations and quality-of-life programs is required to
            sustain the All-Volunteer force, now being tested for the first
            time in a prolonged war.
      --Support for funding and authorities for Army Business
            Transformation initiatives to achieve targeted efficiencies
            through management reform, Institutional Army adaptation, and
            reengineered business practices. These initiatives will free
            human and financial resources for more compelling operational
            needs and accelerate other aspects of our transformation.
        A complete, detailed list of our Compelling Needs for 2007 is
    provided in Figure 2.

        2007 will be a pivotal year for the Army. We will continue to
    conduct operations while transforming the force, its global
    infrastructure, and all of our supporting business processes. The
    resources provided to the Army in 2007 and beyond will enable the Army
    to maintain the momentum of key programs, while accelerating aspects of
    our transformation.Moreover, this funding will determine our ability to
    continue to accomplish our mission and to be postured to meet future
    commitments.

         21ST CENTURY SECURITY ENVIRONMENT: AN ERA OF UNCERTAINTY AND
                                UNPREDICTABILITY

        In the four years since the terrorist attacks on the Nation, the
    international security environment has changed dramatically. As a
    result, military commitments and especially the demand for Soldiers
    have increased both at home and abroad. With the support of the
    President, the Congress, and the Secretary of Defense, we have
    increased our capabilities to deal with the challenges we are facing
    today and accelerated our preparation for those we will face tomorrow.

    Complex Security Challenges
        The National Defense Strategy identifies an array of traditional,
    irregular, catastrophic, and disruptive challenges that pose threats to
    the Nation (Figure 3). These threats are becoming increasingly complex.
    We no longer face only conventional armies who operate within clearly
    established political boundaries. In addition, we will face enemies
    that employ irregular tactics, terror, and asymmetric warfare. These
    enemies will be increasingly transnational and dispersed.
        Fueled by ideologies that oppose our Nation's bedrock values, al-
    Qaeda and other enemies are committed to reducing American global
    presence and to destroying our society. They have publicly stated their
    goal: to gain control in the Islamic world by establishing a unified
    caliphate, stretching from North Africa to Indonesia.
        We are engaged in a long struggle against adversaries who are
    ruthless and unconstrained in achieving their ends. Our previous
    conceptions of security, deterrence, intelligence, and warning do not
    adequately address the threats we now face. To defeat our adversaries,
    who will be neither deterred by nuclear or conventional weapons nor
    defeated in battles with decisive outcomes, we must remain vigilant in
    employing all forms of national and international power--diplomatic,
    informational, military, and economic--in a concerted, integrated
    manner.

    Increasing Complexity
        The security environment in which our Soldiers will operate is
    characterized by challenges and uncertainties, including:
      --Progress in the war on terrorism;
      --The pace of democratic reform in the Middle East and elsewhere,
            especially in fledgling democracies such as Iraq, Afghanistan
            and the emerging Palestinian State;
      --The ability of existing governments to perform traditional state
            functions and deny safe haven to terrorist groups;
      --Progress in controlling the proliferation of weapons of mass
            destruction to state and nonstate actors; and
      --Decisions in four major areas:
        --Defense priorities amidst growing fiscal pressures;
        --Roles and missions of the Armed Forces as defined in the
                Quadrennial Defense Review;
        --Role of the Armed Forces in defense support to civil authorities;
                and
        --Pace of implementation of Base Realignment and Closure (BRAC)
                legislation and Integrated Global Presence and Basing
                Strategy (IGPBS) plans.

    Competing Fiscal Priorities
        The Army will remain engaged around the globe, while operating in a
    constrained fiscal environment. This will continue to limit the
    resources available to accomplish our missions.
                National Budget Trends
        The Office of the Secretary of Defense, Comptroller, projects 2007
    Defense spending will be 3.9 percent of Gross Domestic Product (GDP),
    continuing a downward trend (Figure 4). Defense resources have not kept
    pace with growth in GDP.

                Defense Budget Trends
        The allocation of Defense resources has changed over time (Figure
    5) in response to the focus and demands of the National Military
    Strategy. Today, despite providing the bulk of the forces for the war
    on terrorism, the Army receives the smallest share of programmed
    resources. Increasing pressure to reduce the federal deficit, coupled
    with rising fuel, health care, and other costs, may impact the
    resources appropriated to accomplish Army missions.

                Army Investment Trends
        The bulk of the Army's funds are committed to sustaining people,
    maintaining vital infrastructure, and preparing equipment for combat
    deployment. As a result, our ability to fund investment accounts is
    extremely limited (Figure 6). This creates a perennial tension between
    current and future demands.

    Investment Trends
        Since 1990, the Army's share of investment dollars has been
    considerably smaller than that of the other Departments (Figure 7).
    Consequently, the Army has been unable to invest in the capabilities to
    sustain a rising operational tempo and to prepare for emerging threats.
    Supplemental authority has enabled the Army to ``buy back'' crucial
    capability to meet the operational demands of the war on terrorism and
    to improve our ability to sustain the full scope of our global
    commitments.

    Implications for the Army
        The implications of the evolving security environment are clear.
      --The Nation will continue to be engaged in a long struggle of
            continuous, evolving conflict that, as in Afghanistan and Iraq
            today, will manifest itself in complex, traditional, and
            irregular challenges to include cyberspace attack. These
            struggles will be waged by Soldiers who will be expected to
            perform difficult tasks and create decisive outcomes to
            accomplish the objectives of the National Military Strategy.
      --Our Soldiers must be prepared to deal with the full spectrum of
            threats. As described in the Army's capstone concept for the
            future force, they must be able to operate effectively as part
            of joint, interagency, and coalition teams.
          Therefore, we must continue to improve the strategic
            responsiveness of our forces and our generating base through
            improvements in:
        --strategic agility;
        --joint interdependence;
        --speed;
        --survivability;
        --lethality;
        --sustainability;
        --networks to improve situational awareness and command of forces;
                and
        --information assurance and network security
      --Our Soldiers and units must be prepared to operate with little to
            no warning. We will no longer have the luxury of partially
            manning, equipping, or training a unit and relying on
            significant warning time to mobilize, train, and prepare to
            deploy. Rather, the units we have designated to be available
            for deployment will need their full complement of Soldiers,
            equipment, and training to be ready for immediate deployment
            from our power projection infrastructure.
        Failure to invest in Soldiers to build the right capabilities--by
    improving our doctrine, organizations, training, materiel, leaders,
    people, and facilities--will increase risk for the Army, the Joint
    Team, and our Nation. Building the capabilities required to hedge
    against the uncertainty of tomorrow will require prudent investments
    today. These investments must be sustained at predictable, consistent
    levels over time. Investing in defense capabilities in this manner
    would reflect a significant departure from historic patterns of
    spending, which have increased America's vulnerability prior to each of
    the major conflicts of the 20th century.

     THE ARMY VISION: RELEVANT AND READY LANDPOWER IN SERVICE TO THE NATION

        The challenges posed by the 21st century security environment drive
    our vision of the force we must become to continue to accomplish our
    mission. The Nation has entrusted us to preserve peace, maintain
    freedom, and defend democracy. We have performed this role for more
    than 230 years. Today, because of the actions of our Soldiers and our
    record of accomplishment, the American people regard the Army as one of
    the Nation's most respected institutions. We will maintain this trust.

                   mission: providing forces and capabilities
        The Army exists to serve the American people, to protect vital
    national interests, and to fulfill national military responsibilities.
    Our mission is enduring: to provide necessary forces and capabilities
    to the Combatant Commanders in support of the National Security and
    Defense Strategies. The Army is also charged with providing logistics
    and support to enable the other Services to accomplish their missions.
    The Army organizes, trains, and equips Soldiers who, as vital members
    of their units, conduct prompt, sustained combat on land as well as
    stability operations, when required.

    Accomplishing the Mission Today: Sustaining Global Commitments
        The Army continues to provide Combatant Commanders with a wide
    range of capabilities to prevail in the war on terrorism and to sustain
    our global commitments. These capabilities include support to civil
    authorities in response to threats and crises at home. Our worldwide
    commitments extend far beyond Iraq and Afghanistan. Today,
    approximately 600,000 Soldiers are on active duty (currently 487,000
    active component, 72,000 Army National Guard and 41,000 Army Reserve),
    with 245,000 Soldiers serving worldwide in 120 countries (Figure 8).
    More than 1,700 Army civilians serve side-by-side with them in the
    field. Our Soldiers and civilians perform a variety of missions vital
    to America's national defense. Here at home, more than 13,000 Soldiers
    are on duty specifically fulfilling critical missions to support the
    Global War on Terrorism.
        The Army's operational pace remains high, sustaining obligations
    and continuing trends established during the post-Cold War era. In
    addition to Iraq and Afghanistan, our forward presence continues to
    preserve peace on the Korean Peninsula, the Sinai, the Balkans, and
    numerous other places of strategic importance.
        Whenever and wherever needed, Soldiers continue to answer the Call
    to Duty. During this past year, Soldiers supported civil authorities
    during a variety of disaster relief and recovery missions. More than
    42,000 National Guard Soldiers; 7,300 active component Soldiers; and
    3,500 Army civilians assisted citizens in Louisiana, Mississippi,
    Texas, and Florida after Hurricanes Katrina and Rita. Active and
    reserve aviation units flew thousands of helicopter sorties. These
    pilots and crews saved countless lives while distributing food, water,
    and other supplies. Working closely with state and federal agencies,
    the Army Corps of Engineers provided emergency support and is now
    executing more than $4 billion worth of projects to support recovery.
    Soldiers also provided relief for earthquake survivors in Pakistan. At
    home and abroad, on a daily basis, our Soldiers and civilians are doing
    critical work in service to our country.

        In the four years since September 11, our National Guard has
    mobilized more than 329,000 Soldiers for both state and federal
    missions. On any given day, the Army National Guard provides vital
    capabilities in virtually every mission area. As of January 2006, more
    than 72,000 Soldiers from the National Guard are mobilized. Besides
    their commitments in Iraq and Afghanistan, National Guard Soldiers are
    protecting the homeland by securing borders, protecting key
    infrastructure, and securing special events such as the Super Bowl.
    They also support other missions of U.S. Northern Command. They are
    preserving peace in the Sinai and in the Balkans. They are also
    establishing the conditions for continued progress in Iraq and
    Afghanistan.
        Since September 11, the Army Reserve has mobilized over 143,000
    Soldiers who, together with their fellow active and National Guard
    Soldiers, have enabled the Army to accomplish its mission at home and
    abroad. The Army Reserve provides vital capabilities across a diverse
    range of mission areas. As of January 2006, more than 41,000 Army
    Reserve Soldiers serve on active duty. The Army Reserve's 98th and 80th
    Divisions (Institutional Training) deployed to Iraq and Afghanistan to
    support U.S. Central Command's training of security forces.

    Major Decisions in 2005
        During 2005, the Army made four key decisions to accelerate change
    needed to win today and to continue to prepare for tomorrow's
    challenges.
      --Accelerated the Fielding of the Future Force.--In April 2005, the
            Army announced refinements of its plan--The Army Plan--to
            transition continuously from the current force to the future
            force to realize the Army Vision. This plan guides our efforts
            to transform the Army into a modular force, while continuing to
            modernize by fielding Future Combat Systems (FCS) and other
            technologies. We are leveraging recent combat experiences to
            train and educate our Soldiers and leaders and provide the
            campaign and expeditionary capabilities needed to deal with
            future challenges.
      --Restructured the FCS Program.--In April 2005, the Army restructured
            the FCS program for two reasons: (1) to improve contractual
            arrangements with industry and provide a better framework to
            manage the cost and schedule aspects of this vital program; and
            (2) to further leverage FCS technologies as quickly as feasible
            to improve our Soldiers' ability to fight and to protect
            themselves. By improving control and oversight, these new
            arrangements are paying dividends now.
      --Established the Business Transformation Initiatives.--In February
            2005, the Army decided to implement an Army-wide Business
            Transformation initiative. (We are reviewing all of our
            business, resourcing, management, and acquisition processes to
            become more effective, improve quality, reduce cycle time, and
            achieve cost reductions.) To do so, we are applying the Lean
            Six Sigma methodology. Just as we are leveraging the lessons of
            war to improve fighting effectiveness, we are applying relevant
            corporate best practices to improve our business processes and
            make best use of our financial, human, and materiel resources.
            Other key aspects of Business Transformation include:
            Information Management Systems Portfolio Management,
            Institutional Army Adaptation, and Business Initiative
            Councils.
      --Adopted the Army Force Generation (ARFORGEN) Model.--The Army began
            to implement the ARFORGEN model to ensure all units are fully
            ready for deployment. This model will establish and coordinate
            cycles of readiness and training for all active and reserve
            units. To sustain our ability to execute the National Military
            Strategy, this model schedules deployment windows for our units
            while balancing the requirements associated with transforming,
            modernizing, implementing a new global stationing plan, and
            other mission demands.

                 THE ARMY PLAN TO ENABLE MISSION ACCOMPLISHMENT

        We are executing The Army Plan, consisting of four overarching,
    interrelated strategies, to enable mission accomplishment and to
    achieve the Army Vision over time. This plan accelerates the redesign
    of the forces, support structures, and headquarters that are
    accomplishing our mission today. This plan also guides our initiatives
    to provide the Combatant Commanders the assets to protect the Nation
    today and tomorrow.
        The Army is:
      --Providing relevant and ready landpower for the 21st century
            security environment;
      --Training and equipping Soldiers to serve as warriors and growing
            adaptive leaders;
      --Sustaining an All-Volunteer force composed of highly competent
            Soldiers that are provided an equally high quality of life; and
      --Providing infrastructure and support to enable the force to fulfill
            its strategic roles and missions.
        We are transforming to create a future force with a broad set of
    capabilities to enable our Soldiers to address strategic problems the
    Nation will face (See Figure 9).
        The benefits of our approach are clearly evident in the attitudes
    and levels of commitment we see in our Soldiers, as well as the
    attributes of our combat formations, the forces that sustain them, and
    the facilities and business processes that generate them from their
    home stations. The combined effects of transformation, modernization,
    innovation, and improvement--reinforced by positive change in the
    attitudes and behaviors that create the culture of our service--are
    helping us to become the force the Nation will need to safeguard its
    peace and freedom in the 21st century.

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

     Examples of Unique Army Capabilities to Support Joint, Combined, and
                             Interagency Operations
    Countering Terrorism
        Assist friends, allies, or partners to conduct military operations
    by providing logistics, command and control, intelligence, protection,
    and other support to the Joint Force.
        Train military and security forces to counter extremist, radical,
    or insurgent elements.
        Provide ground forces (conventional and special operations) to
    sustain large-scale counter-terror and counter-insurgency operations.
        Rapidly deploy substantial numbers of ground forces from strategic
    distances to meet Combatant Commanders' requirements for counter-terror
    or combat operations.
        Conduct extended stability operations.
    Defending the Homeland
        Detect and prevent hostile actions against the homeland through the
    presence of the National Guard and the Army Reserve within states and
    communities.
        Support civil authorities in consequence management, disaster
    relief, and other roles including: reinforcing public safety and
    providing logistics, transportation, communications, utilities
    management, engineering, and other services.
    Shaping Choices of Countries at Crossroads
        In support of Combatant Commanders, establish relationships with
    foreign leaders, forces, and people through: security cooperation,
    training, humanitarian and civil assistance, medical, engineering,
    exercises, and other national and international programs.
        Seize control and defend key facilities or terrain to preclude
    actions by potential adversaries.
        Conduct expeditionary operations to deter, destroy, or defeat
    potential adversaries.
        Conduct extended campaigns to deter or prevent potential
    adversaries from engaging in protracted conflict with joint or U.S.-led
    coalitions of forces.
    Preventing Acquisition of Weapons of Mass Destruction by State and Non-
            State Actors
        Conduct irregular or unconventional warfare in support of the Joint
    Force.
        Deny sanctuary and safe haven for terrorist groups.
        Assist the forces of other nations to conduct operations against
    adversaries seeking to possess or transfer control of weapons of mass
    destruction.

        While the problems we face will evolve, Soldiers' ``boots on the
    ground'' will remain vital to our solutions.

        Source: Strategic Problems drawn from 2006 Quadrennial Defense
    Review, Office of the Secretary of Defense, February 2006.

                                    Figure 9

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        The Army Plan is continuously improving our ability to operate as
    part of the Joint Team, while ensuring our ability to dominate in any
    environment against current, emerging, and unforeseen threats. We
    believe that every dollar spent to build capability for our current
    force is an investment in our future force. Our initiatives are guiding
    our efforts to:
      --Grow innovative, adaptive Soldiers and leaders through training and
            education programs that build on recent combat experiences and
            leverage the Training Transformation Program;
      --Adapt the doctrine which guides how we fight, how we sustain our
            forces, and how we train Soldiers;
      --Create far more capable, strategically deployable brigades that are
            designed to receive new technologies and equipment as soon as
            they become available;
      --Increase Soldier and unit effectiveness and protection; and
      --Apply better business practices to free resources to use for our
            most pressing operational requirements.
        Our ongoing intellectual and cultural transformation is
    dramatically improving how our leaders, Soldiers, civilian workforce,
    and families are adapting to the reality of protracted conflict. This
    transformation is reinforcing the commitment to continuous improvement
    that has taken hold across the Army.

      PROVIDE RELEVANT AND READY LANDPOWER FOR THE 21ST CENTURY SECURITY
                                  ENVIRONMENT

        To support current global operations and prevail in the war on
    terrorism, we are increasing the quality and the effectiveness of our
    essential fighting units, the Brigade Combat Teams (BCTs). We are
    forming a rotational pool of 70 BCTs that will allow us to sustain
    global commitments, surge forces for unforeseen contingencies, and
    reduce stress on Soldiers and equipment. We are also creating the right
    mix of Support Brigades to ensure that our Soldiers receive the
    logistical, engineering, intelligence, protection, aviation, and
    communications capabilities they will need to support the Combatant
    Commanders.
        We are rebalancing the force by placing the right Soldiers with the
    right skills into our jobs and organizations in greatest demand. At the
    same time, we are stabilizing Soldiers, to keep them with their units
    longer, to improve teamwork and reduce stress on families caused by
    frequent moves between posts. We are maintaining momentum in
    transforming and modernizing our formations--through modular
    conversion, pursuit of future combat systems, and fielding other
    advanced technologies. These complementary initiatives will ensure that
    our Soldiers are well prepared to operate in campaign and expeditionary
    settings with our joint and coalition partners.

    Support Current Global Operations with Relevant and Ready Landpower
        To sustain a steadily increasing demand for military forces, we are
    building a modular force centered on BCTs. Our modular conversion
    across the active and reserve components is designed to meet the
    demands of the current war, sustain other global commitments, establish
    the organizational structure needed to accelerate modernization, and
    support a new global basing posture that will rely more heavily on
    rotational presence.
        Our plan will create a rotational pool of 70 BCTs: 42 in the active
    component and 28 in the Army National Guard. These BCTs will be
    organized into one of three standard designs: Infantry, Heavy, or
    Stryker. We will support these BCTs with more than 200 active and
    reserve Support Brigades. These Support Brigades will enable the BCTs
    to accomplish a broad range of missions. They will also provide
    essential capabilities to support civil authorities in homeland defense
    missions, including consequence management and disaster relief.
        Our Support Brigades are organized into two categories: Multi-
    functional Support Brigades and Functional Support Brigades. The
    multifunctional brigades will perform operational roles including:
    Combat Aviation, Combat Support (Maneuver Enhancement), Sustainment,
    Fires, and Battlefield Surveillance. The functional brigades will
    perform broad support roles on a theater-wide basis including: Air
    Defense, Engineer, Explosive Ordnance Disposal, Military Police,
    Signal, and others.

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                                Accomplishments
    Since 9-11
        Soldiers helped to overthrow two terrorist regimes, rescue two
    nations from oppression, and to liberate over 50 million people.
        More than 144,000 Army Reserve Soldiers, 329,000 National Guard
    Soldiers, and 498,000 active component Soldiers supported Combatant
    Commanders in Iraq, Afghanistan, Guantanamo Bay, the Balkans, the
    Sinai, and elsewhere.
        120,000 National Guard Soldiers and 31,000 Army Reserve Soldiers,
    along with active component Soldiers, helped secure the homeland
    through key asset security, special events security such as the Super
    Bowl, airport security, and Air Force Base security augmentation.
        Began 37 of the 70 planned Brigade Combat Team modular conversions;
    18 of these 37 conversions completed.
        Doubled depot output in just three years to refurbish and reset
    vehicles and equipment for future deployments.
        Extended the life of more than 4,000 HMMWVs and 1,200 aircraft
    through the reset program.
    2005
        Soldiers and coalition forces secured vital elections in Iraq and
    Afghanistan where millions voted.
        Two training divisions plus 4th Brigade Combat Teams worth of
    officer and noncommissioned officer leadership trained Iraqi and Afghan
    security forces.
        Soldiers trained and equipped 88,000 Iraqi Security Forces during
    2005, increasing their ranks to 224,000 in 136 battalions.
        Soldiers deployed to South Asia and Southwest Asia to provide
    tsunami and earthquake relief.
        More than 42,000 National Guard Soldiers; 7,300 active component
    Soldiers; and 3,500 Army civilians; complemented with Army Reserve
    aviation and transportation units, provided hurricane relief support
    (including Katrina and Rita).
        Deployed advanced systems to share information and improve
    situational understanding and command of forces for four divisions and
    three Brigade Combat Teams in Iraq and Afghanistan.
        Equipped most deploying units with the Joint Network Node to
    enhance command of forces.
        Advanced $2.2 billion contract for production of 368 Armed
    Reconnaissance Helicopters--the Army's first new manned helicopter
    acquisition since 1983.

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        Like our theater commands, our corps and division level operational
    command posts and headquarters, Support Brigades will also be converted
    to modular designs. They will be trained, manned, and equipped to work
    directly for each of these headquarters without augmentation of people
    or equipment.
        We are also improving the readiness of our reserve forces that are
    making vital contributions on a daily basis--and have transitioned from
    a strategic to an operational reserve as our global commitments have
    increased. We are working to improve our access to these forces to
    support our strategic requirements. Access will be enabled by reducing
    reserve component overstructure and managing reserve Soldiers in ways
    that will improve assigned strength in each of our units, while
    increasing opportunities for education and special skills training.
    These improvements, coupled with modular conversion, will improve the
    Army's overall ability to provide ready forces and capabilities to the
    Combatant Commanders and to civil authorities in a timely manner.
        In addition, to make best use of our resources, we are both
    rebalancing and redistributing our forces. We are rebalancing to create
    the right mix of units in high demand, and Soldiers with critical and
    high demand skills in each of our active and reserve components. At the
    same time, we are redistributing Soldiers to create the right mix
    between our operational forces and our institutional structures.
      --To assure timely access to the right types of units and Soldiers,
            we are rebalancing skills within our three components. We have
            determined the types of units and skills that are in greatest
            demand in today's environment--including infantry, engineer,
            military police, military intelligence, Special Forces,
            chemical, civil affairs, and psychological operations units--
            and have identified over 100,000 positions to rebalance. We
            have accomplished more than half of this rebalancing and
            project to be completed by 2011.
      --To sustain increased global commitments, we are also increasing, or
            ``growing,'' the Operational Army in the active component. Our
            goal is to grow the Operational Army by 40,000 Soldiers by 2008
            (from the 2004 baseline of 315,000) to bring our active
            component operational force total to 355,000 Soldiers. This
            change will be enabled by military-to-civilian conversions and
            better management of our Individuals Account.
        The combined effect of rebalancing, redistributing, and growing the
    Operational Army is increasing our overall effectiveness. We are
    improving our ability to provide trained Soldiers in cohesive
    formations to the Combatant Commanders and to support civil
    authorities, while reducing stress on Soldiers and families.
        To support global operations while transforming, we are preparing
    our forces for war--or resetting them--as quickly and efficiently as we
    can. Our reset program is restoring units returning from war to
    required levels of readiness to prepare them for future missions. As we
    reset our units, we are simultaneously converting them to their new
    modular designs. We have reset more than 20 major units. Many of these
    units have already returned to theaters of war in their new
    configurations.
        The Army Plan introduces a new readiness model, ARFORGEN, to manage
    the force and ensure the ability to support demands for Army forces.
    ARFORGEN sequences activities for all active and reserve Army units to
    include: Reset; Modular conversion; Modernization; Manning adjustments;
    Soldier and leader training and education programs; Unit training;
    Employment; and Stationing decisions.
        To sustain global commitments, we will transition units through a
    progression of three sequential readiness pools: Reset and Train, Ready
    (eligible for deployment and exercises), and Available (immediately
    available for world-wide employment). This model establishes a plan for
    scheduled deployment on an Army-wide basis. Through semi-annual
    synchronization conferences, we will organize our forces into three
    Expeditionary Force Packages: Ready Expeditionary Forces that are
    training and preparing for potential future missions; Contingency
    Expeditionary Forces that are ready for employment or exercises but not
    yet deployed; and Deployment Expeditionary Forces executing assigned
    missions.
        Our goal is to be able to generate a continuous output of trained
    and ready forces that will support one operational deployment in three
    years for the active component, and one operational deployment in six
    years for the reserve component. At lower levels of demand, this model
    may allow the Army to support one operational deployment in four years
    for active forces. This new model establishes the basis to bring all
    units to a full state of readiness--with people, equipment, and
    training--before they are scheduled to deploy. It allows the Army to
    accomplish the following critical objectives: Reduce uncertainty for
    Soldiers, families, and the communities that support installations;
    Improve availability of forces for Combatant Commanders; Generate a
    continuous force of 18-19 BCTs, along with all required Support
    Brigades; and Surge up to an additional 15-19 BCTs in response to
    crises.

    Build a Campaign-Quality Modular Force with Joint and Expeditionary
            Capabilities for Today and Tomorrow
        The war on terrorism and the changing paradigm for maintaining
    forward presence have created both the necessity and the opportunity to
    accelerate change from the current to the future force. Our conversion
    to a modular force--one that is carefully balanced between active and
    reserve component BCTs, Support Brigades, and division and corps level
    operational command posts--is well under way. This conversion is
    transforming the Army into a more lethal, flexible, deployable, and
    sustainable force. It is enabling us to shift the center of gravity of
    our capabilities (previously focused primarily on traditional
    challenges) to better address the full spectrum of traditional,
    irregular, disruptive, and catastrophic challenges.
        The combination of transformation to build a modular Army and
    continuous modernization, to field Future Combat Systems (FCS) and
    other advanced technologies, is methodically producing the future
    force.
        FCS is our primary modernization program and most critical
    investment. This program will pioneer the next generation of
    warfighting capabilities which will improve Soldiers' ability to find
    and fight their enemies. FCS includes a new class of manned and
    unmanned air and ground vehicles, interconnected by a modern network to
    better support and sustain Soldiers.
        The program is currently in the developmental phase. The first unit
    fully equipped with manned ground vehicles is projected to achieve
    initial capability by 2014 (and will be able to fight by 2017). When we
    complete our intended fielding plan in 2025, new manned ground vehicles
    will replace 40 to 50-year old tactical vehicles designed in the 1970s
    to defeat Cold War enemies.

        A significant contribution of FCS is that it will immediately place
    advanced technologies into the hands of our Soldiers that will increase
    their capability and provide greater protection. By integrating
    advanced technologies into our formations in four ``spin outs'' that
    will occur in roughly two-year increments, we will strengthen our
    current forces in distinct ways:
      --The first ``spin out,'' on track for delivery in 2008, will
            introduce Unattended Ground Sensors, Non-Line-of-Sight Launch
            Systems, the Intelligent Munitions System, and the Network.
            These capabilities will enhance Soldiers' understanding of
            their situation in dynamic, battlefield conditions by promoting
            a common perspective of enemy and friendly locations on digital
            maps. This improvement will greatly increase the area that
            Soldiers can influence and control. The Network will also
            provide Soldiers with more timely Actionable Intelligence.
      --The second and third ``spin outs,'' are currently on track for 2010
            and 2012 respectively and will introduce new types of unmanned
            aircraft systems and ground vehicles for our Soldiers. These
            technologies will enable Soldiers to employ greater numbers of
            sensors to see and find their enemies first. These ``spin
            outs'' will also enable robotic reconnaissance of dangerous
            areas, mines, and booby traps. Together, they will increase
            Soldier protection and enhance the precision of their weapons.
      --The fourth ``spin out'' will complete the Network, currently on
            track for 2014. When completed, this improvement will reinforce
            the comprehensive efforts now under way to improve the accuracy
            and responsiveness of the joint weapons systems designed to
            support Soldiers.
        When whole BCTs are fielded with the full complement of FCS
    systems, these units will be able to generate significantly more
    capability. These FCS-equipped BCTs will contain more fighting vehicles
    and more infantry squads than the units we field today. They will be
    able to generate more capability and control more area with
    significantly fewer Soldiers than today. They will require less fuel,
    supplies, and other logistical support.
        These new capabilities will directly benefit all U.S. ground
    forces, including the Marine Corps and the Special Operations Forces
    from all Services. They will fundamentally alter how we deploy, employ,
    and sustain our ground forces. These capabilities will improve our
    capability to put ``boots on the ground,'' to stabilize contested
    zones, and to support joint and interagency teams.
        The future force comprises more than just FCS-equipped, modular
    BCTs. It includes all of the improvements in strategic agility and
    efficiencies that will result from implementing BRAC and IGPBS
    decisions. These decisions will enable the repositioning of forces to
    better respond to emerging challenges. We will also be able to execute
    much of our enduring overseas presence mission with units that deploy
    from the United States for overseas duty, during rotational windows
    scheduled and managed as part of the ARFORGEN model.
        For both rotational duties and for contingencies, our units will
    rely on pre-positioned equipment. To increase both strategic agility
    and efficiency, we are modernizing our pre-positioned equipment sets.
    We are also reducing the number of variants of our heavy combat vehicle
    fleet from four to two. This initiative will promote standardization,
    reduce the number of systems that we must train active and reserve
    Soldiers to operate, and reduce maintenance costs.

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

                                Compelling Needs

        Full funding of the Army request in the 2007 President's Budget,
    plus the requisite supplemental funding for combat operations to ensure
    Soldiers are fully trained and equipped in the most expeditious manner
    to enhance current force readiness and to achieve victory in the long
    war.
        Resource the Army's requirements for resetting over 50 brigades
    consisting of over 350,000 pieces of equipment including: 615 aircraft;
    7,000 combat vehicles; and 30,000 wheeled vehicles.
        Support the Army's effort in 2007 to grow our operational forces to
    355,000 Soldiers (increase of 40,000 Soldiers), and restructure both
    the Institutional and Operational Army across the active and reserve
    components to meet global commitments now and in the future.
        Fully fund continuous modernization of the current force through
    the Future Combat Systems Program and key supporting programs,
    including increasing Soldier protection, sustaining development of
    advanced technologies, developing the Joint Network Node, LandWarNet,
    and rebalancing active and reserve component units and skills to ensure
    the Army remains the preeminent landpower on earth.
        Sustain momentum in force transformation through modular
    conversions planned in 2007--three active component and seven reserve
    component Brigade Combat Teams, 13 active component and five reserve
    component supporting brigades, headquarters and support units--to
    ensure the Operational Army has relevant combat power for the 21st
    century.

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

        Our commitment to being a learning, adaptive organization is
    evident in our efforts to apply lessons learned from our operations
    both at home and abroad. We are working to develop a future force that
    is better able to fight as part of joint and coalition formations in
    either protracted campaigns or in expeditionary operations and to serve
    the Nation--by examining how to best accomplish traditional and
    nontraditional missions through five major areas of focus:
      --Sustain the Force enables modular Army logistics units to better
            anticipate requirements and provide rapid and precise
            capability to Army, joint, and multinational partners. We are
            improving theater-wide distribution systems and visibility of
            all of the assets and resources, both deployed and in-transit,
            needed to support military operations.
      --Actionable Intelligence is providing Soldiers and leaders with
            expanded situational understanding by distributing intelligence
            with more speed and accuracy, while providing the means to
            improve understanding of different languages and cultures.
      --Improve Capabilities for Stability Operations is improving our
            understanding of how to stabilize areas of operation and
            support security, transition, and reconstruction operations
            while continuing to conduct combat operations.
      --Improve Contributions to Homeland Defense is focusing on balancing
            capabilities in the Active and Reserve Components to ensure the
            right capabilities are available to address expanded homeland
            defense requirements and broadening the options available to
            civil authorities.
      --Increase Army Capabilities to Dominate in Complex Environments is
            focusing on finding innovative solutions to challenges posed by
            operations in urban, mountainous, cavernous, and jungle
            environments while expanding Soldier ability and protection,
            and enhancing cultural awareness, regional familiarity, and
            language skills.
        The combination of transformation and modernization, reinforced by
    initiatives of this type, and continued improvements in training
    Soldiers, developing leaders, and improving facilities is producing
    relevant and ready landpower for the 21st century.
        Supporting Initiatives (Addendum C): The areas of focus discussed
    above are reinforced by six initiatives: Develop Operational
    Capabilities in LandWarNet; Execute Major Acquisition Programs;
    Restructure Army Aviation; Enhance Joint Interdependence; Stabilize
    Soldiers and Units to Enhance Cohesion and Predictability; and Leverage
    Science and Technology.
    train and equip soldiers to serve as warriors and grow adaptive leaders
        The Army Vision centers on producing Soldiers armed with the
    values, combat skills, and mindset that enable them to serve as
    competent, disciplined warriors who reflect our shared ethos. Our
    training programs, at our home stations, our Combat Training Centers,
    and across our institutional training base are leveraging our combat
    experiences to grow adaptive leaders who are highly skilled, resilient,
    able to thrive in rapidly changing environments, and ready to operate
    with our joint, interagency, and multinational partners. We are
    committed to continuing to equip our Soldiers with the best
    capabilities, weapons, and protection our Nation can provide--
    leveraging our national strength to reduce risk to our Soldiers.
    Reinforce our Centerpiece: Soldiers as Warriors
        Our Soldiers continue to serve magnificently as we enter the fourth
    year of the war on terrorism. They believe in their mission, the
    Soldier's Creed, and the Warrior Ethos. As evidenced by their service,
    they remain committed to something far bigger than themselves.
        In Iraq and Afghanistan, our Soldiers are consistently defeating
    the enemies of freedom.

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

                                Accomplishments
    Since 9-11
        Adapted Combat Training Center training scenarios to match expected
    threats and provided enhanced training challenges to develop adaptive
    leaders.
        More than half of the observer/controllers at our Combat Training
    Centers have experience in Iraq or Afghanistan.
        Greatly improved individual Soldier protection. Today every Soldier
    in Iraq and Afghanistan is issued improved body armor.
        Continued to meet Combatant Commander requirements to up-armor the
    vehicle fleet. To date, over 37,000 light, medium and heavy tactical
    wheeled vehicles have been fielded.
        Equipped 49 Brigade Combat Teams and nearly 500,000 Soldiers with
    state-of-the-art equipment through the Rapid Fielding Initiative.
    2005
        Instituted the Combat Action Badge to recognize those Soldiers who
    directly engage or who are engaged by the enemy.
        Implemented standard 39 Warrior Tasks and Nine Battle Drills to
    initial military training for Soldiers of all military occupational
    specialties.
        Expanded training base capacity from 405,000 to 454,000 seats to
    enable growth in combat forces.
        Began implementation of new Officer Education System, including
    Basic Officer Leader Course and Intermediate Level Education.
        Used our experience gained in Iraq and Afghanistan to adapt our
    training bases and Combat Training Centers to provide enhanced training
    on marksmanship, fighting in urban areas, live fire convoy training,
    IED awareness, and working with non-English speaking allies.
        Increased ammunition production more than 400 percent to 1.5
    billion small arms rounds per year to adequately train Soldiers and
    meet operational needs.
        Participated in the Joint Task Force that developed technical
    solutions and provided critical training for ground forces to detect
    and defeat Improvised Explosive Devices.
        Began development of a new Civilian Education System.

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

        They have created the conditions to permit free, democratic
    elections and to reconstruct vital infrastructure and institutions.
    Like the American Soldiers of generations past, today's warriors are
    distinguishing themselves with tremendous acts of courage and valor in
    places such as Baghdad, Samarra, An Najaf, Fallujah, Tal Afar, Mosul,
    and Khandahar.
        Our Soldiers understand the Army's values and personify our ethos,
    demonstrated most poignantly by their willingness to sacrifice all so
    that others may live in peace and freedom. Our Nation must remain
    equally committed to them by providing the capabilities and support
    they need to succeed in their mission.
    Train Soldiers
        Our continued commitment to innovative training and education led
    us to enhance the rigor and relevance of Initial Military Training for
    new enlisted Soldiers and officers. Today, every Soldier, regardless of
    specialty, becomes a warrior first. To be better prepared for combat,
    all recruits receive advanced training in marksmanship and livefire
    convoy procedures. Current training draws from recent combat experience
    and emphasizes 39 Warrior Tasks and Nine Battle Drills previously
    required only of infantry Soldiers.
        Our commitment to medical training and readiness has resulted in
    the highest survivability rate in military history. Every Soldier in
    combat carries a new blood-clotting bandage and a new onehanded
    tourniquet. Many are certified as combat lifesavers through extensive
    training. These capabilities combine with highly-trained combat medics,
    tremendous improvements in medical evacuation, and world-class field
    medicine to save lives every day.
        We are strong believers in life-long learning. We are using
    information technology to enhance Soldier and leader education in a
    time of war. Soldiers participate in more than 1,500 online courses to
    improve job proficiency and to work toward civilian degrees. Our Army
    Knowledge Online websites average more than one million visits per day,
    allowing Soldiers and leaders to collaborate and to share information
    regarding the lessons learned from combat and from training.
    Enhance the Combat Training Centers
        Just as we have transformed individual Soldier training, our unit
    training has evolved to better reflect the complexity of modern
    battlefields. We have invested in our Combat Training Centers to
    replicate the complex environments--terrain, social, language, and
    culture--in which our Soldiers are fighting. Using these world-class
    training facilities, every unit conducts a Mission Rehearsal Exercise
    before deploying to combat. These exercises feature nongovernmental
    organizations, contractors, media, coalition role players, and hundreds
    of civilians on the battlefield. Similarly, our Battle Command Training
    Program uses state-of-the-art simulation techniques to replicate the
    realities of combat. This program trains deploying division, corps, and
    task force staffs who will serve as joint or coalition task force
    operational headquarters and includes information operations and other
    joint missions they might support or execute in the future.
        We are continuously improving training by providing a mix of live,
    virtual, and constructive training events. This cost-effective
    approach, which uses state-of-the-art simulation tools, improves
    Soldier and unit capabilities and links home station training to the
    joint team. The rigor that we are adding to our Soldier, unit, and
    joint-level training, is reducing risk for our Soldiers by improving
    our predeployment preparation.

    Grow Adaptive Leaders
        The complexity of the 21st century security environment requires
    more of Army leaders at all levels. As we have seen in Iraq,
    Afghanistan, Korea, Europe, across the Americas, and in peace
    enforcement operations around the world, the actions of individual
    Soldiers and leaders can have strategic consequences. To be effective
    today and tomorrow, we are growing a new breed of leader--one more akin
    to a pentathlete who is able to rapidly transition between complex
    tasks with relative ease.
        The future environment will demand that Army leaders at all levels
    be multi-skilled, innovative, agile, and versatile. Therefore, we are
    continuing to evolve our training and education systems to grow
    adaptive civilian and military leaders who are comfortable in leading
    during times of change and uncertainty.

        Recognizing that intellectual change precedes physical change, we
    chartered a task force to Review Education, Training and Assignments
    for Leaders. This task force, now six months under way, is drawing upon
    the ideas and experiences of the finest leaders inside and outside of
    the Army. The task force will recommend changes to assess and improve
    all Army education, training, and assignment processes to produce
    pentathletes.
        Unlike World War I and World War II, when the Army closed the Army
    War College, we have improved our leader education programs while at
    war. At the Army War College and in all of our schools, training
    centers, and doctrine development positions, we are placing recently
    returned veterans into key positions to enhance the relevance of the
    education and training we provide. We are also moving to fully
    implement a new Basic Officer Leader Course (BOLC). Consistent with our
    warrior first approach, this tough, standardized, small-unit leadership
    experience is ensuring that all junior officers, in all of our
    branches, master the skills they will need to lead in combat. We are
    executing similar improvements in all of our officer and
    noncommissioned officer education programs. Our civilian development
    program is enhanced through our Civilian Education System.

    Equip Our Soldiers
        Protecting our Soldiers continues to be our highest priority. With
    great support from the Congress, the Department of Defense, and the
    President, we have delivered more than 37,000 up-armored vehicles to
    meet Combatant Commander requirements. Additionally, we continue to
    contribute to the Joint Organization established to defeat our
    adversaries' use of improvised explosive devices. (Figure 10)

        We are also exploiting the value of the Rapid Equipping Force (REF)
    to better protect our Soldiers. REF works in partnership with industry,
    academic, and military leaders to support Soldier needs as quickly as
    possible. It provides field commanders with readily employable
    solutions to enhance lethality and survivability. Often using off-the-
    shelf and developmental technologies, REF is enabling us to remain
    ahead of an adaptive enemy and to save Soldiers' lives. Examples of
    last year's successes include the deployment of digital translators,
    vehicle scanning systems, and robots able to inspect possible
    improvised explosive devices.
        A similar program to increase Soldier capabilities is the Rapid
    Fielding Initiative (RFI). RFI has equipped nearly 500,000 Soldiers
    since its inception. RFI accelerates the fielding of commercial, off-
    the-shelf systems to produce state-of-the-art capabilities. RFI
    provides a specific set of equipment to every Soldier, and a set of
    additional items to Soldiers assigned to BCTs. The Training and
    Doctrine Command is using combat lessons learned to maintain the
    currency of the items we supply. We plan to complete fielding these
    items to all operational forces by September 2007.

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

                                Compelling Needs
        Support and funding to implement the findings of the Review of
    Education, Training, and Assignments for Leaders, examining all
    pertinent policies and programs with a view to creating military and
    civilian ``pentathletes'' able to lead effectively amidst the
    complexity and uncertainty of the 21st century security environment.
        Continue to support Army initiatives to sustain Soldier, leader,
    and unit training development and provide stability for Soldiers and
    their families.
        Continue to support the Rapid Fielding Initiative to complete the
    goal of equipping all operational forces (active and reserve component)
    by September 2007.
        Maintain funding support for equipment modernization programs that
    speed state-of-the-art force protection systems and weapons to our
    Soldiers in the field.

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

        Supporting Initiatives (Addendum C): The areas of focus described
    above are reinforced by three supporting initiatives: Support Joint
    Improvised Explosive Device Defeat Organization (JIEDDO); Expand
    Cultural Awareness and Language Capabilities; and Develop Joint
    Training Capabilities.

     SUSTAIN AN ALL-VOLUNTEER FORCE COMPOSED OF HIGHLY COMPETENT SOLDIERS
               THAT ARE PROVIDED AN EQUALLY HIGH QUALITY OF LIFE

        We owe our success to the versatile young Americans who answer the
    Call to Duty. This is the first time in our modern history that the
    Nation has tested the concept of an All-Volunteer force during a
    prolonged war. We are executing a full range of initiatives and
    incentives to recruit and retain high caliber citizens to man our
    active, reserve and civilian ranks. Caring for Soldiers and Army
    families through tangible quality of life programs provides a sense of
    belonging and sustains motivation for continued service. Improving
    Soldier and family housing reflects our commitment to providing a
    quality of life that matches the quality of our Soldiers' service to
    the Nation.

    Recruit and Retain the All-Volunteer Force
        We have maintained our All-Volunteer Army by recruiting dedicated,
    high-quality Soldiers and then retaining them well beyond their initial
    obligations. While the recruiting environment for America's young men
    and women is competitive, we will not compromise standards as we
    temporarily increase the size of the Army by 30,000 Soldiers. Our
    recruiting goal this year exceeds 186,000 Soldiers for all three
    components. This annual goal compares to about 140,000 recruits for all
    of the other Services combined.

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

                                Accomplishments
    Since 9-11
        Exceeded combined active and reserve retention goal each year.
        Built over 24,000 barracks spaces and modernized over 9,000
    existing spaces through the Barracks Modernization Program.
        Privatized 59,500 sets of quarters at 26 different installations
    through the Residential Communities Initiative to improve family
    housing.
        Continued to state-of-the-art health care as they return from
    theater.
        Established a Well-Being framework to integrate, resource, and
    measure quality-of-life programs for Soldiers and families.
    2005
        Achieved 106 percent of the combined active and reserve retention
    goal.
        Increased recruiting and retention incentives programs.
        Assisted Family Support and Readiness Groups from company to
    division-level. Developed Virtual Family Readiness Groups.
        Implemented the U.S. Army Wounded Warrior Program (formerly
    Disabled Soldier Support System) to synchronize Army programs that care
    for severely disabled Soldiers.
        Established a community-based Child and Youth Services Program for
    child care, youth development, and school transition to support 160,000
    Army Reserve youths.
        Implemented a $250 million Barracks Improvement Program to upgrade
    substandard Soldier barracks.

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

        Last year was a challenging recruiting year. However, we finished
    strongly, exceeding the monthly goals for the last four months by more
    than 400 Soldiers per month in the active component. This trend
    continued into the new recruiting year in all three components. To
    achieve success this year, we have expanded advertising, increased the
    number of recruiters, and augmented numerous incentive programs. We
    recently initiated a new program, Unity of Effort, to recruit former
    members of the Armed Forces. This program features enlistment bonuses
    and, in many cases, reinstatement of previous rank. We are optimistic
    that our efforts, reinforced by Congress and the Nation's support, will
    result in meeting our recruiting goals for this year.
        The Army is retaining Soldiers at tremendously high levels. Since
    2002, while fighting the war on terrorism, we have surpassed our
    combined Army retention goals each year. In 2005, we exceeded our goal
    by more than six percent. We reenlist two out of every three eligible
    Soldiers who reach the end of their term of service during a given
    year. We are particularly proud that one out of every two first-term
    Soldiers decide to reenlist. In a time of war and a high operational
    pace, we believe this achievement is indicative of the high quality of
    leadership that our Soldiers experience in their units. Our Soldiers
    value the tradition of service to the Nation and appreciate the
    opportunity to contribute in a meaningful way.
        The continued support of spouses, parents, veterans, and the
    employers of our reserve component Soldiers plays a huge role in
    recruiting and retaining the All-Volunteer force. This support has a
    direct effect on the pride and morale of each of our Soldiers. In May
    2005, to recognize the role and contributions of key influencers in our
    society, we established the Freedom Team Salute Program. To date, we
    have received requests to commend almost one million spouses, parents,
    veterans, and civilian employers.

    Care for Soldiers and Army Families
        We continue to work to assure Soldiers and their families that they
    will be taken care of and all their needs will be met. Caring for
    families plays a vital role in sustaining a national commitment to
    serve and requires both the attention of leaders and the application of
    resources.
        Army Well-Being programs provide leaders a variety of ways to care
    for Soldiers and their families. We have integrated numerous quality-
    of-life functions into a comprehensive well-being framework that
    enables us to focus resources, measure success, and address the needs
    of an Army at war. Our objective is to sustain the fighting strength of
    our Army while providing for the individual needs of Soldiers and
    families.
        To assist Family Support and Readiness Groups at all levels, we
    have developed Virtual Family Readiness Groups. We have expanded child
    care programs on installations and in communities that have deployed
    Army National Guard and Army Reserve units. The Army Reserve
    established a Child and Youth Services Program to facilitate access to
    child care, youth development, and student support. The new Deployment
    Cycle Support Program helps families to understand and cope with the
    stress of deployments. Our Army Spouse Employment Partnership program
    has placed over 11,000 spouses in positions with major corporations and
    State and Federal agencies. We are currently working on a school
    transition program to help families and communities affected by BRAC
    decisions. These are just a few of the many ways that we care for
    Soldiers and families.
        Health care is another critical aspect of caring for our Soldiers
    and their families. The Army provides world-class health care for 3.5
    million beneficiaries, on the battlefield and at hospitals and clinics
    worldwide. To honor our obligation to care for Soldiers and families,
    we continually look for ways to improve health and well-being. The U.S.
    Army Wounded Warrior Program, formerly known as the Disabled Soldier
    Support System, provides sustained care for our severely wounded
    Soldiers. This program provides continuous and comprehensive transition
    and support services for our Soldiers until they are returned to duty
    or for up to five years after medical retirement. This program
    exemplifies our commitment to honor the Soldier's Creed by ``never
    leaving a fallen comrade.''

    Improve Soldier and Family Housing
        We are committed to providing quality housing for our Soldiers.
    Housing for single and married Soldiers has been improved significantly
    as a result of the Barracks Modernization Program and Residential
    Communities Initiative (RCI).
        To improve substandard living conditions across our installations,
    we committed $250 million to an immediate Barracks Improvement Program.
    As part of a longer-term Barracks Modernization Program, we will have
    funded 85 percent of our barracks modernization by the end of this
    year. We have programmed funding through 2009 to modernize our
    remaining barracks spaces. In addition, 45 percent of barracks for our
    recruits at our training centers will be modernized by 2011. Using
    vital supplemental funding, we also initiated a program to modernize
    the barracks used by Army Reserve and Army National Guard Soldiers
    during their annual training.
        Through RCI, we are providing better family housing for our
    Soldiers by privatizing 82,000 homes at 42 installations. This program
    leverages private investment capital to improve housing at a much
    faster rate than traditional methods of financing and contracting for
    military construction. When completed in 2010, over 90 percent of Army
    housing in the United States will have been privatized. We have also
    constructed more than 3,600 family homes and renovated 6,300 existing
    homes using traditional military construction.
        Improved housing, in barracks and quarters, provides Soldiers and
    families with a quality of life that recognizes their service to the
    Nation. These programs have a positive, enduring effect on Soldiers'
    morale, and contribute immeasurably to our ability to sustain our
    volunteer force.
        Supporting Initiatives (Addendum C): The above areas of focus are
    reinforced by the following three supporting initiatives: Continue Army
    One Source; Establish Multi-Component Family Network; and Execute Child
    and Youth Services School Transition Support.

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

                                Compelling Needs
        Support and funding to achieve critical recruiting and retention
    goals. Meeting these goals for all components will ensure the quality
    of our All-Volunteer force.
      --Achieve an active component recruiting goal of 80,000 and retention
            goal of 64,200; an Army National Guard recruiting goal of
            70,000 and retention goal of 34,900; and an Army Reserve
            recruiting goal of 36,500 and retention goal of 16,900.
      --Continue support of Army initiatives to provide predictability and
            stability for Soldiers and their families in both the active
            and reserve components.
      --Full funding and support for quality-of-life programs to sustain
            the All-Volunteer force, now being tested for the first time in
            a prolonged war.
      --Support housing initiatives to provide quality housing for Soldiers
            and families at installations impacted by Base Realignment and
            Closure and the Integrated Global Presence and Basing Strategy.

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

     PROVIDE INFRASTRUCTURE AND SUPPORT TO ENABLE THE FORCE TO FULFILL ITS
                          STRATEGIC ROLES AND MISSIONS

        The infrastructure that the Army maintains plays a vital role in
    supporting the Joint Force. We are adjusting our global footprint to
    improve readiness at each of our installations. To free resources for
    more compelling operational needs, we are reengineering every one of
    our business processes. At the same time, we are completely
    transforming our infrastructure, consisting of installations, depots,
    and arsenals--and the information network that connects them--to
    reflect the deployment requirements and global commitments of the 21st
    century security environment, while becoming dramatically more
    efficient.

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                                Accomplishments
    Since 9-11
        Created the Installation Management Agency to unify the business
    structure of Army installations and to create uniformly high standards
    of quality for Soldiers and their families.
        Developed a strategic stationing plan that synchronizes decisions
    of Base Realignment and Closure, Integrated Global Presence and Basing
    Strategy, Army Modular Force initiative, and the demands and realities
    of the Global War on Terrorism.
        Optimized Power Projection Platforms to mobilize and deploy over
    500,000 Soldiers to support the Global War on Terrorism.
    2005 \1\
        Awarded the General Fund Enterprise Business System contract to
    enhance the management of financial resources.
        Planned and implemented an Army-wide Business Transformation
    initiative based on the Lean Six Sigma methodology to reduce the cost
    of the business side of the Army.
        Identified and began initial implementation of substantial
    structural changes to the institutional base of the Army.
        Implemented a strategic management system to measure Army
    performance and ensure optimum allocation of resources.

        \1\ Several continue into 2006.

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

    Adjust Global Footprint to Create ``Flagships of Readiness''
        The Army is moving units and transforming posts through an effort
    that we call ``Stationing.'' In 2007, we will reposition major elements
    of our operational force (Figure 11). At the same time, we will
    establish the environmental foundation and initiate the renovation and
    construction needed to reposition schoolhouses, headquarters, and other
    support activities. Our stationing effort will posture our forces,
    logistics activities, and power projection infrastructure to respond to
    the demands of a complex, uncertain future as efficiently and
    effectively as possible.
        We have produced a plan that integrates BRAC decisions, the IGPBS
    plan, and the Modular Force initiative. This plan allows us to divest
    Cold War era infrastructure and create the infrastructure required for
    the foreseeable future. We are consolidating activities by leveraging
    information technology and advances in supply chain management. We are
    also completely reengineering our business processes to eliminate
    waste.
        This consolidation will yield tremendous savings over time. Our
    plan reduces overhead costs by streamlining the installation staffs,
    contract support, and infrastructure that will support units and
    activities at their new locations. We are exploiting this opportunity
    to become more efficient and more effective as we implement our
    stationing plan.
        Stationing involves more than merely opening, closing, or
    realigning functions. It requires balancing military, economic, and
    strategic necessities to determine the scope and timing of closures,
    consolidations, construction, renovation, unit activations, and unit
    deactivations. We have scheduled all of these activities to occur in
    ways that will enhance the flow of forces to and from current global
    commitments.

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

                         Major Stationing Moves in 2007
        1st Brigade, 1st Armored Division moves from Germany to Fort Bliss.
        212th Fires Brigade moves from Fort Sill to Fort Bliss.
        17th Fires Brigade moves from Fort Sill to Fort Lewis.
        Stryker Brigade Combat Team 7 activates at Fort Lewis.
        Battlefield Surveillance Brigades activate at Fort Hood and at Fort
    Bragg.
        Support Brigades (Maneuver Enhancement) activate at Fort Irwin and
    Fort Polk.

                                   Figure 11

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

        Our stationing plan and requirements for funding, construction,
    renovation, and environmental remediation are guided by a set of key
    goals: Use existing infrastructure to reduce cost and excess capacity;
    Minimize use of temporary facilities; and Place priority on barracks,
    housing, motor pools, ranges, and training facilities to ensure that
    our Soldiers are properly prepared for the challenges they will face.
        While positioning the Army to better respond to the 21st century
    security environment, we are simultaneously working to ensure that our
    Soldiers and families enjoy the benefits of installations that are
    truly ``Flagships of Readiness.''
        The quality of our installations remains critical to accomplishing
    our mission. Our depots, training bases, and home stations enable the
    Army to: Build, train, deploy, and sustain our operational forces;
    Reset and regenerate combat power of returning forces for future
    missions; Provide homes, health care, essential support, and much of
    the quality of life that our Soldiers and families enjoy; and Provide
    the workplace for our civilian workforce of more than 230,000 people
    that is performing an increasingly important role in accomplishing the
    Army's wartime mission.
        Since 2001, the Army has made tremendous progress in enhancing
    training and generating combat power in time of war. Despite
    improvements, the Army still requires significant resources to overcome
    years of insufficient investments in its installations and
    infrastructure. We are committed to reducing our facilities
    recapitalization rate to meet the Department of Defense 67-year goal.
    If resourced, our stationing plan will produce installations better
    able to train and prepare our forces for future missions. Our plan will
    also provide a quality of life that our Soldiers and families deserve,
    and help to sustain the All-Volunteer force.
    Implement Business Transformation Initiatives
        We are fundamentally changing how the Army conducts business. Our
    goal is to streamline or eliminate redundant operations to free
    financial and human resources to redirect to our core warfighting
    missions. We are: Improving our processes to repair equipment and reset
    our forces; Reengineering our manufacturing and administrative
    processes; Outsourcing, where it makes sense; Seeking to make best use
    of economies of scale in all of our contracted services; Applying
    information technology to improve support and eliminate functions where
    possible; and Achieving cost savings in software and hardware while
    pursuing enterprise-level solutions in our networking practices.

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

                                Compelling Needs
        Support to execute a carefully synchronized plan to achieve a new
    global basing posture while fulfilling the requirements of the National
    Military Strategy. The requirements of this plan (for renovation,
    construction, environmental remediation and other costs) will exceed
    the resources currently apportioned for base realignment and projected
    to be recouped through consolidation and closure.
      --Support Army efforts to synchronize Integrated Global Presence and
            Basing Strategy, Base Realignment and Closure, and stationing
            of modular units.
      --Support funding to achieve a 67-year facilities recapitalization
            rate.
      --Maintain support for 2007 military construction requirements in
            accordance with the Army Modular Force initiative, Base
            Realignment and Closure, Integrated Global Presence and Basing
            Strategy, and other Department of Defense guidance.
        Support for funding and authorities for Army Business
    Transformation initiatives to achieve targeted efficiencies through
    management reform, Institutional Army adaptation, and reengineered
    business practices. These initiatives will free human and financial
    resources for more compelling operational needs.

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

        Across the Army, we are reengineering all of our business processes
    to achieve greater efficiency, improve quality, decrease cycle time,
    and reduce cost. The method we are using, Lean Six Sigma, has already
    produced a marked improvement in manufacturing and repair processes at
    all of our depots within the Army Materiel Command. Once fully
    implemented across the Army, with full adherence to labor laws and
    other administrative requirements, we will replicate these successes
    across the Army in all our activities.
    Develop the LandWarNet Institutional Infrastructure
        We are investing in information technology at our installations and
    reserve component facilities to lay the foundation for fielding
    LandWarNet. The Army's portion of the Global Information Grid,
    LandWarNet compromises both infrastructure and services. It moves
    information through a seamless network to better support our combat
    forces and the institutional structures that generate them. Our
    information technology infrastructure will enable operational forces to
    ``reach back'' for data, such as repair part visibility, intelligence
    and other support, and innovations such as telemedicine. This same
    technology is improving our ability to manage business.
        Supporting Initiatives (Addendum C): The areas of focus discussed
    above are reinforced by three supporting initiatives: Execute Base
    Realignment and Closure; Improve Global Force Posture; and Improve
    Medical Infrastructure.
         balancing risk: the tension between current and future demands
        The Army has always experienced a tension between current and
    future demands, perhaps more now than ever before. Consistent
    investment in current and future readiness is needed to: Ensure that
    the size and mix of our components and capabilities are in balance;
    Enhance our global posture, agility, and readiness to conduct
    expeditionary operations on short-notice; and Organize, man, train, and
    equip our Soldiers to win today and tomorrow.
    Meeting Today's Demands While Preparing for Tomorrow
        The Army has adapted to fight the war on terrorism following a
    decade of insufficient modernization investments. At the start of
    combat operations, many of our units were under-equipped and not
    immediately ready for deployment, especially in our reserve components.
        To meet Combatant Commander requirements, we had to aggregate
    equipment from across the force to fully equip those Soldiers deploying
    into harm's way. As a result, we significantly reduced the readiness of
    many units to prepare others for combat.
        This readiness decision was especially evident in the Army National
    Guard during our national response to hurricanes Katrina and Rita. With
    help from the President, the Congress, and the Department of Defense
    via supplemental appropriations, we have been provided the means to
    address many of our equipment shortfalls and readiness requirements,
    yet we still have much to accomplish.

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

                     Army Actions to Mitigate Risk in 2005
    Operational Risk
        Funded our reset program to repair over 7,000 tracked and wheeled
    vehicles and over 550 helicopters;
        Completed the modular conversion of 11 Brigade Combat Teams,
    including one Stryker brigade that will deploy this year; and
        Implemented the ARFORGEN model to allow the Army to sustain a
    commitment of up to 18-19 Brigade Combat Teams with the ability to
    surge an additional 15-19 Brigade Combat Teams on short notice.
    Future Challenges Risk
        All tactical vehicles in Iraq and Afghanistan that operate away
    from forward operating bases have up-armored or add-on armor
    protection. Nearly 2,400 tactical wheeled vehicles do not have missions
    off of forward operating bases and are not armored; and
        Restructured the Future Combat Systems program to ``spin out''
    advanced technologies to Soldiers as they become available, rather than
    waiting for total system fielding.
    Force Management Risk
        Continued modular force conversions, enlarging the pool of
    available units to reduce the stress on the force;
        Continued military-to-civilian conversion to free up Soldier
    positions from the Institutional Army to the Operational Army;
        As a component of the ARFORGEN, initiated lifecycle management of
    11 Brigade Combat Teams to keep Soldiers in units longer, improve unit
    readiness and cohesion, and provide greater predictability for Soldiers
    and their families; and
        Created a stationing plan to better posture the force for
    deployments and other global commitments.
    Institutional Risk
        Implemented business transformation initiatives to improve how the
    Army does business and consequently reduce cost;
        Awarded the General Fund Enterprise Business System contract to
    allow better financial management;
        Created a stationing plan to improve strategic responsiveness and
    invest in our most critical installations; and
        Invested in LandWarNet to improve each installation's ability to
    manage information and better support operational forces.

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

        To manage risk within acceptable levels during wartime, the Army
    requires:
      --Full funding of the Army request in the 2007 President's Budget and
            special consideration, in light of wartime demands, for
            avoiding any reductions to the Army's budget and program. In
            addition, supplemental funding is required for combat and
            contingency operations and to continue to reset, repair,
            recapitalize, and replace battle losses of equipment for
            several years beyond major deployments. Supplemental funding is
            needed to overcome the stress on equipment resulting from
            sustained combat operations in harsh environments. These
            resources will ensure that the Army is fully manned, trained,
            and equipped to achieve victory in the war on terrorism. These
            resources will also enable the Army to maintain the momentum of
            key programs, while accelerating transformation.
      --Funding to increase Army capabilities and overall capacity as well
            as support for the legislative authorities and programs needed
            to assure access to our reserve components--who, by necessity,
            have become an operational vice a strategic reserve. We must
            achieve a proper balance of capabilities and skills among our
            active and reserve forces and continue to build high-quality
            units to increase capability and ease the strain on our
            deployed Soldiers.
      --Support and funding to achieve critical recruiting and retention
            goals needed to grow our operational forces. Meeting these
            goals for our active and reserve Soldiers sustains the quality
            and effectiveness of our All-Volunteer force.
      --Funding for the FCS program--to enhance current force capabilities
            today with ``spin outs'' of available technology--and
            accelerate more than 300 other modernization programs. Our most
            critical investment program, FCS will be the Army's first major
            modernization in over 30 years and will better prepare and
            protect Soldiers for current and future threats. These
            capabilities will directly benefit our active and reserve
            components, all U.S. ground forces, and our allies that support
            ground campaigns.
      --Full funding to maintain momentum in building a rotational pool of
            70 BCTs and more than 200 modular Support Brigades and
            headquarters. Already well under way, our transformation to
            become a fully modular force is preparing our Soldiers to
            conduct sustained operations of the type we see today. In
            addition, our transformation is increasing the depth and
            breadth of our capabilities to prepare our Soldiers for
            tomorrow's challenges, particularly as we evolve to maintain
            overseas presence with rotational units.
      --Full funding for Army installations and support to execute a
            carefully synchronized plan to achieve a new global basing
            posture, while fulfilling the requirements of the National
            Military Strategy. This plan will make full use of the
            resources currently apportioned and projected to be recouped
            through consolidation and closings. Unanticipated costs
            associated with environmental remediation, renovation,
            construction, and other areas, may require additional resources
            in future years (a situation that will require continuous
            reevaluation). Full funding and continued support for Army
            installations and quality-of-life programs is required to
            sustain the All-Volunteer force, now being tested for the first
            time in a prolonged war.
      --Support for funding and authorities for Army Business
            Transformation initiatives to achieve targeted efficiencies
            through management reform, Institutional Army adaptation and
            reengineered business practices. These initiatives will free
            human and financial resources for more compelling operational
            needs and accelerate other aspects of our transformation.
        The Army is committed to producing units that are ready for the
    challenges they will face tomorrow and to overcoming years of
    underfunding prior to the events of 9-11. We have received
    unprecedented support to ``buy back'' much needed capability. We
    cannot, however, fool ourselves by maintaining large numbers of forces
    on paper that, in reality, lack the people, equipment, training, and
    support needed to accomplish the missions they will be assigned. We are
    determined to support our Soldiers and their families with an improved
    quality of life that matches the quality of the service they perform
    for America.
        Building the capabilities required to hedge against the uncertainty
    of tomorrow will require prudent investments today. These investments
    must be sustained at predictable, consistent levels over time--a
    departure from historic patterns of spending which have increased our
    Nation's vulnerability at the outset of each of the major conflicts of
    the 20th century. As George Washington stated, ``To be prepared for war
    is one of the most effective means of preserving peace.'' Consistency
    in funding, even as the war on terrorism ebbs and flows, is absolutely
    essential to the Army's ability to preserve peace and freedom for the
    Nation.
                  preserving peace and freedom for the nation
        Guided by the Army Vision, we are accomplishing our mission today
    while building the future force--of Soldiers, leaders, modular forces
    and institutional support structures--to do so tomorrow.
        We remain resolute in our determination to preserve peace and
    freedom for America. To identify, learn, and adapt to new challenges,
    we continue to focus on tough questions that will remain at the center
    of the defense debate:
      --What are the strategic requirements of the 21st century? What
            decisions must we make now to fulfill our Title 10 obligation
            to ensure the Army, as part of the Nation's Armed Forces, is
            best prepared to defend U.S. interests in the face of
            traditional, irregular, catastrophic and disruptive challenges?
      --How can we best prepare our leaders to become multi-skilled
            ``pentathletes'' able to operate confidently and successfully
            amidst the challenges and uncertainties we will face?
      --Are joint land forces (Army, Marines, and Special Operations
            Forces) properly sized, structured, trained, and oriented to
            provide the capabilities needed to perform the missions that
            the Nation will require?
      --What additional actions are required to ensure that our forces are
            organized, trained, manned, and equipped to be relevant to, and
            ready for, the challenges they will face?
      --How do we ensure that our physical infrastructure (installations,
            depots, arsenals, and the network that connects them) best
            support our mission? How do we balance our resources to:
            Provide quality of life to sustain our volunteer force;
            maintain deployment facilities (air, ground, sea, rail, cargo,
            and other facilities) to support Combatant Commanders'
            timelines; and establish a training base to prepare our
            Soldiers and units for the challenges they will face?
      --How can we best leverage the human and financial resources we have
            been provided to ensure that we remain the world's preeminent
            landpower--ready to meet and relevant to, in capabilities and
            mindset, the challenges we will face?
      --What will be the impact of protracted conflict on the All-Volunteer
            force? What combination of quality of life, compensation,
            incentives, service options, and other tools will be required
            to recruit, retain, and sustain the concept of the All-
            Volunteer force for the future?
        With the support of the President, the Congress, and the Department
    of Defense, we are developing the capabilities and the capacity to
    sustain our global commitments and to prevail in the war on terrorism.
    We need your continued support to meet the needs of the Combatant
    Commanders and our Soldiers, who answer the Call to Duty by
    volunteering to serve the Nation in this time of war.
                                    Acronyms
        AC--Active Component
        ARFORGEN--Army Force Generation
        ARNG--Army National Guard
        ASEP--Army Spouse Employment Partnership
        AW2--U.S. Army Wounded Warrior Program
        BCT--Brigade Combat Team
        BOLC--Basic Officer Leader Course
        BRAC--Base Realignment and Closure
        CBRNE--Chemical, Biological, Radiological, Nuclear and High Yield
    Explosives
        CTC--Combat Training Center
        DOD--Department of Defense
        FCS--Future Combat Systems
        FTS--Full Time Support
        FY--Fiscal Year
        GBIAD--Ground Based Integrated Air Defense
        GDP--Gross Domestic Product
        HMMWV--High Mobility Multipurpose Wheeled Vehicle
        IED--Improvised Explosive Device
        IGPBS--Integrated Global Presence and Basing Strategy
        JIEDDO--Joint Improvised Explosive Device Defeat Organization
        JTF--Joint Task Force
        MFO--Multinational Force and Observers
        NDAA--National Defense Authorization Act
        OEF--Operation Enduring Freedom
        OIF--Operation Iraqi Freedom
        O&M--Operations and Maintenance
        QDR--Quadrennial Defense Review
        RC--Reserve Component
        RCI--Residential Communities Initiative
        RDA--Research, Development, and Acquisition
        REF--Rapid Equipping Force
        RFI--Rapid Fielding Initiative
        SAPI--Small Arms Protective Inserts
        SBCT--Stryker Brigade Combat Team
        TOA--Total Obligation Authority
        UAS--Unmanned Aerial Systems
        USAR--United States Army Reserve
        WMD--Weapons of Mass Destruction
                       Addendum I (Helpful Army Websites)
        The following websites provide greater information on various
    topics:
        The Army Website: This site is the most visited military website in
    the world, averaging about 7 million visitors per month or 250 hits per
    second. It provides news, features, imagery, and references.
            http://www.army.mil
        The Army National Guard: Provides information about the Army
    National Guard.
            http://www.arng.army.mil
        The United States Army Reserve: Provides information about the Army
    Reserve.
            http://www.armyreserve.army.mil/usar/home
        Army Families Online: This site provides information and links to
    other support programs that support our Soldiers and their families.
            http://www.armyfamiliesonline.org
        Wounded Warrior Program: This site provides information on the
    Army's Wounded Warrior Program which provides support for severely
    wounded Soldiers and their families. It can be found through the Army
    Families Online website at
            http://www.armyfamiliesonline.org
        Deputy Chief of Staff for Personnel, G-1: For information on
    personnel issues.
            http://www.armyg1.army.mil
        Deputy Chief of Staff for Logistics, G-4: For information on Army
    logistics.
            http://www.hqda.army.mil/logweb
        Chief Information Officer, G-6: For information on Army Information
    Management.
            http://www.army.mil/ciog6
        Deputy Chief of Staff for Programs, G-8: For information on
    materiel integration.
            http://www.g8.army.mil
        Future Combat Systems: For information on the Future Combat Systems
    program.
            http://www.army.mil/fcs
        Army Logistics Transformation Agency: For information on Army
    logistics transformation.
            http://www.lta.army.mil
        Army Medicine: For information on Army medical programs.
            http://www.armymedicine.army.mil
        Army Posture Statement: For the web-based version of this year's
    Army Posture Statement and previous years versions.
            http://www.army.mil/aps
        Army Modernization Plan: Provides a detailed overview of the Army's
    organizational and materiel modernization efforts.
            http://www.army.mil/features/MODPlan/2005
           Addendum J: Additional Information on Army Related Topics
        We have provided additional information on the following topics in
    the CD-ROM and web-based versions of the 2006 Army Posture Statement.
    They are available as in-text links and may be accessed through this
    addendum either on the CD-ROM or the Web.

        Actionable Intelligence
        Active Component/Reserve Component Rebalance
        Adapting the Major Army Command Structure
        Add-on Armor for Tactical Wheeled Vehicles
        Army Barracks Modernization Program
        Army Capabilities to Dominate in Complex Environments
        Army Career Intern Program
        Army Community Service
        Army Energy Strategy for Installations
        Army Environmental Programs
        Army One Source
        Army Prepositioned Stocks
        Army Reserve
      --All-Volunteer Force and the Army Reserve
      --Army Reserve Child and Youth Services Program
      --Army Reserve Education Services
      --Army Reserve Employer Relations
      --Army Reserve Facility Management Transformation
      --Full-Time Support Revalidation
      --Regional Personnel Service Centers
      --Reserve Components Separate Competitive Categories for Officer
            Promotions
      --Selected Reserve Incentive Program
      --Sexual Assault Prevention and Response Program
      --Trainees, Transients, Holdees and Students Account
      --Voluntary Selective Continuation of Alerted and Mobilized Selected
            Reserve Lieutenant Colonels and Colonels
        Army Retention Program
        Army Spouse Employment Partnership
        Army Well-Being
        Army's Capstone Concept for the Future Force
        Base Realignment and Closure Decisions for the Army in 2005
        Basic Officer Leader Course
        Battle Command
        Business Transformation
        Campaign Quality Force
        Child and Youth Services School Transition Support
        Civilian Aides to the Secretary of the Army Program
        Combating Weapons of Mass Destruction
        Combined Force Interoperability through Security Cooperation
        Concept Development and Experimentation
        Cultural Awareness and Language Capabilities
        Defense Integrated Military Human Resources System
        Defense Support to Civil Authorities
      --Avian Flu Pandemic Preparation
      --Establishment of Army Forces North
      --Hurricane Katrina Response
      --Special Events for 2005
        Deployment Cycle Support Program
        Expeditionary Capabilities
        Freedom Team Salute
        Future Combat Systems
        Future Combat Systems Manned Ground Vehicle Development
        Global Force Posture
        Information Assurance and Network Security
        Installation Design Standards
        Integrated Global Presence and Basing Strategy
        Interceptor Body Armor
        Joint Improvised Explosive Device Defeat Organization
        Joint Interdependency
        Joint National Training Capabilities
        Joint Tactical Radio System
        LandWarNet and the Global Information Grid
        Life Cycle Management Initiative
        Live, Virtual, Constructive Training Environment Integration
        Major Acquisition Programs
      --Future Combat Systems
      --Black Hawk Utility Helicopter
      --Medium Extended Air Defense System
      --Chinook Cargo Helicopter
      --Longbow Apache Attack Helicopter
        Medical and Dental Readiness
        Medical Infrastructure Requirements for Army Transformation
        Military-to-Civilian Conversions
        Modular Conversion
        Modular Force
        Multi-Component Family Network
        Naming Convention Decisions
        National Security Personnel System
        Rapid Equipping Force
        Rapid Fielding Initiative
        Recruiting an All-Volunteer Force
        Red Team Education and Training
        Reset
        Residential Communities Initiative
        Restructuring Army Aviation
        Review of Education, Training, and Assignments for Leaders
        Science and Technology
        Soldier's Creed
        Spiraling Technology into the Current Force
        Stability Operations Capabilities
        Stabilizing Soldiers and Units to Enhance Cohesion and
    Predictability
        Sustainable Range Program
        Sustaining the Force
        U.S. Army Combat Training Center Program
        U.S. Army Wounded Warrior Program
        Unity of Effort
        Up-Armored Vehicle Program
        Utilities Privatization
        Virtual Family Readiness Group
        Warfighter Information Network--Tactical
        Warrior Tasks and Battle Drills

        Senator Stevens. General Schoomaker, we'd be happy to have
    your statement.

                    STATEMENT OF GENERAL PETER J. SCHOOMAKER

        General Schoomaker. Chairman Stevens and Senator Inouye and
    other distinguished members of the subcommittee, it's a
    pleasure to be with you today.
        I'm going to limit my opening statements to some
    introductions, if I might. But I would like to start out by
    telling you, again, how proud I am to be able to serve with
    these great soldiers and their family members that we have
    today.
        And, in direct answer to Senator Dorgan, which I'd be glad
    to expound upon later, if you want, we now, after 4 years at
    war, which is, by the way, longer than World War II--we now
    have deployed approximately 52 percent of our regular force.
    And we are doing a study to look at the Reserve forces, as
    well, to figure it out.

                                   RETENTION

        Of those soldiers that we have deployed overseas on either
    Operation Iraqi Freedom (OIF) or Operation Enduring Freedom
    (OEF), 75 percent--in excess of 75 percent of those soldiers
    that have deployed have re-enlisted and are remaining in the
    current Army. As you look at the deployments increasing--yeah,
    this sounds counterintuitive, but as they increase, so does the
    percentage of those that remain, all the way up to--I have
    charts here that--from the study that indicates that we have
    soldiers--for instance, soldiers on their fifth deployment, 93
    percent of them have remained in the Army. So, there is a
    dynamic taking place here that's extraordinary, in my view,
    that speaks very well to the dedication of these soldiers and
    their professionalism.
        I also believe it talks to the effect of our
    transformational efforts to balance the Army and to achieve
    some predictability and increased readiness in the force as we
    go forward. So, I'd be glad to talk more to that later.
        I would like to introduce those that are present with us
    today that I think we should recognize for your situational
    awareness. First of all, we have Lieutenant General Clyde
    Vaughn, all the way to the right, who is the Director of the
    Army National Guard, and Lieutenant General Steve Blum, who is
    the Chief of the National Guard Bureau. Next to Steve is
    Lieutenant General Ron Helmly, who is the Chief of the Army
    Reserve. You all recognize yourself there, so that--then
    directly behind me--I know they're posted all over all the post
    offices around the country, so you probably recognize them--
    somebody not in the post office, but they should be, is
    Lieutenant General Jerry Sinn, who is directly behind me. He is
    the military deputy for the Army Budget, who is very, very
    important to us.
        I would--it's with a great deal of pleasure that I now
    introduce three soldiers, one Active, one Guard, one Reserve.
    And these soldiers are typical and representative of those
    soldiers that we've got serving in our great Army. And I'd like
    to start with Sergeant Billie Grimes, who is sitting here. Some
    of you may have seen her on the cover of Time magazine. She's
    the center soldier. She is a combat medic. And she served,
    previously, 4 years in the Army Reserve. She's now on active
    duty, serving at the Army--U.S. Army Medical Research Institute
    of Infectious Diseases (USAMRIID) up at Fort Detrick, up where
    we have USAMRIID.
        Now, Sergeant Grimes was serving on OIF with the 1st Armor
    Division, and is the young combat medic that saved the life of
    the Time reporter who lost a portion of his arm and his hand to
    a grenade attack, where she responded very quickly. She was
    part of the 501st Forward Support Battalion who was supporting
    a field artillery unit there that was doing duties in Baghdad.
    And as Senator Inouye pointed out, not only is she the proud
    recipient and wearer of the Combat Medical Badge, which is like
    the Combat Infantry Badge. I mean, it's a very, very highly
    respected badge. She also has three Army commendation medals
    (ARCOMs). And you'll notice, as Senator Inouye pointed out, she
    also has a Good Conduct Medal, which most of us don't get to
    earn, because we're not enlisted solders--but, anyway, we're
    very proud of Sergeant Grimes and her service.
        Next to her is Staff Sergeant Sean M. Boiko. And Sergeant
    Boiko is from Van Nuys, California, a member of the Army
    Reserve. And he is an MP, a 31 Bravo, one of the most deployed
    Military Occupational Specialty (MOS), just like Sergeant
    Grimes' MOS, 91 Whiskey. Currently, he is in the community-
    based healthcare system program at Fort Meade, Maryland, where
    he is working to overcome his wounds so that he can remain in
    the Army.
        You'll notice he wears the Purple Heart, the ARCOM, and the
    Combat Action Badge. Sergeant Boiko was a member of an eight-
    man Military Transition Team (MiTT), which is our military
    transition teams that are training the Iraqi army. And he was
    stationed between Fallujah and Ramadi in some tough country in
    al Anbar Province, where he came under attack by an improvised
    explosive device (IED) and ended up being evacuated for his
    injuries. He had injuries to his left arm, hearing loss, and
    very severely herniated disks in his back. And he's now been
    through about 6 months of rehabilitation, and they feel that,
    within the next several months, that he will be able to achieve
    the standards to remain in the Army, which is his desire to do.
    We're very proud of him, as well.
        You'll notice he wears a 2nd Marine Division patch on his
    right shoulder because that's who he was supporting out there.
        Thank you, Sergeant Boiko.
        Now, this last fellow is Specialist Jason Mike, and he's
    from Radcliff, Kentucky. He's in the Kentucky Army National
    Guard. He also is a medic. Notice he's wearing the Combat
    Action Badge. And he was with a Military Police (MP) Company
    that was on Route Tampa during OIF3, where he ended up in an
    action that has become well known. This was a convoy of about
    30 trucks that was ambushed by over 50 insurgents. And his MP
    platoon responded, and they got into about a 45-minute
    firefight.
        Now, what's interesting is, you'll notice he's kind of
    built like a football player, and that's because he was. He was
    a fullback. And so, in the middle of this action, Specialist
    Mike ends up with a squad automatic weapon in one arm, and a M-
    4 carbine in the other hand, fighting in both directions at the
    same time in his trench line, where, after having killed 27
    anti-Iraqi-force insurgents, wounding six, capturing one, and
    after firing an anti-tank weapon at one of the strongholds that
    they had, he then turned to treating the wounded there, and, as
    a result, was awarded the Silver Star for his actions.
        So, again, we're very, very proud of him and what he
    represents.
        I will wrap up, saying that we have submitted a posture
    statement for the record, which is our formal statement. I
    stand behind the Secretary and his statement, and, again, stand
    prepared to answer your questions.
        Thank you.
        Senator Stevens. Well, thank you very much, General.
        Without objection, we'll set our time limit at about 7
    minutes.
        Mr. Secretary and General, I'm going to have to go back and
    make a statement on the floor here before the hour is out, so
    the co-chairman will conduct the hearing.

                      ARMY NATIONAL GUARD FORCE STRUCTURE

        Mr. Secretary, the budget for the Army now reflects an Army
    National Guard strength at 333,000 soldiers. We were told, the
    press reported, that we're going to be 350,000 soldiers. And
    then there was reduction. And 75 Senators, including ourselves,
    signed a letter to Secretary Rumsfeld about the importance of
    the National Guard. And I understand there's now been a
    decision to keep the 350,000. But we haven't had a budget
    amendment to cover them. How are we going to pay for them?
        Mr. Harvey. Our original plan, as you noted, Senator, was
    to fund the National Guard at whatever level they could recruit
    and retain. So, for the last 14 or 15 months, that's been on
    the average of 333,000, with the proviso that if they recruited
    and retained to a higher number, we would fund to that number.
    Now, in order to go--the basic soldier cost to go from 333,000
    to 350,000 is approximately $300 million, including the basic
    complement of soldier, equipment, and--their pay, and their
    benefits, and their training. So, we would submit a--if
    required, a change to the budget in order to fund that.
        Senator Stevens. You're not now over the 333,000.
        Mr. Harvey. We're slightly over it. I believe we're between
    335,000 and 336,000 right now. So, the Guard, for the last 5
    months, unlike the preceding 13 or 14, is meeting their
    recruitment goals. So, it's all good news right now. They are
    starting to turn the corner. They had leveled off in the high
    20s. They were down to 328,000 to 329,000, and stabilized about
    333,000. And now they're growing--again growing. So, whatever
    number that they can recruit and retain, we will fund to that
    number. And if reprogramming is necessary, we'll submit the
    request to the appropriate committees to do that. For fiscal
    year 2006 they are funded at 350,000.
        Senator Stevens. General, what changes have been made in
    the Army National Guard that are structural? And can you really
    tell us, is your concept still the total force Army--Active,
    Guard, and Reserve? Is that still the concept we're working on?

                     ARMY FORCE GENERATION MODEL (ARFORGEN)

        General Schoomaker. Sir, that is still the concept. We're
    talking about a single force. Where the Guard and Reserve in
    the past have been considered a strategic reserve to be called
    up, for instance, in the cold war sense, with an awful lot of
    forewarning, what we are now doing is organizing, training, and
    equipping a total force--Active, Guard, and Reserve--on a
    common modular basis, where all of the brigades, by type, are
    the same. And our intent is to man and equip all of the
    brigades at 100 percent of requirement, placing them in a force
    rotation model that gives all of the forces predictability, in
    terms of when they are susceptible for deployment--
    fundamentally, the Active Force, on a one-and-three rotation;
    the Guard, on a one-and-six rotation--in other words, at about
    half the speed; and the Army Reserve, on a one-and-five
    rotation.
        Senator Stevens. This modularity concept, then, the Active
    and Guard are equipped and trained the same, right?
        General Schoomaker. Exactly the same, sir.
        Senator Stevens. Are they interchangeable, the brigades?
        General Schoomaker. Totally. I might also add that if you
    take a look at the 2005 to 2011 program for the Army, there is
    approximately $21 billion worth of equipment investment in
    there, which is more than four times the previous program's
    investment in the National Guard. And that does not count the
    approximately $2 billion worth of investment in new aviation
    going into the Guard and Reserve.
        Senator Stevens. Well, Mr. Secretary, last year we were
    talking about converting to 34 brigade combat teams. Now our
    staff tells us recent briefings have indicated there's 28
    units. Is that the top number now, 28?
        Mr. Harvey. The fundamental change from last year, which, I
    might note, was driven by the Army's best estimate of what the
    steady-state deployment requirements would be. And based on the
    Department of the Army's best estimate in anticipation that the
    Quadrennial Defense Review (QDR) would give us a better number,
    we chose 20 brigade combat teams, which then, if you put that
    into the rotational models that the chief talked about, you
    would come up with 43 brigades in the Active, and 34 in the
    Guard. And that's how we got to those numbers.

                           QUADRENNIAL DEFENSE REVIEW

        Coming out of the QDR, the QDR said the strategic window
    for steady-state deployment coming out of operational
    assessments and other judgments was--between 18 and 19 was
    sufficient strategically to meet the needs of the 21st century
    security environment.
        Using that as a steady-state, we decided that we could do
    that with 42 in the Active and 28 in the Guard. So, that's
    where those two numbers came from. That was demand-driven,
    where the previous numbers were really an estimate, a supply-
    driven estimate, in anticipation of the QDR.
        We have a number that is determined by a strategic
    assessment. We feel good about that number.
        In conjunction with the 28, however, we also looked at the
    Guard structure and decided we did not have enough support
    brigades for their State mission. So, we increased the number
    of support brigades by six. When you add it all up, they
    started out with 106. They ended up with 106. And, as I
    mentioned in my opening remarks, the mix is different. And we
    believe that mix is consistent with their dual mission, their
    State mission, as well as their national defense mission.
        Senator Stevens. Well, this is going to have to be my last
    question, but we've got the future combat system now, costs are
    up from $92 billion, as estimated, to now $160 billion. We're
    having modularity, the global posture review, future combat
    systems. These are all budgetary challenges. And are they all
    financed within the amount that's been requested here?
        Mr. Harvey. Yes, the Army modular force and the future
    combat system are in the base budget for fiscal year 2007.
        Senator Stevens. Thank you very much.
        Gentlemen, I hope you'll excuse me. There's--I've got to
    debate an amendment on the floor.
        Senator Inouye [presiding]. Thank you very much.

                                    TRICARE

        General Schoomaker, when I had the privilege of serving in
    the military, only 4 percent of the personnel in my regimental
    combat team had dependents--they were married and had children;
    96 percent had no dependents whatsoever. Today, I believe, in
    the United States Army, it's somewhere between 70 and 75 with
    dependents. Whenever I visit an Army base, I ask for the
    privilege and opportunity to chat with enlisted personnel. No
    officers around. It never fails, the first question asked is on
    health benefits for the dependents. And now, the DOD is talking
    about copayments for benefits, for pharmaceutical items. My
    question to you, will this have any impact on recruiting, and
    especially retention?
        General Schoomaker. Sir, I don't believe so, because the
    copayment issue does not affect the Active Force. The Active
    Force is covered totally. And I'm talking about those soldiers
    that are serving. The issue that you're describing affects
    those that have retired from Active duty----
        Senator Inouye. But not for pharmacy. The copayment affects
    Active personnel also, in the hospital.
        General Schoomaker. Sir, I'd have to check on that.
        Mr. Harvey. We'd have to check on that. But they do have--
    the option is that you don't have to pay anything if you use
    the national service.
        General Schoomaker. I don't believe there's any change in
    the current----
        Mr. Harvey. No.
        General Schoomaker [continuing]. Practice of--what we are
    trying to encourage people to do is use the mail pharmacy
    program.
        Mr. Harvey. Yes.
        General Schoomaker. I will check and provide it for the
    record.
        [The information follows:]

        The proposed changes do not increase pharmaceutical costs
    for Active duty Soldiers and do not increase costs for active
    duty families or retirees if the prescription is filled at a
    military treatment facility or through the TRICASE mail-order
    system. However, the proposal would increase prescription drug
    co-payments for dependents and retirees who use a retail
    pharmacy. I have attached a slide outlining these proposed co-
    payment changes for fiscal year 2007.

                                                    TRICARE PHARMACY
    ----------------------------------------------------------------------------------------------------------------
                                                         Active Duty      Active Duty Families        Retirees
                                                   -----------------------------------------------------------------
                                                                Proposed              Proposed              Proposed
                                                                (fiscal               (fiscal               (fiscal
                                                     Current      year     Current      year     Current      year
                                                                 2007)                 2007)                 2007)
    ----------------------------------------------------------------------------------------------------------------
    MTF:
        Generic...................................  .........  .........  .........  .........  .........  .........
        Brand Name................................  .........  .........  .........  .........  .........  .........
        Non-formulary.............................  .........  .........  .........  .........  .........  .........
    Mail Order:
        Generic...................................  .........  .........         $3  .........         $3  .........
        Brand Name................................  .........  .........          9         $9          9         $9
        Non-formulary.............................  .........  .........         22         22         22         22
    Retail:
        Generic...................................  .........  .........          3          5          3          5
        Brand Name................................  .........  .........          9         15          9         15
        Non-formulary.............................  .........  .........         22         22         22         22
    ----------------------------------------------------------------------------------------------------------------

        General Schoomaker. But the main emphasis of the
    recommendation that we've made is to capture or to help control
    the costs of those--of retired persons, up to the age of 65,
    before Medicare kicks in. So, what we are trying to do is
    arrest this excessive growth, and to normalize the copays back
    to the time in which they were started. There's never been an
    adjustment to this.

                            EQUIPMENT MODERNIZATION

        Senator Inouye. Twenty-five years ago, when Chairman
    Stevens and I began our service on this subcommittee, the Army
    had so-called big five systems, the M1 tank, the Bradley, the
    Blackhawk, Apache, and the Patriot missiles. Today, you're
    still buying these systems. Do we have any new ones?
        Mr. Harvey. Yes, we do, Senator. The future combat systems
    is that ground-based modernization that will provide the next-
    generation man-ground systems, as well as a number of other
    supporting systems that will make both the current force and
    that future force more effective. In terms of--we also have, in
    parallel with that, a very large aviation modernization
    program, which consists of two new helicopters, the light
    utility helicopter, which is mainly for the National Guard, and
    the armed reconnaissance helicopter, which is a replacement for
    the OH58 Kiowa Warrior. We're also modernizing the fleet, in
    terms of the next model of the Blackhawk, conversion of the
    Apaches from the A to D model, and the upgrade of the Chinook.
    We have a very broad-based helicopter program and a very broad-
    based program to upgrade the ground based, and also developing
    the next-generation theater air defense, the PAC3 MEAD system.
    So, across the board, we're modernizing.
        General Schoomaker. Sir, if I could add to that. If we do
    not pursue the future combat system, we will not have a new
    start in over 40 years of a major system like the Bradley tank,
    the things that you mentioned. We are not building new tanks,
    and we're not building new Bradleys. We are refurbishing them
    with the reset money and the rebuild money that we have asked
    for. The power of the future combat system is in the spinouts,
    the four technology spinouts that we are taking to put over the
    top of the existing reset force. And the manned ground
    vehicles, which are the final piece of this, that bring in the
    new systems that are beyond 2014. I think it's important to
    recognize that the restructuring we did on flight control
    systems (FCS) last year--or the year before, is an important
    piece of how we're modernizing the force. And the business
    transformation of FCS the Secretary brought in is working on
    the affordability.

                          STRYKER BRIGADE COMBAT TEAMS

        Senator Inouye. I note that we were very enthusiastic about
    the Stryker. But now, in the fiscal year 2007 budget, you're
    asking for less. I think you've cut it in half.
        Mr. Harvey. Well, Senator, in the mix of the 42 brigade
    combat teams and of the 28 I talked about, 7 are Stryker
    brigade combat teams. And we're very high on the Stryker
    system, and we view that as a bridge between the heavy units
    that we have today and the future combat system of the future.
    The eight manned ground vehicles that the Chief mentioned. It's
    an excellent force. There are going to six in the Active, and
    one in the Guard. But I think what you saw, the decrease, is
    because we're getting to the end of that program. We've fielded
    three to four already. We're going to complete the remaining
    three.

                      RECRUITING AND RETENTION INCENTIVES

        Senator Inouye. I have one last question, Mr. Secretary.
    The Army faces a $1 billion shortfall in bonuses and incentives
    for recruiting and retention; the Reserve, $360 million; and
    the National Guard, $250 million. My question is, Why doesn't
    your fiscal year 2007 fully fund these requirements?
        Mr. Harvey. Senator, the numbers I'm looking at, in terms
    of recruiting and retention incentives, show increases in the
    base budget between all the years. We'll submit these for the
    record.
        But I'm looking, for example, that last year recruiting and
    retention incentives are about $300 million. This year, 2006,
    we requested $341 million, and then, 2007, an increase. But
    we'll get you those numbers for the record.
        And the other thing is that we also include incentives and
    advertising in the supplemental. Unfortunately, this is just
    the way it's proposed. We'll provide, for the record, the total
    between base budget and supplemental fiscal year 2006 to 2007
    so you can see the total package.
        Senator Inouye. Well----
        Mr. Harvey. And I think you're going to see that there's an
    increase.
        Senator Inouye. I ask the question, because we want to be
    helpful to you.
        Mr. Harvey. I know you do. And we appreciate the past
    support. And you've been very, very generous. And, by the way,
    I think that is a key ingredient in the fact that for the last
    9 months we have made our recruiting goals in the Active. And
    we're kicking in some additional incentives because of what you
    passed in the 2006 budget. And I think they're having a very
    beneficial effect.
        For the record, we'll get you the entire package, because
    you've got to look at the two components together.
        Senator Inouye. Thank you, sir.
        [The information follows:]

              Recruiting and Retention Budget for Fiscal Year 2007

        Fiscal year 2007 recruiting and retention budget request
    support a peacetime base force of 482,400 Army. Our current
    planning assumes continued recruiting and retention challenges.
    We continue to evaluate the Army's recruiting and retention
    requirements, and to work with OSD and the Administration to
    refine our total requirements during our nation's time at war.

                    ENLISTED RECRUITING AND RETENTION BUDGET
                            [In millions of dollars]
    ------------------------------------------------------------------------
                                                 Fiscal year--
                                 -------------------------------------------
                                     2004       2005       2006       2007
    ------------------------------------------------------------------------
    AC:
        PB/Appropriated.........        322        305        305        392
        Title IX/Supplemental...  .........        257        575  .........
        Reprogramming...........         24        190  .........  .........
        Executed................        346        752        505  .........
    USAR:
        PB/Appropriated.........        129        135        189        178
        Title IX/Supplemental...  .........          9        217  .........
        Reprogramming...........  .........  .........  .........  .........
        Executed................        112        130        133  .........
    ARNG:
        PB/Appropriated.........        216        244        376        383
        Title IX/Supplemental...  .........         54        195  .........
        Reprogramming...........  .........        196  .........  .........
        Executed................        215        494        353  .........
    ------------------------------------------------------------------------

        Senator Inouye. Senator Shelby.
        Senator Shelby. Thank you.

                                 DEPOT FUNDING

        Secretary Harvey, it's my understanding--and you correct me
    if I'm wrong--that the Army's intent is to, what you call,
    ``pure fleet'' its active duty armor brigades with M1A2 SEP
    tanks by procuring at least one brigade, or 60 tanks, at every
    budget opportunity. Would it not make sense--assuming that's
    true, would it make sense to ensure that both the 2006
    supplemental and the 2007 appropriations bill fund these 60 SEP
    tanks?
        Mr. Harvey. As you know--you may be referring to the
    supplemental that we proposed and the supplemental that was----
        Senator Shelby. Right.
        Mr. Harvey [continuing]. That made it through the system.
    Our position is that, provided that the supplemental request
    that was not included in the 2006 supplemental, it will be
    included in the 2007. So, we have a master plan to, as you say,
    ``pure fleet'' both the Active and the Guard, and we've got, of
    course, the industrial organic capability to do that at our
    depots. And so, we view, over the next 2 years, if those are
    funded per our request--so, what wasn't funded in 2006 is
    funded in 2007 bridge, we're okay. We've got detailed plans of
    loading the depots. And, provided that's timely, I think we
    feel like we have sufficient funding to do that. And it's very
    important that we do that, because that's all part of having a
    fully resourced Army.
        Senator Shelby. Got to have it, hadn't you?
        Mr. Harvey. Got to have it.

                        UNMANNED AERIAL VEHICLES (UAVS)

        Senator Shelby. General, unmanned aerial vehicles, some of
    us are concerned that the Air Force is considering options
    which would effectively give them procurement authority and
    operational control of the extended-range multiple-purpose
    unmanned aerial vehicle program. What steps has the Army taken
    to ensure that this does not happen, if that's going down that
    road? I mean, the Army's got a big role to play here, I
    believe. And you're playing it.
        General Schoomaker. Well, I would agree. And I do not
    foresee the situation that you described.
        Senator Shelby. I hope not.
        General Schoomaker. Because we are working hand-in-glove
    with the Air Force, as you know, on a Center of Excellence----
        Senator Shelby. Absolutely.
        General Schoomaker [continuing]. At Indian Springs, which
    primarily has to do with the whole notion of how we have common
    tactics, techniques, and procedures, and how we maintain
    command and control, so that we can share the----
        Senator Shelby. Absolutely.
        General Schoomaker [continuing]. The take from these. But
    the extended range multi-purpose (ERMP) UAV program is a purely
    Army program that is tied to our force structure and is
    organic----
        Senator Shelby. And your needs, right?
        General Schoomaker. Excuse me?
        Senator Shelby. Your needs in the Army.
        General Schoomaker. Exactly. I do not see this as an issue
    at all. And it certainly has never risen as an issue between
    the Chief of Staff of the Air Force and myself. We have a very
    good----
        Mr. Harvey. Let me say, Senator, also, that----
        Senator Shelby. Okay.
        Mr. Harvey [continuing]. That we continue to explore ways
    that we can jointly develop----
        Senator Shelby. Absolutely.
        Mr. Harvey [continuing]. Components so that we can minimize
    the cost. I think a good example of----
        Senator Shelby. Well, we've encouraged you to do this in a
    lot of areas.
        Mr. Harvey. Yes. A good example of our close cooperation
    with the Air Force is the joint cargo aircraft----
        Senator Shelby. Right.
        Mr. Harvey [continuing]. Which we are now developing
    together. So, we continue to explore that, but, at the same
    time, we have unique needs that we need to develop on our own.
        General Schoomaker. I'd like to add, too----
        Senator Shelby. Yes, sir.
        General Schoomaker [continuing]. Before we leave this. If
    you remember, when we restructured and canceled Comanche----
        Senator Shelby. Absolutely.
        General Schoomaker [continuing]. And we restructured Army
    aviation, we gave up the buy of a considerable amount of manned
    rotary-wing aircraft----
        Senator Shelby. Yes.
        General Schoomaker [continuing]. For the ERMP capability.
    This is inherent to our Army aviation structure, to our
    intelligence, surveillance, reconnaissance (ISR) structure in
    the Army, and it is not something that, in my view, can be
    farmed out. This is a level below what it is that the Air Force
    brings in on----
        Senator Shelby. Thank you.
        General Schoomaker [continuing]. Their systems.

                           JOINT CARGO AIRCRAFT (JCA)

        Senator Shelby. Secretary Harvey, if I can go back, you
    mentioned the joint cargo aircraft. And when you develop
    something jointly, there are costs involved. If the Air Force
    is going to use it as a single platform, the Army's going to
    use it, is it more than you need for the Army, or will the
    jointness take care of everything?
        Mr. Harvey. You mean the basic----
        Senator Shelby. Sometimes we'll--are the needs for the Air
    Force more than you need in the joint cargo aircraft?
        Mr. Harvey. This----
        Senator Shelby. Would it cost----
        Mr. Harvey. The least--the design is----
        Senator Shelby. Do you see what I'm getting at?
        Mr. Harvey. Yes, I do. The basic design of the aircraft, I
    think, is a convergence of the needs of both services.
        Senator Shelby. Right.
        Mr. Harvey. Then you get a common platform, and then you
    make modifications to that platform, depending on what specific
    needs you have. If you added up A plus B, which is we go our
    way, they go their way, but we go together, C is less than A
    plus B. So, I think, overall, it's a savings. And both services
    know that to be successful, both needs----
        Senator Shelby. Sure.
        Mr. Harvey [continuing]. Have to be met. So, I'm very
    optimistic that we'll do it, and we'll also save the taxpayers
    money.
        Senator Shelby. That's what we want to do. But, first, the
    mission.
        Mr. Harvey. That's right.

                           JOINT COMMON MISSILE (JCM)

        Senator Shelby. The joint common missile, I bring that up
    again. You know, it was terminated in December 2004 in the
    budget decision 753, even though a lot of us thought it had a
    healthy low-risk program. It was on schedule, it was on budget,
    and successfully demonstrating important new capability for the
    warfighter.
        In 2006, Congress appropriated $30 million, General, you
    will recall, for the JCM. What's the plan for 2007? And why was
    funding not included for the JCM in the 2007's--President's
    budget? Mr. Secretary, you want to----
        Mr. Harvey. There's a joint study ongoing----
        Senator Shelby. It is.
        Mr. Harvey [continuing]. In the joint staff, an analysis of
    alternatives. And my understanding is, there's going to be a
    decision made by the Joint Chiefs of Staff Requirement
    Oversight Council (JROC) in April----
        Senator Shelby. Yes.
        Mr. Harvey [continuing]. And a recommendation made to the
    Deputy Secretary in May, and a decision. So, the decisionmaking
    process is fully engaged right now. Depending on what course of
    action they decide, then we will certainly request funding for
    that program, either by reprogramming or--internally--or
    externally, ask the committee to reprogram.
        So, I think a thoughtful program is going on. I think it's
    been established that there is a capability gap in both Navy
    and Army. And so, it's not ``if,'' it's ``how'' to best meet
    that gap. We may----
        Senator Shelby. Thank you.
        Mr. Harvey [continuing]. Be back for some reprogramming
    action.
        Senator Shelby. Mr. Secretary, General, we thank you--I
    do--for serving. Again, we are proud of these soldiers you
    brought us here. We all are. And we should all acknowledge
    that.
        Thank you, Mr. Chairman.
        Senator Inouye. Thank you very much.
        One last question, sir. Your 2007 budget request calls for
    $111 billion.
        Mr. Harvey. Right.

                             UNFUNDED REQUIREMENTS

        Senator Inouye. Your supplemental is $35 billion. And
    there's another item, called the ``Unfunded List,'' of $7.4
    billion. Some of my colleagues have been asking me, ``Are these
    requirements?''
        Mr. Harvey. I think the Chief is best prepared to answer
    that.
        General Schoomaker. I'm not sure which unfunded list you're
    asking for. We traditionally have been asked, from the House,
    for an unfunded requirements list. In general, with more
    dollars, what we would do is accelerate our plan. That's what
    we want to do, is accelerate the plan that we're on. It's a
    very tightly knit plan, the Army campaign plan that pulls all
    this together. My view is, the faster we can execute it, the
    cheaper it will be and the smarter we will be by getting it
    accomplished in anticipation of budgetary pressures in the out-
    years. That would be my answer to you.
        Senator Inouye. In other words, in order to make your
    fiscal year 2007 budget request really work, the unfunded list
    is necessary.
        Mr. Harvey. Let me just state as follows. The end state,
    Senator, in terms of force structure, in terms of our
    modernization programs that we've talked about, the end state
    being the 70 brigade combat teams, the 211 support--that will
    not change. We believe that that force structure and our
    modernization programs and the other funding that you provide
    in--for recruiting and retention, it's just a matter if we want
    to accelerate that and reduce institutional risks or--not
    operational risks. This would be running the factories, running
    the depots. You know, if you got the big momentum going, we
    want to keep it going. So, it just--it would accelerate us
    getting to the end state that we--the Chief and I--which is a
    fully resourced--that is, a fully equipped, trained, and manned
    Army across all components--to the numbers we talked about.
    That's what we would do.
        General Schoomaker. Sir, if I could just add. I just want
    to make sure I'm very clear in the answer that I gave to you.
    In the past, you might have seen an unfinanced requirement list
    that would have said, ``Look, we had to make decisions, and we
    had to leave things out.''
        Mr. Harvey. Yes.
        General Schoomaker. In this case, we are funding our plan
    totally at the speed at which we get funding. If we were to
    achieve more funding, we would go faster on exactly the same
    program.
        Mr. Harvey. Right.
        General Schoomaker. And that was what I was trying to say
    there. And I think----
        Mr. Harvey. Right. We're not----
        General Schoomaker [continuing]. It supports what----
        Mr. Harvey [continuing]. Leaving anything out.
        General Schoomaker. Right.
        Mr. Harvey. It's a matter of timing. The quicker, the
    better, I think, because of the risk involved. And so, I think
    we would reduce risk if we get there faster. But, this is very
    acceptable.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Inouye. Mr. Secretary, General Schoomaker, on
    behalf of the chairman, I thank you for your service and for
    your testimony today. And I'd like to thank the three heroes
    here with us, and their comrades who are now serving us. Thank
    you very much.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]
               Questions Submitted to General Peter J. Schoomaker
                  Questions Submitted by Senator Thad Cochran

                              HYPERBARIC TREATMENT

        Question. General Schoomaker, I have been informed that hyperbaric
    treatment helps reduce tissue loss from wounds and could mean the
    difference between amputation above or below the knee, elbow or other
    major joint. Funds were appropriated in the fiscal year 2006 budget for
    the Army to purchase and emplace a hyperbaric chamber for the Walter
    Reed Army Medical Center to help treat wounded veterans returning from
    Iraq and Afghanistan. Would you agree we should provide these veterans
    with quality care and the best chance for recovery? Could you provide
    this Subcommittee with an update on the status of this project?
        Answer. The Army is committed to providing the best possible
    healthcare to wounded Soldiers. The medical benefit of hyperbaric
    treatment for most of the Soldiers treated at Walter Reed Army Medical
    Center is very limited. Most of these patients had amputations
    performed prior to reaching Walter Reed, so hyperbaric capability at
    Walter Reed would not have prevented these amputations. In fiscal year
    2005, 10 patients from Walter Reed, including six retirees, three
    Soldiers, and one family member, were provided hyperbaric therapy at
    local civilian hospitals at a total cost of $73,049. Additionally,
    funds were appropriated for the Navy to purchase and emplace a
    hyperbaric chamber for the National Naval Medical Center at Bethesda.
    For the very small number of patients at WRAMC who would benefit from
    this therapy, it is much more cost effective to buy hyperbaric therapy
    from civilian hospitals. The Army does not have a clinical need for a
    chamber at Walter Reed and does not have the necessary staff to use a
    chamber as intended. Given the Base Realignment and Closure decision to
    close the existing Walter Reed campus, it is not in the Army's best
    interest to put a chamber at Walter Reed that will not generate a
    return on investment in terms of purchased care savings or research
    capabilities. The Army has asked the Subcommittee to reconsider this
    project and to allow us to use the appropriated funds to upgrade the
    Magnetic Resonance Imaging machine which will benefit many of the
    combat casualties, Soldiers, families, and retirees cared for at Walter
    Reed.

                             INTRA-THEATER AIRLIFT

        Question. General Schoomaker, I know the Army has budgeted to
    procure a new intra-theater light cargo aircraft to replace the C-23
    Sherpa aircraft and the CH-47 Chinook heavy-lift helicopters. Under
    Secretary Kenneth Krieg directed the Army and the Air Force to complete
    an acquisition strategy for a new Joint Cargo Aircraft program, and I
    have been informed that earlier this month a joint program office
    charter, with the Army as lead agency, was announced. General, will the
    Army's intra-theater cargo lift requirements be fully met by the joint
    cargo aircraft procurement?
        Answer. The Joint Cargo Aircraft (JCA) program will meet the Army's
    organic intra-theater fixed wing cargo aircraft lift requirements by
    providing the capability to transport time-sensitive, mission-critical
    resupply, and key personnel transport at the tactical level. The Army's
    approved Aviation modernization plan and fixed wing Organization &
    Operations (O&O) plan calls for the replacement of the existing Army
    utility and cargo fixed wing aircraft with two aircraft variants; the
    Future Cargo Aircraft (FCA) and the Future Utility Aircraft (FUA). The
    Army initiated the fixed wing modernization with the FCA program. The
    FCA is scheduled to replace the Army's aging and less capable C-23
    (Sherpa) fleet, its C-26 (Metroliner) fleet, and a portion of the C-12
    (King Air) fleet. The FCA is not a replacement for the CH-47 (Chinook);
    the FCA system provides a complementary capability to the CH-47
    helicopter. The Army plans to begin development of the FUA Critical
    Capabilities Document (CDD) in fiscal year 2009.
        On December 20, 2005, the Office of the Secretary of Defense (OSD)
    issued a Program Decision Memorandum (PDM) that directed the Services
    to develop and brief a FCA/Light Cargo Aircraft (LCA) Joint Program
    Office Plan to the Defense Acquisition Executive (DAE), Mr. Krieg, no
    later than February 28, 2006. The Services initiated the process of
    folding the Air Force's LCA emerging capabilities into the Army's FCA
    program in January 2006. Between January 12 and March 17, 2006, the
    Services developed a Joint FCA Acquisition Strategy Report (ASR), a
    draft Joint Program Office Charter, and a draft Memorandum of
    Agreement, which together detail the way ahead for convergence of the
    two programs into a single JCA program. These agreements state that the
    Army will be the initial lead for the JCA program and that the JCA
    Program Office will be located in Huntsville, Alabama. On March 17,
    2006, Mr. Krieg approved the Joint FCA ASR and the JCA request for
    proposal was subsequently released.
        Question. General Schoomaker, can you update the committee on the
    timeline making the selection for the new Joint Future Cargo Aircraft?
        Answer. The JCA request for proposal was released on March 17, 2006
    and are due no later than May 17, 2006. The Services' JCA source
    selection process will begin in May 2006 and proceed through December
    2006. The Services anticipate Milestone C and contract award in January
    2007.
        Question. General Schoomaker, has the merging of the Air Force's
    requirements with the Army's on this program affected the Army's target
    date for deployment of the aircraft?
        Answer. The Army's FCA ASR was forwarded for the DAE's approval on
    November 15, 2005. At that time, the Army anticipated releasing the FCA
    request for proposal on December 15, 2005. On December 20, 2005, the
    Office of the Secretary of Defense issued a PDM that provided initial
    funding to the Air Force to initiate development of a LCA program. The
    same PDM directed the Services to develop and brief a FCA/LCA Joint
    Program Office plan to the DAE, Mr. Krieg, no later than February 28,
    2006. On December 22, 2005, Mr. Krieg withheld his approval of the
    Army's FCA ASR pending completion of a Joint (Army/Air Force) FCA ASR.
    The joint Future Cargo Aircraft ASR was subsequently approved by the
    DAE on March 17, 2006 resulting in a three month slip in the Army
    portion of the JCA program. The Army still anticipates the first unit
    being equipped in fiscal year 2009.
        Question. General Schoomaker, will the Army explore having U.S.
    allies join the program in the developmental phase--as a number have
    done with the Joint Strike Fighter program--or do you know if coalition
    nations have expressed an interest to purchase this new cargo aircraft?
        Answer. The JCA is a commercially available aircraft, currently
    offered on the open market, and to date no U.S. coalition partners have
    requested to participate in the JCA program. While it is possible for
    coalition nations or NATO partners to procure JCA directly from the
    original equipment manufacturer, once the vendor is selected some
    coalition partners may seek to participate in the U.S. sponsored
    program.

                               ARMY MODULAR FORCE

        Question. General Schoomaker, I continue to watch the Army's
    transformation efforts with interest. As I understand it, instead of
    divisions being the centerpiece of the Army, brigade combat teams will
    be a strategically agile force that can ``plug into'' joint and
    coalition forces in an expeditionary manner. Could you describe what
    the Army will look like at the end of fiscal year 2007 and the rate at
    which the remainder of the Army to include the National Guard will
    become a modular force?
        Answer. Modular transformation is the most dramatic restructuring
    of forces since World War II. The centerpiece is the building of
    brigade combat teams (BCT) and associated multi-functional and
    functional support brigades. The Army also is rebalancing our forces to
    create the right mix of units, develop critical Soldier skills, and
    build effective operational and institutional forces across all three
    components. The Army is building toward 70 BCTs and 211 multi-
    functional and functional support brigades. By the end of fiscal year
    2007, the active component will have converted 29 modular BCTs and
    activated nine new modular BCTs. Additionally, the active component
    will have built 32 multi-functional and functional support brigades.
    Active component modular transformation will be completed by fiscal
    year 2010. The Army National Guard is building toward 28 BCTs in a
    total of 106 brigades by the end of fiscal year 2011. By the end of
    fiscal year 2007, the Army National Guard will have converted 25 BCTs
    and built 50 multi-functional and functional support brigades. However,
    the BCT conversion primarily addresses changes in unit designs and
    manning to facilitate recruiting and individual training. The equipping
    upgrades to complete the conversions of these brigades will extend
    through fiscal year 2011. The Army Reserve will have 65 support
    brigades by fiscal year 2007. However, with completion of modular
    transformation in fiscal year 2011, the Army Reserve will re-size to a
    total of 58 multi-functional and functional support brigades. The Army
    is currently conducting a collaborative effort with the Army National
    Guard Adjutants General to address warfighting requirements, current
    operational demands and potential Homeland Defense missions. The
    results of this effort may change the number and type of BCTs and
    support brigades in the Army National Guard beginning in fiscal year
    2008.
                                     ______

                Questions Submitted by Senator Dianne Feinstein

                       TRAINING OF IRAQI SECURITY FORCES

        Question. The Administration and the Pentagon continue to repeat
    the mantra, ``When the Iraqis standup, we will stand down.'' However,
    here in the Congress, we continue to receive mixed reports on the
    progress of training a capable Iraqi Army. While it is my understanding
    that the number of Iraqi battalions able to function ``in the lead''
    (or at Level 2) has increased to over 50 today, I have also heard that
    the number of Iraqi battalions at Level 1, or able to operate fully
    independently, has recently dropped from one to zero.
        Answer. Senator, this question should be referred to the Commander,
    U.S. Central Command for response.
        Question. Will you please explain why we have had such difficulty
    transitioning Iraqi forces from Level 2 to Level 1? How is it that not
    one Iraqi battalion is able to function independently of coalition
    forces?
        Answer. Senator, this question should be referred to the Commander,
    U.S. Central Command for response.
        Question. Are you confident the U.S. military in Iraq has enough
    qualified trainers to adequately train the Iraqi forces? Should U.S.
    commanders on the ground shift additional forces from security duties
    to training?
        Answer. Senator, this question should be referred to the Commander,
    U.S. Central Command for response.
        Question. What percentage of the Iraqi Army controlled by the
    Ministry of Defense is Sunni? To what extent are former officers and
    soldiers--disbanded through our ``Debaathification'' policy--returning
    to serve in the Army? What incentives are being provided to lure Sunni
    recruits?
        Answer. Senator, this question should be referred to the Commander,
    U.S. Central Command for response.
        Question. What is the ethnic makeup of the Iraqi battalions in an
    advanced state of readiness? What percentage of these battalions are
    made up of Kurdish and Shiite recruits?
        Answer. Senator, this question should be referred to the Commander,
    U.S. Central Command for response.
        Question. What steps are being taken to integrate units to create
    an ethnically and religiously diverse Iraqi force? From a security
    standpoint, is diversity even desirable?
        Answer. Senator, this question should be referred to the Commander,
    U.S. Central Command for response.
        Question. Will the emerging Iraqi forces have enough independent
    technical capabilities (communication networks, air power, heavy armor,
    weaponry, and intelligence logistics) to operate on their own without
    U.S. assistance in the near future?
        Answer. Senator, this question should be referred to the Commander,
    U.S. Central Command for response.
        Question. What is the timeframe for creating an Iraqi Army which is
    superior in force and skill to the Sunni insurgency or any of the
    Shiite or Kurdish militias?
        Answer. Senator, this question should be referred to the Commander,
    U.S. Central Command for response.
        Question. This year was labeled the ``Year of the Police'' by the
    Pentagon--a phrase clearly intending to indicate a renewed effort to
    train Iraqi security forces under the control of the Iraqi Interior
    Ministry. Please describe current U.S. oversight activities vis-a-vis
    the Iraqi police forces, particularly the paramilitary units under
    control of the Interior Ministry? How can the United States and Iraq
    further prevent Shiite militias from dominating local police forces?
        Answer. Senator, this question should be referred to the Commander,
    U.S. Central Command for response.
        Question. How would you assess the progress over the past 3 months
    in the training of Iraqi police units?
        Answer. Senator, this question should be referred to the Commander,
    U.S. Central Command for response.
        Question. To what degree do you remain concerned about the
    infiltration of police forces by: the insurgency? local militias? Iran?
        Answer. Senator, this question should be referred to the Commander,
    U.S. Central Command for response.
        Question. What are the greatest barriers that coalition troops
    currently face in their efforts to train an effective police force in
    Iraq?
        Answer. Senator, this question should be referred to the Commander,
    U.S. Central Command for response.

               ARMY TRANSFORMATION AND THE C-17 AIRCRAFT PROGRAM

        Question. Reports suggest that the Mobility Capabilities Study
    (MCS)--which was supposed to provide the Pentagon an accurate
    projection of future strategic airlift requirements--neither takes into
    account (1) the Army's transition to a modular brigade force structure
    nor (2) the Future Combat Systems (FCS) program. Consequently it is my
    understanding that DOD has commissioned a new study (MCS-06) to address
    these and other areas that the previous MCS study failed to account for
    in considering the military's future air mobility needs. With this
    being the case, has the Army ever articulated or estimated the airlift
    requirements that will be connected to the mobilization of the 15
    Future Combat Systems (FCS) brigade combat teams (BCTs)?
        Answer. The Army is in the process of establishing the airlift
    options available to Joint Forces Commanders to support the deployment
    of Future Combat Systems (FCS) Brigade Combat Teams (BCTs). The 2005
    Mobility Capability Study (MCS 05) focused on the strategic lift
    requirements for the 2012 timeframe. The study did not consider
    deployment of FCS equipped forces. MCS 05 examined the strategic
    mobility capabilities provided by the current pre-positioning, sealift
    and airlift programs of record and found them to provide sufficient
    lift. The strategic airlift modeled in the MCS 05 study consisted of
    current programmed fleet of 180 C-17s, 112 C-5s and the Civil Reserve
    Air Fleet (CRAF), and found it to sufficient to meet lift requirements.
    We realize that now and in the future, deployment and sustainment of
    heavy Army forces in support of the combatant commanders (COCOMs) will
    employ a mix of airlift, sealift, and pre-positioned stocks.
    Maintaining this balance provides multiple options for deployment and
    employment of force. The Army requested a Joint analysis of
    requirements for global airlift, sealift, and pre-positioned stocks
    extending through 2024 and will support the MCS-06 study.
        Question. If not, when does the Army anticipate it will be able to
    provide the Air Force a realistic projection of its airlift
    requirements based on its transition from a division-centric to
    brigade-centric force?
        Answer. Developing strategic lift requirements is a Joint process
    which has to consider the type, amount, and location of forces to be
    moved. MCS 06 will capture the modular mobility requirements for
    sealift, airlift and associated pre-positioning. COCOMs dictate the
    timing and location for the delivery of Army forces within the context
    of a Joint Force flow. Personnel and equipment required during the
    first 30 days of a conflict will be given the highest priority for
    movement by airlift. The heavy units that are needed in less than 30
    days may be pre-positioned rather than have them compete for strategic
    airlift. Finally, the equipment and sustainment items not required in
    the first 30-45 days will likely be delivered by sealift. The Army
    provides input to the development of these requirements by providing
    Joint Staff and COCOM planners with Army Future Force concepts of
    employment and capabilities. COCOM and Joint planners will then develop
    the Joint Force flow requirements that will be used to development
    total Joint lift (sea and air) requirements. Pre-positioned stocks will
    also be used to fill shortfalls in either sealift or airlift due to
    wither speed of delivery of sealift or physical capacity (amount of
    lift) of the aircraft.
        Question. Under the Global Posture Review, 38 of the Army's 42
    active-duty brigade combat teams (BCTs) will eventually be stationed in
    the Continental United States, Alaska, and Hawaii. At any one time, the
    Army hopes to have up to 19 of these BCTs (14 active and 4-5 reserve)
    PLUS associated operational headquarters and support brigades--ready
    for operations world-wide. Given this force reconfiguration--based on
    operational requirements--are you confident there will be sufficient
    military airlift to transport up to 15 of these brigade combat teams
    (BCTs), along with the associated headquarters and support units, from
    bases in the United States to a crisis area?
        Answer. Airlift is only one portion of strategic lift capability to
    deploy Army forces. The bulk of Army combat power will be projected by
    sea. Airlift, coupled with sealift and globally pre-positioned stocks,
    provides for both rapid employment and long-term sustainment of Army
    forces. The 2005 Mobility Capability Study (MCS 05) which modeled
    strategic airlift requirements based on the current programmed fleet of
    180 C-17s, 112 C-5s and the Civil Reserve Air Fleet (CRAF) indicates
    that DOD has sufficient strategic airlift available through the 2012
    timeframe. Both the Army transformation to modular brigades and
    restationing in response to the Global Posture Review will be completed
    within the timeframe considered.

                               CIVIL WAR IN IRAQ

        Question. We have seen a significant increase in the number of
    Iraqis killed in sectarian violence over the past 3 months. Reports
    suggest that over 1,000 have died since the February 22nd bombing of
    the Golden Mosque in Samarra and over the weekend we discovered more
    evidence of revenge killings in a mass grave that included 30 beheaded
    bodies. Former Iraqi Prime Minister Ayad Allawi has stated his belief
    that Iraq is already experiencing a civil war. However, Pentagon
    officials and the Administration have taken great pains to dispute the
    idea that we have entered into a period of civil war in Iraq.
        For the record, do you believe Iraq is now enmeshed in a ``civil
    war?''
        If not, how would you define a ``civil war?''
        Finally, assuming that Iraq is now (or does) face a full-blown
    civil war, how does this affect U.S. military strategy and the status
    of U.S. troops deployed in the region?
        Answer. Senator, this question should be referred to the Commander,
    U.S. Central Command for response.

                                TROOP REDUCTIONS

        Question. Does the Army plan to reduce its endstrength in Iraq this
    year? Next year?
        Answer. In accordance with title 10, U.S. Code, the Army is charged
    with organizing, manning, training and equipping a force capable of
    fulfilling current and future Secretary of Defense-approved
    requirements of combatant commanders. Thus, the Army force scheduled to
    deploy in future rotations to Iraq is conditional upon periodic
    strategic and operational assessments from the Commander, U.S. Central
    Command (CENTCOM). The number and type of forces requested by the
    CENTCOM commander may fluctuate as the political, economic and security
    conditions in Iraq and Afghanistan evolve over time.

               TROOP REDUCTIONS/TRAINING OF IRAQI SECURITY FORCES

        Question. Do you agree with General Casey that a drawdown in U.S.
    troops might ease some of the enthusiasm for the ongoing insurgency in
    Iraq?
        Answer. The President's National Strategy for Victory in Iraq is
    very clear in that we will help the Iraqi people build a new Iraq with
    a constitutional, representative government that respects civil rights
    and has security forces sufficient to maintain domestic order and keep
    Iraq from becoming a safe haven for terrorists. To this end, the Army
    is committed to providing General Casey with the required Army
    capabilities for success on the ground in Iraq.

                                TROOP REDUCTIONS

        Question. Secretary of State Rice and Chairman of the Joint Chiefs
    of Staff General Pace have both suggested in recent days that it is
    likely that the military will drawdown troop levels sometime this year.
    Last fall General Casey, the top commander in Iraq, stated that a
    reduction in American troops would take ``away an element that fuels
    the insurgency.''
        How do you think that a reduction in the number of American forces
    would affect the rise in sectarian violence in Iraq?
        Answer. Senator, this question should be referred to the Commander,
    U.S. Central Command for response.

                            IRAQ'S INFLUENCE IN IRAQ

        Question. Earlier this month, Secretary Rumsfeld said in a press
    conference that Iran is ``currently putting people into Iraq to do
    things that are harmful to the future of Iraq. They're putting Iranian
    Qods Force-type people into the country.''
        Can you provide more information on this statement--how many
    Iranian nationals have you found in Iraq, what are they doing, and are
    they collaborating with the Iraqi SCIRI party?
        Answer. Senator, this question should be referred to the Commander,
    U.S. Central Command for response.
                                     ______

                    Questions Submitted to Francis J. Harvey
                   Questions Submitted by Senator Ted Stevens

                                   MODULARITY

        Question. What is the estimated total cost of the Army's modularity
    initiative? How much funding has been provided to date to implement the
    modularity initiative? What is the estimated amount of future funding
    needed to complete the modularity initiative?
        Answer. The Army estimates the total cost of the modularity
    initiative at $52.5 billion through fiscal year 2011. To date, the Army
    has received $6.5 billion: $5 billion in the fiscal year 2005
    supplemental and $1.5 billion programmed in the base budget in fiscal
    year 2006. The estimated amount needed to complete the Army modularity
    initiative is $46 billion.

                           FUTURE COMBAT SYSTEM (FCS)

        Question. What is the estimated total cost of the FCS program? How
    much funding has been provided to date for the FCS program? What is the
    estimated amount of future funding needed to complete the FCS program?
        Answer. As reported in the Program Manager, Future Combat Systems
    (Brigade Combat Team) (PM FCS (BCT)) Selected Acquisition Report, dated
    December 31, 2005, the estimated total cost is $119.9 billion (fiscal
    year 2003 Base Year dollars) or $164.6 billion (then year dollars).
    From fiscal year 2003 through fiscal year 2006, the FCS program has
    been appropriated in the amount of $8 billion (then year dollars) while
    only receiving actual funds of $7.6 billion. With the current funding
    schedule, the estimated funding requirement is approximately $157
    billion (then year dollars).

                              RESETTING THE FORCE

        Question. To date, how many units has the Army reset? How much
    funding has been provided to date to reset Army units? Based on current
    information, how much future funding is needed to reset Army units?
        Answer. The Army has reset or will have reset a total of 95
    brigade-sized or brigade combat team elements from fiscal years 2004-
    2006. The break-out of brigade-size elements by year is shown below:

                                TOTAL ARMY BCT'S
    ------------------------------------------------------------------------
                                                                  No. BCT's
                           Component/Unit                          or units
    ------------------------------------------------------------------------
    Active:
        3ID....................................................            5
        4ID....................................................            5
        2/82...................................................            1
        3/1 ID.................................................            1
        3ACR...................................................            2
        101st..................................................            6
        2ACR...................................................            1
        1/10...................................................            1
        2/10...................................................            1
        Various................................................            3
    NG:
        45th Inf...............................................            1
        Various (no BDE sized elements all various (CS/CSS)....            4
    USAR: Various (no BDE sized elements all various CS/CSS)...            5
                                                                ------------
          Total Army BCT's Supported in Fiscal Year 2004.......           36
                                                                ============
    Active:
        101 ID.................................................            6
        4 ID...................................................            6
        172 ID.................................................            1
        1 AD...................................................            1
        10 MNT.................................................            3
        Various (no BDE sized elements all various CS/CSS).....            3
    NG: Various................................................            4
    USAR: Various..............................................            2
                                                                ------------
          Total Army BCT's Supported in Fiscal Year 2005.......           26
                                                                ============
    Active:
        3ID....................................................            5
        1/82d..................................................            2
        1/25th.................................................            1
        2/2ID..................................................            1
        3/1 AD.................................................            1
        3 ACR..................................................            2
        2/10th 2 (1 BCT, plus DISCOM slice)....................            2
        1st COSCOM.............................................            1
        Various (no BDE sized elements all various CS/CSS).....            3
    NG: Various................................................           12
    USAR: Various..............................................            3
                                                                ------------
          Total Army BCT's Being Reset in Fiscal Year 2006.....           33
    ------------------------------------------------------------------------

                            BUSINESS TRANSFORMATION

        Question. Please describe how the Army is accelerating Business
    Transformation efforts in the fiscal year 2007 budget request. What is
    the estimated total cost to implement Army Business Transformation
    efforts? What is the estimated total savings the Army expects to
    achieve as a result of Business Transformation efforts?
        Answer. To explain how the Army is accelerating Business
    Transformation efforts in the fiscal year 2007 budget request, the
    scope of Army Business Transformation needs to be understood, then how
    specific budget requests accelerate this transformation and associated
    total cost and savings can be explored.
        Our business transformation initiatives include Continuous Process
    Improvement (CPI) using the Lean Six Sigma (LSS) methodology, Business
    Situational Awareness, Organizational Analysis and Design (OAD), and
    Professional Development.
        We have started the largest deployment of Lean Six Sigma ever
    attempted. This effort is underway with training, education, and
    project selection. Projects will be both centrally sponsored for
    crosscutting initiatives as well as command specific; a combined top-
    down and bottom-up approach to accelerate the transformational effect.
    The result will be reduced cost and cycle time while increasing
    quality, production, reliability, and safety.
        Business situational awareness is the product of timely and
    accurate information to support policy and resource allocation systems.
    These enterprise information solutions will provide Army leaders
    clarity on systems and processes where today it is difficult to
    observe.
        Organizational Analysis and Design examines functions and structure
    of organizations, then redesigns and realigns organizational elements
    as necessary to accomplish the mission/work assigned. This analysis,
    design, and alignment will reduce redundancies and ensure organizations
    can effectively and efficiently fulfill the needs of our warfighters.
        Professional Development of Army Leaders is critical to successful
    business transformation and the Army is examining ways to broaden the
    education, training, and experience of our officers and civilians to
    meet the complex challenges of leading the Army business enterprise.
    This initiative area will help educate and develop leaders of Army
    enterprises so that they are fully prepared for the challenges of
    leading the Army's complex business organizations.
        To ensure these efforts are successful and to highlight their
    importance, we created the Office of the Deputy Under Secretary of the
    Army for Business Transformation, headed by Mr. Michael Kirby.
        The scope of the efforts just reviewed is immense, literally
    touching or impacting every facet of the Army. The fiscal year 2007
    budget request accelerates these efforts by: funding the initial wave
    of projects and certification for lean six sigma (LSS) deployment ($7.8
    million in fiscal year 2007); with opportunities to all subordinate
    organizations to reallocate their training budgets to invest in this
    primary effort.
        The answer to the question of total cost is elusive for several
    reasons. Since business transformation includes efforts that will
    become embedded in the fabric of the Army, these efforts will not end;
    instead, they will become a self-sustaining Army capability, changing
    the way we do business. For example, the LSS deployment is using
    industry experts, where the Army lacks them, to train, create, and
    certify Army experts who will soon be able to do the training, and
    certification of future Army experts. Thus a better understanding of
    the relevant cost for the Continuous Process Improvement and
    Organizational Analysis and Design efforts is likely startup costs--the
    lean six sigma certification and initial project costs identified
    above.
        The cost of providing business situational awareness in most cases
    will be embedded within the technology that we are obtaining to help
    manage the Army enterprise. The transformational aspect is how we use
    the data that enterprise resource planning (ERP) programs provide not
    necessarily the program itself. While it might be technically correct
    to include the cost of all ERPs in the total cost of business
    transformation, I think it is more appropriate to attribute these costs
    to the functions each ERP is being designed to produce and that is the
    way they are shown in the fiscal year 2007 budget request.
        No cost estimate currently exists for professional development
    since it is still under intense study and no specific course of action
    has been determined.
        The answer to the question of total savings is as elusive as total
    costs not only in an accounting perspective but also due to replication
    and economies of scale. The benefits generated from business
    transformation in many cases are not directly pecuniary--LSS and OAD
    will increase responsiveness and quality; SA will increase the quality
    of decision making; and professional development will help create more
    capable leaders. Likewise some of the savings are impossible to
    estimate at this point--LSS and OAD projects are still being scoped; SA
    will identify redundancies that are currently unknown; and professional
    development impacts cannot be estimated until the path forward is
    decided.
        The answer to this set of questions may lack the specificity
    desired. This highlights one of compelling reasons that we need to
    transform the way we do business. As we move forward to the Army will
    share the results of these initiatives with you.

                    RESTRUCTURING THE FORCE--AC/RC REBALANCE

        Question. When does the Army expect to complete the AC/RC
    rebalancing effort? What costs are associated with implementing the AC/
    RC rebalancing initiative? How is the AC/RC rebalancing effort
    synchronized with the Army modular force effort?
        Answer. Active component/Reserve Component (AC/RC) rebalance is
    always an on-going part of force re-structuring as the Army addresses
    the right mix of capabilities to meet strategic and operational
    requirements. Beginning with the Program Objective Memorandum (POM) for
    2004-2009, the Army formally identified restructuring initiatives
    affecting the mix of capabilities across all three components.
    Subsequent initiatives were generated by the Secretary of Defense
    guidance in July 2003, concerning the reduction of involuntary
    mobilization of the RC in the first 15 days of a rapid response
    operation, and limiting involuntary mobilization to not more than one
    year every six years. Additionally, the Chief of Staff, Army, focus
    area in early 2004, addressed manning issues, high demand/low density
    capabilities and the establishment of training overhead accounts
    (Transient, Trainees, Holdees and Students--TTHS) for the RC. Under
    these three phases of force re-structuring, the Army program identified
    over 125,000 spaces of change between fiscal years 2004-2009. At the
    end of 2005, the Army had completed re-structuring efforts affecting
    over 30,000 spaces--approximately 21,000 in the rebalance of
    capabilities across the three components and over 9,000 affecting the
    elimination of over structure and the establishment of TTHS accounts in
    the RC. Costs for phase one and phase two initiatives were reflected as
    offsets across existing programs to capture the changes in equipment,
    facilities, and operational tempo as force capabilities were rebalanced
    across the components. The costs for phase three have been reflected in
    the re-investment of existing programs and improved readiness as RC
    overstructure is eliminated. With implementation of modular
    transformation beginning in fiscal year 2004, additional re-structuring
    initiatives will occur through fiscal year 2011. Based on the results
    of Total Army Analysis (TAA) 2008-2013, and the efforts underway with
    POM 2008-2013, the Army will update its AC/RC rebalancing program in a
    report to the Office of the Secretary of Defense in June 2006. The
    update will synchronize AC/RC rebalance initiatives with the Army
    Campaign Plan and will ensure all re-structure and rebalance efforts
    are linked to modular transformation.

                      BASE REALIGNMENT AND CLOSURE (BRAC)

        Question. What is the Army total cost estimate for implementing the
    BRAC recommendations?
        Answer. The current Army BRAC estimates are in the range of $15 to
    $18 billion. The fiscal year 2007 President's budget request funded
    $9.5 billion for Army BRAC through the BRAC implementation period
    (fiscal year 2006-2011). For fiscal years 2006 and 2007, the
    requirements of $4.4 billion fully fund the program. The Army continues
    to refine the remaining BRAC implementation requirements to be
    resourced and these will be documented in the 2008/2009 BRAC
    President's budget request.

             INTEGRATED GLOBAL PRESENCE AND BASING STRATEGY (IGPBS)

        Question. What is the Army's estimated total cost to implement
    IGPBS decisions? How much funding has been provided to date to
    implement IGPBS decisions? What is the estimated amount of future
    funding needed to implement IGPBS decisions?
        Answer. The Army estimates the total cost of IGPBS at $2.9 billion
    through fiscal year 2013. This includes Base Realignment and Closure
    IGPBS stationing actions included in the 2005 BRAC Commission Report.
    In fiscal year 2006 the Army has funded $460.8 million; $337.6 million
    for BRAC and $123.2 million base budget (MCA--$12 million; MPA--$33
    million; OMA--$66.7 million and OPA--$11.5 million). The remaining
    estimated amount needed to complete IGPBS is $2.4 billion.

                WARFIGHTER INFORMATION NETWORK--TACTICAL (WIN-T)

        Question. What is the Army plan for transitioning from Joint
    Network Node to WIN-T? Please explain how the WIN-T program has been
    rebaselined to support the FCS program? What is the estimated total
    cost of the WIN-T program? How much funding has been provided to date
    for the WIN-T program? What is the estimated amount of future funding
    needed to complete the WIN-T program?
        Answer. Currently, the Army is assessing how to optimize transition
    from the procurement and fielding of the Joint Network Node to
    Warfighter Information Network--Tactical (WIN-T). The WIN-T program's
    re-baselining supports Future Combat Systems (FCS) by aligning the
    availability of configuration items to support FCS integration and lab
    testing. Afterward, WIN-T will provide form fit and function products
    that meet prescribed space, weight, and power dimensions and liquid-
    cooling technology for integration into FCS platforms. The total
    acquisition cost for the WIN-T program per the December 2005 Selected
    Acquisition Report (SAR) is estimated in fiscal year 2003 constant
    (base year) dollars at $10.6 million for Research, Development, Testing
    and Evaluation (RDTE) and procurement costs. The total acquisition cost
    in then year dollars is $14.2 million. The total amount of funding
    provided to date in fiscal year 2003 constant (base year) dollars
    (2002-2006) for WIN-T is $322.6 million. Adjusted for inflation, this
    amount is $335.7 million (then year dollars). The estimated amount of
    future funding needed to complete the WIN-T program estimated in fiscal
    year 2003 constant (base year) dollars is $10.2 million. Adjusted for
    inflation, this amount is $13.8 million (then year dollars) for RDT&E
    and procurement.

                       JOINT TACTICAL RADIO SYSTEM (JTRS)

        Question. Prior to the JTRS program restructure, what was the Army
    total cost estimate to develop and field JTRS Cluster 1 and JTRS
    Cluster 5 radios? What is the Army's current total cost estimate to
    develop and field JTRS radios? How has the Army JTRS fielding plan
    changed as a result of the program restructuring?
        Answer. The JTRS Program had programmed approximately $3 billion in
    the Future Years Defense Plan (FYDP) prior to the restructuring. After
    the restructuring, the current estimate to develop the total JTRS
    Increment 1 program, which includes the air, ground, and maritime
    domains is now approximately $4 billion in the FYDP. The Army portion
    of this DOD enterprise-wide estimate is approximately one-third of the
    $4 billion. This estimate was approved by the Department in November
    2005 at the Defense Acquisition Board (DAB). The Increment 1
    development is designed to deliver critical networking capabilities to
    the warfighter. Future incremental developments will add additional
    capabilities as technology matures and funding becomes available.
        Since the program has been restructured, the Army's fielding plan
    has changed to accommodate the revised funding and program timelines
    approved by the DAB. In general, the JTRS program restructuring delayed
    the fielding of JTRS capabilities about two years. The FCS program, as
    well as other Army fielding plans, has been synchronized to achieve
    JTRS capabilities as soon as the JTRS begins to field its systems
    (fiscal year 2009/10).

               ARMY TRANSFORMATION AND THE C-17 AIRCRAFT PROGRAM

        Question. What is the estimated total cost to implement the
    recommendations of the Army Aviation Task Force? How much funding has
    been provided to date to implement Army Aviation Task Force
    recommendations? What is the estimated amount of future funding needed
    to complete implementations of Army Aviation Task Force
    recommendations? Please describe how Army Aviation Modernization
    efforts have changed since completion of the Army Aviation Task Force
    review?
        Answer. In 2003, the Chief of the Staff, Army (CSA) directed Army
    aviation to become a ``capabilities based maneuver arm optimized for
    the joint fight with a shortened logistics tail.'' The desired outcome
    is aviation units in modular configuration that are agile, flexible,
    deployable, and sustainable.
        The Acting Secretary of the Army and CSA recommendation to
    terminate the Comanche program was supported by the Secretary of
    Defense and approved by the President on February 20, 2004. It was
    subsequently briefed to Congress the week of February 23-27, 2004.
        In order to implement the aviation focus group recommendations and
    CSA-approved decisions, all funding resulting from the termination of
    the Comanche program and all funding within aviation programs will
    remain with the Aviation Battlefield Operating System for the
    resourcing of aviation programs.
        Army aviation funding, from both the aviation base budget and
    Comanche reprogramming, totals $12.2 billion (fiscal year 2005-2007)
    and is applied in accordance with the aviation investment strategy.
    Retention of funding within Army aviation, combined with the commitment
    from senior Army leadership, the Secretary of Defense, Congress, and
    the President, creates the opportunity to ``fix'' Army aviation. The
    challenge is in maintaining the long term fiscal discipline necessary
    to fully implement the strategy.
        The aviation investment strategy supports the Army Aviation
    Modernization Plan, included in the Army Modernization Plan, which
    describes the changes intended to improve Army capabilities to meet
    current and future full-spectrum aviation requirements. The Aviation
    Modernization Plan was developed based on a full Doctrine,
    Organization, Training, Leadership and Education, Materiel, Personnel,
    and Facilities analysis that included the integration of lessons
    learned from recent operations.
        Army aviation is moving aggressively to (1) Satisfy current and
    future operational capabilities; (2) Modernize the entire fleet while
    supporting current deployments; (3) Rapidly acquire best materiel
    solutions by facilitating correct and comprehensive policies; and (4)
    Achieve Joint interoperability, modularity and deployability through
    transformation.

                         RECEIPT OF SUPPLEMENTAL FUNDS

        Question. Secretary Harvey, it would be helpful if you could
    explain how soon you will need the Supplemental funds requested for the
    Global War on Terror which were requested in mid-February. Also, could
    you share with the committee what impact there would be from any delay
    in receipt of the requested funds?
        Answer. We will need the Supplemental enacted in May in order to
    receive the funding by early June. After this date we risk exhausting
    all funds from both Title IX and base programs and could face
    insolvency in some appropriations.
                                     ______

                  Questions Submitted by Senator Thad Cochran

                        ARMY NATIONAL GUARD END STRENGTH

        Question. Secretary Harvey, the fiscal year 2007 budget funds the
    Army National Guard at 333,000 and not the congressionally mandated
    350,000. I understand this is part of the Army's plan to transform and
    to modernize.
        A positive aspect of your plan is that National Guards units would,
    for the first time, be resourced equivalent to active forces. I also
    understand there is a commitment from the Department to fund the Army
    National Guard to the strength they are able to recruit, up to 350,000.
        Based on current indicators, the National Guard will exceed
    retention goals. In Mississippi for example, the Guard achieved 101
    percent of their retention mission during a very difficult time that
    they were supporting the Global War on Terror and trying to deal with
    the terrible effects of Hurricane Katrina.
        My question to you is how will the Department fund the increase in
    personnel when Guard recruiting and retention goals are achieved?
        Answer. The Army is committed to funding the Army National Guard to
    350,000 in fiscal year 2007. Cost per 1,000 National Guard Soldiers is
    difficult to capture based on each Soldier's varied status in the
    National Guard. For example, Soldiers mobilized for Operation Iraqi
    Freedom costs differ dramatically from a Soldier performing weekend
    drill on inactive duty for training. Efforts are ongoing regarding the
    equipment/investment (procurement) restoral, and the total amount
    depends on the final outcome of force structure adjustments.

                              EQUIPMENT READINESS

        Question. Secretary Harvey, I understand that high utilization
    rates and extreme conditions in Iraq and Afghanistan continue to take a
    toll on military equipment. I have also been informed that
    traditionally, units returning from combat operations bring their
    equipment back with them. However, in order to minimize transportation
    costs and keep key items in the combat zone, this has not been the case
    relative to Iraq and Afghanistan. For example, the 155th Separate Armor
    Brigade from Mississippi left 370 trucks, 14 wreckers, and 20
    ambulances in Iraq which impacts readiness and its ability to conduct
    training and homeland security missions along with responding to the
    Governor's call.
        Are funds requested in this budget request and in the fiscal year
    2006 Supplemental adequate to finance the repair and replacement of
    equipment damaged or destroyed during combat operations in Iraq and
    Afghanistan?
        And do they ensure the Guard, Reserve and active units have the
    equipment at their home stations necessary to maintain readiness
    ratings, conduct training and respond to homeland security missions or
    natural disasters?
        Answer. The key to our ability to sustain our long-term commitments
    at home and abroad is to reset our equipment and make near and long-
    term investments in a better equipped, more capable force. To achieve
    this, we need Congress to support our reset and investment strategies
    specified in our program and supplemental requests for fiscal years
    2006 and 2007.
        As you know, years of under-funding for the Army prior to 9/11
    resulted in a $56 billion ``hole'' in readiness across all three
    components due to insufficient modernization to fill existing
    shortfalls and emerging needs. That ``hole'' deepens due to battle
    damage and operational wear and tear. We maintain sustainment stocks in
    theater to rapidly replace battle losses in the short-term to mitigate
    risk to Soldiers and operations. We also prioritize dollars and
    equipment to deployed units, sustainment stocks, and next-deployers to
    ensure deployed Soldiers have what they need to accomplish assigned
    missions. All of this results in lower resource levels among units
    across the Army that are resetting and training for homeland or global
    operations.
        Resetting equipment through repair, recapitalization, and
    replacement is a wise and critical investment that provides Soldiers
    the equipment they need and enables the Army to accelerate its
    transformation to more capable units. However, reset requirement costs
    are over and above the normal costs to sustain the Army, and we expect
    the total reset bill for fiscal year 2006 to be nearly $13.5 billion.
    In accordance with DOD policy and intent, we rely on Supplemental
    funding to pay for our reset program.
        With previous Congressional help, we increased our depot production
    capacity for repair and recapitalization by 250 percent from where it
    was before the war, and we reset 37 brigade combat teams in the last
    two years. Many of those brigades have already returned to theater in
    their more capable, modular configuration. We have also increased and
    fenced our investment accounts for the Reserve Component to more than
    $24 billion in fiscal year 2005-11.
        Fiscal year 2007 will be pivotal for the Army. While the Office of
    the Secretary of Defense has not yet submitted a request for
    supplemental funding in fiscal year 2007, the anticipated funding in
    fiscal year 2006 and fiscal year 2007 will enable us to address reset
    while protecting our investment accounts. Resetting and investing will
    enable us to transform and provide better manned, trained, and equipped
    Army units for full spectrum operations in defense of the nation at
    home and abroad.

                      BASE REALIGNMENT AND CLOSURE (BRAC)

        Question. Secretary Harvey, included in last year's BRAC was the
    decision to close the Mississippi Army Ammunition Plant (MSAAP) on
    Stennis Space Center. Since the facility was located on land leased
    from NASA, I understand the facility will be turned over to NASA. I
    understand NASA and the Army are in discussion concerning this
    transfer; however, it seems the two parties are at an impasse. I am
    hopeful the Ammunition Plant can be the first property transferred off
    the Army's rolls. Could you provide the subcommittee with an update on
    where the Army is in the BRAC process, to include the status of the
    Mississippi Army Ammunition Plant?
        Answer The Army is in discussions with NASA and plans are
    continuing to move the Mississippi Army Ammunition Plant back to NASA
    by the end of calendar year 2006.

                         LIGHT UTILITY HELICOPTER (LUH)

        Question. Secretary Harvey, I understand the Army is in the process
    of selecting a commercial helicopter to fill the role of your Light
    Utility Helicopter to be used for non-combat missions. I congratulate
    you for deciding to use a helicopter that is already in production and
    which does not require any research and design funding. It would seem
    to me that this approach will save the taxpayers money and provide the
    Army with the needed platform in a very short period of time. Can you
    please highlight how that process is going?
        Answer. Given that the Army chose to fulfill the LUH requirements
    through the acquisition of an existing commercial available FAA
    certified aircraft the Army was able to reduce the timeline from
    concept development/refinement to acquisition to less than 36 months.
    This enables us to fulfill our commitment to modernizing the Army
    National Guard with a new light utility helicopter within the next five
    to seven years. The LUH request for proposal was released on July 26,
    2005, and the source selection activity began October 20, 2005. The
    competitive source selection is currently underway and the Army
    anticipates Milestone C and a contract award in early summer 2006.
                                     ______

                  Questions Submitted by Senator Arlen Specter

                       ARMY HERITAGE AND EDUCATION CENTER

        Question. In 2001, the Army decided to incorporate a facility at
    Carlisle that would support the Army Heritage and Education Center. The
    facility would serve as both as a storage and conservation facility for
    the Army Heritage Museum collection and would serve as a conservation
    facility for the collection of historic documents and photographs Army-
    wide. This facility was initially programmed for funding in fiscal year
    2006 and according to my information is now programmed in fiscal year
    2009. Could you update me on the status of the project and explain why
    the project keeps slipping though the design of the facility is
    complete and the need for the facility remains?
        Answer. The Museum Support Facility was initially programmed for
    funding in the fiscal year 2005 Future Years Defense Program (FYDP) for
    fiscal year 2009 and remains in fiscal year 2009 in the current FYDP.
    The design is currently 95 percent complete and could be ready to
    advertise in approximately three months.

     NATIONAL MUSEUM OF THE UNITED STATES ARMY/ARMY HERITAGE AND EDUCATION
                         CENTER--COMPLEMENTARY PROJECTS

        Question. In November 2001, Assistant Secretary Fiori indicated
    that the National Museum of the United States Army and the United
    States Army Heritage and Education Center (AHEC) were complementary
    projects, not competitive and that they have different, but equally
    important missions. Since then, the Army has provide $5 million to
    contract with the Army Historical Foundation to raise funds for the
    National Museum of the United States Army facility while the Army
    Heritage Center Foundation which is raising funds for the AHEC has
    received no Army funding support. In supporting the Army Historical
    Foundation's fundraising effort, it appears that the Army does not
    consider that the AHEC is equally important. You have legislative
    authority to enter into agreements with the Army Heritage Center
    foundation to support the design, construction and operation of the
    AHEC. The Army Heritage Center Foundation has $10 million in matching
    funds from the Commonwealth of Pennsylvania to continue this project
    and the Foundation is ready to begin construction of the next phase of
    their project later this year subject to obtaining additional funds and
    grants. Does the Army support the mission of the Army Heritage and
    Education Center? Are the two facilities complimentary? What level of
    funding does the Army plan provide to contract with the Army Heritage
    Center Foundation for the continued development and expansion of the
    AHEC?
        Answer. The Army remains totally committed to both the National
    Museum of the United States Army (NMUSA) at Fort Belvoir, Virginia, and
    the United States Army Heritage and Education Center (AHEC) at Carlisle
    Barracks, Pennsylvania, as equally invaluable complimentary
    institutions. The first round of construction on the AHEC, building an
    expansive, superbly designed state of the art archive, was altogether
    funded by the Army, ample testimony to the importance of the project to
    the Army. Federal funds have been identified for other aspects of the
    overall AHEC project, although much that remains to be built is to be
    built with private funds--as is also the case with the NMUSA. It is not
    true that the Army unilaterally distributed funds to the Army
    Historical Foundation to help them raise money for the Fort Belvoir
    site. Congress identified money for the Army Historical Foundation, and
    directed the Army to administer its distribution on the behalf of the
    federal government. We are happy to do so and would like to see a
    similar arrangement made for the Army Heritage Center Foundation. The
    Army is by law limited in the help it can offer private foundations
    without Congressional intervention. Both the NMUSA at Fort Belvoir and
    the AHEC at Carlisle Barracks are complex projects with multiple
    facilities to be built over time, with various mixes of federal and
    private funding. Those facilities to be built with federal funding are
    on track and reflect the Army's unwavering commitment to both the NMUSA
    and the AHEC. We would welcome whatever support Congress extends to
    both the Army Historical Foundation and the Army Heritage Center
    Foundation--or whatever direct support Congress allows the Army to
    extend.
                                     ______

                Questions Submitted by Senator Pete V. Domenici

                          IMPROVISED EXPLOSIVE DEVICES

        Question. One of the biggest dangers facing our troops in Iraq has
    been roadside explosives known as IEDs. They have disrupted our convoys
    and patrols, and they will likely continue to threaten the on-going
    rotation of troops in Iraq. The Army leads the Joint IED Defeat Task
    Force, which is working to find and destroy these home-made bombs.
        Does the Army have the authorities it needs to get existing
    technologies in the hands of our troops to better detect these bombs?
        If not, what authorities do you need?
        What successes have you had with this task force?
        How is the task force finding, testing, and deploying new
    technologies?
        Answer. Mr. Chairman, I have asked the Director, Joint IED Defeat
    Organization (JIEDDO) to respond to your concerns.

                    SCIENCE AND TECHNOLOGY (S&T) INVESTMENTS

        Question. Would you please comment on the importance of basic S&T
    investments for transformation?
        Answer. The goal of the Army Science and Technology (S&T) program
    is to achieve transformational capabilities that will enable the future
    force while pursuing opportunities to enhance current force
    capabilities. The U.S. Army's single largest S&T investment focuses on
    enabling technologies to field the initial Future Combat Systems
    Brigade Combat Team and follow-on technology insertions.
        Question. Does the Army have the funding it needs to invest in
    basic science and technology?
        Answer. With the Army fully engaged in the Global War on Terror, we
    are challenged to satisfy the resource demands to sustain current
    operations while simultaneously maintaining our S&T investments in the
    most important technologies to enable capabilities for the future
    modular force. However, the Army S&T program is funded consistent with
    the ability to mature technologies synchronized with funding resources
    we are provided to execute our acquisition programs.

                           FUTURE COMBAT SYSTEM (FCS)

        Question. Can you comment on what types of project will be tested
    at White Sands?
        Answer. The currently approved FCS test and evaluation master plan
    details the categories of testing currently planned to be conducted at
    the U.S. Army White Sands Missile Range (WSMR). All categories of
    equipment and systems in the FCS program will be tested at White Sands,
    to include manned combat and support vehicles, unmanned ground and
    aerial vehicles, sensors, and networking components. Within these
    categories, all of the FCS Platforms/systems will be tested as
    individual systems and in a system of systems environment. There are
    also 52 complimentary programs which will also participate in FCS
    system of system level testing at WSMR. These include weapon systems,
    vehicles, sensors, and communication systems. The specific categories
    of testing includes: component level specialty testing utilizing WSMR
    unique test capabilities; field experiments, which serve as program
    risk reduction efforts; Spin-Out Capability Testing for the Current
    Forces, which will begin to integrate FCS technologies into the current
    force; System of System Testing for the FCS BCT; and finally, system
    level Integrated Qualification Testing.
        Question. Do you know how much FCS testing will be conducted at
    White Sands?
        Answer. Due to the unique size and location of White Sands, the
    Army envisions conducting almost all of the system-of-systems or unit
    level testing at White Sands ranges and the adjacent Fort Bliss ranges.
    This allows experimentation and testing in an environment that provides
    an operational setting close to that envisioned for some key
    employments of the FCS Brigade Combat Team (BCT). The FCS systems,
    system-of-systems, and BCT will be experimented with, and tested at all
    unit levels up to the brigade level at White Sands. Technical component
    system level testing will be conducted at White Sands within the
    construct of their capabilities, to include electromagnetics, software,
    and unmanned systems. This technical testing will be augmented by that
    conducted throughout the Army major range and test facility base
    infrastructure as appropriate, based on unique expertise and
    facilities. This testing will be conducted on a two-year integration
    phase cycle with increasing complexity as the FCS program matures.
        Question. What does the Army need to coordinate work between Fort
    Bliss and White Sands Missile Range?
        Answer. The development, training and testing of a FCS-equipped
    force is a significant task, but from a test/training event
    coordination perspective, it is one that is not dissimilar from other
    major Army exercises such as Roving Sands. These large-scale events
    were successful only as a result of the close communication and
    coordination between Fort Bliss and WSMR. With the large area of
    operations and its doctrinal employment, it is anticipated the fully
    capable FCS-equipped brigade in the SO4/initial operational test and
    evaluation timeframe will require the use of essentially 100 percent of
    the WSMR and Fort Bliss airspace and approximately 80 percent of the
    Fort Bliss land-space and 75 percent of the WSMR land space (in area
    and 100 percent in distance). Of course these are a function of the
    scenarios and development objectives, including disparately operating
    the FCS System of Systems across the required area of operations.
    Additionally, the FCS development will require integrated frequency
    management, scheduling, and ranges across WSMR and Fort Bliss, as well
    as portability of instrumentation test assets from WSMR and
    Developmental Test Center (DTC). The WSMR and Fort Bliss have conducted
    regular interchanges in the past and continue to coordinate on emerging
    detailed requirements with an objective of establishing processes for
    integrated asset and operations support to the Army and the FCS
    development. This is simply an expansion of historical and on-going
    coordination and use of the combined capabilities. As an example, plans
    are being formulated to integrate airspace management and scheduling
    into the tri-service air traffic control center at WSMR to provide a
    regional airspace utilization operations capability for the Army
    (inducing FCS), Navy and Air Force RDT&E and training. Given all of
    this information and the associated coordination required, much work
    has already occurred between the two installations and the PM FCS (BCT)
    leadership. At this time, the Army does not anticipate any assistance
    required with coordination between the two installations and their
    respective organizations.
        Question. What can White Sands Missile Range, Holloman Air Force
    Base, and New Mexico do to help the Army with FCS testing?
        Answer. White Sands Missile Range can continue to support the
    Program Manager, FCS in the planning process and the execution of the
    FCS Testing in accordance with the current test and evaluation master
    plan. As the detailed test plans are developed, a more complete request
    for assistance may be provided.
        Question. On a related note, what will the Army's decision to
    expand its presence at Fort Bliss mean in terms of growth and increased
    activity in New Mexico?
        Answer. From a test perspective there will be a permanent presence
    established to support planning and resource development and
    coordination. The exact numbers of personnel are yet to be determined,
    but as indicated above, there will be personnel at WSMR by the summer
    of 2006. As each program test event is executed there will be a surge
    of effort to support, namely in personnel. These events will take place
    as discussed in the preceding paragraphs. Lastly, given the complexity
    of the FCS program and the magnitude of the test events, the surge in
    personnel supporting the test events will number in the 100s. With the
    central test control residing on WSMR and an aggressive test schedule
    over the next three years, it is likely this increase in personnel will
    provide a positive economic impact/growth to New Mexico.
                                     ______

                  Questions Submitted by Senator Conrad Burns

                                 NATIONAL GUARD

        Question. I fully support your goal of having a fully equipped and
    fully manned National Guard that is every bit as capable as its active
    component. Can you highlight your plan to transform the National Guard?
        Answer. The Army National Guard (ARNG) is simultaneously
    transforming with the active component into the modular force design.
    This is important as it is the first step along the way to ensuring
    that all three components, active, Guard, and Reserve, are
    interoperable on the battlefield. It started with the acceleration of
    the ARNG's modular force conversion as approved by the Vice Chief of
    Staff of the Army on June 9, 2005. As approved, all brigade combat
    teams will complete organizational conversion by fiscal year 2008. But
    this action only addresses unit design and manning; it does not
    complete the equipping for those brigades. To make the ARNG as capable
    as the active component, a serious investment into its equipment
    modernization is required. To address longstanding equipment shortages,
    the Army has programmed $21 billion from fiscal year 2005 through
    fiscal year 2011 for ARNG procurement to ensure that the ARNG is
    properly equipped to perform effectively as the Army's operational
    reserve. Additionally, the Army will leverage the Army Force Generation
    model to provide ARNG units a predictable time sequence for potential
    mobilization. This initiative has the benefit of focusing resources and
    training to ensure the readiness of those units that are scheduled for
    mobilization. Lastly, the restructuring of the ARNG is an important
    step to ensuring that the ARNG is properly manned. In the last couple
    of years, the Army, working with the ARNG, has eliminated its
    historical over-structure in order to align structure and manning
    within its authorized end strength of 350,000. These significant force
    structure adjustments and resource investments advance the Army's
    intent of ensuring every ARNG unit is fully equipped, fully trained,
    and fully manned.

                                    SOLDIERS

        Question. As I already mentioned, our troops on the ground are our
    focus. Can you discuss how your spiral development and fielding plan is
    getting new equipment and technologies to our soldiers as quickly as
    possible?
        Answer. Nothing is more important than ensuring our Soldiers have
    the best equipment to accomplish their mission. The Army is adapting
    processes to rapidly enhance the capabilities of our units and Soldiers
    in the complex operational environments of Operations Iraqi Freedom and
    Enduring Freedom. This has the emphasis of all senior leaders and is an
    Army-wide, enterprise level effort.
        We rapidly respond to capability requirements from the field and
    constantly assess and improve fielded equipment. Effective capability
    development is more than just inserting materiel solutions, and
    requires a holistic approach that includes the integration of training,
    sustainment, organizational, and doctrinal changes.
        Army organizations have partnered to rapidly develop, assess and
    field capability to the force. Organizations such as the Army G3's
    Rapid Equipping Force, U.S. Army Training and Doctrine Command's Spiral
    Developments Division, U.S. Army Army Materiel Command's Research,
    Development and Engineering Command and the U.S. Army Test and
    Evaluation Command, have developed processes that support accelerated
    capability development. Other partners in this effort are the Assistant
    Secretary of the Army for Acquisition, Logistics and Technology; the
    Joint community; and Industry.
        We have had successes in a number of areas particularly in the area
    of force protection. This has been done through the development and
    fielding of systems through route clearance companies consisting of
    vehicles such as the Buffalo and RG31, Counter-Remote-Controlled-IED
    Electronic Warfare systems (CREW), small robots such as PACKBOT, an
    Improved First Aid Kit (IFAK), an unmanned aerial vehicles and other
    Intelligence, Surveillance and Reconnaissance and command and control
    systems.
        The efforts of these organizations have also produced a Counter
    Rocket, Artillery, Mortar (C-RAM) capability currently in use in
    theater, and training enhancements that ensure our Soldiers are better
    prepared for the asymmetric challenges in the current operational
    environment.
        To better address the asymmetric challenges, the Army recently
    organized the Asymmetric Warfare Office, under the Army G3, to lead the
    effort in developing the necessary policy, programs, and resources to
    stay in front of these types of threats.
        Our organizational and process changes are paying off. We are
    better able to quickly react to the changing battlefield, ensuring our
    Soldiers have the best equipment our nation can provide.
                                     ______

                Questions Submitted by Senator Dianne Feinstein

                                   WAR COSTS

        Question. Prior to the U.S. invasion of Iraq, Pentagon officials,
    including Secretary Rumsfeld, estimated that the total cost of the Iraq
    War would not surpass $50 to $60 billion. As you know, to date, the
    cost of combat operations in Iraq has reached about $250 billion, and
    that number could well surpass $300 billion by the end of the year.
    Unfortunately, the Pentagon has not provided Congress any war funding
    estimates past fiscal year 2007.
        First, in this age of rising budget deficits, can you provide this
    Committee any type of estimate of what level of future funding will be
    necessary from the Congress to appropriately pay for the costs of this
    ongoing war?
        Answer. In the short term, we anticipate the costs of this ongoing
    war to remain at current levels. I cannot estimate future costs, which
    will be driven by the size of the coalition force in Iraq and the level
    and duration of the conflict. As the Iraqi forces accept increasing
    responsibility for the security of their country, our forces will
    withdraw and costs for military operations will decline accordingly.
    However, the Army will require funding to reset our force for an
    estimated two years beyond that timeframe.
        Question. Why does the Administration continue to rely almost
    entirely on emergency supplementals to fund the war?
        Answer. From the Army perspective, base budgeting requires a
    generally stable operational environment with predictable costs. That
    is not the case with our operations in Iraq. In addition, we anticipate
    significant changes in future funding requirements as we shift from an
    operational presence to resetting the force.
        Question. Wouldn't you agree that the American taxpayers deserve to
    know upfront--through the regular base budget--the amount of money that
    is going to the war effort? Or do you believe it is fair to continue
    the reliance on this budget gimmickry?
        Answer. The regular base budget provides comprehensive information
    on the costs to sustain America's Army across a generally stable
    period. The war effort is not part of that base, but represents the
    added costs to fulfill our role in supporting the combatant commanders.

                       TRAINING OF IRAQI SECURITY FORCES

        Question. Secretary of State Rice and Chairman of the Joint Chief
    of Joint Chiefs of Staff, General Pace, have both suggested in recent
    days that it is likely that the military will drawdown troop levels
    sometime this year. Last fall General Casey, the top commander in Iraq,
    stated that a reduction in American troops would take ``away an element
    that fuels the insurgency.'' Does the Army plan to reduce its
    endstrength in Iraq this year? Next year?
        Answer. In accordance with title 10 U.S. Code, the Army is charged
    with organizing, manning, training, and equipping a force capable of
    fulfilling current and future Secretary of Defense approved
    requirements of combatant commanders. Thus, the Army force scheduled to
    deploy in future rotations to Iraq is conditional upon periodic
    strategic and operational assessments from the Commander, U.S. Central
    Command (CENTCOM). The number and type of forces requested by the
    CENTCOM commander may fluctuate as the political, economic, and
    security conditions in Iraq and Afghanistan evolve over time.
        Question. How do you think that a reduction in the number of
    American forces would affect the rise in sectarian violence in Iraq?
        Answer. Senator, this question should be referred to the Commander,
    U.S. Central Command for response.

                              SUBCOMMITTEE RECESS

        Senator Inouye. The subcommittee will reconvene tomorrow at
    10 o'clock in the morning, when we will hear from the
    Department of the Air Force. And, until then, we'll stand in
    recess. And I thank you very much.
        [Whereupon, at 3:33 p.m., Tuesday, March 28, the
    subcommittee was recessed, to reconvene at 10 a.m., Wednesday,
    March 29.]