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


                                     

                         [H.A.S.C. No. 110-117]

                                HEARING

                                   ON
 
                   NATIONAL DEFENSE AUTHORIZATION ACT
                          FOR FISCAL YEAR 2009
                                  AND
              OVERSIGHT OF PREVIOUSLY AUTHORIZED PROGRAMS

                               BEFORE THE

                      COMMITTEE ON ARMED SERVICES

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                MILITARY PERSONNEL SUBCOMMITTEE HEARING

                                   ON

 BUDGET REQUEST ON OVERVIEW OF RECRUITING, RETENTION, AND COMPENSATION

                               __________

                              HEARING HELD

                           FEBRUARY 26, 2008

                                     
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                    MILITARY PERSONNEL SUBCOMMITTEE

                 SUSAN A. DAVIS, California, Chairwoman
VIC SNYDER, Arkansas                 JOHN M. McHUGH, New York
LORETTA SANCHEZ, California          JOHN KLINE, Minnesota
NANCY BOYDA, Kansas                  THELMA DRAKE, Virginia
PATRICK J. MURPHY, Pennsylvania      WALTER B. JONES, North Carolina
CAROL SHEA-PORTER, New Hampshire     JOE WILSON, South Carolina
NIKI TSONGAS, Massachusetts
               Michael Higgins, Professional Staff Member
                 John Chapla, Professional Staff Member
                     Rosellen Kim, Staff Assistant


                            C O N T E N T S

                              ----------                              

                     CHRONOLOGICAL LIST OF HEARINGS
                                  2008

                                                                   Page

Hearing:

Tuesday, February 26, 2008, Fiscal Year 2009 National Defense 
  Authorization Act--Budget Request on Overview of Recruiting, 
  Retention, and Compensation....................................     1

Appendix:

Tuesday, February 26, 2008.......................................    39
                              ----------                              

                       TUESDAY, FEBRUARY 26, 2008
FISCAL YEAR 2009 NATIONAL DEFENSE AUTHORIZATION ACT--BUDGET REQUEST ON 
          OVERVIEW OF RECRUITING, RETENTION, AND COMPENSATION
              STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

Davis, Hon. Susan A., a Representative from California, 
  Chairwoman, Military Personnel Subcommittee....................     1
McHugh, Hon. John M., a Representative from New York, Ranking 
  Member, Military Personnel Subcommittee........................     2

                               WITNESSES

Chu, Dr. David S.C., Under Secretary of Defense for Personnel and 
  Readiness......................................................     3
Coleman, Lt. Gen. Ronald S., USMC, Deputy Commandant for Manpower 
  and Reserve Affairs, Headquarters, U.S. Marine Corps...........    10
Harvey, Vice Adm. John C., Jr., USN, Chief of Naval Personnel, 
  Deputy Chief of Naval Operations, Department of the Navy.......     6
Newton, Lt. Gen. Richard Y., III, USAF, Deputy Chief of Staff, 
  Manpower and Personnel, Headquarters, U.S. Air Force...........     8
Rochelle, Lt. Gen. Michael D., USA, Deputy Chief of Staff, G-1, 
  Headquarters, U.S. Army........................................     4

                                APPENDIX

Prepared Statements:

    Chu, Dr. David S.C...........................................    49
    Coleman, Lt. Gen. Ronald S...................................   132
    Davis, Hon. Susan A..........................................    43
    Harvey, Vice Adm. John C., Jr................................    92
    McHugh, Hon. John M..........................................    46
    Newton, Lt. Gen. Richard Y., III.............................   120
    Rochelle, Lt. Gen. Michael D.................................    77

Documents Submitted for the Record:

    [There were no Documents submitted for the record.]
Witness Responses to Questions Asked During the Hearing:

    Mr. Jones....................................................   157
    Ms. Shea-Porter..............................................   155
    Dr. Snyder...................................................   155

Questions Submitted by Members Post Hearing:

    Mrs. Davis...................................................   161
    Dr. Snyder...................................................   161

FISCAL YEAR 2009 NATIONAL DEFENSE AUTHORIZATION ACT--BUDGET REQUEST ON 
          OVERVIEW OF RECRUITING, RETENTION, AND COMPENSATION

                              ----------                              

                  House of Representatives,
                       Committee on Armed Services,
                           Military Personnel Subcommittee,
                        Washington, DC, Tuesday, February 26, 2008.
    The subcommittee met, pursuant to call, at 10:00 a.m. in 
room 2212, Rayburn House Office Building, Hon. Susan A. Davis 
(chairman of the subcommittee) presiding.

OPENING STATEMENT OF HON. SUSAN A. DAVIS, A REPRESENTATIVE FROM 
    CALIFORNIA, CHAIRWOMAN, MILITARY PERSONNEL SUBCOMMITTEE

    Mrs. Davis. Good morning. The meeting will come to order. 
Today, the subcommittee will turn its attention to recruiting, 
retention and compensation programs, these essential building 
blocks of military manpower. As you all know, this is a very 
challenging recruiting and retention environment. We believe 
that a relatively low unemployment rate, a protracted war on 
terrorism, a decline in propensity to serve, and a growing 
disinclination of influencers to recommend military service 
will cause the environment to remain difficult during fiscal 
year (FY) 2008 and in the years that follow.
    As you might expect, the subcommittee is concerned about 
the need to achieve the number of new recruits needed to meet 
mission requirements, particularly now that we are engaged in 
adding forces to both the Army and the Marine Corps. In terms 
of the narrow objective to simply meet the number requirements, 
the armed services and their National Guard and Reserve 
components were remarkably successful during fiscal year 2007 
and during the first four months of fiscal year 2008. However, 
those recruiting and retention successes continue to be 
accompanied by sacrifices in recruit quality and increasing 
costs.
    The subcommittee has become increasingly troubled that the 
erosion of recruit quality over an extended period will result 
in long-term consequences for force management and leadership 
development. For a number of years, the subcommittee has also 
expressed concern about the increasing reliance of recruiting 
and retention programs on emergency supplemental funding. This 
trend contributes to the steadily increasing cost because 
fragile recruiting and retention programs require strategic 
planning and timely execution. We seem destined to learn again 
and again that these programs cannot be optimally managed with 
supplemental funding inserted at the eleventh hour.
    The subcommittee was not alone in observing that recruit 
quality has suffered and that the cost of maintaining the All-
Volunteer Force has increased. Representatives of the 
Commission on the National Guard and Reserves have cited these 
trends when justifying their conclusions that the current 
personnel management model and retirement system is not 
competitive in the employment marketplace and cannot be 
fiscally sustained and therefore must be reformed.
    So we are anxious to discuss with you these issues today, 
and we certainly are very glad and honored that you are here 
today.
    [The prepared statement of Mrs. Davis can be found in the 
Appendix on page 43.]
    Mr. McHugh, do you have an opening statement?

  STATEMENT OF HON. JOHN M. MCHUGH, A REPRESENTATIVE FROM NEW 
     YORK, RANKING MEMBER, MILITARY PERSONNEL SUBCOMMITTEE

    Mr. McHugh. Madam Chair, I thank you. I think you summed up 
the broad perspective very well. Let me just ask unanimous 
consent that my formal statement be entered in its entirety in 
the record.
    Mrs. Davis. Without objection.
    Mr. McHugh. I do want to say to Dr. Chu and Admiral Harvey: 
gentlemen, I can't promise you this is your last appearance 
before us. Were it in my power, I would. Clearly, it probably 
does present one of, if not the only opportunity we will have 
to thank you both publicly. Your appearances before this 
subcommittee for such a period of time have been very, very 
helpful to us, very instructive. More than that, your 
leadership in the challenges that face our volunteer armed 
services are legendary, and we wish you very best in the 
future.
    Also, we welcome General Newton. This, I promise him, is 
his first, probably not his last appearance. General, we wish 
you well and thank you for being here today.
    As you noted, Madam Chair, the challenges and the issues we 
are about to discuss per your opening statement are not new to 
this subcommittee. The concern we have, as in the past, about 
various recruit standards are something we want to talk about 
here today, amongst other issues. So, as I said, those are 
outlined in my opening remarks, and they are now formally 
within the record. So I would be happy to yield back so we can 
get to the testimony.
    [The prepared statement of Mr. McHugh can be found in the 
Appendix on page 46.]
    Mrs. Davis. Thank you, Mr. McHugh. I wanted to introduce 
our panel again. Gentlemen, thank you very much for being here. 
We thank you all for your service over the years, and we look 
forward again to a good hearing today.
    I want to introduce the Honorable David Chu, Under 
Secretary of Defense for Personnel and Readiness; Lieutenant 
General Michael Rochelle, Deputy Chief of Staff for the U.S. 
Army, G-1 Headquarters; Vice Admiral John Harvey, Chief of 
Naval Personnel; Lieutenant General Richard Newton, III, Deputy 
Chief of Staff, Manpower and Personnel for the U.S. Air Force; 
Lieutenant General Ronald Coleman, Deputy Commandant for 
Manpower and Reserve Affairs, Headquarters, U.S. Marine Corps. 
Thank you again.
    General Newton, I know that this is your first opportunity 
to testify before us, and we welcome you for being here.
    Dr. Chu.

STATEMENT OF DR. DAVID S.C. CHU, UNDER SECRETARY OF DEFENSE FOR 
                    PERSONNEL AND READINESS

    Dr. Chu. Good morning, Madam Chairman. Thank you for your 
kinds words. Mr. McHugh, likewise. Thank you for your very 
gracious thoughts. I am privileged to appear this morning on 
behalf of the Department of Defense (DOD) and be joined by my 
colleagues, the four Deputy Chief of Staffs for Manpower and 
Personnel of the military services. We do have statement for 
the record. I hope, Madam Chairman, that you would accept them 
as part of the committee record of this hearing.
    The volunteer force, as we all know, has served the Nation 
well; served it well in the longest conflict in which we have 
used a volunteer force that involves use of active military 
forces in a combat. We purposely have as a country set high 
standards for the quality of that force and for the motivation 
of the young people that seek to join the American military. I 
believe we see the payoff to those high standards in the 
performance of this force in the field, which has been truly 
remarkable. It is a tribute, in my judgment, to this young 
generation of Americans, and to some not so young Americans, 
that American forces in terms of their conduct in the field 
have been widely praised, whatever the controversy might be 
about the underlying policies that they serve.
    The fact we have been successful in sustaining this 
volunteer force is, in my judgment, very much a reflection of 
the partnership between the executive and legislative branches 
over the last seven years. You have given us the flexibility 
that we needed to have so that we could be successful in 
recruiting and retaining military personnel. You have enlarged 
the space within which we operate so we could offer a broader 
range of incentives, especially the better set of special and 
incentive pay authorities you gave us just this January with 
the enactment of the National Defense Authorization Act (NDAA) 
for Fiscal Year 2008.
    If you look at the specific legislative proposals we have 
advanced in fiscal 2009, you will see that is the same theme we 
are pursuing, to seek additional flexibility, to seek 
additional latitude in terms of how we use the classic tools 
that have been so successful in recruiting and retaining 
qualified young Americans to serve.
    You mentioned, Madam Chairman, in your opening statement 
the quality issue. I think to the extent there is a quality 
issue, it is largely in the Army, and it is largely about the 
proportion that are high school diploma graduates. I would want 
to emphasize that the military as a whole insists that everyone 
is a high school graduate, whether by diploma or by General 
Educational Development (GED). In that regard, it stands well 
above the national average, which is believed by census to be 
on the order of 80 percent that enjoy that high school status.
    We do recognize that the decision to stay in the military, 
to continue serving is very much a family decision, and if the 
family is satisfied, the military person is more likely to 
pursue what he or she has seen as a calling. In that regard, 
our conclusion is that the two most important issues for a 
family are the education of its children and the opportunity 
for the spouse to pursue a career. Not just a job, but a 
career. It is in that regard, as you all know, the President in 
his State of the Union Message advanced several propositions 
regarding how we better support the education of military 
children and the opportunities for spouses to pursue a career. 
Notable among those is the notion that there should be some 
degree of transferability of the member's GI bill benefits to 
the family, and that we as a government should give better 
support to the career aspirations of military spouses through a 
form of preferential hiring in the Federal Government and 
through an expansion of what we do in terms of offering day 
care support to the children if the spouse should indeed seek 
to work.
    We look forward to the ongoing dialogue with you, Madam 
Chairman, on the best way to meet the Nation's need for a 
quality Armed Service forces. We are confident we can succeed 
in building on the successes in the past.
    I thank you, and I turn to General Rochelle.
    [The prepared statement of Dr. Chu can be found in the 
Appendix on page 49.]

STATEMENT OF LT. GEN. MICHAEL D. ROCHELLE, USA, DEPUTY CHIEF OF 
              STAFF, G-1, HEADQUARTERS, U.S. ARMY

    General Rochelle. Chairwoman Davis, Ranking Member McHugh, 
distinguished members of the committee, thank you once again 
for the opportunity to appear before this distinguished body 
and report on the Army's personnel posture, representing our 
magnificent soldiers, and for your continued support of the 
Army.
    Without question, our Nation's Army is still the best 
trained, best equipped, best led Army in the world. But as we 
enter the seventh year of war, the third longest period of 
armed conflict in U.S. history, there is little question that 
our Army is out of balance. Your Army soldiers and their 
families are remarkable, having endured lengthy and repeated 
deployments and hardships. Many have been injured, and many 
more have made the ultimate sacrifice. In spite of the 
tremendous burdens they bear, they remain resilient and 
committed to serving our Nation. Indeed, they are today's 
heroes, truly a national treasure, and I look forward to our 
dialogue regarding how best to support and sustain them, and 
thank you for this opportunity.
    Restoring balance and creating readiness is our top 
priority, after winning the war on terror. Regaining our 
``boxer stance,'' as it were, the ability to shift our weight 
and respond decisively requires that we apply the Army chief of 
staff's four imperatives: Sustain, prepare, reset, and 
transform. Key is growing the Army to 547,400 as soon as 
possible. We are on target to meet this goal by the end of 
fiscal year 2010. Thanks to your support, Army growth will help 
us return to shorter deployments, increased time at home 
between deployments, and greater predictability for soldiers 
and families in both the Active and Reserve components.
    We must grow to become a modular expeditionary force that 
is fully capable of supporting combatant commanders in meeting 
the full spectrum of contingencies. Our efforts to grow the 
Army are challenging. Only 3 in 10 of our 18- to 25-year-olds 
today are fully eligible for enlistment. The remainder fall 
short in some element of the standards for health, education, 
or character.
    Our recruiting mission is difficult, given the lowest 
propensity for military service, as you have observed, in two 
decades; declining support from those who influence our youth; 
opportunities for post-secondary education; and a competitive 
job market, all you have in your remarks, Madam Chairwoman, 
noted. In spite of what is happening in the United States, we 
are on track to meet our recruiting goal for fiscal 2008.
    I am personally concerned about the Nation's ability to 
produce the highest possible caliber of military recruits, 
declining high school graduation rates, and alarming rates of 
obesity in our young adult population, all of which I have 
testified or commented on before this committee in the past.
    I share your concerns about quality, and am committed to 
recruiting a force with the highest possible educational 
attainment and aptitude scores. Our current analysis, which I 
would be delighted to discuss during the testimony, and our 
commanders in the field tell us that soldiers assessed in 
fiscal year 2007 are performing exceptionally well. Every one 
of these soldiers is qualified in their military occupational 
specialty, and demonstrated performance on the battlefield 
speaks for itself. I believe that a willingness to serve in the 
Army at this place in time portends a unique aspect of quality 
that accession metrics simply cannot measure, the heart of a 
well-led, well-trained volunteer soldier.
    While equipment and technology are certainly vital to 
readiness and transformation, people are the Army. Retaining 
soldiers starts at home. We must sustain soldiers and their 
families with a quality of life commensurate with their quality 
of service and the service they provide. This is absolutely 
essential to both near-term readiness and the ability to 
attract a quality force for the future. With support from the 
Congress, the Army has made tremendous strides in this regard. 
From funding for improved housing facilities and essential 
services, to increased pay and benefits, and improvements to 
health care, the results are tangible and meaningful. Our 
soldiers and families recognize and deeply appreciate the 
actions taken by their military and civilian leadership to 
improve their quality of life in these areas.
    These targeted improvements to policies, programs and 
services, services delivery, mitigate risks exacerbated by 
prolonged conflict and the many stresses it entails. We ask for 
continued congressional support for these programs that provide 
our soldiers and families with the quality of life they so 
richly deserve.
    If I may relay a short story, we had a visit to the 
Pentagon recently by wounded warriors from Walter Reed and 
Bethesda. And as I was speaking to several of the wounded 
soldiers and their family members, I encountered a young 
soldier who had been shot through the leg, had part of his bone 
removed, had an extension, and was recovering very, very well. 
He and his wife were from the 172nd Airborne from Vicenza, 
Italy, which caused me to ask a question about children. And I 
simply asked, You came from Italy to be at your husband's side, 
and you have been here for several weeks now. Are there 
children? And she responded, No. I forced my husband to agree 
that we would not start a family until we had been together for 
six consecutive months; we haven't started a family.
    In closing, restoring balance means restoring our ability 
to eliminate circumstances like these endured by heroes who 
have given so much, not only answering the call to serve but 
also deciding to continue to serve during this period of 
persistent conflict.
    I thank you for the opportunity to once again appear. I 
also thank you for the partnership and the support that this 
committee has demonstrated time and again on behalf of our 
soldiers. I look forward to answering your questions.
    [The prepared statement of General Rochelle can be found in 
the Appendix on page 77.]
    Mrs. Davis. Thank you.
    Admiral Harvey.

STATEMENT OF VICE ADM. JOHN C. HARVEY, JR., USN, CHIEF OF NAVAL 
PERSONNEL, DEPUTY CHIEF OF NAVAL OPERATIONS, DEPARTMENT OF THE 
                              NAVY

    Admiral Harvey. Thank you, ma'am. Chairman Davis, Ranking 
Member McHugh, distinguished members of this committee, I thank 
you for the opportunity to appear before you today on behalf of 
the 330,000 active duty and 70,000 Reserve component sailors 
now serving our Nation.
    Sir, I thank you for those kind remarks. Were it up to me, 
I would be looking forward to as many sessions before this 
committee as you could arrange. But as the Chief of Naval 
Operations (CNO) explained, orders are orders, and even the 
Chief of Naval Personnel gets his. So subject to confirmation 
by the other body, other duties await. But this is a wonderful 
committee with which to engage in our common cause, both at the 
member level and certainly at the staff level of extraordinary 
professionals. It has been a real pleasure to do business here 
and represent our people to you.
    In large part, because of your work and the extraordinary 
support you have given to your Navy and to all the services, I 
am very pleased today to report that your Navy is ready, 
relevant and responsive. We are recruiting a high quality 
force, and we are retaining those high quality sailors we need 
to sustain a quality force, and we intend to keep it that way.
    Now those are pretty straightforward words, and I would 
like to back up the words with just a picture to illustrate 
what they mean to us. We are sustaining our Nation's engagement 
in Iraq and Afghanistan both directly and in support of Army 
and Marine ground forces, and we are simultaneously 
strengthening our engagement around the world in keeping with 
the guidance contained in our new cooperative maritime strategy 
for the 21st century.
    Now let me give you an example of what your Navy is doing 
on any given day. Last week, on 20 February, our Nation's 
attention was focused on the USS Lake Erie, one of our Aegis 
cruisers in Hawaii, as it successfully engaged a failing 
satellite with a Navy standard missile launched by Fire 
Controlman Second Class Andrew Jackson of Raytown, Missouri.
    But also on 20 February, just as Lake Erie was engaging the 
satellite in an extremely challenging and complex real world 
scenario, our Navy was also operating newly developed riverine 
forces up Euphrates River near the Haditha Dam. Navy SEALs were 
pursuing al Qaeda deep in Afghanistan and all throughout Iraq, 
and the Harry S. Truman Carrier Strike Group and the Tarawa 
Expeditionary Strike Group were supporting Operation Iraqi 
Freedom (OIF) and Operation Enduring Freedom (OEF) in the 
Arabian Gulf.
    February 20 was a day in which 127 of our 279 ships, about 
46 percent, were underway or deployed, including 2 aircraft 
carriers and 5 big deck expeditionary warfare ships. That day, 
20 February, your Navy had 54,000 sailors forward deployed 
overseas, including about 24,000 sailors in U.S. Central 
Command (CENTCOM), of whom 10,000 were afloat and about 14,000 
were boots on ground in various capacities. And on 20 February, 
we had approximately 10,000 sailors on individual augmentation 
missions serving in roles ranging from our traditional 
expertise in intelligence, medical support, explosive ordnance 
disposal, and combat zone destruction, to delivering new 
capabilities in areas like civil affairs, provincial 
reconstruction teams, running detainee operations, and 
combating Improvised Explosive Devices (IEDs) while embedded in 
Army and Marine tactical units.
    Also on that day in the CENTCOM area of operations, three 
of our surface combatants were engaged in anti-piracy 
operations in and around the Horn of Africa, sustaining the 
flow of relief supplies to people in drought and famine. 
Sailors in the Naval Air Systems Command (NAVAIR) region 
supported President Bush's trip to Africa with Operation Nomad 
Fire, while the USS Fort McHenry and the high speed vessel 
Swift continued the inaugural deployment in support of Africa 
partnership stationing in the crucial areas in the Gulf of 
Guinea where 15 percent of our Nation's oil generates.
    On 20 February, we had frigates and P-3s partnering with 
the Coast Guard conducting counternarcotics in the Caribbean 
and off the coast of South America, resulting in 4.4 metric 
tons of drugs seized in January and February.
    Closer to home, in Newport News, construction continued on 
our newest nuclear-powered aircraft carrier, the USS George 
H.W. Bush. Finally, we had about 870 of our newest recruits 
conducting Battle Station 21 at Great Lakes on the 20th of 
February, the culminating experience of their initial training 
at bootcamp.
    On that day, 20 February, the common element in all of 
these missions, from the high end operations of our Aegis 
weapons system, to the low tech but certainly no less demanding 
riverine mission, was our people. It is the Navy's people who 
are making it all happen, executing these important missions 
and achieving great success. It is the same Navy that 
accomplishes all these very diverse tasks, and our Navy's 
people, our young men and woman, Active and Reserve, who have 
volunteered to serve a cause much larger than themselves, 
deserve all the credit and our gratitude for the immeasurable 
achievements made in the defense of our Nation.
    In the years that have passed since 9/11, again, with the 
strong support of the Congress and this committee, your Navy 
has undertaken a significant reshaping in order to develop the 
capability to engage worldwide at every level of warfare while 
maintaining our ability to dominate the blue water anywhere 
around the globe. And so, as we approach our steady state force 
levels of 322,000 sailors in our Active component, 68,000 
sailors in our Reserve component, it is clear we will simply 
not be a smaller Navy, we will be a different Navy, and to get 
the essential manpower, personnel, training and education 
pieces of this different Navy right, we are putting together 
all the component parts of our value chain for people to ensure 
we have the right sailor in the right job at the right time, a 
concept we call FIT. Our efforts will ensure we are ready to 
respond to any mission at any time, anywhere, from the deep 
ocean to well beyond the shore line.
    Your Navy is a service whose routine forward presence 
around the world, actively supporting our friends and allies, 
pursuing our enemies, and maintaining the global maritime 
stability upon which our economic well-being depends, clearly 
illustrated by the many missions we accomplished on a typical 
day in February, is a fact now and will certainly remain so for 
the indefinite future.
    On behalf of all our sailors, Active and Reserve, I wish to 
thank this committee for their steadfast support for all our 
Navy people who are doing so much for so many every day. I have 
submitted a written statement for the record, ma'am, and I 
stand ready to respond to your questions.
    Thank you.
    [The prepared statement of Admiral Harvey can be found in 
the Appendix on page 92.]
    Mrs. Davis. Thank you, very much.
    General Newton.

STATEMENT OF LT. GEN. RICHARD Y. NEWTON III, USAF, DEPUTY CHIEF 
 OF STAFF, MANPOWER AND PERSONNEL, HEADQUARTERS, U.S. AIR FORCE

    General Newton. Chairwoman Davis, Ranking Member McHugh, 
and distinguished members of the committee. As you mentioned, 
ma'am, this is my first opportunity to testify before this 
committee, and I have been in my current duties for just what 
seems to be a brief few weeks, but certainly gained a lot of 
insight in terms of not only the inner workings of our Air 
Force, but having had the opportunity to meet with Dr. Chu on a 
number of occasions, as well as the opportunity to latch up 
with my fellow colleagues here, I am very honored to be here, 
and look forward to, again, a long venture with this committee.
    Again, thank you for the opportunity for me to discuss our 
efforts to ensure we recruit and develop and retain high 
quality airmen for the world's most respected air space and 
cyberspace force. Our men have been continuously deployed and 
globally engaged in combat missions for over 17 straight plus 
years, since the first F-15 touched down in Saudi Arabia in 
August of 1990. Today, airmen are fully engaged in the 
interdependent joint fight and stand prepared for rapid 
response in conflict across the globe to provide capabilities 
for our joint combatant commanders.
    Our priorities are clear. We win today's fight, developing 
and caring for our airmen and their families, and preparing for 
tomorrow's challenges. Today's airmen are doing amazing things 
to execute the Air Force mission, to meet Air Force 
commitments, and keep the Air Force on a vector for success 
against potential future threats in a very uncertain world. Our 
aim is to improve capability while maintaining the greatest 
combat-ready Air Force in the world. I look to accomplish this 
by recruiting and retaining the highest quality airmen 
throughout the airman's life cycle.
    As we prepare for an uncertain future, we are transforming 
the force to ensure we are the right size and shape to meet 
emerging global threats with joint and battle-trained airmen. 
In order to dominate in the domains of air and space and 
cyberspace throughout the 21st century, we must recruit, 
develop and organize America's diverse and brightest talents 
for very complex, multinational and interagency operations of 
the future.
    Our recruiting force has met the enlisted recruiting 
mission through persistence and dedication. Since 2000, the Air 
Force has enlisted over 258,000 airmen against a goal of almost 
255,000, for approximately 101 percent mission accomplishment 
in recruiting. For fiscal year 2008, the active duty 
requirement was 27,800, and just over 9,000 airmen have 
accessed up to this point, with about 9,500 waiting to enter 
basic military training down at Lackland Air Force base in 
Texas. We are on track to meet our goals this year.
    For fiscal year 2007, active duty Air Force officer 
retention finished 11 percent above our goal, while enlisted 
retention fell about eight percent below our goal, still within 
acceptable margins. The Air Force Reserve fell short of its 
enlisted retention goal by three percent, and was less than 
one-half percent shy of the officer retention goal. The Air 
National Guard met their overall officer listed retention goals 
for fiscal year 2007. Even with these successes, some enlisted 
specialties in the Active Air Force did not achieve their 
overall retention goal, including air traffic control and 
Mideast crypto linguists, structural civil engineering, 
pavement and construction equipment vehicle operations, and 
contracting.
    Our most critical warfighting skills require a special 
focus on retention to maintain combat capability due to 
critical manning and the demands of increased operations tempo 
placed on career fields such as pararescue, combat control, and 
explosive ordnance disposal. Budget support for retention 
programs is critical to effectively manage the force and 
preserve needed warfighting capability. These programs are 
judiciously and effectively targeted to provide the most return 
on investment in both dollars and capability.
    Retention in the Air Force Reserves is also becoming a 
concern, although we missed our goal in FY 2007 by only a 
slight margin, less than one-half percent. However, this marked 
the second year in a row that we did not reach our Reserve 
retention targets. We have seen an increase in turnover rate 
via gradual decreases in first term and career reenlistments 
over the last 3 years, with reenlistments dropping nearly 10 
points. We believe this is partly due to fallout from Base 
Realignment and Closure (BRAC), some budgetary issues with 
regard to Program Budget Decision (PBD) 720, but will monitor 
closely to identify opportunities to influence our airmen's 
behavior as they reach key career decision points.
    The Air Force's ability to retain experienced health care 
personnel past their initial commitments has declined, and that 
is compounding our recruiting challenges as well. Retention at 
10-year point is 26 percent for physicians, 18 percent for 
dentists, 34 percent for nurses, 36 percent for biomedical 
officers, and approximately 52 percent for administrators. The 
Air Force continues to develop accession and retention 
incentives to ensure the right mix of health care 
professionals. As part of our Air Force transformation, we are 
reviewing and synchronizing our developmental efforts to 
realize efficiencies in how we utilize developmental tools, 
educational training, and experiential to produce our stellar 
airmen, military and civilian officer, and enlisted and Active 
and Reserve components. We are dedicating resources to ensure 
our most important weapons system, our airmen, is prepared to 
deliver air space and cyberspace power wherever and whenever it 
is needed.
    In conclusion, the Air Force is often the first to fight 
and last to leave in many cases. We give unique options to all 
joint force commanders. The Air Force must safeguard our 
ability to see anything on the face of the Earth; range it; 
observe it or hold it at risk; supply, rescue, support or 
destroy it; assess the effects; and exercise global command and 
control of all these activities. Rising to the 21st century 
challenge is not a choice. It is our responsibility to bequeath 
a dominant Air Force to America's joint team that will follow 
us in service to the Nation.
    Again, I greatly appreciate your unfailing support. We in 
the United States Air Force greatly appreciate your unfailing 
support of the men and women in the United States Air Force, 
and I look forward to your questions.
    [The prepared statement of General Newton can be found in 
the Appendix on page 120.]
    Mrs. Davis. Thank you, very much.
    General Coleman.

     STATEMENT OF LT. GEN. RONALD S. COLEMAN, USMC, DEPUTY 
COMMANDANT FOR MANPOWER AND RESERVE AFFAIRS, HEADQUARTERS, U.S. 
                          MARINE CORPS

    General Coleman. Chairwoman Davis, Ranking Member McHugh, 
and distinguished members of the subcommittee, it is my 
privilege to appear before you today to discuss Marine Corps 
recruiting, retention, and other personnel issues. On behalf of 
the Commandant of the Marine Corps, General Conway, I would 
like to first thank you, ma'am, for you and your subcommittee 
members visiting Camp Lejeune yesterday, and especially our 
wounded warrior regiment.
    Our new wounded warrior regiment is quickly becoming what 
you envisioned, a comprehensive and integrated approach to 
caring for our wounded, ill, and injured Marines and sailors 
through all phases of their recovery. As you know, we have 
recently implemented a 24 by 7 wounded warrior call center to 
reach out to our wounded warriors, including those who have 
already left service, and a job transition cell to help them 
find satisfying work. We are very proud of how the regiment has 
progressed in such a short time, and are thankful for the high 
priority you have given it.
    Today, I would like to make a few key points. First, in 
regard to our end strength growth, the Marine Corps achieved 
unprecedented success in fiscal year 2007. We exceeded our goal 
of growing to 184,000 Marines, and ended the year with an 
active duty end strength of 186,492. We fully expect to exceed 
our next milestone of 189,000 during fiscal year 2008 as we set 
our sights on 202,000.
    We owe our success in large part to our recruiters, who met 
all our accession goals in fiscal year 2007 while maintaining 
our high quality standards. We expect to meet this challenge 
again this fiscal year. Thank you for your support for our 
enlistment incentives, which make these achievements possible.
    Retention should also be viewed as a success. We reenlisted 
3,700 more Marines in fiscal year 2007 than in the prior fiscal 
year. Nevertheless, retention will continue to pose a 
significant challenge as our goals become more and more 
aggressive. We thank you for your support of our selective 
reenlistment bonus program. It is the foundation of our 
retention efforts.
    The funds provided to us have increased significantly in 
recent years, and is money extremely well spent. These funds 
have enabled us to increase retention in targeted and 
specialized Military Occupational Specialties (MOSs) that allow 
us to maintain the leadership and experience necessary for 
combat and other operational requirements, as well as for the 
new units stood up in support of our 202,000 growth.
    I want to emphasize today our efforts toward Marine 
families. Thanks to your support, we are putting our family 
readiness programs on wartime footing, increasing steady state 
funding, and making a host of improvements. We are establishing 
school liaison officer capabilities at every Marine Corps 
installation to advocate our Marine children. We are also 
expanding our exceptional family member program to improve 
support and provide respite care to those special families. 
These and other initiatives will help ensure that we fulfill 
our obligation to our Marine spouses, children, and other 
family members.
    Overall, the commitment of Congress in supporting our 
202,000 end strength growth and to improve the quality of life 
of Marines and their families is central to the strength that 
your Marine Corps enjoys today. Thanks to you, the Marine Corps 
remains the Nation's force in readiness, and will continue to 
fulfill its mission of being the most ready when the Nation is 
least ready.
    I look forward to answering your questions.
    [The prepared statement of General Coleman can be found in 
the Appendix on page 132.]
    Mrs. Davis. Thank you very much. I appreciate the testimony 
that you have all brought to us today. I think you highlight 
for us all the extraordinary men and women who serve this 
country, and their families, because we know that they 
sacrifice greatly. That is the reason I think that we are all 
on this committee, because we know that the men and women are 
the heart of our efforts, and our national security, and we 
must do everything that we can to be sure that they are getting 
what they need, and we also have to be sure, and I think it is 
perhaps even the sober introduction that I had, that we want to 
be sure that we are providing for the kind of funding and the 
needs that we have to be recruiting and getting the best that 
we can. And we know that you are all very much focused on that 
effort. We saw that at Camp Lejeune yesterday, and I want to 
thank the members who were able to go with us for the day to 
speak with many of the Marines that were there and to 
understand the needs that we have in terms of our education of 
our children, as well as the services that are provided to 
families.
    So I wanted to mention that again because I think it was a 
good trip, and we will have many others to see how illustrative 
many of the members' communities are, the issues that we are 
going to be focusing on.
    I want to turn to the supplemental because that is an area 
that I think we continue to try and understand. What is going 
on here; how can we best provide for the recruitment needs 
across the services? We know that within the Army and the 
Marines, perhaps the problem is a little more acute. But what 
are we really dealing with? Because repeatedly we see that 
there are shortfalls in the recruitment dollars that are 
needed, and when those dollars come in with the supplemental, 
albeit even a late supplemental, that presents problems.
    We saw where even the Army National Guard I think had been 
paying out some larger enlistments, and then they weren't able 
to do that. They had to stop these efforts. What is happening? 
Are we worried about this in a way that is not reflected in 
your concerns. And if that is a concern that you have, why is 
that happening? Are we shortchanging some of those efforts when 
we are certainly trying to cover the needs in a whole host of 
other areas?
    Dr. Chu, what is your feeling about this? Is this something 
that we are overly concerned about that?
    Dr. Chu. Thank you for raising that point and issue, Madam 
Chairwoman. I would say as long as I have been serving the 
Defense Department, it has been a debate for a number of years. 
Every constituent element would like to have its entire budget 
in the base budget of the Department because that does 
facilitate execution and it makes it easier to move forward.
    That said, the Comptroller and Secretary of Defense 
recommend to the President how we are going to finance the 
overall defense program. As we all appreciate, a significant 
portion of the Defense Department the last several years has 
been financed with supplemental funding. I do think in the 
specific case of the recruiting monies for fiscal 2008, the 
early enactment of the second tranche of the so-called global 
war on terror funding is really the solution so that we do have 
the money in a timely way in order to execute well.
    I have talked with my colleagues and specifically with the 
Chief of the National Guard Bureau about the importance of 
keeping the recruiting effort on track by, as people phrase it 
in the finance community, cash flowing from other accounts 
within the same appropriation lot. Certainly in the case of the 
National Guard Bureau it is committed to doing that.
    We all understand that what is important in terms of 
recruiting success is a steady effort. This is not like 
cramming for final exam. You can't make it all up at the end of 
the year. So I am confident we will execute well. We would like 
to see the second half of the global war on terror funding 
enacted as soon as possible.
    The issue of how the Department divides its budget between 
the base budget, the supplemental, the funding vehicles like 
the global war on terror funding mechanism, are issues, as 
people say, above our pay grades. We would obviously always be 
comfortable by having as much as possible in the base budget, 
and the Department is moving to put more of the programs that 
had been funded in supplemental vehicles into the base budget. 
But that is a multiyear job.
    Mrs. Davis. If all of you would like to comment, we 
appreciate that. But the Army particularly has a shortfall. I 
believe staff is estimating about $1.8 billion more than the 
$3.8 billion budgeted for recruiting programs. I guess that 
includes both the Army and Marines as well.
    General Rochelle. That amount is larger than just the Army, 
Madam Chairwoman. Thank you for the opportunity to respond to 
that question. We would clearly wish to have all of our budget 
in the base budget, all the requirements met in the base 
budget, but the reliance on supplementals is likely to 
continue, at least throughout the global war on terror, would 
be my estimation.
    Nonetheless, and I would echo Dr. Chu's comment, the 
reliance on that necessitates timely receipt of those 
supplemental resources in order to be able to plan and execute 
efficiently and effectively.
    Mrs. Davis. General Rochelle, basically I think what you 
are saying is within the foreseeable future we would be having 
the supplemental reflect that.
    General Rochelle. One more point, if I may, Madam 
Chairwoman. I am pleased to report, however, that the Army 
senior leadership has decided that we will resource recruiting 
and retention 100 percent out of the base beginning in fiscal 
2010. In spite of what I foresee as the continuing reliance on 
supplemental for critical resources, we are moving our 
recruiting and retention into the base in fiscal 2010.
    Mrs. Davis. Do you have any trouble trying to predict that 
in fiscal 2010? Why are we not doing it earlier then?
    General Rochelle. It is going to take a measured response 
and a planned execution to wean ourselves off reliance on the 
supplemental for recruiting and retention. And I will end with 
that comment.
    Mrs. Davis. My time is up. Did anybody else particularly 
want to comment on this? Because we want to pick up your 
comments later, if necessary.
    General Coleman. Yes, ma'am. I would say as far as the 
Marine Corps, ma'am, we would love for it to be in the 
baseline. But as with Lieutenant General Rochelle, we certainly 
need and see the need in the foreseeable future for 
supplementals, ma'am.
    Mrs. Davis. Thank you.
    Mr. McHugh.
    Mr. McHugh. Thank you, Madam Chair.
    You heard the chairwoman speak, and Dr. Chu and others 
speak about the concerns that have been raised with respect to 
erosion, so-called erosion of recruit quality, and the various 
standards, the waivers that have been increasing. Rather than 
color my question with my opinions, let me just start with you, 
Dr. Chu. How do you view these standards? Do you think the 
traditional standards are still relevant? Do you have data that 
suggests maybe we ought to be looking and measuring at other 
things? What is the perspective you have?
    And let me add a second part to that. Given the current 
standards, what do leaders like yourself look for? What kind of 
things happen when we are falling below the standards that 
cause you concern and a need to react.
    Dr. Chu. I think you have raised the fundamental issue, how 
do we set these standards, why are they as they are, and in a 
developing situation, how should we keep reexamining the 
validity of those standards. The present standards, as I know 
you appreciate, come out of the 30-some year experience with 
the volunteer force. That is a different situation from a 
conscript.
    We discovered fairly early on that one of the key issues is 
retention, because we want a more senior, more experienced 
force. We found, and we have tried a variety of different 
indicators, but we found one of the best predictors of the 
individual's willingness to stick with a military choice, 
through the first term of service especially, is the possession 
of a high school diploma.
    Separately, thanks to experiments done in the 1980's, 
experiments in which we sent people down, for example, in the 
case of the Army, in front of patriot consoles, and tested 
their ability to respond to simulated events that would in fact 
replicate what they do in the field, we found that there is a 
continually increasing payoff to the score on the Armed Forces 
qualification test. It doesn't flat out, doesn't fall off, just 
keeps going up. So you would like that set of scores to be as 
high as possible.
    That all said, the more you want to drive to the very top 
of the ability distribution, the more you are increasing the 
compensation needs of the Department. There is a balance here. 
There is also a secondary issue. Some people do not do well on 
paper and pencil tests, and the Armed Forces Qualification Test 
(AFQT) is a paper and pencil test. Most of our tasks are 
actually physical in nature. So it is not a complete predictor 
of performance.
    The National Academy of Sciences was asked to advise the 
Department in the 1990's about how do we strike a balance among 
these criteria: Measures of stick-to-itiveness, motivation 
perhaps is another way you might phrase it, versus measures of 
ability, and the cost of same. Out of that experience came our 
contemporary standard that we would like to see new non-prior 
service enlistees all have a high school diploma. Ninety 
percent. Some allowance for various other situations that might 
be out there where people don't earn a diploma. We are not 
trying to be overly rigid about this.
    Sixty percent should score above average on the Armed 
Forces Qualification Test, and as the statutes provide, we do 
not enlist from the lowest 10 percent on the Armed Services 
Qualification Test. And the further standard that was imposed 
is that we would limit to 4 percentage points those who score 
between the 10th and the 30th percentile, the so-called 
Category IV. We have had experience with that in the draft as 
well in terms of these standards, which informs the AFQT 
findings specifically.
    We also have, as you indicated in your question about the 
waivers, a broad set of screening questions. We want to know 
when we are enlisting in the Armed Forces. We asked them rather 
intrusive questions about their personal life, including have 
they ever tried drugs. We set fairly high standards. If you say 
yes, I did, and in the case of Marine Corps, I think it's just 
once, it requires a further review. One of the reasons is we 
acquire the highest number of so-called waivers. Perhaps waiver 
is not the right word. This is a positive response on a 
screening question. I think the Army allows you to say twice, 
and then it says we want a review of this particular case.
    Those are important reviews. The fact that the incidence 
has risen in the case of the Army and Navy doesn't necessarily 
mean we have lower quality. We have to be sensitive to what is 
the background rate of behaviors among American youths. So if 
you see an increase as we have at various times in history in 
drug experimentation, you are going to see a higher rate of 
people saying yes.
    The Army has now done some research, and I will defer to 
General Rochelle on this issue, and I really think this is 
where we ought to be focused, on what is the actual performance 
of people to whom we have given what we call a waiver. My 
understanding of the result is that on average performance is 
equal to perhaps slightly better than actually the rest of the 
population. That might seem counterintuitive at first. But 
after you reflect, I think it is persuasive. After all, these 
people honest enough to answer these questions accurately, that 
is one issue out there. We do test for drug usage as well, I 
might add. Second, they pass through a stronger filter than has 
everybody else. We look more deeply into their background.
    So, yes, it is something to watch very carefully. We are 
constantly asking ourselves could we do better. And I want to 
specifically mention two pilots the Army is carrying on. One is 
an Assessment of Recruit Motivation and Strength (ARMS) test, 
looking at the physical fitness issue. Not entirely clear that 
our measures of weight are the right way of judging your 
fitness. And so the Army has a set of physical tests it can 
administer instead and enlist under those standards. We will 
track those people for several years and see how they do.
    Likewise, we are looking at the question of is there a set 
of indicators that could be a substitute for the diploma as a 
predictor of first term attrition. That is the so-called Tier 
Two Attrition Screen that we are using today. We set aside a 
certain portion of Army enlistments we will run for several 
years before we conclude yes or no. I think you need to run it 
for at least three years to get a good sense of is this 
working.
    Just to sum up, we think the standards set are the right 
standards. We are constantly reexamining whether they are the 
best standards, the best predictors to use, because there are 
some costs, particularly on the front, to that standard. And we 
do know this is a major inhibition in terms of recruiting as 
high a fraction of Hispanic youth as we would like to see in 
the military today.
    Mr. McHugh. Thank you, Madam Chair.
    Mrs. Davis. Thank you. Perhaps we will want to return to 
this later on.
    Mr. Murphy.
    Mr. Murphy. Thanks, gentlemen, for your service to our 
country. General Newton, I welcome you. My brother is actually 
about to deploy overseas in the Air Force, he is a Major, this 
weekend. Keep doing a great job. We appreciate it.
    Gentlemen, I spoke before last year when you testified and 
I talked about after I came back from my first deployment when 
I was in active duty how I helped with the recruiting efforts 
up at West Point and then up in New York. I am concerned though 
about what the chairwoman said about the supplemental.
    As you know, we gave the money, the $3.8 billion, which was 
in the base, but then $1.8 billion for the supplemental. I know 
last year in the testimony I mentioned it to all of you about 
my concerns with the supplemental. I happen to be one of those 
Blue Dog Democrats, fiscal conservatives, and I want to make 
sure we are wrapping our arms around the budget and cutting out 
fraud, waste, and abuse.
    But I was told last year and the testimony was by the 
Marine Corps, who said it was their goal to have everything in 
the baseline by fiscal year 2008, and the Army said it was 
going to be their goal to get as much in the base budget as 
possible.
    I just think that there is an excessive reliance on this 
supplemental spending. And I know that was against what the 
pledge was originally with the new Secretary of Defense. I just 
want to make sure that we correct this. I am happy that, 
General Rochelle, you said by fiscal year 2010. That is 
terrific.
    Are there specific instances that not having a 
predictability of what recruitment funding is going to be, how 
it hurts your efforts to recruit. And if you could all describe 
that, I would appreciate it.
    Dr. Chu. Let me defer to my colleagues. I do think the 
Department is very sensitive to the need to execute well on 
recruiting programs. We report monthly to the Secretary of 
Defense in some detail where do we stand. I know the Secretary 
of the Army has made a practice of a deep dive into the 
recruiting matters.
    We know we are being held to account, and that we have 
partnered with our financial colleagues to make sure that there 
is enough cash on hand to execute where we will not be hobbled 
by this structure.
    Mr. Murphy. Dr. Chu, before they comment, in your 
testimony, I copied down, it says when you have these in the 
baseline budgets and not rely on the supplemental, that it is 
easier for you to move forward. But you also mentioned and said 
it is above your pay grade. You say you report once a month.
    Dr. Chu. The President's budget request is the President's 
budget request. It is the product, as you appreciate, of 
everyone's advice as to how we should move forward both 
substantially and in terms of a financing vehicle. The 
supplemental issue is essentially a financing issue, not a 
matter of our intent.
    What I would underscore in terms of execution is we all 
understand that we need to use money in a variety of accounts 
to assure recruiting and retention within the appropriation 
purpose statutes, et cetera, I should rush to emphasize. But we 
need to use the monies available to ensure that recruiting 
stays on the right path. We have an energetic conversation with 
our financial colleagues to make sure that happens.
    That all said, that all said, that is an additional effort. 
That means more liaison, more care, more focus. It would, of 
course, from our perspective as the manpower community, it 
would be easier to have it in the base budget. That is 
certainly true. However, we are executing well with the 
structure we have. As General Rochelle testified, the Army is 
moving to put more in the base budget. I think the Department 
as a whole is moving to put more of the ongoing program in a 
base budget as a strategic matter. It will not all happen in 
one year.
    Mr. Murphy. Is it accurate to say that you are moving 
toward that and your higher chain of command is not moving 
toward having it in the base budget?
    Dr. Chu. That would not be fair at all. The higher chain of 
command understands we have to put more in the base budget. It 
won't all happen at once. There is excess demand to go in the 
base budget. That is the truthful situation.
    Mr. Murphy. But, Dr. Chu, who in the Department of Defense 
cannot foresee there is going to be recruitment challenges? We 
have all known about the recruitment challenges that we face. 
We all know about what was already mentioned earlier. Who 
couldn't foresee challenges?
    Dr. Chu. We all know it is a challenging recruiting 
environment. This is a question of how is it financed, not what 
are we proposing to do. A most useful step at this juncture 
would actually be the prompt enactment of the second half of 
the global war on terror funding for fiscal 2008. That is where 
we really to focus now, not how did the budget originally get 
presented.
    Mr. Murphy. That is the easy solution. There is no one on 
this committee that doesn't support the military and want to 
give you every single dime we can give you. I think the rub is, 
Dr. Chu, would be every single year we ask you to give us the 
projections for the year, what you need, anticipating where the 
challenges are going to come from, and anticipate that so we 
can have the hearings and have the proper oversight that we 
need to do, and we ask this year after year, and we are not 
getting it.
    Dr. Chu. I think we have provided that. I think had the 
global war on terror funding tranche been all appropriated at 
once, earlier on, we wouldn't be having this conversation.
    Mr. Murphy. There is a rub though, Dr. Chu, with $3.8 
billion, which was in the base, and an additional $1.8 billion, 
almost 50 percent more in a supplemental.
    Dr. Chu. That request was forwarded early to the Congress. 
It is now for the Congress to act.
    Mr. Murphy. Through a supplemental, Dr. Chu.
    Dr. Chu. Absolutely correct.
    Mr. Murphy. So if I could ask the specific departments. If 
you can just give me, so I can understand better, where this 
rub hurts you as far as where you can't foresee the challenges 
when you don't have the funds up front in the base.
    Admiral Harvey. Sir, in the Navy we have a base of about 
$217 million, with about $120 million that comes in the 
supplemental. What I have done with the folks who control the 
actual flow of the dollars, another organization, we laid out 
in our annual program and I said I am executing on the 
assumption that I will have this money. And so the agreement we 
have had is that among equals and claims on the supplemental 
dollars, that the money comes my way first to maintain the 
essential people programs; in this case, the recruiting 
programs. So I operate as if I have the full amount in hand.
    We lay it all for advertising that is trying to counteract 
the drastic drop in propensity that has occurred over the last 
five years. So we lay out our plan and operate on the 
assumption that the money will be forthcoming when we need it.
    Mrs. Davis. Mr. Murphy, I know you have gone over your 
time. This is always difficult because we actually do want to 
hear from all of you. I am going to go ahead. If there are any 
very specific comments, we will go ahead and hear that and 
perhaps come back later on and that. Ms. Drake has a question, 
I know. Any specific example or concern that comes to mind that 
you really want to relate?
    Okay. Ms. Drake.
    Mrs. Drake. Thank you, Madam Chairman.
    First of all, Admiral Harvey, I want to congratulate you on 
shooting down the satellite.
    Admiral Harvey. I had a little help on that one, ma'am.
    Mrs. Drake. Well, and the young man's name was Andrew 
Jackson. I thought that was interesting, too.
    When we were briefed on that there was a lot of doubt in 
our minds about, number one, would we be able to do it, would 
it take three tries, and really the consequences if it were to 
land in a populated area. That just shows we do have the best 
fighting force in the world, the best trained, the best 
equipped, and we are very proud of what you were able to do.
    Admiral Harvey. Thank you, ma'am.
    Mrs. Drake. A couple of things. First, Dr. Chu, I just want 
to ask you a little bit about our Special Operations Forces, 
especially with the focus on them now, their high operational 
tempo. If you could speak to us on recruitment and retention, 
and if you think you have the tools in place to be able to do 
what we recognize we need to do there.
    But I would also like to ask you in regards to the last 
question, because I have sat here on the committee before and 
it appeared to be clear to me that a decision has been made to 
fund our military, number one, through a base budget, and 
number two, through a supplemental, because it would be easier 
for you to identify needs and what we need rather than just you 
trying to anticipate for an entire year and not being able to 
hone in.
    So from the tone of the last question, I am curious. Has 
something changed, or is that something Congress would need to 
change if we decided we didn't want to continue supplemental 
funding? My understanding on it is it is sort of a decision 
prior to me coming to Congress that we would fund in a double 
step to be more specific and targeted on how much the military 
needs to accomplish our goals.
    Dr. Chu. Thank you for both questions. Let me start with 
the bottom line issue that you raised on the Special Operations 
Forces, do we have the tools we need? I think the short answer 
is yes; particularly with recent changes we think we have the 
instruments that will ensure continued success.
    We did use the tools that you have given us starting about 
three years ago in a different way than we had before. I 
particularly appreciate therefore the actions in the fiscal 
2008 authorization bill that gave us more latitude on this 
front. That specifically is the energetic use of the critical 
skills retention bonus at late stages of the career. We have 
found with the special operations community, because in several 
of its lanes people come to that area of specialization later 
in their careers, we want to keep people beyond 20 years of 
service. So we have broken new ground by offering significant 
retention incentives for people to stay beyond 20 years. That 
is a first in the Department.
    My conversations with both General Brown and Admiral Olson 
suggest that it is succeeding. It is doing what we wanted to do 
in retaining experienced special operations personnel beyond 
where they might normally have taken a retirement.
    On the recruiting front, again, I think your willingness to 
enlarge the size of the recruiting bonus is very helpful. I 
think as far as special operations personnel are concerned, one 
of our issues has been the successful completion of training 
rate. The Navy I know has specifically worked on this because 
it has been an issue in the SEAL community. I defer to Admiral 
Harvey on that matter.
    On the supplemental issue, you are absolutely correct that 
early in this conflict the Department did seek to put more 
money in the base, and was advised by the Congress, there was 
some to and fro really with the appropriations community, now 
the preference, including for the reasons that you outlined, 
ought to be put more related costs in the supplemental. Of 
course, we view a substantial part of the recruiting premium we 
need to pay as being related to the current conflict and its 
effect on propensity to serve and the attitude of influencers.
    There has been, one can only characterize it, as an 
energetic dialogue at the Secretary of Defense level between 
the Department and the Congress about what is the right 
balance. I do think over time, as we have testified, the 
Department believes we ought to put more of the ongoing program 
in the base. How much, for exactly the reason you raise, I 
think has yet to be determined.
    Mrs. Drake. Thank you very much. Thank you, Madam Chairman.
    Mrs. Davis. Mr. Wilson. 
    Mr. Wilson. Thank you, Madam Chairman. And thank all of you 
for being here, Mr. Secretary, Generals, Admiral. I really want 
to thank you because it is my view that the opportunities that 
you provide for young people are unparalleled, and I say this 
as a veteran myself of 31 years. I have four sons who have 
served in the military; two who have served in Iraq. By having 
military service, I know I, I know they, have received the best 
of education. And, Admiral, I do have a graduate of the Naval 
Academy.
    I just am grateful for the educational opportunities, the 
travel opportunities, the opportunity to meet people within the 
military, out of the military, to have lifelong friends. People 
are very capable and patriotic. You are providing that 
opportunity.
    I also know this because I represent the bases of Fort 
Jackson, very proud of Parris Island, General, and I am very 
proud of the Marine Air Station, Beaufort Naval Hospital. When 
we visit these facilities, when we visit our troops overseas in 
Iraq, Afghanistan, around the world, we go and maybe inspire 
them, but they inspire us. So, again, thank you for the 
opportunities presented.
    I do have an interest, Secretary Chu, that you just touched 
on in regard to retention by way of maintaining the wonderful 
people who serve in the Guard and Reserve. There has been a 
real question about the age of retirement. Currently it is 60. 
There are different proposals that I have supported that it 
would go straight to 55 due to the seamless nature of the 
Active forces and Guard and Reserve.
    Additionally, I have supported, and you touched on it, and 
that is persons who serve over 20 years, that for every 2 years 
that they serve there would be a reduction of 1 year from the 
time of retirement. Additionally, there has been an effort, 
which was partially successful last year, and that is to reduce 
the age of 60 by the period of deployment. The opportunity has 
now been created where it can be reduced. Unfortunately, it was 
proactive rather than retroactive for the conflict that we are 
in.
    Indeed, we all, both political parties here, want to assist 
you with the success that you have had in recruiting and 
retention. But what would be your comments about how can we 
help you reduce the retirement age for Guard and Reserve?
    Dr. Chu. Sir, thank you for raising that issue. I know it 
has been a matter of great concern to the Reserve community for 
some years. I will be plain. The Department has not been 
enthused about proposals to lower the age at which Reserve 
members would be eligible for an annuity from age 60. Our 
calculation, supported by a lengthy study by the RAND 
Corporation, are that it would actually reduce overall 
retention in the Reserve, and not increase it.
    That all said, the chairwoman in her opening remarks did 
raise what is really the fundamental issue, just the whole 
retirement program, Active and Reserve, in the right place as 
we go forward in the 21st century. It is a very fundamental 
question. I am not saying that we have endorsed that proposal 
in the Department. I do think it is the meritorious subject of 
an extended debate. It is a subject that the second volume of 
the Quadrennial Review of Military Compensation (QRMC) now 
ongoing will take up. I would hope we put any further changes 
to Reserve time into that, rather than trying to debate it 
separately.
    I think there is a real risk if you take just a piece of 
the retirement system, because it is so essential to how 
careers are shaped militarily, and start changing it. You will 
have a number of unintended adverse consequences that will 
require new Band-aids to fix. So if we are going to deal with 
retirement, we ought to deal with it in a holistic way, not a 
piece at a time.
    Mr. Wilson. Well, as you look at it, I am somewhat 
astounded that the researchers came to the conclusion they came 
to because, knowing my colleagues who have served or are 
serving, it would be such a great incentive for them to 
remaining longer. These are trained personnel, dedicated, 
physically capable.
    It is just a real gold mine, Madam Chairwoman, of persons 
who want to serve, and what a great incentive to provide them 
with a retirement program similar to the Active forces.
    Again, thank all of you for the opportunities that you 
provide to the young people of our country. I yield the balance 
of my time.
    Mrs. Davis. Thank you.
    Ms. Shea-Porter.
    Ms. Shea-Porter. Thank you. I thank you all for being here 
and for your service.
    I do have some concerns, and I want specifically to 
concentrate on what is happening to the Army right now. Dr. 
Chu, I listened to your testimony and you said that these 
recruits who are below the level that we normally recruited 
just 4 short years ago, for example, in 2004, 92 percent of the 
recruits were high school graduates. We are now down to what I 
consider to be a worrisome 79 percent.
    Even more troubling for me is the number of new recruits 
who fall in Category IV, the lowest mental category that we can 
accept them in. That has increased, I think, an astounding 
amount. It went from one-half to four percent in a period of a 
few years. My worry here is your comment that they are actually 
in many instances, I am putting my word in, out-performing 
those who have high school diplomas and those who have scored 
in a higher mental category. You say it is counterintuitive, 
but it seems to be happening. Could you explain that to me, 
please?
    Dr. Chu. First of all, let me clarify, Madam. Thank you for 
raising these important issues. My comments about performance 
are based on the Army study. I would hope we do more work of 
this kind that looked at the high school diploma credential. 
One thing I would emphasize, this is something we in the 
Department often gloss over as well. We set the standard that 
everyone has to be a high school graduate. Whether that is by a 
diploma or by a GED is the issue for attrition purposes. That 
is the matter I was speaking to. The standard of 90 percent, 
and we were above 90 percent in the Army a few years ago, 
having a high school diploma is a standard set for motivation 
because it predicts attrition.
    The Armed Forces Qualification Test issue is a wholly 
different matter. Yes, the proportion in mental Category IV, 
when was the 10th to 30 percentile, has risen, but it has risen 
to our standard. In other words, our norm was no more than four 
percent, for a variety of reasons that we have set.
    I do think we have to keep the whole quality issue in a 
broad historical perspective. I have had the privilege of 
watching the volunteer force since its inception. In its early 
years we had much higher, as much as half of the Army's non-
prior service enlistees were in mental Category IV. So we have 
been in a different place. The change from one-half percent to 
four percent is not by historical standards all that 
significant.
    Yes, I think the Army has pursued a skillful strategy as I 
look at its challenging recruiting environment. If it needs to 
take risk, and it has taken some risk, as General Rochelle 
effectively testified, it is better to take risk on the 
attrition factor, because we can work on that issue, rather 
than on the AFQT quality indicator as a measure of underlying 
ability. So we will take the person with better AFQT scores 
even if he or she doesn't have that high school diploma.
    We do insist, we do insist that that person pass the GED, 
which is a national standard and in fact, you might argue, a 
better way of ensuring the person really has gotten to the 
place he or she wants to through his or her high school. So 
everyone is a high school graduate, whereas only 80 percent of 
the country can claim that.
    Ms. Shea-Porter. It does seem to me that if we are 
accepting people in the lowest mental category, and it is a 
pretty dramatic increase in the past four years, I don't think 
it is fair to compare it to historical levels because isn't the 
equipment more complicated, aren't the requirements of a 
soldier more complicated now, the technology is at a higher 
level? Is this a fair comparison?
    Dr. Chu. It is not the lowest mental category by statute, 
and we observe that statute faithfully. We do not recruit from 
the lowest 10 percent points. That is mental Category V. That 
has been a longstanding statutory prohibition.
    Ms. Shea-Porter. The lowest one that you can access?
    Dr. Chu. Statutorily.
    Ms. Shea-Porter. The lowest you are allowed to access?
    Dr. Chu. There is always an issue out there of people who 
don't test well. They may be dyslexic, for example.
    Ms. Shea-Porter. I understand that. But I don't believe 
that level has changed dramatically in four years, so there is 
a problem.
    Dr. Chu. I don't call it a problem, Madam. I do think the 
larger issue here, and General Rochelle and my colleagues spoke 
to it in their testimony, the larger issue is: Is the country 
willing to argue that its best young people ought to step 
forward for military service? Our unfortunate reality is that 
fewer, as we phrase it, influencers are willing to do that 
these days.
    Ms. Shea-Porter. That is another debate for another day.
    Dr. Chu. But that is the solution, Madam.
    Ms. Shea-Porter. I would like to ask you while I am still 
using my time, please, about moral waivers. Could you tell me 
exactly what are you giving moral waivers for, and what 
percentage of people right now are coming into the Army with 
moral waivers?
    Dr. Chu. Let me ask General Rochelle to speak to the Army's 
moral waiver percentage, if I might. The overall picture of all 
types, medical, moral, et cetera, is, if I recall these numbers 
correctly, up in the case of the Army and the Navy all across 
the last four-year period, 2003-2007, down in the case of the 
Marine Corps and the Air Force. You have got different trends 
in the different military services.
    Moral waivers basically have to do--a lot of them have to 
do with drug experimentation. Have you ever used illicit drugs? 
That is a question answered by many Americans these days, and 
we require review if you admit such usage. They may involve 
have you had any brush or contact with the criminal justice 
system. Most of those are for arrests, not convictions. Most of 
those are for arrests, not convictions. They also deal with 
convictions for misdemeanors, not for felony offenses.
    Mrs. Davis. Do the services have those numbers available, 
and perhaps we can get those for the record.
    Ms. Shea-Porter. Thank you.
    [The information referred to can be found in the Appendix 
beginning on page 155.]
    Mrs. Davis. Dr. Snyder.
    Dr. Snyder. Thank you, Madam Chairman. I think my 
microphone is working. It kind of fell here on the desk a bit 
ago.
    I will only make two or three quick comments and two or 
three questions. Dr. Chu, I appreciate your discussion both now 
and a while ago about the issue of waivers. I think you made a 
comment some people probably should not be considered a waiver, 
it is more just a serious look at folks. As you know, and 
everybody on this committee knows, this is a tension in terms 
of how you evaluate people, and we don't want that tension to 
go away. I haven't heard anybody say anything wrong on either 
side here. You want us to keep talking about quality and help 
you get the quality you want. On the other hand, we don't want 
you to be unfair to people that could have good military 
service. So this tension is not going to go away. But I 
appreciate your discussion.
    I do want to make the comment, Admiral Harvey, that missile 
that shot down the satellite was put together by the good 
people of Camden, Arkansas. So they were very proud of your 
shoot-down also.
    Admiral Harvey. A team effort every step of the way.
    Dr. Snyder. Just one question about the issue of budget 
that I think began by Chairwoman Davis. It came out when 
Secretary Gates testified that Mr. Spratt pointed out that the 
President's projected budget actually in real dollars goes down 
over the next several years. Well, nobody thinks that is going 
to happen. The Marine Corps is going to have more personnel, 
the Army is going to have more personnel, the Air Force wants 
more personnel. The number is going to go up. We all know that. 
What is going to happen is this is a way to punt this to the 
next Administration.
    I think, General Rochelle, your comment about we are all 
planning on this being in fiscal year 2010, you know, we can go 
back years here when Mr. Hefley was talking about, before he 
left, about the need to have more and more of the budget of 
your needs in the baseline budget, but it hasn't gotten done. 
Now we are going to start a period in the next Administration. 
I don't think there is any mystery what is going on here. I 
think the next Administration will deal with it. But it allows 
the current deficit numbers not to look so bad.
    My questions I wanted to ask are first to you, General 
Newton. In page two of your written statement, and I am sorry I 
wasn't here for your opening statement, I was at a Veterans' 
Affairs meeting, you say, quote, that the Air Force undertook 
significant personnel reductions to generate billions of 
dollars to reprogram toward recapitalizing and modernizing 
essential air space and cyber systems congruent with our three 
mission priorities. The impact on our warfighting airmen has 
been significant. We have been compelled to make some very 
difficult choices with respect to our people. And you go on 
from there.
    We can always say we have difficult choices, and military 
people always step forward. I am concerned. I would like an 
articulation both right now but then in written form, what are 
those difficult choices. Last week we went to the ribbon 
cutting for a wonderful new child care center that we all 
worked on getting funding. There is a waiting list on all kinds 
of bases. So what is going to happen? There is not the 
personnel to staff the full child care center. They have a 
waiting list for military families that want to get in the 
center, but the staff is not there to--the facility is there, 
they have got toys, they have got cribs, but because of these 
personnel reductions. So we now say we are now compelled to 
make difficult choices. We are screwing some kids. That is a 
difficult choice.
    What other facilities are like that? What are these 
difficult choices that are being made?
    General Newton. The difficult choices I was referring to 
have to do with mission effectiveness. You hit on one: 
effective child care and not only how we equip but also provide 
men and women to serve in our child development centers (CDC). 
Yes, it is a quality of life issue. But it is also a mission 
effectiveness issue. In fact, it is the number one quality of 
life issue among our enlisted men and women who are serving 
today.
    Dr. Snyder. As some of you know, even with this old gray 
head, my wife and I have a 21-monther and we battle this stuff 
all the time with child care centers. If one of us are pulled 
out for 6 months or 12 months and sent 10,000 miles away, child 
care becomes difficult real fast. What else is going on here? 
This is very concerning, is it not?
    General Newton. Yes, sir. In fact, as I previously 
articulated, our mission within the child development centers 
are very important to us because, if anything, it is the 
demographics of our Active duty men and women who are serving 
and not necessarily just in the garrison but in much more 
expedition in the Air Force, which kind of compounds the issue 
as well.
    We made a conscious decision in terms of rather than 
deferring modernization recapitalization of our equipment and 
our capabilities, we made a really tough decision a couple of 
years ago to pay for that recapitalization modernization of our 
equipment. That is why we reduced our end strength of 
approximately 40,000.
    The specific issue, however, you are referring to is not 
necessarily Active duty men and women serving in the child 
development centers but our ability to hire civilians in order 
to work in the CDCs. That is what I have discovered in my just 
brief couple weeks in my current duties. There is a backlog in 
our United States Air Force in terms of being able to bring on 
board civilians. I am taking an active role, and I would take 
for the record and perhaps even address what we are doing at 
Little Rock. But it is very much on my scope in terms of making 
sure that we provide and are effectively enabling to bring on 
civilians in capacities such as child development centers and 
elsewhere.
    Dr. Snyder. My time is up. When this discussion came up 
several years ago of cutting personnel, nobody said oh, by the 
way, we are going to build brand new wonderful child care 
centers and then not staff them in order to build fighters. 
That was not how this was presented to us.
    Mrs. Davis. Thank you. Mr. Jones, I wanted to thank you 
particularly for the trip to Camp Lejeune yesterday. We enjoyed 
you being our host. Certainly child care issues were important, 
and discussed, and I think we came away feeling a little sorry 
that we have not been able to do what we need to do, and 
particularly at Camp Lejeune that was a big issue. So, Walter, 
thank you.
    Mr. Jones. Madam Chairman, thank you. I would say, General 
Coleman, I was humbled and honored that this committee, many 
members came down to Camp Lejeune. I dictated a letter to 
General Dixon today and told him how proud I was and humbled to 
be able to say that Camp Lejeune is in the Third District of 
North Carolina. It was very impressive.
    As the chairman said, Mrs. Davis, we had a great, 
informative six, seven, eight hours down at Camp Lejeune, and 
we interacted with the Marines and talked about family issues. 
I wanted to just say thank you again.
    Admiral, one of the questions that kept coming up 
yesterday, and I know that there is no easy answer to the issue 
of psychologists and psychiatrists, but it was said over and 
over yesterday, sometimes directly and sometimes indirectly, 
that many of our men and women who are serving in Afghanistan 
and Iraq, the numbers coming back with some form of Post-
Traumatic Stress Disorder (PTSD) is, from a percentage point of 
view, maybe even greater than Vietnam. In addition, the family 
situation, the need for counseling.
    I know that the Navy is doing everything they can. You 
cannot get as many psychiatrists or psychologists who have been 
in uniform overseas. It would be a wish that maybe it was that 
way, to be able to sit down with a soldier or Marine and talk 
about their situation. But it doesn't happen that way. We have 
got to have those who come out of college, those who are 
professionals, contract type arrangements.
    If it is true at Camp Lejeune, it is true at every military 
base. I will go to you since Camp Lejeune is the base we 
visited yesterday, but the issue of how are we going to provide 
the adequate mental health to our men and women in uniform and 
their families. I know you don't have a crystal ball.
    Admiral Harvey. I don't have a crystal ball, but I have 
been able to use the tools that were provided in the 
authorization bills in 2007 and 2008 that have significantly 
increased the activity that we are seeing from coming out of 
the medical schools, dental schools, and the like. We haven't 
turned that into results yet, but those tools have changed the 
game for us in terms of the recruitment piece, at which we had 
been missing the mark for about the last four to five years as 
the war picked up. So recruiting, number one, has been 
extraordinarily challenging. It is my number one recruiting 
priority. But I have got tools now that I am beginning to see 
are having an impact.
    The other piece of this is what we have learned in terms of 
what the servicemen and women, in particular, who they want to 
talk to. You talk about the contract hires. Certainly that is 
what we are using to fill the gaps that exist. I am at 78 
percent manning right now in psychologists across the Navy, and 
about 98 percent in psychiatrists, and 96 percent in social 
workers. I am responsible, and we provide obviously to the 
Marine Corps, as you saw yesterday.
    Also, we have learned that the young men and women are not 
satisfied with simply talking to a contract person. Unless you 
have been there, done that, got the T-shirt, then they have 
great doubts as to the quality of the conversation that they 
have to have. Now we are also doing this servicewide screening 
on all returnees for PTSD and the required follow-up. That is 
six months, one year and two years. So while we have been 
learning, we have also expanded the population of those we are 
trying to reach and who have to be reached with quality care 
just for the checkup. At the same time, it has been very 
challenging to recruit them.
    I do note that we have significantly reduced our loss rate 
of these individuals. The psychologists and psychiatrists have 
been carrying quite a load in the last four to five years. For 
a while there I was really getting concerned that we were 
unable to bring in enough even to maintain a steady state 
level. But we have seen the loss rate come down gradually over 
the last couple years. Again, the tools you have given us to 
sustain the medical force have been exceptionally helpful in 
that regard.
    So it is a full court press, sir, and you have correctly 
identified, it is a shortfall we have got. It is number one on 
our scope. We have tools that make sense, that can compete. But 
I just noticed today on the cover of USA Today we talked about 
the shortage of surgeons across the country, and particularly 
in rural areas. It is symptomatic of where we are in the Nation 
and what we have to compete with to provide the required 
counseling services to the men and women.
    So the situation is certainly as you saw it. But I am 
hopeful, sir, that we are going to make a turn in that and 
sustain an effort that will bring us to the manning levels we 
need to be to provide the care we have to provide.
    Mr. Jones. Admiral, would it be possible, maybe after 
Easter, if my staff and I could get a briefing on this 
recruitment effort and how you feel like it is today and how 
you see it?
    Admiral Harvey. That is a great time. January, February, 
and March is when all the acceptances and all the issues come 
out and we will find out just what our scorecard is. That is a 
great time. We will be at your disposal to provide you all this 
information.
    Mr. Jones. I would appreciate that very much.
    Mrs. Davis. Really as a follow-up to that issue, I think we 
were very concerned, and we know that there is a national 
problem here as well, but it certainly affects men and women 
who are serving and the inability to have professionals 
available. What is interesting is that in many ways I think 
they were suggesting that we don't always need to rely on 
professionals. They should be there to back up with a host of--
in a host of ways, certainly to be able to prescribe. But the 
mentoring that can go on is very critical as well.
    I think we need to be perhaps doing more to capture those 
individuals who have a great aptitude to work with their fellow 
military colleagues and comrades and to be able to perhaps 
develop their own skills in this area, which could be extremely 
beneficial and perhaps help with their education and to go on 
and do something that they hadn't planned certainly to do in 
their careers but in fact they may be well suited for that and 
be able to contribute a great deal.
    I wanted to just turn to one of the reasons that we are 
having this problem of course is because of the continuing 
stress on Army personnel and their families and the 
continuation of the 15-month tours and in the combat zone. We 
know this is no secret. Army Chief of Staff General Casey has 
repeatedly reflected the increase in discipline, divorce and 
suicide rates, the erosion of recruit quality and junior 
officer retention rates that all combine to create alarm, I 
think, in terms of what is happening for our service members.
    It is interesting, in the U.S. News and World Report it was 
quoted that Congress tends not to ask tough questions because 
we are afraid that if we do so we would be accused of not 
supporting our troops. Clearly, the intent is to find out how 
we can do this better.
    And so I would like to ask you, Secretary Chu, what you 
believe is the current status of efforts to reduce the 15-month 
tour in Iraq for Army personnel. What is happening? General 
Rochelle, I know you also were concerned about the stress on 
the force. Could you give us an assessment of how close we are 
to doing serious long-term damage to the Army?
    Dr. Chu. Madam chairman, thank you for those questions. 
First of all, let me ask for the name of the U.S. News and 
World Report reporter because I would like to challenge the 
proposition Congress doesn't ask tough questions, specifically 
many of these such questions.
    On your issue of when can the Department, as General Casey 
very much wants to start backing away from 15-month tours. This 
depends, as I know you and the members appreciate, on the 
balance, are three factors: first, are we successful in growing 
the Army and Marine Corps so we have more capacity for deployed 
forces; deployed ground forces specifically. Second, will the 
demands in Iraq particularly stay at the levels they now are, 
or lower. In other words, can we continue down to the 15 
brigade level, 15 Army brigade level, which is the goal, and 
stay at least at that level, if not south of that level, as the 
Secretary has said repeatedly that he hopes we can get. And 
third, are there any other contingencies around the world that 
will demand more ground forces to upset the calculations of the 
first two.
    We are hopeful that we can get to this goal at an early 
date, but I think it would be rash to make any promises at this 
juncture.
    General Rochelle.
    General Rochelle. Madam Chairman, thank you so much for the 
question and the opportunity to comment. I would like to come 
back and start if I may with a comment made by Representative 
Jones, and that is with respect to the need for medical and, 
most especially, behavioral health professionals. As my good 
friend and colleague has already stated, we are nationally on 
the brink of what I would consider to be, personally, 
nationally on the brink of disaster with medical health 
professionals, as a rule. I would commend to anyone to read the 
book ``Will the Last Physician Turn Out the Lights.'' It is 
enough to really scare you.
    To your question how close are we, we are asking ourselves 
that question, and we don't know the answer just yet, because 
it is not quite as clear as pointing to a statistic, nor quite 
as clear as pointing to a single metric of the many that we 
track and monitor: Divorces, separations, obviously attempted 
suicide, suicides, and the like, all of which alarm us greatly. 
It is not that simple, nor is it as simple as comparing to 
Vietnam, because our abilities today to identify individuals 
who are at risk far surpasses any capability we had back in the 
sixties and seventies. So we are better able to identify at-
risk soldiers and address their needs.
    Our families are telling us that 15 months deployment, way 
too long. Our soldiers are telling us that as well. In addition 
to that, they are also telling us that 12 months back 
following, or less, 12 months back following a 15-month 
deployment is simply not enough. So we are in a bit of a 
quandary, and it is our challenge and our commitment to answer 
the combatant commanders' requirements for trained and ready 
forces. That is our obligation to the Nation.
    So how close are we? Again, we are asking ourselves that 
question. My only concern, frankly, is that as history has 
shown, and it has shown it in the Army in the past, we may have 
crossed that point before we realize it, and we are trying 
desperately not to have that happen.
    Mrs. Davis. Thank you. My time is up. I just wonder, very 
quickly, General Coleman, when will you know that the force has 
been pushed too hard, before their lines are crossed?
    General Coleman. Ma'am, I think in the items that you spoke 
of, I think we would see it in a great increase in domestic 
violence. I think we would see it in suicides, I think we would 
see it in unauthorized absences (UAs), I think we would see it 
in desertion. The Marine Corps has not seen that yet. We were, 
and it is our ethos, we were always a 6-month deployment and an 
18-month back, and that was based a lot on our sister service, 
the Navy.
    In the beginning of this fight, then Commandant General 
Hagey was pushed toward a we will deploy for 12 or 15 months, 
and we held off on that. I think the seven-month, for most of 
our Marines, and most Marines go out for seven months and we 
try to get them back for at least seven. We try for a two to 
one dwell. So we are not there yet, ma'am, and we are very 
thankful for that.
    Mrs. Davis. Thank you. Mr. McHugh.
    Mr. McHugh. Thank you, Madam Chairman. We have heard a 
little bit today about health care, mental health care in 
particular. But switching to the broader issue. Certainly that 
has been a topic of discussion in previous hearings. We have 
seen in the national media lately some stories with respect to 
frustrated members of the services as they try to work their 
way between the DOD disability system and the Veterans Affairs 
(VA) system. The President, as far as my understanding goes, 
totally endorsed Dole-Shalala, the commission reports. We have 
heard repeatedly about how the distinction between medical 
retirement and medical separation employed in the VA and the 
DOD systems is patently unfair. General Schoomaker appeared 
before the committee just a couple of weeks ago and spoke about 
that fundamental problem.
    So, Mr. Secretary, where are we with the implementation of 
Dole-Shalala, and I would say particularly with respect to 
eliminating those distinctions in the medical separation versus 
medical retirement?
    Dr. Chu. As you know, sir, and I think if we are raising 
this issue, the President's State of the Union Message did call 
for the enactment of the full Dole-Shalala set of 
recommendations, and did submit legislation last fall to that 
end, and has advocated for it, and we continue to advocate for 
it. We would like to see the central element of Dole-Shalala, 
which would address exactly this issue, why do we have under 
the statutes separate systems, we would like to see that issue 
addressed. We would like to see early enactment of those 
central provisions.
    We recognize some of them are controversial with the 
veterans service organizations. But I do think as a country we 
would be far better off if we get to that conclusion so there 
is a single system. Dole-Shalala, as you appreciate, would 
simply have those leaving military service by reasons of 
medical unfitness all be retired under a simple system and that 
the question of compensation and getting forward with your life 
would be the Veterans Affairs Department lane, and they would 
operate that more or less exclusively instead of it being a 
hybrid as we now have.
    Within what we can do under current statute, we have 
inaugurated, and the first cases have been reviewed, a single 
examination system to the Department of Veterans Affairs (DVA), 
meaning VA does the exam, and does it to its standard. We take 
its ratings and use them under the current statute for the 
medical unfitness percentage that DOD must by law apply. Early 
returns from that pilot are very encouraging. It should be 
faster for the prospective veteran. It should be easy to 
navigate. The Secretary has asked that we, as soon as we are 
confident about its features, that we start proliferating it 
beyond the National Capital Region which it now applies. But it 
all performs under current statutes. We would be eager to see 
Congress enact the remaining portions of the Dole-Shalala 
agenda, really this central set of provisions that deals with 
the hybrid we have today and creates a more thoughtful system 
for the future.
    Mr. McHugh. My understanding is that the pilot program can 
be expanded to test a fully integrated system. Is that your 
understanding?
    Dr. Chu. We fully anticipate expanding the pilot program, 
which is a single exam program, to our disability evaluation 
system nationwide. We do want to make sure that it all works 
correctly; the procedures, the administrative aspects are in 
place before we do it.
    Mr. McHugh. But my point is, and I may be mistaken here, 
and if someone wants to correct me, I stand ready to have that 
occur, but the difference between the medical separation and 
medical retirement is a key issue.
    Dr. Chu. It is.
    Mr. McHugh. That does affect or does require a legislative 
solution at the end of the chain. But you are looking at 
harmonizing those in the pilot?
    Dr. Chu. We are in the process of harmonizing those as much 
as we can in the current statutes. The key element is a single 
exam so we don't have different ratings for the two agencies 
for the same condition. So going forward in the pilot and 
eventually nationwide, one rating. So a bad knee, the VA decide 
that is 20 percent disability; we just accept that number and 
implement the current statute. What it does not give us, and 
that is why we need the statute change, is a truly integrated 
system as the Dole-Shalala system would create.
    Mr. McHugh. Madam Chair, this would be a question I guess 
for us, because I think Dr. Chu would answer it in a pretty 
obvious way, we may want to look at extending them an 
additional amount of limited authority to fully, totally 
integrate, including taking it a step beyond the limits that 
the Secretary has just suggested as we go forward.
    Thank you, Mr. Secretary.
    Mrs. Davis. Mr. Jones.
    Mr. Jones. Madam Chairman, thank you.
    Well, first to General Rochelle. Thank you for the 
suggestion of the book. I have written it down. I would like to 
suggest a book to you that I think you would find very 
interesting. ``Day of Reckoning,'' by Pat Buchanan. Anyone that 
reads this book I think will fully understand, based on his 
excellent knowledge of history and facts, I think they will 
find this book very interesting as it relates to the present 
and the future and why we are having so many problems trying to 
fund some of these programs and the military is having problems 
just trying to meet its need to fight the war on terrorism.
    Dr. Chu, a couple of questions. One is, can you provide for 
this committee the deployment record of the 3,200 Marines that 
are going to Afghanistan?
    Dr. Chu. I can, sir, yes, sir.
    Mr. Jones. I would appreciate that for the committee, and 
certainly my staff and I would appreciate it.
    Dr. Chu. Sir, you mean the prior deployment record?
    Mr. Jones. Right. Whatever their prior record.
    Dr. Chu. How long before and how long back. We can do that.
    [The information referred to can be found in the Appendix 
beginning on page 157.]
    Mr. Jones. Dr. Chu, last year Congressman Edwards and I put 
in a bipartisan bill to stop any type of increases on the 
TRICARE participants. I realize that you and others are 
grappling with some very, very difficult times, as we are as a 
Nation and we are as a Congress. I am going to make more of a 
statement than a question after I ask about the 3,200 Marines. 
I don't know how this country and how the Congress can, quite 
frankly, do what is necessary to fight for the American people 
until we get a handle on our priorities in this country.
    The Constitution does require that we have a strong 
military. That is a given, I think. In Buchanan's book he makes 
a profound statement that is going to lead to another statement 
I am going to make. He says that, in the history of the world, 
that any great nation that has to borrow money from other 
governments to pay its bills, will not long be a great nation.
    That is where we are as a Nation. I am not getting into the 
policy of Iraq, whether we should or should not. Let's make 
that clear. There definitely is a fight in Afghanistan that is 
justified. But my point of this is that I want to ask you not 
as a Secretary of Defense Personnel but ask you as an American 
citizen, take off your DOD hat, is it a great concern to you 
that our Nation has to borrow money? And let me give an 
example, we owe China, now China and Hong Kong, we owe them 
$440 billion in debt. I am not asking you as a professional in 
the Department of Defense, but as an American taxpayer, as I 
am, not a congressman, but a taxpayer, does this bother you?
    Dr. Chu. Sir, you raise a very fundamental question. I 
think the issue is not so much where the borrowing occurs but 
the extent to which the Nation has offered a larger set of 
commitments to its population than are likely to be easily 
financed as we go forward. I think that is merely the big 
budget issue in our country today and for the next 10 years, 
the promises we have made to the nonworking generation. That is 
Social Security, that is Medicare, military retirement, health 
care for military retirees, pensions for civil servants. They 
will take several percentage points more of the Gross Domestic 
Product than the Federal Government currently spends. No one 
thinks that is sustainable. The big issue is how do we deal 
with it as a country.
    That is why in our narrow lane we try to take a first step 
with the TRICARE program, and that is why we welcomed what you 
directed last year, this Task Force on Defense Health Reform. I 
am very grateful to Congressman McHugh and Chairwoman Davis for 
actually sitting down and listening to Dr. Wolenski, the co-
chair of that group, give her report. We are not necessarily 
advocating that as the unique solution, but I think it has 
identified a set of steps that we ought to as a country and you 
in your committee's jurisdiction ought to consider.
    I think we need to start that journey to bring these 
various entitlement programs under a degree of control that 
allows us to offer to the nonworking generation the benefits it 
ought to have. We want to honor the spirit of those promises. 
We may not be able to do everything exactly as we do it today, 
and that is really the essence of the quarrel we have had the 
last several years about the TRICARE fees issues.
    Mr. Jones. Madam Chairman, my last point, I said this to 
Secretary Gates, who we have great respect for. The sad thing 
is and the frustration to those of us on this committee, and 
the frustration more so than even we, is the American people. 
The American people read the same papers that we read. And as I 
said to Secretary Gates, who I have great respect for, two 
weeks ago, USA Today, and this has just frustrated me to death 
and I went to the American Legion in North Carolina last week 
and I held this paper up. Our allies, primarily the Middle 
East, has paid only 16 percent of their pledge to help rebuild 
Iraq. In other words, they have paid $2.5 billion out of a 
pledge of $15.8. Good old Uncle Sam has already paid $26 
billion to help rebuild Iraq, and obligated another $16 
billion.
    So there the Middle East is getting richer and richer and 
their kids are not dying in Iraq or Afghanistan, but primarily 
Iraq, and therefore here we are footing the bill for a country 
that we are paying every time we pump gas in our cars. And the 
American people are frustrated. I know you are frustrated, and 
I am not even speaking for you. You cannot do what you need to 
do when we can't even get our allies to pay their bills.
    That is not a statement to you, sir, personally. It is my 
frustration on behalf of the people of the Third District and 
the military in this country. Thank you.
    Mrs. Davis. Thank you.
    Ms. Shea-Porter.
    Ms. Shea-Porter. Thank you.
    Dr. Chu, I had some problem with the word ``nonworking'' 
generation. They are called retired because they worked. So I 
think when you frame a debate as nonworkers, it suggests 
possibly that there are people just kind of taking from the 
system. So I just wanted to say that as somebody who worked 
with elders for many years. I prefer to call them retired. They 
built this country.
    Dr. Chu. I wouldn't in any way want to denigrate their 
efforts.
    Ms. Shea-Porter. I know that. I want to say that because 
the phrase sort of struck me wrong, and I am sure you didn't 
intend it that way, but it sounds like we have people who did 
not work. So I want to call them retirees.
    Anyway, what I really wanted to ask you about was I had an 
opportunity to listen to military spouses a week ago and they 
had a long list of issues that they were struggling with, not 
the least of, the small but actually critical insults such as 
if their spouse is overpaid, then they have to return it from 
the check so quickly that the family feels this terrible impact 
instead of staging it over a period of time. There were lots of 
things like that this were really upsetting them.
    I listened to what you said about the problem seems to be 
the influencers are keeping people from going into the 
military. I think really that the people are reacting to what 
is happening right now in the military and in this country. The 
influences are not the problem, the problem is obviously deeper 
and they are just reacting to that.
    I would like to say that what I just heard Congressman 
Jones state is certainly what I am hearing in my district as 
well. I am from a military family. I was a military spouse. I 
am eternally grateful for those who stand there in our defense. 
But there are some problems we need to address, and we can't 
blame it on elsewhere. We have to look and see what is going 
wrong. I think the questions about Iraq and our Middle East 
policy are having a real strong and negative impact.
    To that end, I would like to ask you, General Rochelle, 
please, if you would comment about what is happening for 
retention for West Pointers right now. I know that you have 
been struggling with losing some of them. I would like to ask 
you why in your opinion they are leaving at this point.
    General Rochelle. Happily, Congresswoman. The military 
academy graduates have traditionally left at a rate that is a 
little bit higher than we would like, given the investment that 
we make and the Nation makes in them. We are now seeing, 
however, an ever so slightly, and I want to emphasize ever so 
slightly, a higher rate of departure in certain classes from 
the military academy, primarily the class of 2000, which was 
the class that was on active duty, either fully trained as a 
young officer, or near fully trained as a young officer, and 
then of course deploying from 2001 and beyond.
    On balance, however, across all classes and sources of 
commission, Officer Candidate School, Army Reserve Officer 
Training Corps (ROTC) scholarship and nonscholarship, we are 
seeing a sustained 10-year average retention rate among our 
officers. Now I come back to the fact that there are blips that 
cause me personally and others some concerns, but nothing near 
crisis yet.
    I will also conclude by saying that we are grateful to the 
Congress for the authority to expend the critical skills 
retention bonus for young captains for the first time in the 
history of our Army. I believe that that is going to be very 
critical for us going forward. We are dealing with a generation 
of young officers who, as the chairwoman commented in her 
remarks, not unlike our young enlisted soldiers, are very 
bright, have options, and especially in an economy as we are 
experiencing today, notwithstanding challenges in the economy 
as well.
    Ms. Shea-Porter. Thank you. Could you also please tell me 
about the stop loss policy in effect? How many soldiers have 
been impacted at this point, and when do you expect that to 
end?
    General Rochelle. We are studying stop loss and would like 
to be able to conclude it as quickly as we can. Let me put it 
into scope for you. At any point in time if you look across the 
total Army, and that is Active, Guard and Reserve, and that is 
1.1 million individuals, the total number of individuals stop-
lossed is never more than 10,000. And the average in the last 3 
years is 8,000 or below. Today, it is 7,600.
    Ms. Shea-Porter. What impact do you think that is having on 
morale?
    General Rochelle. Well, it is obviously at the individual 
level having an impact. We would like once again to, demand 
notwithstanding, we would like to eliminate stop losses as 
quickly as we possibly can. We are looking at options to do 
just that.
    Ms. Shea-Porter. Thank you. Once again, I would like to 
state that we know the stress on these men and women in the 
military, and we are very, very grateful for what they do. 
Thank you.
    Mrs. Davis. Mr. Kline.
    Mr. Kline. Thank you, Madam Chairman. I apologize, 
gentlemen, for my absence. As you know very well, veterans of 
many hearings here, we come and go, shuttle in between hearings 
and sometimes floor activity, although this morning I don't 
think there is any floor activity. But we have had multiple 
hearings.
    A couple of questions. One, General Coleman, how are 
recruiters in Berkeley doing these days?
    General Coleman. Thank you for that question, sir. They are 
doing well. The morale is extremely high, and out of a bad 
situation the Marine Corps has done well. They upheld 
themselves to the high standards that you and other Marines 
would love to see them uphold themselves to, sir.
    Mr. Kline. I knew they were. Thanks, General. I think it is 
appalling what has happened from the city council in Berkeley. 
But I never doubted for a minute that the Marines would hold up 
well.
    Dr. Chu, we talked briefly before the hearing about the 
yellow ribbon reintegration program. As you know, it has been a 
program very near and dear to my heart. We worked on it very 
hard. I am very proud of the work that Major General Shellito, 
the Adjutant General (TAG) in Minnesota and all the fine folks 
out there have done, and frankly, members of the Guard 
particularly, but the Reserve component in general in States 
across the country. And we put language in the bill, in the 
NDAA, which you and I talked about, that puts your office as 
the executive agent, as the office in charge.
    So a couple of questions I want to get here for the record. 
One, there is a letter from Lieutenant General Blum, which was 
to you, talking about the implementation of that program, and 
in it he estimates the annual cost of the program to be 
approximately $73 million, of which $23 million will fund a 
national network of transition support workers. I think the 
other $50 million, he doesn't specify it in this letter, is 
essentially to pay for the drill pay, if you will, of the 
members of the National Guard when they are called back for 
this training. Does that $73 million sound right to you? Are 
you familiar with that?
    Dr. Chu. Sir, our preliminary estimates are that it will 
cost somewhat more than that. I don't want to commit to a 
figure at this juncture. But I do want to emphasize that we are 
committed to implementing the statute in the spirit in which it 
was passed. I do think we can use, as the statute allows us to, 
some of our existing programs, bring them together in a 
cohesive way, but also create new structures so we do reach out 
to our service personnel, especially our Reserve personnel, 
Guard and Reserve, in a better way than we have been able to do 
in the past.
    So we are on track, in my judgment, to stand up an office 
as the act directs, to secure resources, which we will be 
taking out of the second half of the global war on terror 
funding vehicle. We have discussed that with the Comptroller, 
who has given her pledge on that front in order to get this 
going in a timely and effective way.
    Mr. Kline. Okay. I appreciate that very much. I just think 
it is such an important program, and it really needs to work. 
While I am not familiar with your plans to combine programs, I 
think you had some family services activities and so forth, and 
certainly there needs to be some latitude in moving funds. I am 
very, very intent that we not water down in any way, and I 
don't believe that is the case, but we need to be wary of that, 
that as you combine programs, you may inadvertently water down 
one or the other. I am particularly concerned about this one 
because as we have looked at these men and women in the Reserve 
component when they have come back and they haven't had the 
facilities, the infrastructure of the Active component, it has 
become very clear that we need to make an extraordinary effort 
to take care of them.
    You and I have differed on whether that should be mandatory 
or not. We have now made it statute. I think that is the right 
thing to do, and I very much appreciate your willingness to 
step up in your role as executive agent, your office, to make 
sure this happens, and we will continue to work with you on 
that.
    Thank you, Madam Chair. I will yield back.
    Mrs. Davis. Thank you. Dr. Snyder.
    Dr. Snyder. Thank you. Of course, Dr. Chu, this is a good 
example of we all want something in the baseline budget until 
it is something we want, and then we are proud that you can do 
it out of the supplemental. I think it does make sense because 
this is something that is a set program in time. I was going to 
ask about that, too, because in your written statement you say 
the Department is fully committed to implementing this program 
and my understanding was you were looking for funding in the 
supplemental.
    Gentlemen, I want to come back to this issue about child 
care. I think the numbers at the Little Rock Air Force Base, 
with the new building that we just opened, they have a capacity 
of 335 kids total between their facilities on base. But because 
of personnel cuts they can only handle 237 children, which is 
just a little bit under 100 kids, although that varies, on the 
waiting list. I don't want to just fix the Little Rock Air 
Force Base problem. I think it is a systemwide problem. So I 
hope you will get back to us in written form. You used the word 
impact has been significant, and difficult choices. I would 
like to know where specifically child care, gymnasiums, youth 
programs, counseling, where is it that you think there has been 
negative impact and difficult choices made in the Air Force, 
and take it in detail.
    General Newton. Let me take that for the record. Again, I 
will say though, it is something I have got my focus on because 
it is not like you intimated, not just at Little Rock Air Force 
Base.
    Dr. Snyder. It is not just in the Air Force either.
    General Newton. Across the Air Force we have challenges in 
how we provide civilian support to our child development 
centers, who principally man the CDCs.
    Dr. Snyder. I know there are appropriated and 
nonappropriated staff slots.
    General Newton. I would be delighted to get the details 
back to you on that.
    [The information referred to can be found in the Appendix 
beginning on page 155.]
    Dr. Snyder. Dr. Chu, and this may be a question you just 
want to say you don't have an opinion, this whole issue of 
interagency reform has been increasingly talked about for some 
time, I think both in the Department and amongst the think 
tankers there has been discussions about it. If we had 
everything the way that you, Dr. Chu, thought they ought to be 
in terms of adequate staffing for the State Department, 
adequate staffing for United States Agency for International 
Development (USAID), the kind of redundancy the civilian side 
of government needs to be able to have people available to go 
overseas, would that have--if that had been all set up like 
seven, eight years ago, do you think or have an ability to 
render an opinion about whether you think that that would have 
cut down on the needs of personnel, military personnel that we 
need to have both in Afghanistan and Iraq today?
    Dr. Chu. My view is it is less an issue of numbers than an 
issue of preparation. We have begun to implement, I am 
delighted to say, the President's Executive order direction on 
creating a national security professional development program, 
in which a key element is addressing just this issue: Are the 
staff of the different Cabinet agencies prepared to deal 
effectively in what some like to call an integrated 
environment, or bring several agencies together, whether that 
is here in the United States to deal with a homeland issue, or 
overseas in Iraq, Afghanistan, Africa, whatever.
    We had early stages in this. It will involve, I am 
delighted to say, deliberate investments in our civilian staff 
in the United States Government. That is not something I would 
argue we have done to the level we should in the past. So we 
are very much heartened by this initiative in terms of the 
opportunity it offers.
    The change will not occur overnight, I acknowledge. Within 
Defense we have taken a first step in this direction by how we 
have thought about staffing the African command. We made a 
deliberate effort from the beginning to engage the staff of 
other Cabinet agencies to reach out to them to offer to pay for 
the slots. So this is not an issue of our trying to get a free 
ride from somebody else. And this is to be both senior and mid-
grade personnel.
    I am pleased to say we already have recruited several 
senior executive service level personnel from other Cabinet 
agencies to serve as the leadership. In fact, the Deputy 
Commander for Political and Military Affairs essentially is an 
ambassador from the State Department, career Foreign Service 
officer, distinguished lady with a great background on the 
continent, and is going to bring extraordinary leadership to 
that effort.
    Dr. Snyder. Several years ago, when the 39th National Guard 
Brigade was activated and served a year in Iraq, when everyone 
showed up, reported, about a third of them were not medically 
fit. We got them going down to bases and we figure we are 
better off not doing that so we have changed those processes 
around. As you know, they have been mobilized again and some in 
fact are already overseas, the advance folks. But when they 
showed up, we had about the same number that were not medically 
fit for deployment again. I think a lot of it is dental and 
some other issues.
    Do you have any thoughts about how we might address those 
issues in a prospective manner? Because I think most of us 
think these folks are showing up every month or two weeks in 
the summer and then somehow their medical needs are not being 
dealt with. Do you have any thoughts on this in terms of a DOD 
proposal? You have been around a while. Do we need to be 
approaching this and looking in some more dramatic way of 
addressing these issues?
    Dr. Chu. I think on the dental issue, I think some were 
less dental than immunizations and other matters of that sort. 
But on dental issues specifically, I think there are two 
actions we are undertaking. First, short-term, bringing dental 
services to the unit. So the other three brigades used dental 
vans, mobile vans, in which we at training assemblies brought 
the van to the unit, said you got an issue, we will take care 
of it. They got their dental readiness way up there in the 90 
percent range. Second, we have to advocate more strongly to our 
Reserve personnel, and we are doing that within Defense, but we 
value your help because you speak to the units in the hometowns 
directly. You can be effective in a way we cannot.
    We offer to the Reserves a dental insurance program. Our 
regret is most people don't sign up for it. I have even had 
very senior Reserve officers say yes, I waited until the active 
duty call came because then it is all on your tab, not mine. It 
is not expensive insurance, a decent policy. I think we need to 
get our people to take it and use it.
    We are setting the standard by demanding more inspection by 
Reserve covered units of where are they in terms of dental 
readiness. I hope over time that would solve the problem. 
Short-term though, the answer is the mobile vans the other 
brigades have used.
    Dr. Snyder. Thank you.
    Mrs. Davis. Thank you, Dr. Chu. I think we probably don't 
need one final round. If I could take my question, I appreciate 
it.
    Dr. Chu, you touched briefly in response to a question by 
Mr. Wilson on the retirement system, and that we need to look 
at that not just for the Guard, to look at any changes, but we 
need to look at it holistically. Certainly the National Guard 
and Reserve released their report reflecting the fact that we 
need to perhaps envision a new system that would reduce 
reliance on defined benefits and mandatory service in favor of 
early vesting, increased use of thrift savings plans, gate-paid 
bonuses to attract personnel to remain on active duty.
    Are we at a point when we should be taking a look at 
whether we should design this system that would reflect what 
they consider in their commission report certainly a 21st 
century workforce?
    Dr. Chu. I think this is a big issue in front of the 
defense establishment. We welcome further dialogue with the 
subcommittee, the full committee on this matter. There are 
vastly different opinions about whether or not changing it is a 
good idea. We have worked for the better part of 50 years with 
the current system. It works well from the perspective of many 
of my colleagues who have to actually run the personnel 
establishments of the individual military services. So I 
suspect a first answer from anyone would be ain't broken, don't 
fix it.
    On the other hand, on the other hand, the report of the 
Commission on National Guard and Reserve was actually mentioned 
in a report of a panel that Secretary Rumsfeld appointed, which 
observed that one of the injustices in our system is only eight 
percent of the enlisted force that starts out ever reaches 
retirement. So this is not a benefit that most people enjoy. 
And shouldn't we think about rebalancing this benefit in a 
manner using some of the tools that you described. But that is 
a big change to the system, not one I think you should 
undertake lightly or quickly. We will develop the second volume 
of the mandated Quadrennial Review of Military Compensation to 
this subject, not to recommending an answer, but to outline the 
issue and how much you think about alternative systems, of the 
effect of gate pay in lieu of the annuity now the case as large 
and undefeated as it is now.
    You have given us authority in the last several years and 
we are using that authority to allow military personnel to 
deposit in the thrift savings programs. I am delighted that a 
high fraction of military families do report they are saving 
something out of their paycheck. That is the first step to a 
better financial future for them, and we will next month 
celebrate--I am sorry, two months from now celebrate the 
Military Saves Week, as we have done in the past.
    The change to the retirement system is not a small step and 
there would have to be an extensive dialogue about the pros and 
cons and wisdom of doing so, and careful empirical work on what 
the effect would be, will we attain the goals that are set out.
    Mrs. Davis. I think we would recognize that is not 
something that we can do easily here in a session or certainly 
at the end of a session. It would take a broader look. I would 
assume then in all the services perhaps there is different 
perspective on how we approach this as well. It is an important 
conversation.
    If I may again, quickly, as you know, and I have raised 
this issue before when we talk about recruiting and retention, 
is the one of don't ask, don't tell. I think there are roughly, 
when this is raised, discharge of about 11,000 qualified 
service members under this. When that issue was raised, we 
suggest that well, over time it is really not that large a 
number. But I think there have been some estimates that we 
would have more qualified male applicants, as many as perhaps 
41,000, who would seek to enter the Armed Services, and perhaps 
even 2,500 more would be retained.
    Given the issues around retention and recruitment goals, 
would repealing that law make a difference in this area, do you 
think, aside from a number of other issues that are addressed? 
But in terms of numbers, have you evaluated this?
    Dr. Chu. Madam Chairman, as you know, it is a statutory 
matter. The Department carries out the statute as Congress has 
enacted it. I think most testaments of any change in supply of 
personnel are small, quite small in number. I have not heard 
the 41,000 figure. Sounds like a cumulative number of some 
kind. It is an issue that is socially derisive in our country 
at large to speak plainly about it. I do think in the period in 
which the military is challenged on many fronts, and we have 
heard that discussed this morning, and not clear to me that 
this is an additional issue you want to ask the military to 
address. But that is ultimately the Congress's call.
    Mrs. Davis. I appreciate that. And I know that in 
conversations it is raised and I think that we will probably 
continue to raise it for some time.
    I want to thank you all very much for your testimony today. 
I think we have had a good discussion, and we will continue to 
look at a number of these issues. What we want of course is to 
have you have, to have the services have the ability to 
recruit, retain, and to take care of our military and their 
families in the best way possible. And we will continue to work 
on that.
    [Whereupon, at 12:10 p.m., the subcommittee was adjourned.]
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=======================================================================


              WITNESS RESPONSES TO QUESTIONS ASKED DURING

                              THE HEARING

                           February 26, 2008

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

      
              RESPONSE TO QUESTION SUBMITTED BY DR. SNYDER

    General Newton. We hear from some of our field activities that 
financial projections for FY08 and beyond are causing hard choices. To 
meet some of our budget constraints, we have taken steps to close or 
consolidate some fitness facilities or reduce their hours of operation. 
We've reduced services and hours of operation in some dining 
facilities, and reduced services, materials and hours in some 
libraries. We have taken a deliberate approach to these reductions, to 
minimize the impact as much as possible to both home station and 
deployed quality of life programs for our Airmen and their families.
    The Air Force has made ``Taking Care of Our People'' one of its top 
three priorities, with emphasis on ensuring the highest quality of life 
standards. In an October 2007 survey, 96 percent of Airmen agreed 
quality of life is an important enabler for their success in combat, 
and 67 percent believed the Air Force is committed to quality of life. 
As such, we know that community support programs that support both 
married and single Total Force Airmen will need to become more agile 
and capable to keep pace with a smaller Air Force that is transforming. 
We will continue to capitalize on the ingenuity of our Airmen and 
commanders to find more innovative ways to support our people. [See 
page 35.]
                                 ______
                                 
           RESPONSE TO QUESTION SUBMITTED BY MS. SHEA-PORTER
    Dr. Chu. The following table depicts the number and percentage of 
enlistments with conduct (moral) waivers for Fiscal Years 2006 and 
2007: [See table next two pages.]

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     Data through September 30, 2007
    1. Number of waivers may exceed ``Accessions with Waivers'' (in 
Table 1) due to individuals receiving multiple waivers
    2. Comparing waivers across Services may be misleading because 
waiver requirements are applied against Service-specific standards, 
which vary
    3. The Armed Services Vocational Aptitude Battery, used in Aptitude 
Waivers, was renormed in FY2005
    4. Marine Corps data for 2006 has changed from previous reports_
data previously included Reserve data
    5. Changes in the collection and reporting of Conduct Waiver data 
in June 2007 may make comparisons to previous years unreliable

    [See page 22.]
                                 ______
                                 
              RESPONSE TO QUESTION SUBMITTED BY MR. JONES
    Dr. Chu. The 24th Marine Expeditionary Unit and the 2nd Battalion, 
7th Marines are deploying to Afghanistan to meet U.S. Central Command's 
requirement for additional forces. Approximately 3,175 Marines will 
make this deployment. The chart below depicts the deployment history of 
the Marines that comprise these units:


----------------------------------------------------------------------------------------------------------------
                                   USMC Personnel Deploying In Support of OEF
-----------------------------------------------------------------------------------------------------------------
                                                                      Times Deployed
                                                     ------------------------------------------------    Total
                                                           0           1           2          3+
----------------------------------------------------------------------------------------------------------------
Marines                                                    1392        1194         492          97        3175
----------------------------------------------------------------------------------------------------------------
Percentage                                                  44%         38%         15%          3%        100%
----------------------------------------------------------------------------------------------------------------


    The dwell time, or number of days these Marines have had at home 
between deployments, is plotted as a graph on the attached [next] page. 
The graph depicts the number of days in dwell versus the number of days 
deployed for each Marine, with each blue diamond representing one 
Marine. The red line indicates the 1:1 dwell ratio, meaning that for 
each day deployed there has been an equal amount of time at home. The 
green line represents the Department's goal, which is a 1:2 dwell 
ratio, meaning that for each day deployed, twice as many days were 
spent at home. The points left of these lines represent those Marines 
deploying at less than the 1:1 or 1:2 deployment to dwell ratio. Those 
points right of the lines represent those Marines deploying at greater 
than the 1:1 or 1:2 deployment to dwell ratio. [See page 30.]
      
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?

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


              QUESTIONS SUBMITTED BY MEMBERS POST HEARING

                           February 26, 2008

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

      
                   QUESTIONS SUBMITTED BY DR. SNYDER

    Dr. Snyder. Dr. Chu, in your testimony before the subcommittee you 
claimed there was evidence suggesting that recruited personnel 
receiving moral waivers were marginally higher performers than those 
who did not require waivers. Please provide the subcommittee with 
whatever evidence you have supporting this assertion.
    Dr. Chu. In November 2007, the Army analyzed the behavior of nearly 
18,000 soldiers recruited between 2003 and 2006 (6.5% of all non-prior 
service accessions), who were granted a conduct waiver, and compared 
them to those enlisted without a conduct waiver. The Army found the 
following:

          Recruits with conduct waivers reenlisted at a 
        somewhat higher rate than their non-conduct waiver peers

          The waived population was promoted to E-5 faster 
        (four months on average) than the non-waived population in the 
        one specialty studied (Infantry--11B)

          The conduct waiver population had a higher ratio of 
        valorous awards

          The conduct waiver population was higher quality than 
        the non-conduct waiver population:

                  87% versus 84% High School Diploma Graduates

                  69% versus 65% scoring in the upper half of the 
                Armed Forces Qualification Test (AFQT) I-IIIA

                  0.8% versus 2.3% scoring in the lowest 
                acceptable category, AFQT IV (well below the 20 percent 
                of accessions as stipulated by the Congress)

    Additionally, the Department commissioned research in 2004 to 
examine the relationship between moral character waivers and 
performance (attrition). While individuals who received a moral 
character waiver were more likely to be separated within the first 18 
months of service than those who did not require a review, we also 
consistently found that, across the Services, attrition rates among 
individuals who had waivers approved at the highest authority levels 
(such as Recruiting Command Headquarters), were not significantly 
different than rates for individuals without moral character waivers. 
In other words, individuals who were closely scrutinized by senior 
officers (this would typically be individuals who needed a waiver for a 
prior serious conviction) and were granted a waiver, performed like 
those who did not require a review of their records.
    Further, in order to compensate for needing a waiver, the Services 
often require that those individuals are high school graduates with 
above average scores on the AFQT. We know from other research that 
individuals with high AFQT scores perform better in training and on the 
job than individuals with lower scores.
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MRS. DAVIS
    Mrs. Davis. Dr. Chu, member associations of the Military Coalition 
and other veteran groups are calling for the housing authorization 
standards to be revised so that mid-grade and senior enlisted members 
may be paid basic allowance for housing (BAH) at rates that will 
support three bedroom single family residences. Have we reached a point 
where the Congress should consider changing the housing standards for 
mid-grade and senior enlisted service members?
    Dr. Chu. The Department of Defense's 10th Quadrennial Review of 
Military Compensation (10th QRMC) is assessing the effectiveness of 
military pay and benefits in recruiting and retaining a high-quality 
force. In 2007, the 10th QRMC revalidated housing standards for all pay 
grades, including mid-grade and senior enlisted, and found that the BAH 
rates were within 10 percent of predicted housing expenditures for 
members with dependents. The 10th QRMC did not recommend any changes to 
the housing standards.
    Mrs. Davis. The budget request for fiscal year 2009 provides all 
military personnel with a 3.4 percent across-the-board pay raise. If 
the 3.4 percent pay raise is adopted, fiscal year 2009 will be the 
first year since fiscal year 1999 that the military pay raise has not 
been at least .5 percent above the level of private sector pay raises 
as measured by the ECI. Given that the 3.4 percent pay raise being 
proposed does not provide a pay raise that is greater than increases in 
the private sector for the first time in nine years, is this raise 
sufficient to recognize the stress currently being placed on the 
military members and their families?
    Dr. Chu. The 3.4 percent basic military pay raise, equal to the 
increase in the ECI, keeps us competitive with the private sector, and 
is part of the Department of Defense's commitment to provide a secure 
standard of living for our most important investment--all of those who 
serve in uniform. The average military pay increased 32% during 
President Bush's Administration,\1\ compared to an average increase of 
24% in private sector wages and salaries, as measured by the ECI. 
Targeted raises throughout the Administration fully closed the pay gap 
as identified by the 9th Quadrennial Review of Military Compensation 
(QRMC). The final targeted raise in April 2007 also extended the pay 
table to 40 years of service, providing additional reward and incentive 
for longer service.
---------------------------------------------------------------------------
    \1\ Beginning with the 6.9% pay raise on January 1, 2002. This does 
not include the 0.4% raise of July 1, 2001.
---------------------------------------------------------------------------
    Instead of basic pay raises exceeding the ECI, the Department 
prefers the capability to target compensation for members who are at 
the greatest risk of leaving service and/or those in critical skill 
areas where we have the greatest need to improve retention. We prefer 
that any additional money go into the discretionary special and 
incentive pays such as Hardship Duty Pay, retention bonuses, or other 
allowances that can be specifically target for desired effects.
    Mrs. Davis. Fiscal Year 2007 was the third consecutive year that 
the active Army had failed to achieve its recruit contract goal. Given 
that the active Army Delayed Entry Program (DEP) was at 9 percent at 
the beginning of fiscal year 2008, what is being done to improve the 
Army's recruit contract performance and make the DEP a useful tool?
    General Rochelle. For the past two years, the Army has achieved its 
Active Component Recruiting Mission of 80,000 and is on track to 
succeed this year despite experiencing Entry Pool Levels of 12.4%, 
15.1% and 9.2% respectively for FY 2006, 2007, and 2008. While recruit 
contract achievement is important, the bottom-line measure of success 
for Army recruiting remains accessions and the Army continues to meet 
this mark. Entry pool levels less than 20% increase the risk of mission 
accomplishment and the optimal entry pool size is 35% or greater; 
however, recruiting success is determined by the number of new Soldiers 
serving in unit formations--not the number enrolled in the Future 
Soldier Training Program.
    The Future Soldier Training Program (FSTP), the Active Component's 
DEP, remains a useful tool despite its reduced size in recent years. 
The Army is adjusting policies and resources (e.g., increasing the size 
of the recruiter force, funding enhanced media outreach at both the 
national and local level, increasing funding of enlistment incentive 
programs, etc.) to ensure mission success and improve future DEP 
numbers. Additionally, the Army began offering the Deferred Ship 
Bonus--$1000.00 for each month in the FSTP paid upon completion of 
initial entry training--to high school seniors who enlist during the 
academic year and ship to training after graduating. The intent of the 
incentive program is to increase both the size of the entry pool and 
the Tier I (i.e., high school diploma and post secondary degree) 
recruit quality mark percentage.
    Mrs. Davis. Of the three components of the Army, only the Army 
Reserve failed to achieve its end strength objective for fiscal year 
2007. The Army Reserve was 10,118 short of its end strength. What is 
the Army doing to bring the Army Reserve end strength up to authorized 
levels?
    General Rochelle. The Army Reserve continually evaluates 
initiatives and develops new programs in an effort to meet 
congressionally mandated end strength.
    In fiscal year 2007, the Army Reserve implemented several 
initiatives to help boost its lagging end strength. At the forefront of 
the Army Reserve's programs was implementation of a community-based 
recruiting initiative called the Army Reserve-Recruiting Assistance 
Program (AR-RAP). AR-RAP pays a $2,000 bonus for referring other people 
who enlist in the Army Reserve. Fiscal year to date, the Army Reserve 
has 49,939 active recruiting assistants who have accessed 1,299 new 
Soldiers. Further, fiscal year to date, the Army Reserve retained 738 
Soldiers as part of an education stabilization program and 461 captains 
with its Critical Skills Retention Bonus (CSRB) program. The Army 
Reserve also gained 475 Soldiers from the Active Component and 
Individual Ready Reserve with an affiliation bonus and/or 24 month 
stabilization from deployment.
    The Army Reserve shares its recruiting mission among multiple 
agencies: Army Reserve Career Division, Human Resources Command and 
United States Army Accessions Command. In fiscal year 2008, due to 
multi-agency efforts and the previous year's initiatives, the Army 
Reserve is realizing recruiting and retention successes. Army Reserve 
recruiting is currently at 102.7% of its year to date mission 
accomplishment. As of 7 Apr 08, the Army Reserve has seen a net gain of 
5,234 Soldiers during the fiscal year. Finally, retention rates for the 
Army Reserve are trending ahead of projections.
    Mrs. Davis. The budget request for fiscal year 2009 provides all 
military personnel with a 3.4 percent across-the-board pay raise. If 
the 3.4 percent pay raise is adopted, fiscal year 2009 will be the 
first year since fiscal year 1999 that the military pay raise has not 
been at least .5 percent above the level of private sector pay raises 
as measured by the ECI. Given that the 3.4 percent pay raise being 
proposed does not provide a pay raise that is greater than increases in 
the private sector for the first time in nine years, is this raise 
sufficient to recognize the stress currently being placed on the 
military members and their families?
    General Rochelle. The across-the-board pay raise proposed in the 
President's budget is sufficient to meet our overall recruiting and 
retention goals. During the 9th Quadrennial Review of Military 
Compensation in 2004, the Department of Defense set a goal to adjust 
military salary to the 70th percentile when compared to similar 
civilian careers. We believe this goal has been achieved and now must 
be maintained. The 3.4 percent raise will outpace the ECI. There are 
other monetary/non-monetary benefits that are used to account for time 
in combat and shortage skills. The Army uses specific special and 
incentive pays to target those critical skills where we are 
experiencing recruiting and retention challenges, rather than raising 
the pay of the entire force. This is the most cost-efficient method to 
address our critical shortages.
    Mrs. Davis. Three active components--Navy, Air Force, and Marine 
Corps--have all experienced some retention challenges within their 
enlisted force. The Air Force has struggled with mid-career retention 
for years and failed to achieve its mid-career retention objective 
during fiscal year 2007. During the first four months of fiscal year 
2008, new challenges have appeared in the rates for first term (87%) 
and career (89%) reenlistments. Your service has experienced periodic 
difficulty meeting enlisted retention objectives that are continuing 
during fiscal year 2008. Although they are admittedly not significant, 
why does it appear to be so difficult to get these problems under 
control? What are your plans and have you increased retention bonuses 
to meet these challenges?
    General Newton. For background, the Air Force enjoyed extremely 
high retention at the start of Operation Iraqi Freedom (Mar 2003) due 
to the swell of patriotism, temporary implementation of Stop-Loss, and 
a massive influx of reenlistment bonus dollars. Five years later we 
find that those individuals have now completed their initial 
commitments, are coming off initial selective reenlistment bonus 
contracts, are facing increased workload at home station (due to 
deployed airmen), have spent multiple tours deployed themselves, and 
are facing downsizing. These are but a few of the challenges we face in 
the retention business.
    That said, the Air Force has met or exceeded its retention goals 
for Zones A (17 mo. to 6 years), B (6 to 10 years), and Zone C (10 to 
14 years) from FY 2002 through March 2007. From April 2007 to December 
2007 the Air Force experienced a slight downward trend in Zones B and C 
during which retention fell below both goal and historical average. 
This slight decrease in retention is not problematic as the Air Force 
will continue to downsize its personnel in FY09. Since December 2007, 
retention has stabilized but remains below goal. Note that current 
retention rates are holding steady at levels equal to or higher than 
pre-GWOT retention rates. To help arrest the downward trend in 
retention (as we foresee stabilizing our endstrength in the outyears), 
the Air Force has secured a $61.4M plus up in its Selective 
Reenlistment Bonus (SRB) initial pays budget for FY09. This will first 
be applied to our critical warfighting skills to ensure we meet our 
GWOT obligations.
    Mrs. Davis. Why has the Air Force allowed these retention problems 
to reoccur year after year without apparently being able to find a 
solution?
    General Newton. Actually, retention has not been a longstanding 
problem for the Air Force.
    The Air Force has met or exceeded its retention goals for Zones A 
(17 mo. to 6 years), B (6 to 10 years), and Zone C (10 to 14 years) 
from FY 2002 through March 2007. From April 2007 to December 2007 the 
Air Force experienced a slight downward trend in Zones B and C during 
which retention fell below both goal and historical average. This 
slight decrease in retention is not problematic as the Air Force will 
continue to downsize its personnel in FY09. Since December 2007, 
retention has stabilized but remains below goal. Note that current 
retention rates are holding steady at levels equal to or higher than 
pre-GWOT retention rates. To help arrest the downward trend in 
retention (as we foresee stabilizing our endstrength in the outyears), 
the Air Force has secured a $61.4M plus up in its Selective 
Reenlistment Bonus (SRB) initial pays budget for FY09. This will first 
be applied to our critical warfighting skills to ensure we meet our 
GWOT obligations.
    Mrs. Davis. The budget request for fiscal year 2009 provides all 
military personnel with a 3.4 percent across-the-board pay raise. If 
the 3.4 percent pay raise is adopted, fiscal year 2009 will be the 
first year since fiscal year 1999 that the military pay raise has not 
been at least .5 percent above the level of private sector pay raises 
as measured by the ECI. Given that the 3.4 percent pay raise being 
proposed does not provide a pay raise that is greater than increases in 
the private sector for the first time in nine years, is this raise 
sufficient to recognize the stress currently being placed on the 
military members and their families?
    General Newton. No, this raise is not sufficient to recognize the 
stress currently being placed on the military members and their 
families. However, aside from direct compensation to offset stress, 
there are indirect means that the Air Force uses to help to relieve 
stress. The availability of Child Care Centers, Airmen and Family 
Readiness Centers, Morale, Welfare and Recreation activities and other 
support systems on base offer some relief to military members who are 
balancing the demands of service, family, and home.
    Mrs. Davis. Three active components--Navy, Air Force, and Marine 
Corps--have all experienced some retention challenges within their 
enlisted force. The Marine Corps, for the first time in recent memory, 
showed some weakness in initial term retention during fiscal year 2007 
(92%). Although the career number as reported by DOD appears strong at 
129 percent, a more detailed examination indicates that second term 
reenlistments were also short (85%). Your service had experienced 
periodic difficulty meeting enlisted retention objectives that are 
continuing during fiscal year 2008. Although they are admittedly not 
significant, why does it appear to be so difficult to get these 
problems under control? What are your plans and have you increased 
retention bonuses to meet these challenges?
    General Coleman. The challenge of achieving retention is mainly due 
to the rapid growth in end strength and the eligible reenlistment 
populations. As Marines' contracts are on average four years, the 
current eligible population enlisted four years ago in support of a 
175,000 strength Marine Corps. The quick ramp up of end strength 
requires a greater number of reenlistments from these low eligible 
populations. To achieve these higher reenlistment percentages, the 
total retention bonus budget has been increased nearly tenfold since 
2005, and the number of occupations eligible in both the first term and 
career force has been increased.
    Mrs. Davis. Why does the Marine Corps continue to report a combined 
total for mid-career and career enlisted retention when an existing 
mid-career enlisted retention problem might benefit from more exposure 
and closer management attention?
    General Coleman. Although the Marine Corps accounts for mid-career 
and career reenlistments under a combined total, close attention is 
paid to the mid-career. Since 2005, retention bonus plans have placed 
increased focus on mid-career retention, and in 2007 internal goals 
were established for the mid-career. The rationale behind the combined 
total is a result of the founding of the Subsequent Term Alignment Plan 
(STAP) in fiscal year 2002. The primary focus at that time was in fact 
on mid-career reenlistments due to a decrease in retention around 8 
years of service. At that time, more emphasis was put on mid-career 
retention bonuses. Over the next few years, STAP increased to provide 
additional focus on career force retention around 12 years of service, 
although only a few occupations in the career force. In 2007 and 2008, 
there was a robust retention bonus plan for both the mid-career and 
career forces.
    Mrs. Davis. The budget request for fiscal year 2009 provides all 
military personnel with a 3.4 percent across-the-board pay raise. If 
the 3.4 percent pay raise is adopted, fiscal year 2009 will be the 
first year since fiscal year 1999 that the military pay raise has not 
been at least .5 percent above the level of private sector pay raises 
as measured by the ECI. Given that the 3.4 percent pay raise being 
proposed does not provide a pay raise that is greater than increases in 
the private sector for the first time in nine years, is this raise 
sufficient to recognize the stress currently being placed on the 
military members and their families?
    General Coleman. The ``gap'' compares increases in basic pay to 
increases in the Employment Cost Index since 1982. The Congressional 
Budget Office, the Office of Management and Budget, and the Department 
of Defense all argue that this ``gap'' measure is faulty and, when 
measured appropriately, disappears. The Ninth Quadrennial Review of 
Military Compensation argued that the appropriate measure of the 
adequacy of regular military compensation (RMC) is the 70th percentile. 
(When RMC reaches the 70th percentile of private-sector pay, RMC is 
higher than the pay of seven in ten private-sector workers and lower 
than the pay for three in ten private-sector workers.) Targeted pay 
raises from 2001 to 2007 achieved this percentile objective as RMC is 
now at or greater than the 70th percentile for all military members. In 
addition, basic pay does not include housing or subsistence allowances. 
If we incorporate the growth in the Basic Allowance for Housing and 
Basic Allowance for Subsistence into the measure (and compare the 
increase since 1982 in Basic Pay, Basic Allowance for Housing and Basic 
Allowance for Subsistence), we actually find a .5 percent ``surplus'' 
and hence no gap.
    Mrs. Davis. Three active components--Navy, Air Force, and Marine 
Corps--have all experienced some retention challenges within their 
enlisted force. The Marine Corps, for the first time in recent memory, 
showed some weakness in initial term retention during fiscal year 2007 
(92%). Although the career number as reported by DOD appears strong at 
129 percent, a more detailed examination indicates that second term 
reenlistments were also short (85%). Your service had experienced 
periodic difficulty meeting enlisted retention objectives that are 
continuing during fiscal year 2008. Although they are admittedly not 
significant, why does it appear to be so difficult to get these 
problems under control? What are your plans and have you increased 
retention bonuses to meet these challenges?
    Admiral Harvey. The war on terrorism, Individual Augmentation 
assignments and an increased sea/shore ratio do create a challenging 
retention environment, which we continue to monitor closely. Our 
assessment of Navy's retention posture is that it remains strong and 
supports our end strength requirements. The Navy attained 98 percent of 
the fiscal year 2007 numeric reenlistment goal for Zone A (0-6 years) 
and exceeded both the Zone B (6-10 years) and Zone C (10-14 years) 
numeric reenlistment goals. The Navy attained at least 96 percent of 
the numeric reenlistment goals in each of the three zones during the 
first five months of fiscal year 2008.
    Quality of Service for Sailors and their families remains a top 
priority as we continue to focus on providing adequate pay, health 
care, housing, proper work environments, and career-long training and 
education opportunities for our Sailors. The Navy uses specifically 
targeted retention bonuses, for example, our Selective Reenlistment 
Bonuses and Critical Skills Retention Bonuses, which provide us with 
some flexibility in retaining certain critical skills. In addition, we 
incentivize Sailors to `Stay Navy' and volunteer for sea duty and other 
assignments with Sea Duty Incentive Pay and Assignment Incentive Pay 
among other pays and incentives.
    Mrs. Davis. Why does the Marine Corps continue to report a combined 
total for mid-career and career enlisted retention when an existing 
mid-career enlisted retention problem might benefit from more exposure 
and closer management attention?
    Admiral Harvey. The Navy closely monitors progress toward 
established enlisted reenlistment goals in Zone A (0-6 years), Zone B 
(6-10 years), and Zone C (10-14 years). Zones B and C allow management 
attention for both mid-career and career enlisted Sailors. The Navy 
does not set reenlistment goals for Sailors beyond 14 years of service 
as their reenlistment rates have been greater than 96 percent during 
recent years.
    Mrs. Davis. The budget request for fiscal year 2009 provides all 
military personnel with a 3.4 percent across-the-board pay raise. If 
the 3.4 percent pay raise is adopted, fiscal year 2009 will be the 
first year since fiscal year 1999 that the military pay raise has not 
been at least .5 percent above the level of private sector pay raises 
as measured by the ECI. Given that the 3.4 percent pay raise being 
proposed does not provide a pay raise that is greater than increases in 
the private sector for the first time in nine years, is this raise 
sufficient to recognize the stress currently being placed on the 
military members and their families?
    Admiral Harvey. The 3.4 percent across-the-board pay raise 
requested in the President's budget ensures basic pay remains 
competitive with civilian wage growth. It is equal to the amount 
required by law, matches earnings increase in the private sector, as 
measured by the Employment Cost Index (ECI), and is sufficient to meet 
the overall needs of the Navy.
    Since 2001, as a direct result of the sustained efforts of the 
Congress and the Department of Defense, average basic pay has increased 
32 percent. Through these efforts, in 2007, the Department achieved its 
goal of establishing pay equal to, or greater than, the 70th percentile 
of private sector pay for those of comparable age, education and 
experience. We continue to support pay raises that keep pace with the 
private sector. As compensation strategies must be flexible and 
adaptable to changing service needs and employment market conditions, 
the targeted use of bonuses and special pays remains a complementary, 
yet essential, tool in overcoming recruiting and retention challenges 
in career fields designated as critical skills.

                                  
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