[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]



 
  RETHINKING OUR DEFENSE BUDGET: ACHIEVING NATIONAL SECURITY THROUGH 
                          SUSTAINABLE SPENDING

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

                                HEARING

                               before the

                   SUBCOMMITTEE ON NATIONAL SECURITY
                          AND FOREIGN AFFAIRS

                                 of the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 20, 2010

                               __________

                           Serial No. 111-152

                               __________

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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                   EDOLPHUS TOWNS, New York, Chairman
PAUL E. KANJORSKI, Pennsylvania      DARRELL E. ISSA, California
CAROLYN B. MALONEY, New York         DAN BURTON, Indiana
ELIJAH E. CUMMINGS, Maryland         JOHN L. MICA, Florida
DENNIS J. KUCINICH, Ohio             JOHN J. DUNCAN, Jr., Tennessee
JOHN F. TIERNEY, Massachusetts       MICHAEL R. TURNER, Ohio
WM. LACY CLAY, Missouri              LYNN A. WESTMORELAND, Georgia
DIANE E. WATSON, California          PATRICK T. McHENRY, North Carolina
STEPHEN F. LYNCH, Massachusetts      BRIAN P. BILBRAY, California
JIM COOPER, Tennessee                JIM JORDAN, Ohio
GERALD E. CONNOLLY, Virginia         JEFF FLAKE, Arizona
MIKE QUIGLEY, Illinois               JEFF FORTENBERRY, Nebraska
MARCY KAPTUR, Ohio                   JASON CHAFFETZ, Utah
ELEANOR HOLMES NORTON, District of   AARON SCHOCK, Illinois
    Columbia                         BLAINE LUETKEMEYER, Missouri
PATRICK J. KENNEDY, Rhode Island     ANH ``JOSEPH'' CAO, Louisiana
DANNY K. DAVIS, Illinois             BILL SHUSTER, Pennsylvania
CHRIS VAN HOLLEN, Maryland
HENRY CUELLAR, Texas
PAUL W. HODES, New Hampshire
CHRISTOPHER S. MURPHY, Connecticut
PETER WELCH, Vermont
BILL FOSTER, Illinois
JACKIE SPEIER, California
STEVE DRIEHAUS, Ohio
JUDY CHU, California

                      Ron Stroman, Staff Director
                Michael McCarthy, Deputy Staff Director
                      Carla Hultberg, Chief Clerk
                  Larry Brady, Minority Staff Director

         Subcommittee on National Security and Foreign Affairs

                JOHN F. TIERNEY, Massachusetts, Chairman
CAROLYN B. MALONEY, New York         JEFF FLAKE, Arizona
PATRICK J. KENNEDY, Rhode Island     DAN BURTON, Indiana
CHRIS VAN HOLLEN, Maryland           JOHN L. MICA, Florida
PAUL W. HODES, New Hampshire         JOHN J. DUNCAN, Jr., Tennessee
CHRISTOPHER S. MURPHY, Connecticut   MICHAEL R. TURNER, Ohio
PETER WELCH, Vermont                 LYNN A. WESTMORELAND, Georgia
BILL FOSTER, Illinois                PATRICK T. McHENRY, North Carolina
STEVE DRIEHAUS, Ohio                 JIM JORDAN, Ohio
STEPHEN F. LYNCH, Massachusetts      JEFF FORTENBERRY, Nebraska
MIKE QUIGLEY, Illinois               BLAINE LUETKEMEYER, Missouri
JUDY CHU, California
                     Andrew Wright, Staff Director
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on July 20, 2010....................................     1
Statement of:
    Conetta, Carl, co-director, Project on Defense Alternatives; 
      Benjamin Friedman, research fellow, CATO Institute; Todd 
      Harrison, senior fellow, Center for Strategic and Budgetary 
      Assessments; Gary Schmitt, Ph.D., resident scholar and 
      director, Advanced Strategic Studies, American Enterprise 
      Institute for Public Policy Research; and Gordon Adams, 
      Ph.D., distinguished fellow, Stimson Center................     8
        Adams, Gordon............................................    62
        Conetta, Carl............................................     8
        Friedman, Benjamin.......................................    24
        Harrison, Todd...........................................    40
        Schmitt, Gary............................................    52
Letters, statements, etc., submitted for the record by:
    Adams, Gordon, Ph.D., distinguished fellow, Stimson Center, 
      prepared statement of......................................    65
    Conetta, Carl, co-director, Project on Defense Alternatives, 
      prepared statement of......................................    11
    Friedman, Benjamin, research fellow, CATO Institute, prepared 
      statement of...............................................    27
    Harrison, Todd, senior fellow, Center for Strategic and 
      Budgetary Assessments, prepared statement of...............    43
    Schmitt, Gary, Ph.D., resident scholar and director, Advanced 
      Strategic Studies, American Enterprise Institute for Public 
      Policy Research, prepared statement of.....................    54
    Tierney, Hon. John F., a Representative in Congress from the 
      State of Massachusetts, prepared statement of..............     4


  RETHINKING OUR DEFENSE BUDGET: ACHIEVING NATIONAL SECURITY THROUGH 
                          SUSTAINABLE SPENDING

                              ----------                              


                         TUESDAY, JULY 20, 2010

                  House of Representatives,
     Subcommittee on National Security and Foreign 
                                           Affairs,
              Committee on Oversight and Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10 a.m. in 
room 2154, Rayburn House Office Building, Hon. John F. Tierney 
(chairman of the subcommittee) presiding.
    Present: Representatives Tierney, Maloney, Lynch, Welch, 
Foster, Driehaus, Quigley, Chu, Duncan, Jordan, Flake, and 
Luetkemeyer.
    Also present: Representatives Frank and Paul.
    Staff present: Andy Wright, staff director; Talia Dubovi, 
counsel; LaToya King, GAO detailee, Boris Maguire, clerk; 
Victoria Din and Alexandra Mahler-Haug, interns; Adam Fromm, 
minority chief clerk and Member liaison; Justin LoFranco, 
minority press assistant and clerk; and Christopher Bright, 
minority senior professional staff member.
    Mr. Tierney. Good morning. A quorum being present, the 
Subcommittee on National Security and Foreign Affairs, the 
hearing entitled, ``Rethinking our Defense Budget: Achieving 
National Security through Sustainable Spending,'' will come to 
order.
    I ask unanimous consent that only the chairman and ranking 
member of the subcommittee be allowed to make opening 
statements.
    Without objection, so ordered.
    I ask unanimous consent that Congressman Barney Frank and 
Congressman Ron Paul be allowed to participate in this hearing 
if they are able to attend. In accordance with committee rules, 
they will only be allowed to question the witnesses after all 
official members of the subcommittee have first had their turn.
    Without objection, so ordered.
    I ask unanimous consent that the hearing record be kept 
open for five business days so that all members of the 
subcommittee will be allowed to submit a written statement for 
the record.
    Again, without objection, so ordered.
    Once again, good morning, and we thank our witnesses for 
being here this morning to assist us.
    Today the subcommittee continues its oversight of spending 
of the Department of Defense. Specifically, we will examine 
recommendations from a number of defense experts for ways that 
we can reduce defense spending while ensuring that our national 
security interests are not compromised.
    Over the last two Congresses, this subcommittee has devoted 
significant time and resources to oversight of defense 
spending. We have examined the defense acquisitions process, 
and have worked to ensure that adequate planning and testing is 
completed by multi-billion-dollar weapons systems were 
purchased. We have investigated contracting in our overseas 
military operations and discovered widespread waste, lack of 
management, and blindness to broader security implications of 
these problems.
    We have looked closely at the Missile Defense Agency, 
military aid programs, and strategic planning for new 
technologies such as the unmanned aerial vehicles. We continue 
to try to get a clear picture from the department of the actual 
number of overseas military bases we have, as well as the 
strategic rationale for each location. Time and again we see 
opportunities for increased efficiency, less waste, and better 
use of taxpayer money.
    Just 2 weeks before President Obama was sworn into office 
in January 2009, the Congressional Budget Office announced that 
the fiscal year deficit was estimated at over $1 trillion. The 
inauguration occurred with an anticipated estimated long-range 
deficit of $11\1/2\ trillion. In February of this year, 
President Obama established the bipartisan National Commission 
on Fiscal Year Responsibility and Reform. This commission has 
been tasked with finding ways to improve the long-term fiscal 
outlook of the United States. It is critical that the 
commission scrutinize all aspects of our budget, including the 
defense budget, as it formulates its suggestions.
    I hope, in fact, that members of the commission will pay 
close attention to our discussion here today. In fact, I am 
scheduled to meet with the commission's co-chairs tomorrow 
afternoon, at which time I intend to urge them to do just that.
    Today we will consider options for realigning our national 
defense spending. We have with us a panel of experts from 
diverse political viewpoints who will speak about ways that 
they and others who worked with them on the related report 
believe we can cut the defense budget while maintaining our 
commitment to national security.
    Two of our witnesses are members of the Sustainable Defense 
Task Force, which has recently released a report with 
recommendations that, if implemented, would reduce the 
department budget by some $960 billion by the year 2020. 
Neither I nor the individual members of this subcommittee are 
bound to agree with each and every recommendation made by the 
report or in the testimony today, yet most of the Members 
would, I believe, welcome consideration of the topic and a 
number of the individual suggestions that are proffered.
    We look forward to the discussion of those recommendations, 
as well as any additional suggestions from our panel.
    To be absolutely clear, this discussion should not be 
dismissed, as it may be by some, as an attempt to weaken the 
Department of Defense or under-prioritize United States' 
national security. As this subcommittee's track record 
demonstrates, every member of this panel takes the security of 
our country very seriously. Waste is waste, regardless of the 
context, and inefficiencies only hurt our ability to respond 
effectively to crises and promote our national security 
interests. Sound national security in an austere budget 
environment requires strategic choices and rational resource 
allocation. Bigger is not always better, especially in matters 
of national defense.
    Budgets always involve hard choices, but in this case these 
choices can be made and make our Nation stronger. It is through 
that lens that we approach our conversation today. It is our 
duty on this subcommittee and in Congress as a whole to make 
certain that taxpayer money is spent responsibly.
    As President Obama has said, ``We have an obligation to 
future generations to address our long-term structural deficits 
which threaten to hobble our economy and leave our children and 
grandchildren with a mountain of debt.'' The critical 
importance of our national security does not in any way exempt 
the Defense Department from its obligations to spend money 
wisely and efficiently.
    [The prepared statement of Hon. John F. Tierney follows:]
    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT] 
    
    
    Mr. Tierney. With that, I would like to recognize Mr. Flake 
for his opening comments.
    Mr. Flake. I thank the chairman and thank the witnesses for 
coming in.
    As the chairman noted, every member of this panel takes the 
defense of our country seriously, but we also recognize that we 
have a huge problem in terms of debt, deficit, and savings 
cannot be simply gained in entitlement programs or other 
discretionary programs; it has to be gained here, as well.
    Since 2001, as was noted, nearly 65 percent of the increase 
in discretionary spending has come from defense, and we need to 
make sure that we are spending taxpayer money wisely. That is 
the purpose of this hearing, and I hope we are enlightened by 
what you have to say. Thank you for your preparation and thank 
you for coming.
    Mr. Tierney. Thank you, Mr. Flake.
    So the subcommittee will now receive testimony from the 
witness panel before us today. Before we start, I will 
introduce all of you, and then we will begin, going from my 
left to right.
    Mr. Carl Conetta is the co-director of the Commonwealth 
Institute's Project on Defense Alternatives [PDA]. Since co-
founding PDA in 1991, Mr. Conetta has authored and co-authored 
over 30 PDA reports and has published widely outside the 
Institute, including contributions to 10 edited volumes. Mr. 
Conetta also recently served as a member of the Sustainable 
Defense Task Force, and in this capacity contributed to the 
Task Force Report entitled, ``Debt, Deficits, and Defense: A 
Way Forward,'' which represents a series of recommendations to 
reduce the budget of the Department of Defense by $960 billion.
    Mr. Conetta has appeared extensively before Congress, the 
executive branch, and other governmental and non-governmental 
institutions, and has been interviewed by a range of major 
media outlets. He has also served as a consultant for the 
Council on Foreign Relations, the House Armed Services 
Committee, and the American Academy of Arts and Sciences. 
Before joining PDA, Mr. Conetta was a fellow at the Institute 
for Defense and Disarmament Studies, served as an editor of the 
South End Press, and taught for 2 years at the University of 
Connecticut.
    Mr. Benjamin Friedman is a research fellow in defense and 
homeland security studies at the Cato Institute. He also served 
recently with Mr. Conetta as a member of the Sustainable 
Defense Task Force and contributed to the report. Mr. 
Friedman's areas of expertise include counter-terrorism, 
homeland security, and defense politics, with a focus on threat 
perception. He is co-editor of a book on the U.S. military 
innovations since the cold war, and his work has appeared in 
Foreign Policy, the San Francisco Chronicle, the Baltimore Sun, 
thewashingtonpost.com, Defense News, and several other 
newspapers and journals. Mr. Friedman holds a B.A. from 
Dartmouth College, and is a Ph.D. candidate in political 
science and an affiliate of the security studies program at the 
Massachusetts Institute of Technology.
    Todd Harrison is a senior fellow for Defense Budget Studies 
at the Center for Strategic and Budgetary Assessments. He 
joined the Center in 2009 from Booz Allen Hamilton, where he 
supported clients across the Department of Defense, assessing 
challenges to modernization initiatives and evaluating the 
performance of acquisition programs. He previously worked in 
the aerospace industry, developing advanced space systems and 
technology, and served as a Captain in the U.S. Air Force 
Reserves.
    Since joining the Center, Mr. Harrison has authored a 
number of publications, including the ``Analysis of the Fiscal 
Year 2010 and Fiscal Year 2011 Defense Budget Request'' and the 
``Impact of the Wars in Iraq and Afghanistan on the U.S. 
Military's Plans, Programs, and Budgets.'' He holds a B.S. and 
an M.S. in aeronauts and astronautics from the Massachusetts 
Institute of Technology.
    Dr. Gary Schmitt is a resident scholar and director of the 
American Enterprise Institute's Program on Advanced Strategic 
Studies. His work focuses on long-term strategic issues that he 
believes affect America's security at home and its ability to 
lead abroad. Dr. Schmitt previously served as the staff 
director of the Senate Select Committee on Intelligence, and as 
the executive director of President Ronald Reagan's Foreign 
Intelligence Advisory Board.
    In addition, Dr. Schmitt has served as the executive 
director at the project for the New American Century, as a 
consultant to the Department of Defense, a fellow at the 
Brookings Institution, and as a member of the research faculty 
at the University of Virginia. Dr. Schmitt has co-authored and 
edited several books and has published widely for scholarly 
journals, volumes, and newspapers in the areas of national 
security, foreign policy, and the American Presidency. He holds 
a B.A. from the University of Dallas and earned his Ph.D. from 
the University of Chicago.
    Dr. Gordon Adams is a distinguished fellow at the Stimson 
Center and a professor of U.S. foreign policy at American 
University. Prior to that, he was the director of the Security 
Policy Studies Program at the Elliott School of International 
Affairs at George Washington University. He also previously 
served as the deputy director of the International Institute 
for Strategic Studies in London and as the Associate Director 
for National Security and International Affairs at the Office 
of Management and Budget as a senior White House budget 
official for national security.
    He has been an international affairs fellow at the Council 
on Foreign Relations and received the Department of Defense 
Medal for Distinguished Public Service. Dr. Adams has published 
books, monographs, and articles, and has testified numerous 
times before Congress on Defense spending and national security 
issues. He received his Ph.D. in political science from 
Columbia University and graduated magna cum laude from Stanford 
University.
    Again, I want to thank all of you for making yourselves 
available today and for sharing your substantial expertise.
    It is the policy of this committee to swear you in before 
you testify, so I ask you to please stand and raise your right 
hands.
    [Witnesses sworn.]
    Mr. Tierney. The record will please reflect that all of the 
witnesses answered in the affirmative.
    I remind all of you that your full written testimony will 
be submitted in the record and incorporated in it. We have 
allocated 5 minutes for each of you to give us an opening 
statement, synopsizing your comments, if you would. The red 
light is the one to let you know that your time is up. About a 
minute before then it will turn amber, giving you fair warning. 
For the first 4 minutes you get a green light going.
    We are happy to do that. We are anxious to get to the point 
where we can have an exchange, so we invite your testimony, 
starting with Mr. Conetta, please.

  STATEMENTS OF CARL CONETTA, CO-DIRECTOR, PROJECT ON DEFENSE 
    ALTERNATIVES; BENJAMIN FRIEDMAN, RESEARCH FELLOW, CATO 
 INSTITUTE; TODD HARRISON, SENIOR FELLOW, CENTER FOR STRATEGIC 
   AND BUDGETARY ASSESSMENTS; GARY SCHMITT, PH.D., RESIDENT 
  SCHOLAR AND DIRECTOR, ADVANCED STRATEGIC STUDIES, AMERICAN 
  ENTERPRISE INSTITUTE FOR PUBLIC POLICY RESEARCH; AND GORDON 
       ADAMS, PH.D., DISTINGUISHED FELLOW, STIMSON CENTER

                   STATEMENT OF CARL CONETTA

    Mr. Conetta. Chairman Tierney, Congressman Flake, members 
of the committee, thank you for the opportunity to appear here 
today before you to discuss how we might put our security 
posture on a sustainable basis.
    You have the report of the Sustainable Defense Task Force 
before you, I hope. I was one of the authors of that. We have 
recently prepared a short, one-page summary. You might also 
have that before you. There are a number of proposals outlined 
there. I am not going to examine them in detail. Maybe we will 
get into that during the question period. There is quite a bit 
there that is controversial. The proposals need your scrutiny, 
they need your criticism, and we can go into detail during the 
question period.
    What I would like to do is say something about the concerns 
and the criteria that we used in developing those proposals.
    We began our work with the recognition that today's 
financial crisis and great recession have altered the context 
in which all Federal policy must be assessed. For the 
formulation of security policy, there are now three relevant 
reference points: 11/9/1989, when the post-cold war era began; 
9/11, when we were awakened to its full dangers; and 2007, when 
the financial crisis commenced. The last of these affects our 
security prospects in two ways: first, by weakening already 
troubled states, diminishing their capacities, while also 
adding to the store of human desperation and social and 
economic dislocation worldwide. This is a favorable context for 
the spread of extremist organizations.
    Second, the crisis makes the future of our economic power 
and influence less certain. It weakens our foundation. 
Considering both the size and projected duration of our current 
national debt, we now carry a burden greater than at any time 
in living memory. Bringing it under control may require budget 
cuts of $300 billion a year, possibly even more. At the same 
time, interest payments on the debt will grow from 5 percent to 
15 percent of the budget over the next decade. This pincer 
movement will constrain our capacity to meet program needs, as 
well as to meet emerging ones.
    The challenge to the essentials of our national strength--
our economy, our infrastructure, most of all our people--is 
real. As we now turn to adjust priorities and get our financial 
house in order, what we need to keep foremost in our minds are 
those essentials. They are the foundation on which our national 
security establishment is built.
    Looking back over the past 12 or so years, we can now say 
that our allocation of resources was premised in part on 
irrational exuberance, about available wealth, and about 
available credit. This left us less attentive to the cost/
benefit balance when making investments.
    In every endeavor, in every area of policy, there is a 
point of diminishing return. Beyond this, the benefit of 
investment declines and it becomes less assured. So how far do 
we push beyond that point, that point of diminishing return? 
That depends partly on how much wealth and credit we believe is 
at our disposal. It is that part of the equation that we got 
seriously wrong over the past 10 or 12 years, and it distorted 
our choices.
    A proper appreciation of scarcity would have led us to 
different choices. Since 1998, U.S. defense spending has risen 
by about 96 percent in real terms. This has no precedent in all 
the years since the Korean War. The post-1998 defense boom is 
nearly as great as those enacted by Presidents Kennedy, 
Johnson, and Reagan combined, and only about half of the recent 
increase is due to our recent wars and contingency operations.
    Whether one looks at the total DOD budget or just that 
portion not attributable to today's wars, U.S. defense spending 
is now stabilizing at levels significantly above the cold war 
peaks. Clearly, what has not occasioned this surge is a neck-
and-neck race with a pure competitor. There is none. But what 
we have seen over the past 10 or 12 years--somewhat more, 
actually--is a substantial expansion in the goals, roles, and 
missions assigned to our armed forces.
    Beginning at the end of the cold war, we pushed our armed 
forces to prepare for and conduct more types of missions and 
activities faster and more frequently across a broader expanse 
of the earth than ever before, and we set out goals that 
reached well beyond the traditional ones of simple defense and 
deterrence. We added various forms of preventative action; not 
only preventative war and regime change, but also greater 
reliance on our military to shape the strategic environment and 
transform entire nations.
    In this light, it is not surprising that we have moved from 
spending only two-thirds as much as our adversaries during the 
cold war to spending more than twice as much today, and that 
discounts our war spending. Had President Reagan sought an 
advantage this great, he would have had to triple his budgets.
    The spending balance reflects the fact that we enjoy 
abundant overmatch in the conventional realm. And one criteria 
that we employed in the report in coming up with our 
recommendations was to trade down some of this over-match.
    Another step we took was to roll back some of the soft uses 
of our military power, so-called environment-shaping functions, 
where costs are high and payoff is indeterminate. What we 
focused on were the surge requirements for war in dealing with 
the conventional realm.
    A different picture emerges when we survey our recent 
experience in large-scale counter-insurgency wars, Iraq, and 
Afghanistan. Rather than over-match, what we see is mis-match. 
The task force exempted war spending from its cut options. We 
didn't examine the money that is spend on war; we cordoned that 
off. And we pegged those spending cuts that we did propose, 
while some would directly affect the wars, those that would, we 
pegged to the wars winding down.
    An example would be reductions in ground forces. Likewise, 
we cordoned off capabilities directly relevant the counter-
terrorism, such as special operations forces and intelligence, 
although the latter, given recent news, may deserve a second 
look.
    This doesn't imply that we support the wars in Iraq and 
Afghanistan or we oppose them. That wasn't our intention. We 
wanted to look at the long-term budget. However, some of our 
options do assume that in the long term we are not likely to 
repeat those experiences again.
    The fabulous cost, the slow progress, and the uncertain 
outcome of recent efforts at regime change, armed nation 
building, and large-scale counter-insurgency make them a poor 
strategic choice. There are two parts to that conclusion: one, 
that it is a choice that we have made, and, two, that it is a 
bad one.
    Those are some of the concerns, some of the criteria we 
brought to bear in developing the options. We can discuss 
others later.
    I think really the most fundamental point we want to make 
is that we need to look at this budget with new eyes, and our 
principal concern cannot be about guns versus butter; our 
principal concern has to be refurbishing and preserving 
national strength. That has to be the criteria that we bring to 
bear in all of our decisions from this point forward.
    Thank you very much.
    [The prepared statement of Mr. Conetta follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Mr. Tierney. Thank you, Mr. Conetta.
    Mr. Friedman, if you would.

                 STATEMENT OF BENJAMIN FRIEDMAN

    Mr. Friedman. I also want to thank the chairman and the 
ranking member and the members of the committee for the 
opportunity to testify. I am especially pleased to be here with 
this distinguished panel, most of whom have been in this 
business since I was a kid or younger.
    I want to make two main points today. First, substantially 
reducing military spending requires reducing the ambitions it 
serves. Second, a more restrained defense strategy would not 
only allow cost savings; it would actually improve our 
security.
    I am agnostic as to whether our current defense budget is 
sustainable. I think many foolish things are sustainable, at 
least for a while. What I do believe is that it would be unwise 
to spend anything like the $549 billion that the administration 
requested in the base budget, a non-war budget, for fiscal year 
2011.
    I think there is no good reason we should now spend more on 
the non-war defense budget in real terms than we did in any 
year during the cold war. So I advocate a more modest defense 
strategy, one that I call restraint, because it starts with the 
assumption that power tempts us to take part in foreign 
troubles that we could and should avoid. Restraint means 
resisting that temptation. It would husband American power 
rather than dissipate it in pursuit of ideological and 
unreachable goals.
    Restraint does not require cuts in military force structure 
and spending; it allows a less busy military could be a smaller 
and cheaper one.
    Now, an alternative approach to saving on defense is to 
pursue the same ends more efficiently. Efforts to streamline 
the Pentagon's operations through acquisition reform, 
eliminating waste and duplication, or improving financial 
management might save some money, but these reforms have 
historically delivered few savings, probably because what seems 
inefficient from a business standpoint, whether it is 
maintaining essentially two Air Forces, keeping twice as many 
shipyards open as we need, or building gold-plated weapons 
systems is actually efficient in producing political goods, 
whether it is the service's preferences for weapons or jobs. 
So, rather than efficiency driving savings, I think spending 
cuts ought to drive efficiency.
    Market competition encourages private organizations to 
streamline their operations, and, while no such pressure exists 
in government, by cutting the top line and forcing the services 
to compete for their budgets I think we can incentivize them to 
find some efficiencies themselves.
    That said, I think it would be a mistake to take up the 
force structure reductions recommended in my written testimony 
without their strategic rationale. I think that would badly 
overburden the force, which would be unfair, without improving 
security.
    So, as I suggested, the real driver of excessive defense 
spending is lack of prioritization, which is the essence of 
strategy. We spend too much because we choose too little. 
Unbalanced power and massive budgets have limited the need to 
choose among priorities. We confuse the necessary with the 
desirable, our sympathies with the requirements of our safety. 
The truth is that the United States doesn't really have a 
defense budget. I think that adjective is wrong. I think our 
military force's size and composition now lack a meaningful 
relationship to the requirements of protecting Americans.
    For example, our security no longer requires that we defend 
the European Union, which has a collective economy larger than 
our own, from Russia or its own dissolution. I think peace 
among European states is deep-seated. Russia, which now spends 
less on its aging military than we spend on researching and 
developing new weapons, alone, is not about to reclaim its 
Soviet empire, let alone threaten western Europe.
    South Korea, likewise, long ago grew wealthy enough and 
then some to defend itself against the north. And neither do we 
need to defend Japan from China. I think history suggests that 
the likely result of withdrawing U.S. forces and commitments 
from Japan will be slightly higher defense spending in Japan 
and a stable balance of power in China, in large parts because 
they are separated by a decent-sized body of water. Those 
states don't have much to fight over today.
    I also think there is little basis for the claim that you 
often hear that global trade depends on U.S. military 
deployments overseas. I think that theory is a little bit too 
esoteric to discuss briefly here, but I will say that the 
historical and theoretical case for it is thin. I think it 
exaggerates the fragility of global markets and trade and the 
economic impact that supply disruption in a particular region 
would cause here in the United States.
    Nor is it wise, I think, to spend heavily on defense today 
to hedge against the rise of possible future challenges like 
China. The smaller military that I recommend would maintain a 
vast superiority over China and all other states for the 
foreseeable future, particularly at sea and in the air, but the 
best offense against an uncertain future is a prosperous 
economy unburdened by excessive spending and debt, which can 
finance a buildup of military capability if need be.
    I will also say that counter-terrorism does not require 
great military spending. The military assets best suited to 
that are relatively cheap niche capabilities, UAVs, 
intelligence collectors, and special operations forces. The 
theory that we can only be safe by jihadists by occupying and 
ordering the states where they operate has been tested and 
proved prohibitively costly in blood and treasure. We have been 
reminded there that we lack the power to organize the politics 
of unruly foreign states, and evidence suggests, I think, that 
trying to do so makes us more likely to be a target of 
terrorism than prevent it. And so state building and 
occupations, I think, are a business that we should avoid once 
the current wars end, and that ought to drive down the size 
required of our ground forces.
    So, to conclude, defining security so broadly is actually 
counter-productive. Our military posture and activism globally 
drag us into other's conflicts, provoke animosity, and prompt 
states to balance our power by arming, driving proliferation.
    By capitalizing on our geopolitical fortune, we can safely 
spend far less. By avoiding the occupation of failing states 
and shedding commitments to defend healthy ones, we can plan 
for fewer wards. By shedding missions we can cut force 
structure, reducing the number of U.S. military personnel and 
the weapons and vehicles we procure for them, particularly in 
the ground forces, and reduce operational costs.
    My written testimony specifies the cuts I recommend to that 
end, and with that I will conclude and look forward to your 
questions.
    [The prepared statement of Mr. Friedman follows:]
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    Mr. Tierney. Thank you very much.
    Mr. Harrison.

                   STATEMENT OF TODD HARRISON

    Mr. Harrison. I would like to thank the subcommittee for 
the opportunity to share with you some of my thoughts on 
rethinking the defense budget.
    I have organized my remarks into five potential areas of 
savings which address many of the options that are presented in 
the report of the Sustainable Defense Task Force.
    The first two areas, achieving greater efficiencies and 
refocusing on the core business of defense, are changes that do 
not affect the size, composition, or capabilities of the 
military, and the savings in these areas are quite modest.
    Three other areas of savings--reforming the military 
personnel system, reforming the acquisition system, and 
altering the force structure--have the potential to yield much 
greater savings, but they involve more substantive changes in 
the missions and capabilities supported by DOD.
    The first area is achieving greater efficiencies. The 
Pentagon has again renewed its efforts to reduce waste and 
achieve greater efficiencies, with Secretary Gates' speech last 
May directing the services to take an unsparing look at how 
they operate. Undersecretary Carter has followed up with some 
specific proposals. Many of these proposals are things that 
have been tried in the past with various degrees of success. 
And, while working to achieve greater efficiencies should 
always be a goal of the department, efficiencies alone are not 
likely to result in the magnitude of savings needed over the 
coming decade. As Undersecretary Hale noted in a 2002 report on 
promoting efficiency in DOD, keep trying but be realistic.
    The second area of savings is refocusing on the core 
business of defense. Many programs and activities that are 
funded within the Defense budget stray far from DOD's core 
mission: to deter war and to protect the security of our 
country. The task force recommends combining the military 
exchanges and commissaries to achieve savings. I will go one 
step further and ask why should DOD be operating a chain of 
retail stores at all? The exchanges and commissaries are an 
artifact of a bygone era and could be closed or sold to a 
private operator.
    Another activity outside the core business of defense that 
the task force did not address is the DOD-funded and-operated 
primary and secondary school system within the United States. I 
should note the that I am only talking about DOD's schools 
within the United States, not the schools that DOD operates in 
foreign countries around the world where military families 
would likely not have access to an American style school 
otherwise.
    In the United States, though, education has primarily been 
the responsibility of the States. DOD notes in its annual 
report on these schools that the U.S. schools date back to the 
time of a frontier Army post when, ``adequate public education 
was not available in the local area.'' This is no longer the 
case in the seven States where these schools are located, and 
since K-12 education is not core to the business of defense, 
DOD should transfer these schools, either to the States in 
which they reside or to the Department of Education. The 
resulting savings in the defense budget could total some $750 
million annually.
    The third area of savings I would like to address is 
reforming the military personnel system. DOD is the single 
largest employer in the United States. It accounts for 51 
percent of Federal workers and employs more people than Wal-
Mart and the Post Office combined. Therefore, any changes to 
military pay and benefits have a profound and lasting effect on 
the Federal budget.
    Since fiscal year 2000, total military personnel and health 
care costs per active duty troop has risen 73 percent in real 
terms. What is most concerning is that the cost structure 
within the military compensation system has grown out of 
balance. For the Department of Defense, 52 percent of total 
compensation goes to non-cash and deferred benefits, compared 
to an average of 29 percent in the private sector. And, just as 
some private companies have been struggling to remain 
competitive under the heavy burden of excessive labor costs, 
so, too, will the Department of Defense struggle in the years 
ahead to maintain its force structure if labor costs are not 
brought back into balance.
    The task force makes several good proposals in this area, 
calling for changes to the way pay raises are calculated, and 
raising the enrollment fees military retirees pay for TriCare.
    What the task force doesn't address are problems with the 
military retirement system. DOD currently uses a cliff vesting 
retirement system, where benefits only become effective after 
20 years of service. This system creates distorted incentives, 
because it encourages personnel nearing the 20-year mark to 
stay on duty, even if only for the purposes of attaining the 
benefit, and after 20 years, when personnel are often in their 
early 40's, the incentive sharply reverses, encouraging 
personnel to retire early, since they can continue making 50 
percent or more of their military pay while simultaneously 
drawing full pay at a civilian job.
    For ways to reform the military retirement system, I would 
draw your attention to the 10th quadrennial review of military 
compensation. One of the most attractive options this report 
proposes is to transition from the current defined benefit plan 
to a defined contribution plan, more like a 401(K), just as 
many businesses and State governments have done.
    The fourth area of savings is reforming the acquisition 
system. I would divide acquisition reform into two areas: 
reforming what DOD buys and reforming how DOD buys. Eleven of 
the nineteen options in the task force's report fall into the 
category of reforming what DOD buys. It is true that cutting 
acquisition programs can yield some of the greatest savings, 
but such decisions should not be based on budget 
considerations, alone. They should consider which missions and 
capabilities DOD no longer needs to support and what the effect 
will be on the industrial base.
    The task force does not address the issue of reforming how 
DOD buys things; that is, the acquisition process, itself.
    I would draw your attention to one issue, in particular, 
and that is too many requirements being piled onto weapons 
systems. Many different organizations within the department 
have a role in the requirements process, ranging from the Joint 
Requirements Oversight Council, the JROC, to the various 
organizations within OSD that review and approve programs as 
they pass through acquisition milestones. Yet, few of the 
organizations that have the power to add, modify, or otherwise 
influence requirements also have the responsibility to fund 
progress. Creating a better organizational alignment between 
those who set requirements and those who budget for programs 
would reduce the incentive to add the kinds of exquisite 
requirements that drive-up costs and stretch out schedules.
    The fifth and final area of savings I would like to address 
is altering the force structure. The task force recommends 
several changes to the force structure, including reducing U.S. 
troops in Asia and Europe by one-third and rolling back the 
size of the Army and the Marine Corps to pre-2007 levels. If 
the primary intent of these measures is simply to reduce 
personnel costs, the department would be better served in the 
long run by first tackling the underlying labor cost structure 
and only then adjusting the size of the force as necessary. 
Again, such decisions should not be based on budgetary factors, 
alone. They should be informed by a realistic assessment of 
future threat environment and a determination of where the 
department is willing to take risk, a strategic approach.
    In conclusion, I would like to note that, while a declining 
defense budget would force the Department to make many 
difficult decisions, it also presents an opportunity. It is an 
opportunity to transform the military into a more efficient and 
effective force.
    Ironically, the rapid rise of the base defense budget over 
the past decade may have prevented the department from 
transforming because it allowed the services to continue 
funding existing programs and not fully commit to 
transformation, but the era of constrained resources that is 
now upon us may finally force the services to make the 
difficult choices that are necessary to create a more efficient 
and effective military.
    Thank you.
    [The prepared statement of Mr. Harrison follows:]
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    Mr. Tierney. Thank you very much.
    Dr. Schmitt.

                   STATEMENT OF GARY SCHMITT

    Dr. Schmitt. Mr. Chairman, Mr. Flake, thank you for the 
opportunity to testify today. I notice that there are five of 
us up here on the panel, and if this was a hand I suspect I am 
going to be the sore thumb.
    Mr. Tierney. It could have been otherwise.
    Dr. Schmitt. I think the hammer is about ready to hit me.
    Let me begin with the obvious: we do spend a lot on 
defense. The task force report is absolutely right when it says 
that nearly 65 percent of the increase in Federal discretionary 
spending since 2001 has come from increase in the Pentagon's 
budget, but I would say this is a bit misleading. First, we are 
at war, after all. And even in that, as a percentage of the 
GDP, these wars have been waged more cheaply than similar wars 
such as Korea or Vietnam.
    Second, from 2001 to 2010, the baseline defense budget grew 
by $228 billion. This amounts to an annual real rate of growth 
of just 4 percent. Growth, to be sure, but not the gusher 
Secretary Gates spoke of in May at the Eisenhower Library. And 
certainly the $228 billion pales in comparison with the nearly 
$800 billion spent to stimulate, supposedly, the economy.
    The report begins with a quote from my good friend, Kori 
Schake, a former Bush national security official and a McCain 
campaign advisor, ``Conservatives need to understand that 
military power is fundamentally premised on the solvency of the 
American Government and vibrancy of the U.S. economy.'' I 
certainly don't disagree. But as she, herself, states in a 
recent article in a recent Post, ``Advocates of a strong 
national defense ought to be thinking seriously about 
entitlement reform; that is, Social Security, Medicaid, and 
Medicare.'' Referencing Congressman Ryan's Roadmap for America, 
she goes on to say that the real threat to adequate defense 
spending is the explosion in domestic programs. ``Defense 
spending isn't addressed in the Road Map because it is not 
material to the overall debt picture.''
    From this perspective, the real problem is not defense 
spending, but the fact that some 56 percent of Federal outlays 
are tied to mandatory spending accounts, and will, if current 
budget estimates hold true, expand at an even greater rate. 
Defense, meanwhile, accounts for 18 percent of those outlays 
and will shrink to just 15 percent in the near years.
    Now, the task force report, Debts, Deficit, and Defense, is 
right to think that if a trillion dollars could be cut from 
defense it wouldn't make a difference. I agree. However, let's 
remember that $300 billion has already been cut from defense in 
the past 2 years, and to follow the report's recommendations 
requires, in my opinion, taking some rather risky steps.
    However, rather than go through the report's specific list 
of recommendations, which I would be happy to talk about in 
more detail in the question and answer session, let me make the 
broad point that the force structure they outline is one that 
runs against the basic force structure that has been agreed 
upon by three successive administrations, two Democrat and one 
Republican. It seems to me that we ought to think twice before 
jettisoning a force structure that by any standard has 
performed remarkably well, has done so at a very high tempo, 
and has enjoyed bipartisan post-cold war support for more than 
a decade and a half.
    Now, having said that, there is no question that savings 
can be had when it comes to defense. Todd here I think has laid 
out a number of useful proposals. Health and personnel costs 
have skyrocketed over the past decade and, while benefits for 
those in an all-volunteer force must remain high, there is no 
question that there are elements in the Pentagon's budget that 
need closer scrutiny.
    However, the real problem--and I realize just how difficult 
an argument it is to make these days--is that we spend too 
little on Defense. The key point here is that the procurement 
holiday that marked much of the 1990's was a hole the Bush 
administration never dug the Pentagon out of. Now the Obama 
administration wants to hold defense spending flat or less in 
the coming years, which, when combined with the rising 
personnel costs and rising operations and maintenance costs, 
has resulted in a significant shortage in resources, perhaps, 
according to the Congressional Budget Office, on the order of 
$30 billion to $40 billion a year, needed to recapitalize our 
armed forces.
    All of which brings me to my final point: the danger today 
is that with the chronic under-funding of our core defense 
capabilities, we will slip into a posture of strategic 
retrenchment through inadvertence. In this respect, one of the 
virtues of the report is that it does not hide the strategic 
implications of its cuts, raising at the end a very different 
vision for American grand strategy from what has been.
    By my lights, it is a path I would prefer we not take. I do 
not think we should let go of a strategy that has, among other 
things, successfully prevented destructive wars between the 
great powers, and helped shape an international order which, 
for all its problems, remains relatively stable. No doubt it 
has cost the American taxpayer a lot to maintain, but the 
benefits we have gotten in return in terms of general peace, 
expansion of democratic rule around the globe, and our own 
prosperity I believe are benefits that are far greater.
    Thank you.
    [The prepared statement of Dr. Schmitt follows:]
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    Mr. Tierney. Thank you, Dr. Schmitt.
    Dr. Adams.

                   STATEMENT OF GORDON ADAMS

    Dr. Adams. Thank you very much, Chairman Tierney, 
Congressman Flake. I appreciate the opportunity to testify 
here. One of the advantages, of course, of coming last is that 
everybody has already said the things I was going to say, but, 
of course, not everybody has said them, so I will try to be 
brief.
    I want to make three very simple points and introduce my 
testimony for the record, as you indicated, Mr. Chairman.
    Simple point No. 1 is the Defense Department is now facing 
a planning crisis that it has not yet fully anticipated and is 
not yet ready to cope with what is going to hit it. All 
budgets, in fact all planning in the Federal Government, is 
resource constrained, so we cannot sit here and say we totally 
want the force that we want to have and we want it to do what 
we want it to do independent of resources. It has always been 
resource-constrained and this week, of course, Congress is 
beginning the process of marking up appropriations for fiscal 
year 2011, which is going to constrain, among other things, 
defense from the administration's request.
    But even that constraint doesn't begin to cope with the 
tidal waves that are hitting the Department of Defense over the 
next 2 or 3 years and over the next decade, which all of you in 
Congress are going to have to deal with.
    The tidal waves take two forms. Tidal wave No. 1, which has 
been amply discussed here, is the tidal wave of deficits and 
debt. At historically high shares of gross domestic product 
and, frankly, with forecasts for debt and those deficits that 
are still quite optimistic compared to what we may encounter as 
Congress works through the fiscal agenda over the next few 
years.
    Second tidal wave hitting defense is that we are, in fact, 
at some point not too distant future pulling back from Iraq, 
pulling back from Afghanistan, which means that the public 
willingness to tolerate extremely high and unprecedented high 
levels of defense spending is going to weaken and go away. That 
is the natural course of things.
    Now, we have been to this movie before. We were at this 
movie from 1985 to 1998. From 1985, when deficit reduction 
began, through 1998, overall national defense outlays fell 20 
percent in constant dollars. DOD budgets fell 36 percent in 
constant dollars over that period of time.
    What caused that change? Step one, a major attention of 
Congress and the White House to deficits and debt reduction. 
Step No. 2, the end of the cold war, where the major strategic 
planning scenario that undergirded our defense budget 
disappeared.
    Combining those two things, starting with the first Bush 
administration, those things went down, the force structure 
shrank by a third, 50 percent cut in constant dollars in 
procurement budgets, and lots of program kills, most of them 
begun under the Bush administration. But that is what happens 
as the cycle of defense changes and as the politics of the 
globe change.
    So we are heading for another one of those periods in our 
history, and you in Congress are going to have to cope with it. 
The department is not yet there.
    Second point I want to make is the tried and true way of 
achieving savings, some of which have been mentioned in 
testimony so far, are inadequate to cope with this decline. In 
fact, we have created pressures for upward growth in defense 
budgets over the last decade, and strength has grown, not 
shrunk, and strength determines a lot of where the budget is 
going. Personnel costs have been growing faster than personnel 
costs in the economy as a whole. The retirement costs for the 
Department of Defense personnel have grown. Health care has 
grown at a faster rate than Medicare costs have grown.
    Overhead has grown, meaning the tail is now becoming larger 
than the tooth. Operations and maintenance costs grow 
inexorably at 2\1/2\ percent per year, and that seems to not 
change regardless of party, administration, or era. And 
acquisition reform, much-touted acquisition reform, currently 
is really, frankly, a recycling of ideas we have dealt with 
before. Acquisition reform keeps proving to be a mirage, and it 
is a mirage, frankly, because in the acquisition system the 
incentives are wrong.
    It is not just a question of requirements. If services have 
to buy in to get systems at an affordable budget, they will buy 
in at a cheaper cost than they project the system to cost. If 
contractors have to buy in in order to win a contract, they 
will buy in at a cheaper cost than the system turns out to 
cost. So the incentive structure makes acquisition reform an 
uphill battle.
    The third point I want to make, I think that Secretary 
Gates, who is trying to protect 1 percent real growth in 
defense budgets, is actually fighting a losing battle, and the 
key to now constraining defense is going to be in mission 
discipline. Sadly, the Quadrennial Defense Review did not 
execute mission discipline. It simply layered missions on top 
of each other without setting priorities and without 
calculating the risks of the various missions and the risks 
that we, as a Nation, are prepared to tolerate.
    I can associate myself with many of the comments that have 
been made about mission, but I think we are at a point in 
American history where a serious baseline discussion of 
strategy and mission is an essential part of how we approach 
defense planning and defense forces.
    The bottom line here has to do with looking seriously at 
counter-terror missions and whether they should have been 
fenced; looking at the counter-insurgency stabilization and 
nation-building missions, we don't draw the wrong lessons from 
Iraq and Afghanistan; looking carefully at how many nations in 
the world we want to build partner capacity in; ensuring that 
we maintain deterrence, alliance, support in conventional war 
in what is one of the safest periods in our national security 
history; and, finally, in looking seriously at re-balancing the 
tool kit so we, in fact, do more strategic planning with 
civilian agencies, we make governance stabilization and 
reconstruction, civilian not military missions, and reinforce 
our diplomacy.
    Last point, I would urge the Congress to give serious 
consideration to unifying the budget functions for defense and 
foreign policy so we can make those kinds of tradeoffs.
    So, in sum, defense budgets are resource constrained. The 
current tools for dealing with those resource constraints are 
inadequate. And, indeed, as was said earlier on this panel, I 
think it was Mr. Friedman who said it, spending cuts will drive 
efficiencies. We have seen that before. I predict we will see 
it again.
    Thank you very much.
    [The prepared statement of Dr. Adams follows:]
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    Mr. Tierney. Well thank you very much, Dr. Adams, and thank 
all of you for your testimony, written and verbal here today.
    We are going to go to our question period here, 5 minutes 
per member, and I am going to start, but I think it is a great 
jumping off point from Dr. Adams' comments, which were 
reflected in some of the other testimony here. I don't know 
that we really have a budget in the Department of Defense. It 
seems to me we just spend whatever we think we want to spend.
    I think the last comment about piling on mission on top of 
mission just seems to be going, and if we have a weakness in 
our civilian capacities, then we ask the military to take that 
on. That is not to say they are not good at it, they are not 
willing to do it, or they are not well intentioned, but it 
sometimes seems out of line for what they really are proposed 
to do and designed to do on that.
    So let me ask this generally: if we were to concentrate 
just on making the military that we have more efficient, 
getting rid of some waste, fraud, and abuse, are we all pretty 
much in agreement that would be a far less significant savings 
than if we really took a look at the mission and took a look at 
just how we structure it, what are the purposes of the mission 
of the Department of Defense? Do we have any disagreement on 
that? Dr. Schmitt, do you disagree with that?
    Dr. Schmitt. No, absolutely not. I mean, I think the best 
you can expect out of efficiency of any government organization 
is probably 5 percent, and that is even hard to do.
    Mr. Tierney. That is a big number. I mean, if we can get 5 
percent we would be pretty happy.
    Dr. Schmitt. Well, that is the golden apple. I wouldn't 
count on it, either.
    Mr. Tierney. We are trying. We have a lot of hearings and 
design on that.
    The other part is I would suspect that we have to worry 
about efficiencies and a budget within the Department of 
Defense, but as policymakers we ought to also look at what the 
Department of Defense budget is within our overall budget on 
that basis and take a look at it. I think a number of you have 
testified that you think that there is a situation here where 
what is spent in the military is material to the overall debt 
picture, except, Dr. Schmitt, you quoted somebody in your 
testimony saying that they didn't think that the defense 
spending was material at all to the overall debt picture. Is 
that a position you endorse?
    Dr. Schmitt. No, not technically. I mean, look, it 
obviously would help to cut defense spending, but I also think 
that the cost for the kinds of cuts that have been proposed by 
the task force will raise larger questions about the ultimate 
cost to the country. So on the whole I would say the real 
problem fiscally, yes, defense cuts would help fiscally, but 
not substantially, and the real issue is the entitlement 
programs.
    Dr. Adams. Mr. Chairman, could I comment briefly?
    Mr. Tierney. Yes, I would like someone to comment on that.
    Dr. Adams. Defense has obviously played a role. The largest 
single source of spending growth over the past decade in the 
Federal Government has obviously been on the mandatory side. On 
the discretionary side, the defense budget has absorbed 
something like two-thirds of the overall increase in 
discretionary spending. That has been driven in large part by 
war costs, the costs of Iraq and Afghanistan. So there is no 
question that it has contributed to our deficit.
    Interestingly, national defense has an over 19 percent 
share of all fiscal year 2010 Federal spending, which is the 
same as Social Security, and it is 3 percent higher than of all 
means tested entitlement programs combined. Now, that excludes 
Social Security because that is not means tested, but if you 
look at mean tested programs, defense is obviously--there is a 
kind of a third to third to third piece here in terms of 
overall spending.
    Clearly, from the spending side of the equation, what 
Congress faces and what I think anybody seriously addressing 
deficit reduction or debt control faces is how do you put all 
the pieces on the table at the same time.
    Since 1985 to 1998, the period I mentioned earlier, what 
clearly made deficit reduction possible, because people 
disagree on where the cuts ought to come, was when that deficit 
exercise, starting with Gramm-Rudman-Hollings in 1985, put all 
pieces of first discretionary spending on the table and then, 
with the Budget Enforcement Act of 1990, put discretionary, 
mandatory, and revenues on the table with both caps and pay-go.
    Those two things in the 1990's combined with a healthy 
economy, which we don't have right now, were enough to drive us 
into surplus by the end of the decade. If we even made some 
progress of that kind, it would be a good thing for the 
economy. The problem that we have is that you can't get 
agreement, I believe, here in Congress unless all those pieces 
are on the table, and that is going to inevitably involve the 
administration, as well.
    So if you want to do it, you have to do it with everything 
on the table.
    Mr. Tierney. And I think that is indicative of this day, I 
don't think there are a lot of competing hearings out there 
necessarily, but I am struck by the lack of attention to this 
particular subject. It is as if people don't want to deal with 
it or don't want to go there on that.
    Mr. Conetta, do you see some value in our national Social 
Security and whether or not our seniors are secure in their 
retirement, whether or not people have health care, whether or 
not they have an opportunity for education, and whether or not 
we, in fact, have job training and research and development, 
things like that? How does that play into our national security 
structure?
    Mr. Conetta. There has been a lot of interesting work done, 
analyses of our operations in war, of our success in war. 
Stephen Biddle, an analyst with the Council on Foreign 
Relations, has produced a number of reports looking at why we 
won so well, for instance, in the first Persian Gulf War.
    Often, the assumption is that we win because of our 
technology, and what he demonstrates, I think pretty 
convincingly, is that it is not that. We win because of a 
combination of our technology, our training, our people, our 
capacity to work as a team.
    The point I am getting at here is that I think people are 
the most important part of our armed forces. We have a 
volunteer military, and we are able to fill it with quality 
people. Why is that possible for us and not as possible for 
other nations? I think part of the answer is that we, as a 
Nation, pay attention to the health, the education, and the 
welfare of our people, so certainly that is a contributor, a 
factor in our ability to put together the military we do.
    I think that is the type of thinking we need to approach 
this. We need to approach it from that perspective. We need a 
holistic approach, and to understand that many of the benefits 
are indirect but they are real.
    Mr. Tierney. Thank you very much.
    Mr. Flake.
    Mr. Flake. Thank you. Thank you all. That was very, very 
enlightening.
    Mr. Harrison, you mentioned that one of the problems we 
have in cost is requirements keep getting piled on to weapons 
systems. Can you explain a little further on that? How does 
that raise cost, and what can we do to remedy that?
    Mr. Harrison. Well, what happens on acquisition programs is 
one of the services gets together and says we need some new 
weapons system to fill a capability gap, and then it goes up 
for review. The other services get their chance, their hack at 
it. The combat commanders get to look at it. The more people 
look at it, the more people touch it, they start adding more 
and more requirements to it. Even once the system begins 
development, people will look at it again and say, oh, well, 
now that I understand it better I would like it to do X or Y or 
Z, and you end up with a program that just keeps growing and 
growing and growing.
    Every requirement you add adds cost. And even once you have 
added a requirement, if you try to take that requirement out it 
may also add cost. So the discipline in acquisition system is 
important, that people have to be willing to say, OK, here's 
the weapons system we are going to build, here are the 
capabilities that it really needs to have, and we are going to 
take our hands off of it and let industry built it under the 
contract that we have given them, and then we will take 
delivery of it.
    But too often we have these program offices that stay in 
the loop, and all these other different bodies that review 
requirements at every acquisition milestone, and it just keeps 
opening up the door every time for people to add more to it, 
and the costs just start to grow.
    Mr. Flake. Thank you.
    Mr. Friedman, you seem not very confident that we can 
decrease defense spending by realigning the mission or 
reevaluating our objectives, but rather we should impose 
spending cuts and then let that define the mission. Is that 
accurate, or----
    Mr. Friedman. I am confident that having less ambitious 
missions would cut spending. I am not confident that efficiency 
gains would reap a lot of savings.
    My view is that there are a lot of efficiency gains to be 
had; the problem is that there is no free lunch politically. I 
mean, the requirements process, these weapons get a lot of 
requirements because the services have various constituencies 
that want things from them. A destroyer does a lot of things, 
and there are a lot of people in the Navy who want something 
from a destroyer, and it is hard to deal with that. Similarly, 
the commissaries, everybody knows that you can save a lot of 
money on the commissaries, but the people going to the 
commissaries really like the discounts that they are getting at 
the commissaries. It is basically a benefit.
    So I don't disagree that you can't save money on that; I 
disagree that you can save money on that without political 
pain.
    Shipyards are another big one. I mean, we have too many 
shipyards. You close some shipyards, you can cut overhead costs 
on procurement of ships, but nobody wants to close a shipyard 
because those are big employers.
    So my point is just that it is very hard to do.
    Mr. Flake. I am from Arizona. We can close a lot of 
shipyards with no problem at all.
    Mr. Conetta.
    Mr. Conetta. The reform impulse during the 1990's was 
fairly strong, at least on the political end, but it isn't how 
we achieved savings during that period. The principal savings 
were achieved first by reductions in structure because of the 
end of the cold war, and then, because we were able to cascade 
so much of the equipment that had been modernized during the 
Reagan era into the Clinton era, so we in a sense got a free 
ride.
    The idea of or the impetus for increased efficiencies 
during that period was to answer the question: how do we now 
increase modernization spending again without losing the peace 
dividend? How are we going to be able to do that? And so the 
answer was we are going to find all these efficiencies in a 
wide variety of ways. Many of them never really went forward. 
They were going against a resistant medium. Some of them did, 
and the most successful was the BRAC process, which, 
incidentally, took a lot of the decisionmaking power out of the 
Pentagon and out of the political process, and that helped a 
great deal. But even there the net savings probably didn't 
amount in the end to more than 3 or 4 percent of the total 
budget.
    Part of the problem here, as others have pointed out, is 
that there is a resistant median, and what one really needs, I 
think, is to be able to approach the topic from the perspective 
that these cuts must occur, that the cuts are our premise, and 
from that point forward you have to find out how to apply them.
    That wasn't the case then, and eventually what happened was 
we had to rebound the budget in order to feed modernization, 
but it needs to be our premise in the future.
    Mr. Flake. Thank you.
    One more question. Dr. Schmitt, you mentioned that there 
are areas of savings that we can find, I think you said in 
personnel and what not, from the report that has been issued. 
What other areas, other than personnel cost, overhead, 
retirement, in terms of acquisition or wherever, where do you 
see savings that can be had?
    Dr. Schmitt. I think it is a real difficulty when they are 
in the report talking about cutting force structure, because I 
think force structure is the bone that is left after the 
administration has really cut $300 billion already from future 
programs. So we are getting close to we have to make a 
decision. Do we really want to cut force structure? I go back 
to my original point, which is that this is a force structure, 
more or less that several administrations, Democratic and 
Republican, have agreed on. So I think there is efficiencies. 
Look, TriCare has to be adjusted. The health care benefits are 
driving up O&M. So those are real issues. There are other 
things that can be done.
    I would look at, for example, there are overseas bases that 
probably can be reduced in numbers, but I don't think it gets 
you anywhere close to the kinds of savings that maybe we in 
Congress would like, or Congress would like to fix the fiscal 
problem that we face.
    I just want to sort of go back to one thing that Gordon 
said, which is he noted that 19 percent of Federal outlays go 
to defense now. Well, 19 percent is basically what it was when 
he was at OMB. Federal outlays for defense have not grown 
inordinately, and the truth is the Obama administration will 
take the defense outlays down to around 15 percent in a few 
years. So if I had to step back from this, I would say that the 
problem isn't defense, it is these other issues.
    Mr. Flake. Thank you.
    Mr. Tierney. Thank you.
    Mr. Welch, you are recognized for 5 minutes.
    Mr. Welch. Thank you, Mr. Chairman. Thank you and the 
ranking member, Mr. Frank and Mr. Paul, for their leadership on 
this.
    There are two issues as I hear your testimony. One is just 
trying to cull the budget and look at where you can get 
efficiencies, and that has been something that various 
Congresses have attempted to do. You have identified some 
places for savings, like perhaps the benefits. I think, Dr. 
Adams, you indicated that a lot of the procurement reforms are 
a rehash. But then the second area, which is probably more 
promising for savings, is examining the force structure and the 
mission. That is a debate Congress has not yet had.
    It seems as though there has been an acceptance in 
Congress, whether explicit or implicit, that one of the 
responsibilities of our military is now, in fact, to take on 
the challenge of nation building, and in order also to 
accomplish that goal we outsource a very substantial component 
of the effort. We have 100,000 troops or so in Afghanistan, and 
100,000 contractors.
    So I would like to just hear briefly from each of you as to 
what precise elements of a policy could you recommend we focus 
on that would achieve savings. There was discussion about 
nation building. There was discussion about the question of 
force structure.
    I will start with you, Mr. Harrison.
    Mr. Harrison. If you are looking for larger savings, I 
think that you are correct that the place to achieve large 
savings is in changing the type of weapons systems we buy and 
altering our force structure, reducing the force structure in 
certain areas.
    Not to stray too far outside of my expertise as a budget 
guy, but if you look at our threat environment around the 
world, I think it is true that threats have diminished somewhat 
in Europe, so maybe we could draw back some of our forces from 
there. With Asia I am not so sure. I see good arguments on 
either side of that, that threats might be rising or that they 
might be balanced by some of our allies that are in that 
region. But I think if you are going to make these cuts you 
don't want to cut force structure or weapons systems just for 
the purpose of achieving savings.
    Mr. Welch. Dr. Schmitt, do you have any comments on that? I 
only have 5 minutes.
    Dr. Schmitt. I understand. I think you have raised the 
right issue, which is that we were talking about the kinds of 
decisions that have to be made if we really want to sort of cut 
deficits and use the defense budget to really participate in 
reducing the deficits. You are going to be talking about 
cutting force structure in substantial ways, which is bound to 
have--and I think one of the things about the report that is 
most honest is that it calls for different kinds of a grand 
strategy.
    I personally wouldn't go that route. I think it is more 
dangerous over the long term. But it is absolutely the question 
that should be on the table, and I think, frankly, it is the 
question that we haven't debated over the last several years. 
So this hearing, in fact, is really useful in that regard, 
because it raises the key issue.
    Mr. Welch. Dr. Adams.
    Dr. Adams. Yes. Thank you, Congressman, for asking that 
question because I do think it is the essential question here. 
There is no particular magic in a force structure number. Dr. 
Schmitt has been referring to the fact that all these 
administrations have agreed on a force structure number. Well, 
the reality is circumstances change and force structure 
requirements change as those circumstances change. So when the 
cold war ended, we took a force that was 2.2 million down to 
1.4 million over a period of 4 or 5 years because circumstances 
had changed.
    So the real question we have to ask ourselves is: have 
circumstances changed? What is the lesson, if there is a 
lesson, of Iraq and Afghanistan? What is the lesson of 
terrorism? What is the mission of the military forces that 
emerged from those lessons and the circumstances in the world?
    Let me make just three points. One is overall the United 
States faces right now today no existential threat, completely 
different circumstance from the cold war. Right? We are, in 
fact, living in a safer world.
    Point No. 2, the volume, rate, and lethality of conflict 
around the world has gone down over the past 20 years, not up. 
As a consequence, the challenges that we face that might even 
involve our forces are less than what they once were.
    No. 3, if the lesson of Iraq and Afghanistan is that the 
U.S. military has an expanded function for fighting terrorists, 
countering terrorist organizations, arming other countries, 
training their security forces, fighting insurgencies--not sure 
where they are, but fighting insurgencies on a global basis--
and nation building, that is the set of missions that need to 
have a very, very hard scrub by the Congress of the United 
States.
    There is a cottage industry at DOD today, a cottage 
industry supported right now by this administration that would 
have that mission set for the department expand rather than 
contract. That I think is the critical circumstance that 
Congress needs to look at today in threat terms, in capability 
terms, in mission terms, in seeking a much more standardized 
and shrunk American military force.
    Mr. Welch. Thank you. I yield back. Thank you.
    Mr. Tierney. Thank you. Thank you, Mr. Welch.
    Mr. Luetkemeyer.
    Mr. Luetkemeyer. Thank you, Mr. Chairman.
    I was kind of struck with some of the discussion we just 
had here. I think sometimes we can be penny wise and security 
foolish if we forget about the purpose of the military, which 
is our No. 1 duty as Congressmen, to protect and defend our 
country and the Constitution.
    So I am curious. Some of the cuts and things that you 
suggested, Mr. Friedman, how is that going to impact our 
ability to stage operations around the world if we close down 
some bases in certain areas?
    Mr. Friedman. Well, logistically certainly it is helpful if 
you want to have a war in Europe to have bases in Europe. The 
same goes for Asia. So we are not saying that there is no----
    Mr. Luetkemeyer. With all due respect, I know that we have 
a big hospital base in Germany right now that tends to a lot of 
our men and women who come from Iraq and Afghanistan who are 
injured. Are you saying we need to move that or do something 
different?
    Mr. Friedman. I wouldn't recommend closing that while we 
are still sending wounded people from Iraq or after there. In 
the future, after those wars are over, I think I would 
recommend doing that, along with bringing all our bases from 
Europe back, because I don't think there is much in Europe that 
requires U.S. military forces.
    My argument, going back to the last question, is not 
necessarily that there are no threats left in these regions or 
never will be. My argument is that there are other nations, 
wealthy ones, in those regions that are perfectly capable of 
defending themselves when those threats arise.
    Sure, there is some risk associated with not having troops 
in the places where I would like to not have troops, but there 
is also a risk with having them there in terms of the cost that 
comes through the force structure of having those missions, and 
there is a risk associated with participating in a war that 
maybe we could avoid.
    So I think there is danger on both sides.
    Mr. Luetkemeyer. How do you think that makes us vulnerable?
    Mr. Friedman. Which part of it?
    Mr. Luetkemeyer. What are the vulnerabilities if you cut 
back on things like that?
    Mr. Friedman. I'm sorry?
    Mr. Luetkemeyer. How do you make us more vulnerable?
    Mr. Friedman. How do I make us more----
    Mr. Luetkemeyer. Yes. Don't you think you make us more 
vulnerable by doing some of those things?
    Mr. Friedman. I think having forces in places where we 
don't necessarily need to be, because we don't need to 
participate in a war there because a host country has the 
capability to do it themselves makes us more vulnerable because 
I would like to avoid fighting in wars that we could avoid. 
Wars are dangerous and bad things. They are very costly. So 
that is the sense in which I mean that. And I think they make 
us more vulnerable because we have to maintain force structure 
associated with those missions, which is very costly.
    Mr. Luetkemeyer. I know that I am speaking of more than 
just the bases, themselves. I am talking about all of the 
military operations, all of the equipment that they have. I am 
very familiar with a young man, for instance, who flies an F-16 
that is 22 years old, broke down twice while he was in 
Afghanistan and again on the way home. I certainly would not 
want to curtail his ability to have a piece of equipment that 
he is safe in and protect our men and women who are on the 
ground with. I think that, again, we can be penny wise and 
security foolish if we are not careful in how we do the 
structure of the cuts you are talking about.
    I am also curious. I saw, in listening to Secretary Clinton 
last night, she had an interview and made the comment that 
there was no intention of pulling out and continued to support 
Afghanistan and Pakistani efforts. How do you see this playing 
out, Dr. Schmitt?
    Dr. Schmitt. I expect, if we are to be successful in 
Afghanistan, that the reductions that are being talked about in 
2011 will be very minimal and the likelihood of actually having 
a substantial number of forces in Afghanistan for an extended 
period are quite high.
    The difficulty with counterinsurgencies is you simply need 
boots on the ground. They succeed if you have enough boots on 
the ground. Historically they succeed. If you don't have enough 
boots on the ground, you won't succeed. But they do take time 
and they do take resources, and then the question is: do you 
want to put those resources in? And if you don't, then what are 
the consequences for abandoning Afghanistan once again?
    Mr. Luetkemeyer. Very quickly, how many of you have served 
in the military? One. How many of you have members of the 
family in the military right now? None.
    Dr. Schmitt, just very quickly, do you think the concern 
that we may have here or need to take into consideration, the 
effect that it may have on our own economy if there is 
instability in the world by not trolling activities around the 
world that could impugn or impact us in a certain way?
    Dr. Schmitt. Yes. One of the points I tried to make and 
hopefully made in the statement, is that we have had a very 
expensive global posture since the end of World War II. We have 
had one since the end of the cold war. I think that has led to 
general stability and prosperity around the world. It is very 
costly, from the U.S. perspective, but on the whole it has 
allowed us to grow economically and allowed our allies to grow 
economically, and I think, in fact, in terms of the sort of 
world order, the benefits outweigh the cost that we put into 
it. There is no question that it is costly, but I think, again, 
the benefits are much more there than not.
    The second thing I would say is that we get used to that 
order. We are used to traveling around the world without any 
disruption. We are used to oil flowing from the Persian Gulf. 
But remember the first Persian Gulf War? Just think what the 
consequences of that if we did not have the sufficient troops 
to push Saddham out of Kuwait.
    These are things that we tend to assume are going to go on 
in the absence of the security role that the United States 
plays. I personally think that is a bad bet.
    Mr. Luetkemeyer. Thank you. Thank you, Mr. Chairman.
    Mr. Tierney. Thank you.
    Mr. Lynch.
    Mr. Lynch. Thank you, Mr. Chairman.
    I also want to thank the witnesses for helping the 
committee with its work.
    Normally in the midst of two wars this is not the typical 
time when we would grapple with reducing defense spending, but 
I think the deficits and the financial situation requires us to 
do so. We do have an opportunity now. In August our troop 
deployment in Iraq will go from 165,000 down to 50,000, so 
maybe it is an opportunity to re-balance and reassess some of 
this.
    After September 11th we saw a big shift from military 
responsibilities and intelligence responsibilities going over 
to the contractor side. As the chairman has said, a lot of us 
on this committee have been over to Iraq. I have been over 
there at least 12 times, Afghanistan and Pakistan probably 
another 10 times. It is amazing the amount of responsibilities 
that used to be core military or intelligence or State 
Department functions that we have contracted out.
    Now, the last couple of weeks we heard a report from 
Secretary Gates, who said that when we hire a private 
contractor to take over a responsibility that was formerly 
performed by Government personnel, that we pay 25 percent more 
to have that contractor do it. I think there is a real 
opportunity for savings here, and I want to know, from your 
standpoint, is this an area we are looking at where we are 
paying that premium to have private contractors handle this?
    I have heard it from everybody. I have heard it from 
Treasury, I have heard it from USAID, I have heard it from the 
military that these contractors are cleaning up and they are 
making pretty hefty profits, and that is all at the cost of the 
American taxpayer. We have to be smarter now and more 
resourceful and more prudent with the way we are spending 
money. Is this an area that we should be looking at, to reduce 
those costs performed by contractors and have them, instead, 
performed more efficiently and more cheaply by Government 
personnel?
    Dr. Adams. Mr. Congressman, could I tackle at least one cut 
of that?
    Mr. Lynch. Sure, that would be great.
    Dr. Adams. I know others on the panel may want to, as well.
    I think this contractor versus civil service versus uniform 
is one of those areas where you might get certain kinds of 
efficiencies, but you also pay certain kinds of costs. In other 
words, the key issue for me really here remains mission. What 
is it we are doing? And then who is responsible for doing it?
    When I was at OMB, we did an awful lot of time working on 
what they call Circular A-76 comparisons. Would it be cheaper 
to contract it out? Would it be cheaper to do it in-house? 
These are notoriously difficult calculations to make.
    The short-term advantage of doing it with contractors is, 
once the contract is done, the contractor can go away and you 
don't assume responsibility for the contractor, so up front it 
may cost you more dollar-for-dollar in the given year to do a 
certain function with a contractor. Long-term, you are not 
going to be invested in that contractor for life.
    Mr. Lynch. And that is a great point, Dr. Adams, but we are 
talking about core functions.
    Dr. Adams. Absolutely.
    Mr. Lynch. These functions are not going away.
    Dr. Adams. No.
    Mr. Lynch. So this is perpetual contracting. I am talking 
about those functions, not something that is going to go away.
    Dr. Adams. Absolutely. I am going straight there with you.
    Mr. Lynch. OK.
    Dr. Adams. This is just an analysis I am giving you right 
now. On the do it on the government side, you can do it 
probably more efficiently, although the cost comparisons tend 
to be difficult because where you allocate wages and salaries, 
when you do it on the government side of course you are 
investing on somebody over a lifetime, which means it is not 
just the direct costs up-front, it is the lifetime costs that 
benefits the retirement pay and so on, so it makes these 
comparisons very difficult to do.
    The problem that I think we have gotten into is more 
substantive than the issue of cost, and it is the question you 
raise. We are now asking contractors to do things which ought 
to be done under the inherently governmental function title by 
public sector employees. if we do the sets of roles and 
missions that we are doing currently, it is going to be 
enormously expensive to acquire the government personnel to do 
all of those, which is why the question of mission is tied to 
the question of whether you do it by a contractor or in the 
public sector. In other words, to have the right-sized force 
you have two things you have to deal with. One is how much are 
you asking people to do, and the second thing, which we haven't 
talked about, is what is the relationship between your tooth 
and your tail.
    Historically, we have now something on the order of two-
thirds of the active duty military personnel actually involved 
in tail not in tooth, and the ratio of combat forces to tail 
has actually gotten worse over the past 50 years. It was closer 
to 50/50 50 years ago. It is now about two-thirds/one-thirds 
tail to tooth. So the other piece of managing this in the 
government sector is not necessarily adding people, it is 
redefining what people's jobs are and how much of a tail you 
actually need as opposed to the tooth that you need up front.
    Mr. Tierney. Thank you, Dr. Adams.
    Mr. Lynch. Thank you. I yield back.
    Mr. Tierney. Thank you, Mr. Lynch.
    Mr. Duncan.
    Mr. Duncan. Thank you very much, Mr. Chairman, and thank 
you for calling this hearing. It has been a very interesting 
and informative panel.
    I don't have any questions. I just want to make a few 
comments.
    When you add up the regular military budget, the 
supplemental, and emergency appropriations, the military 
construction budget, the money that comes in at the end of the 
year, anonymous bills, we are spending more on defense than all 
the other countries in the world combined. As Mr. Conetta has 
pointed out, a 96 percent increase just since 1998, about three 
times the rate of inflation over that period.
    Most people in the country, if you ask them, they will tell 
you they are against massive foreign aid, but what they don't 
realize is that we have turned the Department of Defense in the 
last many years into the Department of Foreign Aid, because 
most, or at least very much, of what the Defense Department 
does is just pure nation building, which is another word for 
foreign aid. We simply can't afford it.
    I agree with Mr. Friedman that much of our interventionist 
foreign policy that we followed over the last several years has 
created great resentment around the world and has made 
terrorism more likely instead of less likely.
    When you sit and think about it and about what we have 
gotten for over a trillion dollars now in Iraq and Afghanistan, 
fighting against militaries or organizations like Al Qaeda, the 
main anti-terrorism official in the U.N. said a few months ago 
that Al Qaeda was now so small it was having trouble 
maintaining credibility.
    But we are fighting against organizations or militaries 
with budgets of less than one-tenth of 1 percent of ours. And 
these threats have been so greatly exaggerated. I voted for the 
first Gulf War because I went to all those briefings and heard 
all the generals and the people from the Defense Department and 
the State Department tell how great the threat was and talk 
about Saddam Hussein's elite troops. And then I saw those same 
elite troops surrendering to CNN camera crews and empty tanks 
and I realized then that the threat had been greatly 
exaggerated, and it still has been over these last many years.
    So what have we gotten for all this money? Last weekend we 
had another suicide bomber in Iraq, 48 people killed. The 
situation there is still just terrible.
    Then I saw in the current issue of Newsweek Dr. Richard 
Haas, president of the Council on Foreign Relations, and he is 
in favor--there has never been an intervention that he hasn't 
favored, I suppose, but he wrote about Afghanistan. We are not 
winning, it is not worth it. And he says in this article the 
economic costs to the United States of sticking to the current 
policy are on the order of $100 billion a year in economic 
cost. The military price is also great, not just in lives and 
material, but also in distraction from other potential 
problems.
    I was impressed with Mr. Harrison talking about the 
personnel costs, because we have sent so many factories to 
foreign countries, other countries over the last 30 years that 
now for many young people in small towns and rural areas their 
only way our or their greatest, the highest pay they can 
receive is in the military, but we can't afford to keep 
increasing the military pay and benefits like we have been, 
especially when we are headed into a time when the entire 
Federal budget is going to be taken up by Social Security and 
Medicare and Medicaid and various pensions.
    So I appreciate what most of these gentlemen are doing. 
Most of the think tanks and others that favor increasing the 
military budget at this point are supported by the Defense 
contractors, and the Defense contractors hire all the retired 
admirals and generals, and really what all this is about is 
about money and power instead of any real threat to us. I am 
just amazed that more conservative Republicans aren't awake. I 
think some are awakening to this, because fiscal conservatives 
should be the ones most horrified by what is going on here.
    Thank you, Mr. Chairman.
    Mr. Tierney. Thank you, Mr. Duncan. I appreciate it.
    Ms. Chu.
    Ms. Chu. Dr. Adams, you argue that U.S. involvement in Iraq 
and Afghanistan have led to the abuse of the emergency 
supplemental process, and actually funded defense spending that 
is wholly unrelated to the wars in Iraq and Afghanistan. Can 
you explain how the wars in Iraq and Afghanistan have bloated 
the non-war defense budget?
    Dr. Adams. I am sorry. Could you say that again, 
Congresswoman?
    Ms. Chu. You have argued that----
    Dr. Adams. I heard that, yes.
    Ms. Chu. So can you explain how it has bloated the non-war 
defense budget?
    Dr. Adams. Yes. There are two principal ways in which the 
supplementals and the war titles have been used over time in a 
way that funds expenditures in the Department of Defense that 
are not directly war related. One which is pretty visible is 
putting into the supplemental budgets hardware, military 
equipment, and procurement, that is unrelated to equipment 
losses in the wars in Iraq and Afghanistan.
    That has clearly been done. It was true of the 
supplementals more than it has been true of the recent war 
titles in the budgets, but every single war supplemental, 
starting with the first one, has carried spending for equipment 
that basically restocks inventories here at home or in 
exercises for the military but is not replacing equipment lost 
in Afghanistan or Iraq.
    So one of the agreements that the new administration, the 
Obama administration, when it came in, negotiated with the 
Department of Defense was to restrict the uses of the 
supplementals for purchasing equipment that ought to be in the 
regular base equipment acquisition planning of the services. 
There remains a gray area there, and the gray area is what is 
called reconstitution, so I always urge the Congress to take a 
very close look at what is called reset or reconstitution in 
war titles and supplementals for equipment that really ought to 
be funded through the base budget because it is in the long-
term plan for the services.
    The other area that is more difficult to tease out is in 
operations and maintenance, and about two-thirds of the 
spending for the wars in Iraq and Afghanistan falls in 
operations and maintenance. This is the support for our troops 
that are in the field. It is not their pay, but it is the 
support services for the troops. Some of it is going to the 
contractors we were talking about earlier.
    The unique characteristic of operations and maintenance 
funding in budgetary terms is its fungibility. That is to say, 
money appropriated for operations and maintenance to the 
departments and to the military services is essentially 
fungible with any other money appropriated to operations and 
maintenance, which means, from the services' point of view, 
operations and maintenance funding, which is two-thirds of the 
war, is funding that is also useful for their general 
operations and maintenance and can easily be moved around 
inside the service budget to fund operations and maintenance 
requirements at home.
    That area has not been sufficiently scrutinized by 
Congress. It does constitute a significant addition of O&M 
resources to the services.
    Ms. Chu. You have also said that what we should learn from 
Iraq and Afghanistan is that we do not need a military 
capability of intervening globally in all conflicts and 
disorder, and that we could prioritize missions that could 
maintain or even enhance our national security at less cost 
with smaller forces. Can you explain what kind of military 
missions you have in mind, how it could work, considering the 
threat of Al Qaeda?
    Dr. Adams. Sure, and I know others on the panel may have 
responses they want to give to that because they have talked 
about the area of mission.
    This is, I think, the fundamental issue. What is the role 
and responsibility of the United States globally? What are the 
challenges that we face? What is the role and mission of the 
military in meeting those challenges? We don't often talk about 
it that way, but defense forces are basically a support 
function for our national security policy. They are not our 
national security policy. They are a support function for it.
    So the real question that I think we haven't addressed yet 
but now need to urgently is: in the array of missions that we 
have, which ones are most important to the security of the 
United States, how much is the military role in carrying out 
those missions? And how much force do we need to actually 
execute those missions?
    The most highly debatable area of mission right now today 
is in this area of counter-insurgency, stabilization, nation-
building, counter-terrorism, and building partner capacity. 
That whole envelope of missions is an area where defense 
responsibilities have expanded enormously, and where the lesson 
we seem to have drawn from the war in Iraq and Afghanistan is 
we now need to be prepared to do those missions on a global 
basis.
    There is no sustained analysis of that proposition. We have 
excellent work on how to do counter-insurgency--80 percent of 
it, by the way, is considered a civilian function in the 
counter-insurgency manual--we have no analytical text that 
tells us where, when, how, and why the United States is 
responsible for those missions on a global basis and where we 
are going to have to execute them.
    So right now we have no analysis of that area of mission in 
terms of policy and challenge that should tell us how many 
forces we have, and I think that is highly questionable that 
our national security is engaged every time there is a 
terrorist attack, every country where there is an insurgent, 
every country that has a fragile state, every country that has 
a security sector.
    Right now we have an open door on mission and an open door 
on budgets without any analysis. If we turn that around and 
take a hard, cold look at that area, I think we will discover 
that we don't have as many areas where we need to conduct those 
kinds of missions. We are not peculiarly well-suited in the 
military to carry out governance reconstitution and so on, and 
we don't have so many countries where we need to worry about 
doing them.
    Where that leads me is to say we can take a step back in 
that area of mission and we can look seriously at our civilian 
capacities in the government to execute those parts of those 
missions that involve governance and economic development, 
which is the long-term responsibility that we and many other 
countries and international organizations have, but involve 
substantially less commitment of military force, certainly not 
on a global basis.
    We then return to missions that others have talked about 
here, which have more to do with the traditional functions of 
the military--deterrence, allied reassurance, conventional 
warfare--and a niche set of missions that may involve the 
military part of counter-terrorism, humanitarian operations, 
non-emergency evacuation operations, and the like where we can 
tailor a force that I would suggest is considerably smaller 
than the force that we have today. It would be more efficient 
and more sculpted to do those kinds of missions.
    So, in a very brief description, that is how I would 
approach the question of missions.
    Mr. Tierney. Thank you, Dr. Adams. Thank you, Ms. Chu.
    Mr. Jordan.
    Mr. Jordan. Thank you, Mr. Chairman.
    I didn't get to hear everyone's testimony. I assume Dr. 
Schmitt is not, and frankly I wouldn't be either, but how many 
of the rest of the panel are supportive of a freeze to defense 
spending or a cut to freeze over an extended period of time, 
which would in essence be a cut? Who on the panel supports that 
step? We will go down the line: freeze or reduction? Doctor, do 
you support that?
    Mr. Harrison. For me it depends. It depends on what changes 
we are making in the missions that we are willing for our 
military to support and what risks we are willing to take.
    Mr. Jordan. OK. I didn't want to speak for you, Dr. 
Schmitt, but I assume that is where you are, just a blanket cap 
or freeze.
    Dr. Schmitt. No, I wouldn't support that.
    Mr. Jordan. OK. Dr. Adams.
    Dr. Adams. Definitely support.
    Mr. Jordan. Yes or no?
    Dr. Adams. Sorry, definitely support it.
    Mr. Jordan. Definitely support it. Now, three and a half, I 
guess, who supported the cap, would you support the same type 
of approach to every other agency in the government--Department 
of Agriculture, Department of Energy, Education, up and down 
the line?
    Mr. Friedman. It depends. We have to talk agency-by-agency. 
I can't speak for every agency, so we have to go one at a time.
    Mr. Jordan. OK.
    Mr. Conetta. I think that, given our current circumstance, 
we should start with the premise of proportionate cuts. We 
should determine what types of deficit reduction. We need to 
begin with proportionate cuts as a premise and go from there. I 
don't think we end up with proportionate cuts. That becomes a 
question of matching needs to budget.
    Mr. Jordan. OK.
    Mr. Harrison. I think the spending freeze on non-security-
related discretionary spending that is in the President's 
budget this year, I think that is a good thing.
    Mr. Jordan. OK. Dr. Schmitt, would you agree?
    Dr. Schmitt. Freeze and/or cuts.
    Dr. Adams. Definitely support it. I worked for 5 years in 
the Clinton administration in OMB, and one of the most 
effective tools for both the executive branch and the Congress 
in dealing with deficit reductions was caps and pay-go. They 
enforced an incredible discipline on every element of the 
government.
    Mr. Jordan. Let's cut to the chase then. I have introduced 
the only balanced budget in Congress. Our budget does this. 
Frankly, until you do that, you don't force Congressmen to do 
the work we should have been doing all along: finding out which 
programs work, which ones are stupid, which ones are redundant, 
what makes sense, what doesn't make sense.
    So it seems to me we should have some kind of cap, but I 
wouldn't say on defense, I would say on the overall budget 
because, frankly, as Mr. Luetkemeyer pointed out in his 
questioning, defense is where we are supposed to spend taxpayer 
dollars. It is everything else that is, according to Robert 
Rector at Heritage Foundation, it is the 71 different means-
tested social welfare programs we have which, when you add 
State dollars and tax dollars from the State and Federal 
actually are more than national defense, so there is a whole 
host of areas that we should be focused on.
    How many on the panel would support an overall spending 
limit, some percentage of GDP, would support that kind of 
concept in our budgeting process? We will go down the line 
again.
    Mr. Conetta. Yes. You mean with regard to the entire 
budget, or with regard to defense, a cap?
    Mr. Jordan. I am talking overall budget. I mean, it is the 
problem.
    Mr. Conetta. I don't think it is wise to----
    Mr. Jordan. We start with a $3 trillion deficit we have, 
the $13 trillion national debt we have. It is the overall 
budget, yes.
    Mr. Conetta. Yes. I don't think we should ever go to 
deciding that any portion of government spending or government 
as a whole should be tied to any particular GDP figure. So no, 
don't tie it to GDP.
    Mr. Jordan. Mr. Friedman.
    Mr. Conetta. You need to make a determination----
    Mr. Jordan. I need to go quick. Mr. Friedman.
    Mr. Friedman. Yes. I support that, not indefinitely but 
sure, this year, next year, yes.
    Mr. Jordan. OK.
    Mr. Harrison. I would not support it for the overall budget 
for the simple fact that we have some things in there like 
Social Security benefits that have already been promised that 
are growing. Net interest on the national debt is rapidly 
growing in the budget. I think you have to look. Spending is 
only one side of the equation. I think you have to also look at 
the other side of the equation as revenues.
    Mr. Jordan. And I am going to get to the other side in a 
second if I get time.
    Go ahead, Dr. Schmitt.
    Dr. Schmitt. I would support it.
    Mr. Jordan. Yes. Dr. Adams.
    Dr. Adams. I support caps for discretionary spending, pay-
go for mandatory spending. I would not take any part of the 
Federal budget, including defense, to a share of GDP.
    Mr. Jordan. It seems to me the one thing we need, in 
addition to doing this, putting limits and going through the 
exercise of figuring out what works, what doesn't, and getting 
spending under control, the one thing we really need more than 
anything to deal with our budget situation is growth. So give 
me your thoughts. You guys probably guess where I come from on 
the growth side, but we need to have the right kind of tax 
policy, the right kind of regulatory policy if we are going to 
have economic growth.
    You talk about the years where we actually balanced the 
budget and started running surpluses. It is because we had 
sustained and strong economic growth in this country and, 
frankly, we are not having it now. I would argue the policies 
that Congress and the administration have been pursuing are 
making it difficult to get the kind of economic growth we need 
to deal with our budget situation long-term. So your thoughts 
on that quickly and then I will be done, Mr. Chairman.
    Mr. Conetta. Well, I think one thing for sure, looking 
back, I mean, this is not my area of expertise, how to feed 
productivity growth. But one thing we can say for sure is that 
much of the growth that we thought we had in the mid- and late 
1990's turned out to be a castle of sand, which we are now 
paying for through our debt. So we obviously need a different 
approach to how to feed and stimulate our economy than the one 
that was present at that time. It wasn't just a government 
question. It was a question of credit and wealth building in 
the country, as a whole. It was built on speculation.
    Mr. Tierney. Thank you, Mr. Conetta.
    Mr. Frank, you are recognized.
    Mr. Frank. Thank you, Mr. Chairman. I appreciate this 
hearing. And I thank all the witnesses.
    We need a thoughtful, non-rancorous discussion about the 
appropriate mission, and I thank all the panelists for the 
spirit in which we have it. That is the key issue: what should 
we be doing? What is the policy we should be setting? And we 
have not had that conversation, and I thank you, Mr. Chairman, 
for providing this forum for this continuing conversation.
    I do want to add just one thing. I know there was a 
question raised about who served in the military. I think we 
ought to be very clear. Let me volunteer that I did not serve 
in the military. I wasn't wanted. I actually did try to line 
myself in once, but they didn't need me at the time in 1960, 
and then subsequently I guess there is no point in trying to go 
where you are not wanted.
    But the question of whether or not you served in the 
military is very relevant to how we should conduct military 
operations. It is not relevant to whether we should conduct 
particular operations. That is what this is about. The mission 
is not about how you fight a war. When we do put our people 
into war, then I want to be guided by their judgments and I 
want to give them all that we can. That is why war is very 
expensive for us, because you don't send our young people into 
war.
    All of us here on this rostrum have had the terrible 
experience of going to a funeral of a young man or woman killed 
in these wars, and so that means you spend it. But whether or 
not you get involved, no, that is not a matter of military 
expertise. We honor the military's expertise when they get 
engaged.
    Second, I would say this. Dr. Schmitt, I was a little 
surprised to hear you say that one of the big arguments for 
this is that is the way it has always been, or for a long time, 
that there has been a bipartisan consensus. Frankly, I had 
thought of the American Enterprise Institute as being somewhat 
more transformational in its approach. The notion that because 
we had always done this in a bipartisan way as one argument for 
continuing to do it I think is mistaken. It would certainly 
argue against your suggestion that we seriously alter 
entitlement policy. Social Security has an equally long 
bipartisan history, and no one I know thinks that, frankly--I 
mean, I think that is the kind of argument people throw in that 
doesn't really motivate them, whether that is the way it has 
always been.
    But I would ask you, Dr. Schmitt, in terms of your view 
that the military has been denied funding it should have 
ideally gotten, what in the last 10 years or so would be 
examples of where we were unable to accomplish a valid national 
security goal because we lacked the military resources to do 
it?
    Dr. Schmitt. I think we have been able to accomplish those 
goals, but it has been extremely close run. Let me give you an 
example when it comes to, for example, the wars in Iraq and 
Afghanistan.
    Mr. Frank. All right. I appreciate it, but you suggested to 
me that there was a shortfall.
    Dr. Schmitt. There is.
    Mr. Frank. Yes.
    Dr. Schmitt. There is a shortfall, which others can talk to 
here as well as I can. There is a shortfall in replacing, 
recapitalizing the----
    Mr. Frank. OK, but I asked you a specific question. We have 
paid no price for that yet.
    Dr. Schmitt. We have paid no price for that yet.
    Mr. Frank. OK. I would say, in my view, I can find some 
resources, the Iraqi situation. Frankly, I think it almost 
doesn't honor fully the military goal. I am told we are going 
to keep 50,000 troops in there, but they are not going to be 
combat troops.
    First of all, I think there is some fudging there, because 
they do, I think shooting and being shot at, I don't know how 
you define combat, but it does seem to me the people there are 
doing that. Continuing to keep people there makes no sense to 
me, but that is an example. If you leave the mission as it is, 
then you can argue for more.
    I also wanted to comment on another important point that 
was made, Gordon Adams made, and others. Here I think some of 
my liberal friends may be a little bit inconsistent in over-
emphasizing the extent to which you can reduce spending by 
simply getting rid of fraud, waste, and abuse. There has never 
been a budget item I have seen that said fraud, waste, and 
abuse which you could zero out.
    We talk about fat. Metaphors mislead us. Yes, there is fat 
in every human enterprise, and especially in some public 
enterprises, but it is not layered, it is marbled. You can't 
just slice it off at the edges. It is deeply involved. That is 
why I do believe that the most effective way to enforce 
efficiency is to put limits on spending, not flat caps, but to 
let people know there are limits, because imposing efficiency 
from the outside is very difficult. Incentivizing efficiencies 
from within is what happens.
    I think one of our problems has been that the Pentagon has 
in general and the national security has in general been less 
subject to budgetary discipline, and because less subject to 
budgetary discipline less efficient.
    Just one last question, again for Dr. Schmitt. I think we 
are over-extended. I would ask you to evaluate, because clearly 
the missions you talk about, oil from the Persian Gulf, it 
doesn't just come to the United States. In fact, we get more of 
our oil, I think, from other places. Do you believe that our 
wealthy western European allies are contributing sufficiently 
to the common purposes that we have?
    Dr. Schmitt. No.
    Mr. Frank. What can we do to do that? I think here is the 
problem. I agree with that. Well, no is a very good answer. Not 
everybody has to hedge everything around here. But the point is 
this: I think we are the enablers of that. There was a very 
interesting article in the New York Times a month ago about how 
the Europeans were able to afford more in some areas of their 
budget because we carry them.
    What would you think we should do if you agree that they 
are not doing enough? Is there anything we can do to get them 
to do more, because clearly if they did more couldn't we do 
less?
    Dr. Schmitt. Yes, we could do less, but I would add that 
they are doing quite a bit. There are tens of thousands of 
allied troops in Afghanistan that have----
    Mr. Frank. Excuse me. How many NATO, non-American troops 
are in Afghanistan?
    Dr. Schmitt. Thirty-five thousand, forty thousand.
    Mr. Frank. Compared to what of us?
    Dr. Schmitt. Fifty thousand now, up to----
    Mr. Frank. And in Iraq?
    Dr. Schmitt. In Iraq, originally about a third of the 
force----
    Mr. Frank. Originally, but you said first that you don't 
think they were doing enough.
    Dr. Schmitt. Let me be clear: yes, the allies could do 
more. I have my doubts that if we reduce our posture in the 
world and reduce our own budget substantially, as the task 
force suggests, that we will, in fact, get more from our 
allies.
    Mr. Frank. Let me ask you that, though, because I think 
that, I mean, what do you know that they don't know? After all, 
excuse me, I want to phrase this question. There is, you say, a 
common purpose with our European allies. There are missions 
that have to be accomplished, fighting terrorism. I wish you 
could fight terrorism with nuclear submarines, because then we 
would win, because we have more nuclear submarines than they 
have. Unfortunately, I don't think that much of what we spend 
helps us. I don't think the political part is a lack of 
ordnance, a lack of weaponry.
    But, given that they have the same interests we have, why, 
if we did it with less, would they not do more? Would they say, 
oh, well, Persian Gulf, can't get the ships out, tough? Why 
would they not be incentivized if we stopped carrying them to 
do some more?
    Dr. Schmitt. There are free rider problems with the allies, 
but it is not as severe as sometimes people say. I repeat that 
if we cut back our forces, it is not as though, because of 
their own budget, the way they have handled their own budgets, 
toward which we are heading, they have less flexibility for 
actually increasing defense.
    Mr. Frank. Are they dumb? Would they endanger the shipping 
lanes, the Persian Gulf, the Straits of Morocco or whatever 
that I hear about? I mean, are they suicidal, the Europeans? 
Why would they not want to defend themselves if we stopped, cut 
back?
    Dr. Schmitt. Secretary Gates made the point a few months 
ago, talking about the NATO strategic review, and he said 
unless the NATO partners begin to up the ante in terms of 
defense spending the strategic review won't be worth the paper 
that it is written on. I agree with that. I am just saying----
    Mr. Frank. Would you add a threat that we would withdraw 
somewhat from western Europe to let them do some more on their 
own?
    Dr. Schmitt. No. We have withdrawn from western Europe. The 
amount of troops that we have there is fairly minimal. It is 
there for logistics and for use because logistics is easier to 
go from Europe to the Middle East than----
    Mr. Frank. Let me ask you one last question. The 15,000 
Marines on Okinawa, which, of course, destabilized the Japanese 
Government by our insisting on them, I have assumed, and I 
think we should have sea power and air power available with 
regard to the People's Republic of China. Is there a 
contemplation that we are going to use 15,000 Marines in any 
kind of land war involving the People's Republic of China?
    Dr. Schmitt. No, probably not, when it comes to the land 
war with China, but the expectations, those troops are there to 
be able to be deployed in Korea, possibly in a conflict in the 
Taiwan Strait, and elsewhere.
    Mr. Frank. Well, the Taiwan Strait is----
    Dr. Schmitt. If I could----
    Mr. Frank. Excuse me. A conflict in the Taiwan Strait would 
be with whom?
    Dr. Schmitt. With China and Taiwan.
    Mr. Frank. OK. Seems to me the notion that we are going to 
use Marines in any kind of combat with China is, I think they 
are there for some kind of political reason to reassure the 
Japanese, keep the Japanese from spending money, and I think 65 
years after World War II ended it is time for the Japanese 
military budget to become realistic.
    Thank you, Mr. Chairman.
    Mr. Tierney. Thank you, Mr. Frank.
    I want to thank you and Mr. Paul and the others who were 
instrumental in having this organization do the report that 
gave us such a good platform to have this discussion. I thank 
all of you for participating.
    I would allow everybody to ask another question or two if 
they want on that, primarily so I can ask the one that I want 
to on that. One of the beauties of being Chair, I guess.
    Can any of you--and let's just go down the line--can any of 
you tell me the number of bases that the United States has 
overseas, and consequently the number of military personnel 
that we have in those bases?
    Mr. Conetta.
    Mr. Conetta. I would say 873, but the number is probably 
wrong. It is an old number. It has changed a lot because of 
building in central Asia, Afghanistan, and Iraq. It is a number 
to start with. It is also important to recognize that much of 
that number are really small installations. The number of major 
bases is much smaller, though it is growing.
    In terms of total numbers of people we have overseas, 
active duty military is in the vicinity of 350,000 divided now 
not quite equally. More are engaged in the CENTCOM area, Iraq 
and Afghanistan. The rest are pretty much tied down in Asia and 
Europe. And that is just the active component. I think it is 
probably around 45,000 more reservists who are overseas 
supporting them. So all told we have over 350,000 overseas.
    Mr. Tierney. Thank you.
    Mr. Friedman.
    Mr. Friedman. Well, I was going to please Congressman Frank 
and just say no, I don't know the answer off the top of my 
head.
    Mr. Tierney. OK.
    Mr. Friedman. He knows more than me.
    Mr. Tierney. That is acceptable.
    Mr. Tierney. Dr. Adams.
    Dr. Adams. What Mr. Conetta said is about the right number.
    Mr. Tierney. OK. I ask that question because we have been 
working for about 8 months now with the Department of Defense 
trying to get those answers and they don't have them, so it is 
interesting that you can tell me the number of bases you think 
and the number of personnel, because we have gone around and 
around in charts and paths. We bring it up here and wind it, 
paper the wall.
    Mr. Conetta. I can only tell you a wrong number.
    Mr. Tierney. It starts with what is the definition of a 
base? It is the installation? All the installations, satellite? 
The number of countries that they are in is astounding, and 
some of those countries--I think we had an interesting time 
finding what the heck is our national security interest in 
having troops in a base in that particular location.
    It is a conversation we want to have on this group, but it 
is one that is very difficult to start until you get the facts 
on that, and the facts are so difficult to get from the entity 
that should have them. It should disturb us all on that. It 
makes you wonder how they can budget and control for those 
people on those bases and those materials that are in all those 
places.
    I think that is part of it. All this theory that we are 
talking about is very interesting.
    Dr. Schmitt, I was interested in the colloquy between you 
and Mr. Frank, but part of it would be much better informed if 
we really knew how many bases were overseas and where they 
were. It would be fair to you and fair to Mr. Frank to actually 
have a discussion and be able to point out, well, this one has 
some significance and this one doesn't. But the fact that we 
can't even begin to identify where all these people are and 
then try to figure out what is their impact on our national 
security interests and how do they play into it and are they 
essential or not is sort of incredible on that.
    Do any of you have any comments that you want to make as we 
wrap this up, something that you want to leave us with that we 
may not have covered and should have into or gone into in more 
depth? We will go left to right if it is OK with you, Mr. 
Friedman. Mr. Conetta.
    Mr. Conetta. I wanted to underscore what I think is 
probably the small amount but real amount of consensus that we 
have discussed as a panel. I think we all agree that it is 
worthwhile going after problems of waste and trying to improve 
the efficiency of the Pentagon. I think we all agree that is 
important. I think we also all agree that it is relatively 
small peanuts, that if you are looking for big savings it 
becomes a question of affecting missions and structures, though 
we obviously don't all agree that would be a wise thing to do.
    This pertains especially to Secretary Gates' efforts now to 
achieve as much as $100 billion savings from reductions in 
infrastructure and efficiency. It may cast some doubt on 
whether that is possible. But I think we have identified the 
notion that if you really want to have big savings, it is going 
to have to be structured, though we don't all agree that is the 
thing to do.
    One step forward possibly for our thinking in that area is 
this: we all know what the input is to our military machine. It 
is dollars. But we seldom speak in terms of what the output is. 
We sometimes say that the output is structure, which would mean 
tactical units, or we might, as a proxy for that, say the 
output is trained individuals. But actually that is not the 
output in either case. The real output is military power. If we 
pay attention to the change in our military power, which is not 
a question of how many ships we have, how many people or planes 
we have; it really is a more complicated equation than that.
    I think we would conclude that, in fact, our military is 
much more powerful today, although considerably smaller, than 
it was during the end of the cold war. And that may help our 
thinking about can we reduce and where can we reduce.
    Mr. Friedman. Just two small points. Dr. Schmitt mentioned 
a couple of times the $300 billion in cuts that came from 
procurement programs that Secretary Gates canceled. That is 
true, but those programs were mostly replaced with other 
programs. So, while there was savings, they went right back 
into other procurement for the most part, and in this year, the 
procurement budget rose significantly. So it is not as if we 
have been cutting the procurement budget. We have not.
    And then, second, with regard to this question I never 
served in the military, sure, I never served, but when I talk 
to people from the military I get the sense that they kind of 
like the idea of doing less and having achievable missions 
rather than really difficult nation-building goals. I think 
there is actually a large well of support within the military 
for the kind of thing that I was talking about in my testimony.
    Mr. Tierney. Thank you. Mr. Harrison.
    Mr. Harrison. I would just add that I did serve in the 
military. I don't know that it qualifies me any more to speak 
about these matters than the other gentlemen at this table.
    But my final note, I would just caution that, as we are 
going through this budget situation over the next several 
years, we do run the risk of optimizing our force for the wrong 
type of conflict. Right now Secretary Gates has put a lot of 
emphasis on optimizing the force for counter-insurgency 
warfare. We run the risk that 10 years from now, once we are 
out of Iraq, Afghanistan, that the Nation is not likely to want 
to get into a situation like that for a long time when you have 
a military that is optimized for the wrong type of conflict.
    Mr. Tierney. Thank you. If I can just interrupt for 1 
second, Mr. Harrison, I think you hit something on the head. I 
get constantly asked the question about whether or not this 
administration or the last administration or any of these 
people that promote the counter-insurgency theory are intent on 
doing that in Somalia, Sudan, Yemen, the other areas, is that 
their intention and goal. That is one of the things that we 
have to look at. I think Dr. Adams mentioned that.
    Dr. Schmitt.
    Dr. Schmitt. Well, certainly you should look at it. I mean, 
I actually think we have been fairly discreet in some cases. I 
mean, we have not jumped into every conflict or every place of 
instability. I think actually some of the military has done a 
pretty good job of prioritizing where they have to be.
    Just two points. One is, and this could be sort of read 
different ways, but I think the report, when you actually look 
at it, is probably more sanguine from my point of view about 
after these wars, about the Middle East, and it is more 
sanguine about the military balance in east Asia than I would 
be comfortable with.
    I think the trend lines in east Asia are not good. It is 
something that we are going to have to deal with, and it is 
going to be costly to deal with it, because the way to deal 
with it, because it is the Pacific and the Indian Ocean, are 
fairly significant and costly platforms.
    Again, I think Todd is right. There is an emphasis on 
today's wars. Maybe that is what has to be done. But there is 
stuff coming down the road that is going to be difficult for us 
to deal with.
    The second thing is I would say that there is kind of an 
expectation that Iraq and Afghanistan are these one-offs and 
that we won't be doing that in the future. That may be the 
case. Maybe we will decide that is the case. But I would just 
say that both Democrat and Republican administrations have been 
involved in wars in the Middle East now for 20 years, and so I 
would say that if history tell us anything, the likely trend 
line is that we are not going to be out of that area any time 
soon.
    Mr. Tierney. As in we never learn, I guess.
    Dr. Adams.
    Dr. Adams. Four points, I think.
    One, I congratulate you on going down this road, because it 
tries to marry up the problems that we have economically at 
home and in terms of the Federal budget with how we approach 
our national defense.
    No. 2, as we go down that road, as you in Congress go down 
that road, dealing with the reality that to get an agreement 
everything has to be on the table is a good principle.
    No. 3, efficiencies clearly are not enough, and I think you 
have a fair amount of consensus on the panel in that regard 
that efficiencies aren't going to get it, and Secretary Gates' 
ambition right now probably falls short of what you are going 
to have to deal with.
    And, fourthly, I want to underline that the discussion that 
we have on this issue, and it is understandable because it is 
the subject of this particular hearing, all too often falls 
into the box of saying what should the military be, what should 
the military do, how should the military behave. We don't have 
enough conversations about what are the purposes of American 
statecraft and what is the role of the military in that broader 
engagement globally in dealing with the broader set of 
challenges.
    I heard Dr. Schmitt say just a moment ago, and maybe he 
misspoke, but to say the military does a pretty good job of 
prioritizing where it should be. Well, it is not the military's 
job to prioritize where it should be. It is the national 
security policy apparatus, the White House, the Congress, the 
civilian agencies, all of whom need to be engaged in that 
decision, and ultimately it is the Congress and the President's 
decision about where the military should be engaged or not 
engaged.
    I dig his principle, though. There are lots of areas where 
we don't have a stake, and defining policies as we defined them 
today puts us at risk of being in areas where we don't have a 
stake. I wouldn't use Afghanistan and Iraq as the proxy here 
for what else we may do. In both cases those were wars of 
choice. Those were not necessary interventions; they were wars 
of choice. We chose to go in and remove a regime in 
Afghanistan. And you can support it or disagree with it, but it 
was a choice. We chose to go in and depose a regime in Iraq. 
And in both cases, we ended up inheriting responsibilities for 
a whole array of functions that we have asked the military to 
do. I think it is very debatable that we are going to go into 
those kinds of situations again at any point in the near 
future.
    Mr. Tierney. I would hope so. I would hope it is debatable.
    Interestingly enough, we had a conference not too long ago 
about northern Africa, Algeria and Libya and Morocco and places 
like that, and one of the general consensus--and these were 
Members of the Senate and the House and both parties--the real 
question at the end became what is our interest there. I don't 
think we ask that question enough. What is our interest there, 
and who else might have an interest that ought to be taking the 
lead as opposed to us so that we don't have to do that 
everywhere all the time.
    Let me again just say how much I appreciate all of your 
written testimony and your time spent here, your expertise 
today. I think you have helped us embark on a conversation that 
I hope continues. I think it is a valuable one for us to have. 
I hope it bleeds into some of the other committees both here 
and in the Senate on that and the American public. I think it 
is important, so thank you very, very much.
    The meeting is adjourned.
    [Whereupon, at 11:58 a.m., the subcommittee was adjourned.]

                                 
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