[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


 
             DEPARTMENT OF DEFENSE FISCAL YEAR 2009 BUDGET 

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

                                HEARING

                               before the

                        COMMITTEE ON THE BUDGET
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

           HEARING HELD IN WASHINGTON, DC, FEBRUARY 27, 2008

                               __________

                           Serial No. 110-32

                               __________

           Printed for the use of the Committee on the Budget


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                        COMMITTEE ON THE BUDGET

             JOHN M. SPRATT, Jr., South Carolina, Chairman
ROSA L. DeLAURO, Connecticut,        PAUL RYAN, Wisconsin,
CHET EDWARDS, Texas                    Ranking Minority Member
JIM COOPER, Tennessee                J. GRESHAM BARRETT, South Carolina
THOMAS H. ALLEN, Maine               JO BONNER, Alabama
ALLYSON Y. SCHWARTZ, Pennsylvania    SCOTT GARRETT, New Jersey
MARCY KAPTUR, Ohio                   MARIO DIAZ-BALART, Florida
XAVIER BECERRA, California           JEB HENSARLING, Texas
LLOYD DOGGETT, Texas                 DANIEL E. LUNGREN, California
EARL BLUMENAUER, Oregon              MICHAEL K. SIMPSON, Idaho
MARION BERRY, Arkansas               PATRICK T. McHENRY, North Carolina
ALLEN BOYD, Florida                  CONNIE MACK, Florida
JAMES P. McGOVERN, Massachusetts     K. MICHAEL CONAWAY, Texas
NIKI TSONGAS, Massachusetts          JOHN CAMPBELL, California
ROBERT E. ANDREWS, New Jersey        PATRICK J. TIBERI, Ohio
ROBERT C. ``BOBBY'' SCOTT, Virginia  JON C. PORTER, Nevada
BOB ETHERIDGE, North Carolina        RODNEY ALEXANDER, Louisiana
DARLENE HOOLEY, Oregon               ADRIAN SMITH, Nebraska
BRIAN BAIRD, Washington              JIM JORDAN, Ohio
DENNIS MOORE, Kansas
TIMOTHY H. BISHOP, New York
GWEN MOORE, Wisconsin

                           Professional Staff

            Thomas S. Kahn, Staff Director and Chief Counsel
                 Austin Smythe, Minority Staff Director














































                            C O N T E N T S

                                                                   Page
Hearing held in Washington, DC, February 27, 2008................     1

Statement of:
    Hon. John M. Spratt, Jr., Chairman, House Committee on the 
      Budget.....................................................     1
    Hon. Paul Ryan, ranking minority member, House Committee on 
      the Budget.................................................     9
    Hon. Gordon England, Deputy Secretary of Defense.............    11
        Prepared statement of....................................    14


                         DEPARTMENT OF DEFENSE
                        FISCAL YEAR 2009 BUDGET

                              ----------                              


                      WEDNESDAY, FEBRUARY 27, 2008

                          House of Representatives,
                                   Committee on the Budget,
                                                    Washington, DC.
    The Committee met, pursuant to call, at 10:08 a.m., in room 
210, Cannon House Office Building, Hon. John M. Spratt, Jr., 
[chairman of the committee] presiding.
    Present: Representatives Spratt, Edwards, Allen, Becerra, 
Doggett, Berry, McGovern, Scott, Etheridge, Hooley, Bishop, 
Moore, Ryan, Barrett, Conaway, Tiberi, Smith, and Jordan.
    Chairman Spratt. Let me open the hearing by welcoming a new 
member, Jim Jordan from Ohio recently elected. We are glad to 
have you.
    I would also like to welcome our witnesses. I beg your 
pardon, Mr. Ryan.
    Mr. Ryan. Thank you. I appreciate it, Chairman. I too just 
wanted to welcome our colleague, Jim, to the Committee.
    Just a couple of things on Jim. He is a champion wrestler. 
You can just kind of tell by looking at his ears. And he 
graduated from the University of Wisconsin with a degree in 
economics. He graduated from Ohio State with a masters in 
education; Capital University with a law degree. He served both 
in the Ohio General Assembly and the Ohio State Senate. He is a 
great addition to our Committee and we are all looking forward 
to working with you, Jim. Welcome to the Committee.
    Chairman Spratt. I would also like to welcome our witness 
the Deputy Secretary of Defense, Gordon England who has been 
here before and we appreciate his coming again. The Under 
Secretary of Defense, the Comptroller, Tina Jonas who is an 
alumnus of the Hill and we are glad to have you. And the Vice 
Chairman of the Joint Chiefs of Staff, General Cartwright, you 
honor us with your presence. We appreciate your coming also.
    They are here of course to discuss the 2009 Defense budget. 
On behalf of the Committee we appreciate your coming, but above 
all we appreciate your service to our country.
    Our purpose is to gain a better understanding of the 
President's 2009 Defense budget. What it includes, what it 
excludes and what it portends, especially for the long-run 
future.
    There are two particularly noteworthy features of the 
Defense budget that we would like to explore with you this 
morning. First, the absence of a full year estimate for the 
war. There is only a $70 billion so called place holder for war 
operations in 2009 and nothing, nothing at all, no additional 
amount beyond 2009.
    Second, the so called based Defense budget appears to us to 
decline in real terms beyond the budget year, 2009. This seems 
to us at odds with the Administration's Defense plans as we 
understand them.
    We need to understand better your real, most likely budget 
if we are going to make the trade-offs and balance the 
priorities and put this budget on a sustainable fiscal course. 
We will all claim that our target is to balance the budget by 
2012, but that balance will be a bogus objective if we don't 
have good input, we won't have good output.
    Without that understanding whether it be for the war or for 
base day-to-day Defense the so called base budget, we will be 
taking stabs in the dark as we try to plow the path to a 
balanced budget and it will be much more difficult than it 
needs to be.
    In fact, gaming the process helped put us in this hole. 
There are lots of reasons we are deep in deficit now. No 
question that the recession took its toll and could take its 
toll again. There is no question that the war has been costly 
or that the 9/11 episode was costly. All of these things have 
contributed.
    But you may recall that Secretary Rumsfeld deferred the 
submission of his first real Defense budget saying he needed 
first to consider it in terms of what he wanted to do by way of 
transformation. But when Secretary Rumsfeld finally submitted 
his real budget, I think that was in June, he acknowledged 
before the House Armed Services Committee that one reason he 
had delayed or deferred was that the President had asked that 
the tax cut bill come first.
    President Bush in effect told us that we could have guns 
and butter and tax cuts too and never mind the deficits. But in 
three years by 2013, the budget's bottom line was no longer a 
surplus of $236 billion as it had been in 2000, but a deficit 
of $413 billion. And it appears to us that this same attitude 
underlies much of the budget submitted this year.
    It is with this against this back drop that we review the 
Defense budget. We have huge deficits, an economy that is or 
could be headed towards recession, and a bow wave of baby 
boomers all of which will put enormous pressure on the budget's 
bottom line. There are monumental challenges in front of us and 
the first order of business today is to get a complete 
understanding of our Defense plan, which after all constitutes 
the lions share, far more than half, of all discretionary 
spending.
    Since the year 2000 the Defense budget has ridden the crest 
of a long wave. Experienced it's largest, longest sustained 
build up since World War II. Spending, or outlays, on National 
Defense totaled $675 billion for 2009 and measured in 2008 
constant dollars rank as the highest Defense budget since World 
War II, surpassing the peaks of Vietnam and Korea.
    Spending reaches this high level even though the budget 
includes only $70 billion in new budget of authority to finance 
just a portion of the total cost that we are likely to incur in 
maintaining the substantial forces in Iraq and Afghanistan in 
2009.
    Looking beyond the budget year, projections reflect a $61 
billion nominal cut in Defense for 2010 and cuts below the 
level needed to keep pace with inflation thereafter. There is 
no funding after 2009. No funding for Iraq and Afghanistan. And 
the base budget appears to us to be cut in real terms, and that 
just seems to us to be at odds with reality.
    Costs have increased every year for operations in Iraq and 
Afghanistan and we believe the cost will probably continue at 
some level over the five-year budget window which we work with. 
For the base budget current Defense plans call for increases 
above inflation, not decreases. CBO in an update to it's report 
on the long-term implications of current Defense plans which 
was issued in December concluded that current Defense plans 
excluding the war could cost billions more per year than the 
Administration's budget shows.
    Let me just show you some slides to sort of wrap up my 
point and to give context about what we would like to talk 
about this morning. Jose, if we could just take them one by 
one, please, sir.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    That is number four, I believe. This shows that even 
without full war funding, with only the $70 billion provided 
for 2009, the level of expenditure in real dollars, 2008 
dollars is higher than Vietnam, higher than Korea, higher than 
any time since World War II. It is a substantial sum of money.
    Second slide.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    This shows the basic budget in layer cake fashion which we 
put together along with CBO. The bottom sliver is the baseline 
budget when the Bush Administration came to the office. The 
next layer is the Bush 2009 policy additions. And the next 
layer, several layers, are the future war costs, which I will 
come back to. But you can see from 2000 until 2010 or 2011 the 
Defense budget has more than doubled.
    Next chart.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    And this shows you what the war costs have been from 2001 
through 2008. This would include the operations we had over 
Iraq during the period before the between the Persian Gulf War 
and the invasion of Iraq in 2003. Comes to a very substantial 
sum, over $800 billion. And of course the $70 billion bar there 
at the very far right, one of the bookends, is in contrast to 
the $196 billion that was required last year.
    Next chart.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    We asked CBO, we have asked DOD, but you have declined to 
give it us because of the variables involved in projecting this 
number. We said to them, Let's make an assumption: That we draw 
down the force levels that are there today gradually so that by 
2013 in both theaters, Iraq and Afghanistan there is 75,000 
troops, given the fact that nearly half that number in 
Afghanistan today and are likely to be there for some time. 
That is probably a pretty conservative assumption.
    But we assume that by 2013 the troop level would hit 75,000 
in both theaters together and then would stay at a steady state 
for the rest of the projection period. We added up the total 
amount of the continued deployment in both of those places over 
the next ten years and the total comes to a trillion dollars on 
top of the $800 billion already expended, is a substantial sum 
of money.
    Next chart.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    In addition, as we looked at last year's budget and then 
again at this year's budget, we found that there was a trend 
here. Namely, that in the out years beyond the current budget 
year, there was a downward decline in the budget for the base 
Defense operations. Day-to-day Defense operations. It is not 
huge, but it seems to be at odds with what we understand to be 
the likely course of the Defense budget. And when I asked 
Secretary Gates about this at the House Armed Services 
Committee, he indicated that this was the product of a 
negotiation with OMB. And it did result, if they complied with 
OMB's growth Defense growth objectives, it would amount to a 
decline in real spending on National Defense.
    So one of the questions we have for you this morning is, is 
that a realistic forecast of likely Defense spending in the 
foreseeable future. Next chart.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    This shows you that the direct budgetary cost of the Iraq 
War alone exceeds $600 billion. That includes a request for 
2008 and it assumes it will be appropriated. It comes to $608 
billion, a substantial sum of money in sunk cost.
    Next chart.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    We frequently here today talk that the Defense budget, 
President Bush came to the Citadel and made a speech during his 
campaign and then went back again and made another Defense 
speech. But he indicated then that we needed to get Defense 
spending up over and above three percent of GDP. Three and half 
to four percent was what he proposed. Well it appears to us if 
you look at National Security broadly considered, not just 
function O5O for the Pentagon, but of course the Nuclear 
Program at DOE, all of function O5O. If you look at 
international affairs or much of it which goes to National 
Security and if you look at Veterans programs, which after all 
are a collateral cost of maintaining a substantial military 
over the years.
    You get a total of expenditures of between around $800 
billion and as a percentage of GDP that is 5.3 percent of GDP 
already. There is a lot of talk about having a resolution that 
would dictate that spending be at least 4 percent of GDP. As we 
see National Security and you continually define it that way 
yourselves, Homeland Security, National Defense, Veterans 
Affairs is well above 4 percent. Already it is 5.3 percent.
    Next chart.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    And this kind of rubs it in. It is not really fair. You 
might can call this the value of having allies. This is one 
reminder of what the first Persian Gulf War cost of us because 
we had contributing allies. We had the Japanese contributing, 
we had the Germans contributing. If they didn't contribute 
troops they contributed real money and of course the Persian 
Gulf States put up substantial sums themselves. And the net 
cost to our budget was $2.1 billion.
    We are not suggesting you could pull that off again in 
today's episode in Iraq, but it does raise the question, to 
what extent are we trying to build new alliances and a new 
division of labor in the world so that our allies in different 
regions of the world share a bigger burden of the total cost of 
Defense.
    Next chart.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Well this should give you another ground for wondering if 
the out year numbers are good and that is the so-called SAR 
reports which is summarized periodically by GAO show that all 
of our major weapon systems are experiencing substantial cost 
growth, particularly those like the F-35, the F-222 of course 
has been a very expensive airplane to buy. The Navy is now 
buying a number of ships like the CVN-X Carrier which have a 
very high front-end cost on the theory that the operational 
cost and the life-cycle cost will be substantially less. Let's 
hope it works out that way, but we have seen substantial 
overruns in the acquisition of military, on your watch, on 
everybody's watch. It is the nature of the beast. I am not 
blaming--it is your lap it just happened in and nobody seems to 
have been able to contain the cost of major weapon systems.
    That just gives you the overview of why we are concerned 
this morning. We didn't come here to berate you. We appreciate 
your service to the country, but we need good numbers. We need 
a good firm basis for projecting what likely costs for Defense 
are going to be so we can face squarely the hard decisions we 
have got to make if we are indeed genuine about trying to get 
this budget on a sustainable course back in balance by 2012.
    Thank you for coming, but before your testimony I would 
like to recognize Mr. Ryan for a statement.
    Mr. Ryan. Thank you, Chairman Spratt. Welcome back, 
Secretary, Deputy Secretary England and welcome General 
Cartwright and Ms. Jonas to the Committee. I appreciate the 
work you do and the monumental task that you have managing an 
organization with over 3 million employees, facilities in over 
5,000 locations and 163 countries and a budget of over a half a 
trillion dollars.
    I also appreciate the work you do in managing an agency 
that is attempting to transform from a cold war footing to a 
more agile joint force while prosecuting a very challenging 
global war against terrorism. And I am particularly grateful to 
the men and women who put on a uniform each and every day and 
answer the call to protect our freedom while placing their 
lives on the line in places far away from their families and 
loved ones.
    I believe that providing for our national security is the 
highest obligation of the federal government.
    And if you could call up slide one, please.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    The dramatic Defense cuts of the 1990's left the Department 
of Defense ill-equipped to meet the new challenges we have 
faced over the last decade. I would hope, however, that with 
the funding levels provided since 2000 and an increase of over 
80 percent to the base budget, the Department is getting on a 
more sound financial ground as we prepare to enter the next 
decade and the new challenges it will bring.
    The war on terror has been very costly, both in the 
sacrifice made by our fighting forces and in dollars, but not 
as costly as enduring the alternative, inaction in the face of 
adversity. As a member of this Committee, I have been and will 
continue to be supportive of providing the Department the fully 
funding it needs to continue to prosecute this war. I am 
disappointed, however, that the majority has failed to act on 
the President's request of over one year ago for supplemental 
funding.
    I am also disappointed, though not surprised given the 
circumstances, that the Administration only requested a portion 
of funds for the war in 2009. This Committee has called for 
transparency in regard to war funding both in the 
Administration's request and in the budget. Clearly, there is 
still room for improvement on this front. So it is my hope that 
we will use our time today to gain a better understanding of 
what the Department's 2009 supplemental request will be.
    And if you could pull up number seven, please.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    This just gives you in perspective of where we are. And 
this is a real apples to apples comparison of National Defense 
spending as a percentage of GDP. We contributed more as a 
percentage of our economy under the Carter Administration than 
we are today, and we are facing a war that is global in reach. 
A war that is going to cost us a lot and a lot of time.
    And so I think it is important to put these things in 
perspective. I think it is important to consider the fact that 
this is our highest priority for our nation, for our federal 
government, but at the same time given all the dollars involved 
and all the sacrifices that we see from our men and women that 
we represent, we need to have more transparency in the way we 
spend our constituents dollars.
    And with that, I welcome our witnesses. Thank you.
    Chairman Spratt. Thank you, Mr. Ryan. I ask unanimous 
consent that all members who did not have a chance to make an 
opening statement be able to submit one for the record at this 
point and Secretary England, General Cartwright, Secretary 
Jonas, you can submit your full statement for the record. We 
will make it part of the record so that you can summarize it as 
you see fit.
    We again thank you for coming and the floor is yours. We 
look forward to your presentation.

STATEMENT OF THE HONORABLE GORDON ENGLAND, DEPUTY SECRETARY OF 
DEFENSE; ACCOMPANIED BY: THE VICE CHAIRMAN OF THE JOINTS CHIEFS 
   OF STAFF, GENERAL JAMES E. CARTWRIGHT; TINA JONAS, UNDER 
               SECRETARY OF DEFENSE (COMPTROLLER)

                  STATEMENT OF GORDON ENGLAND

    Mr. England. Chairman Spratt and Mr. Ryan, members of the 
House Committee on the Budget. First of all, thank you very 
much for the opportunity to be here. We do appreciate the 
opportunity to come and discuss the budget and the war cost 
with you. I will tell you for me I always, first of all, I 
learn something, it is always informative for me and I hope it 
is a benefit to this Committee. So I thank you for the 
opportunity to be here.
    Chairman Spratt. We will give you a package of our charts 
to take back to the Pentagon with you. [Laughter]
    Mr. England. It is a delight to have General Jim Cartwright 
with us, you know, because this is the first time with me 
before the Budget Committee that I have the General with me. So 
I welcome him and also to have Ms. Tina Jonas back with us 
again today.
    I will try to respond to a few of your comments. There will 
only be one opening statement, Mr. Chairman, and that will by 
my opening statement. And then because I know time is short we 
will get immediately then to questions and dialogue.
    I do want to comment that the President's base budget as 
you know is $515.4 billion. But you need to know, I mean that 
is a lot of money, but on the other hand, we do respond to the 
threat in today's environments. I mean this is in our very best 
estimate what it takes to defend this nation, defend our 
freedom and liberties and we are in a very complex security 
environment. It is distinguished by a number of very prominent 
factors.
    First of all, of course, terrorism and the war that we are 
in and our magnificent people are fighting every day. We still, 
obviously, concerned about the whole proliferation of WMD, 
failed and failing States, and emerging powers who's intentions 
are unclear.
    So we are not only fighting the war, but we are also, 
obviously, trying to defer conflicts in the future and that 
requires military capabilities to deter future conflicts. Now 
each of those threats pose their own unique challenges and each 
demands a certain set of capabilities, but our total security 
relies on the comprehensive approach and that is distinguished 
by a balance set of capabilities for the entire spectrum of 
challenges. And that is what we try to do is balance across 
this entire capability.
    Now when appropriated the funds that we have asked for will 
provide the resources necessary to execute the national 
military strategy. Now $515.4 billion is a lot of money, but it 
does have to be considered. I have heard two sets of numbers 
today in terms of historical context. I mean we look at it in 
terms, obviously, by our Department of Defense spending. It has 
grown since 9/11 and we are now at about four percent of GDP. I 
think that is the charts that Mr. Ryan showed.
    Now that is, however, as the charts showed the lowest 
invested by this nation in time of war. I think in modern 
history at least, because while imperfect for point of 
reference it was about nine percent during Vietnam; 11.7 
percent during the Korean War. So, fortunately, while our costs 
have gone up to defend the nation, so has the basic economics 
of the nation have grown considerably during that period of 
time. So we are to some extent a beneficiary of a vibrant 
economy, but we are also less of a cost for the economy than we 
have been in past conflicts.
    Now the question you raised about what is the cost in 
particular the cost of war relative to the $70 billion. I think 
Secretary Gates was clear on his testimony to both the SASC and 
the HASC. In addition to the $515, the Secretary stated at that 
time in addition to the $515.4 base budget as you know every 
request includes $70 billion in an emergency bridge funding to 
take us, to bridge us, until we know what the right number is.
    Now the total requirement as you commented will indeed be 
larger. And later this year, once we have an accurate 
appreciation of the requirement, we will have a more detailed 
request submitted to you.
    Now when Secretary Gates was pressed on this matter, he 
offered a number of $170 billion as a total requirement, but he 
also said it was definitely imperfect and imperfect for a 
number of reasons, which is why we did not turn this number in 
earlier, but instead turned in a bridge.
    First, as mentioned, we do not yet have the appropriation 
for Fiscal Year 2008 in terms of our supplemental. So we have 
of that request we still have $102 billion outstanding. 
Frankly, we do not know when we are going to get it or if we 
will get that amount. And that will cause increased cost and 
disruption, but of course depending if we don't get it then of 
course that will change completely as we go forward in your 
2009 estimate. And then in addition what adjustments will be 
made from the upcoming recommendations that General Petraeus, 
which will be in about month. General Petraeus will come in and 
brief the Congress so that could indeed result in some 
significant change going forward.
    But in addition, as you know, there is definitely going to 
be a change in Administration and the fact is of this 
supplemental three quarters of it will be spent during the next 
Administration. So in the next Administration will, obviously, 
have some say about how they view this and what the 
expenditures should be.
    So I would and as we go forward I would like to say what is 
most important to us, and I think what is most important to the 
nation and to our men and women who are on the front lines is I 
would urge a Congress to support, first the budget request, but 
also to expeditiously appropriate the outstanding balance of 
the year's war funding request so that we can fund our troops 
and provide them the support that they deserve. And 
importantly, to reduce any disruption of effort associated with 
this impending change in Administration.
    I mean last year when we had continuing resolutions, we did 
not have our war funding, that was hugely disruptive. And now 
we are about to go through a period of planned disruption, that 
is a change of Administration, people leave, policies change. 
And if we have an uncertain budget at that time I can tell you 
it will be extraordinary for the people who replace me and 
other people in the next Administration to carry on in any 
efficient and effective manner.
    So I would urge the Congress, particularly this year, to 
act expeditiously. I do want to comment that while we are all 
debating the budget, there are men and women who are on the 
front lines standing the watch securing our freedom and 
liberty, which is what the Department of Defense is all about. 
And so while these are important discussions, we should not 
lose sight of the fact that we do have people deployed every 
day and we do need to support them. And I believe that the 
American people do want to give them our full support.
    So we are prepared to have a dialogue, answer questions. 
Hopefully help this process along today. And so Chairman 
Spratt, Representative Ryan and members of the Committee, we 
look forward to the dialogue. And we thank you for the 
opportunity to be here for that opportunity.
    [The prepared statement of Gordon England follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    
    Chairman Spratt. Thank you again for coming. Does General 
Cartwright have a statement you would like to make?
    General Cartwright. I do not.
    Chairman Spratt. Okay. Secretary Jonas?
    Ms. Jonas. No, Mr. Chairman.
    Chairman Spratt. Okay. The overarching question is, is the 
President's budget submission a realistic budget? And I think 
the answer is, its not by at least $100 billion because that 
amount which the Secretary has authorized off the seat of his 
pants before the Senate Armed Services Committee has to be 
added to the $70 billion that is in place, the place holder.
    Is the revised number now a rough approximation of $170 
billion?
    Mr. England. Well it is a number. I mean, Mr. Chairman, I 
mean here is the dilemma we have. On one hand we are required 
to give you numbers that we can support and so we provide you 
rationale for the numbers when we give them to you. And in this 
case, I mean, we don't have a basis because we don't know what 
decisions will be made next month after General Petraeus comes 
on board. And we also don't know the status of the money that 
we are spending today.
    So we are already spending money out of our base budget 
that is, frankly, going to the war cost. So we are already 
pretty much in the dilemma. I mean trying to justify the number 
with the uncertainties we have today puts us in a dilemma. So, 
frankly, the decision on the $70 billion is an OMB decision, 
but I will tell you that I felt that that was the right 
approach and I actually had a lot of discussions on that 
subject in terms of what was most realistic that we could do to 
provide some reasonable confidence in the numbers. So we know 
it is at least the $70 billion.
    And we have in the past, I think three or four times now, 
we have had a $70 billion bridge and that is how we have 
managed to go each year. And then last year, of course, we came 
in with a full budget, that actually turned out to be the worst 
of all for us because we didn't get a budget approved. We ended 
up with a CR and we still haven't gotten the war cost.
    So I understand there is frustration on behalf of this 
Committee, but there is also some frustration on our side in 
trying to find a way to work through all this that meets all 
the criterias that everybody would like us to meet. And we are 
trying to do that, sir. I mean I can assure you we are trying 
to be as open and forthright as we can in this matter and we 
will continue to be that way with you.
    Chairman Spratt. Well lets take Afghanistan. What we have 
been there what now, six years? And we have just increased our 
presence there. And General Jones has just come back saying 
that he is disappointed with the progress we have made there. 
We have got a South Carolina contingent that Gresham Barrett 
and I are proud of, the 218TH brigade, and they are doing the 
damnest to help train the Afghan Army.
    We have got a long way to go and, nevertheless, we are also 
have a cost basis that goes back five or six years. Isn't there 
some way we can--and we are likely to be there for some time to 
come. Isn't there some way we could extrapolate for that cost 
and determine what a good number is for approximating the 
likely cost of the deployment to Afghanistan?
    Mr. England. Mr. Spratt, I mean it would be, I think it 
would be wonder if we can do it. I mean the problem is war is 
inherently unpredictable. If it was predictable, obviously, 
this would be much easier on the battlefield and then easier to 
cost, but we have a foe that is not predictable. Obviously, 
they are a determined enemy we have. And so it is very 
difficult to look years ahead in terms of what the outcomes 
will be.
    Chairman Spratt. Well, General Petraeus apparently is going 
to come back with--are we going to build down to 140,000 troops 
sending trimming some of the brigades that were added to 
facilitate the surge. But the troop level that he is shooting 
for is 140,000 troops?
    Mr. England. Let me let the Vice----
    Chairman Spratt. Is that--that be used as an approximation 
of the cost to this deployment?
    Mr. England. Let me let the Vice address that and then I 
will comment.
    General Cartwright. General Petraeus will come in and 
comment on the plan that was laid out over the last year. The 
troop number is somewhere between 130 and 140,000 have been 
associated with the press. The actual numbers and the work that 
we are doing is on the classified side so that we can have 
another conversation about that for the details. But the intent 
was to get down to the pre-surge levels and counting the 
brigade combat teams, 15 brigade combat teams by the middle of 
July.
    He will come in and assess his progress on that activity. 
We need to understand his assessment in order to make sure that 
we are going to be able to draw down to those levels. Where we 
will draw down between now and July and what implications that 
has beyond July. Those are the types of things that we hope to 
find out and then come back to you with numbers based on that 
testimony.
    Chairman Spratt. But we do have those numbers within a 
fairly reasonable range, don't we? We are talking about 
somewhere between 125 and 150,000 troops.
    Mr. England. So, Mr. Spratt, if I can. The NDAA requires, I 
believe and someone can correct me here, but I believe we are 
now required to provide monthly to the Congress projections 
including three months into the future in terms of troops. And 
there was about a week ago people from the Department of 
Defense came and briefed our Committees of record and that is 
classified document, but it is available. And I my view is that 
may give you some better insight, but again that is today's 
projection and that is why even the 140 number as I think 
General Hamm had a number of qualifiers with that pretty much 
along the lines of which you just heard from General 
Cartwright.
    Chairman Spratt. The chart that we put up which is taken 
from CBO and it shows the out-year cost beyond this year, 
assuming a build down to 75,000 troops in both theaters. Does 
that number ring true to you? Is that approximation something 
that you find a reasonable take on based upon the assumptions?
    Mr. England. Of course everything is based on the 
assumptions, Mr. Spratt, so I mean pick whatever the 
assumptions are and I am sure you can get a number. And however 
you multiply that out, but it is all based on what those 
assumptions are. And of course I don't know how you, I mean I 
don't frankly know how you arrive at those assumptions. I mean 
we don't have those assumptions built in. I mean it is a set of 
assumptions. I would guess for planning whatever you feel is 
appropriate to do that.
    But we don't have a set of numbers like that in terms of 
assumptions that far into the future. I mean we are still, 
frankly, in the debate today in terms of what the Fiscal Year 
2009 GWOT costs will be. Right? And we won't get any clarity, 
more clarity than that for another month or two, at which time 
we will have more clarity and I think be able to give you a 
more precise estimate.
    But going out that period of time and estimating the war I 
just think is extraordinarily difficult.
    Chairman Spratt. Let me ask you about the chart five, 
please, Jose.
    This is something was presented in the last year's budget 
and it occurs again. It is somewhat different numbers in this 
year's budget, namely in real terms over five years the future 
Defense budget that you submitted to us is shown as declining; 
negative real growth. Is this a realistic betrayal of what the 
Defense budget is likely to be over that five year period of 
time?
    Mr. England. So, first of all, I guess the validity is 
depending on what the inflation is over the future. And I guess 
that is one thing we don't know now. It is that is the case by 
the way the budget right now based on our latest projection OMB 
projection of inflation, it is below inflation.
    I know the Secretary would like, obviously, to have a 
budget that accounts for inflation with at least some modest 
growth, but we have not had those discussion with OMB because I 
mean we do that the year we are in the year of the budget and 
then we work that year and we update it. But for 2010 we will 
leave we will have a budget for 2010 and in 2010 we will 
discuss with OMB, you know, the basis of the budget going 
forward. But I would, again, the Secretary said what he would 
like is to have it at least accommodate inflation hopefully 
with some modest growth, but that is a discussion we will have 
in the 2010 budget going forward.
    Chairman Spratt. Well CBO, Congressional Budget Office and 
the Congressional Research Service have both done studies of 
your plans for the foreseeable future, the so called fit up. 
And they simply can't conceive of the budget costing less than 
inflation will require. In fact, they think additional cost 
will be substantially above inflation, unless you make major 
changes in weapons system procurement or in force levels.
    Mr. England. So, Mr. Spratt, in the past I can tell you my 
own experience is now in the last seven years there was a 
period where we were below inflation. We did indeed have it 
adjusted and OMB agreed to adjust it for inflation. And by the 
way, that was about the time we also agreed to grow the force. 
So you are right, the budget actually went up after that point, 
because we decided to grow the Army and the Marine Corps so we 
actually had a growth in the budget.
    But certainly the Department of Defense would recommend 
that we have at a minimum a flat budget to accommodate for 
inflation, but we will not have that discussion with OMB for 
some time yet.
    Chairman Spratt. Let me ask you two more questions. One is 
about weapons systems and I said it has been the frustration of 
every Administration, Democrat and Republican. But, 
nevertheless, GAO has done an overview of cost growth in major 
acquisition programs, the so called selected acquisition 
program, the SARs. And found that from 2002 through 2007 it was 
cost growth of $392 billion. A large sum of money. What are you 
doing to contain the cost growth of major weapons systems, new 
weapons systems coming off the production line?
    Mr. England. So, Mr. Ryan, I believe that we have now 
incorporated into the system some fundamental changes. And the 
fundamental changes is, if I could discuss one or two here. One 
of the fundamental changes we now look at what we call 
capability portfolios. That is we used to look at individual 
programs of which we have thousands of individual programs. But 
the fact of the matter is, you can lump these programs into 
capabilities where a lot of programs come together that have to 
work together to provide a top level capability.
    So we have now put these programs together and we manage 
them differently. And we are also telling people that they can 
no longer just have cost growth, they have to go back and look 
at the fundamental requirements and do trade offs in terms of 
requirements and cost.
    So we are working to tighten the system internally. I will 
tell you, however, when you listen to our contractors, what the 
contractors require is stability and predictability in terms of 
programs. And so I mean these when we get delays in budgets or 
we don't get supplementals, I can tell you what it does. It 
adds instability and unpredictability in our contractor force. 
And, therefore, they do not invest for the long term for our 
programs.
    So we are already at low rates and disruptions are very 
costly. So I think this is an area where we both need to work 
together, both at Congress, the DOD and our contractors. But I 
believe this problem does run deep and it has to do with both 
budgeting and the way programs are managed and requirements. 
And we are working at it as hard as we can, sir.
    Chairman Spratt. One final question.
    Mr. England. Can I have the----
    Chairman Spratt. Yes, sir.
    Mr. England [continuing]. Say one word here please?
    General Cartwright. Real quick on that.
    Chairman Spratt. General Cartwright.
    General Cartwright. What we have done over the last year is 
in the management between defining what the requirement is and 
defining the acquisition strategy. We have brought the 
acquisition community into the requirements discussion. We have 
set trip wires and expectations on cost that get tripped based 
on the selected acquisition reports.
    So we have a way of monitoring and setting the expectation 
up front so the acquisition community understands what is 
tradable and what is absolutely essential to the war fighter. 
That helps us provide stability on the requirements side so 
that these requirements don't grow over the life of the 
program.
    Chairman Spratt. Do you think that if we have a substantial 
deployment in Iraq throughout the next ten years and a 
substantial deployment in Afghanistan you are going to be able 
to complete the recapitalization of the Armed Forces based upon 
the systems that are now in acquisition and those that you know 
will be coming out of the pipeline?
    And we have got a pretty substantial investment account 
increase coming, right now upon us, and it is to continues for 
some time to come for R&D and for procurement. Do you think 
that you can sustain that level of procurement to modernize our 
forces, transform our forces, and at the same time maintain 
this level of troops in some sort of engagement in those two 
theaters?
    Mr. England. Well, of course, right now, Mr. Spratt, the 
war cost is separate from the base budget. So in the base 
budget we do include and thanks to the Congress and the support 
of both the R&D budgets are up and this year for the first time 
our procurement budgets are over $100 billion. So for the first 
time we have substantially, I believe when I came in we were 
down like $40 billion or something back in 2001. We are now at 
about $100 billion in terms of modernization accounts.
    So those accounts, what we have factored into the FYOP up 
in terms of our modernization is accommodated within those base 
budgets. The war costs, though, are independent and that is, 
for us, a separate appropriation. But I would tell you the base 
budget and we do balance and make sure that we do have 
affordable programs in that budget.
    Chairman Spratt. Okay. We have got a vote coming in a few 
minutes, but we have time for Mr. Ryan. Mr. Ryan.
    Mr. Ryan. Thank you, Chairman. First off, Secretary 
England, I have got a list a questions I wanted to ask you in 
writing, if you could respond----
    Mr. England. Yes, sir.
    Mr. Ryan [continuing]. Instead of taking up all this time 
on your DODs budget and health care costs. So I will submit 
this to you and if you could get this back to me in writing, I 
would appreciate that.
    Mr. England. Yes, sir.
    Mr. Ryan. One of my concerns is that as we do these 
supplementals, which we believe the notion of a supplemental is 
to reimburse the incremental costs of war. That things that 
ought to belong in the base budget get pushed into the 
supplemental budget. And that is just a concern of ours just 
for basic good budgeting principles.
    And if you look at your supplementals since 2001 you will 
notice that the investment account funding has grown from a 
billion to over $70 billion in 2008, if this current request is 
actually enacted. And combined with your regular 2008 
appropriation, investment account spending is $250 billion. For 
reference in 2001 it was $104 billion.
    Why has the spending increased by 140 percent over the last 
seven years in the procurement, research and development, 
testing and evaluation accounts? That is question number one.
    Question number two is, obviously, if we have equipment 
that is damaged or worn out in the theater, we replace that and 
it is logical to assume that that is done in the supplemental 
request, but help me disaggregate what is equipment that is 
lost in war and what is equipment in procurement that belongs 
in the base budget?
    And it seems to me that base budget stuff is creeping into 
these supplementals. Can you just please elaborate more on 
that?
    Mr. England. So, Mr. Ryan, it may be we try not to let it 
migrate, frankly. So we do review every one of these request. 
So in the base budget we do have an attrition number for 
equipment for normal training operations that we would normally 
do in our base budget.
    So there is an attrition number for some replacement 
equipment in the base budget. And so if an airplane goes down 
on just, you know, a training unrelated mission that goes that 
is replaced in the base budget. But if it is all war related in 
the global war, then that goes in the supplemental.
    So we do try to parse that. I can't tell you we are perfect 
at this, but we do work at it to make sure that we can support 
it when we turn it in to you, sir.
    Mr. Ryan. And I understand we have a 140 percent increase 
in the investment account in the base budget, but we have gone 
from a billion in the first supplemental to $70 billion in this 
supplemental.
    Am I to take from that, that is all attributable to war and 
war costs and in theater problems? I mean this is, you know, 
this is research, development, test, evaluation, procurement. 
That is my concern is we are seeing a lot of migration. A 
billion to $70 billion over just you know 2001 to this last 
supplement.
    Mr. England. So I will ask Tina to comment, but for 
example, the MRAP vehicles alone 15,000 vehicles is 20 some 
billion dollars. So that one procurement, which is a war cost 
because it is for men and women deployed in Iraq and 
Afghanistan. So that alone is 20 some billion dollars for that 
one vehicle.
    Mr. Ryan. That is why, if you could just walk me through 
the numbers, that would be helpful.
    Mr. Gordon. Okay. Tina, can you help there?
    Ms. Jonas. That was, I think, a great example because of 
course the MRAP vehicle if you think about our annual ship 
building budget it is about $14 billion. So for that one 
procurement alone and that is in force protection.
    And I would say one area of procurement growth has 
definitely been in the force protection area. We also are using 
our vehicles at rates that we never envisioned. So they are 
just wearing out and it is in some cases it is five, six, seven 
times what was expected. In other cases it is combat losses. We 
have lost unmanned arial vehicles. In fact, we were just told 
the other day that we have recently lost at least four UAVs. So 
it is the rate and usage that is driving a lot of the 
procurement associated with the GWOT budget.
    Mr. Ryan. I think it would be helpful to us, because 
obviously, we realize we need to invest. I just want to make 
sure we are investing in the right budget, you know, aisle and 
the column.
    Ms. Jonas. Yes.
    Mr. Ryan. If you could possibly break that $70 billion down 
in the investment account that is in the supplemental for us 
and explain, you know, how this belongs in the supplemental 
column and not in the base budget. That would be very helpful.
    Ms. Jonas. Well, of course, the $70 billion that we have is 
a bridge right now. It does not have any detail associated with 
it.
    Mr. England. No, this is a different $70 billion.
    Mr. Ryan. That is a different----
    Ms. Jonas. I am sorry.
    Mr. Ryan. Not the $70 in the investment account.
    Mr. England. I believe, see I am not familiar with the $70. 
I have never sort of parsed it out that way. But I believe, Mr. 
Ryan, you are asking in the $189 billion total----
    Mr. Ryan. That is right. That is what I am asking.
    Mr. England. Tina, I think the question is----
    Ms. Jonas. Okay.
    Mr. England [continuing]. In the $189 total there is $70 
billion in the investment account----
    Mr. Ryan. That is right.
    Ms. Jonas. Yes, we----
    Mr. England [continuing]. Can we break that out?
    Ms. Jonas. Yes, we certainly have that. As a matter of 
fact, that would be available on our website from last year. We 
have the Global War on Terror. That is all broken out.
    Mr. Ryan. And an explanation how it belongs in the 
incremental war funding and not in the base budget?
    Ms. Jonas. Certainly. And I would be happy to come by and 
walk you through it, sir.
    Mr. Ryan. Yes. I am just interested in that.
    Ms. Jonas. Yes.
    Mr. Ryan. We are worried about this migration. I know we 
have a couple minutes left. Perhaps, this one is for you, 
Secretary, or maybe for you, General. It is my understanding 
that the Chairman of the Joint Chiefs recently endorsed the 
idea of putting a budget floor tied to GDP of four percent of 
GDP for DOD. What is your position and opinion of that 
proposal? Who ever wants to comment, I would appreciate it.
    Mr. England. If I can comment, Mr. Ryan. There has been 
discussions, I know the Secretary has discussed this a number 
of times. And so I would and it has come up a number of times 
with the Chairman, the Secretary, and myself. And I would tell 
you this is still a source of discussion in the Department of 
Defense. I am not sure we have settled that that is the right 
approach or not, although there has been discussion in that 
regard.
    So, I mean I would like to defer that, because I don't 
believe we are in a position to say yes, that is what we 
believe the right way forward is.
    Mr. Ryan. But the Department is actually actively 
considering whether or not to support this bill?
    Mr. England. Well, we are definitely having discussions and 
whether we will go forward to OMB or not I think is still an 
open point at this time. But there is a discussion about 
particularly the 2010 budget what should we be doing going 
forward in the 2010 budget? What is a rational way to do this 
in terms of having built in modernization for our military and 
particularly for the volunteer force, which is an expensive 
force. But when I commented before, predictability is very 
important and stability. If we had a predictable right floor or 
just number that we could go forward with it, it would help 
immensely in terms of managing our programs.
    So that is something we are discussing still and we would 
like to get back with you on that subject.
    Mr. Ryan. Okay. General Cartwright, any----
    General Cartwright. Same lines. It may not be the whole 
budget. It may be a portion of the budget that we can put some 
predictability, particularly in our acquisition programs, to 
allow us to move forward. There is also the attribute of just 
what is appropriate based on what the need is at the time. And 
should that be pegged to a hard number.
    Mr. Ryan. Yes.
    General Cartwright. So we are trying to straddle the fence 
here between two needs and we are not yet at a point where we 
are ready to articulate exactly how that comes.
    Mr. Ryan. Yes. I just as a budgeteer, I think that this 
idea needs to be looked at a little more closely than some 
might have done. I think that is right. We need predictability. 
We need to be able to plan out. It saves us money in the long 
run with contracting and all of those things, but to put some 
arbitrary number for just this part of our federal budget, to 
me, just seems like bad budgeting.
    But I just, you know, we have go to find a better way of 
getting that predictability, of getting the commitment and the 
investment made, and this is just my personal opinion, than 
pegging some percentage of GDP which is setting aside this 
portion of our budget, which is a significant portion, to be 
treated different than any other portion of our budget. And 
that is something as I would just encourage you as you 
deliberate on this to really think that one through.
    Mr. England. Yes, sir.
    Mr. Ryan. I know we have got to get going here. So I 
appreciate----
    Chairman Spratt. We have got four and a half minutes to 
make a vote if you can bear with us we will be back as quickly 
as possible.
    Mr. England. That would be fine.
    Chairman Spratt. We appreciate your forbearance.
    Mr. England. Absolutely.
    Chairman Spratt. The Committee will stand in recess subject 
to the call of the Chair.
    [Recess.]
    Chairman Spratt. In the interest of time, I think what we 
will do is turn to Mr. Edwards now and then we will come back 
to Mr. Ryan when he returns. Mr. Edwards.
    Mr. Edwards. Mr. Chairman, thank you. Secretary England, 
welcome back to our Committee. Secretary Jonas, General 
Cartwright, thank you all, the three of you, for your 
incredible service and sacrifices on behalf of our country. And 
as a fellow Texan, Secretary England, it is a special privilege 
to have you back before this Committee.
    Mr. England. Thank you.
    Mr. Edwards. Before I ask a question, Mr. Chairman, I just 
want to say for the record for future debates in this 
Committee, I think it is fair to say I have been known, as you 
have, as someone who has supported a strong National Defense 
and significant increases in Defense spending. And so in that 
sense I have worked with the Bush Administration in support of 
their Defense request.
    Where I differ with the Administration, Mr. Chairman, is in 
the argument that we can balance the budget over the next five 
years while extending trillions of dollars of tax cuts and 
maintaining investments in our critical priorities for this 
country. And what I would like to say for the record, it now 
appears based on this testimony today that to claim that we 
could balance the budget through the President's budget 
proposal over the next five years while extending the 
President's temporary tax cuts would require a $52 billion 
cumulative cut in current services for Defense programs and 
that is added to a $20 billion cut in present services for 
veterans programs. And $17 and a half billion of those cuts in 
the VA would be out of VA health care programs.
    So my point isn't so much to ask Secretary England a 
question about that, but to just lay down the foundation so 
when we hear in the months ahead that we can have it all; we 
can fight a war, we can have a Defense build up, we can afford 
massive extensions of tax cuts without under funding our 
nation's top priorities, I for one just simply don't believe 
that is possible. Unless one thinks it is a good idea to cut 
$52 billion out of real services in Defense and $20 billion out 
of veterans programs during a time of war over the next four 
years.
    With that having been said, Secretary England, let me ask 
you, one of the programs through my Energy and Water 
Appropriations Committee, that I have been involved in for the 
last decade is supporting the Nunn-Lugar program. And President 
Bush and John Kerry one of the things they both agreed on in 
their presidential campaign in 2004 was our greatest unmet 
challenge that should be our highest priority should be 
defending America against the threat of nuclear terrorism.
    I know we have done a lot in the area of intelligence 
funding and increases there, but as I understand it the 2009 
request would actually on the DOD side of Nunn-Lugar would 
actually be $21 million below current services. And the 
Department of Energy Nuclear Non-Proliferation Programs, tied 
in Nunn-Lugar, would be nearly a 40 percent cut; $411 million 
cut below the 2008 levels.
    Given the importance of protecting Americans against the 
threat of nuclear terrorism and given the massive amount of 
nuclear materials, enough in Russia to build literally 
thousands of nuclear bombs if a terrorist, God forbid, were 
able to steal that material. Is there a rationale behind 
requesting cuts and current services for this important 
program?
    Mr. England. Mr. Edwards, I didn't realize we had cuts and 
so I have to ask Tina. Tina, can you answer that or do we need 
to get it back? It is in current services so?
    Ms. Jonas. Yes.
    Mr. Edwards. A $21 million cut below current services 
according to our Committee staff----
    Ms. Jonas. Actually----
    Mr. Edwards [continuing]. On the DOD part of it, $411 
million cut in the Department of Energy part of the Nunn-Lugar 
program.
    Ms. Jonas. Mr. Edwards, the amount that we have in the 
budget is about $414.1 million and that is actually $11 million 
lower than the enacted level. And we would be happy to get back 
to you with a little bit of the details. I will say that and 
maybe the Vice Chief could talk to that a little bit in terms 
of the importance, the strategic importance, as you know his 
background.
    But we would be happy to talk to you about that. I think 
this program as in past also had some unobligated funds. It is 
multi-year money. And so we want to make sure----
    Mr. Edwards. Right.
    Ms. Jonas [continuing]. That we get it right.
    Mr. Edwards. But I would and that is a fair point to make. 
I would want to emphasize, though, sometimes you have to leave 
an account of unobligated funds so that when an agreement is 
accepted between Russia and the United States, we have got the 
money to follow through on that. And without those unobligated 
funds, you hit a brick wall in terms of even negotiating those 
critical----
    Mr. England. Mr. Chairman, I can say this: That as a budget 
item this never came to my attention in all of our discussions. 
So I would expect it is the answer is probably somewhere along 
the lines that Tina said, because as far as I know, I mean, we 
fully funded the request in this area at the Department. So 
this is an area we may just need to look at this and get back 
with you.
    But this was not an issue in any of the budget discussions 
with me.
    Mr. Edwards. Okay.
    Ms. Jonas. If I could add, there programmatically the you 
may know that the chemical weapons destruction activity at 
Schuchye has been completed. So that may be part of the 
levels----
    Mr. Edwards. Okay. I would welcome any additional follow 
up.
    Ms. Jonas. Absolutely, Mr. Edwards.
    Mr. Edwards. And my time is up, although, perhaps for the 
Chairman, if did General Cartwright wanted to comment?
    I just my final comment before you say anything, General 
Cartwright, would just be we are spending $515 billion to try 
to protect the American people and that is what the Department 
of Defense is all about. And God bless our service men and 
women for what they do in that effort. It just seems to me to 
be quibbling over a few million dollars on a program that is 
about a billion dollars or so out of that $500 billion. A 
program designed to protect the American cities from nuclear 
holocaust, I don't know why we quibble.
    Mr. England. Mr. Edwards, I don't believe that is the case. 
I mean I don't believe we are there is any quibbling. And again 
it is, I mean my view is we did fully fund the request in this 
matter, but we will get back.
    Mr. Edwards. Okay.
    Mr. England. And give us an opportunity to look at this.
    Mr. Edwards. That is very fair.
    Mr. England. We will definitely follow up.
    Mr. Edwards. I would welcome a further discussion. And 
thank you, Secretary England on that.
    General Cartwright. Just real quick. The good news story 
here is over the last four years our execution rate has gotten 
significantly better.
    Mr. England. Right.
    General Cartwright. We have completed projects.
    Mr. England. Right.
    General Cartwright. We need to enter into the discussion 
about how we go beyond the current limits of Nunn-Lugar and 
expand our work against weapons of mass destruction to a more 
global basis----
    Mr. Edwards. Right.
    General Cartwright [continuing]. Rather than just focus so 
much.
    Mr. Edwards. Right. I salute you for the good work you have 
done. I hope we can even do more together in the future. Thank 
you.
    Mr. England. Thank you.
    Chairman Spratt. Secretary Jonas, I didn't understand your 
statement. Did you say that Schuchye had been completed?
    Ms. Jonas. That is my understanding, that the work there is 
scheduled for completion in 2009 so.
    Chairman Spratt. I think issue there is that the Russians 
have taken over the project and they haven't let the 
subcontracts on it.
    General Cartwright. And we are having some real challenges 
with the MOX facility and so we can get you the exact details.
    Chairman Spratt. MOX as well.
    General Cartwright. Right.
    Chairman Spratt. But Schuchye was a separate----
    General Cartwright. That was a separate one, but we have 
got two that are causing us some challenges.
    Chairman Spratt. And even when you finish with Schuchye 
that is, at most, 15 percent of the chemical weapons stock. So 
it is just a down payment on the problem.
    Mr. Gresham Barrett,
    Mr. Barrett. Thank you, Mr. Chairman. Secretaries Jonas and 
England, thank you and General Cartwright. Thank you for being 
here today.
    Secretary England, I want to go back to the four percent 
that we were talking about a little bit today. I am a big 
proponent of that. I think that there needs to be a set base 
line of GDP. And you talked you said that you all were still 
talking about within the Department.
    Do you think that the talk is because four percent is too 
low? Does it need to be higher? I mean have you had any 
discussions like that or you are just not sure that is the 
direction you need to go into?
    Mr. England. Well I think it is a combination of those 
things, Mr. Barrett. This is sort of a broad issue and it has 
some profound implications. So on one hand it gives us a floor, 
it gives us stability, it gives us predictability and that is 
all to the positive.
    Mr. Barrett. Right.
    Mr. England. The down side is, obviously, if the economy 
accelerated then, fine, we would be happy with maybe more money 
than we thought. Go in the other direction, however, you ended 
up in a recession and you would find yourself in a very bad 
situation.
    So, I mean on one hand we ask that Congress for the money 
that we believe we need based on the circumstances at that 
time. And the circumstances change and that percentage could be 
up or down. So I mean personally I have some hesitation because 
while it provides for predictability which I and stability 
which I am a huge proponent of, it does worry me that we are 
still subject to the economy itself in terms of variations.
    And so again it is a big question and I am not sure we have 
come down in balancing this exactly, but we are having those 
kind of discussions. And there is lots of other facets to this 
also. I think the General Cartwright brought up an interesting 
point, there may be that there is some aspects of the budget 
that you definitely want to baseline and that in the 
procurement accounts, for example, if we had predictable 
procurement accounts that we knew for certainty in terms of 
availability of funds, not just year to year. I mean if you 
look at our procurements, multi-years are terrific of us, 
right?
    Mr. Barrett. Yes, sir.
    Mr. England. And then our and the industrial base. So to 
the extent we can get closer without across our procurement 
accounts that would be very beneficial to us.
    Mr. Barrett. Well please keep us informed on that, because 
I do think that, you know, you got to have national security 
first because if you don't nothing else matters. So I think----
    Mr. England. Absolutely.
    Mr. Barrett [continuing]. A baseline approach is certainly, 
some type of baseline approach, I think, makes perfectly good 
sense.
    Lets talk just briefly about what would happen if we needed 
to fight another front. There has been a lot of talk about what 
is going on in the Middle East with a lot of partners over 
there. We are stretched to the limit, lady and gentlemen. And I 
am concerned about have you talked about what the estimated 
cost, what the estimated troop size if we need to open up 
another front, what that entails. If you have done any 
preplanning or looked at anything about men, material, cost, 
the whole nine yards. And, General, that might be your 
bailiwick, I am not sure.
    General Cartwright. We do a substantial amount of what if 
type planning. And we have done that and given the diversity of 
the threat that we are facing with Iraq and Afghanistan ongoing 
and instability in that region the challenges that we have in 
the Pacific, the challenges that we are starting to understand 
better in Africa and South America. There is more than enough 
opportunity to try to look at each of these and see what would 
be our regret factor if they went in a direction that we had to 
react to. And we try to work our way through that.
    Clearly, we believe we have the forces for the most 
significant threats that we have out there and we try to make 
sure that that is the case. Any additional threats will impose 
some significant strain on the military. We will take people 
that are currently at home resting and have to deploy them and 
that will be hard. And the duration of that deployment if it 
extends out two years, it will be very difficult for us to 
handle.
    Mr. Barrett. Have you----
    Mr. England. With a--could I just add one proviso, though?
    Mr. Barrett. Yes, sir.
    Mr. England. And I think the Vice Chairman would agree with 
this. It depends on the nature of the conflict. I mean, 
frankly, our Air Force is not stressed at the moment, neither 
is the United States Navy. So there are different it is an 
uneven with the military. I think, though, I can unequivocally 
say and the Chairman has said before, if we are faced with a 
major threat to America, we do have the resources to respond 
and will do so.
    I mean there is no ambiguity there for anyone around the 
world who may want to take advantage of the situation. The 
United States military is extraordinarily strong and capable 
and would respond to any threat and does have resources to do 
so.
    Mr. Barrett. And I see my time is up. Thank you, gentleman.
    Chairman Spratt. Mr. Doggett.
    Mr. Doggett. Thank you very much for your testimony and 
your service. Yesterday, as you know, Army Chief of Staff 
General George Casey said that he had no reason to doubt 
Senator Obama's account by an Army Captain of a rifle platoon 
in Afghanistan that his platoon was short on men, short on 
ammunition, and short on Humvees.
    That incident, though a while back in time in Afghanistan, 
is hardly isolated. Only this Sunday there was another report 
on the 173rd Airborne Combat Team in Northeastern Afghanistan 
that noted, ``The soldiers were on a 15-month tour of duty that 
included just 18 days off.'' Many of them were stop lost 
meaning their contracts were extended because the Army is 
stretched so thin. You are not allowed to refuse these 
extensions. And, ``We don't get supplies, assets. We scrounge 
for everything and live a lot more rugged.''
    Admiral Fallon, the head of U.S. Central Command, I think 
has been quite candid and frank in recent months in describing 
the Taliban as having been more successful in regaining their 
strength because of the invasion of Iraq. In Afghanistan there 
was, to use Admiral Fallon's words in January, ``Kind of a 
little bit of neglect.'' And in another interview Admiral 
Fallon said our Afghan problems began occurring when, ``The 
attention and the resources were focused in Iraq not where 
Osama bin Laden is hiding and not where those who aided and 
abetted him were regaining their force.''
    As you know the bipartisan Afghan study group co-chaired by 
retired Marine Corp General James Jones, for whom I know you 
and the Pentagon have a great deal of respect, has described 
the dire situation that this mismanagement has caused, 
concluding that Afghanistan risk sliding into a failed state 
and becoming a forgotten war.
    His report found that in Afghanistan there were, ``Too few 
military forces, insufficient economic aid, and no clear and 
consistent comprehensive strategy.'' The assessment that he 
made concluded and recommended that we stop tying together, as 
the Administration has wrongly done, Afghanistan and Iraq 
because this creates, in their words, ``The false impression 
that they consist of the same mission.'' Something many of us 
in Congress have been saying since the outset.
    My questions to you, Secretary England, are number one, 
isn't General Jones and his bipartisan group correct that our 
allies will be unwilling to provide the resources that we need 
to get the job done in Afghanistan as long as the 
Administration continues to lump Afghanistan and Iraq together 
in the mislabeled global war on terrorism?
    Second, while the cost of the war which you are here to 
testify about today in Iraq is measured in blood, is measured 
in the $12 billion a month you have been spending there lately. 
Isn't part of the cost also the job that was left undone in 
Afghanistan as these resources were diverted to Iraq?
    And, third, when we look at the claim that we were going to 
capture Osama bin Laden dead or alive and weaken the Taliban, 
aren't we farther from that objective today than when you 
testified before this Committee last year?
    Mr. England. So a lot of questions and I will turn some of 
them over here to the Vice who is probably more capable than I 
am. I know General Jones well. He was in my office just the 
other day having lunch with me.
    Mr. Doggett. I assume so.
    Mr. England. I haven't gotten that kind of report directly 
from General Jones, so I guess I am a little surprised.
    Mr. Doggett. Well I am reading from the report that he 
chaired and signed. And I am sure you have copies of that 
because the Pentagon made a fairly short reaction to it. But I 
am reading directly from the report. I am sure you and your 
office have at least read the report, haven't you?
    Mr. England. I have, but also have not picked out just a 
few words out of the report. So I think you have to take the 
report in context. I don't want to debate the report. I mean I 
am not here to do that. The report is the report.
    Mr. Doggett. Well my question is the conclusion. Do you 
agree that as they concluded and recommended that we are not 
going to get the help we need until we decouple the Afghan war 
and that effort from Iraq.
    Mr. England. So my understanding is a number of people 
supporting us in Iraq has actually grown so that the NATO has 
committed----
    Mr. Doggett. Really? Don't we really have a phased 
redeployment already underway in Iraq as Poland leaves, as 
Australia leaves, as Canada leaves. And you supplement it by 
hiring the Georgians to come in?
    Mr. England. So there is discussions. The Secretary was 
just in Europe and so I don't want to preempt him, but he 
Secretary was in Europe talking to our NATO allies. Our NATO 
allies understand the importance about Afghanistan. It is a 
separate----
    Mr. Doggett. Have they sent any new troops there?
    Mr. England. There are----
    Mr. Doggett. If I understand what Secretary Gates asked 
for.
    Mr. England. Well there are discussions with the NATO 
allies. And I am not going to preempt those----
    Mr. Doggett. Discussions don't help.
    Mr. England. And I am not going to preempt those 
discussions, sir. But----
    Mr. Doggett. Well the discussions have been going on for a 
long time and the troops haven't come. Do you disagree with the 
recommendation of the Afghan study group that Afghanistan and 
Iraq have to be decoupled before we get the help we need?
    If you do, I will respect your disagreement.
    Mr. England. Sir, my view is we are funding the effort. I 
mean this is the Budget Committee. And we are funding the 
effort in Afghanistan. We are doing what we need to do. 
Unfortunately, I will tell you that in the budget itself where 
we have requested funds today, we do not have the funds we need 
in Afghanistan, because we are still waiting approval by the 
Congress.
    So I would say that----
    Mr. Doggett. I understand that is the dodge----
    Mr. England [continuing]. It is----
    Mr. Doggett [continuing]. That is pretty standard to 
avoid----
    Mr. England. It is what----
    Mr. Doggett [continuing]. With inability of our allies to 
do their fair share so it is not all American blood, and not 
all American taxpayers, and not somebody up in Northeastern 
Afghanistan who has to scrounge for supplies.
    Mr. England. Well----
    Mr. Doggett. You have not gotten those resources and this 
bipartisan Committee came out with a report in January that the 
Pentagon has been dodging that made a clear recommendation from 
the former head of the Marine Corps. And I am just asking you 
for a straight answer. Do you agree that we have got to 
decouple to get somebody to share a little of this burden or 
are we going to have to keep carrying it all by ourselves 
because of an ideological commitment that tie these two 
unrelated conflicts together?
    Mr. England. Mr. Doggett, we have a global war on terror 
and we fight that on different fronts. And we fight that in 
Afghanistan and we fight that in Iraq and we have troops 
deployed in other parts of the world. And so this a global 
war----
    Mr. Doggett. And I understand that is the party line, but 
it is the party line that General Jones bipartisan commission 
rejected. And I take I will take your answer as a respectful 
disagreement. Just get a response to my last question. Aren't 
we in a worse position today with reference to the Taliban, 
with reference catching Osama bin Laden than we were when you 
were here last year?
    Mr. England. I will let the Vice Chairman answer that. I 
would tell you this: We are against a determined foe. I do not 
think you can predict day to day and month to month the fight 
against the Taliban. It is a long--pardon me, sir. It is a long 
fight against the Taliban. It is not something we are going to 
measure day to day or week to week. And so this is a determined 
foe and it will ebb and flow, but we have forces in Afghanistan 
to deal with those issues along with our NATO allies. And so 
this is a combined coalition fight in Afghanistan.
    Mr. Doggett. Mr. Secretary, I will accept your answer, but 
I found your answer earlier to Chairman Spratt and again now 
that the reason you can't budget is because we have an 
unpredictable foe to be, frankly, astounding. If in the history 
of military history of this country we have ever had a 
predictable foe, I would like to know when it was.
    Mr. England. And I agree, by the way, and that is the way 
we have funded in the past. We fund our war cost as we have war 
cost. And that is what we are asking this Congress to do again 
is to fund the war cost. And it is important that those costs 
be funded, otherwise, we cannot prosecute the war. It does take 
funds to do that. And it has been very disruptive to have to go 
from hand to mouth when we do not have those funds 
appropriated.
    Mr. Doggett. You have got the funds to carry this war on 
through July, don't you? That is the report that the 
Congressional Research Service provided as an objective 
analysis. If we don't do--if we folded our tents and went home, 
which we certainly don't plan to do, you have got the resources 
now. It is not because of any inaction here, you don't have the 
resources from our allies, of course, because you have been 
unable to get them because you won't accept the recommendations 
of people like General Jones.
    I yield back.
    Chairman Spratt. Mr. Tiberi.
    Mr. Tiberi. Thank you three for coming today. Kind of going 
along on that point, Mr. Secretary, reading your bio you led a 
private sector company before, now you are helping lead a very 
large public sector operation, the Pentagon, with men and women 
in the field. With respect to that budgeting issue, and maybe 
the two others can help us with this as well. How difficult is 
it, and what impact does it have, not only on you but the men 
and women on the ground in combat when there is uncertainty of 
money coming? An uncertain flow. An uncertainty of when we will 
be passing a supplemental, not only this year but in the past. 
And what measures does it cause you to go through and what 
measure does it cause the commander on the ground to go 
through? Can you share a little bit of that with us?
    Mr. England. So, I would be pleased to. First of all, I 
will tell you the good news and the bad news. The good news is, 
is that we try to accommodate, obviously, everything we can in 
the budget so there is no impact. The bad news is there appears 
to be no impact and therefore there is no urgency.
    I mean we do try to accommodate. We, obviously, do not want 
to impact our men and women in uniform so we do everything we 
can so they are not impacted as we allocate funds. Some of this 
does not show up immediately. I mean if we do not have funds 
enough in terms of resets, or buying procurement or buying at a 
lower level or keeping an efficient rate at a factory. I mean 
that it doesn't show up. It will show up at some future time.
    So we do everything we can to minimize the effects. It is 
important to our men and women in uniform to know that the 
nation is behind them. And one way that that is demonstrated is 
the funding that is provided to the Department of Defense in 
their behalf so that they can execute the war. There is no 
question that it is meaningful that we have some consistency in 
terms of our funding.
    I don't think people in the military sit there and ponder 
what is going on at the national budget level, obviously, 
because it is very local to them. So I don't think you can draw 
any direct connection to that, but it is meaningful, I think, 
in terms of the response to our Department. And, Chairman, I 
will----
    General Cartwright. I would just add to that the types of 
budget issues that interruptions will be manifested out in the 
field are those types of funds like the CERP fund where local 
commanders are setting the priorities with the people that they 
deal with in the community to help them move along. And if we 
walk out and, for instance, say what we will do is help you put 
together a sewer line that will give you a quality of life or 
potable water or something like that. When they start to see 
that those funds are not going to be available to them, to 
those commanders, that kind of resource is more valuable than 
bullets most of the time, because it builds the opportunity to 
let the, pick your country, whether it is Afghanistan or Iraq, 
allow them to build the capacity to do for themselves.
    So they tend to look at, in the field, day to day what is 
the status of those funds? Will I have them? Will I be able to 
make commitments to these people that I can keep, and 
therefore, validate their trust in me.
    The other things that the local commanders see are the 
repair up forces. When a Humvee is damaged, do I have the 
spares on the shelf? Or am I starting to cut back there because 
we are not sure we are going to have the money to commit the 
contracts, etcetera.
    So those are the types of things locally that we see. Back 
here on the Pentagon side, the acquisition, the interruptions 
of the acquisitions at the home forces. And the Congressman 
brought up the 173rd. In places like Vincenza where the 173rd 
is based. The resources that are start to be in jeopardy of 
child care, of services, things like that, start to affect 
families, indirectly affect the war fighters.
    These are the kinds of things that they will see.
    Mr. Tiberi. Thank you.
    Mr. England. But we work very hard not to have that happen 
to our men and women in uniform. I mean so we do everything we 
can so that they are not affected.
    Mr. Tiberi. Thank you. Another direction. I had a call last 
night from a constituent, military retiree, Mr. Secretary, who 
was concerned about a proposal of yours that will increase fees 
and co-payments. Two questions.
    Do you believe Congress has to approve that? And number 
two, can you just give us a brief history as to why you believe 
you need to do it?
    Mr. England. Our current health care cost is I believe 
about $42 billion a year. It is about six percent of our 
budget. It is projected to grow to $60 some billion or by 11 or 
12 percent of our budget in the out years. About 65 percent of 
that is retirees. We had in, I believe 1996 a co-pay for drugs, 
etcetera. That has not changed since 1996. So we propose that 
we change that literally to account for inflation. And since 
then, of course, everybody's retirement income, everything has 
gone up significantly.
    So this does not apply to our active men and women. It does 
not apply to people, I believe, over age 65. It applies to 
those people who have retired and also in most cases working 
with significant income. So this is a way to just put some more 
balance into the system. It certainly wasn't owners at all, it 
was to adjust for those levels. And, yes, my understanding is 
Congress I believe we have been precluded by the NDAA from 
imposing any change in fees. So those fees are now more than 
ten years old in terms of the co-pay. And we were recommending 
adjusting as a way of just good business practice.
    And so that, I believe, is the--is that clear? Do I have it 
right, Tina?
    Ms. Jonas. You have got it exactly right, sir.
    Mr. England. Okay. And so that was, again, a prudent 
business practice which would be meaningful in terms of trying 
to moderate this significant increase in cost we have in this 
area.
    Mr. Tiberi. Thank you. I will yield back.
    Mr. Edwards [presiding]. Mr. Berry.
    Mr. Berry. Thank you, Mr. Chairman and thank you for 
holding this hearing. Secretary England and General Cartwright 
and Secretary Jonas, I have absolutely no doubt that you all 
love this country. You care just as much about it as I do and 
all the other people in this room. I know that you are doing 
the best job that you can do. You serve a different master than 
we do. You have a Commander in Chief and we have got about 
660,000 commanders in chief.
    All that being said, it is very distressing to me that we 
hold a hearing in this Committee and are presented with a 
budget and with testimony in the face of a deficit that has 
exploded over the last seven years. And we use things like 
unpredictability and then we talk about well we don't want any 
disruption and certainly we don't. None of us do. We don't want 
our troops not to have what they need. If there is a tool out 
there from repairing a sewer line to a water line or whatever, 
if that saves lives and creates stability and peace and 
prosperity some place and we can afford to do it, lets do it.
    I don't see how we can possibly continue in this country to 
carry on this, what I consider to be a false debate, and not 
lay all of our cards on the table and recognize the fact that 
the country is fiscally in horrible condition. And that this is 
a very expensive enterprise. And that we are going to all have 
to sit down to the table, face the reality of the situation, 
and deal with it in an appropriate way or this country is going 
to get sucked into the black hole of fiscal irresponsibility. 
We are going to be the next sub prime victim in the countries 
of history. And this concerns me a great deal. I don't see how 
that we can possibly continue on the path that we are on. And I 
know you all are doing what you consider to be your job and you 
have no ill will or bad intentions whatsoever. And I don't 
intend to suggest that, but I can tell you we have got to get 
real about it.
    Having said that, I have a question that is much more 
specific than my comment. According to several press reports 
the Marine One Helicopter Program is being significantly 
delayed and is well over budget. According to these reports, 
initial feeling of the new helicopters to transport the 
President may be delayed by up to five years and the price tag 
has ballooned from $7 to $11 billion. Including at least an 
additional one billion for the second phase of the program.
    These schedule issues and cost increases are a result of 
nearly 2,000 program requirement changes. It is my 
understanding that in the light of these issues the Pentagon 
and Lockheed Martin, along with its European partner Agusta 
Westland are now looking at ways to restructure the VH-71 
Helicopter Program.
    Mr. Secretary, you are requesting over a billion dollars 
for further Navy development of the program in this year's 
budget, a significantly higher amount than what the Department 
requested in the last couple of years. What Congress ultimately 
appropriated and at a time when we have ever growing cost for 
the wars in Iraq and Afghanistan. Can you please provide a 
little detail into the budget request for the VH-71 and put the 
request in context of the reports I just mentioned.
    Mr. England. Mr. Berry, I can. That is the program, I think 
it is the VH-71 Program which is the new Presidential 
helicopter. That program is in the development phase. The 
program has what we call two increments. Increment one and 
increment two. And the money in the program is primarily for 
increment one. I believe that we may need additional funds, but 
that is something we are looking at on increment one and two.
    So your reporting, and I am not sure all those numbers are 
right, but we are re-looking at the program because the program 
for both contractors was a commercial derivative that has added 
some cost as we put in some security safety requirements into 
the helicopter. So that is an area that is being looked at 
right now. I am not in the position to give you any answers, 
because we don't have any answers except I am quite certain we 
will continue with the program because it is a needed program, 
but we will just have to come back with you and tell you how if 
and how we decide to restructure the program.
    Mr. Berry. Right. Thank you, sir. I yield back, Mr. 
Chairman.
    Mr. Edwards [presiding]. Mr. Conaway.
    Mr. Conaway. Thank you, Mr. Chairman, appreciate that. One 
of the concerns that a lot of us have is that our job really is 
to look a 20-year horizon as to threats against this country 
and yes we have got to fund this year's threat and this year's 
hype. But we also ought to have some folks that are on your 
side of the table that are looking 20 years down the road to 
see what we are doing, because we have got I suspect an immense 
investment in platforms that are not a part of the fight today, 
but will be a part of a fight that could possibly be there in 
the future.
    And so, Secretary, if you could give me some sense of 
things that may have happened within the 2009 budget that would 
have an impact on this issue of how we make sure we can fight 
and invest for the fight 20 years from now, as well as 
continuing to be able to fund the fight that we are under right 
now and the type of fight that we have got on now.
    Does that make any sense in terms of what I am asking?
    Mr. England. No, it makes a lot of sense, Mr. Conaway. As a 
matter of act you know our Quadrennial Defense Review requires 
us to look out 20 years and obviously it is less fidelity as 
you move out. It is very good close in and very poor as you 
look out, but we do try to look out. And so I mean we look at 
all the projection, all of our intelligence, all of our 
classified everything so that we can get some feel for what is 
going on in the world in terms of what could happen to us in 
the future.
    In the 2009 budget the Vice Chairman and I actually 
together chair all the groups dealing with the 2009 budget and 
so we look at both near and long term. Keep in mind, a lot of 
our programs are very long term just because of the nature of 
what we do as a long time developing the program. So to some 
extent our most things in our procurement account in the base 
budget are actually long term. I mean they are destroyers, or 
replacement equipment and submarines. And a lot of this is 
replacement, new equipment, better capability for dealing with 
future threats.
    A lot of the very, very near term is in the supplemental 
because it is, obviously, buying equipment for today's war. In 
the 2009 budget in the groups that the Vice Chairman and I 
chair we basically looked at $30 some billion in terms of, you 
know, applicability and where it should it best fit, etcetera. 
So we bring all the people in from the entire Department and 
this is part of the debate when the budget is put together in 
all the services and in OSD in terms of trying to strike that 
right balance.
    And the Vice.
    General Cartwright. I might just add just a couple of 
points. As we look at ten, because we are in the process of 
building the budget for ten right now. The beginning of that 
process is to look at the 20-year threat assessment to 
understand and baseline ourselves. So we bring in our think 
tanks places like DARPA. We also look at industry. We ask them 
to come in. And so we have just finished a couple of weeks at 
looking at those threats and then trying to understand what it 
is that is going to address them, because building an aircraft 
carrier today that a high school student is 40 years hence into 
the future, that aircraft carrier will still be in our 
inventory. Will it be relevant against the threats we have out 
there? What are the attributes that would make it relevant?
    We have started to adjust in taking those looks and I will 
be one to tell you that the recent activity that we had 
associated with the satellite was the result of not knowing a 
specific threat, but putting together systems that could 
respond to the unexpected. One other piece that we are doing 
that the Secretary instituted are these portfolio management 
approaches. So we have services that look at the sea service, 
the air, etcetera, but these portfolios take common things like 
command and control that if we build them in these stove pipes 
may not talk to each other. These portfolios are designed to 
look for our seams; look for those areas where we might be 
vulnerable so you will see investment in this budget that you 
are dealing with right now that is looking at those seams and 
trying to understand and make sure that we are not surprised in 
those seams, nor that we are not surprised in a way that would 
disadvantage us in the future. We may have to adjust, but we 
won't have to wait four or five years for the solution is the 
hope.
    That is where we try to point ourselves.
    Mr. Conaway. Just one quick--is there anything in the 2009 
budget in circumstances where you had to rob Peter to pay Paul 
in this context?
    General Cartwright. I would say to you that more often than 
not what we looked for is where we can build a hedge? Where 
should we be building something that we put definite dollars 
against the war we are in and the fight that we are in, but 
what do we want to do with whatever we are investing in? Lets 
take the MRAP as an example. Something that we know we need 
right now for the fight that we are in. What are we going to be 
able to do with that? What is usable in the future? Are the 
dollars against that for command and control? Is the chassis 
something that we can use in another way?
    We have looked at those types of investments and tried to 
lay in the seed corn for the event that we will be surprised or 
as we look out to the future is it likely that we are going to 
need something? So some of these vehicles as an example are set 
up to work in a chem-bio environment, because we know likely in 
the future we are going to address that and we don't want to 
have to start from scratch to do it.
    Mr. Conaway. Thank you, Mr. Chairman.
    Chairman Spratt [presiding]. Mr. Scott.
    Mr. Scott. Thank you, Mr. Chairman. Let me follow up on a 
couple of those questions we just asked.
    There is an article recently on CNN about the MRAPs. Have 
we--what is the problem with getting them out in the field?
    Mr. England. I don't know a problem, Mr. Scott. I mean the 
MRAPs probably go under the fastest programs ever gone through 
the Department. And we are producing about 1,000 a month. And 
they get processed into Kuwait and into the field. So as far as 
I know it is moving. Obviously, would be nice if you could have 
this done instantly, but they are large vehicles. And so they 
are being shipped. They were being flown over and now they are 
being shipped. And now I think the queue is sufficient, it is 
only by ships.
    Mr. Scott. Okay. And General Cartwright, you mentioned 
figuring out where the seams are. Are you making full use of 
modeling and simulation upon those seams?
    General Cartwright. I will tell you that I probably drive 
people crazy with modeling and simulation, because I absolutely 
demand it. It----
    Mr. Scott. Say again?
    General Cartwright. I demand it.
    Mr. Scott. Okay.
    General Cartwright. It is just it cuts time off, it cuts 
expense, trial and error. I mean it is one of the great tools 
that have come available to us.
    Mr. Scott. Secretary Gordon, as I understand the Navy 
budget and you probably have to get back to me on this. The 
budget is sufficient to keep the aircraft carriers on schedule?
    Mr. England. Yes, sir, I believe it is.
    Mr. Scott. And if you could report back to me what I can 
tell my ship repair companies as to what the OMN budget is 
going to do to ship repair. I assume that is something you 
can't just say off the top of your head.
    Mr. England. We will get--Mr. Scott, I will have the Navy 
get back with you directly. I will just pass on to Navy, have 
them get back with you directly, sir.
    Mr. Scott. Okay. And Representative Drake who represents 
Langley----
    Mr. England. Right.
    Mr. Scott [continuing]. Is interested in what the budget 
does for the Hornets.
    Mr. England. Okay.
    Mr. Scott. Our Air National Guard has an interest in that 
too. So if you could get back on that. And as you know, 
Representative Joanne Davis recently passed one of her 
passions, which was getting those ships out of the ghost fleet 
out of the James River which constitute a major potential 
environmental hazard. They have been slowly but surely getting 
out and we want to make sure the budget continues that program.
    Mr. England. You know, Mr. Scott, I actually asked that 
question the other day myself just because of my own Secretary 
of the Navy they asked how that fleet was coming. They told me 
it was going down, but again I will get the Navy to respond. 
But I am quite confident they have money in the budget to do 
that.
    Mr. Scott. BRAC well there is $1.9 billion to effectuate 
the BRAC closings. As you know the costs for Fort Monroe went 
from $70 some million to $270 some million overnight without 
including the cost which could be hundreds of millions of 
dollars for cleaning up the mess left behind. Do we have enough 
money in the BRAC line item?
    Mr. England. I will confirm it with you, but Mr. Scott, 
everywhere where we know we had either you know deficiencies in 
the budget or an overrun or a problem to be addressed. As far 
as I know we put that money in the budget this year.
    Tina, right? So we should be totally whole in the budget 
for BRAC.
    Ms. Jonas. I think we are----
    Mr. England. If we are not----
    Ms. Jonas. Yes. We have a very healthy BRAC budget, but we 
will follow up with you, sir on the issue that you raise with 
Fort Monroe.
    Mr. Scott. Fort Monroe specifically.
    Mr. England. Yep.
    Mr. Scott. The budget includes an increase in personnel, 
7,000 Army, 5,000 Marines. Is that sufficient to maintain a 
decent rotation schedule or are we still going to be on these 
extended multiple rotation schedules that we are on now?
    Mr. England. Well it will take a while to get to the new 
level, 202,000 Marines and we are still growing, and also Army 
is still growing. But I will let you address--we are not at the 
end point because we just started that growth last year, Mr. 
Scott. So it takes a while to get to the new----
    Mr. Scott. And we are having trouble recruiting at the 
level we are at. And so when you respond, if you could tell me 
what affect the increase might have on our ability to actually 
recruit quality personnel. I would appreciate that.
    One of the recruitment tools we have is the GI Bill. As you 
know my Senator Jim Webb has introduce a GI Bill which would 
restore the education benefits to what they used to be during 
the Vietnam War. And we would appreciate comments on that in 
writing. I am running out of time so I just mention the 
questions that I have.
    Last year's budget included language that Representative 
Barbara Lee had proposed to go through the GAO study of ways 
that the military could save money. There were dozens of 
potential cost saving items and we put money in there for you 
to actually pursue those cost savings. And if you could bring 
me up to date on the status of that.
    And two last questions in just in accounting. Has the use 
of, excessive use of contractors run up the cost of the war 
more than it would have been if we had used military and 
civilian military personnel?
    And, finally, the accounting cost. We keep hearing about $8 
billion lost in Iraq that hadn't been that is not accounted 
for. If you could give us an update on----
    Mr. England. I think that is Iraqi funds, but we will look 
into it.
    Mr. Scott. Okay. If you could just bring me up to date on 
what the status of that is.
    Mr. England. If you will, just to make sure, if you will 
give us all those questions we will be sure we get back with 
you, Mr. Scott.
    Mr. Scott. Okay. Thank you.
    Mr. England. You bet.
    Chairman Spratt. Mr. Ethridge.
    Mr. Ethridge. Thank you, Mr. Chairman. Let me thank each of 
you for being here this morning and let me echo my friend Mr. 
Berry's comment. Thank you for your service. It is a difficult 
job, but we also have one to do on this side of the mic as well 
as you could appreciate.
    I have just returned from a trip to Iraq meeting with our 
soldiers, because representing Fort Bragg and Pope which is now 
transitioning through BRAC. I have the privilege of 
representing some of America's finest. And they are being 
deployed just like our neighborhood folks down at LeJeune on a 
in a very rapid basis and many of them I met with over there 
were on their third tour, some on their fourth rotation, which 
was sort of set a little of the tone for one of my questions. 
But before I do, I want to back up and ask either one of you 
who want to comment on this.
    You did mention we were in pretty good shape with BRAC, but 
given the movement of facilities coming to Fort Bragg, I would 
ask specifically and you may need to get back to me on this if 
you don't have it right now, that we do have adequate funding 
still in those accounts currently. And an additional question 
that I will need developed for me, one of the real issues that 
is being batted around in the adjacent counties to Fort Bragg 
is because of the build up we are seeing significant increase 
in needs for education and other issues that we have. I don't 
think we have anticipated in the BRAC funding. And I would 
appreciate a feed back on that of what that cost is.
    And specifically the question is this: If you have students 
in a school in a unit where the base is, you are funded at a 
far higher level than the students in the adjoining county. 
Last time I checked they usually cost about the same amount to 
educate students. Having been State Superintendent of Schools 
for eight years. And one of the real challenges we are facing 
is those counties tend to be counties with less resources. That 
is patently unfair to our men and women in uniform who we are 
sending overseas. Those children are in those schools. So I 
would appreciate feedback as soon as possible as we work 
through this budget process.
    Mr. Chairman, thank you again for this hearing. Let me take 
one other point I want to make because as we made this CODEL 
over there, one of the things I saw we visited the MRAP 
facility as vehicles were coming in. And I would encourage the 
speeding up of that process, anything we can do to speed it up, 
would make a difference. I was we were informed that we have 
not lost a single life of a service person that was moving 
about in one of those vehicles except one that happened to be 
in the gun turret outside the vehicle. I think it is imperative 
we do that very quickly.
    And of what we saw is that the violence is down for a 
variety of reasons. One of which is our men and women doing a 
marvelous job, certainly working with local officials. But now 
that that has happened, I think the Iraqi leadership needs to 
step up to the plate. We have given the room and the 
opportunity to get the job done. We just can't continue this 
forever, standing up there as you well know.
    We have talked about dollars today and budgets are about 
money. And we need to continue and I certainly have supported 
every budget for our military and will continue to do so. But I 
think you are aware that we are spending about $12 billion a 
month in Iraq by recent estimates, $500 plus whatever that 
number may be. But we are not--I have been fortunate enough 
having a new grand child born in the last few weeks and that 
child is now being faced with a lot of money that we are 
borrowing from foreign governments. We have to get a handle on 
this. We have to have help from our neighbors in that area, 
they are the ones who stand the lose the most as we start 
drawing down.
    So my question would be as we look at this, the continued 
numbers of troops we are talking about keeping there. Mr. 
Secretary, there are those who say when we talk about drawing 
down they talk about a precipitous withdrawal. We are not 
talking about that. We weren't even talking about cutting and 
running. I think what we are talking about is being realistic. 
We have got to all sit at the table and get a realistic handle 
of how we balance this federal budget. The dollar dropped 
yesterday at new lows around the world. There is a reason for 
that and that is because we are spending dollars that we don't 
have.
    How much longer can we ask our men and women to continue 
these extended deployments, multiple deployments? It is 
bringing a heavy toll on our men and women that I represent, 
that you represent as Secretary in the Department of Defense. 
And, Mr. Chairman, I know from your standpoint you feel it from 
our men and women that I met with at Anbar Province. They are 
doing a marvelous job. They tell you that. They love the job 
they are doing, but they are tired. They are absolutely tired.
    So who would like to respond to that? It may be a 
philosophical question, but it is an important question that we 
have to answer.
    Mr. England. Well----
    Mr. Etheridge. It reflects our budget responsibilities.
    Mr. England. No. And so it really is dealing with the dwell 
and the time on station. And that is part of the reason, Mr. 
Etheridge, that we decided to grow the force and the Congress 
concurred with that. So we are actually growing the force as a 
way to increasing supply.
    Mr. Etheridge. I couldn't agree more, but in the short term 
that is not helping those guys and gals out there who are 
rotating.
    General Cartwright. You know, my sense is that we have to 
grow the force in the longer term initiatives that we have put 
in place that you have been so helpful with. But in the nearer 
term as General Casey eluded to yesterday, we are waiting for 
this March/April report from General Petraeus, but as you saw 
on the ground, the conditions are improving and we are starting 
to transition from being the fighting force to moving to an 
over watch position which will allow us to reduce the forces, 
hopefully, over time, conditions permitting.
    If we can do that we can get these tours back into a 
manageable state. We need to get to that condition because the 
families also feel this stress. But if we keep it the rate that 
we are going, it will challenge our ability to retain the 
quality of people that we need to recruit the quality of people 
we need. There will be challenges out there. We are handling 
those challenges today. How long that can go, I have to I mean 
I have to agree it is not forever. And we are doing the best 
that we can to address these issues on the etches, the long 
term, the near term.
    Like you, and I don't want to put words in your mouth, but 
I was very heartened with my last trip to the AOR with what we 
have accomplished and how much the Iraqis in particular are 
stepping up to the ball and they just did a budget $49.9 
billion a lot of which is going to their security and that is 
heartening.
    Mr. Etheridge. Thank you. I would hope that they spend some 
of that on their police, because I really think that is the 
critical area right now that it really hurting.
    General Cartwright. Yes, sir.
    Mr. Etheridge. Thank you, Mr. Secretary. I yield back.
    Mr. Spratt. Mr. Becerra.
    Mr. Becerra. Mr. Secretary and General, thank you very 
much. Madam Secretary. Thank you very much for being with us 
again. And by the way, I think it needs to be said that it is 
our role to, obviously, ask you tough questions, your role to 
give us as best you can an answer to that. And I think the men 
and women in uniform understand that we are suppose to do our 
job to make it possible for them to have the best equipment, 
the best training, the most efficient policy making shop, and 
Pentagon that we can.
    So as we talk about this, I hope that we will continue to 
convey the thoughts that to every warrior that is out there 
wearing a uniform for this country, we say thank you for their 
service. And, General, to you to but if you will continue to 
convey that to every person in uniform from the highest ranking 
general to our newest enlistee that we want to make sure that 
they understand that we can have a vigorous conversation here 
but we ultimately know where the fight is.
    I have a couple of questions I would like to get to. I am 
concerned about--if I can have chart the chart on page eight 
come up. On the cost of the 1991 Gulf War.
    To me this is what is very telling about this situation we 
are in Iraq and Afghanistan. If we look at the net cost to this 
government, the U.S. Government of the Gulf War, dollar wise. 
Again, we could never reclaim the lives that were lost. But in 
terms of dollars, to come out with a net cost of $2.1 billion. 
I think George Bush, Sr., could certainly say that we had a 
coalition that helped us fight this war, even though we put 
most of the boots on the ground. We had the support of many 
other countries, equipment, soldiers, but also to help pay for 
the cost of this.
    My understanding is that as of today we have spent in Iraq 
and Afghanistan, but mostly in Iraq, a total of some $800 
billion. You are requesting $70 billion in this next budget and 
you have already acknowledged that that is not enough. Eight 
hundred billion dollars. Of the $800 billion, Mr. Secretary, 
that we spent, how much have our members of the coalition of 
the willing, how much have they willingly contributed to offset 
the costs of the war so far?
    Mr. England. So, I don't know, sir. I mean I don't know 
what that number is. Obviously, they funded troops and all. So 
I mean I just don't know what their budgets are and I just I 
can't tell you.
    Mr. Becerra. So compared to the Gulf War, is it possible 
for you all to provide us with a number of how much the our 
willing coalition partners have provided in kind or equipment 
contributions or cash contributions to fight this effort in 
Iraq and Afghanistan?
    Mr. England. I would expect we can give you an estimate of 
that. I mean I don't know what it is.
    Mr. Becerra. I would appreciate that.
    Mr. England. But----
    Mr. Becerra. I would appreciate that. I think it is obvious 
that our fighters, our warriors are giving their all. And I 
think it is important, incumbent upon us to say that our 
military and policy thinkers are giving their all and their 
best as well.
    But when I take a look at the fact that today we are 
approaching the 5th anniversary of this U.S. invasion in Iraq, 
compared to the less than four years it took us to be in World 
War II, the little over two years that we were in World War I, 
the little over three years we were in Korea. The fact that the 
most expensive war we have ever faced, World War II cost us 
about you could put it in today's dollars and in terms of our 
troops, it cost us about $50,000 per soldier to conduct the 
war.
    Today's war put in those same dollars is costing us about 
$400,000 per soldier. We are spending about $12 billion a month 
just in Iraq. We as a government spend as much as every other 
country in the world spends on its military budgets combined. 
So that the six countries that President Bush has called the 
rogue States and that would even include Lybia which apparently 
is no longer a rogue State, but Cuba, Iran, Lybia, North Korea, 
Sudan, and Syria spend \1/29\th on all their military budgets 
of what we spend. So we spend 29 times as much as they do.
    If you add with those six countries Russia and China 
together they combine spend about 30 percent of what we spend 
on our military, yet we are the ones that are spending hundreds 
of billions of dollars in a country that couldn't put one plane 
up in the air against us when we invaded it in Iraq. And we 
can't figure out how to get out.
    And so I am not sure if there is a question here, other 
than to say, what is demoralizing, what is very frustrating is 
that while we see our men and women in uniform doing the best 
they can, following every order they are given, somehow while 
we spend more than anyone else in the world, while we have 
committed more than anyone else in this willing coalition, we 
are in a rut. And I would hope that the message that goes back 
to the Pentagon, our policy makers, our military thinkers, is 
that we can only ask so much of our men and women in uniform. 
And we can only continue to do this in ways that show that we 
value and reward what our men and women are willing to do when 
they enlist into the service.
    I can't tell you that with all the numbers that I cited and 
that I continue to see on the horizon, that there is a lot of 
good that we can tell the men and women who are going to be 
sent to Iraq soon. Afghanistan, I think, the fight is a little 
different and I hope wish could devote more there.
    But I will conclude by just saying, Mr. Secretary, that we 
know we have a lot of good folks that serve this country, 
especially in uniform. And we who wear this different uniform 
want to be as supportive as we can, but I must tell you, by 
God, it is very difficult to find the value in having gone into 
Iraq the way we did and this so called coalition of the willing 
which doesn't seem too willing compared to the Gulf war.
    Mr. England. So, just one reminder for you with all these 
numbers.
    Mr. Becerra. Yes.
    Mr. England. Small data point. Two airplanes probably 
worth, I don't know, $100 million or something caused probably 
a trillion dollars worth of damage to the U.S. economy on 9/11/
01. So I mean this is a different kind of war and I don't think 
talking about encapsulated traditional warfare.
    Mr. Becerra. Yes.
    Mr. England. And I don't think it applies to the threat we 
have there. So I don't think we can forget what happened to our 
economy. I don't know what the total amount was that damaged 
our economy, but it was certainly dramatic compared to the cost 
of two airplanes, plus Pennsylvania and the Pentagon.
    So, I would just change the perspective somewhat. I mean I 
find all this interesting, but I frankly, Congressman, I think 
it is a different perspective for the world we are in today.
    Mr. Becerra. I think so.
    Mr. England. And we look at it differently.
    Mr. Becerra. Mr. Secretary, I take the point. And I think 
if President Roosevelt were alive he would tell you that on 
December 7 back in the 1940s we didn't expect that Hawaii would 
be facing what it did. That President Eisenhower and President 
Kennedy did not expect that Sputnik would beat us up in space. 
And so we have been challenged on many occasions, but the fact 
remains that the resources we put in, the men and women we have 
sacrificed for an endeavor that has no end in sight it is tough 
to swallow, because we have always been able to give our men 
and women in uniform a much better sense of what they are 
fighting for.
    Mr. England. But I----
    Mr. Becerra. I take with full understanding your point and 
I hope you take a full understanding of my point.
    Mr. England. Certainly.
    Mr. Becerra. That we are working in this together. As I 
said at the very beginning, we want the young man who is about 
to enlist to recognize that there is value that even though we 
have vigorous debate here, they by putting on that uniform make 
it possible to have this vigorous debate here, because they are 
challenging others to make sure that we have those----
    Mr. England. Well, we welcome it. But I would tell you if 
you talked to our men and women in uniform who serve, they 
would tell you, I think they would disagree with you. They 
would tell you they have made immense progress. And they are a 
doing wonderful things----
    Mr. Becerra. Mr. Secretary, don't get me wrong, I agree 
with what----
    Mr. England. So----
    Mr. Becerra. I would disagree with me if I said that, but I 
didn't say that. They have made immense progress. They are men 
and women on the ground with boots on it, they have made the 
progress. Absolutely.
    I don't know if we can say that we have made commensurate 
progress given what they have done with the orders that they 
have been given. Someone should give us a little bit better 
order, because for us to be spending so much to not to be able 
to tell them when they are going to have to or when they are 
going to have a chance to come home after that third or fourth 
tour of duty. That is where are failing is.
    And so what I am saying to you, I have full confidence in 
what our men and women in uniform can tell us. I can't say that 
our policy makers and military thinkers have held up their end 
of the bargain.
    So with that, Mr. Chairman, I thank you for the opportunity 
to speak.
    Chairman Spratt. Mr. Secretary, I understand you need to be 
back at the Pentagon for a meeting at 12:30?
    Mr. England. I do. I don't know what--I have sort of lost 
track of time. But I have--what is the time now?
    General Cartwright. 12:15.
    Mr. England. 12:15. No, so if I am here until--I actually 
planned to be here until 12:30 but at 12:30, Mr. Chairman, I do 
need to leave.
    Chairman Spratt. That is great. Ms. Hooley.
    Ms. Hooley. Thank you, Mr. Chair. Thank you, Mr. Secretary, 
for being here. I am going to quickly go through five 
questions. You can answer as many as you can in that time 
period, but I would like a written response to those that you 
don't get to.
    Mr. England. Certainly.
    Ms. Hooley. The first question is, I have been on Budget 
Committee before when you have come in with a budget that is 
really under what we expect to expend. I mean you have got a 
$70 billion request. We keep doing supplementals. I would like 
to see the what you think the war is going to cost us for the 
next year and actually have that number in the budget as 
opposed to a budget number that we know we are not going to be 
able to--it is not going to be accurate and we are going to 
need a lot more.
    Second question is, the Department proposes to increase the 
TRICARE fees for military retirees. I think that contradicts 
the notion that this is a shared sacrifice during time of war. 
Well, the men and women have already made that sacrifice and 
this proposal asks them to once again sacrifice. Do you think 
this policy is fair, especially during the time of war?
    Question number three is, the Commission on the Guard and 
Reserve issued a report January 30th, that concluded the U.S. 
military isn't ready for a catastrophic attack on this country. 
It said the National Guard is ill trained and ill equipped to 
handle the job. It says our military does not have sufficient 
trained ready forces available to respond to a chemical/
biological or nuclear incident. They reported that there are 
even fewer Army National Guard units that are combat ready than 
just a year ago, which was only 88 percent.
    What will it take to turn this readiness problem around? 
And what specifically does the Defense budget do with regard to 
resolving this issue? And will significant funding commitments 
be needed for 2009 and beyond?
    Question number four: Mr. Secretary, due to equipment not 
being rightfully transferred back to the States, and I will use 
my State as an example. The Oregon Guard units lack of supply 
of trucks, equipment, and people is around 50 percent of 
capacity. Our Governor is dealing with flood season and soon 
thereafter fire season. We know this is going to happen in 
Oregon. Because of the DODs policy of not returning what should 
rightfully be at our State's disposal, my State doesn't have 
the equipment or the troops it needs to fully be prepared for 
these likely events.
    Mr. Secretary, when is the equipment going to be returned 
to our States?
    And the last question is, last year we authorized and 
mandated establishment of a national reintegration program 
entitled Beyond the Yellow Ribbon Program. And it is very 
different for a guardsman or a guards woman coming home where 
they are dispersed, their buddies aren't there, they don't have 
a base, they don't have medical facilities. And reintegration 
is incredibly important for our returning Guard and Reserve.
    I want to know when we are going to get this program 
started. We need the support staff in the States. We need an 
allowance for the guards people when they come home as opposed 
to a couple of days, as they look for jobs, find out what 
educational opportunities are, and get reacquainted with their 
families. I think a reintegration program is incredibly 
important. We already have nine started in Oregon and 
Minnesota, I think, have been the two examples of how to do 
this. And I have been very involved in that.
    So I would like to know when Beyond the Yellow Ribbon 
Program is going to start. And if you would be willing to embed 
an experienced guardsman on your staff to be a liaison to this 
program and for all other matters of support to reserve 
component servicemembers and their family in our geographically 
dispersed and uniquely challenging environment.
    So you have 20 seconds to answer any question you can.
    Mr. England. So I will just comment. I will just comment, 
but we will get you answers too. So if I can, number two. 
Actually I just can't remember what number one was. Number two 
was the co-pay.
    Ms. Hooley. Right.
    Mr. England. Why is it the people retired. There is already 
a co-pay. It hasn't been updated since 1996. So the request was 
to make this consistent with inflation, basically. And it 
didn't apply to active duty. It didn't apply to people over 65. 
It applied to people typically retired with a job.
    And so that was a way to try to constrain the budget, which 
is otherwise going out of sight on medical care. We will answer 
more. CBNR. We do not agree with the findings of the 
Commission. We agree with many of their findings. There were 95 
recommendations in the second report. The Secretary has 
directed a group to look at all that. But I don't believe that, 
frankly, National Guard Bureau would agree with that 
conclusion, because we have equipped a lot of the guard units 
that deal with that issue, but we will look at it and come out 
more definitive when that review is completed.
    National Guard. We are putting a lot of equipment. We met 
with the Governors just the other day and Steve Blum, had 
General Steve Blum with me. I think when it comes to trucks and 
all those things, I do not think there is an issue in terms of 
dealing with natural disasters and we have funded that. Trucks 
there is compacts between States. I mean trucks, obviously, can 
drive one State to the other. So I think there is a general 
concurrence that that is really not a major issue. But we will 
address the specific numbers with you.
    Ms. Hooley. I would like you to do that, because----
    Mr. England. And the----
    Ms. Hooley [continuing]. If you talk to our Governor and 
our guards they say it is a real problem.
    Mr. England. We will follow up. And I will have the 
National Guard Bureau do that. The Yellow Ribbon Reintegration 
Program has came out with the NDAA this year and we actually 
had 83 mandates from the National Defense Authorization Act. 
This was one of those to go do. It is obviously not in the 
budget, because it just came out. We will address the Program 
when we are putting the structure in place. But then I will 
comment again, when we do that we have to find the money from 
somewhere. As the year goes on it gets hard to do. We are 
almost halfway through this fiscal year.
    So as we juggle accounts it gets more difficult as time 
goes on. It is an important program. So we are going to do it. 
But it just gets hard to do.
    Ms. Hooley. It is a relatively small amount of money for a 
program that really means a lot to our people coming home. It 
is a critical program.
    Mr. England. I understand. No, look, I understand. I agree. 
I mean it is a good program. We are going to do it. I said we 
are going to do it. We are putting the structure in place to do 
it, but I only comment again, I mean it is one of a lot of 
other mandates that were not in the budget. And so we just have 
to find money to do it and it gets harder as the year goes on. 
That is my point, particularly when we are still trying to 
juggle money in other accounts.
    But we will get you a more specific answer on all five of 
those.
    Ms. Hooley. Thank you.
    Chairman Spratt. Ms. Hooley, we have got to move on.
    Ms. Hooley. I am done.
    Chairman Spratt. Thank you. Mr. Allen.
    Mr. Allen. Thank you, Mr. Chairman. Secretary England, 
thank you very much for being here. General Cartwright and 
Under Secretary Jonas, thank you all for being here.
    The U.S. Navy has stated that the nation needs no fewer 
than 313 ships to respond to threats to our national security. 
But if you look at what we budgeted for ships over the last few 
years, we are not even close to building at a rate which will 
get us to that particular goal.
    With the Navy hoping to get that to that goal by 2024 we 
need to be building 12 ships a year, but the President's budget 
this time has only eight ships being funded. And my question, 
first question is, do you disagree with the Navy's goal of and 
its need for getting to a 313 ship Navy?
    Mr. England. No, I don't.
    Mr. Allen. How and when are you going to be able to get us 
to a place where we are closing in on that goal instead of 
falling farther behind?
    Mr. England. Sir, Congressman, I think where the Navy has 
fallen behind to that number is large in the area of Littoral 
Combat Ships because I know they planned to buy 55. They had 
some set backs with that program, but they are still pursuing 
this. So that is a reasonable portion of those ships. And when 
we tried to come out with an approach that we could have a more 
affordable ships along with the more expensive so that there 
would be a right mix to satisfy that requirement.
    So Navy is on the track. That is their objective. We do not 
disagree with the objective. But they have had trouble, 
frankly, getting started. I understand that they have now 
turned on the new destroyer. I believe they have put that 
recently under contract. And hopefully get Littoral Combat 
Ships squared away and increase in the submarines.
    So they are in the line now to increase. That said, the 
budget I believe this year is $14 billion. It is a lot more 
than when I was back Secretary. So they have increased the 
budget, but the cost has gone up. So they still have a little 
bit of a hockey stick in the out years and that will have to be 
dealt with.
    Mr. Allen. Yes. From my review of the budget, I mean I 
don't see that LCS Program, first of all, they are small ships. 
They don't sustain the ship building industry the way the 
larger ships do. But they also, you know, they are not in the 
budget as I recall at a level to get us to 313 ship Navy by 
2024.
    I understand that by 2010 China will have almost twice the 
number of submarines, not the same capability, but almost twice 
the number of submarines as the United States. And their Navy 
will surpass ours, in numbers again, not all its capability by 
2015. And Russia's target is to be the second largest navy in 
the world.
    My question is, how can you expect us to get to a place 
where we are competitive in this area if we don't substantially 
and quickly ramp up our ship building account. And last year 
the House did that. They increased the ship building account by 
$3 billion. The Senate wouldn't go along so we wound up with 
about $300 million, I believe it was, over funding for the year 
before. But how are we going to ramp up that ship building 
number, particularly with the conflict in Iraq taking different 
estimates, $10 to $12 billion a month.
    Mr. England. Well, I mean Iraq doesn't come out of this 
base budget and the procurement accounts have gone up. The 
ships cost have gone up significantly so the Navy, I know and 
the destroyer now has a limited in terms of the cost of that 
ship because it is about twice what the prior ships cost.
    My view is this, is they are going to they just have to 
bring the Littoral Combat Ship along to get a mix of vessels, 
otherwise it just will be unaffordable, sir. I mean they are 
going to have to have a mix of ships if they are to get to that 
number with any kind of a reasonable budget. I mean otherwise 
the costs will just be too much.
    Mr. Allen. And coming back, finally, just to the cost of 
the conflict in Iraq. It has to be true, Mr. Secretary, doesn't 
it, that the spending $500 billion so far in direct cost for 
the war in Iraq has diminished the amount of money available 
for ship building?
    Mr. England. Well, Mr. Allen, our base budget is going up. 
I mean this year our base budget is up $35 billion independent 
of the war in Iraq. So the Navy budget went up this year. I 
mean we were up not only inflation, but five percent above 
inflation. So the base budget and procurement accounts have 
been going up. I mean basically the problem has been not that 
the budget--$14 billion I mean again back when I was Secretary 
of the Navy, wow, that just seemed like a huge amount of money 
back then because our budgets were much smaller.
    Mr. Allen. But, Mr. Secretary----
    Mr. England. So I believe it is more of a cost of the----
    Mr. Allen. Mr. Secretary, regardless of what is the base 
budget or not, it has to be the case that $500 billion over 
five years for Iraq has diminished amount of money that might 
otherwise be available for Navy ship building, isn't that 
right?
    Mr. England. But it is not evident to me that if we weren't 
in this war that we would have another $500 billion. I mean our 
base budget handles all of our needs except for the war cost, 
Mr. Allen. So I mean it is not evident to me we just have that 
added tacked onto our budget.
    I doubt if it would have been. But in the meantime, our 
budgets have gone up and it is now our responsibility to find a 
way to fit within those budgets and do those the balance across 
the services and across ship building. That is a Navy 
challenge. They need to do that.
    Chairman Spratt. Thank you, Mr. Allen. Ms. Moore, we have 
got about three minutes to make a vote if we make it and the 
Secretary needs to be across the River. If you have got one or 
two questions.
    Ms. Moore. I just have one or two questions. One question, 
actually, and I will be very brief.
    I am very concerned that the Department of Defense and 
Mental Health Taskforce last July indicated that the Department 
had was insufficient, their system of care for psychological 
health is insufficient to meet the needs of today's forces, 
their beneficiaries. And insufficient to meet their needs in 
the future. Thirty-eight percent of soldiers, 31 percent of 
Marines and 49 percent of the National Guard are showing 
psychological symptoms when they come home.
    That this is a shortage of mental health clinicians. And 
so, sir, when you say that you know this is a very carefully 
designed budget and there is something like a .0006 percent 
increase for health care and others of my colleagues have 
talked about the co-pays, just a shortage of health care. I am 
very, very concerned that we are that our soldiers are getting 
short shrift.
    Mr. England. We--can I go quick to answer to it, because I 
know we all have to go. We have had a number of taskforces, we 
have addressed this. I would be pleased to send you the reports 
on what we are doing, but we now do health assessments for our 
troops before anyone deploys, they do face to face when they 
come back. We are greatly expanding this whole area.
    So I would be pleased to provide you information on that. 
But this is an area that is getting a lot of attention by DOD 
and VA. And we----
    Ms. Moore. Your budget request really doesn't reflect that 
you are shifting monies into this training and stuff. I mean 
there is only $150 million increase in your $23.6 billion 
health care budget.
    And so I am worried that a lot of taskforces and I don't 
know exactly what you are going to do.
    Mr. England. We will send you the information so you will 
know that, Ms. Moore.
    Ms. Moore. All right. Thank you, sir.
    Mr. England. You bet.
    Chairman Spratt. Mr. Secretary, Madam Secretary, and 
General Cartwright, thank you very much for coming and thank 
you for your answers and your participation in the hearing this 
morning. We very much appreciate it.
    Mr. England. Mr. Chairman, you are welcome. It is good to 
be with you again, sir.
    Chairman Spratt. Thank you.
    General Cartwright. Thank you.
    Ms. Jonas. Thank you, Mr. Chairman.
    Ms. Moore. When you see me asking questions you always know 
it is the end. That is how you know. [Laughter]
    Chairman Spratt. I ask unanimous consent to members who 
didn't have the opportunity to ask questions of the witness be 
given seven days to submit such questions.
    Mr. England. Absolutely.
    Chairman Spratt. Thank you again.
    Mr. England. We will be pleased to respond, Mr. Chairman. 
Thank you.
    [Whereupon, at 12:32 p.m., the Committee was adjourned.]

                                  
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