[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]


                                     


                          [H.A.S.C. No. 112-2]
 
                     PROPOSED DEPARTMENT OF DEFENSE
                         BUDGET REDUCTIONS AND
                        EFFICIENCIES INITIATIVES

                               __________

                      COMMITTEE ON ARMED SERVICES

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD

                            JANUARY 26, 2011


                                     
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                   HOUSE COMMITTEE ON ARMED SERVICES
                      One Hundred Twelfth Congress

            HOWARD P. ``BUCK'' McKEON, California, Chairman
ROSCOE G. BARTLETT, Maryland         ADAM SMITH, Washington
MAC THORNBERRY, Texas                SILVESTRE REYES, Texas
WALTER B. JONES, North Carolina      LORETTA SANCHEZ, California
W. TODD AKIN, Missouri               MIKE McINTYRE, North Carolina
J. RANDY FORBES, Virginia            ROBERT A. BRADY, Pennsylvania
JEFF MILLER, Florida                 ROBERT ANDREWS, New Jersey
JOE WILSON, South Carolina           SUSAN A. DAVIS, California
FRANK A. LoBIONDO, New Jersey        JAMES R. LANGEVIN, Rhode Island
MICHAEL TURNER, Ohio                 RICK LARSEN, Washington
JOHN KLINE, Minnesota                JIM COOPER, Tennessee
MIKE ROGERS, Alabama                 MADELEINE Z. BORDALLO, Guam
TRENT FRANKS, Arizona                JOE COURTNEY, Connecticut
BILL SHUSTER, Pennsylvania           DAVE LOEBSACK, Iowa
K. MICHAEL CONAWAY, Texas            GABRIELLE GIFFORDS, Arizona
DOUG LAMBORN, Colorado               NIKI TSONGAS, Massachusetts
ROB WITTMAN, Virginia                CHELLIE PINGREE, Maine
DUNCAN HUNTER, California            LARRY KISSELL, North Carolina
JOHN C. FLEMING, M.D., Louisiana     MARTIN HEINRICH, New Mexico
MIKE COFFMAN, Colorado               BILL OWENS, New York
TOM ROONEY, Florida                  JOHN R. GARAMENDI, California
TODD RUSSELL PLATTS, Pennsylvania    MARK S. CRITZ, Pennsylvania
SCOTT RIGELL, Virginia               TIM RYAN, Ohio
CHRIS GIBSON, New York               C.A. DUTCH RUPPERSBERGER, Maryland
VICKY HARTZLER, Missouri             HANK JOHNSON, Georgia
JOE HECK, Nevada                     KATHY CASTOR, Florida
BOBBY SCHILLING, Illinois            BETTY SUTTON, Ohio
JON RUNYAN, New Jersey               COLLEEN HANABUSA, Hawaii
AUSTIN SCOTT, Georgia
TIM GRIFFIN, Arkansas
STEVEN PALAZZO, Mississippi
ALLEN B. WEST, Florida
MARTHA ROBY, Alabama
MO BROOKS, Alabama
TODD YOUNG, Indiana
                  Robert L. Simmons II, Staff Director
                Jack Schuler, Professional Staff Member
               William Johnson, Professional Staff Member
                 Mary Kate Cunningham, Staff Assistant


                            C O N T E N T S

                              ----------                              

                     CHRONOLOGICAL LIST OF HEARINGS
                                  2011

                                                                   Page

Hearing:

Wednesday, January 26, 2011, Proposed Department of Defense 
  Budget Reductions and Efficiencies Initiatives.................     1

Appendix:

Wednesday, January 26, 2011......................................    53
                              ----------                              

                      WEDNESDAY, JANUARY 26, 2011
   PROPOSED DEPARTMENT OF DEFENSE BUDGET REDUCTIONS AND EFFICIENCIES 
                              INITIATIVES
              STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

McKeon, Hon. Howard P. ``Buck,'' a Representative from 
  California, Chairman, Committee on Armed Services..............     1
Smith, Hon. Adam, a Representative from Washington, Ranking 
  Member, Committee on Armed Services............................     2

                               WITNESSES

Lynn, Hon. William J., III, Deputy Secretary, U.S. Department of 
  Defense; GEN Peter W. Chiarelli, USA, Vice Chief of Staff, U.S. 
  Army; Gen. Joseph F. Dunford, Jr., USMC, Assistant Commandant, 
  U.S. Marine Corps; ADM Jonathan W. Greenert, USN, Vice Chief of 
  Naval Operations, U.S. Navy; and Gen. Philip M. Breedlove, 
  USAF, Vice Chief of Staff, U.S. Air Force......................     4

                                APPENDIX

Prepared Statements:

    Lynn, Hon. William J., III...................................    60
    McKeon, Hon. Howard P. ``Buck''..............................    57
    Smith, Hon. Adam.............................................    59

Documents Submitted for the Record:

    [There were no Documents submitted.]

Witness Responses to Questions Asked During the Hearing:

    Mr. Johnson..................................................    75

Questions Submitted by Members Post Hearing:

    Ms. Bordallo.................................................    79
    Mr. Coffman..................................................    85
    Mr. Conaway..................................................    83
    Mr. Critz....................................................    82
    Dr. Heck.....................................................    86
    Mr. Kline....................................................    81
    Mr. Lamborn..................................................    84
    Mrs. Roby....................................................    86
    Mr. Ruppersberger............................................    83
    Mr. Shuster..................................................    83
    Mr. Turner...................................................    79
    Mr. Wittman..................................................    84
   PROPOSED DEPARTMENT OF DEFENSE BUDGET REDUCTIONS AND EFFICIENCIES 
                              INITIATIVES

                              ----------                              

                          House of Representatives,
                               Committee on Armed Services,
                       Washington, DC, Wednesday, January 26, 2011.
    The committee met, pursuant to call, at 10:00 a.m., in room 
2118, Rayburn House Office Building, Hon. Howard P. ``Buck'' 
McKeon (chairman of the committee) presiding.

    OPENING STATEMENT OF HON. HOWARD P. ``BUCK'' MCKEON, A 
 REPRESENTATIVE FROM CALIFORNIA, CHAIRMAN, COMMITTEE ON ARMED 
                            SERVICES

    The Chairman. Good morning, ladies and gentlemen. Thank you 
for joining us for our first hearing of the 112th Congress.
    I can't think of a more appropriate subject to begin our 
oversight than a discussion of the Department of Defense's 
topline budget expectations and the manner in which Secretary 
Gates is bringing fiscal discipline to the Department and his 
proposals for finding efficiencies to reinvest in much-needed 
modernization and operations.
    Before we get started, I would like to take the opportunity 
to introduce our new leadership team. In adopting the committee 
rules last week, the committee reorganized the jurisdictions of 
the subcommittees to align with military missions rather than 
individual military departments.
    Our new subcommittees and leadership teams are: Emerging 
Threats and Capabilities, Chairman Mac Thornberry, Ranking 
Member, James Langevin; for Military Personnel, Chairman Joe 
Wilson, Ranking Member, Susan Davis; for Oversight and 
Investigations, Chairman Rob Wittman, Ranking Member, Jim 
Cooper; for Readiness, Chairman Randy Forbes and Ranking 
Member, Madeleine Bordallo; for Seapower and Projection Forces, 
Chairman Todd Akin, Ranking Member, Mike McIntyre; for 
Strategic Forces, Chairman Mike Turner and Ranking Member, 
Loretta Sanchez; and last but not least, for Tactical Air and 
Land Forces, Chairman Roscoe Bartlett and Ranking Member, 
Silvestre Reyes.
    I couldn't be more pleased about the selection of these 
members for our leadership team for the 112th Congress and 
appreciate the great depth and breadth of experience that they 
each bring to the table. I am confident that we will have a 
productive and purposeful year. And I look forward to working 
with each of them.
    As we get this new session started, there are a few 
administrative issues that I would like to reiterate. First, 
questioning will occur in regular order by seniority of those 
present before the gavel and then by order in which members 
arrive. That is how we will proceed today. There will be some 
hearings where we will vary from that. We will explain it as we 
go through.
    Second, there will be strict enforcement of the five-minute 
rule.
    Finally, to minimize obstruction of the walkways, only 
members and committee staff are permitted on the dais during 
the hearing. Thank you for your cooperation and let's get 
started.
    In September, we held a preliminary hearing on the 
Department's efficiencies initiative. At that time, I expressed 
concern about the lack of information that we had been 
provided. I remain dismayed, despite repeated assurances from 
the Department about an interest to work together on these 
issues, though we have seen little change in the Department's 
willingness to share information.
    Now, let me be clear on this. I agree with Secretary Gates 
that we must scrutinize defense programs to ensure that we are 
getting the most bang for our buck and concentrating our 
limited resources on the highest priority programs. I support 
initiatives focused on reducing waste, streamlining operations 
and eliminating redundancies across all enterprises.
    However, I will not support initiatives that will leave our 
military less capable and less ready to fight. Make no mistake 
about it; we stand at a critical juncture in the wars in 
Afghanistan and Iraq.
    As we draw down in one AOR [Area of Responsibility] and 
build up in another, the decisions that we make today will 
directly impact the level of success of these efforts. I cannot 
say it strongly enough. I will not support any measures that 
stress our forces and jeopardize the safety of our men and 
women in uniform. I will oppose also any plans that have the 
potential to damage or endanger our national security.
    Most concerning about the efficiencies initiative are the 
plans to reduce the Army and Marine Corps end strength and to 
implement even deeper cuts beyond the initial $100 billion 
goal. The reduction of an additional $78 billion from the 
Department's funding topline caught this committee by surprise. 
And we intend to pursue the impact of this decision by the 
Administration.
    We have asked much of our men and women in uniform over the 
years. They have bravely fought and sacrificed for all of us, 
each and every one of us in this room. And I cannot in good 
conscience ask them to do more with less.
    Now I would like to turn to our ranking member, Adam Smith 
from Washington, for his opening statement.
    [The prepared statement of Mr. McKeon can be found in the 
Appendix on page ?.]

STATEMENT OF HON. ADAM SMITH, A REPRESENTATIVE FROM WASHINGTON, 
          RANKING MEMBER, COMMITTEE ON ARMED SERVICES

    Mr. Smith. Thank you, Mr. Chairman. And again, 
congratulations on being the chairman of the committee. This is 
our first formal open hearing. And I have not had the chance to 
publicly congratulate you on that. But you have already done a 
terrific job of reaching out to me and to our side of the 
aisle. I think we are going to have a great working 
relationship. And I very much look forward to that. So thank 
you, Buck, and congratulations again.
    And I think this hearing is perfectly appropriate. It is 
always the number one duty of this committee to make sure that 
our national security is provided for, to make sure that our 
troops and those who are fighting to protect us have the 
resources they need to do the job that we on the civilian side 
ask them to do.
    Everybody on this committee has done an outstanding job of 
making sure that that priority stays right at the top of our 
list. And I think we have done an admirable job of that through 
the years. And I am sure that we will continue to do so.
    But as we go forward, we have to be mindful of the fact 
that just spending money doesn't necessarily make us safer. And 
I think anybody who spends, you know, just a few minutes 
looking at the Pentagon budget, including the gentlemen before 
us today who are going to testify, will readily agree that 
there are savings and efficiencies to be found within the 
Department of Defense budget. There is absolutely no question 
about it.
    We have wrestled over the years with a variety of different 
programs that were funded that turned out not to do what we 
wanted them to do. And we wound up wasting a lot of money, 
quite frankly. I know this committee in particular in the last 
couple of years has been very focused on acquisition reform. 
Mr. Andrews has been a leader on that as well as others on both 
sides of the aisle to try to figure out how to get more for 
what we spend.
    And I want to emphasize that point. Wasting money anywhere 
in our budget, even in the Department of Defense, does not 
makes safer, does not protect our troops and does not enhance 
our national security. In fact, it does just the opposite. So 
this committee and you gentlemen as well as everyone at the 
Pentagon have an obligation, not just to spend the money, but 
to make sure we are spending it efficiently and effectively.
    And I really want to applaud Secretary Gates and the others 
at the DOD for stepping up to that very difficult challenge to 
looking at our budget and saying where can we save money. 
Because there is no place where you are going to save money 
where somebody isn't going to complain about it. As the quote 
always goes, ``One person's waste is another person's income.'' 
It is not going to be easy, no matter how you do it.
    But I believe you gentlemen and Secretary Gates have 
stepped up and begun a very, very important process to find 
those savings. I applaud that effort. We look forward to 
learning more about the details.
    And also, I would be remiss if I didn't put this into the 
broader framework of our budget deficit and our budget. You 
know, there is a growing consensus in this country that the 
deficit is too high, the debt is too high, and we are out of 
balance. Now, that consensus falls apart when you begin to talk 
about where you are going to cut or how you are going to raise 
the revenue to make up for that, understandably so, because 
these are difficult decisions.
    But the math here is unrelenting. And we shouldn't forget 
about that.
    2010 we took in $3--or, sorry. We spent $3.5 trillion and 
took in about $2.3 trillion in revenue. That is a $1.2 trillion 
difference. That is about 33 percent of everything we spend. So 
if you started just from a logical standpoint, you would say to 
get us back to balance, we need to cut 33 percent out of 
everything that we spend.
    If you want to take 20 percent of the budget, which defense 
is, off the table, you are then down to about $2.8 trillion 
that you have to cut $1 trillion out of. And that means that 
you have to cut somewhere in the neighborhood of 45 percent out 
of everything. And that is Social Security, Medicare, Medicaid, 
homeland security, infrastructure, education, on down the line.
    I say all that to make sure that we are mindful of the 
difficult challenge that we face and also to remind everybody 
that our national security is also dependent upon having a 
strong economy. If we wind up, you know, putting our country in 
a fiscal hole that we can't get out of, collapsing our economy, 
making it difficult for U.S. industries to prosper and thrive, 
they are not going to be in a position to provide the valuable 
help that they do to our national security apparatus.
    So we have a tough job ahead of us. But savings and 
efficiencies are going to have to be found. And I, for my part, 
am absolutely convinced that we continue to--can continue to 
provide the best national security possible, give our support 
to the troops that they deserve and still find savings within 
the Pentagon budget. I think this hearing is the first start in 
that process.
    I know the gentlemen in front of us have worked very, very 
hard on this problem. I look forward to hearing their 
testimony. And I look forward to working with the Chairman and 
with the Pentagon and all members of this committee to find 
those savings and make sure that we continue to provide 
national security in every sense of the word.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Smith can be found in the 
Appendix on page ?.]
    The Chairman. Thank you.
    Now I would like to introduce our witnesses this morning. 
We have first the Honorable William J. Lynn III, the deputy 
secretary of defense from the Defense Department; General Peter 
W. Chiarelli, vice chief of staff of the U.S. Army, Admiral 
Jonathan W. Greenert, vice chief of naval operations, U.S. 
Navy; General Joseph F. Dunford, Jr., assistant commandant, 
U.S. Marine Corps; General Philip M. Breedlove, vice chief of 
staff, U.S. Air Force.
    Thank you, gentlemen.
    Mr. Secretary.

 STATEMENT OF HON. WILLIAM J. LYNN III, DEPUTY SECRETARY, U.S. 
DEPARTMENT OF DEFENSE; GEN. PETER W. CHIARELLI, USA, VICE CHIEF 
    OF STAFF, U.S. ARMY; GEN. JOSEPH F. DUNFORD, JR., USMC, 
   ASSISTANT COMMANDANT, U.S. MARINE CORPS; ADM. JONATHAN W. 
 GREENERT, USN, VICE CHIEF OF NAVAL OPERATIONS, U.S. NAVY; AND 
 GEN. PHILIP M. BREEDLOVE, USAF, VICE CHIEF OF STAFF, U.S. AIR 
                             FORCE

    Secretary Lynn. Thank you very much. And good morning, Mr. 
Chairman and members of the committee. Thank you very much for 
the opportunity to be with you today and discuss our efficiency 
efforts at the Department of Defense.
    Before I start, I would like to extend my thoughts and 
support to one of the members of your committee who is not here 
today, Representative Gabrielle Giffords as well as her 
husband, Navy Captain Mark Kelly and the others affected by the 
events in Tucson. Gabby and Mark are part of the military 
family, and we are very much cheering Gabby on as she begins 
her rehabilitation.
    Today I am pleased to be joined by the vice chiefs of staff 
of the Army, Navy and Air Force as well as the assistant 
commandant of the Marine Corps. I will have a brief statement, 
and then we will turn to your questions for the bulk of the 
hearing.
    The leadership of the Department is well-aware that the 
nation is dealing with significant fiscal pressures. We owe it 
to the taxpayers to make the most of every dollar entrusted to 
us.
    Indeed, we could all benefit from following the direction 
of President Eisenhower, who believed we should spend whatever 
is necessary for national defense, but not one penny more.
    To that end of the Department sought in both the fiscal 
year 2010 and the fiscal year 2011 budgets to curtail or 
eliminate programs that were either too troubled to continue or 
that provided capabilities that were too narrow to justify 
their costs. We identified more than 20 programs in those 
categories that would have cost more than $300 billion, if 
pursued to their completion.
    We have also initiated a comprehensive search for greater 
efficiencies in our business operations, our personnel system 
and our headquarters structure. Specifically, Secretary Gates 
laid out three objectives that I will describe today.
    The services first were directed to achieve $100 billion in 
efficiencies over the 5-year Future Years Defense Plan. Second, 
the services could retain and invest those efficiency savings 
in enhancement of high-priority warfighting programs. And 
third, the Department developed additional efficiencies and 
other changes to accommodate a $78 billion reduction in our 
topline that contributed to the Administration's deficit 
reduction efforts.
    Over the past 6 months, the military services have 
undertaken a comprehensive examination of their overhead 
accounts to achieve the $100 billion savings objective the 
secretary issued them. The savings come from numerous sources. 
A portion are generated by reorganizations that reassign 
personnel and reduce layering in the Department.
    For example, the Army will consolidate six installation 
management command regions into four and close the evaluation 
task force. The Navy will eliminate selected squadron staffs 
and disestablish the 2nd Fleet in Norfolk. The Air Force will 
consolidate four air operations centers and three numbered Air 
Force staffs.
    The services will also achieve savings through implementing 
better business practices. For example, the Army will leverage 
efforts of other organizations to reduce the number of data 
centers, and the Navy will shift 6,000 billets from shore-based 
installations to increase shipboard manning.
    Finally, the Air Force will implement better business 
practices in satellite procurement, establishing more stability 
in the development process and utilizing block buys in 
procurement.
    In addition to these business practice efficiencies, this 
service has garnered savings through reductions in programs 
that either cost too much or provided too little capability. 
The Army will terminate procurement of the SL-AMRAAM [Surface-
Launched Advanced Medium-Range Air-to-Air Missile] surface-to-
air missile and the non-line-of-sight launch system. The Marine 
Corps will terminate the expeditionary fighting vehicle.
    As directed by the secretary, all savings realized by a 
military department will be retained and reinvested in that 
department. Approximately 28 billion of the total savings would 
be used over the next 5 years to deal with higher-than-expected 
operating expenses. The remaining savings, some $70 billion, 
would be used to enhance high-priority military capabilities.
    The Air Force will begin development and acquisition of a 
new long-range bomber and maintain maximum procurement levels 
of Reaper UAVs [Unmanned Aerial Vechicles]. The Army will 
invest more heavily in modernization of the army's battle fleet 
of Abrams tanks, Bradley fighting vehicles and Stryker wheeled 
vehicles. The Navy plans to use the savings to buy more ship--
to buy six more ships than were in last year's plan, including 
an additional destroyer.
    In sum, our efficiency initiatives will permit improvement 
in warfighting capabilities in ways that would not have been 
fiscally possible in the absence of the efficiency campaign.
    However, Congressman Smith indicated the strength of our 
national defense ultimately depends on a strong economy as 
well, so as part of the Administration's broader effort to 
address the deficit, the Department reduced its topline budget 
for fiscal year 2012 through fiscal year 2016.
    This reduction, which totaled $78 billion compared with 
last year's plan, will still result in a defense base budget 
request of $553 billion in fiscal year 2012 and modest real 
growth in the near years of the Future Years Defense Plan.
    We accommodated this topline reductions through additional 
efficiencies and other changes outside the warfighting 
accounts. For instance, Secretary Gates has imposed a freeze on 
civilian personnel levels in the Department through fiscal year 
2013, allowing limited exceptions to accommodate growth in the 
acquisition workforce and a few other essential areas.
    The secretary also mandated a reduction of 10 percent per 
year for 3 years in the number of contractors who augment 
government staffs. We have sought to address the enormous 
growth in our medical costs through management efficiencies 
while continuing to improve high-quality military health care.
    We believe, though, it is time to lift the 15-year freeze 
on TRICARE enrollment fees for working-age retirees. We believe 
it is time to phase out subsidies that DOD currently provides 
to a small number of non-military hospitals, and we are making 
adjustments and pharmacy co-pays that will both, we think, 
improved the benefit as well as develop cost efficiencies.
    Finally, we are taking steps to streamline our 
organizational structure. The secretary announced last August 
we are disestablishing the Joint Forces Command and the 
Business Transformation Agency, and we are eliminating the 
position of assistant secretary for networks and information 
integration. In addition, we will pursue efficiencies in 
intelligence operations and in our information technology 
investments.
    Mr. Chairman, the proposals we are describing today are the 
result of a detailed, comprehensive budget and program review 
led by Secretary Gates and involving the senior military and 
civilian leadership of the Department. I know that some will 
argue that our proposals cut defense too much. Others will 
argue that we have not cut enough.
    We believe this budget strikes the right balance for these 
difficult times. In Secretary Gates' own words, ``This budget 
proposal represents a reasonable, responsible and sustainable 
level of defense spending for the next 5 years.''
    I want to end my statement by thanking the Chairman and the 
committee for your strong support of the Department and 
particularly for your strong support of the men and women who 
bear their burdens of our national defense. Thank you, and I 
look forward to your questions.
    [The prepared statement of Secretary Lynn can be found in 
the Appendix on page ?.]
    The Chairman. Thank you, Mr. Secretary.
    The 78 billion topline reduction was a surprise to us when 
we went into the briefing with the Secretary. We thought we 
were going to talking and getting more detail on the 100 
billion. Then we also found out about the 78 billion.
    What guidance was provided by the Administration to the 
Department with regard to the topline budget reductions across 
the Future Years Defense Program? And when was this guidance 
received?
    Secretary Lynn. Mr. Chairman, the topline this past year, 
as it has--as it--as, I think, in every year with every 
administration, was developed in a discussion between the White 
House, led in particular by the Office of Management and 
Budget, and the Defense Department. We had iterative discussion 
that included the President.
    We settled on the $78 billion number as the number that we 
thought we could achieve through efficiencies that did not 
undermine any of our warfighting capabilities. And as to the 
timing, the final numbers were developed in December.
    The Chairman. And have other departments received similar 
instructions?
    Secretary Lynn. Yes, they have, but I wouldn't be able to 
give you the exact numbers of those other departments. But a 
similar process was done with all of the departments.
    The Chairman. Similar percentages of cuts?
    Secretary Lynn. I am not in a position to release the whole 
Administration's budget. My belief, though, is that the Defense 
Department had less--fewer reductions than many other 
departments.
    The Chairman. And we will see those when the President's 
budget is submitted?
    Secretary Lynn. Yes, when the President's budget is 
submitted, you will see all of them, of course, Mr. Chairman.
    The Chairman. Thank you. How will this 78 billion topline 
reduction affect the execution of the fiscal year 2011 funding 
priorities?
    Secretary Lynn. At least off the top of my head, Mr. 
Chairman, I don't think it would affect the fiscal year 2011. 
The challenge with fiscal year 2011 is that we don't yet know 
what the final number is going to be.
    As you well know, we are operating under a continuing 
resolution, and we are awaiting congressional action. So the 
challenge in fiscal year 2011 is how to operate either under a 
continuing resolution or ultimately a midyear appropriation.
    That was the challenge in preparing the program. It is a 
challenge in executing the budget. But I don't think the 
development of the 2012 to 2016 program will affect execution 
of fiscal 2011.
    The Chairman. Okay. The secretary stated on January 6 that 
this plan, and ``represents in my view the minimum level of 
defense spending that is necessary, given the complex and 
unpredictable array of security challenges the United States 
faces around the globe.'' Then he went on to explain why 
further cuts to force structure would be calamitous.
    However, the secretary also indicated just last year that 2 
to 3 percent real growth was necessary beyond 2015 to prevent 
cuts to force structure. How will you maintain this level of 
modernization that the secretary believes is necessary to 
protect our national security in the face of zero percent real 
growth in the coming years?
    Secretary Lynn. The secretary has indicated that to 
maintain force structure and to absorb the growth that you see 
in--due to technology and enhancements and personnel benefit 
enhancements, that you do need a 2 to 3 percent real growth 
with the constant force structure.
    For that reason, when we are going to have a proposed flat 
budget in fiscal 2015 and 2016, we believe that you do need 
some force reductions, and we have put planning and therefore a 
reduction of 27,000 in the Army end strength and 15,000 to 
20,000 in the Marine Corps end strength.
    Secretary Lynn. Now, that reduction will take place after 
we think we will have drawn down substantially in both 
Afghanistan and Iraq and so that our international commitments 
should not be at today's levels.
    The Chairman. Thank you very much.
    Mr. Smith.
    Mr. Smith. Thank you, Mr. Chairman.
    Mr. Secretary, just as a starting point, can you keep the 
numbers in, I think, proper perspective, if you will walk us 
through a little bit how much the defense budget has increased 
in the last, you know, 6 or 7 years.
    You talk about those end-strength numbers. They have gone 
up significantly, and understandably so with our commitments in 
Iraq and Afghanistan.
    But you have just a little bit of the numbers of how much 
we have actually increased the budget in the last 7 or 8 years 
in the Department of Defense. And try to include OCO [Overseas 
Contingency Operations] in that as well, not just what the 
baseline is.
    Secretary Lynn. The--in the--I believe since 2001, the 
budget--the base budget has come close to doubling.
    Mr. Smith. Right.
    Secretary Lynn. And, of course, the--and the end-strength 
numbers are up, particularly in the Army and the Marine Corps, 
and would still be higher even after the proposed reductions in 
2015 and 2016 than they were when Secretary Gates took office.
    And that was really the high point of the Iraqi conflict.
    In terms of the OCO budget, that is about $160 billion this 
year. Obviously in--going back to 2001, before the conflict, 
before 9/11, before the conflict in Afghanistan, that 
essentially would have been zero.
    Mr. Smith. Right. But in NASB, if we added up over the 6 or 
7 years that we have had supplementals, it is somewhere in the 
neighborhood of a trillion dollars, in addition to that 
doubling of the defense budget that has happened.
    Secretary Lynn. That is correct, sir.
    Mr. Smith. And these couple quick questions of specific 
programs, the F-35, most expensive program we have got going, 
has experienced some troubles.
    Can you give us a little bit of an indication of our 
efforts to try to get those costs under control and get us an 
actual product for a reasonable price?
    Secretary Lynn. Yes, Congressman. The F-35 is a--is 
certainly a critical program for the Department. It is the 
fifth generation fighter that we think that we need to have in 
the decade following this.
    The development program, frankly, has not gone as smoothly 
as we had hoped. The costs have risen.
    We have taken additional steps this year to, frankly, 
present the committee with a more conservative program in three 
fundamental ways.
    One, the most difficult aspect of the program has been the 
development of the STOVL [Short Takeoff and Vertical Landing] 
version of the F-35, which is the most complicated version.
    We have decoupled the development of that aircraft from the 
carrier-based and the--and the Air Force versions, which are 
proceeding a bit better, so that they will not be held back.
    And we have put it on what the Secretary has called a 2-
year probation. We are going to continue the program. We are 
going to try and work through the development issues.
    And we are going to decide at the end of 2 years whether to 
go forward with the program, in the strong hope that we will 
have solved those problems at the end of that 2 years.
    The second thing we are doing is we are slowing the ramp of 
procurement. The procurement will be flat from fiscal 2011 to 
2012. And the ramp will be slower by over a hundred aircraft in 
the plan than we had--in the 5-year plan, than we had planned 
last year.
    This is reducing concurrency and getting further in 
development before we invest more in production. It is a more 
conservative approach.
    And then, finally, third, to address any operational gaps 
that we have by slowing that procurement, we have added about 
40 F-18s to the line so that we are able to fill out the fleet 
in the interim period.
    Mr. Smith. Right, and then that, obviously, is a major 
challenge, the tens of billions of dollars more than was 
expected that are being spent on that critical piece of our 
national security, presents some of the challenges for the 
budget going forward.
    Just one final question, General Chiarelli, can you walk us 
through a little bit the early infantry brigade combat team 
update, sort of, as I like to refer to it, Son of Future Combat 
Systems, if you will, our effort to update those programs?
    Information warfare in the battlefield space for our 
brigade teams has not gone terribly smoothly as you know in 
terms of the testing. I know you have been working hard to 
update that, make sure we get the equipment we need, get rid of 
what doesn't work and keep what does.
    Can you just walk us through a little bit in light of the 
most recent testing, where we are at on that and how you are 
planning on going forward?
    General Chiarelli. Well, we are very, very pleased with 
where we are with the network right now. And we are very 
pleased with the SUGV [Small Unmanned Ground Vehicle], which is 
the little robot that goes around.
    Some of the others have created some challenges for us. And 
we will be looking before too long, once the R&D [Research and 
Development] is complete, to make some decisions on some of the 
other systems.
    Mr. Smith. Okay.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Mr. Bartlett.
    Mr. Bartlett. Thank you very much.
    Whatever our topline is, we need to be as efficient as we 
can in using the monies.
    There are three areas that I know we all have concerns 
about, and I just wanted to see where you are going with the--
trying to solve these problems.
    I am a huge supporter of research and early R&D. You never 
know, if you don't try, what will come of it.
    So I don't want my concern here to be in any way--reflect 
on--indicate that I am not a big supporter of research and R&D. 
I think we need to do more of that, not less of that. I think 
we spend too little money there.
    But I am very much concerned that we have too many programs 
that continue to the late R&D stage. There is no way we could 
possibly procure all of them.
    And so we have to find a mechanism for aborting these 
things earlier rather than later, because there is just no way 
that we could procure all of the--all of the end items that the 
number of programs that we now have in late R&D. How are we 
going to address that problem?
    A second problem is when a program is not going well, it 
has to really, really be moribund before we abort it. Two 
recent programs are future combat systems and the expeditionary 
fighting vehicle, you know. And after years and years and 
billions of dollars, we finally decide, hey, that is not a good 
idea.
    I think there were a number of people along the way who 
said, way earlier than that, that that was not a good idea, 
that we shouldn't be doing that.
    How do we address that problem so we don't come to the 
point where we have these sunk costs of billions of dollars and 
aborting a program where parts are made, partners are made in 
many, many districts across the country so it gets wide 
congressional support?
    And the third problem is there is always some new 
technology we can add. I have been here 18 years now. We never 
have finished a program on time and on budget. And we are 
partly responsible for that, because we keep saying, gee, 
couldn't it be a little better? Let us add this new technology.
    How do we determine it is good enough and we stop there? We 
have an open architecture so that we can add these improvements 
later, because many times we are going to have to live with 
these things for the next 40 years.
    So we want it to be as good as it can be. How are we 
addressing these problems? There are huge potential savings in 
these areas. How do we get there?
    Secretary Lynn. Let me take your questions in order, Mr. 
Bartlett. One, we agree with you on the basic R&D. And the 
budget that we will send you next month will indeed have real 
growth in the basic R&D, try to protect that seed corn that you 
are rightly concerned about.
    With regard to decisions on programs, I guess that is not a 
criticism, I think, Secretary Gates has suffered from.
    He has made, I think, some tough, tough decisions, whether 
it is on the presidential helicopter or the F-22 earlier or the 
future combat system that you mentioned, which he terminated, 
then the expeditionary fighting vehicle this year.
    I think the thrust of your question is right. The 
Department needs to make hard decisions early. And we are 
endeavoring to do that.
    I think you are right. It is challenging, both in terms of 
the support programs' buildup, as well as the--it is always 
difficult to know when you have reached the point of do you 
have enough knowledge to make the decision or is it going to 
get better just around the next corner, which tends to be the 
promise.
    Your third question on how do we--I think it goes to what 
the effort Mr. Andrews and others led on this committee.
    It is the fundamental thrust of acquisition reform. It is 
how do you have budget and schedule be equally important as 
performance? You have to balance between all three.
    I think we have often balanced in favor of performance, for 
often good reasons, but budget and schedule suffers. We are 
trying to, in our acquisition reform efforts, balance better.
    And you will see, for example, in the program we are 
presenting next month, that we have, as the secretary has 
announced, we are going to pursue a new bomber program as part 
of family of systems approach to long-range strike.
    An important element of that new bomber program will be a 
firm view of what the cost, of what the unit cost of that 
bomber ought to be, and that we ought to develop the best 
possible technology, but at that price.
    Mr. Bartlett. Thank you.
    Thank you, Mr. Chairman. I yield back.
    The Chairman. Thank you.
    Mr. Reyes.
    Mr. Reyes. Thank you, Mr. Chairman.
    Gentlemen, welcome.
    The first question is for General Chiarelli.
    The committee was told by Under Secretary Westphal that the 
Army was intending on reinvesting some of its savings in the 
efficiency account in the Abrams, Bradleys and Stryker vehicle, 
doing upgrades for those three.
    Could you provide us with a little more detail on those 
upgrades? And also, how much additional funding was the Army 
able to allocate to modernize these particular vehicles?
    And how will it provide better capability for the soldiers?
    General Chiarelli. Well, those are three systems that we 
currently have been able to put some money in from our 
efficiencies, along with many others.
    In Stryker, I think, you know, we are moving ahead with a 
double V-hull. We have been completing some testing, and that 
testing has come out very, very satisfactory.
    We are very, very pleased with it and are moving ahead to 
provide additional protection for the entire crew of the 
Stryker, above what we have right now with the flat bottom 
hull, with some of the add-on armor kits.
    It is a great improvement. We will be making increases or 
changes, improvements to both the Stryker and the Bradley. And 
I will have to get you the exact dollars on that at a later 
time, sir, and I will get those to you.
    Mr. Reyes. Okay.
    The other area I would like to ask is in the area of the 
Patriot missile upgrades, and also the counter-rocket artillery 
mortar systems. What is the Army intending to do with those 
kinds of upgrades, and how will they play out into the 
capabilities to the intent to procure, and obviously with the 
end result of helping to protect our soldiers in the field?
    General Chiarelli. Well, sir, those improvements grew out 
of our portfolio reviews, where we took like-type systems and 
looked at the entire portfolio and compared systems. That came 
out of a portfolio we call air and missile defense.
    And when we looked at that portfolio, we saw we had some 
broken programs. One of the programs that we had concern with 
was SL-AMRAAM. The cost of that missile for SL-AMRAAM had grown 
from $300,000 to, I am told, over $1,000,000 a copy now. And in 
POM [Program Objective Memorandum] 2010-2015 we were only 
buying 100 of those missiles.
    And quite frankly, we saw changes in the threat from the 
time that that program had been conceived. We were able to take 
the savings from that particular program and apply them against 
Patriot and against counter-rocket and counter-mortar, because 
quite frankly, counter-rocket and counter-mortar are the 
threats that are affecting our troops downrange today.
    So with over a billion dollars in SL-AMRAAM savings we were 
able to reinvest that in counter-rocket and counter-mortar and 
also in upgrading Patriot.
    Mr. Reyes. Very good. Thank you, General.
    I yield back, Mr. Chairman.
    The Chairman. Thank you.
    Mr. Thornberry.
    Mr. Thornberry. Thank you, Mr. Chairman.
    Mr. Secretary, you mentioned Joint Forces Command in your 
opening statement. And as I am sure you remember from your 
previous time, a primary reason that the command was created 
was to have a major command that looks forward, a future 
command. And to have joint experimentation come together, so 
that you have a person at the table who is not just worried 
about what is happening today, but looking ahead.
    So if the command goes away, and there are lots of reasons 
I understand to do that, who does that? Or is it your all's 
view that you don't need that person who is future-oriented 
with the joint experimentation capability?
    Secretary Lynn. We agree with you, Congressman, that 
certainly looking to the future and in particular the emphasis 
on jointness through experimentation, through development of 
doctrine, are critical roles. We did not think we, at the point 
we are in the Department, that we needed a command to do that.
    Now, we are retaining many of the sub-organizations--about 
half is the rough estimate--that were doing that, including the 
joint experimentation group. They will report--still the final 
recommendations are still being developed. But the Joint Staff 
and the chairman and the vice chairman will play a stronger 
role in advocating for jointness, in advocating for development 
of joint doctrine in this post-JFCOM [Joint Forces Command] 
world.
    Mr. Thornberry. Yes, I think the concern is you bury stuff 
down in the bureaucracy, it is never going to percolate 
through. And that is part of where we were before Joint Forces 
Command.
    General Dunford, I am not an expert in this area, but my 
understanding was the Marine Corps has had a requirement that 
the Navy is going to get the Marines so close, so many miles 
from shore, then they got to be transferred into some 
amphibious vehicles that will get them onto shore in a certain 
amount of time so that they are in fighting condition. Have 
those requirements changed? Have the miles changed? Have the 
time changed?
    General Dunford. Congressman, thank you.
    First, we are and continue to be committed to the 
capability that was represented by the EFV. That is to be able 
to provide the nation with a short access. Historically, we 
have planned over the past 2 decades for Marines to be 
discharged at 25 nautical miles. In recent discussions with the 
Navy, those figures have in fact changed. And we are in the 
process now of refining the requirement.
    And we think it is somewhere in excess of 12 nautical 
miles, but something less than 25 nautical miles. So we are in 
fact reviewing the requirement right now in the context of both 
our capabilities and limitations, as well as the enemy's 
capabilities and limitations, particularly some newly fielded 
equipment inside of the Department of the Navy.
    Mr. Thornberry. Admiral, is the Navy okay with getting 
closer to shore and being more at risk of missiles from 
reaching the ships?
    Admiral Greenert. Congressman, we are. We have taken a very 
close look at this, and with our integrated fire control 
capabilities in the future, our ability to network with the 
self-protection, the RAM [Rolling Airframe Missile], and some 
of the other systems, the rolling airframe missile that we 
have, our counter-swarm capability, we believe--and I am in 
concurrence with General Dunford--somewhere around 12 miles, 
maybe a little bit more, is acceptable.
    We have modeled this closely; we have war-gamed it closely. 
We are reasonably comfortable. There may be situations when, as 
the maritime component commander, we may not have as much time 
as we assume we will have. We will have to look at the risk 
factor regarding that. That will be the individual operator's 
judgment on that case. But overall, we are good with it.
    Mr. Thornberry. Well, I appreciate y'all's answers. I think 
these are just two examples I picked of where we want to have 
further discussions with you. There has been a sense, at least 
from my part, that some edict comes down from on high saying 
cut the budget, and you all do the best you can and try to put 
a rosy face on it.
    And I think the concern that some of us have is, okay, what 
are the implications of eliminating this vehicle, eliminating 
this command? Have we thought through who does it, what kind of 
capability we lose if that happens?
    And personally, I think there is concern about having that 
thought through and analyzed, rather than going through 
strictly a budget exercise, even though obviously all of us are 
in favor of finding efficiencies wherever we can. So I 
appreciate it. I think there is further discussion to be had.
    Mr. Chairman, I yield back.
    The Chairman. Thank you.
    Mr. Andrews.
    Mr. Andrews. Thank you, Mr. Chairman.
    Good morning, gentlemen. Thank you for your testimony.
    Mr. Secretary, thank you for referencing what the members 
of this committee did on procurement reform. Mr. Conaway 
deserves at least equal credit for that, as do many members. 
And we appreciate the fact you are already starting to 
implement those reforms. Thank you.
    I wanted to come back to the topline discussion, where 
Secretary Gates on January 6th talked about $78 billion off the 
topline through the efficiencies that have been outlined. Under 
the 5-year plan that you are presently working under, defense 
spending will still be considerably higher 5 years from today 
than it is today. Isn't that right?
    Secretary Lynn. Yes, sir.
    Mr. Andrews. If I look at the math correctly, the 
difference between the plan that you are presently operating on 
and what Secretary Gates has now suggested is instead of the 
defense budget being 17 percent higher than it is today, it 
will be about 14.5 percent higher than it is today. Is that 
essentially right?
    Secretary Lynn. I don't have the math in front of me, but 
it sounds right.
    Mr. Andrews. Yes, the numbers to be were $567 billion in 
the base budget in the first year, and $663 by the fifth year. 
He would take that down by $78 billion over 5 years.
    Given that, I want to commend you and the Secretary for the 
real choices that you are putting before this committee and the 
Congress. The easiest thing to do here--it has been for 2 
decades or longer--is to say there can be operating 
efficiencies and overhead savings and we can spend less if we 
do that. In the 20 years since that has been said the budget 
has probably tripled, not just doubled. So there really have to 
be some real decisions.
    And I think you have raised a very interesting one with the 
EFV [Expeditionary Fighting Vehicle] recommendation. I note the 
EFV had a Nunn-McCurdy breach in 2007. And our expert staff 
tells us, a Nunn-McCurdy breach is triggered under the law when 
a program exceeds its budgeted schedule by 25 percent or more. 
Do you happen to recall the magnitude of the Nunn-McCurdy 
breach for the EFV? How far over budget was it?
    Secretary Lynn. Unless General Dunford can provide it, I 
would have to provide it for the record.
    General Dunford. Congressman, I can talk to the unit cost. 
The unit cost was $5 million in 1995. At that time, we had 
planned to buy 1,013 vehicles. The program now is 573 vehicles, 
and it is $17 million for unit cost. So as you can see, it is 
significantly more.
    I think the Nunn-McCurdy threshold is about 25 percent. So 
we exceeded the Nunn-McCurdy threshold for unit cost----
    Mr. Andrews. So let me get this straight. When the Congress 
made a decision to procure these vessels in 1995, we were 
anticipating they would cost $5 million a copy? And that has 
ballooned to $17 million?
    General Dunford. That is correct.
    Mr. Andrews. So it has more than tripled in cost? In lay-
person's language, why is that? Why did it more than triple in 
cost?
    General Dunford. One critical factor is that at the time in 
1995, we planned on buying 1,013 vehicles. The current program 
is 573 vehicles. So that accounts for some of the unit cost.
    Quite frankly, Congressman, I can't tell you why the rest--
why it exceeded cost in other areas. I do know that the unit 
cost was impacted by the total number of vehicles that we were 
going to buy and other factors. Really, I think probably 
General Dynamics can be better able to explain that than me.
    Mr. Andrews. My understanding is that we have not yet 
passed milestone B on this program, that we were approaching 
it, but not yet past it?
    General Dunford. Congressman, we are just about to be at 
knowledge point two in February.
    Mr. Andrews. Yes. And what planning has taken place in the 
Department with respect to an alternative, if in fact we don't 
procure these vessels that have been presently planned? How 
would we get Marines from the ship to the shore?
    General Dunford. Congressman, as I mentioned earlier, first 
we are committed to continue to be able to do that and provide 
a short access for the nation. So we are committed to be able 
to get any vehicle that moves from ship to shore. We believe 
that the knowledge that we learned in the EFV program, combined 
with some new acquisition processes, will allow us to get a 
vehicle that will allow us to meet the operational requirement 
at significantly less cost.
    Mr. Andrews. Is there going to be a gap between when we get 
to that point and now? Is there any operating deficiency that 
the Marines would be subjected to?
    General Dunford. We can currently meet our requirements. 
The use of the assault amphibious vehicle, which is a legacy 
program, absolutely has an effect on our tactics, techniques, 
and procedures. So we mitigate the risk of a legacy program by 
our employment concepts. What we will do now is take a look at 
service life extension program for the assault amphibious 
vehicle to address some of the lethality shortfalls, some of 
the mobility shortfalls.
    And then, we also at the same time, will take a look at, 
you know, what the expeditionary fighting vehicle really 
represents is a small part of our overall ground tactical 
vehicle plan, and about two-thirds of what we need to come from 
ship to shore in armored vehicles. So we will take a look also 
now in addressing what we call the Marine Personnel Carrier, 
which is the balance of our amphibious capability.
    Mr. Andrews. Thank you very much, I appreciate it.
    The Chairman. Thank you.
    Mr. Secretary, I didn't want to interrupt when you were 
asking the questions. But I would like to have a little 
understanding. When the secretary briefed us on this additional 
$78 billion, what he said was, ``Next year's budget would have 
a 1 percent increase, the following year, a half percent and 
then 3 years of flat.'' Now, how does that grow those kind of 
numbers?
    Mr. Andrews. Will the gentleman yield?
    The Chairman. Yes.
    Mr. Andrews. If I may, before the secretary does, my 
understanding is that the numbers are in real dollar terms. So 
that is how.
    Secretary Lynn. That is part of the answer. Mr. Chairman, 
the--we don't actually know what the fiscal 2011 to 2012 growth 
rate is, again, because we don't know what the fiscal 2011 
budget. But it will be somewhere between 1.5 and 3 percent real 
growth. That is on top of inflation, which is in the 1.5 to 2 
percent.
    So you are looking at nominal growth of 4 or 5 percent 
fiscal 2012. Then the real growth in fiscal 2013 and 2014 is 1 
percent in 2013, a half a percent in 2014, then zero real in 
2015 and 2016. In other words, the budget would still grow, but 
only to keep pace with inflation so that when you net those 
numbers up, I believe you end up with the line that Congressman 
Andrews led with.
    The Chairman. Okay.
    Secretary Lynn. So, in current dollars, it wouldn't grow by 
those numbers? It would be inflated dollars? In current 
dollars, it would grow more because of the addition of 
inflation----
    The Chairman. Right. Thank you.
    Secretary Lynn. When the secretary said to you 1 percent, a 
half percent, zero, he was talking real. You have to add 
inflation to that.
    The Chairman. Thank you.
    Mr. Akin.
    Mr. Akin. Thank you, Mr. Chairman.
    I would like to start by making a distinction between two 
things. And I have to say that I don't have so many questions 
as answers. We still get 5 minutes for answers, so I am going 
to just give you a little bit of where I am coming from sitting 
in this committee.
    The first thing is is what you have done. You started the 
beginning of the year and decided we are going to cut defense 
by $78 billion, make some big changes in various programs and a 
whole series of decisions. The question is were those all good 
decisions or not. That is one question.
    The second point, though, is how you did it. The U.S. 
Constitution requires the members of this committee to be 
involved and be part of the decisions for national security. 
The end of last year this committee was approached on the fact 
that we had an opportunity to get two purchases for 10 Littoral 
Combat Ships, which was different than what we had had planned.
    At the last minute, we were said this would be a good idea 
for the Navy. It is saving us some money, and it is a good 
thing to do. We took a look at the numbers in a very compressed 
timeframe, passed legislation and supported the Navy in that 
decision, even though we had no idea that it was coming until a 
week or so before, a couple weeks before when we actually made 
the legislation and got it done.
    We worked with you as co-partners. This month we received, 
like a cc on a general press release to the public, that we 
have made all of these unilateral decisions, and we had no idea 
a bunch of them were even coming.
    The expeditionary fighting vehicle strikes me as one where 
the assumptions are very thin. It appears that we are almost 
canceling a capability in order to make a $78 billion cut on 
the surface. We will look into it. But my concern is that you 
are trying to make, or you have inadvertently made, this 
committee irrelevant because you are not keeping us in the loop 
informing us of what you are looking at.
    That has gotten progressively worse over 10 years to where 
it is right now. And that is unacceptable, at least to me, as a 
subcommittee chair. And I believe I may speak for a few other 
members of this committee that we want to be part of the 
decisionmaking process.
    If you go back 200 years and look at the history of our 
national defense, you find that it is a partnership between 
military and civilians. And both sides play a role in that. And 
at times, the civilian side, that is this committee, has made 
recommendations in 20/20 hindsight that have turned out to be 
very good military decisions such as, among other things, 
arming predators.
    And I don't like, and I don't think this committee will 
tolerate, being left out of the process of decisionmaking. So 
we will have our hearings. And we will look into those 
decisions. And the decisions that we think are poor we will not 
be shy about explaining why we think those are poor decisions.
    But I just think it is clear in January when we are 
starting off on a new foot that we understand each other. And I 
am going to try to explain it so that you understood where we 
are coming from because we don't like to be called at the last 
minute and say--I talked to the secretary of the Navy 2 days 
ago, and I said, ``I am very concerned about cutting the 
defense budget.'' He said, there are not any cuts to the 
defense budget that he knew of. We had the speech last night 
that talked about it.
    Now, to the overall concept, I think it is in your best 
interest to use us as part of your team to help you do your 
jobs. I think it is foolish to ignore us because here is what 
is going on. You want to take a big look at where we are, 
budget-wise, in this country.
    You take your entitlements: Medicare, Medicaid, Social 
Security. Add the other entitlements, and then add service on 
the debt, which is like an entitlement because when we sell a 
U.S. treasury or something, we have to keep paying the interest 
like a little machine that spits out dollar bills. We can't not 
pay that.
    So you take all those entitlements together, add them up. 
Right now those entitlements are equal to the revenue that we 
take in as a nation. So you can cut defense to zero, cut 
discretionary spending to zero, and we are still just even. You 
cannot pay for entitlements by cutting defense. But you can 
destroy our country by cutting defense.
    Now, you want to take a look at some concerning numbers? If 
you take a look at defense spending as a percent of total 
budget authority, we are now, with these proposed cuts, to the 
same place we were in 1998 when we hollowed out our forces. 
That is the kind of thing that it is our job to be concerned 
with and our job to go to bat and say to the Budget Committee, 
``Wait a minute. We really can't take defense. We can't take 
the Marines and deny them the capability to go from ship to 
shore.''
    And if you want to put new engines in some vehicles that 
date back to the Korean era and they can go from four to six 
knots, somehow or other, I am not seeing that as a very 
workable solution, with all due respect to my good friends from 
the Marine Corps. I know you are trying to do what you think 
you have got to do, budget-wise. But some of these decisions 
need to be run by this committee first. And I just wanted to 
put a marker down.
    Mr. Chairman, if I am a little too strong, correct me. But 
that is--that is my strong sense. There needs to be 
partnership. Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Mrs. Davis.
    Mrs. Davis. Thank you, Mr. Chairman.
    And, gentlemen, thank you all for your distinguished 
service. I want to turn to an issue that involves our people, 
the men and women who serve. I know that the Department is 
looking at a number of reforms in the area of military health 
care. And clearly, in many ways, everything is on the table 
here.
    But I wonder if you could share with me what concerns the 
services have raised as it reflects some of the proposals in 
the--that you have in health care. Now, I know we are not 
looking at specifics right now. But I am just wondering 
somewhat about that process and about how the services are 
weighing in, what their concerns are. What have they raised?
    Secretary Lynn. Well, let me let the vice chiefs speak for 
themselves. Let me just give an opening comment.
    As you indicated, part of the development of this program 
was an attempt to reign in health care costs, which have more 
than doubled over the past 10 years. The--there is some 
proposals with regard to fees, with regard to hospitals, 
pharmacy benefit and overall efficiencies. Happy to go into 
more detail at the appropriate time.
    But the process by which those were developed was a full 
Department-wide process led by the Secretary where he had a 
series of meetings that included the entire leadership, the 
chiefs, the service secretaries, the combatant commanders, 
senior OSD [Office of the Secretary of Defense] leadership. I 
know Chairman Mullen led at least one, I think more than one, 
tank session. So this was a very fulsome process.
    But let me turn to the vice chiefs for their reaction.
    General Chiarelli. I would just echo what Secretary Lynn 
said. We were part of that process and agreed with the 
decisions that have been made.
    I will tell you in my area, the area that I am most 
concerned about is I don't have enough uniform health care 
providers. But we made a decision in the Army a while ago to 
cap the number of uniform military health care providers we had 
at a certain number. And I need to find room inside my end 
strength to add some more. It is just not enough.
    We have been able to make up with that through contract 
health care in certain areas. But when it comes to areas like 
behavioral health care, I have got a real problem there, as the 
nation has a real problem there because we just don't have 
enough.
    So I find myself competing with the nation to get that 
really, really important asset that the United States Army 
needs at this particular time. A great example I will give you 
is second and third effects is I need alcohol and substance 
abuse counselors. But many of them have the degrees necessary 
to fleet up to become behavioral health specialists at an 
increased salary.
    So what I find myself doing--as hard as I try to hire 
alcohol and drug abuse counselors, I bring in five to Fort 
Campbell, Kentucky, and I lose five as they fleet-up to 
behavioral health specialist positions that pay additional 
funds. So that is an area for me that is of concern.
    Admiral Greenert. Thank you, ma'am.
    I echo General Chiarelli's comments regarding uniform 
health care providers. Our concern was as we reviewed--and 
there were more initiatives than what is in the budget. And 
some were removed. Our concern was to ensure that our active 
duty members and their families received proper care and world-
class care that they deserve.
    And we are comfortable with that, make sure that 
availability of care outside the service when needed to--
consults--that that was--that that capacity was still there. 
And we are comfortable with that. And that pharmacy, any 
changes to the pharmacy, that we could retain that service and 
make it available. Again, we were comfortable. Ma'am, I would 
say it was a collaborative process.
    Mrs. Davis. Yes. So you are saying, particularly on the 
pharmacy benefit, that you didn't see any drawbacks to that 
that would affect the men and women?
    Admiral Greenert. That is correct.
    Mrs. Davis. All right.
    General Dunford. Congresswoman, like the other vice chiefs, 
our primary concern was ensuring that our Marines that are 
forward-deployed have world-class medical care. We are also 
concerned with making sure that our Marines, when they come 
home, and their families, have world-class medical care. And we 
are unaware of any initiatives in the proposals that would--
that would degrade that health care.
    And so, we have very much been part of that process. And we 
looked at the other initiatives that don't affect the active 
duty force and have been, again, part of that process and feel 
like we have an opportunity to shape that.
    General Breedlove. Ma'am, I would echo the remarks of my 
fellow vice chiefs. It was a collaborative process. We were 
part of it, and we joined that process. In the Air Force and we 
remain focused on the downrange care of our troops involved in 
the conflict.
    But we recently finished the year of the family in the Air 
Force, and we focused on the after-care as our troops come home 
and also taking care of those families when their troops or 
downrange. And we continue to remain focused on that, and we 
don't see any detriment to that in what we see in this 
business.
    Mrs. Davis. All right.
    Well, I appreciate that, because I think there have been 
some concerns that there hasn't been that kind of involvement 
of the different services in that decision. So I want to be 
sure that we are balancing the need to find some savings, but 
at the same time clearly those benefits are expected, and 
people deserve those benefits. And we want to be sure that we 
are doing that in the proper way.
    Thank you, Mr. Chairman.
    The Chairman. Mr. Forbes.
    Mr. Forbes. Thank you, Mr. Chairman.
    Mr. Secretary, it is great to see you. And as you know, we 
have got a limited amount of time, so I will be concise, and I 
hope you will be as well.
    In your statement you said we owe it to the taxpayers to 
make the most of every dollar entrusted to us, and then you go 
want to say one of the ways we are going to do that is the 
services will achieve savings through implementing better 
business practices.
    I looked at many of our Fortune 500 companies to see some 
of their business practices. And if you look at companies like 
Wal-Mart, AT&T, Hewlett-Packard, Verizon, IBM, Procter & 
Gamble, Kroger, Costco, Boeing, Home Depot, Target, they will 
indicate to you that the core business practice that is 
superior to all of the others is to make sure they know where 
their money is going by having audited financial statements. In 
fact, Congress feels so strongly about that we require them by 
law to do the same.
    Now in the Department of Defense, we are giving to you what 
would essentially be the 22nd largest economy in the world, if 
you were a country. It is over $700 billion last year. And as 
you know, by law we require our agency heads to submit to us 
audited financial statements each year so that we know where 
the money is going.
    Now, 21 different agencies have complied with that. 
Clearly, the statute came back and said the Department of 
Defense needed to do that. And in your statement you go on to 
say proposals we are describing today are the result of a 
detailed, comprehensive budget and program review led by 
Secretary Gates and involving the entire senior military and 
civilian leadership of the Department.
    So, Mr. Secretary, my question for you, first one today, is 
what percentage of the $700 billion budget of the Department of 
Defense did Secretary Gates file the audited financial 
statements required by law in 2007?
    Secretary Lynn. Mr. Forbes, we are--the Department does not 
have an auditable financial statement.
    Mr. Forbes. So none were filed in 2007.
    Secretary Lynn. I think one or two agencies, but it is a 
very small part of the budget.
    Mr. Forbes. First of all, you are the chief management 
officer of the Department of Defense. Is it your testimony 
today that you do not know how many were filed? Or are you 
testifying that two agencies did file on the Department?
    Secretary Lynn. I am going to have to provide the exact----
    Mr. Forbes. I will tell you it was none. How about in 2008?
    Secretary Lynn. Well, 2008 I wasn't at the Department, but 
I----
    Mr. Forbes. Do you know whether any financial statements 
were filed?
    Secretary Lynn [continuing]. I think it was--I doubt--I----
    Mr. Forbes. There were none.
    Secretary Lynn [continuing]. Don't think it would have been 
any.
    Mr. Forbes. How about 2009?
    Secretary Lynn. I think the same answer.
    Mr. Forbes. How about 2010?
    Secretary Lynn. I believe the same answer.
    Mr. Forbes. Do you know how many will be filed in 2011?
    Secretary Lynn. The same.
    Mr. Forbes. Do you know how--what percentage of the $700 
billion budget in the Department of Defense will be in audit 
ready posture for 2011--that is, that we could even be capable 
of auditing?
    Secretary Lynn. I don't think any, sir.
    Mr. Forbes. The President last night told us that in making 
decisions in our country, he said, ``It will be harder, because 
we will argue about everything--the cost, the details, the 
letter of every law. Of course, some countries don't have this 
problem. If the central government wants a railroad, they build 
a railroad, no matter how many homes get bulldozed. If they 
don't want a bad story in the newspaper, it doesn't get 
written. But we all believe in the rights enshrined in our 
Constitution.''
    Mr. Secretary, I believe that the Department of Defense has 
developed the philosophy of bulldozing. When you make a 
decision, you make that decision and, as Congressman Akin said, 
you don't even include us. You don't even give us the 
information. And then you bulldoze ahead without doing the 
tough work of trying to work it through us.
    You know, when we ask you to bring to us individuals who 
can testify, give us your analysis, give us your documentation 
of these cuts or anything else, you refuse to do it. So then we 
ask you to do the reports so that we can get the information 
and we can reach an analysis, and the secretary does press 
conferences pooh-poohing reports to Congress and that is just 
too tough. It is too hard. We are not going to do reports.
    So then we put it in the law and we say you got to comply 
with that, because this is the law of the land. But when we did 
that for a shipbuilding plan, the Secretary just said, ``I am 
not going to give it to you.'' When we put it in the aviation 
plan, the Secretary said, ``We are just not going to give it to 
you.'' And when require audited financial statements so we can 
just know when our money is going, the secretary just says not 
going to do it.
    And the question we ought to be asking ourselves--is DOD 
above the law? What--what do we have to do to get you to comply 
with the law? And how can we even begin to talk about savings 
and efficiencies when we cannot verify a single dollar of where 
our defense budget is going?
    And, Mr. Chairman, I will close by just saying this. Shame 
on us if we continue to give the Department of Defense billions 
of dollars without doing the most basic of all good business 
practices by simply knowing where that money is going.
    Mr. Chairman, with that, I yield back.
    Secretary Lynn. Mr. Chairman, if I could respond to a 
couple of the remarks there, first, I agree with Congressman 
Forbes. We do need to develop auditable financial statements. 
We have developed a plan to do that. The plan is quite 
aggressive. It is going to be difficult to achieve.
    And we have focused on the budgetary resources for the 
reasons that you gave, that that is the most important 
responsibility that the Department be able to tell the Congress 
and the taxpayers how each dollar is spent.
    So the secretary very much agrees that we need to comply 
with this. We have as a plan to do that.
    With regard to the shipbuilding and the aviation plans, I 
think that was a disagreement with the committees, as we did 
provide those when we had them. When the committee was asking 
for it, it was in the first couple of months, where the--that 
the Administration had taken office, and they simply didn't 
exist. As soon as they existed, we did provide them to the 
Department.
    Mr. Forbes. Mr. Chairman, I don't want to take more of my 
time, but just to respond to the secretary.
    Mr. Secretary, it wasn't the committees that requested it. 
It was the law that requested when you had to file it, and it 
told you what to do if you didn't have a plan.
    And secondly, if any of these Fortune 500 companies came up 
and said, ``We just can't comply with the law, because it is 
too hard,'' what would we do to them? And, you know, I think it 
is a priority that we ought to make in the Department, and we 
ought to insist on it in this committee.
    And thank you, Mr. Chairman, for the extra.
    The Chairman. Thank you.
    Mr. Courtney.
    Mr. Courtney. Thank you, Mr. Chairman. Congratulations on 
your first hearing.
    I would like to just say that I actually think that on the 
merits, Congressman Forbes is absolutely right about what the 
law says. And it was very frustrating over the last 2 years 
that we didn't get that shipbuilding plan.
    But as you said, we did get that last year.
    And I would like to actually focus for a minute, Admiral 
Greenert, on the testimony regarding the impact of these 
changes to the Navy and ship acquisition. Again, the testimony 
we received is that the savings will be directed towards, 
again, reinvestment in the Navy and that six ships are going to 
be added to the Navy's fleet as a result of this.
    And we will--I guess the first question I have is is that 
going to change the shipbuilding plan that was submitted last 
year?
    Admiral Greenert. Yes, sir, it will, from the perspective 
of there will be an additional six ships to that shipbuilding 
plan. We have been able to move ahead in some of our required 
shipbuilding--for example, oilers. We need to get double-hulled 
oilers. We are operating on a waiver--that is, a U.S. waiver--
and around the world that we may not have those waivers, so 
that helps us toward the longer view.
    It brings us with another destroyer, Arleigh Burke 
destroyer, which helps us--obviously, increases our warfighting 
capability right there. And then, of course, the last one would 
be the T-AGOS [Military Sealift Command Oceanographic Research 
Ship], or the sonar trailing ship, if you will, which increases 
our ASW [Anti-Submarine Warfare] capability.
    Mr. Courtney. Well, to me, you know, that is a priority----
    The Chairman. Mr. Courtney?
    Mr. Courtney. Yes?
    The Chairman. If could just interrupt just for a second----
    Mr. Courtney. Sure.
    The Chairman. We have been told with the new schedule this 
year that we will be interrupted with votes. That will start 
the week of the 14th. We have just been interrupted by a vote, 
and the votes are going to be shorter than in the past. We 
can't wait till it is almost over. So you will be the last 
questioner.
    But anybody else that wants to leave now to vote, there 
will be two votes, and then we will return, and Mr. Wilson will 
be first after Mr. Courtney.
    Mr. Courtney. Great. Thank you, Mr. Chairman.
    Again, the--what you just described obviously addresses a 
priority that this committee, and particularly the Seapower 
Committee, has been struggling with for years, which is despite 
the massive increase in the Pentagon, we have steadily seen the 
fleet size fall below what the Navy has told us repeatedly is 
necessary, at 313 ship Navy.
    And to me, if we are for finding ways to, again, make the 
Navy more efficient and reinvest it in what I think everybody 
agrees is what we all want, then that is certainly not 
weakening our defense. It is actually accelerating the past to 
get to the goal that we all want.
    These sort of story that I think--cautionary tale that I 
think we--we in this committee have to keep aware of, 
particularly in the context of shipbuilding, is what happened 
with the Zumwalt, the DDG-1000, where again, you know, anything 
goes in terms of the way that was put together. And it crashed 
and collapsed of its own weight because of the high cost.
    And last year the shipbuilding plan that was sent over 
projected out a huge bulge that was going to be caused by the 
SSBN price tag, 7 billion per copy. It is my understanding that 
again the Pentagon has really worked hard to try and, you know, 
bring that price down so that we don't find ourselves in a 
Zumwalt-like situation five, 10 years from now.
    And I was wondering if you could maybe talk about that cost 
savings measure and any progress that the Navy has achieved.
    Admiral Greenert. Thank you for the question, sir.
    Yes, we had a--we have a very collaborative process, I 
believe, on the Ohio replacement program. A little bit to Mr. 
Bartlett's question or comment earlier, how is it that we can 
interject, if you will, cost as a key performance parameter?
    And so we have a cost threshold and objective on the Ohio 
replacement program. Point here is as we develop this, as we 
are into the early phases of design, we have to address cost 
again and again and again as a function and balance it against 
the capabilities.
    Admiral Greenert. We haven't been very good at doing that 
in the early phases.
    It has been all about capability. And then we deal with the 
bill later. So we are very focused on that, as you know, sir, 
because of your background and in your area of shipbuilding.
    This is a fairly well-defined capability that we are 
building. And so this is a good program to get started in this 
regard.
    Mr. Courtney. And certainly, the shipbuilding plan, the 
Nuclear Posture Review, the Quadrennial Defense Review, all 
were unanimous in saying that, you know, this is something that 
is essential to having a sea-based nuclear deterrent, is 
something that we must move forward on.
    But we can't allow costs to consume every other aspect of 
the Navy's budget and frankly, put pressure on the rest of the 
Pentagon.
    Secretary Lynn, in your opening comments, you talked about 
the end strength changes post-2015.
    Again, when I first came to Congress in 2007, that was one 
of Secretary Gates' first initiatives, was just to expand the 
end strength for the Army and the Marines.
    You alluded to the fact that we would still end up at a net 
position stronger than we were in 2007. But you didn't really 
sort of flesh out the numbers. I was wondering maybe if you 
could describe that in a little more detail.
    Obviously, we don't want to find ourselves in a situation 
where the Guard and Reserves are really forced to do something 
that they never were done--had to be done in the past and pick 
up the slack.
    Secretary Lynn. I am going to ask for help from the vices 
on that. I think the Army, after the 27,000 reduction will be 
about 30,000 above what Secretary Gates--is that right?
    General Chiarelli. Well, sir, if you add in the increases 
to the Guard and Reserves, which are not part of the decrease, 
in reality, it would be 38 plus another 9, which is 47 higher 
than we were when Secretary Gates became Secretary of Defense.
    Secretary Lynn. And then the Marine Corps, General Dunford?
    General Dunford. Congressman, we have been given a window 
of 15,000 to 20,000. But we still have an opportunity to go 
back to the Secretary of Defense and provide him with the 
results of our recent four-structure review group.
    So the commandant is taking a look at the comprehensive 
capabilities and capacities that we will need.
    And the--and he feels confident he will have a chance to 
talk to the secretary about this specific end strength that the 
Marine Corps will have in the future.
    Mr. Courtney. All right. Thank you.
    The Chairman. We will now take about a 15-minute break. We 
will get back as quickly as we can. Thank you very much.
    [Recess.]
    The Chairman. Well, we were told it was two votes. It was 
only one. So we--we got back, some of us, a little sooner.
    Let us begin where we left off with Mr. Wilson.
    Mr. Wilson. Thank you, Mr. Chairman. And thank you for your 
leadership as the new chairman of our committee.
    And, gentlemen, thank you for being here today. It has been 
inspiring to me to know of your service and to be here with a 
joint service hearing. I am from a joint service family with 
immediate family members who are Army, Navy, Air Force.
    And my late father-in-law, General Dunford, was a very 
proud Marine, and my late brother-in-law. So I cover all of 
you.
    And as I am watching, though, the budget debate that we 
have, I am very concerned. Representing Fort Jackson, the 
extraordinary Army personnel and families there, the Marine 
Corps Air Station at Buford Parris Island, the Buford Naval 
Hospital, the proposed cuts in the Army of 27,000, another 
22,000, cutting the Marine Corps 15,000 to 20,000--a question 
that I have for General Chiarelli and General Dunford.
    Have these proposals--are they done only in the context of 
cutting the budget? Or has there been a military understanding 
of the challenges of our country, an ongoing war, protracted 
war with Al Qaeda, Islamic extremists that we have today, 
potentially a conventional war in the future? And so, I would 
like to know from both of you what has been the driving force 
and what can be understood by the extraordinary people serving 
our country.
    General Dunford. Congressman, in the case of the Marine 
Corps, Secretary Gates has given General Amos an opportunity to 
do a force structure review group, which is going to take a 
look holistically at all the capabilities and capacities we 
need to deal with future challenges. So there are--there have 
been no specific numbers identified for us to draw down at this 
time. It is a window that the secretary has given.
    On the 7th of February, General Amos will have an 
opportunity to sit down with secretary of defense and walk 
through what he believes the Marine Corps ought to be in the 
future. And so, we feel comfortable that the outcome will be 
based on the commandant's recommendations for capabilities and 
capacities and not just a fiscal growth.
    General Chiarelli. Congressman, as you know, the 22,000 
that you talked about was a temporary end strength increase 
that Secretary Gates provided the United States Army as we 
moved off of stop-loss. It was absolutely critical, and we have 
always planned that in 2013 we would, in fact, bring the force 
back down to 547,400.
    The Army supports the plan to reduce the size of its active 
force by 27,000 in fiscal year 2015 and 2016. We support that 
plan.
    The chief personally talked to the secretary of defense 
last summer and asked him to preserve our end strength at 
547,400 through 2014. And he has with this plan.
    And most importantly, the secretary has put on the table 
three critical assumptions that must be met. First, that we are 
out of Iraq, we see the drawdown and Afghanistan taking place, 
and we do not see that commitment of land forces in any other 
theater.
    We feel this is important for our force that we have the 
planning time to do this. This is reversible planning that 
could be reversed, if conditions change. But it allows us to 
take care of our force as we realize the need to balance the 
force. I don't want to pay for a whole bunch of people and not 
have any money for procurement accounts. It allows us to ensure 
we have a balanced force in the future.
    So we support this plan and are beginning the analysis 
right now.
    Mr. Wilson. Well, for both of you, what you are saying is 
reassuring to me for persons serving in the military and 
military families conditions-based.
    In regard to dwell time, that goal has been three to one 
for active components, five to one for Reserve components. Is 
this going to be affected by the potential of a draw down?
    General Chiarelli. I can't tell you that right now, because 
I don't know what demand is going to be, but we feel that one 
of the reasons we would go back to the secretary is if we 
couldn't guarantee our force a minimum dwell time of one to two 
when these drawdowns began.
    Now, one to two is critical for us, one to four for the 
Reserve components. Ideally, we would like to get to something 
higher than that, but our redline is one to two.
    General Dunford. Congressman, certainly, our assumption is 
that no drawdown would take place until our commitments are 
reduced. We are now approaching a one to two deployment to 
dwell across the Marine Corps, and the expectation is that we 
would not draw down again unless our requirements are adjusted 
to be able to maintain at least that one to two deployment to 
twelve.
    Mr. Wilson. Thank you very much.
    The Chairman. Thank you.
    Mr. Kissell.
    Mr. Kissell. Thank you, Mr. Chairman. And I would also like 
to add in my congratulations to you, and looking forward to 
working with you on this committee once again.
    Mr. Secretary and all of our guests, thank you for being 
here. Thank you for what you do.
    Mr. Secretary, one of the things that was alluded to 
earlier was the procurement savings legislation that we passed, 
which I thought was a great bipartisan legislation with good 
legislation.
    How is the implementation of that legislation going? What 
savings have--do we see yet perhaps? How will that play into 
the savings we are looking for? And is any of this savings that 
we estimated would come from that legislation included in what 
we are talking about here?
    Secretary Lynn. Thanks for the question, Mr. Kissell.
    The thrust, I think, of the legislation and the thrust of 
our acquisition reform efforts are, one, to establish stability 
requirements, not to continually change the requirements, but 
to establish a baseline and move forward on that, spiral in 
additional capabilities later, if necessary; second, maintain 
an adherence to cost and schedule, not have an unbalanced 
approach where you are only looking for more performance; and 
then, third, to use independent costing as a brake on the 
system.
    We are implementing all three of those. I think we are 
quite far along on all three. In terms of savings, I think it 
is too early to say, because what you--it takes a while to push 
these all the way through all of the programs.
    And where you will see savings is, hopefully, what you 
would see is that instead of having cost overruns and schedule 
delays, we would hit the program milestones as they were laid 
out.
    So you--in many ways it is less cost savings and more cost 
avoidance. You wouldn't have the case that we have had in the 
past, where you have on average 20 to 30 percent cost overruns 
after milestone decisions.
    Now, we haven't had very many milestone decisions since we 
put in place the legislation that took place, so I think we are 
going to have to measure that and come back to you in the--over 
the course of the next couple of years.
    Mr. Kissell. Thank you, sir. And I think it is important 
and that communication that we have been talking about and 
several of my colleagues today have. I am not going to restate 
that, but it is concern to a lot of us that we do communicate 
in some of the decisions that are being made, as we perhaps 
might need to revisit those because of a change in whatever.
    You know, we need that communication in a way other than 
just hearing about it from whatever source might be. We need to 
hear from, you know, the way it is supposed to be.
    General Breedlove, one specific situation that I read about 
yesterday, and the name of the UAV platform escapes me right 
now, but it seems like it is something-Stare that the Air Force 
is wanting to implement a new platform.
    And the article in the paper indicated there was a lot of 
problems here. This seems like maybe a good example of the kind 
of program that we could be talking about here, where something 
may be running into trouble.
    Just wondering, you know, what the thoughts are on that 
program, how we are going forward with it, perhaps why we are 
going forward with it, if it is having these issues.
    General Breedlove. Congressman, thank you for that question 
and the ability to clean up what I think may have been some 
early and not exactly correct information.
    That program is called Gorgon Stare. It is a program which 
allows our ISR [Intelligence, Surveillance and Reconnaissance] 
forces to look at a larger portion of the battlefield and to be 
able to bring information to our soldiers and Marines on the 
ground that they need about a much bigger piece of their battle 
space.
    Our current systems, as you know, we like to talk about 
them as having a very narrow field of view, and it makes it 
tougher to support the ground troops with some of those.
    This particular wide-area surveillance system early in its 
development, because it was a pretty good leap forward in 
technology, was having some trouble with keeping the 
coordinates and the positions that we wanted to watch. It was 
having some troubles with those, and a leaked early report 
talked about those troubles.
    Three things were identified and the program that needed to 
be fixed. All three of those are very close to fix or fixed 
now, and the program is, quite frankly, performing better. And 
we expect and hope to field it soon, early in the summer maybe, 
into the theater in order to bring that capability to our 
soldiers and Marines on the ground.
    Mr. Kissell. Thank you, sir, because it is so important to 
keep that capacity there.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Mr. Kline.
    Mr. Kline. Thank you, Mr. Chairman.
    Thank you, gentlemen, for your service and your testimony.
    There are many things I would like to cover in our very 
limited time, but I know that the chairman is going to be 
insistent on keeping us to 5 minutes.
    I want to sort of identify myself with the comments of my 
colleagues, Mr. Akin and Mr. Forbes, in the frustration in not 
getting information, in not being consulted that not being part 
of the process of shaping, arming, equipping, recruiting, 
retaining the Armed Forces as we are charged should do by the 
Constitution.
    And I have grave concerns about some of the cuts. General 
Dunford and I have had conversations about the expeditionary 
fighting vehicle. I have great concerns that we have got a 
program here where the requirement has been identified for 
many, many, many years, going back to where I was much younger, 
had hair, was brown, and I was in uniform, and we started 
putting what we then called the triple-A [Advanced Amphibious 
Assault Vehicle] into the FYDP [Future Years Defense Program], 
into the POM. And this was back in the 1980s.
    And so now we have this cancellation, and I, like many of 
my colleagues, and I expect you will hear from my Marine 
colleagues here about their concern over that. But in my 
remaining 3 minutes and 47 seconds, I want to talk about end 
strength and the force structure that goes with it.
    I believe, along with many experts, including the fine 
folks who form the Quadrennial Defense Review independent 
panel, Messrs. Hadley and Perry and their teams, that we should 
not be looking at reducing the end strength of the Marine Corps 
and the Army.
    I have been a member of this panel now for going on 9 
years, and I watched the debate and the struggle as we took the 
size of the Army and the Marine Corps and year by year worked 
to build that end strength as we were putting enormous 
pressure--enormous pressure--on the Reserve component in ways 
that had never been envisioned.
    The Minnesota National Guard has been called up again and 
again. The Red Bulls served the longest combat tour of any unit 
in the Armed Forces continuously in Iraq. They are back again 
and back again. And I am horrified at the prospect of drawing 
down that end strength and assume the force structure that goes 
with it.
    And I am afraid that we are doing that as a cost-saving 
measure. And I assume that the assumption is that if you have 
fewer Marines and soldiers, you need fewer--less equipment and 
therefore less cost. I think that is a poor strategy. I am 
very, very concerned about that. But if you are going to draw 
down, then by golly, we need to know in some detail what that 
force structure is going to be and how you are going to equip 
that force structure.
    I would like to think that--I heard part of the answer to 
my colleague Mr. Wilson's question about end strength that, you 
know, conditions based, and we were going to look at that. This 
process is a little bit unwieldy, as you know, in drawing down 
and building up end strength, but particularly in building up.
    If we accelerate a draw down--and I am not sure when 
exactly that would start; I heard part of that question--then 
we are going to be in a position where we have got an end 
strength that is back--slightly above, but close to where we 
started. I think we are looking at end strength for the Marines 
in this proposal of around 180-some thousand. We were at about 
175,000 when this started.
    We are kind of back where we started--Army a little bit 
bigger than when we started with fighting in Iraq, but 
considerably smaller than where it is today. And you, 
gentlemen, know how hard it is to build back--build that back 
up and get the force structure that goes with it.
    So I guess I am looking for some reassurance that somehow 
you now in a way we haven't had maybe ever, but not in decades, 
some sense of what the requirement is going to be for our 
soldiers and Marines in places that we can think about now, but 
where we are not deployed.
    Mr. Kline. I am a little reluctant here to suggest some 
areas and geography, but we know that there are tough things 
going on in Yemen. There are tough things going on in sub-
Saharan Africa.
    The Al Qaeda threat has not gone away. I assume you agree 
with that, that we are still at war with Islamist extremists, 
Jihadists.
    How--in 30 seconds, anybody, how in the world can you tell 
me you think we don't need this size of an active Army or 
Marine Corps? Anybody?
    General Dunford. Congressman, I can tell you, in the case 
of the Marine Corps that we actually began our Force Structure 
Review Group back in August. So it predated the efficiencies 
exercise.
    And in our case, we are taking a hard look at the actual 
operational requirements. This was not a drill to draw down the 
Marine Corps.
    It was a drill to examine what we believe to be future 
Marine Corps requirements and to ensure we had balanced 
capability across the Marine-Air Ground Task Force.
    So we want to make sure we had a balance between the 
numbers of people that we had across the MAGTF [Marine Air-
Ground Task Force] as well as, you pointed out, as well as how 
to properly equip them.
    And I can assure you that the recommendations that General 
Amos will make to the Secretary of Defense are made based on 
the capabilities he believes the Marine Corps needs to have in 
his best assessment of what the organizational constructs of 
the Marine Corps of the future ought to be.
    Mr. Kline. Okay, I am out of time. And so I am going to 
yield back, except to say we will be looking at it very 
closely, because I am fully ready to challenge that assumption.
    I yield back.
    The Chairman. Thank you.
    Mr. Critz.
    Mr. Critz. Thank you, Mr. Chairman. I just have a couple of 
quick questions.
    Secretary Lynn, I am looking through some of the savings 
that have been identified. And it is--one of the things that 
popped out, it says, many of the efficiency savings announced 
are from consolidation of I.T. systems.
    But in your testimony, you said that the assistant 
secretary for network in information integration has been 
eliminated. Now is that two separate jobs?
    Or does this assistant secretary not have purview over the 
I.T. [Information Technology]--consolidation of I.T. systems? I 
am just trying to figure out how that works.
    Secretary Lynn. Good question, Congressman. The assistant 
secretary position has been eliminated. The chief information 
officer, however, has not. And that individual used to be dual-
hatted.
    And the problem we found with that is that it diffused 
their responsibility--diffused their focus.
    They were--in the old job, they were focused on buying 
radios, command and control, a whole series of things.
    We have moved those acquisition functions to where they 
belong, we think, which is the Under Secretary for Acquisition.
    We are asking the CIO now to focus on information 
technology, focus on how do we interact in this cyberworld that 
we find ourselves in.
    And so Teri Takai, who is our Chief Information Officer, 
will, in fact, be leading that effort in a strengthened CIO 
office.
    Mr. Critz. Okay. Well, I am going to hit on a subject that 
has been talked about a little bit here. It is the EFV vehicle.
    And we have been talking about, I guess, the minimum 
distance it's being talked about from shore is going to be 
about 12 nautical miles. And on a good day, the AAV [Amphibious 
Assault Vehicle] goes, what, maybe eight knots?
    So how long does that mean that, once the Marines drop in 
the water, it is going to take them to get to shore? I don't 
know how to do the math here.
    General Dunford. Congressman, it would take a little over 
an hour.
    Mr. Critz. Now, is there a maximum time----
    General Dunford [continuing]. That speed in 12 knots. In 
other words, it would be about an hour and 30 minutes, if you, 
if we are at 12 nautical miles and you are going eight knots.
    Mr. Critz. It would be an hour and a half?
    General Dunford. That is correct.
    Mr. Critz. Now, do you have a target of how long you want 
the Marines bouncing around in the water before you hit the 
shore?
    General Dunford. We do, Congressman. We think that much 
more than an hour significantly degrades the Marines' 
capability to fight.
    Mr. Critz. So we still do have a need for the EFV. And we 
have sunk about, what is it, $3.5 billion into research, 
development, going into this.
    And what the secretary is telling this committee is that, 
well, we are just going to move on. We are going to upgrade the 
AAV to meet the current needs until we figure out what to do 
next. Is that correct?
    General Dunford. I think, Congressman, we are really going 
to do two things. We are going to upgrade the current AAV with 
a service life extension. But we are going to very quickly seek 
to get a new amphibious vehicle.
    And we believe we can significantly exceed the normal 
procurement timelines associated with a new vehicle by 
leveraging some of the acquisition processes that have been 
used to support Marines that have been deployed in Iraq and 
Afghanistan over the last several years, that the MRAP [Mine 
Resistant Ambush Protected] is a good example from an 
acquisition process perspective of something that was fielded 
very quickly.
    So we very much anticipate being able to get a new 
amphibious vehicle in a much shorter timeline than a 
traditional 8 to 10 years that it might take.
    Mr. Critz. Okay. One of the things that I heard talk about 
with the EFV was that it was a flat-bottom vehicle, and with 
the rise in IEDs [Improvised Explosive Device] that we have 
hit, that that didn't seem to make sense.
    So I know that the contractor has come up with sort of a 
pasty to put on the bottom, once they hit the shore, which I am 
a little bit surprised if you can do that in a hostile 
environment.
    But the AAV also has a flat bottom. Is that correct?
    General Dunford. That is correct.
    Mr. Critz. Okay. To--I have 1 minute left, but I wanted to 
go back to what Mr. Forbes was asking. And the Defense 
Department has identified about $78 million in savings off the 
topline.
    Now, I am curious of how much of that savings is going to 
be plugged back in so that the Defense Department can then 
start providing this committee the audits that have been 
required by law for the auditable reports.
    So I am curious because that allows us to do our job. And 
what Mr. Forbes was saying, what you have heard from this 
committee is we are the ally. We are not the enemy. And we want 
to be helpful.
    But we need to know what we are looking to do and how we 
can be helpful. So has any of that savings been targeted to 
help provide this committee the information that we need?
    Secretary Lynn. The overall efficiencies effort was 
developed $178 billion in savings. Of that, $100 billion has 
been reinvested, frankly, primarily in warfighting 
requirements, as opposed to more the back office functions.
    And $78 billion was provided for deficit reduction to 
accomplish a broader Administration goal. We still are 
committed to improving our audit readiness and ultimately 
getting to auditable financial statements.
    That is not because we are a commercial organization. And 
it is necessary for things like shareholders. The importance 
for us of audited financial statements is it improves our 
management information systems.
    It improves our ability to track budgetary resources, in 
particular. And so our focus is on doing that. And we do have 
an upgrade plan to develop that capability.
    General Chiarelli. I would only add, Congressman, that the 
Army--I think the other services too, are moving toward that.
    We have--we publish a common operating environment to make 
sure that our ERPs [Enterprise Resource Planning] can talk and 
databases can talk and we can get to a point where we are an 
auditable organization.
    And we are moving out on that as quickly, I think, as we 
can.
    The Chairman. Thank you.
    Mr. Franks.
    Mr. Franks. Well, thank you, Mr. Chairman.
    Mr. Chairman, I always to thank those who wear the uniform 
of this country for their commitment to stand between the 
malevolent and the free people of the world. And I am grateful 
to all of you.
    Mr. Chairman, as it happens, there is one particular member 
of this panel this morning that is a dear friend of mine that 
was a commander of Luke Air Force Base in Arizona.
    And seems like every time we hear about him, he has gained 
another star or some other promotion.
    In fact, the Air Force seems to be running out of stars 
where Mr.--General Breedlove is concerned, and made him vice 
chief of the Air Force. And I am--I guess I say that partly 
because I am very grateful to the man.
    He took me up in an F-16 some years ago. And we did an F--a 
360-degree loop. And I have--was--have always been grateful 
that he was at the controls and not me. But I appreciate all of 
you for being here.
    I guess, with that, my first question would be to the 
general. After saying nice things, now we have got to put him 
on the spot.
    General, I am concerned that we have failed to modernize 
our nuclear arsenal, or at least I think that has been a--sort 
of a continuing failure. I don't want to put it on any one 
administration.
    But this Administration, in particular, seems focused on 
maintaining our present military--our nuclear arsenal rather 
than modernizing it. And there have been some savings spoken 
of.
    And I understand that the Air Force is planning to develop 
a new long-range bomber as part of the family of long-range 
strike platforms.
    And I am just wondering if you think that that bomber will 
be or could be used as a modernization platform for our nuclear 
arsenal.
    General Breedlove. Congressman, thank you for your kind 
remarks and the opportunity to talk to both of these. I would 
like to offer that we are upgrading all three of the bombers in 
our current fleet.
    The B-1 has done a magnificent job supporting our ground 
forces in Afghanistan due to upgrades that we have made to that 
fleet.
    The B-52, we are currently in investing in upgrading 
communications gear and other pieces that will make it even 
more viable into the future.
    And much the same with the B-2. We have an ongoing upgrade 
program for the B-2. So I will be happy to have our folks come 
by and give you more details on those upgrade programs for the 
existing fleet.
    For the new aircraft, yes, sir. In the long run, we intend 
for it to start out conventional but grow into a nuclear 
capability.
    And it will have an upgrade effect and a capability into 
many years beyond our existing programs, is the plan.
    Mr. Franks. Well, thank you, sir.
    I guess I--Deputy Secretary Lynn, I am--sort of pose the 
question in a little different terms to you.
    You know, Russia and North Korea and Iran seem focused on 
modernizing their nuclear arsenals, to my great and grave 
concern. The savings that you spoke of in your written 
testimony, I think is about $70 billion.
    Will any of that be dedicated to modernizing our nuclear 
arsenal? What are--what is your perspective there?
    Is it--are we to assume that the Administration will 
continue to focus only on maintaining? Or can we look to see 
some of the indications that they have made on modernizing our 
nuclear forces to be kept and to be focused upon?
    Secretary Lynn. We indeed do have plans to modernize all 
pieces of the--of our nuclear force. The one where new 
resources have been provided is the one you asked General 
Breedlove about, which is the bomber.
    We have--we did ship some of the savings that we developed 
over the course of the past few months into increasing funding 
for that bomber. It was as General Breedlove indicated.
    Its initial focus would be on the conventional mission. But 
we intend to build in the ability to do the nuclear mission so 
that we can transition to that role, if that is the decision 
made down the road.
    The other piece I would add for you is outside of this 
department, but is in the Department of Energy.
    Secretary Lynn. It is one of the critical pieces of 
modernization, is we need to modernize the nuclear 
infrastructure in the Department of Energy. And part of the 
debate over the START [Strategic Arms Reduction] treaty 
included an Administration commitment to undertake that 
modernization. And the President has moved resources. And we 
have been working with the Department of Energy on that.
    In many ways that is actually the near-term requirement. 
And as I say, it is in the Department of Energy, but it is 
fulfilling one of our requirements. So we are working very 
closely with them on that.
    Mr. Franks. Well, thank you. That is very encouraging to 
me, and I certainly recognize the President's commitment on 
that. And I appreciate your following through.
    And thank you, Mr. Chairman.
    The Chairman. Thank you.
    Ms. Sutton.
    Ms. Sutton. Thank you, Mr. Chairman, for holding today's 
hearing. As a new member of the committee, it is my first 
opportunity to participate. And I appreciate, gentlemen, your 
testimony.
    The topic today is integral to our committee's work, as is 
clearly evident by the questions. The proposed budget 
reductions and efficiency initiatives have the potential to 
eliminate wasteful spending and allow us for the reinvestment 
in those critical areas where we need our priorities to be.
    And I do applaud the Secretary, Secretary Gates, and all 
those who worked over the last few months to try to achieve a 
start at this undertaking. And there is no question that 
difficult decisions have and will need to be made, however, I 
think my concerns and the concerns of those in Ohio who I have 
the privilege to represent, are that appropriate decisions are 
made.
    So in discussing military spending, we have to assess how 
each proposed change impacts our national security, our 
military personnel, and our economy, including jobs in our 
manufacturing base. And I am interested to hear from today's 
witnesses a little bit more about how these proposals impact 
these important priorities. You have certainly given us a good 
start on those issues.
    In the coming weeks and months, I am also interested in 
working with DOD and the Office of Corrosion Policy and 
Oversight. Secretary Lynn, you just mentioned the modern--to 
modernize our nuclear infrastructure. Corrosion has an issue to 
play, is an issue there.
    Oversight to address corrosion and the impact that it has 
on our military assets and our strengths, and the significant 
cost savings that it offers us if we address it up front, as 
demonstrated by the Office of Corrosion Policy and Oversight. 
It is not a glamorous topic, but I think it is one that is 
worth our time and attention, especially given the potential 
savings if we address it in a smart and appropriate way.
    So as we move forward, my hope is that we will take a 
balanced and coordinated approach to evaluate cost reduction 
and military spending levels without sacrificing our core 
priorities. And if I could, Secretary Lynn, I would like to 
just direct a couple of questions to you.
    The proposed reductions and efficiencies include, as we 
have heard here, a reduction in the permanent end-strength of 
the active Army and Marine Corps. And one of the concerns I 
have and one that I have worked on in the past and introduced 
legislation to address is the issue of the stop-loss policy, 
where the length of our servicemembers' tours of duties have 
been involuntarily extended.
    I just ask, you know, we have been able to make some gains 
in making sure that our soldiers are getting fair compensation 
for that extended time fighting our wars. But what is the 
status of the use of stop-loss currently? And what assurances 
can you give that these proposed reductions won't result in a 
return to the utilization of stop-loss for our soldiers?
    Secretary Lynn. Well, on the first part of the question, we 
have been aggressively pursuing the members of the service and 
former members of the service who would be subject to 
additional compensation based on the legislation that granted 
them some benefits for having been held up in the stop-loss 
program.
    On the second piece, as General Chiarelli indicated, the 
Secretary was absolute in his direction to the Army to 
eliminate the stop-loss program. The Army is equally resolute 
in committing themselves to eliminate that. The immediate 
impact was the increase of the 22,000 temporary increase in the 
Army end-strength to allow the Army a transition period.
    And we think we are going to--I'll ask General Chiarelli to 
comment in a second--but we think we are going to be able to 
eliminate it in that timeframe and then phase those 22,000 out. 
But I don't think Secretary Gates or the Army leadership has 
any intention to return to that policy.
    General Chiarelli. I think, as you know, we have not stop-
lossed for the last year and our last soldier held up on stop-
loss, if my memory serves me correctly, will come off in March 
of this year. We have no desire to go back to stop-loss, and 
our Army force generation model has personnel aim points that 
we are implementing and will continue to implement that will 
allow us to be--allow us to ensure that we avoid getting 
ourselves in a situation where we would have to use stop-loss 
again.
    It provides us some aim points throughout the year for both 
bringing on soldiers and bringing them off duty that ensures we 
maximize their time in the Army.
    Ms. Sutton. Thank you.
    The Chairman. Thank you.
    Mr. Wittman.
    Mr. Wittman. Thank you, Mr. Chairman. And gentlemen, thank 
you so much for joining us, and I want to thank you so much for 
your service to our nation.
    As you heard a little bit earlier, the concerns I think 
among committee members go to a very basic level. And that is 
we have to make decisions about budgeting and make decisions 
about strategic needs of this nation. And the strategic 
analysis in information needs to come to us first, so that we 
can make those decisions.
    The disappointment has been is that information has not 
been forthcoming, and many times not in a timely fashion so 
that this committee can make decisions. And as you know, we 
have a constitutional responsibility to make those decisions. 
We would rather it be done in partnership with a free flow of 
information from the service branches, from the Secretary's 
office.
    When that doesn't happen, it creates a tremendous 
difficulty for us to make those tough decisions. We need to 
understand what the strategic needs are and then say, here is 
the finite amount of resources we have to get that job done, 
and then make those priority decisions.
    So I would encourage you that when we request information, 
that we are able to get that in a timely manner. It is 
absolutely unacceptable to get a 30-year shipbuilding plan or a 
30-year aviation plan after the point where this body makes 
decisions.
    So that absolutely has to happen. It is going to be tough 
going forward to make those choices. And I know you all have 
been thoughtful about putting your proposals out there on how 
we achieve efficiencies.
    All of us agree the efficiencies need to be there. The 
concern too is this lack of detail about that $78 billion and 
where that will go. We want to make sure again that we are 
meeting the needs.
    It is great to have $100 billion in savings and have those 
roll back into the Department of Defense, but the question is, 
if you are going to take $78 billion out, where exactly where 
is it coming from and where is it going then? And I think that 
is obviously a bit broader issue that we can address at the 
higher levels here in Congress.
    But I do want to get to some of the proposals that you put 
forward as far as initiatives. And General Dunford, I want to 
go first to you about the EFV. I have some very basic concerns. 
As you know, the requirements there, we have a very aged AAV, 
as you know, at the very edge of capability. We have seen some 
problems with it. And I know you have spoken a little bit about 
the plan, but the concern here is what is the plan going 
forward?
    We have spent $3 billion and have processed through 20 
years of development on the EFV, and now we are saying, well, 
let us change course. It is too expensive. We can't afford it. 
We can't afford the operation and maintenance. And then the 
question is, is the details. How is the AAV going to get us to 
that next generation of amphibious vehicles, and how are you 
going to manage the acquisition process? Are you going to 
compress it? Is it going to be expeditious? The key is, is it 
going to have a thorough test and evaluation period? What is 
the timeliness?
    And the bottom line is this. If you are going to use the 
AAV as a bridge to that next generation vehicle, the question 
is, is when is that next generation vehicle going to be in the 
water carrying Marines to shore when they have to make an 
amphibious landing?
    So I will start there.
    General Dunford. Congressman, thanks.
    First, I would like to provide the context within which 
General Amos made his recommendation to the Secretary. When we 
looked at all of our reset costs coming out of the current war, 
and we looked at all of our future requirements, and we looked 
at the period of time 2018 to 2025, we found that the EFV alone 
ate up 50 percent of our overall procurement dollars, and 
exceeded 100 percent of how much money we typically spend on 
the entirety of our ground tactical vehicle fleet.
    And to put that in some perspective, the EFV program was 
573 vehicles, and we have got 43,000 vehicles--43,000 or 45,000 
vehicles in our fleet today. So it came down to--and on the 
operation-maintenance side, similar figures. So it came down to 
with regard to the EFV that it was simply unaffordable for us 
to balance our requirements.
    The EFV carries eight infantry battalions. We have got 36 
battalions--27 in the active force and 9 in the reserve forces. 
We have an overall requirement for 12 battalions to be lifted 
by some type of armored vehicle in order to meet our war plans.
    For those vehicles now, we are looking towards what we call 
a Marine Personnel Carrier, which will be a new vehicle to 
address that particular requirement. What we would like to do 
is look at the totality of our requirement over the next couple 
of years to look at a service life extension program for the 
AAV, to look at moving the Marine Personnel Carrier earlier in 
the pond so that we get that out there and to meet some of 
those requirements that we have right now, today.
    And to be able to leverage the EFV program, the knowledge 
that we have gained from the EFV program, as well as the 
knowledge that we have learned in the development of other 
programs, to get the new amphibious vehicle there in a much 
shorter period of time--I can't tell you this afternoon how 
soon that will be. As I mentioned earlier, the normal 
acquisition timelines are somewhere between eight and 10 years.
    We are very confident, sitting down with our acquisition 
experts, and also taking a look at what is available out there 
in terms of what industry can produce. We are very confident 
that we can exceed that normal 8- to 10-year acquisition 
process. We have been working for 2 years on the details of a 
service life extension program for the assault amphibious 
vehicle unrelated to this decision, and so we will have an 
opportunity to leverage the dialogue we have had with industry 
about that particular program as well.
    We are going to roll all this up into a portfolio approach, 
the new amphibious vehicle, the service life extension program 
for the AAV, and the Marine Personnel Carrier. The difference 
that we will see as we move forward though, is we are going to 
use cost as an independent variable as we get the new 
amphibious vehicle. We know in the aggregate how much we can 
spend on the totality of our ground tactical vehicle fleet, so 
we will share that with industry.
    General Dunford. And so, we need all these three programs 
to, together in conjunction with the other requirements across 
the Marine Air-Ground Task Force, to be within what we project 
to be the resources that we will have allocated in the future.
    So that is the general approach that we are taking, 
Congressman.
    The Chairman. Thank you very much.
    Ms. Hanabusa.
    Mr. Hunter.
    Mr. Hunter. Thank you, Mr. Chairman.
    Gentlemen, thank you all for your service and your 
testimony and the diligent work and hard work that you put into 
this. I just have, kind of, a simple question I would like to 
ask everybody. If you are talking about risk--and we have been 
talking about canceling these programs, certain programs, 
cutting down on other programs, leads us to--it is within what 
Admiral Mullen called the risk envelope, the acceptable risk 
envelope.
    Tell me, do you think if you got rid--and I am just going 
to throw some things out here. If we got rid of the F-22, we 
stopped production of that, that was within the risk envelope. 
We are going to stop--there has been talk about stopping the F-
35 STOVL. That is within the risk envelope. There has been talk 
about cutting the B-22 Osprey. That is within the risk 
envelope.
    You have the EFV, obviously, which has been hit on by, I 
think, every member here. That has been thought of to be in the 
risk envelope. I would like to know what the basis for 
calculating that acceptable risk is for situations that we are 
unable to respond to because we lack a certain type of 
equipment and why that is okay.
    Does that question make sense? Why is it okay to have that 
acceptable risk of not being able to respond to a certain 
threat or do a certain thing? I am just wondering.
    Probably, Mr. Secretary, you first, sir. How do you 
calculate that risk?
    Secretary Lynn. I think from the start of his tenure, 
Secretary Gates has talked about balancing the force between 
the near-term threats that we face and the conflicts we are 
engaged in and the longer-term threats that we might face 5, 
10, 15 years from now.
    And I don't think it is too far to say he thought that the 
program that he inherited was out of balance and was more 
focused on longer-term threats developing what he called 
exquisite capabilities for niche scenarios and not focused 
enough, frankly, on the fights that we are in in--before Iraq 
and right before us, Afghanistan.
    So the overall thrust of our efforts has been to maintain 
acceptable risk in those longer-term scenarios, but to, 
frankly, reduce the risk in near-term, so to shift money to 
MRAPs, to shift money to ISR----
    Mr. Hunter. If I could, Mr. Secretary, let me----
    Secretary Lynn [continuing]. Money to UAVs.
    Mr. Hunter. Let me be more specific now. We--you approved, 
obviously, the LCS [Littoral Combat Ship]. We have two 
different versions of it now. We have two different LCSs that 
operate in an area that is supposed to be the war of now, the 
literal areas within 20 miles of any shoreline.
    The Marine Corps--I think their amphibious move to shore 
from ship was in Lebanon in 2006. It was more of an evacuation 
peacetime move. I think General Mattis led an actual amphibious 
assault in 2001, if I am not mistaken.
    What I don't understand is how do you say the LCS works 
within this area and we need it there because of the type of 
threats that we face, yet we don't need another vehicle that 
would do the same thing that is not a conventional warfare-type 
vehicle.
    I mean, if Russia invaded tomorrow and parachuted in and 
was like the movie, ``Red Dawn,'' you wouldn't have the EFV 
running around. Right? But you would use the EFV if you had to 
hit a shoreline and you had to help some people out or you had 
some terrorist threat that you had to hit quickly.
    How do you marry those two? I am not understanding what--I 
understand your point. But the logic seems to elude me on how 
those two things can be separated, something like the LCS and 
the EFV to both operate that kind of have the same type of 
mission and that would operate in the same waters, yet one is 
cut, and one is not. In fact, one is doubled.
    Secretary Lynn. We didn't actually double the LCS. But we 
accelerated the buy. That is fair enough.
    The--let me be clear. The secretary and the Marine Corps 
remain committed to the amphibious assault mission. We are not 
eliminating the amphibious assault mission. What we are 
changing is the investment approach to that mission.
    As General Dunford indicated, the--using the EFV developed 
a relatively small number of vehicles at a very high cost that 
consumed the Marine Corps tactical--the vehicle budget for 
longer than a decade and absorbed more than half of its overall 
procurement costs. So----
    Mr. Hunter. If you don't mind, I would--I have got 20 
seconds left.
    Secretary Lynn [continuing]. What we are proposing is a 
different approach that involves a new, cheaper vehicle and 
upgrading the older vehicles.
    Mr. Hunter. So it is----
    Secretary Lynn. But it is still commitment to----
    Mr. Hunter. General Dunford, it is acceptable risk to not 
have an answer to that core capability that--or that core 
requirement. It is acceptable risk because it is too expensive? 
Is that--is it too expensive to have the ability to hit a shore 
with an EFV-type vehicle? And I am out of time.
    General Dunford. Congressman, I don't think it is too 
expensive to have that capability. And we are committed to that 
capability.
    In our case, we had finite resources. And I think the 
expectation is that the Marine Corps be relevant across the 
range of military operations. And so, what we were confronted 
with is the need to balance our investment portfolio across the 
Marine Air-Ground Task Force for operations across the Marines, 
the military operations, most specifically focused as a crisis 
response force and readiness.
    So we view ourselves as taking a different approach to 
meeting that capability requirement. The vehicle that we are 
talking about, the EFV, simply took too much money away, and, 
frankly, incurred a significant amount of risk in the rest of 
our portfolio. And so, we were out of balance as the Marine 
Air-Ground Task Force. That is from a Marine Corps perspective, 
the situation we are in.
    And that is what drilled the decision to walk away from the 
EFV and then go back after a new amphibious vehicle that meets 
the capability that I absolutely share your concern with. And I 
think the nation should not incur the risk of not having the 
ability to assure access to the joint force from ship to shore. 
We remain committed to that. We just believe we can meet that 
requirement at less cost than the EFV program.
    The Chairman. Thank you.
    Mr. Johnson.
    Mr. Johnson. Thank you, Mr. Chairman.
    And, Secretary Lynn, I applaud the Defense Department for 
courageously proposing a reduction of $78 billion from the 
defense budget growth through 2016 and challenging the services 
to make better use of their money. This committee and the 
Congress must, however, play our constitutional role in 
defining the scope and specifics of these cuts. But it is an 
admirable initiative. And I do want to commend you for it.
    As we complete our withdrawal from Iraq and begin to draw 
down in Afghanistan, the Pentagon will have to share the burden 
of getting our fiscal house in order, no doubt. And it is 
refreshing to see Defense Department leadership coming to grips 
with this new reality and proposing steps, if only baby steps, 
to adopt to this new reality.
    Secretary Lynn, defense funding accounted for about 15 
percent of federal budget authority during the mid to 1990s, 
the mid to late 1990s. Since the invasions of Afghanistan and 
Iraq, it has climbed to about 20 percent. Do you believe that 
as we end these two wars that we will be able to meaningfully 
reduce defense spending while maintaining our capacity to 
respond to threats, project power and ensure the security of 
the United States?
    Secretary Lynn. Congressman, I think that the proposal that 
we are bringing to the committee formally next month as part of 
the budget process, which involves real growth in the initial 
few years of the plan, while we still expect to be engaged in 
conflicts, particularly in Afghanistan and then flattens out in 
the outer years, when we hopefully have a substantially reduced 
commitment in Afghanistan as well as Iraq is a responsible 
balance between the need to reduce federal spending to bring 
the deficit down and the need to maintain absolutely the 
highest defense capabilities to protect the national security 
interests of the nation.
    Mr. Johnson. Thank you, sir.
    General Dunford, the Marine Corps and the Department of 
Defense are insistent that sea-based forcible entry is an 
essential capability even as you move to shut down the EFV 
program. The Department has no specific proposal to replace the 
EFV. And we have spent, what, $3 billion thus far in research 
and development? And we are at the point now where we can start 
production of these vessels at a cost that exceeds that which 
was anticipated many years ago.
    And the vehicle at this point, I think, has been described 
by Secretary Gates as being superb, I believe, or exquisite or 
excellent in its performance. So we would essentially be 
throwing $3 billion away and starting out with a Korean War-era 
vehicles that have been upgraded, if you will, with plans to 
produce another 21st-century fighting vehicle.
    It just seems that we go this far and then we make a 
decision to yank a program, despite the cost to the taxpayer 
and perhaps the efficiency of the Marine Corps in carrying out 
its obligations.
    That is something that is almost nonsensical. I know it is 
costing money, but we need these vessels for you to complete 
your job. Can you tell how much money the Department of Defense 
would save by canceling the EFV and developing an alternative? 
And also, when do you plan to present a detailed proposal for 
an alternative program? And when can we get the information 
that backs up your decision to stop this project?
    The Chairman. General, maybe you could get that information 
to him on the record, please.
    General Dunford. Thanks, Mr. Chairman.
    Absolutely, we will get the information in terms of how 
much there is a cost avoidance aspect of the EFV, and we will 
share the details of that information. That money is again what 
we hope to reinvest to address our other requirements.
    [The information referred to can be found in the Appendix 
on page 75.]
    General Dunford. But I would just respond to the 
Congressman and say we do absolutely share that commitment to a 
sea-based forcible entry capability. We share the commitment to 
get a new amphibious vehicle as quickly as possible in the 
manner that I described earlier. And we will come back over, 
and we will share with you the details of that.
    We have just gone out now to begin to discuss with industry 
what is in the area of the possible, again using cost as an 
independent variable. We will take that request for proposal 
and continue to work with industry to meet our requirement.
    Mr. Johnson. And we, frankly, don't have any idea whether 
or not a newly developed vehicle would cost in excess of what 
we would pay for these----
    The Chairman. Thank the----
    Mr. Johnson [continuing]. That are ready to come on line at 
this point.
    The Chairman. Thank you very much.
    Mr. Rigell.
    Mr. Rigell. Thank you, Mr. Chairman.
    And good afternoon, gentlemen.
    As a gentleman who has spent a summer becoming a Marine at 
Parris Island, as did my son and my dad, who served at Iwo 
Jima, it is really a great honor to serve on this committee.
    Admiral Greenert, given the operational tempo of our Navy 
and really, I think, the collision of how we are running our 
troops and our--and hours shifts with these budgetary concerns 
that are coming in, the idea of spending what could be $1 
billion to move the carrier to Mayport seems to me to be a 
severely misplaced priority.
    And given the other demands, other things that are lacking, 
it certainly seems to me that it would be critical and much 
wiser to invest or reinvest that money in more pressing 
matters, particularly those that affect readiness.
    So could you concisely give us, the committee, an update on 
exactly where we are with the prospect of moving a carrier from 
Norfolk to Mayport?
    Admiral Greenert. Thank you very much for the question. We 
considered that proposal, as we considered everything in this 
budget preparation, and we are convinced that the value, the 
strategic value of having our carriers dispersed exceeds any 
risk, if you will, associated to the budget.
    We are--we stand by the numbers. It is about $580 million 
cost. We are very comfortable with that number, the cost to 
move to Mayport. Some of the dredging, some of the early 
projects--well, really, the dredging has gotten started. So we 
looked again, as I said before, and we stand by that.
    The risk, when you talk about what are we concerned about 
in readiness, frankly, more near-term we are concerned about a 
continuing resolution because of the risk that that places on 
our readiness ships--$4.5 billion alone to our readiness 
accounts this year.
    Mr. Rigell. Admiral, what steps did you--did the Navy take, 
if any, to examine what could be done in Norfolk to mitigate 
those risks? I am convinced, as are some other retired flag 
officers who I seek counsel from and others, that practical 
steps could be taken to mitigate that risk and keep the carrier 
in Norfolk, allowing us to use those funds to--for more 
pressing matters.
    Admiral Greenert. The issue is not necessarily--well, it 
isn't the risk in Norfolk. It is the consequences is what we 
are talking about to have--the consequences of having all of--
not having an alternate port in the East Coast, as we have on 
the West Coast, as we have for East and West Coast for all of 
our other ship types. The consequences is what-- is the main 
issue here, not the risk, if you will, of an event.
    Mr. Rigell. My time is short.
    Mr. Secretary, would you address for us what--are there any 
other cuts that you are contemplating with respect to JFCOM?
    Secretary Lynn. Congressman, we are in the final stages of 
developing the implementation plan. The--we expect that the 
overall cut will be, as the secretary said, in the 50 percent 
range. I don't think it is going to vary from that. And we will 
provide the detailed to you we have completed that evaluation.
    Mr. Rigell. The--that chairman, I think, rightly pointed 
out the pattern of lack of transparency. And I would certainly 
appreciate and, I think, reasonably expect, as would other 
committee members, that there would be a proactive effort on 
the Department to communicate with leadership within the 
communities. And I would certainly appreciate that going 
forward.
    Now, finally, with respect to TRICARE and the prospect of 
increasing those deductibles, you know, it is widely understood 
when you enlist in the armed services that you are going to get 
lifetime health benefits. And I think to raise those premiums 
or to raise the deductible I think is a breach of trust with 
those who have served our country.
    And if we want to change it going forward, that is an 
entirely other--that is a different subject. And I think we 
should do better disclosure to those who are considering a 
military career to fully explain to them going forward that 
your benefits might be changed.
    But I know every person who has enlisted in the military, 
they did so, and they served, believing they would get lifetime 
care. And I would ask the Department to re-examine that and to 
set that aside as a possible option to address our fiscal 
problems.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Secretary Lynn. Mr. Chairman, if I could just address that 
last point briefly, please, we are not, Congressman, moving 
away from that commitment to lifetime care for retirees. The 
TRICARE proposal simply would lift the freeze, which I don't 
think was part of the promise that they would have fees frozen 
at the 1995 level.
    We think the fees should essentially rise with inflation so 
that you should maintain a constant benefit, but that you 
shouldn't--if you don't rise with inflation, essentially the 
benefit improves every year. That--we don't think that was part 
of the commitment, so we are trying to put in place some kind 
of reasonable inflation measure on those fees, and just--that 
is just for working-age retirees. It would not affect the 
active-duty force at all.
    Mr. Rigell. Full disclosure from the recruiters, please.
    Thank you so much, Mr. Chairman.
    The Chairman. Thank you.
    Mr. Gibson.
    Mr. Gibson. Thank you, Chairman.
    And I want to thank the distinguished panelists here today 
for their service, for their leadership, and for appearing 
before this committee. I would like to express my support and 
admiration for all our service men and women and for their 
families. Serving us so courageously and selflessly forward in 
a time of war, multiple deployments, is recognized.
    I make my pledge for solemn commitment to protect this 
cherished way of life. Having said that, I want to appreciate 
what has been said today, the testimony, you know, the candor, 
the effort to find savings. This deficit that we have threatens 
our very way of life, and everything needs to be on the table 
as we go forward.
    You know, I am interested to learning more about the 
intellectual underpinnings for some of the rationale for the 
cuts, particularly in relation to vision for our country's 
strategy, a fully developed strategy of ends, ways and means, 
and how that impacts policy decisions, programming and 
budgeting.
    And in particular, my question today is for Mr. Lynn and 
has to do with Joint Forces Command. I am interested in 
understanding in relation to the strategy and, in fact, purpose 
for the original charter for the Joint Forces Command, what has 
changed over time and the rationale for why the 
disestablishment. Thank you.
    Secretary Lynn. Congressman, this goes back to the 
Goldwater-Nichols legislation, which I am sure you are familiar 
with, which shifted the balance of the military and put more 
emphasis on joint warfighting capabilities by strengthening the 
combatant commanders, by putting in place an emphasis on joint 
doctrine and joint training, by strengthening the role of the 
chairman of the Joint Chiefs of Staff and having the joint 
staff report to him rather than the chiefs as the body.
    All of those measures were intended to strengthen joint 
news. One of those measures--it was after the Goldwater-Nichols 
era, but a decade later the Department set up the Joint Forces 
Command to help implement those purposes.
    We think the combination of the Goldwater-Nichols efforts, 
as well as the work of the Joint Forces Command, has 
accomplished a lot. And we think that the combatant commands 
are in a much stronger place than they were 2 decades ago, and 
we think the services have a much more joint focus than they 
did 15 years ago.
    And in that context, we think that we can pursue jointness 
without the billion-dollar expense of a four-star command. We 
are going to retain a portion of that. As I responded to 
Congressman Rigell, we think about half of those functions will 
be retained there.
    But the overhead of a four-star command, all of the 
supporting elements--we think we can save those, and we think 
that leadership can be done by the chairman and the vice 
chairman and the joint staff. And we still think we will 
continue down that path of jointness.
    Mr. Gibson. I thank the gentleman. I just want to affiliate 
myself with the remarks that we can restructure our command and 
control headquarters. We can achieve consolidation.
    I think this is really the time to think big, to take a 
look at the way we lay down forces, to take a look at the way 
we structure our command and control. I think there may be some 
other alternatives that we can look at.
    And as we go forward, Mr. Chairman, I would tell you that I 
am willing to be part of that effort, if the committee was 
interested in looking at ways for the 21st century, how we can 
have these--just take a look at full spectrum command and 
control across all the regional combatant commands and taking a 
look at the Joint Forces Command and figuring them out. What is 
the best way that we can protect this cherished way of life in 
a manner that is consistent with the Republic?
    I yield back. Thank you.
    The Chairman. Thank you. Thank you. And you will be given 
that opportunity.
    Mr. West.
    Mr. West. Thank you, Mr. Chairman.
    And Secretary Lynn and distinguished members of the panel, 
I just want to say it is an absolute honor to be here serving 
on this committee.
    It truly is the culmination of an American dream when I 
consider the fact that my father was a soldier in World War II, 
that my mother served 25 years civilian service with the 6th 
Marine Corps District Headquarters in Atlanta, an older brother 
who served as a Marine in Vietnam, the 22 years that I had on 
active duty service, and now my young nephew, who is serving as 
an assignments officer with field artillery branch at HRC 
[Human Resources Command].
    So as I bring that experience to bear, I want to echo some 
of the comments that we have talked about, the military 
personnel side and those reductions, because I recall a time 
when the Soviet Union collapsed--and I was still there in 
active duty and I ended up being a brigade operations officer--
and having to go out and not being able to qualify some of our 
soldiers except for the Weaponeer, that simulation system, or 
not having the repair parts to be able to keep our Howitzer 
systems up and operational.
    So as we look--go forward, I want to make sure that, as we 
talk about this military personnel, that we don't go back and 
do what we did at that time when the Soviet Union collapsed, 
where we saw the military as a bill-payer for some of the other 
budgetary programs that we wanted to do, because I think one of 
the most important things we have to realize that the world 
right now is a lot more Machiavellian than it is a peaceful 
world.
    And we must be able to provide the national security to our 
people here. The thing that I look at is what are the second 
and third order effects?
    We talk about the effects on the National Guard. We talked 
about the effects on the Reserve forces. You know, we look and 
see that now we are starting to see a lot of stress on our men 
and women in uniform with the countless amounts of deployments 
they are doing, four and five deployments.
    I want to make sure that, as we go forward and we talk 
about the end strength of our fighting forces, that we are 
really sitting down and looking at the emerging threats and 
doing a threat-based assessment and an analysis so that we 
don't find ourselves as we did going into Iraq in 2003, where 
we didn't have the right type of equipment, where we didn't 
have a force that was ready for those long, continued 
operations.
    And so I would ask, Secretary, as we look at these 
personnel reductions that we have the time to bring in some of 
the combatant commanders to really look at what are the 
emerging threats in some of these theaters of operation.
    We see what has happened in North Korea. We understand what 
is going on in Somalia and Yemen. Things are not as well as 
they could be in Afghanistan. We have a threat there in 
Pakistan.
    If you look south of our border, in Mexico, it is starting 
to look a lot like Iraq and Afghanistan with beheadings and 
mass graves and things of that nature, and roadside bombs.
    So, you know, the world is still a dangerous place.
    So what manner did we use as an assessment or an analysis 
to come up with these reductions to the Army and to the Marine 
Corps, because we do need those fighting forces to be viable, 
as they are a land combat and maritime combat force.
    Secretary Lynn. Congressman, I have 8 years of experience 
in the Department building programs and budgets prior to my 2 
years here.
    In those 10 years, the involvement of the combatant 
commanders and the building of a budget is unique in, I think, 
the way Secretary Gates has led this.
    I--he had repeated meetings through the course of the 
summer and the fall to evaluate all of the proposals with all 
of the leadership.
    And the--all--the Pentagon leadership is the normal 
practice. Usually the chiefs and the service secretaries----
    Mr. West. Understand.
    Secretary Lynn [continuing]. OSD representatives around the 
table. The combatant commanders are, frankly, usually brought 
in for just a meeting and told what the budget is. And they go 
back out and do their jobs.
    In this case, they were brought in for repeated meetings, 
repeated discussions. They were a part of the process. So I 
think the secretary's understanding of the risks is fully 
informed by their recommendations.
    With regard to the force structure changes, I would take 
you back to, I think, the phrase that General Chiarelli used, 
that the proposals we have are conditions-based.
    They are at, frankly, at the back end of the planning 
period and that was intentional, both to allow time for 
planning, but also to allow time for the expected reductions in 
Afghanistan and Iraq to take place.
    Assuming those do, we think that this is acceptable risk, 
but as I said, conditions-based. If the conditions are 
different than that, we will have to reevaluate, and for just 
the reasons that you said. We do not want to have inadequate 
force to meet the threats that we might face.
    Mr. West. Okay. So, in other words, we have built-in 
flexibility?
    Secretary Lynn. Absolutely.
    Mr. West. Very well. I yield back to you, Mr. Chairman.
    The Chairman. Thank you.
    Ms. Hanabusa.
    Ms. Hanabusa. Thank you, Mr. Chairman.
    Thank you, gentlemen, for being here.
    Secretary Lynn, as you know, I represent Hawaii. And each 
one of you have your services represented in Hawaii. And we all 
believe that Hawaii is very critical, especially in the Far 
East arena.
    Now having said that, an integral part of our success in 
Hawaii has been our civilian workforce. And in reading 
Secretary Gates' statement as well as some of yours, there are 
mentions of cutting in personnel.
    And I assume part of it is meant to be military personnel 
and part of it is meant to be civilian personnel.
    I would like to know how you are making the distinction 
between when you say cuts or freezes and you talk about it in 
terms of savings in TRICARE, for example.
    How is it that you are making the distinction as to which 
part of this workforce shall be cut? And in addition to that, 
somebody is going to have to do that work. So I assume that 
part of this is also looking at outsourcing of that work.
    And I would like to know how that decision is being made as 
to how much of it will be kept in terms of a civilian personnel 
within the military, and how much of it you would be 
outsourcing.
    Secretary Lynn. With regard to outsourcing, we actually 
think we have oversteered in that regard and that there are 
certainly valid purposes and valid roles in outsourcing.
    But we think, in some cases, we have gone too far. We think 
in the acquisition workforce we frankly outsourced too much of 
our expertise. And we need to bring more of it back in house.
    And we are endeavoring to do that, even though, as you 
indicated, there--we are--we have a--I guess I would call it a 
soft freeze. We have made an exception for those acquisition 
increases.
    We also think in terms of staff support, headquarters and 
other office functions, we have relied too heavily on 
outsourcing. And that is the reason for the secretary's 
directive that those staff augmentees be reduced by 10 percent 
per year over the next 3 years.
    So we are still conscious--we could not, frankly, do the 
nation's business without contractors. So this is not at all an 
attack on contractors. But we think, as I said, we have 
oversteered, and we are now trying to correct the rudder a bit.
    Ms. Hanabusa. So if you can tell me very simply, what are 
the areas--you are saying in acquisition areas, you are 
assuming that we would probably bring them back in-house versus 
outsourcing it.
    But what--when you speak, for example, to staff 
augmentation, what exactly are those functions and are they 
intended to be frozen, never filled, cut? How do you look at 
that?
    Secretary Lynn. They are intended to be cut.
    And what I mean by those, those are people, for example, 
who work for private contractors but come to work every day in 
the Pentagon, would be an example of the kind of augmentee we 
are trying to reduce.
    We are just trying to reduce the size of the overall 
headquarters as an efficiency measure.
    And in particular, we think that the growth over the last 
decade of private contract support, in that particular role, 
has been too great. And we are cutting that back.
    Ms. Hanabusa. How does it impact each state, like, for 
example, my state?
    How would you--when you start to cut or augment, whichever 
way you are going to do it, in terms of acquisition or 
whatever, how are you going to face that decision in each 
state? Is there going to be some kind of a uniform policy?
    Secretary Lynn. Well, we are not really doing it state by 
state. We are doing it organization by organization.
    So the heaviest--you would feel the impact where you have 
headquarters. So, I mean, in Hawaii, there are several 
headquarters.
    Ms. Hanabusa. Right.
    Secretary Lynn. They will see some private contractor 
reductions here. Of course, I mentioned the Pentagon, see some 
reductions here as well.
    Ms. Hanabusa. Are we ever going to see--is there any plan 
to augment the workforces, like in headquarters, like in 
Hawaii?
    Secretary Lynn. Admiral Greenert.
    Admiral Greenert. Yes.
    Congresswoman, as you know, the Navy has got a pretty big 
footprint in Hawaii. So, if I may, I will speak a little bit to 
it.
    First, in the military footprint, we found that our ships 
weren't properly manned due to some initiatives we put out 
earlier. And so we have a lot of destroyers and cruisers.
    We will be increasing manning in our destroyers and 
cruisers. When you take the net effect to the fleet in Hawaii, 
there is a net increase of about 300 military personnel.
    Looking at civilian personnel, civilian workers, if you 
will, government civilian workers--our harbor naval shipyard is 
important to us. And we have increased manning there and as--
and joint basing as well.
    Ms. Hanabusa. Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Mr. Scott.
    Mr. Scott. Thank you, Mr. Chairman.
    Secretary Lynn, the $70 billion in reductions, $14 billion 
or approximately 20 percent is listed as economic assumptions 
and other. What are those economic assumptions, and what is the 
breakdown of the other?
    Secretary Lynn. The economic assumptions are changes in 
inflation rates, changes in pay rates that, in other words, 
what it essentially means is that, when you make those 
changes--and in this case they are reductions--you can buy the 
same program for fewer dollars.
    Mr. Scott. Those are the economic assumptions?
    Secretary Lynn. Yes, that is right.
    Mr. Scott. What is the other?
    Secretary Lynn. The other is just the--all the proposals 
that are too small to list. We will provide those when we 
provide the budget.
    Mr. Scott. So we can get a detailed breakdown of all of 
those and the economic----
    Secretary Lynn. Absolutely.
    Mr. Scott. Mr. Chairman, could I ask a further question?
    General Breedlove, we--and Mr. Franks talked about this a 
little bit. I would also like the information on the B-1, the 
B-52 and the B-2 on those upgrades, if you would.
    And as we talk about this new bomber, what capabilities 
will that bomber have that the upgraded B-1, B-52, B-2 don't 
have?
    General Breedlove. Sir, thank you for the question. We will 
get on your calendar and bring by the discussion of the three 
existing bomber aircraft.
    The new aircraft, we envision to bring up the capabilities 
to today's standards in many ways. One of the cost savings 
approaches we have for this bomber is to not lean forward into 
technology that is not proven, but bring our aircraft up to the 
current day's standards.
    For instance, our existing bomber fleet, the stealth 
capability and technology is 15 to 18 years old. We have done a 
lot of work in the F-22 and the JSF that tells us we can do 
that better.
    So the new bomber will have better stealth capability but 
not making leaps forward that we can't count on. And I could 
walk through the systems of the airplane, the avionics, the ISR 
capabilities. It is all the same story.
    General Breedlove. We have had years of improvement in 
those capabilities since we built the F-22, the JSF, the B-52, 
et cetera. And we will bring this new bomber up to today's 
standards of capabilities.
    Mr. Scott. General, if I may follow up with that. If we are 
going to spend the money to upgrade, again, the B-1s, why 
wouldn't we put that technology in--into the upgrades of the 
current fleet? And, you know, that----
    General Breedlove. Sir, in some cases, that is exactly what 
we are going to do. But an aircraft like the B-52 was never 
built to be stealthy.
    Mr. Scott. Yes, sir.
    General Breedlove. You cannot bring that to that aircraft. 
So the--to the degree that we can bring today's technologies to 
these existing platforms, we are doing that. And that is part 
of what we will bring to your office, sir, and to Congressman 
Franks' office and discuss with him.
    Mr. Scott. One further question on that. What is the 
anticipated cost of the new bomber?
    General Breedlove. That, sir, is not fleshed out totally 
yet. We are trying to drive to a number that will allow us to 
buy a fleet that can address the numbers and types of threats 
around the world that we face, as you know, sir, the fleet size 
of the B-2 has challenged a very dedicated group of aviators 
and maintainers. And our distinct goal in this aircraft is to 
control the costs so that we can buy a fleet that makes us 
operationally relevant around the world and around the target 
set.
    Mr. Scott. One final question, if I may, General. I 
represent Warner Robins, Robins Air Force Base. And there were 
$3 billion approximately in savings and changes to the 
logistics of the operations of the depots. Could you go through 
a breakdown of that?
    General Breedlove. I can give you an overall read, and then 
I will try to hit a few of the specific examples. We are not 
taking those savings in people. They are in processes. What we 
are trying to do is adopt more processes like our civil 
competitors, bring leaner--what I would call leaner stocking 
and supply practices so that we do not have money tied up in 
excess stock and supply. And those are examples. And again, I 
would be happy to come by and talk about a list of those, if 
you would like.
    Mr. Scott. Thank you so much.
    I yield back.
    The Chairman. Thank you.
    Mr. Coffman.
    Mr. Coffman. Thank you, Mr. Chairman.
    And I want to acknowledge some of the comments that have 
been made prior to me about the Department of Defense not being 
responsive to the Congress of the United States in terms of 
inquiries. And I want to really second that. And I hope you all 
can do a better job this year and going forward with working 
with members of Congress in terms of providing inquiry--
information to inquiries.
    First of all, I would love it if somebody could get back to 
me and to the committee. I am sure you looked at everything in 
terms of making reductions. And I think we still have four 
brigade combat teams in Europe and forward-deployed. And so, is 
there a potential reduction in short-term, long-term and 
redeploying those forces back home?
    Having served with the First Armored Division in the United 
States Army during the Cold War, I certainly saw the need for 
those forces there then. And, of course, we had a lot more 
then. And I question the need for them now. We can certainly 
demonstrate our support for NATO by doing joint military 
exercises on a periodic basis. And so, I question having 
permanent U.S. bases there.
    In South Korea right now, I think we are moving from an 
unaccompanied tour, our 28,500 personnel that are there, to an 
accompanied tour, 1-year assignments and 3-year assignments and 
building all the infrastructure associated with that for 
dependents. Given the tensions on the peninsula right now, I 
question the need for that. And I question the cost for that. 
And I would like to know if we suspended that personnel change 
and we didn't have to build all the schools, the housing and 
everything associated with dependents, what is the cost savings 
associated with that.
    Then I want to--I certainly want to commend you, Mr. 
Secretary, on some of the savings that you have done in terms 
of the Department of Defense being so top-heavy, combining 
commands, doing away with Joint Forces Command. Having served 
in the first Gulf War with the United States Marine Corps--I 
transferred over from the Army to the Marine Corps--and then 
gone back in 2005 to serve in Iraq, I can tell you the culture 
of the military has changed from when we started Joint Forces 
Command in terms of accomplishing that critical mission of 
being able to work together.
    And we are there now. We certainly need to stay on top of 
that. But it is time to dismantle that bureaucracy. And I want 
to commend you. I think the Defense Department is unlike any 
other agency of government, that it is easy to establish new 
commands, establish new bureaucracies. And it is hard to 
dismantle anything. And so, again, I want to commend you for 
that and certainly support those cost-saving efforts.
    On the EFV, the Expeditionary Fighting Vehicle, I am very 
concerned, having read the secretary of defense's comments on 
the Nunn-McCurdy breach about affirming the requirement of the 
Expeditionary Fighting Vehicle and listening to the testimony 
today where it seems like we are trying to massage a savings 
where I am not sure that there ought to be one.
    I am going--Admiral, I would like to--if you could give us 
a report in writing. You talked about how we went from 25 
nautical miles to 50 nautical miles out--and how we are able to 
achieve that without exposing our forces to a higher risk.
    General Dunford, you mentioned that we were going to do a 
service life extension program to the EFV and that you had a 
lower cost alternative also to the EFV. But it seems like we 
have a gap in terms of our capabilities as to meeting the 
requirement, even if we went out--even if 12 nautical miles was 
acceptable. We don't have that capability now with the AAV.
    I am not sure even with the service life extension program 
we are going to have that capability there. And I think that a 
lot of the technology, a lot of the costs associated with the 
development of the EFV anyway is going--is probably going to be 
transferred to this supposedly low-cost--lower-cost vehicle 
where we didn't have all the startup costs in terms of research 
and development. So I think that there is a lot of--I think at 
the end of the day with the EFV question, what we will have is 
a gap in the requirement.
    And, look, if a gap in the requirement is acceptable as a 
cost savings measure, then tell us that because really, that 
is, at the end of the day, what I am hearing, that we will take 
a risk in not meeting the requirement in order to save money 
because, I think, the Department of Defense feels that--feels 
that the--having force entry requirements is not all that 
significant.
    Thank you, Mr. Chairman. I yield back.
    The Chairman. Thank you, Mr. Coffman.
    Thank you for being here today, for giving as many as 
members of the committee who stayed an opportunity to ask their 
questions. Just one final closing comment. I think you probably 
sensed the frustration of many of the members on the committee 
for their feeling of lack of communication. I know we have the 
hearings. I know you present things to us from time to time 
like you only had the update on that $78 billion that we hadn't 
planned on.
    It just seems to me that if--if we work closer--we do not 
want to be confrontational. We want to be supportive. Every 
member of this committee strongly supportive of the armed 
services. But we get the feeling that sometimes decisions are 
handed to us as a fait accompli. And we are irrelevant. And, 
you know, we all have big egos up here, or we wouldn't be here.
    That is now what I really mean. But it is important to give 
us the opportunity to do our job. And we want to work together 
to make that happen. So if you can carry that message back, you 
are going to hear a lot of it until we feel like we are being 
brought into the process.
    Thank you very much.
    Secretary Lynn. Mr. Chairman, if I could just respond to 
your last----
    The Chairman. Sure.
    Secretary Lynn. Very much appreciate what you said. I did 
get the flavor of the comments and the breadth of them. I will 
say I think the Department recognizes that not all wisdom is 
South of the Potomac River and that Congress has a very 
important role to play and very much value added. And I have 
heard the examples of the F-117 and UAVs. And Congress has 
often been right in these debates.
    So I take your comment seriously. And we will endeavor to 
work with the committee. And we very much appreciate the 
committee's support.
    The Chairman. Thank you very much. This hearing is 
adjourned.
    [Whereupon, at 12:59 p.m., the committee was adjourned.]
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                            A P P E N D I X

                            January 26, 2011

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                            January 26, 2011

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              WITNESS RESPONSES TO QUESTIONS ASKED DURING

                              THE HEARING

                            January 26, 2011

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

      
             RESPONSE TO QUESTION SUBMITTED BY MR. JOHNSON

    General Dunford. [The response was not received at the time of 
publication.] [See page 41.]
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              QUESTIONS SUBMITTED BY MEMBERS POST HEARING

                            January 26, 2011

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

      
                   QUESTIONS SUBMITTED BY MR. TURNER

    Mr. Turner. 1. The Department's plan includes a reduction in 360 
contractors from MDA. Across the FDYP, the Missile Defense Agency (MDA) 
will add $1.7 billion for research and development of the Standard 
Missile-3 (SM-3) Block IIB interceptor and $360 million for additional 
forward-based Army Navy/Transportable Radar Surveillance (AN/TPY-2) 
radars. To offset these increases, MDA has identified roughly $2.4 
billion in efficiencies and reductions; however, the specific 
distribution of these reductions is unknown.

        i. Considering these reductions in personnel and funding, is it 
likely that the administration will meet the strategic goals and 
timeline laid out in the Phased Adaptive Approach?

        ii. What programs will be adjusted to support these lower 
funding levels?

        iii. With the move of MDA to Redstone Arsenal as a result of 
BRAC, MDA is currently facing a personnel issue in meeting the 
personnel needs as a result of the BRAC move and they have to meet the 
insourcing requirements with contractors. What process was used to come 
up with the personnel reductions?

    Secretary Lynn. [The response was not received at the time of 
publication.]
    Mr. Turner. 2. Secretary Gates recently announced his intent to 
eliminate 100 general officer positions.

        i. How will the process to reduce general officer positions 
work?

    Secretary Lynn. [The response was not received at the time of 
publication.]
    Mr. Turner. What kind of analysis does the SecDef refer to when he 
said that ``analysis'' by the Navy and Marine Corps ``suggests that the 
most plausible scenarios requiring power projection from the sea could 
be handled through a mix of existing air and sea systems employed in 
new ways along with new vehicles--scenarios that do not require the 
exquisite features of the EFV''?
    Admiral Greenert. [The response was not received at the time of 
publication.]
    Mr. Turner. What kind of analysis does the SecDef refer to when he 
said that ``analysis'' by the Navy and Marine Corps ``suggests that the 
most plausible scenarios requiring power projection from the sea could 
be handled through a mix of existing air and sea systems employed in 
new ways along with new vehicles--scenarios that do not require the 
exquisite features of the EFV''?
    General Dunford. [The response was not received at the time of 
publication.]
                                 ______
                                 
                  QUESTIONS SUBMITTED BY MS. BORDALLO

    Ms. Bordallo. 1. For Fiscal Years 2001 through 2010, what was the 
cost, including pay and benefits, and strength of the Department of 
Defense's civilian workforce? For the same years, what was the cost, 
including all object classes in 2500, and size of the Department's 
contractor workforce?
    Secretary Lynn. [The response was not received at the time of 
publication.]
    Ms. Bordallo. 2. Given that the A-76 process to evaluate whether 
work done by federal employees should be contracted out or remain in-
house crosses personnel and acquisition functionalities within the 
Department, what is the Department doing to ensure that the appropriate 
management and leadership are engaged at all stages in the process, 
from preliminary planning through execution of a competition?
    Secretary Lynn. [The response was not received at the time of 
publication.]
    Ms. Bordallo. 3. How will the Department comply with the statutory 
requirement that inherently governmental functions be performed by 
civilian employees? For example, the Army's services contract inventory 
has revealed that 2,357 contractors have performed inherently 
governmental functions, less than half of which have been insourced.
    Secretary Lynn. [The response was not received at the time of 
publication.]
    Ms. Bordallo. 4. What are the savings generated from the imposition 
of a three-year cap on the civilian workforce and all other 
efficiencies derived from the civilian workforce, pursuant to the 
Secretary's January 6th announcement? What are the savings generated 
from the planned reductions in spending on service contractors?
    Secretary Lynn. [The response was not received at the time of 
publication.]
    Ms. Bordallo. 5. What workforce planning did the Department 
undertake before imposing a cap on civilian employees? How is this cap 
consistent with Title 10 United States Code, Section 129?
    Secretary Lynn. [The response was not received at the time of 
publication.]
    Ms. Bordallo. 6. The Secretary insists that there can be only 
``very limited exceptions'' to the cap. How are those exceptions made? 
What is the process by which exceptions are granted? What criteria are 
used? Are the criteria consistent with various sourcing laws? What 
functions are likely to qualify? Which functions are not likely? Will 
the authority to authorize exceptions be reserved to a very high level? 
If so, why?
    Secretary Lynn. [The response was not received at the time of 
publication.]
    Ms. Bordallo. 7. How will the Department comply with Title 10 
United States Code, Section 129a and Title 10 United States Code, 
Section 2463 if it cannot add new staff to take on functions that can 
be performed more efficiently in-house or should never have been 
outsourced because they are inherently governmental?
    Secretary Lynn. [The response was not received at the time of 
publication.]
    Ms. Bordallo. 8. Does the in-house freeze not mean that, 
effectively, all new work as well as additions to existing work will be 
contracted without regard to cost or risk?
    Secretary Lynn. [The response was not received at the time of 
publication.]
    Ms. Bordallo. 9. Will the Department's ability to undertake new 
contracts be subject to the same constraints? If not, why? Why should 
there be a hard cap on the civilian workforce and no cap on contractor 
costs? Will new contracts as well as additions to existing contracts 
also require very high-level authorization?
    Secretary Lynn. [The response was not received at the time of 
publication.]
    Ms. Bordallo. 10. How will the Department comply with the statutory 
requirement (Section 807, National Defense Authorization Act for Fiscal 
Year 2008, Public Law 110-181) that unauthorized personal services 
contracts be ``entered into, and . . . performed, in accordance with 
applicable statutory and regulatory requirements,'' and, if necessary, 
be corrected, including through insourcing?
    Secretary Lynn. [The response was not received at the time of 
publication.]
    Ms. Bordallo. 11. How will the Department comply with the statutory 
requirement that DOD give ``special consideration'' to insourcing 
contracts that are poorly performed or undertaken without competition?
    Secretary Lynn. [The response was not received at the time of 
publication.]
    Ms. Bordallo. 12. How will the Department comply with Section 1111 
of the National Defense Authorization Act for Fiscal Year 2010 (Public 
Law 111-84) and ensure that ``funds authorized to be appropriated for 
the Department of Defense that are available for the purchase of 
contract services to meet a requirement that is anticipated to continue 
for five years or more shall be available to provide compensation for 
civilian employees of the Department to meet the same requirement''?
    Secretary Lynn. [The response was not received at the time of 
publication.]
    Ms. Bordallo. 13. Why did the Department limit its focus to support 
service contracts? What percentage of the Department's service 
contracting costs do support service contracts constitute? How does 
this limited focus accommodate the Department's concern, as expressed 
last August, with the extraordinary growth in contract costs for object 
classes 25.1 and 25.2?
    Secretary Lynn. [The response was not received at the time of 
publication.]
    Ms. Bordallo. 14. What other options did the Department consider 
with respect to reducing contractor costs? What was the dollar value of 
those other options? Why did the Department not consider freezing or 
cutting contract costs for all object classes?
    Secretary Lynn. [The response was not received at the time of 
publication.]
    Ms. Bordallo. 15. The Department's focus on the narrow category of 
support service contracts for cuts excludes the vast majority of 
service contract dollars. How will growth in non-support service 
contracts be constrained? How will the cuts in support service 
contracts be enforced in the absence of a contractor inventory that is 
integrated into the budget process?
    Secretary Lynn. [The response was not received at the time of 
publication.]
    Ms. Bordallo. 16. For advisory and assistance services, for Fiscal 
Years 2007 through 2010, what were the estimated and actual costs for:
      management and professional services FFRDC;
      management and professional services non-FFRDC;
      studies, analyses and evaluation FFRDC;
      studies, analyses and evaluations non-FFRDC;
      engineering and technical services FFRDC; and
      engineering and technical services non-FFRDC.
    Secretary Lynn. [The response was not received at the time of 
publication.]
                                 ______
                                 
                    QUESTIONS SUBMITTED BY MR. KLINE

    Mr. Kline. 1. It seems like we are already planning a decrease in 
manpower because we expect to be done in Afghanistan in 2014. How 
flexible are today's decisions to decrease force levels if we find that 
we are not ready to leave by 2014--or, worse, the contingency we are 
not expecting emerges in the meantime? How comfortable are you with end 
strength levels now and in the future to meet our warfighting 
requirements. With your men and women being asked to do more, not less, 
every day, how can you justify future planned reductions?
    General Chiarelli. [The response was not received at the time of 
publication.]
    Mr. Kline. 2. The conventional and asymmetric threats have changed 
significantly since 2001, and so has our National Security Strategy. 
Meeting the short-term wartime requirements in Iraq, Afghanistan, and 
the Horn of Africa was not the only reason we funded an increase in 
military end strength. On the contrary, the troop increases were done 
as a result of lessons learned from these conflicts--to realign our 
troop levels with the changing conventional and asymmetric threats for 
today and the future. How do these cuts in military personnel take into 
account the changes in National Security Strategy and our current 
security treaty obligations with other countries in the world?
    General Chiarelli. [The response was not received at the time of 
publication.]
    Mr. Kline. 3. The Services have been trying to achieve adequate 
dwell-to-deployment ratios in order to reduce the stress on the active, 
reserve, and National Guard forces. What is the status of your progress 
to meet your dwell-to-deployment ratio goals for active duty, reserve, 
and National Guard forces, and how will a planned reduction in end 
strength affect your ability to achieve the adequate dwell time?
    General Chiarelli. [The response was not received at the time of 
publication.]
    Mr. Kline. 4. According to the CBO in 2007, the estimated cost of 
increasing end strength from 2007 to 2013 was $108 billion for the Army 
and the Marine Corps. Now we are talking about decreasing end strength 
before the initiative to grow the force is complete. How much do the 
see-saw decisions to ramp up and then ramp down military personnel end 
strength cost the government--in infrastructure, MILCON, equipment, and 
training?
    General Chiarelli. [The response was not received at the time of 
publication.]
    Mr. Kline. 1. It seems like we are already planning a decrease in 
manpower because we expect to be done in Afghanistan in 2014. How 
flexible are today's decisions to decrease force levels if we find that 
we are not ready to leave by 2014--or, worse, the contingency we are 
not expecting emerges in the meantime? How comfortable are you with end 
strength levels now and in the future to meet our warfighting 
requirements. With your men and women being asked to do more, not less, 
every day, how can you justify future planned reductions?
    General Dunford. [The response was not received at the time of 
publication.]
    Mr. Kline. 2. The conventional and asymmetric threats have changed 
significantly since 2001, and so has our National Security Strategy. 
Meeting the short-term wartime requirements in Iraq, Afghanistan, and 
the Horn of Africa was not the only reason we funded an increase in 
military end strength. On the contrary, the troop increases were done 
as a result of lessons learned from these conflicts--to realign our 
troop levels with the changing conventional and asymmetric threats for 
today and the future. How do these cuts in military personnel take into 
account the changes in National Security Strategy and our current 
security treaty obligations with other countries in the world?
    General Dunford. [The response was not received at the time of 
publication.]
    Mr. Kline. 3. The Services have been trying to achieve adequate 
dwell-to-deployment ratios in order to reduce the stress on the active, 
reserve, and National Guard forces. What is the status of your progress 
to meet your dwell-to-deployment ratio goals for active duty, reserve, 
and National Guard forces, and how will a planned reduction in end 
strength affect your ability to achieve the adequate dwell time?
    General Dunford. [The response was not received at the time of 
publication.]
    Mr. Kline. 4. According to the CBO in 2007, the estimated cost of 
increasing end strength from 2007 to 2013 was $108 billion for the Army 
and the Marine Corps. Now we are talking about decreasing end strength 
before the initiative to grow the force is complete. How much do the 
see-saw decisions to ramp up and then ramp down military personnel end 
strength cost the government--in infrastructure, MILCON, equipment, and 
training?
    General Dunford. [The response was not received at the time of 
publication.]
                                 ______
                                 
                    QUESTIONS SUBMITTED BY MR. CRITZ

    Mr. Critz. 1) Mr. Lynn, Robert Hale, the current DOD comptroller, 
warned in a 2002 paper that ``Because efficiencies are hard to achieve, 
defense managers should avoid counting on projected savings to make up 
budget shortfalls.'' He suggested that ``Save `em before you spend 
`em'' should be the motto of defense management. How does the 
Department reconcile this advice with the its current plan to spend 
projected savings on higher priority capabilities and programs before 
the savings have actually been realized?
    Secretary Lynn. [The response was not received at the time of 
publication.]
    Mr. Critz. 2) Mr. Lynn, what are the projected savings over the 
FYDP from the proposed increase in premiums and copays for working age 
military retirees using TRICARE? How much does it raise the annual 
premiums working-age retirees pay? How much of the projected savings 
are from retirees being incentivized to move out of the military 
healthcare system onto their employer's healthcare plans? What measure 
of inflation will the premiums be linked to for future increases (e.g. 
consumer price index, etc.)?
    Secretary Lynn. [The response was not received at the time of 
publication.]
    Mr. Critz. 3) Mr. Lynn, does the healthcare proposal attempt to 
raise premiums for military retirees over the age of 65 (i.e. non-
working age retirees) for the TRICARE for Life benefit?
    Secretary Lynn. [The response was not received at the time of 
publication.]
    Mr. Critz. 4) Mr. Lynn, many of the efficiency savings announced 
are from consolidation of IT systems. What are the up-front costs of 
consolidating these systems, what is the timeframe for implementation, 
and what is the breakeven point in terms of how long the savings must 
be realized in order to recoup the up-front cost of implementation?
    Secretary Lynn. [The response was not received at the time of 
publication.]
    Mr. Critz. 5) Mr. Lynn, the FY11 budget request showed a projected 
decrease in RDT&E funding each year from FY11 to FY15. Will some part 
of the savings from the efficiency initiative be used to keep RDT&E 
from declining as was previously planned?
    Secretary Lynn. [The response was not received at the time of 
publication.]
    Mr. Critz. 1)Admiral Greenert, there are (3) basic landing elements 
during an amphibious operation. Launch distance from Ship to Shore, 
Speed of Landing Craft, and Travel time to the beach. Are there 
doctrinal requirements for any of these elements? If so, what are they? 
If not, why not?
    Also, will there be a detailed joint Navy/Marine Corps requirements 
process that examines all requirements to include the proximity of 
amphibious naval ships to the shoreline; especially in hostile/anti-
access scenarios?
    Admiral Greenert. [The response was not received at the time of 
publication.]
    Mr. Critz. 1) General Dunford, the Commandant of the Marine Corps 
recommended cancelling the EFV program as part of the Secretary of 
Defense Efficiency initiatives. However, the Marine Corps and the 
Department still proclaim the requirement still remains. Has there been 
or are there plans for a comprehensive study to analyze the cost of EFV 
termination, AAV modernization, and new AAV program initiation; against 
continuing with the current EFV program? If so, when will this study be 
available? If not, why not?
    General Dunford. [The response was not received at the time of 
publication.]
    Mr. Critz. General Dunford, what is the minimum requirement for 
assault amphibian platforms of any type to ensure the Marine Corps 
maintains a dominant forcible entry capability? This includes deployed, 
home stations, training and schools, as well as maintenance spares.
    General Dunford. [The response was not received at the time of 
publication.]
    Mr. Critz. 3) General Dunford, the taxpayers have already spent $3B 
and 15 years of effort on this program. Would it not be more prudent to 
complete the System Design/Development phase; saving the cancellation 
costs and then evaluate the program health before termination?
    General Dunford. [The response was not received at the time of 
publication.]
    Mr. Critz. 4) General Dunford, there are (3) basic landing elements 
during an amphibious operation. Launch distance from Ship to Shore, 
Speed of Landing Craft, and Travel time to the beach. Are there 
doctrinal requirements for any of these elements? If so, what are they? 
If not, why not?
    General Dunford. [The response was not received at the time of 
publication.]
    Mr. Critz. 5) Also, will there be a detailed joint Navy/Marine 
Corps requirements process that examines all requirements to include 
the proximity of amphibious naval ships to the shoreline; especially in 
hostile/anti-access scenarios?
    General Dunford. [The response was not received at the time of 
publication.]
    Mr. Critz. 1) General Breedlove, the FY11 budget request projected 
total spending of $1.7 billion over the FYDP for long-range precision 
strike (e.g. the next generation bomber). How much does the FY12 budget 
request increase the funding for this program above what was already 
planned? What is the timeline for this program, specifically: when does 
System Development and Demonstration (SDD) begin, when is Initial 
Operating Capability (IOC) planned, and how many total bombers are 
planned?
    General Breedlove. [The response was not received at the time of 
publication.]
    Mr. Critz. 2) General Breedlove, why is the Air Force proposing an 
optionally manned design for the bomber? Is this an example of the type 
of ``exquisite requirements'' that have plagued other programs? What 
studies have been performed to estimate the additional cost of making 
the bomber optionally manned instead of just manned or unmanned? Who 
performed these studies (industry or DOD) and what is the confidence 
level of the results?
    General Breedlove. [The response was not received at the time of 
publication.]
                                 ______
                                 
                   QUESTION SUBMITTED BY MR. SHUSTER

    Mr. Shuster. 1. The MEADS program is structured as a tri-national 
cooperative development program involving the U.S., with Germany and 
Italy participating in a jointly managed development program. Initiated 
in 1996 and based on international program cost-sharing, MEADS was 
intended to field a new system quickly and at less cost to the United 
States while increasing trans-Atlantic cooperation and commonality 
(replace Patriot.)
    To date, the MEADS development program has not delivered on 
promised timely and cost-effective fielding of new air and missile 
defense capabilities. Since the program's initiation, the time to field 
the First Unit Equipped (FUE) has repeatedly been revised resulting in 
increased costs and delays to fielding warfighter capability as 
follows:
      In 1996, the expected RDTE cost was $2B to $3B, with a 
planned FUE in 2008.
      In 2002, the expected RDTE cost was $7B to $9B, with a 
planned FUE in 2012.
      In 2008, the expected RDTE cost was $10B, with a planned 
FUE in 2015.
    As you know, Congress passed some strong language (FY11 NDAA) 
restricting the funds for the MEADS missile defense program, due to 
concerns that the program is over budget and behind schedule. It is 
currently still in System Design and Development which I understand 
requires additional funding to complete before a production decision: 
one study estimated the need for an additional $1 B to $1.5B just for 
the design and development phase.
    a.   Regarding the MDA, the Department stated that approximately 
$2.4 billion in efficiencies and reductions were identified. Has MEADS 
been reviewed as a programs to support these lower funding levels?
    b.   Are there more efficient and affordable options out there and 
are OSD and the Army seriously looking at more cost-effective 
alternative capabilities, derived from Patriot and other AMD defense 
systems, as required by the NDAA bill language?
    Secretary Lynn. [The response was not received at the time of 
publication.]
                                 ______
                                 
                QUESTION SUBMITTED BY MR. RUPPERSBERGER

    Mr. Ruppersberger. 1. Two Defense Science Board reports and the 
Army's own reviews highlight that there is an outstanding need for 
adding an Auxiliary Power Unit to the Abrams Tank. The Abrams voracious 
fuel consumption is a significant platform shortfall that has caused 
the Tank to remain on conditional release for over twenty years 
awaiting an Auxiliary Power Unit. What is preventing funding for, and 
implementation of, APU technology developed and tested by the army over 
the past several years and reaping these cost and capabilities 
advantages?
    General Chiarelli. [The response was not received at the time of 
publication.]
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MR. CONAWAY

    Mr. Conaway. 1. You have directed the disestablishment of the 
Business Transformation Agency (BTA) as an efficiency. Is this an 
indication DOD has determined BTA's function was unnecessary? If not, 
what is the Department planning to do with the BTA functions deemed 
necessary by DOD? If these functions are being transferred to or 
recreated in other organizations, how is DOD obtaining an efficiency?
    Secretary Lynn. [The response was not received at the time of 
publication.]
    Mr. Conaway. 2. Deputy Secretary Lynn indicated in his testimony 
that the Services were directed to achieve $100 billion in efficiencies 
over the FY 2012 to 2016 Future Years Defense Plan (FYDP) and the 
Services succeeded. He also indicated the Services could retain and 
reinvest these efficiency savings in enhancements of high priority 
warfighting programs. What is DOD's plan to track how this $100 billion 
is reinvested and monitor over the coming years how this money is being 
used?
    Secretary Lynn. [The response was not received at the time of 
publication.]
    Mr. Conaway. 1. Secretary Gates' proposal includes a $6 billion 
funding decrease within fiscal years 2015-2016 for the reduced 
permanent end strength of the Active Army and Marine Corps. 
Specifically, the Army's permanent end strength would be reduced by 
27,000 and the Marine Corps would be reduced between 15,000 and 20,000. 
First, how will these reductions apply specifically to those who deploy 
most? Secondly, what analysis was done, and by whom, in connection with 
this decision, especially with regard to the ability of both services 
to meet commander war fighting requirements on overall military 
readiness? Are these end strengths locked or would Secretary Gates 
consider changing them based on further analyses by the Army and Marine 
Corps?
    General Chiarelli. [The response was not received at the time of 
publication.]
    Mr. Conaway. 1. Secretary Gates' proposal includes a $6 billion 
funding decrease within fiscal years 2015-2016 for the reduced 
permanent end strength of the Active Army and Marine Corps. 
Specifically, the Army's permanent end strength would be reduced by 
27,000 and the Marine Corps would be reduced between 15,000 and 20,000. 
First, how will these reductions apply specifically to those who deploy 
most? Secondly, what analysis was done, and by whom, in connection with 
this decision, especially with regard to the ability of both services 
to meet commander war fighting requirements on overall military 
readiness? Are these end strengths locked or would Secretary Gates 
consider changing them based on further analyses by the Army and Marine 
Corps?
    General Dunford. [The response was not received at the time of 
publication.]
    Mr. Conaway. 1. As an Air Force Captain and pilot I question the 
necessity to develop a new flight suit for the forces. Would you 
consider delaying the development of a new flight suit currently under 
development? Furthermore, how do you plan to reduce unnecessary 
acquisition and procurement spending?
    General Breedlove. [The response was not received at the time of 
publication.]
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MR. LAMBORN

    Mr. Lamborn. 1. For Missile Defense Agency (MDA), the Department 
stated that approximately $2.4 billion in efficiencies and reductions 
were identified. What programs were adjusted to support these lower 
funding levels?
    Secretary Lynn. [The response was not received at the time of 
publication.]
    Mr. Lamborn. 2. Identified in the $78 billion cut is the reduction 
of 360 MDA contractors. From what areas are these being cut and what 
impact will these have on meeting initial capability of the Phased 
Adaptive Approach in 2011?
    Secretary Lynn. [The response was not received at the time of 
publication.]
    Mr. Lamborn. 3. With the failure of the last two Ground-Based 
Midcourse interceptor tests, how will these efficiencies affect the 
Department's short- and long-term strategies in ensuring we have a 
reliable system for homeland defense? Will these cuts also put a strain 
on testing and integration?
    Secretary Lynn. [The response was not received at the time of 
publication.]
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MR. WITTMAN

    Mr. Wittman. 1. Secretary Lynn, with regard to TRICARE and the 
unaffordable healthcare costs, particularly the working age retirees 
that were mentioned by Secretary Gates and the proposed reforms to 
TRICARE in FY12 to better manage medical coast growth, what is the 
plan? Will this reform be retro-active or will it be a new policy for 
all men and women joining the military after 2012? No one denies the 
fact that TRICARE should be reformed, but drastic changes should not 
affect those currently serving or retired from our military.
    Secretary Lynn. [The response was not received at the time of 
publication.]
    Mr. Wittman. 2. Secretary Lynn, how does the DOD plan to compensate 
for the reduction of the contractor force by 10%. Defense contractors 
have played a critical role in the technical and tactical advances we 
have made in weapons systems, shipbuilding, system engineering, C4I and 
ISR, procurements, test and evaluation, and program management. How to 
we plan on mitigating this void in the workforce while balancing an 
obvious increase in workload?
    Secretary Lynn. [The response was not received at the time of 
publication.]
    Mr. Wittman. 1. General Dunford, did you examine any ``80 percent'' 
alternatives to the current EFV design before deciding to abandon that 
investment? Is there no alternative that would allow the U.S. 
Government to capture the value of the 3 billion invested to date?
    General Dunford. [The response was not received at the time of 
publication.]
    Mr. Wittman. 2. General Dunford, the Marines want a new assault 
vehicle, and as the Commandant stated on January 13, 2011, at the 
Surface Navy Association Symposium, ``the cancellation of the EFV is by 
no means a rejection of the Marine Corps amphibious assault mission. I 
remain committed to develop and field an effective, survivable and 
affordable new amphibious vehicle . . . sooner rather than later!'' 
When is ``sooner''? We need a plan to move our Marines ashore in the 
21st century with a 21st-century vehicle that they need and deserve for 
amphibious assault missions.
    General Dunford. [The response was not received at the time of 
publication.]
    Mr. Wittman. 3. General Dunford, did the Marine Corps consider 
alternatives to the EFV program leading up to the decision to recommend 
termination of the program? For example, the manufacturer has brought 
to our attention a high-low mix alternative that appears to be 
affordable at least based on the Marine Corps budget. Did you consider 
a high-low mix of EFVs and AAVs? Why not?
    General Dunford. [The response was not received at the time of 
publication.]
    Mr. Wittman. 4. General Dunford, you and the Commandant have 
repeatedly stated the EFV is unaffordable and that the program has 
become too onerous. What is exactly is ``affordable'' for the USMC when 
it comes to the EFV? Could your annual procurement budget accommodate 
$500 million per year? Is it $400 million or perhaps $300 million? What 
is the goal price per vehicle and what are the target life-cycle 
management costs of the vehicle?
    General Dunford. [The response was not received at the time of 
publication.]
    Mr. Wittman. 5. General Dunford, the following is taken from CRS: 
The Marines originally planned to procure 1,025 EFVs at a total cost of 
$8.5 billion. According to GAO, as of March 2010, the EFV program will 
require $866.7 million in research and development and $10.226 billion 
in procurement funding for a total of $11.163 billion to complete the 
program and field 573 EFVs. Each EFV was expected to cost about $24 
million apiece. There were concerns that the high cost of the EFV could 
consume up to 90% of the Marines' ground equipment budget. The former 
Commandant of the Marine Corps, General James Conway, reportedly was 
concerned that with potential future cuts to the defense budget, 573 
EFVs might not be affordable. The Marines have stated that it will cost 
approximately $185 million to terminate the EFV program.
    Budget aside, and only talking USMC requirements and mission 
capability, how many future generation amphibious assault vehicles (if 
not the EFV) does the Marine Corps need in order to conduct their ship-
to-shore operations effectively throughout the 21st Century?
    General Dunford. [The response was not received at the time of 
publication.]
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MR. COFFMAN

    Mr. Coffman. 1. Currently the military is transitioning between 
tours to certain areas that may be either accompanied or unaccompanied 
by family members. In South Korea and Europe, what are the savings of 
mandating unaccompanied tours in lieu of accompanied tours? For 
accompanied tours, what risk assessments have been conducted in light 
of the tensions on the Korean Peninsula? For South Korea, Europe, and 
Japan, to what extent do the host nations contribute financially to 
accompanied tours in building new housing, schools, and exchanges?
    Secretary Lynn. [The response was not received at the time of 
publication.]
    Mr. Coffman. 1. What is the impact of the current Continuing 
Resolution on shipbuilding operations, specifically in meeting the 
requirement of a 33 ship amphibious fleet?
    Admiral Greenert. [The response was not received at the time of 
publication.]
    Mr. Coffman. 1. What is the reason for the change in requirement 
for the Expeditionary Fighting Vehicle? The certified requirement has 
been for a tracked amphibious vehicle capable of deploying from 
amphibious shipping at least 25 Nautical Miles from shore. That 
requirement recently changed to between 12 and 20 Nautical Miles. What 
is the reason for this change? Are there significant changes in our 
ability to defend our fleet from enemy shore defenses or are we simply 
assuming a higher risk threshold in changing the requirement?
    General Dunford. [The response was not received at the time of 
publication.]
    Mr. Coffman. 2. If we cannot afford to purchase the Expeditionary 
Fighting Vehicle currently, how can we expect to afford to purchase a 
vehicle with similar capabilities in the future?
    General Dunford. [The response was not received at the time of 
publication.]
    Mr. Coffman. 3. Last year in a Senate Armed Services Committee 
hearing, the topic of early decommissioning of the amphibious ships 
Nassau and Peleliu was discussed. Lieutenant General Flynn, USMC, 
testified that the Marine Corps would like to see a joint Navy and 
Marine Corps operational assessment of the impact of any planned 
amphibious ship decommissionings before those decommissioning plans are 
made final. Does the Marine Corps maintain that position?
    General Dunford. [The response was not received at the time of 
publication.]
                                 ______
                                 
                    QUESTIONS SUBMITTED BY DR. HECK

    Dr. Heck. 1. The Fiscal Year 2010 Defense Authorization Bill 
required that the Department of Defense submit a report on the A-76 
process that included recommendations and improvements. Would you 
please tell us what recommendations on the A-76 process will be 
included in that report to more effectively use this tool for right-
sizing the contractor and government workforce?
    Secretary Lynn. [The response was not received at the time of 
publication.]
    Dr. Heck. 2. In your comments you referenced the Secretary of 
Defense's mandate to reduce the number of contractors who augment 
government staffs. In that regard, absent a robust inventory of 
contracts for services, and with the current moratorium on using the A-
76 process, what confidence do you have that you can achieve the 
savings projected if you are not using all tools available to evaluate 
contractor and government performance?
    Secretary Lynn. [The response was not received at the time of 
publication.]
    Dr. Heck. 3. Lastly, what impact does the A-76 process have on 
civilian government employees compared to members of our armed 
services?
    Secretary Lynn. [The response was not received at the time of 
publication.]
                                 ______
                                 
                    QUESTIONS SUBMITTED BY MRS. ROBY

    Mrs. Roby. 1. I represent Central and Southeast Alabama and I am 
very interested in knowing specifically how the efficiencies planned 
will impact the missions of both Fort Rucker and Maxwell AFB (including 
the Gunter Annex)?
    General Chiarelli. [The response was not received at the time of 
publication.]
    Mrs. Roby. 1. I represent Central and Southeast Alabama and I am 
very interested in knowing specifically how the efficiencies planned 
will impact the missions of both Fort Rucker and Maxwell AFB (including 
the Gunter Annex)?
    General Breedlove. [The response was not received at the time of 
publication.]

                                  
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