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







                         [H.A.S.C. No. 112-76]

 
                     THE FUTURE OF NATIONAL DEFENSE
                   AND THE UNITED STATES MILITARY TEN
                   YEARS AFTER 9/11: PERSPECTIVES OF
                   SECRETARY OF DEFENSE LEON PANETTA
                    AND CHAIRMAN OF THE JOINT CHIEFS
                    OF STAFF GENERAL MARTIN DEMPSEY

                               __________

                      COMMITTEE ON ARMED SERVICES

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD

                            OCTOBER 13, 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                     BETTY SUTTON, Ohio
BOBBY SCHILLING, Illinois            COLLEEN HANABUSA, Hawaii
JON RUNYAN, New Jersey               KATHLEEN C. HOCHUL, New York
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
               Jenness Simler, Professional Staff Member
                Michael Casey, Professional Staff Member
                    Lauren Hauhn, Research Assistant


                            C O N T E N T S

                              ----------                              

                     CHRONOLOGICAL LIST OF HEARINGS
                                  2011

                                                                   Page

Hearing:

Thursday, October 13, 2011, The Future of National Defense and 
  the United States Military Ten Years After 9/11: Perspectives 
  of Secretary of Defense Leon Panetta and Chairman of the Joint 
  Chiefs of Staff General Martin Dempsey.........................     1

Appendix:

Thursday, October 13, 2011.......................................    53
                              ----------                              

                       THURSDAY, OCTOBER 13, 2011
THE FUTURE OF NATIONAL DEFENSE AND THE UNITED STATES MILITARY TEN YEARS 
   AFTER 9/11: PERSPECTIVES OF SECRETARY OF DEFENSE LEON PANETTA AND 
      CHAIRMAN OF THE JOINT CHIEFS OF STAFF GENERAL MARTIN DEMPSEY
              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

Dempsey, GEN Martin, USA, Chairman, Joint Chiefs of Staff........     8
Panetta, Hon. Leon E., Secretary of Defense, U.S. Department of 
  Defense........................................................     4

                                APPENDIX

Prepared Statements:

    Dempsey, GEN Martin..........................................    65
    McKeon, Hon. Howard P. ``Buck''..............................    57
    Panetta, Hon. Leon E.........................................    61
    Smith, Hon. Adam.............................................    59

Documents Submitted for the Record:

    U.S. Army Commands and Organizations.........................    73

Witness Responses to Questions Asked During the Hearing:

    [There were no Questions submitted during the hearing.]

Questions Submitted by Members Post Hearing:

    Ms. Bordallo.................................................    83
    Mr. Conaway..................................................    86
    Mrs. Davis...................................................    82
    Mr. Garamendi................................................    90
    Mr. Johnson..................................................    93
    Mr. Jones....................................................    77
    Mr. Lamborn..................................................    88
    Mr. Owens....................................................    87
    Mr. Palazzo..................................................    96
    Mr. Rigell...................................................    92
    Mrs. Roby....................................................    97
    Mr. Rogers...................................................    82
    Mr. Smith....................................................    77
    Mr. Turner...................................................    79


THE FUTURE OF NATIONAL DEFENSE AND THE UNITED STATES MILITARY TEN YEARS 
   AFTER 9/11: PERSPECTIVES OF SECRETARY OF DEFENSE LEON PANETTA AND 
      CHAIRMAN OF THE JOINT CHIEFS OF STAFF GENERAL MARTIN DEMPSEY

                              ----------                              

                          House of Representatives,
                               Committee on Armed Services,
                        Washington, DC, Thursday, October 13, 2011.
    The committee met, pursuant to call, at 10:03 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. The hearing will come to order. Before I 
begin. Please let me welcome members of the public who are in 
attendance, but remind our audience that our committee will 
tolerate no disruptions of this proceeding. This including 
standing, holding up signs, or yelling. If anyone disturbs 
these proceedings, we will have the Capitol Police escort you 
out immediately.
    The House Armed Services Committee meets to receive 
testimony on the future--the committee will stand in recess 
until the Capitol Police escort the disruptive individuals out 
of the room and restore order.
    [Disturbance in hearing room.]
    The Chairman. The House Armed Services Committee needs to 
receive testimony on ``The Future of National Defense and the 
U.S. Military Ten Years After 9/11: Perspectives of the 
Secretary of Defense Leon Panetta and Chairman of the Joint 
Chiefs of Staff General Martin Dempsey.'' This hearing is part 
of our ongoing series to evaluate lessons learned since 9/11, 
and to apply those lessons to decisions we will soon be making 
about the future of our Force. As our series draws to a close, 
we have received perspectives of former military leaders from 
each of the Services, former chairmen of the Armed Services 
Committee, as well as outside experts.
    Today we will change direction as we look to the viewpoints 
of our sitting Secretary of Defense and Chairman of the Joint 
Chiefs of Staff. Our witnesses today have spent decades serving 
our Nation. Thank you both for being with us and for your 
public service. As I continue to emphasize our successes in the 
Global War on Terror and in Iraq and Afghanistan, we appear to 
be lulling our Nation into a false confidence of a September 
10th mindset. Too many appear to believe that we can maintain a 
solid defense that is driven by budget choices, not strategic 
ones. While I agree that the military cannot be exempt from 
fiscal belt tightening, we have to put this debt crisis into 
perspective if we are to find our way back into fiscal 
responsibility.
    Defense has contributed more than half of the deficit 
reduction measures taken to date. There are some in government 
who want to use the military to pay for the rest, to protect 
the sacred cow that is entitlement spending. Not only should 
that be a non-starter from a national security and economic 
perspective, but it should also be a nonstarter from a moral 
perspective. Consider that word, ``entitlements.'' Well, 
entitlements imply that you are entitled to a certain benefit 
and I cannot think of anyone that has earned that right ahead 
of our troops. By volunteering to put their lives on the line 
for this country, they are entitled to the best training, 
equipment, and leadership our Nation can provide. But all this 
talk in Washington lately about dollars doesn't translate well 
into actual impacts on the force and the risk to our Nation.
    Yesterday, former chairman Duncan Hunter encouraged us all 
to answer these questions before we voted to cut anymore from 
defense. Isn't our primary constitutional duty to defend our 
Nation? Is the world suddenly safer today? Is the war against 
terrorism over? I hope our witnesses today can help us 
understand the ramifications of these possible cuts in relation 
to our force structure as well as our ability to meet future 
needs of our national defense. How can we make sure that the 
Department of Defense is a good steward of the taxpayer's 
dollar without increasing risk to our Armed Forces?
    The U.S. military is the modern era's pillar of American 
strength and values. In these difficult economic times, we 
recognize the struggle to bring fiscal discipline to our 
Nation, but it is imperative that we focus our fiscal restraint 
on the driver of the debt instead of the protector of our 
prosperity.
    With that in mind, I look forward to hearing from our 
witnesses today. The committee will be in recess while the 
disrupters are removed.
    The committee will be in order and I yield now to the 
ranking member of the committee, Mr. Smith from Washington.
    [The prepared statement of Mr. McKeon can be found in the 
Appendix on page 57.]

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

    Mr. Smith. Thank you, Mr. Chairman. I hope my comments will 
perhaps have a more calming effect on the audience. I doubt it. 
I thank you very much for having this hearing. We have had a 
series of hearings with a number of experts analyzing our 
national security needs and the budget threats that they face, 
but now of course we have the two people who are most in charge 
of making those decisions. It is a great honor to have the 
Secretary of Defense and the Chairman of the Joint Chiefs of 
Staff here. They do not have an easy job as they try to wrestle 
with the budget challenges we face. And I agree with the 
chairman, that the cuts that we are facing in our Department of 
Defense budget do place national security issues at risk. We 
have difficult decisions to make to figure out how to 
accommodate even the cuts that have already been put in place 
for the next 10 years. There will be difficult challenges that 
are contained in that.
    And I think we should also point out in addition to the 
sequestration threat, and it is not just that sequestration 
would require further cuts in defense, and I should say further 
cuts in all discretionary spending. And I am concerned about 
infrastructure and education and innovation and a number of 
other areas that face--that have already been cut, number one, 
and, number two, face the severe cuts of sequestration, but I 
think it is really important that the committee understands the 
way that was crafted, it requires across-the-board cuts. If we 
go to sequestration, every line item in the defense budget, and 
frankly, every line item in all discretionary spending has to 
be cut by the exact same amount, which is, frankly, insane. I 
mean, it will get us to the point where we would have to build, 
like, one and a half aircraft carriers. Well, you really can't 
do that.
    So if we go to sequestration, it is not just the cut, it is 
the crazy way it was written that would frankly make it 
impossible to budget. The second piece that I don't think that 
folks have a full understanding of is how devastating running a 
government on continuing resolutions is. The gentlemen before 
us have to make budget decisions, week in and week out when we 
can't pass appropriations bills, and they have to do it on a CR 
[continuing resolution] which doesn't really fund the 
Government the same way as an appropriations bill. It continues 
it from last year, but it doesn't give clear guidance on what 
programs are to be continued. That costs us money and creates 
problems. So I would strongly urge this Congress to pass 
appropriations bills so that we can fund our Government in a 
responsible and reasonable way. It is costing us money and 
leading to inefficiencies and making it more difficult 
certainly at the Department of Defense, but throughout all 
discretionary spending to do their job.
    So both of those things are threats. But as I mentioned 
before with this committee, I am also mindful of the budget 
challenges that we face. They are real. Our budget is 40 
percent out of whack. We borrow 40 cents of every dollar we 
spend. That is not sustainable, and it needs to be fixed and in 
fixing it, I believe everything has to be on the table. Now, I 
am very much aware of the choices that are faced by the 
Department of Defense, the threats and risks that are contained 
in making those cuts, certainly above all, the impact on our 
troops and our ability to continue to adequately provide for 
them and to make sure of the one thing that I think should 
always be without dispute and bipartisan agreement. We can 
disagree about what the mission of our military should be, but 
once that mission is set, there should be no disagreement, that 
we have the highest obligation to make sure that we give our 
troops the support, equipment, everything they need to carry 
out the mission that we have told them to do. It would be 
irresponsible not to. And with that challenge, I believe that 
we need to put everything on the table in trying to deal with 
our budget deficit. As I have said before in this committee, I 
am so concerned about cuts, not just in DOD [Department of 
Defense], but in other parts of our budget, that I am willing 
to say we need more revenue, that we can't take that piece off 
the table if we are truly going to meet the concerns that I 
think we are going to hear expressed today, and again, as I 
will continue to emphasize that also exists for other parts of 
the budget as well.
    So I hope we will consider that. I look forward to the 
testimony of our witnesses and their guidance on how to deal 
with the challenges we face both on the budget side and on the 
national security side, and I will just close by saying we 
could not have two more able people in those positions. And I 
look forward to their testimony. I yield back.
    [The prepared statement of Mr. Smith can be found in the 
Appendix on page 59.]
    The Chairman. Thank you. Now, let me welcome our witnesses 
here this morning. We have Secretary of Defense, Leon Panetta, 
Chairman of the Joint Chiefs of Staff, General Martin Dempsey. 
Gentlemen, welcome to your first hearing in your new positions 
before this committee. I look forward to a candid dialogue. And 
the time is now yours, Secretary Panetta.
    [Disturbance in hearing room.]
    The Chairman. The gentleman will resume.

 STATEMENT OF HON. LEON E. PANETTA, SECRETARY OF DEFENSE, U.S. 
                     DEPARTMENT OF DEFENSE

    Secretary Panetta. Mr. Chairman, Congressman Smith, 
distinguished members of the committee, it really is an honor 
for me to have the opportunity to appear before you. For the 
first time as Secretary of Defense, I would also like to join 
you in recognizing General Dempsey. Marty Dempsey is a 
brilliant soldier, and he is someone who is a proven leader on 
the battlefield and off the battlefield. And I am delighted to 
have him alongside of me in his new capacity as Chairman of the 
Joint Chiefs.
    On behalf of the men and women of the Department of 
Defense, I want to thank the Members of this committee for your 
support and for your determination to join me in every way 
possible to try to ensure that these men and women succeed in 
their mission of protecting America. As a former Member----
    The Chairman. The gentleman will suspend.
    [Disturbance in hearing room.]
    Secretary Panetta. As a former Member of the House for 16 
years, I really do believe that Congress must be a full partner 
in our efforts to protect the country. And for that reason and 
in that spirit, I have had the opportunity to consult with many 
of you and will continue to consult with you as we face the 
challenges that the Department of Defense must confront in the 
days ahead. These are difficult times, and I really do need 
your full guidance, your full counsel, and your full support.
    I would like to thank you for convening these series of 
hearings. This is an important effort that the committee has 
engaged in, looking at the future of national defense and the 
U.S. military 10 years after 9/11, and for giving me the 
opportunity to be here today to add my perspective to that 
discussion. We have been at war for 10 years, putting a heavy 
burden on our men and women in uniform to defend our Nation and 
to defend our interests. More than 6,200 have given their 
lives, and more than 46,000 have been wounded during these wars 
that we have engaged in since 9/11. The conflicts have brought 
untold stresses and untold strains on our service members and 
on their families.
    The Chairman. The gentleman will suspend.
    [Disturbance in hearing room.]
    The Chairman. The gentleman will proceed.
    Secretary Panetta. These conflicts have brought untold 
stresses and strains on our service members, and obviously on 
their families as well. But despite it all, we really have 
built the finest, most experienced, most battle-hardened, All-
Volunteer Force in our Nation's history. Our forces have become 
more lethal and more capable of conducting effective 
counterterrorism and counterinsurgency operations.
    New or enhanced capabilities, including the growth of 
special operations forces, unmanned aerial systems, counter-IED 
[Improvised Explosive Devices] technologies and the 
extraordinary fusion that I personally witnessed between the 
military and intelligence operations have provided the key 
tools that we need in order to succeed on the battlefields of 
the 21st century.
    And make no mistake, we are succeeding. Ten years after 9/
11, we have significantly rolled back Al Qaeda and Al Qaeda's 
militant allies. We have undermined their ability to exercise 
command and control and to do the kind of planning that was 
involved in the attack on 9/11. We are closer than ever to 
achieving our strategic objectives in Afghanistan and Iraq. And 
we continue to be a bulwark for democracy in confronting 
countries like Iran and North Korea and others that would 
constitute a threat to our security.
    The bottom line here is that these conflicts that we have 
been through, that while we are moving in the right direction, 
the fact remains that we are at a turning point, a turning 
point not only with regards to the challenges we face, but a 
turning point with regards to the military as a whole.
    As the current mission in Iraq comes to an end, as we 
continue to transition security responsibility in Afghanistan 
and as we near the goal of disrupting, dismantling and 
ultimately defeating Al Qaeda, the Department is also facing a 
new fiscal reality here at home. As part of the debt ceiling 
agreement reached in August, the Department must find more than 
$450 billion in savings over the next decade. Our challenge is 
taking a force that has been involved in a decade of war and 
ensuring that as we build the military for the future, we are 
able to defend this country for the next decade at a time of 
fiscal austerity. We need to build a force that can confront a 
growing array of threats in the 21st century.
    As I pointed out to some Members the other day, one of the 
differences is that as we came out of past wars, we essentially 
were able to enjoy a peace dividend at a time of relative 
peace. Now as we confront the fiscal challenges that this 
Nation faces, we are doing it at a time when we are continuing 
to confront a series of very real threats in the world to our 
national security. We continue to confront the threat of 
terrorism. Regardless of what we have been able to achieve and 
we have achieved a great deal, there remain real threats out 
there, not only in Pakistan, but Somalia, Yemen, North Africa 
and other places. Those terrorists who continue to plan attacks 
in this country. We continue to have to deal with nuclear 
proliferation in the world. We continue to have to confront 
rising powers in the world. We continue to have to confront 
cyber attacks and the increasing number of those attacks that 
threaten us every day. And yet as we confront those threats, we 
have to meet our fiscal responsibilities. That will require 
setting a very clear set of strategic priorities and making 
some very tough decisions.
    Working closely with the service chiefs, the service 
secretaries and the combatant commanders, I intend to make 
these decisions based on the following guidelines: First, we 
have and we must maintain the finest and best military in the 
world, a force capable of deterring conflict, a force capable 
of projecting power, and a force capable of winning wars.
    Second, we absolutely have to avoid a hollow force and 
maintain a military that even if smaller, will be ready, agile 
and deployable. As I said after every major conflict, World War 
I, World War II, Korea, Vietnam, the fall of the Soviet Union, 
what happened was that we ultimately hollowed out the Force, 
largely by doing deep, across-the-board cuts that impacted on 
equipment, impacted on training, impacted on capability.
    Whatever we do in confronting the challenges we face now on 
the fiscal side, we must not make that mistake and we will not 
make that mistake of hollowing out the Force.
    Third, it demands a balanced approach and we have to look 
at all areas of the budget for potential savings, from 
efficiencies that trim duplication and bureaucratic overhead to 
improving competition and management and operating and 
investment programs, procurement programs; tightening personnel 
costs that have increased by almost 80 percent over the last 
few years, and reevaluating our modernization efforts. All of 
that needs to be considered, all of that needs to be on the 
table if we are going to do a responsible job here that 
addresses the areas where we can find savings without hollowing 
out the Force.
    And finally, and most importantly, we cannot break faith 
with our men and women in uniform. The All-Volunteer Force is 
central to a strong military and central to our Nation's 
future. We have a lot of very effective weapons at the Pentagon 
and at the Department of Defense, a lot of very sophisticated 
technology, but very frankly, we could not be the finest 
defense system in the world without the men and women who serve 
in uniform. They are the ones that have made us strong, and 
they are the ones that put their lives on the line every day in 
order to protect this country.
    We have got to maintain our faith with those that have 
deployed time and time and time again. And that is something I 
intend to do. If we follow these four principles, I am 
confident that we can meet our national security 
responsibilities and do our part to help this country get its 
fiscal house in order.
    To achieve the required budget savings, the Department also 
must work even harder to overhaul the way it does business and 
an essential part of this effort will be improving the quality 
of financial information and moving towards auditable financial 
statements. Today, DOD is one of only two major agencies that 
has never had a clean audit opinion on its financial 
statements. That is inexcusable and it must change. The 
Department has made significant progress toward meeting the 
congressional deadline for audit-ready financial statements by 
2017, focusing first on improving the categories of information 
that are most relevant to managing the budget. But we need to 
do better. And we will.
    Today I am announcing that I have directed the Department 
to cut in half the time it will take to achieve audit readiness 
for the statement of budgetary resources, so that by 2014, we 
will have the ability to conduct a full budget audit. This 
focused approach prioritizes the information we use in managing 
the Department, and will give our financial managers the key 
tools they need to track spending, identify waste, and improve 
the way the Pentagon does business as soon as possible.
    I have directed the DOD Comptroller to revise the current 
plan within 60 days to meet these new goals and still achieve 
the requirement of overall audit readiness by 2017. We owe it 
to the taxpayers to be transparent and accountable for how we 
spend their dollars. And under this plan, we will move closer 
to fulfilling that responsibility.
    The Department is changing the way it does business and 
taking on a significant share of our country's efforts to 
achieve fiscal discipline. We will do so, but we will do so 
while building the agile deployable force we need to confront 
the wide range of threats that we face. But I want to close by 
cautioning strongly against further cuts to defense, and for 
that matter, to other discretionary accounts, particularly with 
the mechanism that has been built into the debt ceiling 
agreement called sequester. It is a blind, mindless formula 
that makes cuts across the board, hampers our ability to align 
resources with strategy and risks hollowing out the Force. I 
understand this formula. When I was in Congress serving on the 
Budget Committee, I served on the conference that developed the 
so-called Gramm-Rudman approach to dealing with these kinds of 
cuts. But even then, every time the cuts were to take place, 
Congress basically postponed it because it was mindless, 
because it was across the board. It was designed as a gun to be 
put to the head of Congress so that it would do the right 
thing.
    And I guess what I am urging the committee, the ``super 
committee'' [Joint Select Committee on Deficit Reduction] to do 
is do the right thing. Come up with the decisions that should 
be made, frankly, on the two-thirds of the budget that is still 
yet to be considered for deficit reduction. You are working 
with one-third of the budget in discretionary spending and it 
is taking a trillion dollar hit, and Defense is going to have 
to pay up almost half of that. If you are going to be 
responsible in dealing with the deficit, you have got to 
consider the mandatory programs and you have got to consider 
obviously revenue spending as part of that as well.
    I truly believe that we do not have to make a choice 
between fiscal security and national security. But to do that, 
to do that will require that we have to make some very tough 
choices. And I have to be frank with you, they are choices that 
could have some impact on the constituencies that you care most 
about. As a Member of Congress, I have been through this. I 
represented an area that had significant military 
installations, Fort Ord, and a number of other installations. 
During the period following the reductions after the fall of 
the Soviet Union, during the BRAC [Base Closure and 
Realignment] process, I lost Fort Ord. Fort Ord was taken down. 
That represented 25 percent of my local economy. So I know what 
it means to go through this process.
    We have to do this right, and we can do it right and we can 
do it responsibly. But to do that I need your support to do 
everything possible to prevent further damaging cuts and to 
help us implement a coherent, strategy-driven program and 
budget that we will identify in the months ahead as critical to 
preserving the best military in the world. This is tough, it is 
challenging, but I also view this as an opportunity to create a 
military for the future that will meet the threats that we have 
to confront. I pledge to continue to work with you closely as 
we confront these challenges and I thank you once again for all 
of your tireless efforts to build a stronger military for our 
country that can protect our people in the future. Thank you.
    The Chairman. Thank you, Mr. Secretary. Mr. Chairman.
    [The prepared statement of Secretary Panetta can be found 
in the Appendix on page 61.]

STATEMENT OF GEN MARTIN DEMPSEY, USA, CHAIRMAN, JOINT CHIEFS OF 
                             STAFF

    General Dempsey. Thank you, Chairman McKeon, Ranking Member 
Smith, Members of the committee. Thank you for the opportunity 
to testify before you today on the future of national defense 
and our military 10 years after the attacks on September 11th. 
I want to begin by introducing the handsome Marine over my 
right soldier here who I just recently appointed as my senior 
enlisted advisor. So this is Sergeant Major Bryan Battaglia, 32 
years United States Marine Corps, served this country and the 
Corps with great distinction and great honor. And he has now 
been appointed as my senior enlisted advisor, so that he can 
help us accomplish the tasks that you just heard the Secretary 
articulate and ensure we remain in contact with the young men 
and women who--America's sons and daughters who we place in 
harm's way. So if you will join me.
    [Applause.]
    General Dempsey. As this is my first time before you as 
Chairman of the Joint Chiefs, I want to make note that I look 
forward to our continued cooperation for all of the very 
important reasons outlined by the Secretary of Defense. I also 
want to affirm that I take seriously our shared responsibility 
of maintaining a military that preserves the trust that is 
placed in our hands by the citizens of the United States. And I 
believe we can sustain that trust while also being good 
stewards of our Nation's resources.
    In the past decade, over 2 million men and women have 
deployed overseas in support of operations in Afghanistan, Iraq 
and elsewhere. Our Joint Force has demonstrated great 
initiative, great strength and great resolve. The security 
landscape has also shifted during this period, and our military 
has demonstrated its ability to adapt and to learn. So from my 
vantage point and in keeping with the theme of these meetings, 
let me point out a few lessons that stand out. First, we live 
in an increasingly competitive security environment; 
capabilities that previously were the monopoly of nation-states 
are now proliferated across the security landscape. As a 
consequence, we must learn faster, understand more deeply and 
adapt more quickly than our adversaries.
    Second, relationships matter more than ever. Coalitions and 
partnerships add capability, capacity and credibility to what 
we see as shared security responsibilities. Therefore we are 
committed, even in the face of some of the budget pressures 
that have been described to expanding the envelope of 
cooperation at home and abroad.
    Third, our Army, Navy, Air Force, Marines and our Coast 
Guard brothers and sisters combine to field a truly unmatched 
team. We still need our Services to maintain and be the masters 
of their core competencies and their unique service cultures, 
but they must operate as a single cohesive team. We must 
continue to value and advance joint interdependence.
    Fourth, innovation is instrumental to the future of our 
Joint Force. We have expanded many of our--what we referred to 
in years past as low-density capabilities and we fielded many 
new technologies. We must continue to unleash innovation in the 
ranks and challenge ourselves to leverage these emerging 
capabilities in new and creative ways.
    And finally, leadership remains at the core of our military 
profession. It is why we have been able to learn, adapt and 
achieve the results that I have described over the past decade. 
Now, developing the next generation of joint leaders will 
preserve our Nation's decisive advantage over any would-be 
adversary.
    With these lessons in mind, we are working to build, to 
conceive, and then build the Joint Force we need in 2020. This 
Force must be powerful, responsive, resilient, versatile and it 
must be admired. It must preserve our human capital and have 
the capability and capacity to provide military options for our 
Nation's leaders. And it must be affordable. Be assured, I am 
fully committed to reducing costs without compromising our 
Nation's security needs. We must make hard choices that balance 
risk and as the Secretary mentioned, avoid hollowing the Force. 
These choices need to be deliberate and precise. Indiscriminate 
cuts would cause self-inflicted and potentially irrevocable 
wounds to our national security.
    To close, I would like to again thank the committee for 
your commitment, your support to the men and women in uniform 
as well as to our families. They deserve the sacrifice--they 
deserve the future that they have sacrificed to secure. Thank 
you and I look forward to your questions.
    [The prepared statement of General Dempsey can be found in 
the Appendix on page 65.]
    The Chairman. Thank you, Chairman. Congratulations, 
Sergeant Major, on your new appointment. President Reagan once 
said that many people go through their lives wondering if they 
have had any impact on their fellow men, if they made a 
difference in life, and he said Marines don't have that 
problem.
    Chairman, the first round of cuts from the Budget Control 
Act will reduce the funding for the military over the next 10 
years by--from $450 to $480, $490 billion. What types of risks 
does the Department of Defense face as you implement these cuts 
over the next 10 years? Will there be any missions that you can 
no longer do? Or is there a fallacy? Will you simply have to do 
the same missions with less?
    General Dempsey. Thank you, Chairman. And as you know, we 
are involved in trying to figure out exactly the answer to that 
question. But I can share some emerging insights with you. The 
emerging insights are that it will require us to look at what 
our national security strategy has been, as articulated 
currently in the Quadrennial Defense Review. To your point 
about missions, in my statement, I mention that what we owe our 
Nation's leaders and our Nation's citizens are options.
    It is somewhat inconceivable to me that we would roll back 
into this committee, to the national--to the leaders of our 
national security apparatus and say we are not going to do this 
because if the Nation needs us to do it, you know we have to 
find a way to do it. That is going to require us to build in--
we will have to prioritize, but we have got to build in some 
versatility, because as many have testified to this committee 
and elsewhere, we generally find that we don't predict the 
future with any degree of accuracy. So it has got to be a 
combination of options and versatility. It has got to be 
capabilities, and it has got to be capacity. We need the 
capability to do things and we need the ability to sustain 
those capabilities over time. That is capacity. Tell me what 
you want me to do, how often you want me to do it, I can build 
you a Joint Force and we are working on that now. But the risks 
will accrue as we determine where we have to limit 
capabilities, if we get to that point, and it could accrue as 
we determine that we need less and then find ourselves using it 
more and asking more and more of our young men and women on a 
rotational basis that we can't sustain. So the risks are both 
to mission but also to the institution.
    The Chairman. Thank you. Mr. Secretary, many have said that 
defense has to be on the table, and I understand that. In the 
first tranche of cuts of the Deficit Reduction Act, the 
military paid for about half of the table. You know, I have 
made the comment that we can't solve the financial problem that 
we have on the backs of the military, or who will have our 
backs the next time we are attacked?
    I don't believe that the DOD should have to pay one penny 
more in discretionary budget cuts. I know you commented on this 
in your opening statement, and based on our conversations and 
our visits up to this point, I think we are of a like mind, but 
I would like to confirm your position, get it on the record. Do 
you agree with me that the national defense has contributed 
enough to deficit reduction and that no further cuts should be 
recommended?
    Secretary Panetta. Absolutely. The fact is we are having to 
cut a half trillion dollars, almost a half trillion dollars out 
of the defense budget. And that is going to take, as I said, 
some very difficult choices. I think we agree that as tough as 
it is, it is manageable. We can do this in a way that protects 
our Force for the future, but it is going to take us to the 
edge. And if suddenly on top of that we face additional cuts, 
or if this sequester goes into effect and it doubles the number 
of cuts, and then it will truly devastate our national defense, 
because it will then require that we have to go at our force 
structure, we will have to hollow it out, we will RIF 
[Reduction in Force] people. It will badly damage our 
capabilities for the future.
    I don't say that as scare tactics, I don't say it as a 
threat. It is a reality. And the reason I can say it is a 
reality because we have been going through how we take $450 
billion-plus out of this budget, what weapons systems do we 
look at? What force structure reductions do we make? What kind 
of benefits in terms of personnel and compensation do we have 
to look at? What do we do with regards to areas that have to be 
tightened up in terms of procurement, et cetera? These are all 
going to be tough decisions.
    Now, as I said, there is an opportunity here and we can do 
this the right way. But if suddenly we are facing additional 
cuts, and if suddenly we are facing a doubling of those cuts, a 
responsible approach to doing this right is going to be 
impossible. That is what I am saying.
    The Chairman. And I think you mentioned the word RIF. If it 
came to that, we would be breaking faith with the very men and 
women who have been laying their life on the line for us. I 
think that is inexcusable, and I think no one on this committee 
would support that. Thank you very much. Mr. Smith.
    Mr. Smith. Thank you, Mr. Chairman. I do think it is 
important to emphasize that, you know, we have not said take 
defense off the table. In fact, defense has already been on the 
table. It was, along with the rest of the discretionary budget, 
what was cut as part of the debt ceiling agreement cut as has 
been mentioned by somewhere in the neighborhood of $450 to $490 
billion, depending on how you add it up, and that is the 
challenge you gentlemen are faced with, is how to make that 
work.
    So we are not suggesting it should be taken off the table. 
I think as we look at how we are going to deal with those cuts 
and then about the potential of sequestration and trying to 
prevent that, it is helpful to sort of understand what the 
threat is. And a couple of phrases that are used frequently 
that I would like you gentlemen to explain a little bit better 
is we have heard that it increases the risk. But that is never 
actually explained. What does that mean? And another way of 
looking at it is, what missions would we not be able to do 
specifically, in terms of, you know, a given region of the 
world, a given threat that we wouldn't be as robust against? I 
mean, throw it open to both of you. Can you tell us a little 
more specifically when you say ``it increases the risk''? What 
risks specifically? What won't we be able to do that you think 
we should be able to do for national security reasons? Mr. 
Secretary, if you want to start and then, General.
    Secretary Panetta. Congressman, obviously we are going 
through the process now of--what we want to do is establish 
what is that larger strategy? So this isn't just numbers 
driven. It is not budget driven. It is driven by a strategy 
that we can shape that tells us, okay, what kind of force do we 
need, we know it is going to be smaller, we want it to be 
agile, we want it to be deployable, we think we have to have 
multimission kinds of weapon systems to help support that 
force. You know, if that is the larger strategy and we are 
still shaping that in conjunction obviously with the service 
chiefs, but also with the President, once we have done that, 
then obviously we are going to have to start making specific 
decisions about, you know, where the reductions are made. I 
mean, you know, without--without telling you that decisions 
have been made and no decisions have been made. You know, I can 
give you an example. For example, if we decide that we have got 
to maintain our force structure presence in the Pacific in 
order to deal with China, and China's expanding role in that 
part of the world, and because of the other issues that exist 
obviously in that very sensitive part of the world, and if we 
decide that the Middle East is also a very important area where 
we have to maintain a presence as well, then just by virtue of 
the numbers that we are dealing with, we will probably have to 
reduce our presence elsewhere, presence perhaps in Latin 
America, presence in Africa, and so if you are talking about 
risks, part of the risks would be, you know, having less of a 
presence in those areas.
    Mr. Smith. Play out a little bit what that presence does 
for us? I could do it, but I am curious to hear what your 
answer is so the American people understand. So we are there, 
what does that do for us? Why is that in our national 
interests?
    General Dempsey. Yes, sir. If I could elevate 10,000 feet 
or so and look down and I will eventually land on the African 
continent. The way we measure risk is the likelihood of 
something occurring and the consequence of it. So thermonuclear 
war is highly unlikely with an enormous consequence, and 
therefore our nuclear deterrent--we will be able to assess the 
risk to our nuclear deterrent as it is affected by potential 
budget cuts. If you work your way from nuclear deterrents down 
to irregular conflict, we can do that at every grade, if you 
will, of the kind of threats we face. But to your point about 
what do we get by our presence on the African continent? We are 
engaged in a conflict today and have been probably, if we look 
back carefully enough at our history--if we look back to about 
1993, the attack on the World Trade Center, the first time, we 
have been involved in a conflict with violent extremist 
organizations, call them terrorists, who are networked 
globally, who are syndicated and who are decentralized. So they 
are not sitting in one place to be acted against. They are 
networked. One of the places they sit is Pakistan. One of the 
places they sit, or sat, is Afghanistan. One of the places they 
sit is the African continent. In order to defeat a network of 
adversaries, we have to be a network. We can't be this 
hierarchal cold war military, and we are not any longer.
    So our presence on the African continent is part of our 
network of building partners, of gaining intelligence and then 
when targeting approaches, or targeting reaches the level of 
refinement, we can act on it. But we have to be networked 
against the specific threat you are talking about and part of 
that requires our presence in Africa.
    Mr. Smith. That is an excellent answer. I think also part 
of our presence is deterring our enemies from doing things. You 
know, it is an instructive point that we are now dealing with 
the high likelihood that Iran felt comfortable, you know, doing 
an assassination on our soil, and part of that has to be at 
least a calculation that they don't fear what the consequences 
of that would be. And you can extrapolate that out to a North 
Korea, to a whole lot of other places, and there are 
consequences in those choices. Excellent answers. I thank you 
gentlemen. I yield back.
    The Chairman. Thank you. We will now proceed to the Members 
having the opportunity to ask questions. I know you all want to 
ask questions, so I will be following the 5-minute rule and ask 
you to consider that in your questions and our witnesses to 
consider that in their answers, please. Mr. Bartlett.
    Mr. Bartlett. Thank you. Usually the resolution of big 
issue matters requires the aggregation of decisions about a 
number of smaller issues, and today I have a question about two 
of our programs that I think could be very effective in 
reducing our costs and improving our capabilities. The first 
relates to the C-27J. Mr. Secretary, yesterday in our 
subcommittee hearing, near the end of the day, your generals 
voluntarily brought up the issue of the C-27J. As you may know, 
sir, there has been a confirmed requirement for 78 of those 
planes for a number of years now. We have procured only 38 of 
them as a result of that. As one of your generals said 
yesterday, we are flying the blades off the lift helicopters to 
meet these lift requirements and these helicopters are 
enormously more expensive than the C-27J. Mr. Secretary, just 
yesterday I think a letter reached your desk signed by 12 
Members of Congress relative to the C-27J. We would appreciate 
your personal attention to that, Mr. Secretary, if that is 
possible.
    Secretary Panetta. You will get that.
    Mr. Bartlett. Thank you very much. The second issue, the 
original acquisition strategy for the F-35 Joint Strike Fighter 
included a competitive engine program because of the thousands 
of engines projected to be procured to reduce costs and 
development risks through competition, and because of the 
Department's positive experience with the alternative engine 
for the F-16 beginning in the mid-80s. Contrary to assertions 
by some, there never has been an F-35 engine competition where 
the 135 [F135 engine] won. In fact, in 2006, the Deputy 
Secretary of Defense signed a memorandum of understanding with 
the F-35 international partners to procure the competitive 
engine. That same year, the Department, due to cost pressures 
on the F-35 program, sought to cancel the development of the 
competitive engine, change its acquisition strategy and use the 
R&D [Research and Development] funding planned for the 
competitive engine to cover overruns in the F-35 aircraft 
program. In spite of these department actions, Congress funded 
the competitive engine program through 2010.
    Now the manufacturer of the competitive engine wants to 
self-fund the R&D for its engine beginning as soon as possible. 
The Department of Defense continues to be a major proponent of 
the competition in its programs, except for the F-35 
competitive engine, opposing self-funded competition of the F-
35 competition engine program.
    In your speech at the Woodrow Wilson Center, you said, and 
I quote, ``We will look to procurement reforms and improve 
competition, cost control and delivery when examining 
modernization operating costs.''
    Mr. Secretary, what kind of message is the Department 
sending to all contractors by opposing the efforts of the 
competitive engine manufacturer to self-fund R&D for its own 
program?
    Secretary Panetta. Congressman, I am a strong supporter of 
competition, but I don't want competition to cost me more 
money. I want it to be cost efficient. And with regards to the 
program, you have identified the problem is that all of those 
that have looked at it indicate that it is going to result in 
more costs to the Defense Department to proceed on that path.
    Now, I will say this, that the manufacturer that wants to 
engage in self-funding has developed an approach. I think we 
need to look at it to determine whether in fact it is cost 
efficient. If, in the end, it is going to cost me more money, 
that is not what I call good competition. If in the end it 
saves me money, then I am willing to look at it.
    Mr. Bartlett. Mr. Secretary, isn't it true that GAO 
[Government Accountability Office] continues to contend that 
pursuing the 136 engine [F136 alternative engine] will probably 
save us money?
    Secretary Panetta. There are those that have indicated that 
there is some savings here and that we could achieve, you know, 
better competition. But frankly, it is disputed within the 
Department, and I have got to work through that dispute.
    Mr. Bartlett. We would appreciate your attention to that, 
sir. As you know, competition always makes things better and 
makes them cheaper. It should be no exception here. Thank you 
very much for your commitment to look at this personally. Thank 
you.
    The Chairman. Thank you. Mr. Reyes.
    Mr. Reyes. Thank you, Mr. Chairman. Mr. Secretary, and, 
General, thank you for being here and thank you for your 
leadership in these critical times that face our Nation. The 
other night, Mr. Secretary, I made mention about the concerns 
that were expressed to me last week in a number of meetings 
with military families. Today I want to ask a question about 
military retirement reform because there is, or there are a 
number of proposals, largely through the Internet that are 
concerning our retirees. Recent budget pressures within the 
Department of Defense have resulted in greater awareness of the 
increasing cost of military personnel programs to include 
military compensation, health care and military retirement. The 
defense business board recently declared that the military 
retirement system was unaffordable and proposed a plan that 
would convert the military retirement system from a defined 
benefit plan to defined contribution plan that is common in the 
private sector. Benefits would vest at 3 to 5 years, as opposed 
to 20 years, in today's system and would not be payable until 
age 60 or 65 as opposed to immediately upon retirement under 
the current system. This would seem to be a very significant 
change in the culture of our military retirement benefit.
    So the questions I have, Mr. Secretary, and also, General, 
if you want to comment, have we arrived at the point where 
reform of military retirement is necessary? Second, is the 
proposal of the Defense Business Board the right solution to 
maintain retention and combat readiness? If the Defense 
Business Board proposal is not the right solution, what would 
be a model that you believe might work?
    And finally should the payment of benefits immediately upon 
retirement be continued as part of any proposed reform 
initiative? I ask those questions because those are concerns 
that have been expressed to me several times last week.
    Secretary Panetta. Yeah. No, I understand. And as a result 
of that report that came out, there were a lot of people that 
were nervous that somehow that would be implemented, and again, 
the bottom line is that we have made no decisions with regards 
to that. As a matter of fact, the President has proposed a 
commission--one of the recommendations to the committee was a 
proposal to establish a commission that would look at 
retirement and provide grandfather protection for those in the 
service, and I would support that. But, look, this is what it 
comes down to. When we are looking at $450 billion-plus in 
terms of where we find savings, I have got to put everything on 
the table and take a look at it. And compensation in the 
retirement area is one of those. But at the same time, I have 
made very clear that we can't break faith with those in the 
service. We have made a promise to people who are on duty that 
we are going to provide a certain level of retirement. We are 
not going to back away from that. We have to maintain that 
promise. Those people have been deployed time and time again, 
they have put their lives on the line in the battlefield. And 
we are not going to pull the rug out from under them. We are 
going to stand by the promise that was made to them.
    So one of the commitments that I have made is that in any 
circumstance related to this issue, we are going to protect 
those that are in the service today. And we are going to 
grandfather them in. Now, having said that, you know, are there 
areas in the retirement area that need to be looked at, for 
example, there are individuals that serve 12, 14, 15 years, 
when they get out, they have no retirement to take with them 
and, you know, is that an area that we ought to look at to 
determine whether or not they ought to be able to move some of 
those benefits to other areas?
    Are there some reforms that can be made along those lines? 
I mean, I think those are the kinds of issues that we ought to 
be open to consider. But I only think it ought to be done 
recognizing that we have to protect those that are on duty.
    General Dempsey. And, sir, if I could--thanks for the 
opportunity to comment on this, because I do want to address 
something I have seen in the discussions about this. I reject 
the characterization of our military retirement program today 
as kind of gilt-edged, and the comparison to civilian 
retirement programs. Look, it might turn out that our current 
plan is unaffordable and we will have to do something about it. 
But when we put a retirement program together, it is because 
these young men and women who become old men and women who 
serve for 20 years, who put themselves in harm's way, who move 
10 or 15 times, who some of them can buy a house, some of them 
can't, their spouses rarely can have employment because we move 
them around, not voluntarily, they move because we tell them to 
go where the Nation needs them. That retirement program needs 
to be fundamentally different than anything you find in the 
civilian sector in my view. We can figure it out. We need the 
time to do so. If it is unaffordable, we will react. But I want 
to reject outright the idea that somehow my retirement program, 
or more important, that Sergeant Major Battaglia should be 
compared to someone else's.
    Mr. Reyes. Thank you. Thank you, Mr. Chairman.
    The Chairman. Thank you, Mr. Thornberry.
    Mr. Thornberry. Thank you, Mr. Chairman. Mr. Secretary, 
today and when I have heard you previously, you have seemed 
quite clear that you believe that we should make no further 
cuts in the defense budget beyond those which have already been 
enacted. Is that true?
    Secretary Panetta. Correct.
    Mr. Thornberry. Does the President share your view on that?
    Secretary Panetta. He does.
    Mr. Thornberry. So as Commander in Chief, I think it is 
important for him to be able to speak out and also say we have 
gone as far as we can go, we have gone to the edge, to use your 
words, and that no more cuts should come from the defense 
budget. I am hopeful we can have bipartisan agreement on that.
    General Dempsey, you used a word that caught my attention 
in your statement. You said if there are further cuts, there 
could be irrevocable damage to our military. Now, a fair number 
of folks here, I think, have the opinion that, okay, so if 
there are cuts either enacted by the super committee or through 
sequestration, we can always make up for that the next year and 
put some more money and everything will be okay. Explain to us 
what you mean by ``irrevocable,'' and how can a cut do damage 
that can't be corrected the next year with some extra money?
    General Dempsey. It comes down to what I have described in 
the statement, Congressman, as the core of our profession and 
that is, the men and women who comprise it and who we develop 
as leaders. You know, we are the military. We consider 
ourselves the preeminent leader development institution in 
America. And I think we have a case to make that. If some of 
the cuts occur in the magnitude, and more important, with the 
targets as they are described right now in sequestration and it 
causes us to RIF--this goes back to the notion of do we have 
the time to reduce the force over time responsibly and 
predictably? That is one thing. If we don't, if we begin to 
have to RIF to meet the budget targets imposed by 
sequestration, we lose that core.
    We have seen this happen in the 1980s--correction, 1990s, 
right after Desert Storm where we created a ``bathtub'' [chart 
bathtub curve], if you will, of captains and majors who exited 
the service and then when we had to regrow the Army by 65,000 
as a result of the conflicts in Iraq and Afghanistan, where we 
suffered was not in the basic rifle infantry men. We can grow 
them. We can grow them in 20 to 30 weeks. You can't grow a 
captain, a major, a lieutenant colonel, a sergeant major in 20 
to 30 weeks. And if we don't--if we are not careful with this 
and we have a migration of that talent out of the Army, that is 
irrevocable for probably 10 or 15 years.
    Mr. Thornberry. Mr. Secretary, let me turn back to you for 
one other question. This series of hearings has been about 9/
11. Ten years ago, one could see a clear trend towards 
terrorism, but the method of attack was certainly unexpected. 
It is undoubtedly true we will face unexpected things in the 
next 10 years that will be affected by our actions here.
    One of the concerns I have is that, for things like 
research and development, those kinds of not specific programs, 
you don't know how they are going to play out, and yet they lay 
the foundation for our future. As you all go through 
implementing what has already been passed--and hopefully that 
is it--tell me how you take into account preparing for 
uncertainty. Because it seems to me that that is absolutely 
central to national security in a complex world.
    Secretary Panetta. Absolutely. In all of the past planning 
that has gone into developing the defense budget, the one thing 
that everybody agrees is that no one has accurately predicted 
the future and has anticipated the kind of attacks and crises 
we have had to confront. You can identify kind of large areas 
where you would expect that a future crisis might lie. But the 
reality is that if we are going to have a strong defense, we 
have got to be prepared to react to a surprise. We have got to 
be prepared to react to something we are not expecting. And 
that is the reason--I mean, I think you have hit on something 
very important, which is we need to have research and 
development. We need to have those kinds of creative areas of 
the Department that look at those kinds of potential problems, 
that develop approaches to those kinds of possible crises in 
the future. I mean, to have that kind of imaginative look at 
where we will be, what kind of potential enemy will we 
confront, that gives us the capability to begin to design a 
truly agile force that can respond to those kinds of threats. 
That is the difference. And I need that. I can't lock in, you 
know, there are three or four threats out there and we are just 
going to deal with those. We have got to be flexible and agile 
enough to respond to any threat, wherever it comes from.
    The Chairman. Thank you. Mrs. Davis.
    Mrs. Davis. Thank you, Mr. Chairman. And thank you to you 
both for your leadership and also thank you for your statements 
about the military and their families. I think that is very 
important for them to hear and for us to obviously be very 
engaged in. And I certainly would encourage all my colleagues 
here to join us on the Personnel Subcommittee. Sometimes the 
committees are a little slim, and we need all of your support.
    I wanted to ask you about our commitments and how we close 
the gap because we do know that our resources--if we wouldn't 
use the word ``shrinking,'' they certainly would be 
diminishing, unlike the unprecedented rise that we saw in the 
last 2 years. Is there anything in addition to what has been 
said that you would like to share about how we close that gap?
    Secretary Panetta. Explain that question.
    Mrs. Davis. The gap between our resources and our 
commitments. I think the General did speak to that. But I am 
just wondering if there is anything additionally from where you 
sit, Mr. Secretary, as well that you would like to say about 
that.
    Secretary Panetta. Well, let me reemphasize a point that I 
have made time and time again. You know, the problem is, yes, 
we need to make these reductions. We know we are dealing with 
more limited resources. But at the same time, I have got a 
responsibility to defend this country. And neither Congress nor 
the President did away with the challenge of terrorism. That is 
still very real out there. We have got terrorists out there who 
continue to plan to attack our country. We have got to stay on 
top of that. We have got to be able to go after them and 
dismantle those kinds of operations.
    We still have two wars that we are in. Now admittedly, we 
are drawing down in Iraq but we are still fighting a war in 
Afghanistan, and we are trying to transition there. But we are 
in a war. We have got the threats from Iran and North Korea. 
They are engaged in nuclear proliferation. They are trying to 
develop a nuclear capability. As we saw within the last few 
days, these are pariah nations that constitute a threat to our 
security, they constitute a threat to the security of the 
world. They are still there. We have still got to deal with 
them.
    We have got cyber attacks that are coming at us left and 
right. We have got to deal with that threat. It is the 
battlefield of the future. We have got rising powers in the 
world that constitute a challenge to us. I mean, China in the 
South China Sea has created concerns for us as to our ability 
to be able to use international waters.
    Mrs. Davis. Mr. Secretary, if I could just interrupt.
    Secretary Panetta. Those are the threats.
    Mrs. Davis. Is there a way that Congress and the committee 
can better assist you in that strategic planning over what our 
role has been today?
    Secretary Panetta. You sure can. As we go through the 
process of developing that larger strategy, I need to be able 
to sit down with you and brief you on that and get your best 
input on that because that will be the place where we have to 
make choices as to what are those threats, what are the things 
we have to be ready for, and also consider what are the risks. 
The issue was raised, you know, what are going to be the risks 
involved here? There are going to be risks here. I am not 
kidding you. When you cut the budget by $450 billion, when you 
make the choices we are going to have to make, there are going 
to be some risks that are going to be out there. Those risks 
have to be acceptable, but there are going to be risks. We need 
to know that.
    Mrs. Davis. Thank you. When General Pace testified just a 
few weeks ago, he mentioned that we don't really have a 
cohesive national security strategy, and he suggested that we 
need something more akin to Goldwater-Nichols when it comes to 
interagency collaboration, looking at the whole-of-government 
approach. Would you agree with that? And what, again, do you 
think that we should be doing to promote it? Should there be 
more reporting mechanisms to the committee in terms of what 
actually is being done about that? We know things have changed 
since we entered Iraq, certainly great progress in many ways. 
But on the other hand, I think a lot of us would agree we are 
not there yet.
    General Dempsey. Yes, Congresswoman. I am not going to sign 
up for the extra reporting here. But I would like to respond to 
the question about, what are we doing to get after General 
Pace's advice. The Secretary has us embarked on a strategic 
review, the idea being that we really need to understand what 
we must do for the Nation, and we have projected it out to 2020 
so we can look back and have four program operating memorandums 
to march toward it. So we are trying to jump across the 
immediate fiscal crisis, determine what does the does the 
Nation need--not what does the Department of Defense need--what 
does the Nation need. And one of the answers to that question 
is, in fact, greater--we have tremendous integration with other 
agencies of government in which those relationships have 
accrued over the course of the last 10 years in ways that are 
absolutely remarkable. We have got to keep that going, and 
those are also some of the ways we can close this gap you 
describe between what the military has to do and what the 
Nation has to do. That work is ongoing, and it is on a very 
fast timeline, being led by the Secretary of Defense.
    Mrs. Davis. Thank you.
    The Chairman. Thank you. Mr. Jones.
    Mr. Jones. Mr. Chairman, thank you very much. And Mr. 
Secretary, General Dempsey, thank you for being here today.
    On Tuesday I had the privilege and honor of visiting Walter 
Reed Bethesda and saying thank you to so many soldiers and 
marines who have lost both legs that it brings me to this 
point. A lance corporal, his mother sitting in the room, asked 
me this question: Why are we still in Afghanistan? Mr. 
Secretary, I have great respect for you. You are on board and I 
know you will develop your own policies and that leads me to my 
question. In February of this year, we had Secretary Gates to 
testify before this committee. And I am going to read enough 
that I think you will understand the question. ``By the end of 
this calendar year, we expect less than 100,000 troops to be 
deployed in both of the major post-9/11 combat theaters, 
virtually all of those forces being in Afghanistan.'' This is 
the key point. ``That is why we believe that beginning in 
fiscal year 2015, the United States can, with minimal risk, 
begin reducing Army active duty end strength by 27,000 and the 
Marine Corps by somewhere between 15,000 and 20,000. These 
projections assume that the number of troops in Afghanistan 
would be significantly reduced by the end of 2014 in accordance 
with the President's strategy. If our assumptions prove 
incorrect, there is plenty of time to adjust the size and 
schedule of this change.''
    Well, you are here today, and I support the chairman and 
most members of this committee that we don't want to see cuts 
to the military that would just decimate the military. But with 
$120 billion being spent each year in Afghanistan, Karzai is a 
corrupt leader--in fact, a marine general. I hand this out to 
everybody that comes to my office. It has got the marines 
carrying a flag-draped coffin. And it says the number of people 
who have been killed in Afghanistan and the cost. And everybody 
that wants to see me about any issue, I hand this to them and I 
say, Please call the White House, the Speaker of the House, and 
the leader of the Senate and tell them to get our troops home 
before 2014, 2015.
    So my question is this: How do I answer the lance corporal 
who has been there twice, severely wounded the second time, and 
many of them who have been over there four, five, or six times, 
you can testify to that. Will you reevaluate and not just 
accept what Secretary Gates said that we will be there until 
late 2014 and significant reduction in 2015? Because, Mr. 
Secretary, you know it is a no-win situation, and the General--
I am going to read this and then please, I will give you the 
time to answer.
    I have had a marine general as my adviser for 21 months. 
Any time I email him, he emails me back. What do we say to the 
mother and father, the wife of the last soldier or marine 
killed to support a corrupt government and a corrupt leader in 
a war that cannot be won? We continue to stay there until 2015. 
How many more have to die? How many more have to lose their 
legs and Uncle Sam will take care of them, as he should take 
care of them, for the next 50 years of their lives? So, Mr. 
Secretary, if you would give me an answer. Are you willing to 
reconsider what Secretary Gates testified to before this 
committee?
    Secretary Panetta. Congressman, our present strategy in 
Afghanistan is one that was developed by the President of the 
United States and by our allies in NATO [North Atlantic Treaty 
Organization] at the Lisbon conference which was to gradually 
transition our forces out of there by the end of 2014. And that 
is what we are doing, and that is what we will continue to work 
at in order to do it right.
    We are in the process of making that transition. We have 
already taken down, by the end of this year, the first 10,000 
of the surge that was put in. We will take out the remaining 
part of that surge next year by the end of the fighting season. 
We will then begin to take down the remaining force through the 
end of 2014. So we are on a path to gradually transition down 
and remove our combat forces from that area.
    I have to tell you that, talking with General Allen, I feel 
that as difficult as that war has been, that the fact is that 
good progress has been made in terms of security. We have 
trained the Afghan army and police. They are operational now. 
We are making transitions. We have already transitioned seven 
areas. We are going to transition another group of areas in the 
fall to Afghanistan security and governance, and we are going 
to continue that process through the end of 2014.
    Yes, there are concerns. Yes, there are problems that you 
have identified. But in the end there is only one reason for 
this mission and that lies in the fact that Afghanistan was a 
safe haven for the Taliban and for Al Qaeda to conduct the 9/11 
attack on this country. And one thing we do not want is 
Afghanistan becoming a safe haven again for Al Qaeda. That is 
what this mission is all about.
    Mr. Jones. Mr. Secretary--last point, Mr. Chairman--we got 
bin Laden, and Al Qaeda has dispersed all around the world. 
Let's bring them home.
    The Chairman. Thank you very much.
    Ms. Bordallo.
    Ms. Bordallo. Thank you very much, Mr. Chairman. And thank 
you, Secretary and General, for testifying today. And as we say 
in Guam, hafa adai, welcome. My first question is for you, 
Secretary Panetta, and has to do with the military buildup on 
Guam. In a recent Senate hearing, now-Deputy Secretary of 
Defense Carter indicated that the Guam realignment was on the 
table for cutting. I fear this comment is in direct 
contravention of our country's agreement with Japan which was 
reaffirmed in June of this year. These comments along with 
certain actions by the Navy have created a sense of uncertainty 
about the buildup and that is unhelpful.
    Does DOD remain supportive of the Guam realignment as 
outlined in the Guam international agreement and the agreed 
implementation plan?
    Secretary Panetta. Congresswoman, we made an agreement with 
Japan related to the situation in Okinawa. Obviously we 
continue to stand by that agreement. We will continue to work 
with Japan on this. The challenge is going to be to try to make 
sure that we do it in a cost-effective way. That is going to be 
the challenge. But as to what we need to do, as to, you know, 
the effort to try to reduce our presence there, I think that is 
something we are committed to.
    Ms. Bordallo. Thank you. Thank you, Mr. Secretary. That is 
what I wanted to have on the record.
    General Dempsey. Congresswoman, could I add just very 
briefly?
    Ms. Bordallo. Yes, General.
    General Dempsey. I mentioned the strategic review we are 
undergoing. One of the questions we have to confront, and we 
are, is the issue of forward presence vice power projection. 
How much forward, how much from CONUS [Continental United 
States], how much rotational? And this conversation will occur 
in that context.
    Ms. Bordallo. Very good.
    The next question is for you, General, as well. There have 
been a number of positive developments this year for the 
military buildup. But the Senate has raised concerns and 
suggests that we rethink the entire program. I believe this is 
unwise, given the current threat environment in the Asia 
Pacific region. What are we doing as DOD and other interagency 
partners in getting the Government of Japan to achieve tangible 
progress in Okinawa? And further, what is our Government--
specifically DOD--doing to help the Government of Japan achieve 
tangible progress?
    General Dempsey. Yes, Congresswoman. Thanks. To kind of 
spin off of my earlier answer. I mean, what we are trying to do 
is become articulate with our friends and allies about our 
intentions. We are not the only nation in the world that is 
facing a new fiscal reality. And so our Japanese partners are 
facing some similar cases, and we have got some issues on the 
Korean Peninsula as well related to our future strategy and the 
new fiscal environment.
    I can just assure you those conversations are ongoing.
    Ms. Bordallo. Good.
    Secretary, another problem here is, can the Hill expect to 
see a final master plan for the military buildup from DOD? Cost 
increases are becoming an issue. I think that is what you 
mentioned. Can you give us an answer on that?
    Secretary Panetta. First of all, I am not sure about a 
military buildup at this point. I think what we are engaging in 
right now as a result of the number we have been handed by 
Congress is going to be an effort to reduce the budget in a 
responsible way. But what I can share with you is that as we 
develop a strategy for what we are going to need in the future 
and as we develop obviously the decisions that will be part of 
our budget presentation early next year, I fully intend to 
consult and advise with you in that process.
    Ms. Bordallo. Very good.
    And one final question. General, as we move to a post-Iraq 
and Afghanistan military, what are some of the biggest 
challenges that you see that face the military? And what areas 
of the world do we need to refocus on to put more emphasis on 
in the coming years?
    General Dempsey. Again, that conversation is occurring even 
as we sit here among those who have been charged by the 
Secretary to answer that question. But I mean clearly we have 
got some emerging regions of the world that we have somewhat 
neglected because of the demands in Iraq and Afghanistan. You 
asked what concerns me in the post-Iraq/Afghanistan. I am 
concerned that we will convince ourselves that the job of 
defending this Nation is complete and that we can somehow go 
back to where we may have been in the mid-eighties, which is a 
military that wasn't sure of itself or its support. And that 
concerns me.
    And again, back to one of the earlier questions about 
leaders. We have got to keep the right leaders in our military. 
That means we have got to train and educate them. We have to 
continue to inspire them so that when we need them--and we 
will--they will still be there.
    Ms. Bordallo. Thank you very much. Thank you, Mr. Chairman. 
I yield back.
    The Chairman. Thank you. Mr. Forbes.
    Mr. Forbes. Thank you, Mr. Chairman. Mr. Secretary, you 
heard the chairman say we only have 5 minutes. If I had longer, 
I would compliment you more on all the things you have done, 
which I think have been very good up to this particular point 
in time.
    I will go right to my question. Less than a month ago when 
you appeared in a Senate committee similar to ours, you made a 
statement that if we allowed the trigger of the sequestration 
to take place and had $600 billion of additional cuts, it would 
be like shooting ourselves in the head. I think that was a good 
analogy. But I will also come back and say, that was more than 
just the fact that these are across-the-board cuts. Because 
even if we said $600 billion but you allocate to cuts, it would 
still be like shooting ourselves in the head. But I took it 
from that, that what you really mean is that for us to ask to 
make $600 billion of additional cuts to defense before we have 
done a strategic analysis and review would be perhaps reckless, 
irresponsible, even dangerous to the country. Is that a fair 
depiction?
    Secretary Panetta. All of that.
    Mr. Forbes. If that is the case, Mr. Secretary, then would 
it not also be reckless, irresponsible, and dangerous for us to 
do the $450 billion of cuts we have already done before we did 
a strategic review and analysis in the same way? And if not, 
differentiate for me the two.
    Secretary Panetta. Well, the reality I am dealing with is 
that Congress----
    Mr. Forbes. I am not blaming you.
    Secretary Panetta. No, I understand. But I am dealing with 
the reality of having to reduce $450 billion and do it over 
these next 10 years. I mean, obviously the better approach--had 
we the resources in this country and had we managed our budgets 
more responsibly, the better approach would have been to 
develop the strategy to be able to discuss exactly what we 
need, determine what the resources would be in order to meet 
that strategy and then come to you and say, this is what we 
need in order to do the job.
    Mr. Forbes. But the two are essentially the same. So if one 
of them was perhaps reckless and irresponsible and dangerous, 
you can make the argument that the other one would be too. And 
the other thing that I wanted to raise is we have heard a lot 
about risk. And both you and the chairman mentioned that there 
were risks to missions and institutions.
    But as you probably know, yesterday we had three former 
chairmen in here, all who had tremendous wisdom and expertise. 
Former Chairman Skelton made an interesting observation. I 
asked him to give us the biggest warning that he would offer us 
as a committee, a Congress, and a Nation. And he said was over 
his tenure in Congress he had seen 13 different contingencies, 
conflicts; 12 of them were unpredictable. That means that the 
President, whoever he might be, is going to have similar 
unpredictable missions that we can't foretell right now. When 
we talk about acceptable risk, isn't it true that we are not 
just talking about risk to the mission or the institution but 
we are talking about risk to the men and women's lives who are 
performing those missions, if we make those and we are wrong?
    Secretary Panetta. You are absolutely right.
    Mr. Forbes. Good. With that, Mr. Chairman, I yield back. 
Thank you both for your service to our country and for being 
here today.
    The Chairman. Thank you very much. Mr. Courtney.
    Mr. Courtney. Thank you, Mr. Chairman. And I want to thank 
the witnesses and congratulate them on your new positions.
    I also want to take a moment to at least highlight your 
announcement today about moving up the auditability target to 
2014. I sit on the subcommittee with Mr. Conaway and Mr. 
Andrews. This committee actually has been moving on this issue. 
That is no mean feat, what you have announced here today. But 
it will in fact help us get towards the goals that we are 
talking about this morning in a smart way. And certainly waste, 
fraud, and inefficiencies are things that I think having an 
auditable set of books really helps us accomplish and doesn't 
affect our ability to defend ourselves. So congratulations on 
that announcement.
    Secretary Panetta. Thank you.
    Mr. Courtney. You said a moment ago that you want to have a 
military that is capable of reacting to surprises. Last March, 
President Obama had to react to a situation that arose in Libya 
where we had a humanitarian disaster in Benghazi on the brink 
of happening. What he did at that time, which I think was the 
right call, was exercise what I think he described as ``unique 
capabilities.'' To help NATO intervene, we had a submarine 
fleet in the Mediterranean, the Scranton, the Providence, the 
Florida which in a matter of 48 hours neutralized Qadhafi's air 
defenses. And you know in this era--I mean there are some 
people who feel that our submarine fleet is sort of a cold war 
relic. Obviously the events in Libya demonstrated that it gave 
this country the ability to react to a surprise. We are at a 
point though where all three of those boats are going to be 
going offline in roughly 10 years. We are now at a point where 
our sailors are being deployed at 7-month stints undersea as 
opposed to 6 months, which has always been the Navy's--again, 
to deal with a shrinking fleet size.
    And I just wanted to ask you, Mr. Secretary, to just sort 
of get your views on the roles of our submarine fleet post-9/
11, particularly in terms of other areas of the world that you 
mentioned earlier where undersea warfare seems to be sort of on 
the upswing with some of our potential threats.
    Secretary Panetta. I have always considered our submarine 
fleet to be an essential part of our forward presence, our 
projection, and also the capability of being able to respond to 
the kind of surprises that we run into in the defense business.
    I think we need a full range of capabilities in order to be 
able to address the threats of the future and the threats of 
the present. Submarines have actually provided that additional 
arm, particularly with regards to our fleets, that I think is 
absolutely essential to our defense in the future.
    Mr. Courtney. Good. Well, thank you. And maybe we can get 
you to come up for the commissioning of the Mississippi in 
December in Groton, Connecticut.
    Secretary Panetta. I suspect I will do that.
    General Dempsey. And if I could add, Congressman, except 
for one Saturday every year in December, I completely support 
the United States Navy.
    Mr. Courtney. Thank you.
    A corollary though to that issue is obviously the SSBN 
[Ballistic Missile Submarine] replacement program which, again, 
we have spent a lot of time in this committee and in the 
Seapower Subcommittee. You mentioned, General, the issue of 
nuclear deterrence which is, thankfully, a low risk situation 
right now but nonetheless a risk. And I just wonder if you 
could share your thoughts in terms of the need to move forward 
with the SSBN replacement program that the Navy has worked hard 
on.
    General Dempsey. Well, as you know, we have been studying 
and must continue to study the capability given to us by the 
triad. And of course the SSBN fleet is our most survivable leg 
of the triad. And therefore, I consider it to be indispensable.
    As we go forward and as we understand the future of nuclear 
nonproliferation talks, I mean, that could change. But for now, 
I think we are exactly where we need to be.
    Mr. Courtney. Thank you. One last question.
    Mr. Secretary, Secretary Gates about a year and a half ago 
announced an initiative within the Department of Defense to 
really look at our regime of export controls.
    Secretary Panetta. Yes.
    Mr. Courtney. Which, again, really are sort of in a cold 
war mentality. Again, I realize you are pretty new into the 
saddle. But any updates you can give us in terms of how that is 
progressing in your own views in terms of how we get there.
    Secretary Panetta. I fully support what Secretary Gates is 
trying to do in that arena. We really do have to update our 
export laws and begin to bring them into the 21st century, 
frankly. Not only for purposes of the technology and the 
industries that we have here, but I think we are at a stage now 
where, very frankly, as we develop those alliances, as we 
develop--I mean NATO performed pretty well in terms of Libya. 
And the real question is, if we are going to develop those 
kinds of capabilities, if we are going to develop those kinds 
of alliances, they have got to be able to have the latest in 
terms of technology and in terms of weaponry. And that means 
that we have got to be able to share that kind of technology. 
So I am working very hard to try to see if we can try to do 
away with some of the barriers that were established by those 
laws.
    Mr. Courtney. Some of us would want to work with you on 
that effort.
    Thank you, Mr. Chairman.
    The Chairman. Thank you. This would probably be a good time 
to wish the Navy a happy birthday.
    Mr. Miller.
    Mr. Miller. Thank you, Mr. Chairman.
    General Dempsey, General Amos has been pretty adamant about 
the F-35B, and I agree that it does increase capacity certainly 
in range. But I am interested in knowing, since this is the 
first opportunity we have had to hear from you directly, do you 
share his enthusiasm for that aircraft? And will you commit to 
helping make sure that we move forward with it?
    General Dempsey. I am supportive, without caveat, of the 
development of a fifth generation fighter. I am concerned about 
the three variants and whether, as we go forward in this fiscal 
environment, whether we can afford all three. But I am eager to 
learn more about that. And I do have great respect for General 
Amos' judgments. But I will tell you, that is something we have 
to keep an eye on. Three variants create some fiscal challenges 
for us.
    Mr. Miller. Secretary Panetta, good to see you. I look 
forward to working with you in your new capacity. Also talking 
about the STOVL [short take off and vertical landing] aircraft, 
I watched a video last week of it landing on the Wasp and my 
question is, with sea trials ongoing now, basically, and the 
aircraft appears to be performing well, it has been on 
probation--which the term ``probation'' doesn't exist in any of 
the acquisition areas, and I think probably it has created or 
could be considered a black mark on the STOVL aircraft. But 
what remains now as far as items that would allow it to be 
removed from its probationary status?
    Secretary Panetta. You know, all of these planes are now 
being fully tested, and that is one of the good things. I mean, 
this is the fifth generation fighter. It is something we 
absolutely need. It is a remarkable plane, and it really does 
the job well.
    But what we want to do is to make sure that as it goes 
through this test period we are able to understand all of the 
issues involved with it, that we are able to be fully confident 
that this plane, once it goes into production, is going to be 
something that will be totally effective and will be totally 
capable of serving the mission that it is required to do. So, 
yeah. I mean, the term ``probationary'' is out there. But 
frankly, what that essentially means is, give us a chance to 
test it, give us a chance to see how it performs, and if it 
performs well then obviously it will be able to make the grade.
    Mr. Miller. Thank you. And the other thing was, OMB [Office 
of Management and Budget] released guidelines for 2013 in the 
budget where it actually states that the Department should 
identify programs to double down on because they provide the 
best opportunity to enhance economic growth. I did have the 
opportunity to go visit the line in Fort Worth for the F-35. 
127,000 direct and indirect jobs right now. Certainly if we can 
remove some of the instability in our purchasing of this 
aircraft and move forward with what we originally intended to 
do--and I understand the budgetary constraints that we are in 
right now. I still contend--and I don't think you meant it the 
way you said it. We have the resources. We don't have a tax 
revenue problem in this country. We have a spending problem and 
an allocation of where those dollars go. But I would hope that 
if that is what the administration would like and we are trying 
to increase jobs and this is an aircraft that we do want to go 
forth, looking at what China is doing and how fast China is 
producing their aircraft now, significantly quicker than what 
we originally anticipated, I hope that you would look at the F-
35 very carefully as meeting OMB's challenge.
    Secretary Panetta. I will certainly do that.
    Mr. Miller. Thank you.
    The Chairman. Thank you. Mr. Loebsack.
    Mr. Loebsack. Thank you, Mr. Chair. I want to thank both of 
you for your service. I look forward to continuing to work with 
you into the future. I think we can all agree that under the 
current fiscal constraints that we are operating under we have 
got to make wise decisions, the best decisions we can make. I 
think we can all agree with that on a bipartisan basis, make 
sure that we don't draw down too much because, as Mr. Forbes 
said, Ike Skelton said, there are contingencies, things are 
going to happen. We are going to have to be prepared. There is 
no doubt about it. And I have two areas of inquiry I want to 
explore with you briefly.
    The first has to do with our organic manufacturing base at 
installations like the Rock Island Arsenal. In the past I think 
it could be argued that we probably drew down too much. And so 
when contingencies came up, when issues came up, it took too 
long for us probably to go back to that organic base, build 
that up again and those capabilities. Congressman Schilling and 
I and this committee, we have been working across the 
Mississippi River, across the political aisle to make sure that 
facilities like the Arsenal can engage in unlimited public-
private partnerships so we can maintain those skills of those 
workers there, not let the organic manufacturing base decline 
to such an extent as we did before.
    The second issue has to do with the Reserve components, the 
Guard and Reserve. A lot of us have concerns that as we begin 
to draw down that we are going to see the capabilities of those 
forces also decline and across the spectrum, including Title 32 
duties that they have as well.
    So first I would like to ask the both of you to respond to 
the issue of the organic manufacturing base. How does that fit 
into the overall plan, making sure those capabilities remain, 
that they don't decline the way they did before.
    Secretary Panetta. Congressman, thank you for the question. 
Two very important issues. One, one requirement that I have 
with regards to our overall strategy is to make sure we 
maintain our industrial base. I absolutely have to have that. 
If we are going to be able to have a strong defense, if we are 
going to be able to maintain a strong defense, if we are going 
to be able to respond to the crises of the future, I have got 
to have an industrial base that can respond to that. If we have 
to mobilize quickly, if we have to weaponize quickly, I have 
got to have that industrial base in place. And if we cripple 
that, we will cripple our national defense. So what I am asking 
is, as we develop a strategy and as we go through some of these 
decisions, we make very sure that we are protecting the base 
that you talked about so that those skills, those capabilities 
are always going to be there for us when we need them. It is 
going to require some decisionmaking here. We are going to have 
to be able to get the cooperation of the private sector as well 
in this effort. But I have met with them, and I am fully 
confident that we can get that done.
    On the Reserve and Guard--and I will let the General speak 
to that. The Reserve and Guard, we have gone through a 
remarkable period where the Reserve and the Guard have really 
performed in an outstanding fashion with regards to the wars 
that we have been in. We have been able to rotate them in. They 
have gotten battle experience. They are better. They are more 
capable. They are more experienced. I don't want to lose that. 
And as we go into the future, what I want to do is, A, try to 
retain that kind of experience to the best we can. But 
secondly, I would like to keep them on some kind of operational 
capability so that we can basically move them into roles that 
will continue to benefit from that experience that we have 
gotten from them.
    Mr. Loebsack. Thank you. General.
    General Dempsey. Thank you, sir.
    I don't have anything to add on the defense industrial 
base, other than to assure you that it is prominent in our 
strategy review. As far as the Reserve Component, if we are 
true to what we say we are, which is a learning organization, 
we need to learn some lessons as our relationship with the 
Reserve Component has changed over the last 10 years. And as we 
develop this strategy, we might find things that we decide we 
don't need immediately; they can be placed into the Reserve 
Component; and things that were in the Reserve Component that 
we now realize we need immediately, we might migrate them into 
the active. So I would say what you will see and what is 
ongoing right now is a very healthy discourse among the three 
components, Active, Guard and Reserve, to determine what is our 
new relationship now based on the last 10 years of war.
    Mr. Loebsack. I thank both of you for your service, for 
your support for these issues. And General, just one little 
area of disagreement, in December, that we are going to 
disagree on the outcome of that game. I have two children who 
are Naval Academy graduates. I apologize. But that is how it 
is. Thanks very much.
    General Dempsey. Congratulations. I have two children who 
are West Point graduates. So we are really at odds.
    Mr. Loebsack. Thank you. And I yield back.
    The Chairman. Thank you. Mr. Wilson.
    Mr. Wilson. Thank you, Mr. Chairman. And thank you, 
Secretary, for being here and General Dempsey. Thank you both 
for your service. Mr. Secretary, I want to thank you for your 
clarity of your response that there should be no further cuts 
in our military defense. Equally, I appreciate you stating your 
belief that that is the position of the President. This is so 
important that our country know and that our adversaries around 
the world know that we will be prepared and we will be able to 
defend the American people. And General Dempsey, in fact with 
the number of threats the Secretary identified that are 
rising--not being reduced--it is very important that we be able 
to fight a two-conflict war. I am very concerned with the 
drawdown, the Army below 520,000, the Marines below 186,600, 
that that puts us at risk. Will we be able to face a two-front 
war?
    General Dempsey. That analysis is ongoing, Congressman. But 
what I can assure you is that I would never advocate a strategy 
for this Nation that would limit us to being able to do one 
thing at a time because that is not the world we live in.
    Mr. Wilson. Thank you very much. And Mr. Secretary, I am 
really honored. I work with Ranking Member Susan Davis to 
promote military families, service members, veterans. An 
extraordinary benefit that they have is the resale system, PXs 
[Post Exchanges], NAVXs [Navy Exchanges], MCXs [Marine Corps 
Exchanges], commissaries. They operate in the most bizarre 
locations around the world. It is a really great morale 
builder, a way of showing our respect to our military. And we 
have extraordinary facilities, such as at Fort Jackson in 
Parris Island that I represent. What is your view about our 
military resale system? In light of the budget constraints, can 
we count on this benefit to be available?
    Secretary Panetta. I view that as a very important benefit 
for the families that are out there. I mean having served 2 
years myself and had my family benefit from that, I understand 
how important that is. And it is something we will continue to 
provide. As we go through the process of looking at the 
infrastructure, there may be some areas where we may have to 
reduce the presence. But for the overall benefit, that is one 
that we think we believe we ought to maintain.
    Mr. Wilson. And a side issue that has been raised is the 
number of military families that work in the resale in remote 
areas around the world that simply couldn't find employment 
otherwise. And so it has so many side benefits that should be 
considered. And I am really pleased that Congressman Loebsack 
has really already brought this issue up, the importance of the 
National Guard and Reserves. As a 31-year veteran of the 
Reserves National Guard and extremely proud father of three 
sons in the Army National Guard, as we really get into the 
circumstance of budget cutting and determining prioritization, 
if you could state further--I can't hear enough because I do 
know firsthand of the extraordinary success, like the 218th 
Brigade in South Carolina of their service in Afghanistan, how 
much our Guard and Reserve appreciate serving overseas and in 
the country.
    Secretary Panetta. There is another factor here that I 
think is extremely important to the Reserve and the Guard, 
which is that the Reserve and the Guard reaches out into every 
community across this country and it makes every community a 
part of our national defense system. And to some extent, every 
community has to participate not only in service but in the 
sacrifice that is involved when we defend this country. So for 
that reason, I think the grassroots operation of having a 
strong Reserve, strong Guard that can help us as we confront 
the crises of the future is something that I want to assure you 
we are not only going to maintain but strengthen.
    General Dempsey. And I will add, Congressman, that having 
served multiple tours in Iraq and Afghanistan and having--most 
of the time when I get on a C-130 to go someplace, it is an Air 
National Guardsman. I have driven up Route Irish between the 
airport and the center of Baghdad and being defended by the 
fighting 69th out of New York. And the highest compliment I 
think we can pay the Guard and Reserve now is, you can't tell 
what soldier is an Active, what soldier is a guardsman, and 
which soldier is a Reserve component soldier. We are truly one 
force now.
    Mr. Wilson. Thank you so much.
    The Chairman. Thank you. Ms. Tsongas.
    Ms. Tsongas. Welcome. It is so good to see you both here 
for your first testimony before this committee, and we look 
forward to many more to come.
    I don't relish the job you have. You have a very difficult 
task in view of the extraordinary challenges we face as a 
country. We all have known for some time that, as we face the 
debt and the deficit, the Defense Department was going to have 
to absorb its fair share. But we all know we want to do it in 
as thoughtful a way as possible. And what I appreciated, 
General Dempsey, was when you said you are a learning 
organization. And as you have talked about the assessment of 
risks, how you develop strategies as you assess those risks, 
just a comment, I would hope you also take into account that 
not every risk can be dealt with through a military response, 
that there are limits to our capacity to deal with every threat 
militarily, that there are perhaps other ways as well. So just 
a comment for the record. And as a learning organization, I am 
sure that that is something you will take into account as well.
    And also, I wanted to reiterate the importance of the 
National Guard and Reserves. I know in the Fifth District of 
Massachusetts, most who are serving today are doing it through 
either one of those great organizations, and they have done it 
with such dignity and professionalism.
    But I wanted to go in a slightly different direction. 
Yesterday the former chairman of our committee, Ike Skelton, 
testified in a hearing that ``The strength of the U.S. military 
flows from the dedication and skill of our All-Volunteer Force. 
Indeed, the new Defense budget must maintain our Nation's 
security by keeping `the profession of arms' professional.'' 
And I believe this is a view you both share.
    With women now playing an ever-increasing role in our 
military, supporting our All-Volunteer Force requires an 
understanding of the issues and challenges confronting both the 
serviceman and the servicewoman. An issue I would like to 
address today is the issue of sexual assault in the military 
which is reported with alarming frequency. Mr. Secretary, in 
2010, there were 3,230 reported sexual assaults in the 
military. But by the Pentagon's own estimate, as few as 10 
percent of sexual assaults are reported. The VA [Department of 
Veterans Affairs] estimates that one in three women veterans 
report experiencing some form of military sexual trauma. And I 
can tell you that from the anecdotal evidence I hear, the 
stories I hear, from returning women veterans but also the VA 
organizations in Massachusetts, that those numbers are 
accurate. Obviously it is unconscionable to begin with that so 
many of our brave service members are subjected to this 
criminal and predatory behavior. However, what also concerns me 
is that this systematic abuse will hurt our readiness by 
deterring highly skilled and patriotic women from enlisting or 
re-enlisting in our Armed Forces.
    In a time of two wars and massive budget cuts, our military 
needs to attract and retain the most capable personnel 
possible. In 2008, when Ann Dunwoody became the first woman in 
our Nation's history to be confirmed as a four-star general, 
women made up 14 percent of our Active Duty personnel. We must 
make sure these women's needs are being met.
    The House version of this year's National Defense 
Authorization Act, which passed in May, takes several important 
steps to address sexual assault in our Armed Forces. This work 
has been done through the combined efforts of many of my 
colleagues, Representative Davis, Representative Pingree and 
Representative Turner. When he appeared before our committee in 
February, I raised this matter and our responses to it with 
your predecessor Secretary Gates and asked him why the 
Department had previously resisted efforts to put certain 
protections in place. He responded he hadn't realized that the 
Department had resisted. He would look into it and find out why 
they oppose it, why not, and why they shouldn't go forward.
    I have a very simple question to Secretary Panetta. In this 
time of austerity where we face massive budget cuts to the 
Department of Defense and potentially threatening cuts, if the 
sequester is exercised, can I count on your support to fund new 
initiatives aimed at preventing sexual assault in our Armed 
Forces? I don't want to see this budget environment become an 
excuse to not fund these initiatives.
    Secretary Panetta. Absolutely. I thank you for your 
leadership on that issue. It is an issue that I am paying a lot 
of attention to because women are performing in an outstanding 
fashion for the Department of Defense. They put their lives on 
the line. They are doing great in terms of helping to defend 
this country. And I think we have to make sure that we provide 
all of the protections necessary so that what happens in these 
horrendous sexual assault cases, A, should not happen but, B, 
if it does happen that justice is rendered quickly.
    Mr. Tsongas. Thank you. I look forward to working with you 
on this.
    The Chairman. Thank you. Mr. Turner.
    Mr. Turner. Thank you, Mr. Chairman.
    General, in your discussion of the range of threats that we 
might face, you said that nuclear conflict is unlikely. It is 
unlikely because of the strength of our nuclear deterrent. It 
is both credible and reliable. Cuts that are currently pending 
before Congress to our nuclear deterrent could affect both that 
credibility and its reliability. At a time where China and 
Russia are investing in nuclear weapons infrastructure, we are 
looking at proposed cuts that would create vulnerability and 
instability. After years of disinvestment, our current proposed 
plan for modernization really looks at the issue of deferred 
costs.
    Mr. Secretary, I am going to ask you a question that I know 
your answer--because we had the opportunity to discuss this at 
the Pentagon on Tuesday. I appreciate your commitment to fully 
funding the modernization program of the NNSA, of our National 
Nuclear Security Administration. It is important though in this 
venue to have you express those opinions because, as you know, 
we are right now heading to the prospects of an omnibus in 
which there could be significant cuts that occur to our nuclear 
weapons infrastructure.
    Now I know you are aware that as the New START [Strategic 
Arms Reduction Treaty] Treaty was being proposed, the President 
came forward and was asked for a commitment to modernization of 
our program. The President and the Senate, taking up the issue, 
recognized that as you go to lower numbers that you actually 
have to set aside increased dollars so that we can have both 
security and, understanding that we have had deferred 
maintenance, that we need to go forward with our modernization 
program. The President said, ``I recognize nuclear 
modernization requires investment for the long term. In 
addition to this 1-year budget increase, this is my commitment 
to Congress, that the Administration will pursue these programs 
and capabilities for as long as I am President.'' The program 
included an $85 billion investment for modernization. And I 
know, as you both are aware, that this program resides in DOE, 
the Department of Energy, as opposed to DOD, the Department of 
Defense. And Secretary Gates, in showing his commitment to that 
program, set aside $8.3 billion over the next 5 years to invest 
in that program. Gates, then saying, ``This modernization 
program was very carefully worked out between ourselves and the 
Department of Energy. And frankly, where we came out on that I 
think played a fairly significant role in the willingness of 
the Senate to ratify the New START agreement. So the risks are 
to our own program in terms of being able to extend the life of 
our weapons systems. This modernization project is in my view 
both from a security and political standpoint really 
important.''
    Mr. Secretary, so my question to you is, do you agree with 
Secretary Gates and the importance of this modernization 
program? And what is your assessment of the proposed cuts? As 
we know, the modernization program, in addition to coming 
across from the President's budget as fully funded, was 
included in the House budget as fully funded. It came out of 
this committee with our National Defense Authorization Act as 
fully funded and then stumbled as it came out of the 
Appropriations Committee, both the House and the Senate 
Appropriations Committees taking a whack at the program.
    As we know, with the omnibus moving forward, your 
statements are even more important now. And I want to highlight 
that one of the issues with Gates' and your support of $8.3 
billion to the Department of Energy programs is that as those 
funds come out of the Appropriations Committee with cuts, in 
effect your funds with being stolen for water projects across 
the country, and I think you might have an opinion about that.
    Mr. Secretary.
    Secretary Panetta. Well, as a former Member, I know in 
those committees, they are going to reach for whatever they can 
in order to try to see if they can fund those projects. I mean, 
I understand that process. But I think it is tremendously 
shortsighted if they reduce the funds that are absolutely 
essential for modernization.
    I and Secretary Gates are in lockstep with regards to our 
positions and, frankly, with the President that we have got to 
fully fund--fully fund the modernization effort with regards to 
the nuclear area. I mean, this is too important. We have always 
been at the cutting edge of this technology, and we have to 
stay there. There are too many other countries that are trying 
to reach out to develop this capability. And if we aren't 
staying ahead of it, we jeopardize the security of this 
country. So for that reason, I certainly would oppose any 
reductions with regards to the funding for weaponization.
    Mr. Turner. I appreciate it. Because your statement is very 
important to identify that this is not an area where we can 
find savings, this is an area where cuts actually expose risks.
    Secretary Panetta. That is right.
    Mr. Turner. General, if you might wish to comment on the 
modernization. As our warheads continue to age, the 
infrastructure continues to atrophy, and it becomes a decrepit 
state that we look to our nuclear deterrent. As we look to 
lowering numbers, we lessen our ability to hedge as our nuclear 
weapons infrastructure ages and has disinvestment.
    Do you have a comment on that?
    General Dempsey. Just to reinforce what you said.
    The Chairman. General, could you please do that for the 
record?
    General Dempsey. I can.
    The Chairman. Thank you very much. Ms. Pingree.
    Ms. Pingree. Thank you very much, Mr. Chair.
    Thank you, Mr. Secretary and General, for being before our 
committee today and for your diligence in answering a great 
diversity of questions.
    I want to first just echo the remarks of my good friend and 
colleague Mr. Jones. And I know he is no longer in the room, 
but I really do appreciate his vigilance and courage in 
continuing to highlight the importance of ending the war and 
bringing the troops back home. I know we started the day with 
protesters in the room, and sometimes they seem disruptive or 
their tactics are some we might argue with. But frankly, we are 
facing a time when there are protesters in almost every city 
where we reside or represent. And there is huge dissatisfaction 
in our country about the representation that they feel many of 
us them give in Congress. And one key area is about ending the 
war, the fatigue that people have. Many people feel we were 
misguided getting into Iraq, that we have been in Afghanistan 
for too long, and in this time of budget deficits we can just 
not justify $120 billion a year.
    And I just want to echo Mr. Jones in saying that I have 
been on this committee only--this is my third year. But I have 
that feeling that we find ourselves often in somewhat of an 
unconscionable inertia around the war. It is hard to end. 2014 
turns to 2015 turns to 2016, and people continually wonder when 
will we end the war, particularly after the capture of bin 
Laden, after the reduced number of Al Qaeda operatives and, in 
fact, in the light of, as you said, huge security concerns in 
countries all over the world which we are not adequately 
prepared for or perhaps ready to defend ourselves.
    I don't think it is unrelated that we are facing these huge 
needs for budget cuts and there is this dissatisfaction out 
there with the way we do things. On the right, it is about our 
growing deficits and the irresponsibility many people feel 
around that. On the left, it is this idea of, why don't we end 
the war and why are we spending $120 billion if we 
significantly need to cut defense?
    Ms. Pingree. And I think that is why we are facing such 
difficult cuts today. And I just feel--it is important to echo 
that. I agree with so many of my colleagues that we need to 
have a strong defense, and I am proud to represent the Bath 
Iron Works and the greatest shipbuilders in the world, the 
naval shipyard where we keep our submarines safe and working, 
and I understand that we don't have a strong enough Navy, that 
there are pending threats from China, and we don't want to be a 
smaller force than they are there. There are true needs in our 
military. There are huge security needs around the country. I 
just believe that this war, which has been crippling us as a 
Nation, which has had excessive costs, which has forced us to 
prepare for exclusively ground wars and not be prepared in 
other areas has to end.
    All that said--and I know you have stated your own opinion 
on that, so I just feel the importance of reinforcing it and 
think that I reflect the thoughts of many, many of my 
colleagues in Congress, and certainly the majority of residents 
in my district. It is an issue I hear about frequently.
    On a completely different topic, as you are pondering the 
difficult cuts that will need to be made one way or the other, 
I want to echo the remarks of my colleague, Mr. Reyes, who 
talked about the Defense Business Board. And I do appreciate 
your response to that, that it is still a plan that is under 
consideration.
    Thank you very much, General Dempsey, for really talking 
about the difference in a retirement system for the military 
than in civilian life. You, I think, said it extremely well, 
that people move constantly, they serve their country in ways 
that we don't do in other lives, that people's spouses often 
can't work and build a retirement, and I strongly oppose that 
plan. I disagree with the idea of making those kinds of cuts. 
And I, frankly, would say that with the Commission on Wartime 
Contracting funding, that we have wasted between $30 and $60 
billion in Iraq and Afghanistan and a billion more--billions 
more in wasted weapons programs that never make it in 
warfighters' hands, it is hard to justify targeting military 
families, those that serve our country when it seems to me, 
again, there are other places to be cut.
    You have stated your opinions eloquently on both of these 
things. If you have other comments, I am pleased to hear them, 
but I wanted to add my voice to others who feel like we are not 
moving fast enough on ending the war.
    Secretary Panetta. Obviously, I respect your concerns and I 
recognize the frustration, you know, having been through these 
wars and the losses that we have incurred. But we are--you 
know, we are in the process of ending the war in Iraq. By the 
end of this year, we will have withdrawn all of our combat 
forces from Iraq. That is going to happen. And with 
Afghanistan, I am fully confident that the President of the 
United States is committed to ensuring that we transition our 
combat forces out of their by 2014.
    We just have to do this right. I mean, what I don't want to 
happen and I think what all of us need to be concerned about, 
if we do this in the wrong way, if we do it so fast that all of 
a sudden Afghanistan falls apart again, it becomes a safe haven 
for the Taliban or Al Qaeda and suddenly we are subject to 
attacks again, then, you know, the world is going to look at us 
and say how could you have let that happen? So that is what I 
am trying to prevent, is to be able to do this, but do it 
responsibly.
    Ms. Pingree. Thank you for your comments.
    General Dempsey. I would like to answer that for the record 
too, Mr. Chairman.
    The Chairman. Would you please. Mr. Kline.
    Mr. Kline. Thank you, Mr. Chairman, and thank you, 
gentlemen. And congratulations on your appearance here in your 
new roles. I want to thank you, Mr. Secretary, for your 
comments about responsibly disengaging from Afghanistan and not 
precipitously so. I mean, we have many, many of our sons and 
daughters who have served, are serving and will serve there. It 
would be a terrible, terrible disservice to them for them to 
serve with no chance of succeeding as well as an incredible 
danger to our own country.
    So thank you for that. And I want to congratulate you sort 
of. I want to congratulate you on your announcement about 2014 
and 2017, way, way, long overdue to have an audit. 2017, I 
daresay that perhaps neither one of us will be here, so I am 
cautiously optimistic that that might occur. But nevertheless, 
I really appreciate your take in the bit in the teeth so to 
speak and trying to get that done.
    Looking at these budget cuts, those in the works and 
horrifyingly those that are potentially out there, I am mindful 
of a former chief of staff of the Army who used to talk about 
the tyranny of personnel costs. And I know that is of some 
concern as we have stepped up to meet our obligations to the 
men and women who are serving in terms of medical care, pay 
raises, retirement benefits and so forth. And I am very 
concerned that we honor your pledge to keep faith with those 
who have served, and I want to get to the question and 
underscore a discussion that I think was started by Mr. Reyes 
about retirement benefits.
    As it happens, I was recently in Fort Bliss, Texas visiting 
my favorite soldier and his family and talking with families 
and soldiers about the story that was ripping around the United 
States Army in The Army Times and elsewhere and the high, high 
level of concern that the retirement benefits that they had 
served and worked for were going to be yanked away. And 
clearly, I think that would be breaking faith with those who 
have served and horribly irresponsible. And the same can be 
said of other benefits that we have put forward.
    But I want to focus on this retirement rumor which is 
ripping through and which they were taking as real and which 
was being actively considered, that after having served 20 or 
15 or a number of years, that they were going to get something 
substantially less than what they had signed up for.
    So for the record, I am absolutely clear, I would like to 
hear from both of you that you are adamantly opposed to that 
happening, to changing those retirement benefits for our 
serving men and women.
    General Dempsey. I am adamantly opposed to changing the 
retirement benefits for those who are currently on active duty, 
but I am also open to look at potential changes to the 
retirement system as part of our overall look at compensation 
for the future.
    Mr. Kline. Mr. Secretary.
    Secretary Panetta. Absolutely. We cannot break faith with 
those that have served and deployed time and time again and 
were promised the benefits of this retirement program. Those 
benefits are going to be protected under any circumstance.
    Mr. Kline. Thank you. Outstanding. Mr. Chairman, I yield 
back.
    The Chairman. Thank you very much. Mr. Johnson.
    Mr. Johnson. Thank you, Mr. Chairman. Secretary Panetta, 
General Dempsey, I want to congratulate each one of you all for 
your new positions and look forward to working with you. I have 
served on this committee for almost 5 years now and one thing I 
have noticed is that from time to time, we have needed the 
presence of our Capitol Hill police officers to maintain order 
in the room while we conduct our business, and I certainly 
respect the rights of people to come in and protest what we are 
doing, but you don't have a right to interrupt our meetings.
    We had a large contingent of protesters today and we were 
able to proceed with the meeting because we had adequate 
resources to maintain order, the Capitol Hill Police 
Department. I appreciate their service. I have also noticed 
during history that, from time to time, there are disturbances 
throughout the world, and these disturbances may interrupt some 
of our various interests around the world, and it is necessary 
for us to have some kind of force to maintain order. And I hate 
that human beings have to have some protection, the weak over 
the--excuse me. The strong over the weak, the weak who seek to 
get stronger and then take over from the then-strong folks. But 
this is just something, it is like competition, like 
capitalism. It is just a natural human phenomenon. And we must 
have sufficient force when necessary to bring about the kind of 
relief that we need in terms of maintaining order throughout 
the world. And that is why we need a sufficient military force 
that is ready to respond immediately to whatever the 
circumstances may be.
    And, of course, people are always trying to get more 
innovative and coming up with new ways of doing things of 
hurting people, and hurting us, Americans. So we have got to 
stay a few steps ahead of that at all times. If we don't, then 
we are not taking care of our business as elected officials in 
this country.
    That having been said, Mr. Secretary, I believe that global 
nuclear disarmament is necessary if our country and our species 
are to survive and flourish. I understand the need to maintain 
a deterrent capability for the time being, but we can, 
nevertheless, dramatically cut our stockpiles and slow 
investment in new weapons. Mr. Secretary, do you agree that 
nuclear weapons programs should be on the table as the 
Department of Defense determines how to reduce its spending 
over the next 10 years?
    Secretary Panetta. Again, you know, we obviously, strongly 
believe that we have to maintain a strong deterrent against 
those countries that could potentially use nuclear weapons 
against us. With regards to reducing our nuclear arena, I think 
that is an area where I don't think we ought to do that 
unilaterally, we ought to do that on the basis of negotiations 
with the Russians and others to make sure we are all walking 
the same path.
    Mr. Johnson. Certainly. And I definitely agree with that 
comment. The Army has spent $2.7 billion trying to build an 
intelligence analysis platform, the Distributed Common Ground 
Systems, a program known as DCGS-A. That program is now 5 years 
behind schedule, vastly over budget and fails to meet the needs 
of our soldiers. An article appeared in Politico earlier this 
summer detailing some of those failures and it explained that 
the program was unable to perform even the simplest tasks and 
frequently crashes. Is this system--we have already spent $3 
billion on this system.
    The Chairman. The gentleman's time has expired. Mr. 
Lamborn.
    Mr. Lamborn. Thank you, Mr. Chairman. And, Mr. Secretary, 
and, Mr. Chairman, I welcome you both to the committee also. 
And I congratulate you both on your new responsibilities, I 
think. And I look forward to many more sessions with you. My 
first question has to do with missile defense. Mr. Secretary, 
as you know, the President's budgets to date have cut a total 
of $1.65 billion out of the ground-based missile defense 
system, the only missile defense system currently in place to 
defend our homeland. Are you committed to the adequate 
resourcing of the ground-based missile defense system in the 
future?
    Secretary Panetta. I am committed to adequately resourcing 
what we have in place.
    Mr. Lamborn. Well, then as a follow-up, do you believe 
there are now an adequate number? I think it is too limited of 
a number, but do you think there is an adequate number of 
ground-based interceptors both to counter the threat to our 
homeland and to provide for testing?
    Secretary Panetta. I have had the chance to visit NORAD 
[North American Aerospace Defense Command] and STRATCOM [U.S. 
Strategic Command] as well. And I had a chance to really look 
at our capabilities. I mean, I think we are in good shape with 
regards to our ability to respond. It doesn't mean that we 
shouldn't continue to upgrade. It doesn't mean that we 
shouldn't continue to look at other ways to try to expand that 
capability. But, you know, we really do have a very remarkable 
defense system set up to deal with that challenge.
    Mr. Lamborn. Okay. Well, I look forward to continued 
conversations on this with you both. And now a separate 
question, but it has to do with capability. This is for both of 
you. As already scheduled budget cuts to the Department of 
Defense in excess of $400 billion for the next 10 years begin 
to take place and apart from sequestration, do you anticipate 
the Army reducing the number of brigade combat teams?
    General Dempsey. As the former chief of staff of the Army 
and currently chairman, I do anticipate that the Army will 
reduce the number of brigade combat teams, but not just because 
of the pressure of a new fiscal environment. Again, I am all 
about trying to understand what the Nation needs in 2020. What 
have we learned over the last 10 years of war?
    So there is a plan that General Odierno, the current chief, 
is working with my support, to take a look at how many brigade 
combat teams you need if you change the nature of the brigade 
combat team. So roll back in another maneuver battalion, some 
intel assets. Things that we didn't know we needed 10 years 
ago, now we know we need them. So we will reduce the number of 
brigade combat teams, but the number remaining will be more 
capable.
    Mr. Lamborn. Are you talking about doing something 
simultaneously with anticipated drawdowns of the numbers of 
troops in both Iraq and Afghanistan?
    General Dempsey. Stated another way, even if we had all of 
the money we needed, we would want to make some changes based 
on the lessons of the last 10 years of war. So we need to do 
that.
    Mr. Lamborn. But are you mostly anticipating a reduction of 
the number of teams that would correspond to the number of 
troops being brought home from those two countries?
    General Dempsey. No, sir. There is a relationship between 
what the combatant commanders establish as a demand. So we know 
what a steady state demand is. And part of that demand is 
articulated by what we see as the future of Iraq and 
Afghanistan. So we know, for example, if the demand is 10, we 
have to have a minimum of 30, because there is one in the 
demand cycle, one just out, one getting ready to go. 30 is not 
the number, but I am just using that illustratively.
    Mr. Lamborn. Okay. Now, if there is sequestration, how 
would that impact the ability of our military to address the 
kinds of threats that you both talked about earlier in your 
testimony?
    Secretary Panetta. All bets are off because it would--
sequestration would demand such drastic across-the-board cuts 
that it is pretty clear that the force structure would be 
reduced drastically. We would be looking at having to increase 
the number of risks within the military. And in addition to 
that, there is no question that we would hollow out the force 
because it would require these drastic, deep across-the-board 
cuts that would affect training, equipment and everything else. 
It would really be devastating in terms of our national 
defense.
    Mr. Lamborn. General, is there anything you would care to 
add to that?
    General Dempsey. As a former service chief, the way that a 
service chief maintains the balance of his force, as he has 
three rheostats. One is manpower, end strength, one--that is 
one. One rheostat. The other end strength is modernization and 
equipment. The other is training and maintenance. The impact of 
the sequestration is not only in its magnitude, it is in what 
it does, what it directs the service chiefs to do in each of 
those rheostats. We lose control. And as we lose control, we 
will become out of balance and we will not have the military 
this Nation needs.
    Mr. Lamborn. Thank you.
    The Chairman. The gentleman's time has expired. Ms. 
Hanabusa.
    Ms. Hanabusa. Thank you, Mr. Chairman. Thank you, Mr. 
Secretary. And thank you, General. Let me begin, first, with 
Mr. Secretary. My questions are on the line of the future. As 
you know, the chairman has put the series of hearings together 
about 9/11 and the future. And you are the fifth in the series.
    General Cody, retired, said this in his testimony, and I 
have written it down because it is something that stuck with 
me. He says the real question with regard to Services budget 
are simple: What missions do you want our military to continue 
to perform? What threats do you want our military to counter? 
What level of readiness do you want the military to sustain? 
And history has taught us that we are not very good at any of 
that. We don't predict well. But we are here and that is almost 
what we are kind of forced to do.
    So, Mr. Secretary, from your vantage point, what is this 
vision that you want to share with us that you perceive this 
military has got to look like? And, General. So you can start 
thinking about your response, I am very curious about your 2020 
Joint Force statement and if you could start with that. But, 
Mr. Secretary, could you begin with that, first?
    Secretary Panetta. I think the General who testified, you 
know, hit the right buttons. We have got to look at the threats 
that are out there. And as I indicated, we are dealing with a 
variety of threats that remain out there that are serious and 
that challenge our security. It begins with terrorism, the 
ability to respond and keep the pressure on terrorism so that 
people can't attack this country, the ability to bring these 
wars that we are engaged in to an end. We are involved in those 
wars. We have got to bring them to an end.
    Thirdly, the area of dealing with Iran and North Korea and 
not only the nuclear proliferation from those countries, but 
the threats that they constitute in the regions that they are 
involved in. We have got to be able to deal with the Middle 
East and the unrest that is going on in the Middle East. We 
have got to be able to deal with the challenge of China and 
rising powers. We have got to be able to deal with cyber.
    That is a quick rundown of the threats that are out there. 
We have got to be able, if we are going to defend this country, 
be able to have an agile, deployable, effective Force that can 
respond to each one of those threats. That is what we have got 
to do. And that is the vision that we have got to create.
    Ms. Hanabusa. Before I get to the General. But, Mr. 
Secretary, isn't that the problem? I mean, I have had these 
discussions and I represent Hawaii. And, of course, China and 
North Korea, they are very real. Is the fact that--to be agile, 
aren't we looking at different types of forces? I mean, we have 
always thought about, I think force-on-force, I think, is one 
of the words that the General used before, but we have 
counterinsurgency, counterterrorism, and all of that are 
different to attack different kinds of problems. Now, if you 
have got a limited amount of resources, what rises to the top? 
Or can anything not rise to the top and we have just got to do 
it all?
    Secretary Panetta. You have got to be damn flexible, and 
that is what we are going to have to be in the future.
    Ms. Hanabusa. General. Thank you, Mr. Secretary.
    General Dempsey. And I thank you, Congresswoman. Well, this 
is exactly the conversation we are having with ourselves. So if 
you are not too busy, we wouldn't mind having you on our 
committee.
    Ms. Hanabusa. I would love to come.
    General Dempsey. Okay. The sort of intellectual framework 
is that when we get to 2020, we need to have taken into account 
the capabilities that we--10 years ago, we didn't have a 
capability in cyber. Ten years ago our special operating forces 
were nowhere near as capable as they are today. These two areas 
are exponentially more capable. So what we are looking at in 
2020 is what is this exponential improvement in capability in 
those two areas that didn't exist 10 years ago 10 years from 
now, what will that allow us to do with the conventional Force 
and how do we integrate those capabilities, not just keep 
piling them on top of each other? Because as we continue to 
pile, we run the risk that you just articulated of becoming 
unaffordable. So that is one answer to your question.
    Secondly, we will have to make some decisions about where 
in the world we will take more or less risk. And that is a 
matter of understanding demographic change, climate change, 
economic change and which countries in the world are appearing 
to align themselves against our interest. And our interests are 
actually not going to change. We need access to resources, we 
need to have freedom of navigation, and we need to be partnered 
on issues of common interests with our allies and partners.
    So we will be able to articulate that world and then look 
back at where we are today, and use the next 4 years when we 
submit 4 POMs [Program Objective Memorandum], 1317 through 
1620, to build that Force.
    Ms. Hanabusa. Thank you, thank you, Mr. Chairman.
    The Chairman. Thank you, Mr. Wittman.
    Mr. Wittman. Thank you, Mr. Chairman. Secretary Panetta, 
General Dempsey, thanks so much for joining us today. Thanks 
for your service to our Nation. And thanks for coming here to 
discuss with us what we know to be some of the most important 
decisions that we all will make in a long time. Secretary 
Panetta, I begin with you. Your statement earlier talking about 
those four decision making guideline, I am in full agreement 
with clear strategic priorities, making sure we have a ready, 
agile and deployable force, making sure we have the capability 
and the capacity as was spoken of. I think those are absolutely 
critical.
    As we look at that clear strategic program plan, whatever 
you want to call it, for the Department of Defense, as you 
spoke of, there are going to be some risks that are out there 
within that decisionmaking framework. The question then 
becomes, as you are faced--both of you are faced with $450 
billion in reductions in the next 10 years is how do you 
calculate those risks? How do you make priority decisions in a 
realm that, as you said, is very dynamic, changes all the time, 
threats emerge, threats disappear?
    My question is this: As you look at prioritizing, can you 
tell us this: Prioritizing--what are the three areas that you 
say have to be preserved and what are three areas most likely 
to be cut?
    Secretary Panetta. You know, again, it really wouldn't be 
fair to try to throw those issues out there because we are 
really in the process of looking at all of those areas and 
trying to decide, you know, as we deal with the threats that 
are out there, what do we need to confront those threats and 
how can we respond, and where is it that we can seek some 
reductions?
    Now, you know, look, let us just begin with what I think is 
going to be, you know, something that is pretty clear. We are 
going to have a smaller force. If you have a smaller force, you 
are not going to be able to be out there responding in as many 
areas as we do now. So the decision then is going to be, you 
know, what are the areas we have to prioritize? For example, 
Korea, you know, we have a large presence in Korea. Korea 
remains a real threat. I think we have got to maintain our 
presence there. Are there other areas, then, where we deploy, 
for example, in Europe, we have got a base structure in Europe 
that is pretty broad. You know, do we need to maintain all of 
that at the same time we are dealing with these other needs?
    So you can see the kind of tradeoffs that are going to have 
to be made, based on the threat, based on the nature of the 
threat. But by doing that, you know, I guess what I need to 
make clear to everyone, particularly on this committee, is that 
when you do that, then there are some risks associated with 
that. What are the risks, for example, if we reduce our 
presence in Europe? Well, it is the relationship with NATO, and 
the role that NATO plays. You know, are we going to be able to 
provide the kind of support that NATO needs in order to do its 
job. Those are the kinds of issues that I think are going to 
have to be.
    Mr. Wittman. Very good. General Dempsey.
    General Dempsey. Yes, Congressman. Just to be clear about 
the end state, I mean, we--I didn't become the Chairman of the 
Joint Chiefs to oversee the decline of the Armed Forces of the 
United States, and an end state that would have this Nation and 
its military not be a global power. So you are never going to 
hear us say, we are going to be really good in the Pacific but 
we are going to completely ignore the Indian Ocean and its 
littorals. We just can't do that. That is not who we are as a 
Nation.
    And so we will remain a global power and the Armed Forces 
of the United States will remain the most dominant military on 
the planet. I mean, we owe the country and we owe the young men 
and women we send into harm's way that.
    So as we look at the future and prioritization, it is not a 
matter of ignoring anything, because again, we can say that, it 
will look good on a PowerPoint slide, it will make us feel 
good, but at the end of the day we are not going to ignore 
anything that threatens our Nation or threatens our interests.
    Risk is generally managed in terms of time. Now, that is 
kind of an indelicate answer. I could certainly flesh it out 
for you over time. So if we were to say that we have to do two, 
three, four things at a time, we could add up the resources 
required, I could put a bill on the table for the SECDEF 
[Secretary of Defense] and say here is what we need, but I know 
you don't have that kind of--so you are going to take all the 
risk. I am just telling you that. And that is not where we need 
to go. Where we need to go is say, look, there are ten things 
we need to be able to do. These we can actually take some risk 
in terms of time, whether it is the time to activate the 
Reserve component, whether it is the time to generate it. So 
time is the independent variable here, and we are trying to 
determine how to use it.
    Mr. Wittman. Very good. Thanks, Mr. Chairman. I yield back.
    The Chairman. Mr. Ryan.
    Mr. Ryan. Thank you, Mr. Chairman. And congratulations to 
both of you. Secretary Panetta, my mom is 100 percent Italian, 
so congratulations on being the second Italian-American 
Secretary of Defense. Let me associate myself first with 
Congressman Loebsack's remarks regarding the defense industrial 
base. I represent a district in northeast Ohio, as you know, 
and it is critical that we have this money that we are 
spending, the billions of dollars invested back into our 
country. And I spent years when I was first on this committee 
dealing with the Berry amendment. And sometimes the waivers 
that were granted through the Berry amendment for specialty 
metals was happening way too often when we have American 
companies, titanium and others, who could provide the materials 
for the military.
    So I hope as you continue to push down through the 
bureaucracy, your view and your vision that some of this is 
taken into consideration. The one issue I do want to talk to 
you about, we see often in our districts when young kids come 
back and they have been killed in action, they are on the front 
page of the paper and we have parades and gut wrenching 
services with their high school buddies and the whole nine 
yards. One of the issues that I have been concerned with too is 
the issue of the kids who come back, can never get 
reestablished. They are dealing with high levels of PTSD [post-
traumatic stress disorder], and they are in the obituary 
section in the back of the paper and there aren't parades, and 
there is no banners and there is not huge services and 
community recognition.
    And one of the issues I think that is dealing this blow to 
these kids is the extreme and prolonged levels of stress that 
they have in multiple tours and being able to deal with this. 
Not only as combat troops, but also trying to deal with the 
stress afterwards. So I want to call to your attention a 
program called the Mindfulness Base Mental Fitness Training 
Program that was established by a woman named Liz Stanley at 
Georgetown. And it is beginning to show both in trials within 
the Army and in the Marines. There was an article in the Marine 
Corps Times a couple of weeks ago called ``Bulletproofing Your 
Brain.'' And it basically helps these folks deal with the 
stress levels that they deal with in combat. And we see with 
high levels of stress, prolonged and extreme levels of stress, 
you have diminishment in your cognitive abilities, diminishment 
in your situational awareness, your ability to focus and causes 
a lot of problems while in theater. But what they are starting 
to see here and study in the field of neuroscience is that you 
can actually change the shape of your brain. You can make new 
neural connections, and I think this is important when you 
begin to teach these soldiers, both to raise their performance 
and improve their performance as soldiers being able to focus 
better, having more efficient use of their faculties as they 
are dealing with this stuff, increased levels of situational 
awareness, but also being able to deal with the stressful 
situations afterwards when they come back.
    And I think this program, if you will look at it, and start 
looking at what some of the studies are suggesting, I think it 
can have a transformational effect. It is my own personal 
opinion. The science is still--the case is being built. But I 
think it can have transformational effects on giving these 
soldiers the tools that they need for when they go back home. 
Benefits now and benefits when they go back home. And the 
reports we are getting back in some of these articles from 
people in the Marines and the platoons is that they think 
something is there. They feel it work and one quote from the 
Marine Times article was a soldier who has been to, I think, 
Afghanistan once and Iraq twice learned this program after he 
got back and he said, boy, I wish I would have had this before 
I went over.
    So I want to bring that to your attention, ask your 
opinions on trying to look at some of these alternative 
approaches to training our soldiers and getting them maybe 
prepared in better ways to deal with what they are going to 
see, hear, smell and have to deal with in war. So----
    Secretary Panetta. Congressman, I want you to know that I 
am willing to look at anything, anything that can help be able 
to serve these men and women when they come back from the 
battlefield to be able to adjust and be able to deal with the 
pressures and the stresses that they bring back with them. This 
is a real problem. You know, we have too high a rate on 
suicides taking place. And it is an issue that bothers me 
terribly because I am writing condolence letters now to those 
families, and that just--you know, it is unacceptable. We have 
got to--we ask these guys to go into horrendous conditions, 
they put their lives on the line, they have to face incredible 
threats to them and to their buddies and suddenly, you know, 
they are pulled out of that and brought back to this country 
and having to face some of the pressures here of having to 
adjust. Whatever----
    Mr. Ryan. I would love to work with you on this program and 
with the General as well. Hopefully at some point we could have 
a committee hearing on it and bring the neuroscientists, bring 
Liz and bring the crew here from some of the folks who have 
experienced it already.
    The Chairman. Good idea. The gentleman's time has expired. 
Mr. Hunter.
    Mr. Hunter. Thank you, Mr. Chairman. Thank you, Mr. 
Secretary, and General, for your service and dedication to 
duty. And it is an honor to be with you today. One, General, I 
am reassured by your comments you just made. It sounds like you 
just said not having a global influence is not an option, but 
it is if a trillion dollars' worth of cuts goes into effect 
over the next 10 years.
    So a lot of folks and my colleagues on both sides have hit 
on the high-level points, but I think what we need to do is 
have the conversation with the American people that if we have, 
like, a Checkpoint Charlie Berlin situation in the Luzon Strait 
or the Strait of Taiwan, we have to build up there for some 
reason and we have a humanitarian disaster, we have a nuclear 
fallout in Japan like we had with their nuke plants, the 
Mediterranean, the Indian Ocean like you mentioned, other parts 
of the South China Sea, Atlantic, Pacific, there is not going 
to be a way for us to respond to everything if we break down 
the military with those cuts.
    So we are going to have to have the conversation with the 
American people, do you not want to help Israel? Because we 
can't help Israel if we have a buildup at Taiwan or some other 
area where we have to stare the bad guys in the eye and build 
up in that region. I just think we have to have that 
conversation because I don't think the American people realize 
that not helping Israel, for instance, is one of the options 
that will need to be on the table if one of those cuts go 
through. So bringing it down from that 10,000 foot view down to 
ground level, let us talk about IEDs. I think that a lot has 
happened under Secretary Gates. You had the UAV [Unmanned 
Aerial Vehicle] Working Group, the IED Working Group, Dr. 
Carter, General Paxton, JIEDDO [Joint Improvised Explosive 
Device Defeat Organization], all of these different groups 
getting together. But it still takes a long time, sometimes 
months, sometimes years to feel deployed, do R&D and get stuff 
to the field, even if it is only an 80 percent solution.
    For instance, the newest thing with the Marine Corps--I was 
there literally not as a Marine, but as a civilian when they 
got the silk underwear because of the IEDs and the way that 
things were going with IEDs and the types of injuries they 
have. But that is the extent of what the American might and the 
American industrial base can provide to our Marines and 
soldiers, is hopefully a cleaner extraction of the 
fragmentation as opposed to a way to combat.
    So my question is, what fresh thinking, what kinds of 
outside-of-the-box ideas are you bringing to the fight on the 
number one threat to our men and women, 70 percent of our 
casualties and KIA [killed in action] are caused by that. 
Historically, low casualty rates compared to any other war in 
human history, but it is still there and that is my question.
    And then if I could, how will these budget cuts if they go 
into effect, affect our counter-IED fight? Thank you.
    General Dempsey. Thank you, Congressman. Thinking of 
defeating the IED is thought about in three aspects. You have 
to defeat the device. You also have to defeat the network that 
produces it, which is the supply chain, the leadership, the 
facilitation, the financing of it. And then there is an issue 
called signatures, which is one of the creative ways we have 
been getting after identifying with--through various sensors 
the signature component of an IED so you can track the network 
and defeat the device. And that work is ongoing. What we have 
done in the Army is essentially said the IED is the enduring 
threat to our force for the foreseeable future. So we need to 
institutionalize--it can't any longer be thought of as a one-
off threat. It is there and it will always be there because the 
enemy knows that asymmetrically they can attack us that way. 
JIEDDO is an important organization. It is fully funded in the 
budgets that we have submitted so that we can do the kind of 
work that you are describing. And so at this point, I can tell 
you that even in the $450 billion-plus cut or reduction, we can 
account for what you said. If the reduction goes deeper than 
that, I would have to--we will have to take a look. But 
everything will be affected if there is another phase of this 
thing.
    Secretary Panetta. I think one of the real success stories 
in my predecessor was the ability to develop the vehicles that 
had to be done on a quick timetable to get them out to the 
battlefield. Under most circumstances, that would have taken 8 
or 10 years. What they did was they basically said we need 
them, we need them now. They made the contract. They required 
that it be produced within a timeframe. They got it done. We 
got it out there and we provided it out in the battlefield. 
That is the model I think we have to follow as we deal with 
these kinds of threats. We can't just sit back and allow this 
thing to go over a long period of time. We have got to get it 
and get it done now.
    Mr. Hunter. The normal acquisition process had to be 
bypassed by this Congress and by your predecessor for that to 
happen. Thank you both. I yield back.
    The Chairman. The gentleman's time has expired. Mr. 
Garamendi.
    Mr. Garamendi. Gentlemen, thank you very much. Mr. Panetta, 
it is always good to share a table or at least an opportunity 
with you. And, General, thank you for your service. I have a 
series of questions. Actually three. I will send them to you in 
writing and save a little bit of time around here. In 
discussions about maintaining our industrial base, which we 
like to call Make It in America, there are numerous questions 
that have arisen about the outsourcing to other countries of 
key military equipment. For example, the fuel for the hellfire 
missile is made in China. It raises a bit of a question. Many 
of the components that deal with the targeting of critical 
weapons are also made overseas in China and other places. This 
is a major concern, and I will send you a more detailed 
question on it.
    The other point that I will just make is that from the far 
left to the far right, various think tanks have been thinking 
about what to do with the military. A very interesting matrix 
can be put together. It was put together by my military fellow, 
and it is very interesting where both come down from the far 
left to the far right and in the middle about things that can 
be done. I will send you that matrix and I think you might find 
it a useful exercise--maybe you have already done it--about 
where at least those two spectrums, far out spectrums, find 
similar potential. I will let it go at that. You can comment if 
you would like. Take a deep breath and take a pass. Thank you 
very much.
    Secretary Panetta. Thank you, John.
    Mr. Palazzo. [Presiding]. At this time, Mrs. Roby from 
Alabama.
    Mrs. Roby. Thank you. I just want to say personally what an 
honor to be here in front of you both today and I just 
appreciate your willingness to serve our country in this 
capacity. I want to touch on something a little bit more on the 
personal side as it relates to our troops. We have talked about 
strategic planning and certainly that is very important as we 
move forward with these cuts. But we have got to talk about the 
morale of the men and women who are currently serving our 
country, both here and abroad and what this whole discussion is 
doing to them as they move forward in their day and nights away 
from their families and really what that looks like.
    I had the opportunity several months ago to sit down with 
some soldiers at Fort Rucker, Alabama, and talk to them about 
what can we do to help support them. And this one soldier 
looked at me and his pregnant wife was sitting at his side and 
he looked at me with tears in his eyes and said, Mrs. Roby, 
don't worry about me, just take care of her.
    And we are fast approaching, as we move towards the 
realness of the sequestration, because as I have said many 
times, that this Joint Committee in a lot of ways is a 
microcosm of all of the problems we already have in Congress. 
And as we move towards this deadline date, it is that soldier 
and his wife and his family that is the real victim in this. 
Time and time again over the course of my short time here in 
Congress, our military families have been the ones that have 
been the insurance policy against political debate here in 
Washington, and I think it is unconscionable, and I think what 
all of your answers that you have provided today are important 
as they relate to specific operations within our military. But 
I just really want to give you both an opportunity to talk 
about the effectiveness, and with the 24/7 news cycle, our 
military families are certainly not immune to the very 
discussions that we are having here. And I have small children 
and I work, my husband and I, very hard to ensure that they 
know that they are loved and that they feel secure. And when 
you have a soldier serving overseas whose spouse is at home 
having to worry about whether or not that paycheck is going to 
come for them to put groceries on the table or to make the car 
payment or the house payment.
    You, General, said that no matter how awesome our 
technology is at moving forward as a progressive military, our 
men and women in uniform are what make this military great. So 
I just wanted to give you an opportunity to both respond to 
that aspect of what we are looking at down the road.
    Secretary Panetta. Congresswoman, I thank you for that 
question. Our men and women are out there putting their lives 
on the line in order to defend our democracy. I think that one 
of the great national security threats is the dysfunctionality 
of Congress and its inability to confront the issues that we 
face now. And I think your concern is that this committee that 
has been established might fail to provide the leadership that 
it has been given, or the responsibility it has been given to 
be able to come up in a responsible way with additional deficit 
reduction. That concerns me as well.
    I have to share with you, I served in this House for 16 
years. During that 16 years, we faced a lot of great threats. 
We faced a lot of problems. But the leadership was there on 
both sides of the aisle, Republicans and Democrats, to work 
together to try to find solutions to these issues, not to walk 
away from them. And I think what is very important for this 
super committee and for all Members of Congress is to take the 
time to think about the sacrifice that those men and women go 
through to put their lives on the line in order to be able to 
defend this country. And if the Members of Congress would be 
willing to engage in the same kind of sacrifice, then I think 
they will have earned the right to represent those constituents 
in Congress.
    Mrs. Roby. Thank you, I appreciate that. General.
    General Dempsey. It is hard to do a better job of answering 
your question and the concern behind it than the Secretary just 
did. In everything we are doing right now, in every 
deliberation about strategies and how we are going to absorb 
different reductions, the family, the soldier, the family, the 
veterans, the wounded warriors, gold star families are always 
the first issue that we discuss. And if we only end up with 1 
dollar at the end of all of this, it will go to a family.
    Mrs. Roby. I appreciate that. Mr. Chairman, I yield back.
    Mr. Palazzo. The chair now recognizes Mr. Coffman from 
Colorado.
    Mr. Coffman. Thank you, Mr. Chairman. First of all, thank 
you so much for your decades of distinguished service. 
Secretary Panetta, General Dempsey, and for your dedication to 
maintaining a strong military. I am reminded of the history of 
Great Britain after World War II where they still saw 
themselves as a world power but they came out heavily in debt, 
they were weakened by World War II. They were still engaged in 
anti-communist operations in Greece and Turkey but then they 
had to turn to the United States, and we assumed that role and 
there is nobody behind us.
    China is a rising power and I don't think we would ever 
want to turn that responsibility over to China. So we have to 
maintain that strong military, that global power as both of you 
have so well articulated today. Let me put three questions 
forward and if we run out of time in terms of answering them, 
then if you could answer them on the record. The first one is 
that we still have a Selective Service system in place. Yet, 
according to the Army recruiting command, individuals between 
the ages of 18 and 22, 75 percent of them, I believe, are 
ineligible today for enlistment in the United States Army of 
young people between the ages of 18 and 22.
    In 1973 was the last year that we had the draft. In 1974, 
we disbanded Selective Service. In 1979, Jimmy Carter put it 
back on the table as a response to the Soviet invasion of 
Afghanistan. And it still exists today, and it is not even in 
your budget. It is an independent agency and it is under the 
Financial Services Committee. It is not even under this 
committee. So the question is, do we still need it? The second 
is in South Korea, I believe we are moving from 1-year 
assignments to 3-year unaccompanied--3-year accompanied tours 
for our 28,000-force presence there. That decision was made, I 
think, really during the height of the Iraq war when dwell 
times were next to nothing. But we are phasing out of Iraq now, 
we will be phasing down in Afghanistan, dwell times will expand 
and the question is, do we really need to spend the $13 billion 
that I believe is necessary in military construction to 
accommodate that change in policy? Can we do something that is 
more cost effective given the expansion of dwell times like 
deploying battalions for 6-month rotations to and from CONUS.
    The last issue is concerns--I think we have rank inflation 
in the military and I would like you to take a look at that. I 
believe if we look at the height of the cold war when I was in 
the United States Army, we had a military much larger than. But 
I believe that there are more 4-star flag officers in the 
military today and a much smaller Force. I think we have as 
many admirals as we have ships in the United States Navy. And I 
think that that is duplicative to the rest of the military. And 
I would certainly like you to take a look at that and the costs 
associated with that. Could you go through those three 
questions, please.
    General Dempsey. I will go from bottom to top and the 
Secretary will take the question about Selective Service. We 
are looking at rank. Some of the rank inflation is a result of 
international partners and their desire for flags, but we are 
looking at that, believe me. Secondly, on Korea, tour 
normalization, it is part of our strategy review to look at our 
forward presence--wherever we happen to be, but notably in 
Korea and in Europe, and again, to determine how best to do it 
in an affordable way and I assure you that we are alert to the 
fact that tour normalization to 3-year tours might become cost 
prohibitive. We do need some structure there with families 
because of the message it sends and the readiness increases 
when you have soldiers there for a longer period of time.
    Secretary Panetta. I mean, we are in the process of looking 
at everything that costs a lot of money and that is one of the 
things that costs a lot of money that we need to look at and 
determine whether or not we can find some savings in the way we 
approach that. On the selective service, the registration, 
registration is still required. You are right, that there is a 
system. It is not associated with us. But, you know, my view is 
that we ought to maintain the registration aspect because 
particularly as we go through these budget cuts, particularly 
as we go into the future, if we face, you know, one of those 
surprises, if we face one of those crises that suddenly occur, 
we have to have some mechanisms in place in order to be able to 
respond. And while right now I have to tell you the volunteer 
force is the best, I wouldn't trade it for anything, it really 
has served its purpose, but I think we always have to be ready 
for that possible contingency in the future if we suddenly had 
to face an unexpected event.
    Mr. Coffman. Thank you. Mr. Chairman. May I have 30 more 
seconds?
    Mr. Palazzo. Without objection, so ordered.
    Mr. Coffman. Thank you, Mr. Chairman. In terms of looking 
at forward bases and whether or not we can demonstrate our 
support for our allies, whether NATO or South Korea through 
scheduled regular routine joint military exercises, we are 
spending almost 4 percent of our GDP [Gross Domestic Product] 
on defense. I think only 4 of our 28 NATO allies are spending 
the required 2 percent required under the NATO charter.
    In South Korea, they are spending 2.7 percent of their 
gross domestic product on defense. I believe we are at north of 
3.6 percent. It seems like we care more about defending the 
South Koreans and the Europeans than the Europeans and the 
South Koreans. So I think that we need to strike a balance in 
that. Thank you, Mr. Chairman. I yield back.
    Mr. Palazzo. The chair now recognizes Mr. Scott from 
Georgia.
    Mr. Scott. Thank you, Mr. Chairman. General, Mr. Secretary, 
I appreciate you being here and we have talked a lot about the 
cuts on the top line. And I represent Robins Air Force Base in 
Georgia and we have Moody to my south, Benning to my west, 
Kings Bay to my east, Stewart, Gordon. I should not have 
started naming all of the bases, but the military industrial 
base and the men and women of the Armed Services are very 
important to us, and I did not vote for the sequestration. I 
think it is too much.
    Now, I do believe that properly managed, we can take our 
cuts and I believe that--I couldn't think of a better person to 
help us manage through that than you, Mr. Secretary. One of my 
concerns is when I look at the things that we are doing that 
are cost drivers, the Energy Policy Act of 2005 says that, in 
our new facilities, we can have zero percent of fossil fuels in 
providing the energy for those facilities by 2030. That means 
no natural gas, it means no coal, it means no petroleum. And I 
guess one is, is that realistic? And two is, I think this is 
just one example I would say of a policy that has been put in 
place with well-meaning intentions, that is going to take 
energy as a percentage of your operations from approximately 3, 
3\1/2\ percent as I understand today, up to a much more 
significant portion of your budget. And I guess my question is, 
what other cost drivers are there like that that we could make 
some changes to that would help you in reducing your costs?
    Secretary Panetta. Congressman, you know, as part of the 
strategy approach to look at, first of all, the overall needs 
and then determine where we go, I really do have to--I have got 
to put everything on the table including what you just 
discussed. I mean, I think we have to look at all of that to 
make sure that we are implementing the most cost-efficient 
approach to dealing with these issues. I mean, I understand, 
you know, at a time when, you know, we we're getting a blank 
check and things were doing fine, you could do all kinds of 
things. But now I am in a situation where I frankly have to 
tighten the belt, and that means I have to look at everything. 
And I think the areas you have pointed out are something we 
have to look at to make sure it makes sense.
    Mr. Scott. I hope you give us a list of the things that you 
need us to help you with along those lines because I do believe 
that in order for us to reach our top line goals without 
affecting national security, that we are going to have to look 
at the cost drivers like that. And with that said, I know that 
you all waited 3 hours for me to ask that question. I will just 
tell you we are ready, willing and able to work with the two of 
you to solve this challenge. I yield back my time.
    Mr. Palazzo. The gentleman yields back. The chair now 
recognizes the gentleman, Mr. Young, from Indiana.
    Mr. Young. Thank you, Mr. Chairman. Thank you, Mr. 
Secretary and General Dempsey, so much for visiting us today. I 
have to say I have been incredibly encouraged, more so than any 
HASC [House Armed Services Committee] hearing I have attended 
thus far during my first term here because you discussed, in a 
very direct way, the need to assess risk, to accept risk, to 
articulate precisely which risks we are willing to accept, to 
do the whole probability of risk times anticipated costs of any 
given threat. That is exactly the sort of analysis that I have 
been pushing for months here and I know others have as well.
    So I thank you for your leadership. Coming out of that 
analysis, of course, we will be able to, of course, prioritize 
missions and that, in turn, will inform our spending decisions 
here in Washington, where do we fund personnel? Where skills 
sets are needed? What weapons platforms? That is the way we do 
business and it is really refreshing.
    I am going to pivot a bit having given you those kudos to 
the war in Afghanistan where I see less clarity and I hope in 
coming weeks and months, perhaps years, we will be required to 
get some more clarity as to what our Nation's doctrine is. Mr. 
Secretary, you indicated that we are in Afghanistan to keep 
Afghanistan from becoming a safe haven for terrorism. True, it 
seems. And I hear that from many. It is a bit too vague for me. 
We did, as Mr. Jones said earlier, we got bin Laden. Al Qaeda 
has dispersed around the world. If a safe haven for terrorists 
exists, it is right next door in Pakistan.
    So what is this doctrine that justifies a massive ground 
presence in Afghanistan? How do we measure success in that 
theater in particular, but also in other theaters, if it is 
justified, to have an American presence there? What is the exit 
strategy? It is going to take well past my reserve time here 
for you to be able to answer that. But as you get halfway into 
answering the first question of that litany, my time will 
expire.
    So I just want to encourage you to clarify these things. 
People are losing their legs, people are dying and we owe it to 
all of them and their families and the United States of 
America. I am going to focus narrowly on one aspect of our exit 
strategy, though. And that is our fiscal commitment to the 
region. It remains open-ended. Right now we are spending $120 
billion a year, and as far as the eye can see from my vantage 
point, we are going to continue to spend money in that region 
in the form of foreign aid and military assistance to harden 
the police and military forces there.
    What is this Administration, Mr. Secretary, what is this 
Administration's economic strategy for Afghanistan, which, 
under the law, it was required to present to this Congress 
before you were sworn in back in June. We are still waiting on 
it.
    Secretary Panetta. Congressman, again, I really understand 
the concerns and all of the issues you raised, and I think we 
frankly, both of us, can more fully respond to it. But I mean I 
didn't support going into Iraq. But when you look at Iraq 
today, Iraq is a more stable country and in a very important 
region that is exercising self-government, is exercising the 
kinds of rights and responsibilities that it never enjoyed in 
the past. And as a result of that, it becomes a more secure 
area and it becomes an area in which they can govern 
themselves. And more importantly, they themselves can exercise 
the responsibility of maintaining stability there. That is an 
important achievement. That is an important achievement. I hope 
that we can do the same in Afghanistan.
    Mr. Young. And so that is, as you have articulated at least 
in summary fashion, the economic strategy for Afghanistan? That 
is narrowly what I am asking for here. And if you wish to 
follow up, I would certainly understand that.
    Secretary Panetta. Well, I think--obviously in Iraq, the 
economic strategy is a lot easier because they have an oil 
resource. In Afghanistan, it is much tougher. Now they do have 
minerals. They do have resources. None of that has really been 
fully developed. But I think providing that kind of support and 
allowing them to be economically independent is going to be 
part of the solution here; otherwise, it is not going to work.
    Mr. Young. And as you say independent, I think trade. Might 
trade be part of the answer, not just in Afghanistan but 
regionally?
    Secretary Panetta. Yes. Very much.
    Mr. Young. Well, I am very encouraged to hear that and I 
look forward to working with the administration, this 
Department, and others to move that ball forward. Thank you.
    Mr. Palazzo. The chair now recognizes Mr. Platts from 
Pennsylvania.
    Mr. Platts. Thank you, Mr. Chairman.
    Mr. Secretary, General Dempsey, I am honored to be with 
you. And I first want to thank both of you for your many, many 
years of dedicated service to our Nation. We certainly are 
blessed by both of you, what you have done in the past and what 
you continue to do now in your new positions.
    I want to first express, on policy, gratitude to the frank 
assessment of where we are; that while we are addressing the 
fiscal challenges of our Nation that we don't do it on the 
backs of our courageous men and women in uniform and at the 
risk of our national security. And you both play very important 
roles in your assessment of where we are with the $450 billion-
plus cuts that are already coming and what that will do to 
national security and our commitment to our men and women in 
uniform and their families is so important to this dialogue, 
this debate that is ongoing. So I thank you.
    Mr. Secretary, I want to also commend you and your 
testimony. I am running back and forth between a markup in 
Oversight and Government Reform. But I did get to hear on C-
SPAN radio your opening statements, although I wasn't here in 
the room, and your focus on financial management within the 
Department. In the Oversight and Government Reform Committee, I 
chair the Subcommittee on Financial Management. Just 3 weeks 
ago, I had Under Secretary Hale's deputy before us and talking 
about where DOD is, moving to 2017. I was delighted as I 
listened to the radio this morning and heard your reference to 
trying to expedite the process in getting to that clean audit. 
And just, I guess two words of caution is one that it is so 
important that we get there because it will allow a better 
management of your resources, especially in tight fiscal times, 
but that it be true systemic changes, not ultimately a heroic 
effort to get a clean audit. And you reference in your 
testimony financial controls. Internal controls is where it is 
at. And the second is that we not repeat the errors of the past 
with the DIMHRS plan, Defense Integrated Military Human 
Resource System, that over 12 years, we spent over $1 billion 
on and unfortunately did not get a result from $1 billion of 
taxpayer funds. We learned from that and not to repeat that. 
But your leadership on financial management on the civilian 
side and General Dempsey on the uniformed side is going to be 
key. And this ultimately is making sure we have the resources 
to provide the training, the equipment that our men and women 
need and we do right by them and their families. So your focus 
on that.
    A final one, really maybe beyond the general scope of 
today's hearing. But just a concern I have regarding our 
efforts in Afghanistan. And that is, when the President 
announced the surge, which I commended, back in December of 
2009, and then the goal of starting to draw down troops this 
year, an important aspect of his statement was based on the 
facts on the ground. And I accept the decision. He is Commander 
in Chief and our military leadership at the Department that we 
can begin that 10,000-troop drawdown this year. My concern is 
that we are already committed to 23,000 next year when we don't 
know what the facts on the ground will be next year. And if we 
are going to stick by that number, I hope within the Department 
and with the Joint Chiefs that we will look at at least moving 
it back to December 31st once the winter sets in and the true 
fighting season is over because now I think it is currently 
September 30th, and I think that creates a hardship for our 
commanders on the ground in how to deal with the full fighting 
season in Afghanistan next year.
    So no questions. I will let you wrap up. You have been very 
patient with all of us. But again, I will just conclude with 
thanks for both of your leaderships. We are blessed because of 
both of you being in the position you are in.
    Secretary Panetta. Congressman, thank you for all of your 
remarks.
    On the last point, I want to assure you, General Allen has 
just been outstanding in the way he has addressed his command 
position there. And I am going to rely a great deal on his 
recommendations as we go through this process.
    Mr. Platts. Great to hear. Thanks again. And I wish you 
both great success in your new assignments. And again, as a 
Nation, to have both of you in those positions is a blessing 
for our Nation and for our security.
    With that, I yield back, Mr. Chairman.
    Mr. Palazzo. All right. The gentleman yields back. And 
seeing no more questions, I will reserve the last question for 
myself.
    Secretary Panetta, as others advocate for immediate and 
sharp cuts to defense, the actual implementation of such cuts 
are rarely discussed. I am concerned that such a rapid decline 
in funding could result in an increase, not a reduction in 
short-term costs for things such as termination cost on 
contracts you have already committed to and increased unit 
procurement costs as production quantities are reduced. Can you 
describe to the committee how such unplanned reductions, should 
they result, be implemented? And what liability could we face 
because of the termination of many of the planned procurements?
    Secretary Panetta. I think we have got to take those issues 
into consideration. Otherwise I don't want to cut off my nose 
to spite my face in this process. And if we try to get savings 
that we have identified, and it will wind up costing us more 
because we have done it in a stupid fashion, I think that is a 
mistake. As I mentioned earlier in my testimony, I went through 
the BRAC process. And I know that all of the dollars that 
people looked at for, you know, huge savings in BRAC. And yet 
they didn't take into consideration the cleanup. They didn't 
take into consideration all of the work that had to be done. 
They didn't take into consideration all of the needs that had 
to be addressed. And in many cases, it wound up costing a lot 
more. I don't want to repeat that mistake.
    Mr. Palazzo. Very well. Again, seeing no questions, Members 
may have additional questions. Please respond to them in 
writing.
    I want to thank the witnesses for their service to their 
country and for their testimony here today. The witnesses are 
excused. This hearing is adjourned.
    [Whereupon, at 1:11 p.m., the committee was adjourned.]
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                            A P P E N D I X

                            October 13, 2011

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              PREPARED STATEMENTS SUBMITTED FOR THE RECORD

                            October 13, 2011

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              Statement of Hon. Howard P. ``Buck'' McKeon

              Chairman, House Committee on Armed Services

                               Hearing on

        The Future of National Defense and the U.S. Military Ten

         Years After 9/11: Perspectives of Secretary of Defense

         Leon Panetta and Chairman of the Joint Chiefs of Staff

                         General Martin Dempsey

                            October 13, 2011

    The House Armed Services Committee meets to receive 
testimony on ``The Future of National Defense and the U.S. 
Military Ten Years After 9/11: Perspectives of Secretary of 
Defense Leon Panetta and Chairman of the Joint Chiefs of Staff 
General Martin Dempsey.''
    This hearing is part of our ongoing series to evaluate 
lessons learned since 9/11 and to apply those lessons to 
decisions we will soon be making about the future of our force. 
As our series draws to a close, we have received perspectives 
of former military leaders from each of the Services, former 
chairmen of the Armed Services Committees, as well as outside 
experts. Today we will change direction as we look to the 
viewpoints of our sitting Secretary of Defense and Chairman of 
the Joint Chiefs of Staff. Our witnesses today have spent 
decades serving our Nation. Thank you for being with us and 
your public service.
    As I continue to emphasize, our successes in the global war 
on terror, and in Iraq and Afghanistan, appear to be lulling 
our Nation into the false confidence of a September 10th 
mindset. Too many appear to believe that we can maintain a 
solid defense that is driven by budget choices, not strategic 
ones. While I agree that the military cannot be exempt from 
fiscal belt-tightening, we have to put this debt crisis into 
perspective if we're to find our way back into fiscal 
responsibility. Defense has contributed more than half of the 
deficit reduction measures taken to date. There are some in 
government who want to use the military to pay for the rest, to 
protect the sacred cow that is entitlement spending.
    Not only should that be a non-starter from a national 
security and economic perspective, but it should also be a non-
starter from a moral perspective. Consider that word, 
entitlements. Well, entitlements imply that you are entitled to 
a certain benefit, and I can't think of anyone who has earned 
that right ahead of our troops. By volunteering to put their 
lives on the line for this country, they are entitled to the 
best training, equipment, and leadership our Nation can 
provide.
    But all this talk in Washington lately about dollars 
doesn't translate well into actual impacts on the force and 
risk to our Nation. Yesterday, former Chairman Duncan Hunter 
encouraged us all to answer these questions before we voted to 
cut any more from defense:

         LIsn't our primary Constitutional duty to 
        defend our Nation?
         LIs the world suddenly safer today?
         LIs the war against terrorism over?

    I hope our witnesses today can help us understand the 
ramifications of these possible cuts in relation to our force 
structure as well as our ability to meet future needs of our 
national defense. How can we make sure DOD is a good steward of 
the taxpayers dollar, without increasing the risk to our Armed 
Forces?
    The U.S. military is the modern era's pillar of American 
strength and values. In these difficult economic times, we 
recognize the struggle to bring fiscal discipline to our 
Nation. But it is imperative that we focus our fiscal restraint 
on the driver of the debt, instead of the protector of our 
prosperity.

                      Statement of Hon. Adam Smith

           Ranking Member, House Committee on Armed Services

                               Hearing on

        The Future of National Defense and the U.S. Military Ten

         Years After 9/11: Perspectives of Secretary of Defense

         Leon Panetta and Chairman of the Joint Chiefs of Staff

                         General Martin Dempsey

                            October 13, 2011

    I would like to join the Chairman in welcoming Secretary 
Panetta and General Dempsey in their first appearance before 
the House Armed Services Committee. In these times of budgetary 
uncertainty, your testimony is particularly important.
    Secretary Panetta, as a former chairman of the House Budget 
Committee and director of the Office of Management and Budget, 
you know the realities as well as, if not much better than, any 
of us sitting on this dais.
    Our country faces a budget dilemma--we don't collect enough 
revenue to cover our expenditures. According to the House 
Budget Committee, we currently must borrow about 40 cents for 
every dollar the Federal Government spends. This problem must 
be addressed in two ways: Spending will have to come down, and 
we're going to have to generate new revenues.
    Like many, if not most, of our members here, I share the 
view that large, immediate cuts to the defense budget would 
have substantially negative impacts on the ability of the U.S. 
military to carry out its missions. I am sure that both our 
witnesses share this view, and I hope General Dempsey can help 
us understand the impacts of additional potential cuts. I am 
also deeply concerned about cuts to all non-entitlement 
spending, which bore the brunt of the recent deficit deal. If 
the ``super committee'' fails to reach a deal, then cuts 
through sequestration will only impose deeper and more 
dangerous cuts to our military and non-entitlement spending 
such as infrastructure, education and homeland security.
    I believe that we can rationally evaluate our national 
security strategy, our defense expenditures, and the current 
mission sets we ask the military to undertake and come up with 
a strategy that requires less funding. We on this committee 
like to say that strategy should not be driven by arbitrary 
budget numbers, but by the same token not considering the level 
of available resources when developing a strategy is 
irresponsible. To that end, I congratulate our witnesses, and 
their predecessors, for undertaking a comprehensive review of 
our current strategy. I know we all are looking forward to the 
results of that ongoing review, and I hope that you can give us 
some insight into how and where it is going. I for one believe 
that we can and must spend smarter and not just more.
    It is also important that we address the revenue side of 
our budget problem. We must consider raising additional 
revenue. In order to avoid drastic cuts to our military and 
other important programs, revenue streams must be enhanced.
    It is my hope that this hearing will help remind everyone 
here that we have to make some serious choices. Our budget must 
be looked at in a comprehensive manner. If we are serious about 
not cutting large amounts of funding from the defense budget, 
something else has to give. Large, immediate, across-the-board 
cuts to the defense budget, which would occur under 
sequestration, would do serious damage to our national 
security. In order to avoid large cuts to the defense budget, 
we're going to have to stop repeating ideological talking 
points and address our budget problems comprehensively, through 
smarter spending and increased revenue.
    Thank you again, Mr. Chairman, for holding this hearing. 
And thank you to our witnesses for appearing here today.

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                   DOCUMENTS SUBMITTED FOR THE RECORD

                            October 13, 2011

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              QUESTIONS SUBMITTED BY MEMBERS POST HEARING

                            October 13, 2011

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                    QUESTION SUBMITTED BY MR. JONES

    Mr. Jones. Yesterday in the hearing, I was not able to stay for the 
second round of questions. As you recall, you agreed with former 
Secretary Gates' Afghanistan withdrawal assessment. He made these 
before the HASC on February 16, 2011. I have enclosed his testimony for 
your information. Please write back to me as to your assessment on how 
many American service members will be killed and wounded in action by 
the time we withdraw our forces in Afghanistan by the end of 2014?
    ``As we end the U.S. troop presence in Iraq this year, according to 
the agreement with the Iraqi government, the overall deployment demands 
on our force are decreasing significantly. Just three years ago, we had 
some 190,000 troops combined in Iraq and Afghanistan. By the end of 
this calendar year we expect less than 100,000 troops to be deployed in 
both of the major post-9/11 combat theaters, virtually all of those 
forces being in Afghanistan. That is why we believe that, beginning in 
FY 2015, the U.S. can, with minimal risk, begin reducing Army active 
duty end strength by 27,000 and the Marine Corps by somewhere between 
15,000 and 20,000. These projections assume that the number of troops 
in Afghanistan would be significantly reduced by the end of 2014, in 
accordance with the President's strategy. If our assumptions prove 
incorrect, there's plenty of time to adjust the size and schedule of 
this change.''
    Secretary Panetta. The United States' focus in Afghanistan is to 
disrupt, dismantle, and defeat al-Qaida and to ensure Afghanistan does 
not again become a safe haven from which terrorists attack the United 
States. We are extraordinarily fortunate that so many brave Americans 
are willing to defend the country from those who wish us ill. Through 
their service we are all safer. The risks of the battlefield are very 
real, and casualties are a consequence of war not taken lightly.
    The Department of Defense is doing everything it can to give 
servicemen and women the training, equipment, and support required. I 
can assure our forces and their families that my commitment, and the 
commitment of our military leadership, is to ensure they have the 
resources and training they need to carry out their missions. Our 
forces are made up of our nation's finest, and they deserve nothing 
less.
                                 ______
                                 
                    QUESTIONS SUBMITTED BY MR. SMITH

    Mr. Smith. I want to call your attention to a legislative issue 
that has national security and budgetary implications for our efforts 
in Afghanistan, Colombia, Mexico, and elsewhere. The current CR does 
not include an explicit extension of certain counternarcotics (CN) 
authorities that expired in FY2011. Extensions are included in both the 
House and Senate versions of the FY12 NDAA and were included in the 
Department's requests for the CR.
    We do not believe it was the intent of Congress for these 
activities to stop, but due to a decision by the DOD GC, the lack of an 
extension for these authorities, particularly for section 1004 support 
for law enforcement, is causing considerable difficulty and jeopardizes 
a wide range of CN activities, including some key efforts in the 
Afghanistan theatre. Is there a way you can help us bridge the gap 
until the NDAA is passed or ask the DOD GC to re-visit his decision?
    Secretary Panetta. As several Combatant Commanders, the Director 
for National Drug Control Policy, and others have argued, the temporary 
lapse in DOD's counternarcotics authorities is indeed having 
significant national security implications for programs in Afghanistan, 
Colombia, Mexico, and along the Southwest border. While I agree that it 
does not appear it was Congress's intent for these activities to stop, 
the fact that these authorities do not exist in law left the Department 
no other choice but to suspend certain counternarcotics support 
activities.
    For the past six weeks, the Department has been working with the 
committee and other congressional leaders to resolve this situation. I 
understand that last week the DOD General Counsel briefed you and 
Chairman McKeon on the rationale behind his determination, and I am 
unaware of any legislation or other information that would contradict 
the Department's position. DOD made every effort to mitigate the impact 
of this lapse in authority, but many of these efforts are incomplete 
and/or temporary solutions. Unfortunately, there is simply no way to 
``bridge the gap'' any further. In fact, many of the mitigation efforts 
will have run their course over the next several weeks, since 
alternative authorities and related funding sources will have been 
exhausted. The Department has therefore asked the committee to provide 
legislation extending these authorities in the next continuing 
resolution. I would ask that this issue be given the highest priority 
consideration as you complete work on the continuing resolution and the 
FY 2012 Defense Authorization bill.
    Mr. Smith. We focus on GTMO, but I understand there are issues 
involving detainees charged with serious offenses in Iraq (Daqduq) and 
the UN report regarding humanitarian concerns in Afghan prisons. How do 
these affect our ability to detain enemy fighters? What is the 
Administration planning to do regarding Daqduq? Are we reaching a point 
in Afghanistan where US prisons will reach capacity? If so, what is our 
plan?
    Secretary Panetta. The President recently announced that all U.S. 
military forces will leave Iraq by December 31, 2011. In this context, 
the Administration continues to look at its options for adequately 
mitigating the threat posed by Daqduq. Regarding Afghanistan, the 
United Nations Assistance Mission to Afghanistan (UNAMA) report 
involved several detention centers run by the National Directorate of 
Security and the Afghan National Police. The Commander, International 
Security Assistance Force (COMISAF) has suspended the transfer of 
detainees captured by ISAF forces, including U.S. forces operating 
under NATO operational control of COMISAF, to these Afghan detention 
centers and jails pending further investigations of the allegations, 
inspections of the Afghan facilities implicated in the report, and 
other remedial measures. We will continue to support the actions of the 
Afghan government to investigate allegations of human rights abuses and 
hold those responsible accountable. This temporary suspension does not 
affect detainees captured by U.S. forces operating under U.S. Operation 
ENDURING FREEDOM (OEF) authority and transferred to the U.S.-run 
Detention Facility in Parwan (DFIP), since such detainees are not sent 
to the Afghan facilities implicated in the report.
    U.S. detention capacity at the DFIP is nearing its current capacity 
due to the persistently high rate of new captures by U.S. forces 
conducting combat operations under OEF authority and the limited 
capacity of the Afghan government to accept detainee transfers for 
purposes of criminal prosecution or other appropriate disposition. To 
address these issues, DOD is expanding the DFIP and reassessing how 
best to transition detention facilities and operations to Afghan 
control. Building the judicial capacity of the Afghan government 
remains a top priority.
    Mr. Smith. There is much concern raised about the risk of 
transferring detainees from GTMO. Is there similar risk if we don't 
transfer anyone else from GTMO? What would it be?
    Secretary Panetta. The inability to transfer detainees from 
Guantanamo attracts criticism from non-governmental organizations and 
the international community. Presidential Executive Order 13492 
mandated the closure of detention facilities at Guantanamo Bay and 
directed a review of each Guantanamo detainee. A Department of Justice-
coordinated Guantanamo Review Task Force completed its work in January 
2010 and recommended that a number of detainees be transferred from 
GTMO, subject to appropriate security assurances from the countries to 
which the detainees would be transferred.

    Mr. Smith. I want to call your attention to a legislative issue 
that has national security and budgetary implications for our efforts 
in Afghanistan, Colombia, Mexico, and elsewhere. The current CR does 
not include an explicit extension of certain counternarcotics (CN) 
authorities that expired in FY2011. Extensions are included in both the 
House and Senate versions of the FY12 NDAA and were included in the 
Department's requests for the CR. We do not believe it was the intent 
of Congress for these activities to stop, but due to a decision by the 
DOD GC, the lack of an extension for these authorities, particularly 
for section 1004 support for law enforcement, is causing considerable 
difficulty and jeopardizes a wide range of CN activities, including 
some key efforts in the Afghanistan theatre. Is there a way you can 
help us bridge the gap until the NDAA is passed or ask the DOD GC to 
re-visit his decision?
    General Dempsey. We agree that it was not the intent of Congress 
for these activities to stop. As you mention, both the House and the 
Senate versions of the FY12 NDAA contain language extending these 
authorities. It is my understanding that an agreement has been reached 
between the Department and Congress on resolving the expiration of the 
CN authorities in the Statement of Managers that will accompany the 
next continuing resolution (CR). The proposed language directs the 
Department of Defense to continue to carry out, for the duration of the 
CR, the CN programs conducted in fiscal year 2011. Once the CR is 
signed, the Department will begin to restore CN programs impacted by 
the expiration of the CN authorities. All geographical combatant 
commands, Special Operations Command, and the Services implemented 
temporary fixes to minimize the impacts caused by the expiration of the 
CN authorities. However, temporary fixes were not necessarily a `one 
for one' replacement and in some cases there were no temporary fixes, 
requiring the subsequent cancellation or postponement of a mission or 
program.
    Mr. Smith. We focus on GTMO, but I understand there are issues 
involving detainees charged with serious offenses in Iraq (Daqduq) and 
the UN report regarding humanitarian concerns in Afghan prisons. How do 
these affect our ability to detain enemy fighters? What is the 
Administration planning to do regarding Daqduq? Are we reaching a point 
in Afghanistan where US prisons will reach capacity? If so, what is our 
plan?
    General Dempsey. As you know, the President recently announced that 
all U.S. military forces will leave Iraq by 31 December 2011. The 
Administration continues to look at its options for adequately 
mitigating the threat posed by Daqduq. Regarding Afghanistan, the 
United Nations Assistance Mission in Afghanistan (UNAMA) report 
involved several detention centers run by the National Directorate of 
Security and several jails operated by the Ministry of Justice. The 
Commander, International Security Assistance Force (COMISAF) has 
suspended the transfer of detainees captured by ISAF forces, including 
U.S. forces operating under NATO operational control of COMISAF, to 
these Afghan detention centers and jails pending further investigations 
of the allegations, inspections of the Afghan facilities implicated in 
the report, and other remedial measures. We will continue to support 
the actions of the Afghan government to investigate allegations of 
human rights abuses and hold those responsible accountable. This 
temporary suspension does not affect detainees captured by U.S. forces 
operating under U.S. Operation ENDURING FREEDOM (OEF) authority and 
transferred to the U.S.-run Detention Facility in Parwan (DFIP), since 
such detainees are not sent to the Afghan facilities implicated in the 
report.
    U.S. detention capacity at the DFIP is nearing its current capacity 
due to the persistently high rate of new captures by U.S. forces 
conducting combat operations under OEF authority and the limited 
capacity of the Afghan government to accept detainee transfers for 
purposes of criminal prosecution or other appropriate disposition. To 
address these issues, DOD is expanding the DFIP and reassessing how 
best to transition detention facilities and operations to Afghan 
control. Building the judicial capacity of the Afghan government 
remains a top priority.
    Mr. Smith. There is much concern raised about the risk of 
transferring detainees from GTMO. Is there similar risk if we don't 
transfer anyone else from GTMO? What would it be?
    General Dempsey. Presidential Executive Order 13492 ordered the 
closure of the detention facilities at Guantanamo Bay and directed a 
review of each Guantanamo detainee. The Department of Justice-led 
Guantanamo Review Task Force completed its work in January 2010. The 
task force recommended that a number of detainees be transferred from 
GTMO, subject to appropriate security assurances. The inability to 
transfer detainees from Guantanamo attracts criticism from both 
domestic groups, including non-governmental organizations, and the 
international community.
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MR. TURNER

    Mr. Turner. Do you agree with Secretary Gates that the 
modernization project is very important both from a national security 
standpoint and from a perspective of sustaining political support for 
the New START Treaty?
    Secretary Panetta. Yes. The nuclear enterprise remains, today and 
for the foreseeable future, a foundation of the U.S. deterrence 
strategy and defense posture. The U.S. nuclear weapons infrastructure 
requires significant investment. In order to remain safe, secure, and 
effective, the U.S. nuclear stockpile must be supported by a modern 
physical infrastructure and staffed by the most promising scientists 
and engineers of the next generation.
    Mr. Turner. What is your assessment of the cuts proposed for NNSA, 
given that DOD transferred top-line authority specifically to support 
these important defense programs?
    Secretary Panetta. The Department of Defense (DOD) relies upon the 
NNSA to provide and sustain the nation's nuclear warheads, and develop 
and maintain the Navy's nuclear reactors in support of our strategic 
deterrence mission. As stated in the Nuclear Posture Review, U.S. 
nuclear weapons have endured well beyond their originally planned 
lifetimes. The 1251 report submitted to Congress last February outlined 
DOD and Department of Energy (DOE)/NNSA nuclear enterprise funding 
requirements. If authorized and appropriated by Congress, a fully 
funded NNSA enables weapon Life Extension Program (LEP) execution and 
investment in a responsive nuclear weapons infrastructure. These 
investments are necessary for continued confidence in the nuclear 
deterrent. Reducing or diverting Fiscal Year 2012 appropriations from 
the U.S. nuclear weapons program, as proposed in the Energy and Water 
Appropriations Subcommittee, will compromise the ability to carry out 
the required modernization of the nuclear weapons complex and 
sustainment of the nation's nuclear weapons. Without the refurbishment 
and modernization of existing nuclear weapons and associated 
infrastructure, the military will need larger quantities of hedge 
warheads to ensure that military capabilities can withstand potential 
failures of aging nuclear weapons. It also will adversely affect our 
ability to certify the stockpile's nuclear performance without the need 
for underground nuclear testing.
    Mr. Turner. It seems unlikely that Secretary Gates was trying to 
pay for water projects when he gave this DOD money to NNSA, do you 
agree? How do you propose we solve this problem? What are your concerns 
about DOD's budget contributions being diverted to parochial water 
projects instead of their intended national security purpose?
    Secretary Panetta. I am concerned that there is insufficient 
transparency to determine whether the $8.3 billion DOD transferred will 
be utilized as agreed upon by the Memorandum of Understanding (MOU) 
between the Secretaries of Defense and Energy making key Life Extension 
Programs and other deliverables at risk. However, I also understand the 
change in economic realities that occurred since the transfer and the 
development of the MOU. DOD is currently working with NNSA and the 
Office of Management and Budget (OMB) to develop a plan with which to 
move forward into the future. This makes even more critical the full 
support of Congress in authorization and appropriation of both DOD and 
NNSA nuclear weapon budgets each year.
    Mr. Turner. We're aware that the Administration is claiming that 
every Administration conducts a targeting review. That is not disputed. 
What appears unique here, however, is that it sounds like the 
Administration has already decided to go lower, is that right? In view 
of robust Russian and Chinese nuclear weapons programs, the illicit 
nuclear weapons programs of North Korea, Iran and Syria, is this mini-
NPR pre-ordained to only recommend reductions to U.S. nuclear forces?
    Secretary Panetta. The Administration is conducting a Nuclear 
Posture Review implementation study to determine the nuclear force size 
and structure needed to support U.S. national security requirements and 
meet international obligations in a dynamic security environment. The 
President directed the ongoing study as part of the 2010 Nuclear 
Posture Review. As stated in the NPR, the United States intends to 
pursue further reductions in nuclear weapons with Russia. When 
complete, the analysis of deterrence requirements and force postures 
will inform the development of any future arms control objectives.
    The analysis from this study will provide options for the 
President's guidance to the Departments of Defense and Energy on 
nuclear planning with respect to the force structure, force posture, 
and stockpile requirements needed to protect the United States and its 
Allies and partners and to inform plans for the employment of nuclear 
weapons in the event that deterrence fails.
    Mr. Turner. Chairman McKeon and I sent you a letter on September 13 
asking you to assist this Committee in its oversight of the nuclear 
weapons guidance by reconstituting an oversight process that existed 
while you were in the Congress in the early 1990s. Can you tell us when 
we might expect an answer?
    Secretary Panetta. You should receive a reply in the near future. A 
formal response is being drafted.
    Mr. Turner. Because of your experience as a former senior member of 
Congress (and Budget Committee Chairman), former director of the Office 
of Management and Budget (OMB), and now current Secretary of Defense, 
you bring a unique perspective to a question I have: What is your 
assessment of the cuts proposed for NNSA, given that DOD transferred 
top-line authority specifically to support these important defense 
programs?
    Secretary Panetta. The Department of Defense (DOD) relies upon the 
National Nuclear Security Administration (NNSA) to provide and sustain 
the nation's nuclear warheads, and develop and maintain the Navy's 
nuclear reactors in support of our strategic deterrence mission. As 
stated in the Nuclear Posture Review, U.S. nuclear weapons have endured 
well beyond their originally planned lifetimes. The 1251 report 
submitted to Congress last February outline DOD and Department of 
Energy (DOE)/NNSA nuclear enterprise funding requirements. If 
authorized and appropriated by Congress, a fully funded NNSA enables 
weapon Life Extension Program (LEP) execution and investment in a 
responsive nuclear weapons infrastructure. These investments are 
necessary for continued confidence in our nuclear deterrent.
    Reducing or diverting Fiscal Year 2012 appropriations from the U.S. 
nuclear weapons program, as proposed in the Energy and Water 
Appropriations Subcommittee, will compromise the ability to carry out 
required modernization of the nuclear weapons complex and sustainment 
of U.S. nuclear weapons. Without the critical refurbishment and 
modernization of our nuclear weapons and associated infrastructure, the 
military will need larger quantities of hedge warheads to ensure that 
military capabilities can withstand potential failures of aging nuclear 
weapons. It also will adversely affect the ability to certify the U.S. 
stockpile's nuclear performance without the need for underground 
nuclear testing.
    Mr. Turner. On October 7, 2011 four members of the Joint Select 
Committee on Deficit Reduction sent a letter to President Obama urging 
that he direct the Office of Management and Budget to re-examine and 
consider ``to make more efficient use of federal government spectrum 
and reallocate some of it for commercial broadband use. In particular, 
we should put every effort into making available paired, 
internationally-harmonized spectrum below 3 GHz in sufficient block 
sizes to support mobile broadband services within the next 10 years.'' 
We understand that this involves spectrum (specifically 1755-1850MHz) 
that is currently allocated to and being used by the Department of 
Defense and other federal agencies for a variety of critical 
capabilities. How is the DOD addressing this issue and by what process 
will the decisions be made? Additionally, what are the technical, cost, 
and schedule impacts to the DOD of the potential reallocation?
    Secretary Panetta. The Department is addressing this issue through 
the Department of Commerce (DOC) and the National Telecommunications 
and Information Administration (NTIA), in cooperation with the Federal 
Communications Commission (FCC). These efforts are in line with the 
President's directive to identify an additional 500 MHz of spectrum for 
broadband. Specifically, as directed by NTIA in January 2011, DOD is 
involved in a year-long study to determine the feasibility of 
relocating systems from the 1755-1850 MHz band. The results of the 
study are documented in an NTIA report that is currently being 
coordinated through the Office of Management and Budget's (OMB) Inter-
Agency Review process.
    Decisions are guided by P.L. 106-65 which directs that DOD not 
surrender the use of a band of which it is a primary user until the 
Secretaries of Commerce and Defense, and Chairman of the Joint Chiefs, 
jointly certify to the House and Senate Armed Services and Commerce 
committees that alternative spectrum with comparable technical 
characteristics is identified to ensure no loss in essential military 
capability.
    Following report coordination, DOD anticipates that the FCC will 
solicit industry comments through a Public Notice Process on the 
results of the report, to be followed by rulemakings that set service 
rules and auction rules. Industry comments will influence future 
negotiations regarding the 1755-1850 MHz band and any potential 
alternative spectrum relocation scenarios/studies, as the Commission 
considers feedback in order to hold a successful auction.
    DOD's 1755-1850 MHz study results indicate that it is feasible to 
relocate from the 1755-1850 MHz band within 10 years, provided that 
$12.93B is afforded to accommodate the relocation, comparable spectrum 
(2025-2110 MHz and 5150-5250 MHz) is made available for DOD systems to 
relocate, and exclusion zones are established to protect critical 
capabilities in the transition.
    Note: DOD studied the feasibility of relocating from the entire 
1755-1850 MHz band (95 MHz) within 10 years. Also, DOD studied the 
feasibility of an early transition from the 1755-1780 MHz band (lower 
25 MHz) within 5 years as an interim step to the full relocation. 
Deviations from the original study requirements (i.e. alternative 
scenarios, etc.) will require additional time to study the technical, 
operational, cost, and schedule impacts.

    Mr. Turner. In what way does the military rely on NNSA's defense 
activities? What are the military implications of not carrying out this 
modernization, particularly as the warheads continue to age and as the 
infrastructure continues to atrophy from its already ``decrepit'' 
state--as it was described by the Strategic Posture Commission?
    General Dempsey. The Department of Defense (DOD) relies upon the 
National Nuclear Security Administration (NNSA) to provide and sustain 
the nation's nuclear warheads, and develop and maintain the Navy's 
reactors in support of our strategic deterrence mission. NNSA's 
Stockpile Stewardship and Management Plan compliments DOD's force 
structure plans to ensure sufficient capability to keep our stockpile 
safe, secure and reliable.
    As stated in the Nuclear Posture Review (NPR), our nuclear weapons 
have endured well beyond their originally planned lifetimes. If 
authorized and appropriated by Congress, a fully funded NNSA will 
enable weapon Lifetime Extension Program (LEP) execution and investment 
in a responsive nuclear weapons infrastructure. These investments are 
absolutely necessary for continued confidence in our nuclear deterrent.
    Mr. Turner. The 2010 Nuclear Posture Review says that, ``by 
modernizing our aging nuclear facilities and investing in human 
capital, we can substantially reduce the number of nuclear weapons we 
retain as a hedge against technical or geopolitical surprise.'' It goes 
on to say that these modernization investments ``are essential to 
facilitating reductions while sustaining deterrence under New START and 
beyond.'' If we do not carry out the modernization program, what is 
your military opinion of the risks associated with nuclear stockpile 
reductions?
    General Dempsey. As long as nuclear weapons exist, we must have a 
national commitment to sustaining a safe, secure, and effective nuclear 
deterrent. I believe the NPR outlined the goals and capabilities 
required to modernize our nuclear enterprise to ensure lasting 
confidence in our Nation's nuclear deterrent force. The NPR articulates 
the importance of a modern nuclear infrastructure for our ability to 
size our nuclear weapons stockpile appropriately.
    While I recognize the nation's fiscal realities will constrain 
spending on national security programs, our nuclear enterprise 
investments are critical to ensure long-term viability. The long-term 
sustainment of the nuclear investments is critical to facilitating a 
shift away from the recent U.S. strategy of retaining large numbers of 
non-deployed warheads as a hedge against technical or geopolitical 
surprise. Our weapons and delivery systems need life extension 
programs. Our industrial base requires safe and modern facilities with 
adequate capabilities and capacity. Lastly, we must attract the 
brightest young minds to scientifically verify the safety, security, 
and effectiveness of today's weapons without a return to underground 
testing and to dismantle unneeded weapons.
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MRS. DAVIS

    Mrs. Davis. Can you tell me more about the group that is currently 
working on the strategic 2020 assessment? Is this group looking at 
strategy with regard to budget constraints and the limited resources 
that you have mentioned (unlike the QDR which is required to not take 
budget constraints into account)? Can you provide me with a list of 
names or positions of those who comprise this group? When can we expect 
to see the final result?
    Secretary Panetta. The strategic choices group is one venue in 
which the Department is considering the emerging defense strategy and 
the translation of that strategy to the FY13-17 and future Presidential 
Budget Submissions. The group is composed of the Secretaries of the 
Military Departments, the Service Chiefs, and the Under Secretaries of 
Defense in direct support of the Deputy Secretary of Defense and the 
Vice Chairman of the Joint Chiefs of Staff. The group will help 
determine the desired attributes and capabilities of the future joint 
force, and weigh the capacity of that force to provide needed 
capabilities against cost and risk.

    Mrs. Davis. Can you tell me more about the group that is currently 
working on the strategic 2020 assessment? Is this group looking at 
strategy with regard to budget constraints and the limited resources 
that you have mentioned (unlike the QDR which is required to not take 
budget constraints into account)? Can you provide me with a list of 
names or positions of those who comprise this group? When can we expect 
to see the final result?
    General Dempsey. The strategic choices group is one venue in which 
the Department is considering the emerging defense strategy and the 
translation of that strategy to the FY13-17 and future Presidential 
Budget Submissions. The group is composed of the Secretaries of the 
Military Departments, the Service Chiefs, and the Under Secretaries of 
Defense in direct support of the Deputy Secretary of Defense and the 
Vice Chairman of the Joint Chiefs of Staff. The group will help 
determine the desired attributes and capabilities of the future joint 
force, and weigh the capacity of that force to provide needed 
capabilities against cost and risk.
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MR. ROGERS

    Mr. Rogers. As the Defense Department considers possible cuts I 
think there has been an evolution since the early 1990s in new Commands 
and organizations that should be reviewed. Please provide me a list of 
all the Army Commands and organizations that have been formed or 
realigned, outside the BRAC recommendations, and numbers of people that 
are currently assigned to those commands/organizations. I also ask that 
you provide me with the increased number of General/Flag Officer and 
Senior Service positions that have been created to lead or manage the 
new Commands and organizations.
    Secretary Panetta. In October 1992, the Army organized under 
fifteen Major Army Commands (MACOMs). In 2005-2006, the Army Command 
Structure was reviewed and reorganized to better support Combatant 
Commands and the Army's modular formations. This established three (3) 
types of command organizations: Army Commands (ACOMs), Army Service 
Component Commands (ASCCs) and Direct Reporting Units (DRUs).
    The Army currently has 23 commands: 3-ACOMs, 10-ASCCs and 10-DRUs. 
The significant difference in the number of commands from the 1990s is 
due to the Army's establishment of four ASCCs (U.S. Army Space and 
Missile Defense Command/Army Strategic Command, U.S. Army North, U.S. 
Army Africa/Southern European Task Force, and U.S. Army Cyber Command) 
to support newly formed Combatant Commands, and the re-designation of 
U.S. Army Central as an ASCC. The Army also activated the U.S. Army 
Installation Management Command to oversee the Army's facilities and 
standardize base operations services across the Army. In addition, the 
Army designated the following existing organizations as DRUs: United 
States Military Academy, U.S. Army Test and Evaluation Command, and 
U.S. Army Acquisition Support Center. Throughout the period considered, 
the documented Army general officer requirements always exceeded the 
Title 10 general officer authorization limits. Consequently, there was 
no growth in the number of general officers to meet structure 
requirements. Rather, changes to the Army's organizational structure 
require the Army leadership to make recurring assessments about which 
positions to support/fill with a general officer based on roles/
missions/priorities.
    The Army reduced more than 30 Senior Executive Service (SES) 
allocations between the 1990s and today. During that same period, there 
were changes to organizations that resulted in both additions and 
deletions in executive positions. However, since agencies are expected 
to manage their executive resource needs within the levels set during 
the biennial allocation process, leadership needs for new organizations 
were met by reprogramming existing resources to meet the agency's 
highest priority requirements and unanticipated needs. [See the 
document on page 73 for more information.]
    Mr. Rogers. How do you plan to protect and preserve the organic 
depot structure and enforce statutory provisions to assure the 
viability of an organic logistics capability necessary to ensure 
military readiness?
    Secretary Panetta. The Department agrees that it is essential for 
national defense that the United States maintains organic depot 
maintenance capabilities that enable our forces to respond to national 
defense contingencies and other emergency requirements. DOD policies 
and actions support the preservation of core capabilities and balance 
the maintenance workload across the public and private sectors.
    The Department applies and enforces the core concept through a 
biennial capability and workload review, completed by the Military 
Services and reviewed by the Office of the Secretary of Defense. The 
purpose of this review process is to ensure a ready and controlled 
source of technical maintenance capability owned and operated by the 
Government. The Department's organic depot maintenance capability is 
subject to title 10, U.S.C., section 2466, which directs that no more 
than 50 percent of each Military Department's annual depot maintenance 
funding can be used for work done by private sector contractors. The 
Department provides this comprehensive information of depot maintenance 
spending in a report to Congress annually.
    In addition to these formal processes and reporting requirements, 
the Office of the Assistant Secretary of Defense for Logistics and 
Materiel Readiness oversees programs and initiatives designed to 
support the effective execution of the Department's maintenance 
requirements. A key element of these programs is the stewardship of the 
U.S. organic depot structure.
                                 ______
                                 
                  QUESTIONS SUBMITTED BY MS. BORDALLO

    Ms. Bordallo. As you are aware, Public Law 110-229, the 
Consolidated Natural Resources Act of 2008, converted the Guam-specific 
visa waiver program into a joint Guam-CNMI regional visa waiver 
program. P.L. 110-229 expressly intended to include visitors from 
countries of ``significant economic benefit'' to the CNMI in the Guam-
CNMI VWP. As Congress intended, and as DHS acknowledged in implementing 
the rule, these countries were the China and the Russia. However, the 
interim final rule promulgated by DHS did not include China and Russia. 
Instead, in October 2009, Secretary Napolitano exercised her 
discretionary parole authority to allow Chinese and Russian tourists to 
travel to the CNMI only. The ability of Chinese and Russian tourists to 
visit Guam visa-free is crucial to the development of Guam's economy. 
DHS is currently considering the final rule implementing the Guam-CNMI 
VWP. DHS indicated that it has requested DOD's opinion on whether 
either the expansion of the visa waiver program to China and Russia or 
the extension of the existing parole authority to Guam would present 
any concerns with respect to security of local DOD bases on Guam. Local 
military commanders on Guam have stated publicly that they are not 
opposed to expanding the visa waiver program to Chinese or Russian 
visitors, and that any security-related concerns can be effectively 
mitigated. This position comports with DOD's long-standing view, as 
expressed in the Guam & CNMI Military Relocation EIS, that the military 
build-up on Guam must be balanced with Guam's economic development. Can 
you confirm that: (a) DOD is actively working to provide DHS with the 
requested response regarding any security concerns to DOD from 
expanding the Guam-CNMI VWP or extending parole authority to Guam; (b) 
as expressed by the local military commanders on Guam, any potential 
security concerns to DOD can be sufficiently mitigated, either within 
the visa waiver mechanism or through conditions imposed pursuant to 
DHS' parole authority?
    Secretary Panetta. The Department of Defense is currently 
evaluating the merits of the application of this program to Guam as 
they relate to Departmental equities and requirements. DOD looks 
forward to interagency discussion once the Department of Homeland 
Security provides its formal proposal to all relevant Departments and 
Agencies.
    Ms. Bordallo. As you know, 10 USC 235 states that ``In the budget 
justification materials submitted to Congress in support of the 
Department of Defense budget for any fiscal year . . . the Secretary of 
Defense shall include the information described in subsection (b) with 
respect to the procurement of contract services . . . the number of 
full-time contractor employees (or the equivalent of full-time in the 
case of part-time contractor employees) projected and justified for 
each Department of Defense component, installation, or activity based 
on the inventory of contracts for services required by subsection (c) 
of section 2330a of this title and the review required by subsection 
(e) of such section.''
    How can DOD have the ``ability to conduct a full budget audit'' if 
DOD is not able to prepare a compliant budget in accordance with 
section 235 because DOD doesn't have an inventory that is compliant 
with section 2330a(c) or conduct the review required by section 
2330a(e)?
    Secretary Panetta. The 2010 NDAA requires that DOD financial 
statements be validated as ready for audit by September 2017. The 
Department has a plan to accomplish that goal and is making significant 
progress as described in the latest biannual report to Congress. I have 
also directed that this effort should be expedited, with a 2014 target 
to make out statements of budget resources audit ready. The first 
priority in the plan focuses improvements on the controls and systems 
associated with budgetary information. The goal is to improve 
information to better inform decisions--not just to ensure the funds 
are spent.
    The financial statements and the budget justification are prepared 
from the same data and processes which the DOD is focused on improving. 
While the audit of DOD financial statements will not validate our 
budget justification materials directly, I feel that the audit will 
provide Congress assurance that our underlying financial information is 
reliable.
    Ms. Bordallo. In response to the GAO report on the inventory of 
contracts for services released in January 2011, DOD indicated that it 
``would develop a plan of action, including anticipated timeframes and 
necessary resources, to facilitate the Department's stated intent of 
collecting manpower data . . . '' and ``assess ways to improve the 
Department's approach to estimating contractor full-time equivalents 
until the department is able to collect manpower data from 
contractors.''
    What specifically has the department done since then to meet these 
objectives?
    Secretary Panetta. Following the GAO's report issuance in January 
2011, the Office of the Under Secretary of Defense for Personnel and 
Readiness (OUSD(P&R)) began formal coordination of a proposed policy 
issuance, ``Development, Review, and Analysis of the Inventory of 
Contracts for Services'' (ICS). This issuance establishes policy, 
assigns responsibilities, and provides uniform definitions and 
guidelines to ensure consistency DOD-wide for the development, review, 
and analysis of the ICS--consistent with the statutory requirements of 
sections 235 and 2330a of title 10, United States Code.
    This proposed issuance requires that as new contracts for services 
are issued, and as options for existing contracts are exercised, DOD 
requiring activities ensure that each statement of work (SOW) include 
specific data elements required to meet the requirements of Title 10. 
Specifically, the requirement to collect direct labor hours and 
associated costs would be included as a deliverable. All services 
provided in support of, or of benefit to, a DOD organization, 
regardless of the source of the funding or acquisition agent and the 
dollar amount of the vehicle, would be reported in the inventory of 
contracts for services. Additionally, the issuance proposed guidance 
with regards to completing a thorough review and analysis of the 
contracted services to ensure they are validated against mission 
requirements, as well as being justified against current and proposed 
expenditures during annual program and budget reviews.
    Based on feedback from the coordination process and as a result of 
the passage of Public Law 112-10, OUSD(P&R) determined to reassess the 
scope and content of this proposed issuance. Section 8108(c) of Public 
Law 112-10 required each military department, agency, and activity of 
the Department to develop a plan to collect direct labor hours and 
associated costs from contractors. Nearly all Components have submitted 
their plan in accordance with section 8108(c).
    On November 22, 2011, the Under Secretary of Defense for Personnel 
and Readiness, jointly with the Under Secretary of Defense for 
Acquisition, Technology, & Logistics, delivered a consolidated 
Department-wide plan to the Congressional defense committees. Based on 
individual Component submissions, this plan delineates both short- and 
long-term actions to be taken by the Department to begin collecting 
data from private sector firms and fully comply with requirements of 
sections 235 and 2330a of Title 10, United States Code. Among the long-
term actions delineated in this plan is the completion of a 
comprehensive DOD issuance that would formalize Department-wide 
processes and responsibilities for compliance with these provisions.
    Ms. Bordallo. In a recent prepared statement to the Senate Armed 
Services Committee, Dr. Clifford Stanley stated OUSD Personnel and 
Readiness is working with all DOD organizations to move towards 
collecting data from the private sector firms providing services for 
the department.
    What progress has been made and have DOD organizations begun steps 
to collect such data?
    Secretary Panetta. The Under Secretary of Defense for Personnel and 
Readiness' May 2011 statement to the Senate Armed Services Committee 
was based on his request to each of the Department's organizations to 
designate representatives to comply with the reporting requirements of 
section 8108(c) of the Public Law 112-10, the Department of Defense and 
Full-Year Continuing Appropriations Act, 2011. These representatives 
comprised a working group including the three Military Departments, 27 
Defense Agencies/Field Activities, Joint Staff, 9 Combatant Command 
organizations, OSD staff, and other DOD organizations. Led by 
OUSD(P&R), this group discussed (1) how to respond to the specific 
requirements of section 8108 and (2) how to improve the Departments 
inventory of contracts for services both in the near and long term.
    In coordination with P&R, each Component developed a plan to 
collect data from the private sector firms providing services for their 
organization. On November 22, 2011, the Under Secretary of Defense for 
Personnel and Readiness, jointly with the Under Secretary of Defense 
for Acquisition, Technology, & Logistics (USD (AT&L)), delivered a 
consolidated Department-wide plan to the Congressional defense 
committees. Based on individual Component submissions, this plan 
delineates both short- and long-term actions to begin collecting data 
from private sector firms and fully comply with requirements of 
sections 235 and 2330a of title 10, United States Code. The 
Department's plan will follow the Army's best practice to modify 
statements of work/performance work statements to require reporting of 
contractor manpower data into a web-enabled database. To support these 
plans, the Army made the source code for its web-enabled data system 
available to all Components for modification and DOD will support a 
review of the system to modify it and make it available to their 
organizations.
    Ms. Bordallo. Additionally, Dr. Stanley stated that OUSD(P&R) ``is 
engaged to assist the Departments of the Navy and Air Force, to enhance 
their service contracting governance ability by leveraging the Army 
system as directed in the FY11 appropriations bill; and to also assist 
the Defense Agencies and Field Activities as they report their plans to 
collect this information.'' In July, in a letter to the chairman, Dr. 
Stanley stated that the Components would be sending their plans.
    The Committee has yet to see those plans or any indication from the 
department that steps are being taken to leverage the Army process. 
Why?
    Secretary Panetta. With passage of Public Law 112-10, the 
Department of Defense and Full-Year Continuing Appropriations Act, 
2011, the Under Secretary of Defense (Personnel and Readiness) (USD 
(P&R)) sent a memo to all DOD organizations, dated April 27, 2011, to 
designate representatives to comply with the reporting requirements of 
section 8108(c). These representatives comprised a working group 
including the three Military Departments, 27 Defense Agencies/Field 
Activities, Joint Staff, 9 Combatant Command organizations, OSD staff, 
and other DOD organizations. Led by OUSD(P&R), this group discussed (1) 
how to respond to the specific requirements of section 8108 and (2) how 
to improve the Departments' inventory of contracts for services both in 
the near and long term.
    As a result of these meetings, on July 18th, USD (P&R) signed an 
interim response to Congress. Following that OUSD(P&R) continued to 
work with all Components of the Department to develop and coordinate on 
those plans. On November 22, 2011, the USD (P&R), jointly with the 
Under Secretary of Defense for Acquisition, Technology, & Logistics 
(USD (AT&L)), delivered a consolidated Department-wide plan to the 
Congressional defense committees. Based on individual Component 
submissions, this plan delineates both short- and long-term actions 
being taken by the Department to begin collecting data from private 
sector firms and fully comply with requirements of sections 235 and 
2330a of Title 10, United States Code.
    Ms. Bordallo. In June, Dr. Stanley submitted the report on 
``Public-Private Competitions'' in accordance with Section 325 of the 
FY10 NDAA, recommending lifting the suspension on A-76. That same 
provision requires the Department to certify compliance with 10 USC 
sections 235 and 2330a in order for the suspension to be lifted.
    Considering the lack of observed progress per the above, could the 
Department justify certification to lift the suspension on public-
private competitions within DOD?
    Secretary Panetta. No, the Department is not currently prepared to 
certify compliance with 10 USC sections 235 and 2330a, as required by 
section 325 of the FY10 NDAA, in order to lift the suspension on 
public-private competitions within DOD. While the recent report to 
Congress noted the utility in having the public-private competition 
tool as a process by which to shape the workforce and appropriately 
align functions between the public and private sectors, there remains a 
lack of true visibility and fidelity regarding the contracted services 
element of the Total Force. The Department made progress in the past 
six months to meet the spirit and intent of 10 USC 2330a, and will 
improve the reliability of data reported in accordance with 10 USC 235. 
Once the recommended improvements to the inventory of contracts for 
services are implemented, the Department will be better able to make 
the certifications required by section 325 of the FY10 NDAA.
    Ms. Bordallo. With respect to the component plans that were 
coordinated by OUSD P&R, how many committed to follow the Army's plan 
to modify SOW/PWSs to require contractors to report direct labor hours 
and costs annually, and to use the Army system directly, or asks for a 
DOD-wide Contractor Manpower Reporting Application (CMRA)-like system 
to report this data?
    Secretary Panetta. Of 44 DOD Components, P&R reviewed and 
coordinated on 41 plans. Of these, 23 follow the Army's plan to modify 
SOW/PWSs requiring contractors to report direct labor hours and costs 
annually. These 23 organizations intend to either use the Army system, 
or have requested a DOD-wide Contractor Manpower Reporting Application 
(CMRA)-like system to report data. The other organizations submitting 
plans proposed implementing contract clauses, modifying existing 
agreements, or in the case of the intelligence agencies, already have 
processes in place to capture data. Some of these organizations also 
have data systems in place to record this information, or would like to 
use a DOD-wide Contractor Manpower Reporting Application (CMRA)-like 
system to report data.
                                 ______
                                 
                   QUESTION SUBMITTED BY MR. CONAWAY

    Mr. Conaway. Secretary Panetta, I want to applaud your initiative 
to make financial management reform and auditability a priority for the 
Department of Defense. I am encouraged that you have directed the 
Department to accelerate key elements of the Financial Improvement and 
Audit Readiness (FIAR) plan, but also recognize there will be 
challenges in achieving these goals. I am interested in more 
information on how you determined the 2014 Statement of Budgetary 
Resources audit readiness date. In addition, as the Under Secretary of 
Defense (Comptroller) works to update the FIAR plan, I request to be 
kept informed on the status.
    Secretary Panetta. Shortly after I took office, I directed the 
Under Secretary of Defense (Comptroller)/Chief Financial Officer 
(USD(C)/CFO) Robert Hale to review DOD/Component FIAR plans with 
appropriate DOD leaders to determine what improvements could be made to 
speed progress, given my keen interest in audit readiness. Two of the 
military Services (Navy and Marine Corps) had plans for their Statement 
of Budgetary Resources to be audit ready by 2013, Army would be ready 
in 2015 and the Air Force would be ready by 2017. In consultation with 
USD(C) Hale, I established reasonable but aggressive stretch goals in 
order to push the organization to meet the overall 2017 goal for 
auditability of all financial statements. The resulting goal for the 
Statement of Budgetary Resources cuts in half the time for the whole 
Department to achieve auditability of the Statement of Budgetary 
Resources for general funds. With CEO involvement, this is achievable.
                                 ______
                                 
                    QUESTIONS SUBMITTED BY MR. OWENS

    Mr. Owens. Secretary Panetta, as we draw down forces overseas, 
training for our UAS operators will need to take place in the United 
States. There is a pressing need to integrate UAS operations into the 
National Airspace System (NAS) so pilots and sensor operators can 
maintain combat effectiveness and flight proficiency. Currently, UAS 
operations are limited to very small segments of airspace. The process 
for securing Certificates of Authorization from the FAA to expand 
access is lengthy and cumbersome.
    For example, in my district, Fort Drum is where the 174th Fighter 
Wing will soon be launching and recovering the MQ-9 (Reaper) aircraft. 
After two years of working with the FAA, the unit is close to receiving 
permission to fly in restricted airspace and above 18,000 feet in 
special use airspace.
    In order to conduct more appropriate and realistic training, the 
MQ-9 will need to fly between restricted airspace, special use airspace 
(military operating areas--MOAs) and the National Airspace System (NAS) 
and take advantage of the entire airspace (from 5000 feet to 30,000 
feet). This is required to avoid weather and to train with the full 
capability of the weapons system. This is the ability to train 
dynamically. Ultimately the Air National Guard needs to be able to fly 
from joint civil military use airports.
    Can you share with us how the Department of Defense is working to 
solve this problem and expedite the approval process? For example, what 
kind of research or pilot programs is the Department of Defense 
conducting to facilitate the integration of UAS into the NAS?
    Secretary Panetta. The Department of Defense (DOD) is addressing 
the major issues enabling Unmanned Aircraft Systems (UAS) integration 
into national airspace through a joint, unified effort led by the DOD 
UAS Task Force. The UAS Task Force serves as the Department's advocate 
for shaping the regulatory policies, procedures, certification 
standards, and technology development activities that are critical to 
the integration of DOD UAS into the NAS. The Task Force developed the 
DOD Airspace Integration (AI) Plan and the Joint Concept of Operations 
(CONOPS) for UAS AI, which guides development of DOD policy and Service 
CONOPS development. The Task Force AI effort is broken down into short-
term and long-term activity.
    As part of the short-term activity, UAS Task Force leadership, in 
partnership with the DOD Policy Board on Federal Aviation, serves and 
supports the multi-agency UAS Executive Committee (ExCom). One of the 
ExCom's key goals is to coordinate and align efforts among member 
agencies (Federal Aviation Administration (FAA), DOD, Department of 
Homeland Security, and NASA) to ultimately achieve routine safe Federal 
public UAS operations in the National Airspace System. Through the 
ExCom, the Department recommended specific improvements to FAA policy 
and guidance that it believes will simplify the Certificate of Waiver 
or Authority (COA) approval process while greatly reducing the time and 
effort it takes to process and approve a COA application. These 
recommendations are under active consideration by the FAA, and the 
larger ExCom is awaiting formal notification of adoption or other 
disposition.
    The Department's long-term goal is to reduce, and ultimately 
eliminate, the need for the FAA's COAs for the vast majority of DOD UAS 
operations. The Department has a number of efforts underway to achieve 
that goal, including development of Sense and Avoid (SAA) capabilities. 
Over the past 3 years, the Department made significant investments in 
SAA technologies enabling broader access to the NAS for DOD UAS. During 
this time period, DOD engineers and technicians worked closely with 
designated FAA staff to clarify the requirements and standards that 
would enable approval and eventual certification of ground-based 
systems for broad deployment throughout the Department and across the 
United States.
    The Department's laboratories, program offices, and industries have 
long been involved in technology development and flight testing of 
airborne SAA (ABSAA) systems to provide even broader, more flexible NAS 
access for military UAS. The Navy and Air Force are working together to 
leverage a common ABSAA functional baseline for the RQ-4B Global Hawk 
(GH) and Broad Area Maritime Surveillance (BAMS) aircraft. The Navy is 
leading development of a joint solution, building upon Air Force 
Research Laboratory and Global Hawk technology efforts to develop a 
Pilot-In-The-Loop capability, which will then be leveraged to develop 
an autonomous SAA capability for GH/BAMS. This technology can provide 
future capability for the Air Force MQ-9 Reaper and the Army MQ-1C Gray 
Eagle.
    Some of the potential technology solutions being evaluated include 
radar systems and associated algorithms specifically designed for 
autonomous SAA, commercial-off-the-shelf electro-optical (EO) sensors 
for sensing non-cooperative aircraft, and short wave infra-red sensors 
that have greater sensitivity for detecting air traffic under 
conditions that are difficult for EO cameras. Other longer-term 
technology options to improved SAA include Automatic Dependent 
Surveillance-Broadcast implementation that will leverage coming 
improvements to the NAS under the FAA's NextGen effort.
    The Department remains committed to achieving safe and efficient 
UAS NAS access as quickly as technology and regulatory revisions will 
allow. DOD is closely engaged with industry and academia to cross-
leverage both technology and aviation processes that will accelerate 
this effort as much as possible.
    Mr. Owens. Secretary Panetta, I have heard from a number of 
constituents regarding the economic development implications of the F-
35 for Upstate New York. I understand that today the F-35 program 
supports some 127,000 direct and indirect jobs across the country, with 
potential for greater benefits down the road. Is the Department still 
fully committed to this platform, and do you believe as others have 
testified in the past that the F-35 presents a critical capability for 
which there is no alternative?
    Secretary Panetta. The Department is committed to the F-35 program. 
The program was reviewed following a Nunn-McCurdy cost breach, and in 
June 2010 the Under Secretary of Defense for Acquisition, Technology 
and Logistics certified that there are no alternatives to the program 
that will provide acceptable capability to meet the joint military 
requirement at less cost.
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MR. LAMBORN

    Mr. Lamborn. The President's budgets have cut a total of $1.65 
billion out of the ground-based midcourse defense (GMD) system, the 
only missile defense system currently in place to defend the United 
States. It was this system that Secretary Gates turned to in 2006 when 
information and warning revealed potential launch activity of long-
range ballistic missiles by North Korea. Can you update us on the 
status of the ``hedging strategy'' this committee has been waiting on 
for almost two years? This strategy, as you know, is supposed to 
provide the answer of how we will respond to developments of the 
ballistic missile threats to the United States, such as a more rapid 
development of long-range ballistic missiles by Iran or North Korea?
    Secretary Panetta. Protecting the United States from the threat of 
ballistic missile attack is a critical national security priority, and 
missile defense of the homeland remains the first priority of the 
Department's missile defense efforts.
    The United States now possesses a capacity to counter the projected 
threats from North Korea and Iran for the foreseeable future with the 
current Ground-based Midcourse Defense (GMD) system. Because of the 
uncertainty about the future ICBM threat, it is important that the 
United States maintain this advantageous position. In order to maintain 
this advantageous position, the Department has committed to 
implementing additional steps to maintain and enhance protection 
provided by the GMD system. These improvements to the program of record 
include:

          Procurement of additional GBIs (which will keep 
        production lines warm through 2016);
          The deployment of additional sensors;
          Upgrades to the Command, Control, Battle Management 
        and Communications system;
          Placement of an additional In-Flight Interceptor 
        Communications System Data Terminal on the East Coast;
          Upgrades to the Early Warning Radars at Clear, Alaska 
        and Cape Cod, Massachusetts; and
          An aggressive GBI reliability improvement program in 
        order to reduce the number of GBIs required per intercept, 
        which will increase the number of ICBMs that can be defeated by 
        the GMD system.

    In addition to the improvements to the GMD system, the 
Administration is also implementing a number of measures to strengthen 
the U.S. hedge posture, including:

          The construction and activation of Missile Field 2 at 
        Fort Greely, Alaska, which will accommodate a contingency 
        deployment of eight additional GBIs, if needed;
          Placement of six GBI silos at Missile Field 1 at Fort 
        Greely in storage mode instead of decommissioning, allowing 
        their return to service within 18-24 months, if necessary; and
          The continued development and assessment of a two-
        stage GBI, which will continue to preserve future deployment 
        options.

    The Administration is also committed to implementing all phases of 
the European Phased Adaptive Approach (EPAA), including developing and 
fielding the SM-3 IIB interceptor. The EPAA will improve our homeland 
defenses while providing missile defense against the regional threat to 
our deployed forces, Allies, and partners in Europe. The EPAA augments 
homeland BMD defense by deploying a forward-based radar in Turkey, 
which will provide data to augment the missile defense coverage of the 
United States. Additionally, the SM-3 IIB interceptor will provide an 
early-intercept capability against potential Iranian ICBMs targeting 
the United States.
    The United States continuously analyzes threat developments and 
future capabilities to identify additional measures that could be taken 
should new threats emerge. The analysis conducted for the hedge 
strategy is informing the budget decisions under consideration as part 
of the development of the Department's fiscal year 2013 budget request. 
The Department will ensure that Congress is briefed on the results of 
the hedge strategy at that time.
    Mr. Lamborn. As you know, at the Shangri-La Dialogue in Singapore 
in June, outgoing-Secretary of Defense Robert Gates stated that, ``With 
the continued development of long-range missiles and potentially a 
road-mobile intercontinental ballistic missile and their continued 
development of nuclear weapons, North Korea is in the process of 
becoming a direct threat to the United States.'' And two weeks later he 
said, ``North Korea now constitutes a direct threat to the United 
States. The president told [China's] President Hu that last year. They 
are developing a road-mobile ICBM. I never would have dreamed they 
would go to a road-mobile before testing a static ICBM. It's a huge 
problem. As we've found out in a lot of places, finding mobile missiles 
is very tough.'' Do you concur with Secretary Gates' statements? If 
North Korea begins fielding an array of road mobile ICBMs, and if they 
proliferate this technology to Iran and other countries as in the past, 
what does such activity do to current judgments about the adequacy of 
the current inventory of Ground Based Interceptors?
    Secretary Panetta. One of the most significant threats to the U.S. 
homeland is the continued progress of regional actors in developing 
weapons of mass destruction and the means to deliver them by ballistic 
missiles. North Korea's demonstrated nuclear ambitions and continued 
development of long-range missiles remain a primary focus of the 
development and deployment of the Ballistic Missile Defense System 
(BMDS).
    At present, the capabilities developed and deployed as part of the 
integrated BMDS protect us from the potential emergence of an ICBM 
threat from Iran or North Korea. To maintain this advantageous 
position, the Administration is taking steps to improve the protection 
of the homeland from the potential ICBM threat posed by Iran and North 
Korea. These steps include the continued procurement of ground-based 
interceptors (GBIs); the deployment of additional sensors; and upgrades 
to the Command, Control, Battle Management, and Communications system. 
Improvements to the Ground-based Midcourse Defense (GMD) system, in 
particular, will better protect us against future ICBM threats, whether 
from Iran, North Korea, or other regional actors. The Department's BMD 
hedging strategy, to be provided to Congress in the coming months, is 
addressing how to best posture ourselves to address potentially larger 
threats.
    Mr. Lamborn. The National Missile Defense Policy Act of 1999 
requires the U.S. to develop a missile defense system capable of 
dealing with threats to the homeland from rogue regimes as well as 
unauthorized or accidental launches from other states, presumably 
Russia and China. Would you be surprised to learn that neither NORTHCOM 
nor MDA have developed training to deal with the unauthorized or 
accidental launch scenario? Would you please take steps to learn why 
and to resolve this situation and would you report back to the 
Committee?
    Secretary Panetta. The Department of Defense developed and deployed 
an operational missile defense capability to defend the homeland 
against limited ballistic missile attack. In the event of an accidental 
or unauthorized ballistic missile attack by any state, the U.S. would 
employ the GMD system in defense of the U.S. homeland.
    U.S. Northern Command is responsible for determining how the system 
is employed, as well as for oversight of the training for assigned 
Ground-based Midcourse Defense (GMD) mission crews. Personnel assigned 
to GMD crews routinely train on different types of launch scenarios, 
with the primary focus of training on actions required to defend 
against a missile threat to the homeland. Training ensures proficiency 
in the execution of the system for launches against the United States 
regardless of their origin.
    Mr. Lamborn. Do you believe, as you execute budget drills to 
implement the $489 billion in cuts that have already been sustained to 
the Defense Department budgets, that the country can continue to afford 
a robust national missile defense as well as a regional missile defense 
architecture like the EPAA, which will not contribute anything to the 
defense of the United States until, perhaps 2020--though this is now in 
doubt thanks to the cuts sustained to the SM-3 IIB development by the 
Senate Appropriations Committee? Is it your understanding that the U.S. 
is deploying the EPAA to defend Europe as its ``national contribution'' 
to NATO? If so, how much will that cost the United States to defend 
Europe in this way?
    Secretary Panetta. The Administration is committed to sustaining 
and enhancing the Ground-based Midcourse Defense program for the 
protection of the homeland, while also implementing phased adaptive 
approaches to regional missile defense starting with NATO with Phase I 
of the European Phased Adaptive Approach (EPAA). The administration is 
committed to all four phases of the EPAA including the SM-3 IIB in 
Phase 4.
    Beginning in 2011, as part of Phase I, the EPAA augments defense of 
the U.S. homeland, and is the United States national contribution to 
NATO. Since President Obama's September 2009 announcement of the EPAA, 
a key U.S. goal has been to implement the EPAA in a NATO context. At 
the NATO Lisbon Summit in November 2010, Allies agreed to pursue a 
territorial missile defense capability to protect NATO European 
populations and territories.
    The Department has a budget and acquisition schedule for regional 
missile defense, including elements associated with the EPAA. The costs 
specific to EPAA are relatively modest, and associated with the planned 
forward based AN/TPY-2 radar and fixed Aegis Ashore sites in Romania 
and Poland. There are regional missile defense costs that cannot be 
assigned exclusively to the EPAA (or to any other specific region) 
because the research, development, and operation of these systems is 
conducted in the context of ballistic missile defense writ large. For 
example, the development and procurement costs for advanced versions of 
the SM-3 interceptor and Aegis BMD software upgrades are part of the 
EPAA, but will also be available for deployment in other regions. The 
costs of the elements of the BMDS are provided annually to Congress in 
the BMDS Assessment Report (BAR).
                                 ______
                                 
                  QUESTIONS SUBMITTED BY MR. GARAMENDI

    Mr. Garamendi. Mr. Secretary, please tell me and the House Armed 
Services Committee how much the Department of Defense is planning to 
spend on the Overseas Contingency Operations Account between 2012 and 
2025? Please provide a year-by-year breakdown. Based on best estimates, 
how much will this spending contribute to anticipated budget deficits 
each year? Do you see the rising deficit as a problem for our national 
security?
    Secretary Panetta. The Department of Defense (DOD) requested 
approximately $118 billion in its FY 2012 Overseas Contingency 
Operations (OCO) President's Budget request for war requirements, a 
drop of 26 percent from the FY 2011 OCO enacted level. The DOD OCO 
budget is a bottom-up budget preparation each year, and it is 
configured to support current military strategy and the Commander's 
assessment of needs on the ground. Consequently, the Department does 
not project OCO requirements beyond the budget year. The Office of 
Management and Budget included a ``placeholder'' of $50 billion per 
year for FY 2013 through FY 2021 in the President's FY 2012 Budget 
request.
    Mr. Garamendi. Mr. Secretary, I'd like to get your thoughts on the 
decline of the U.S. manufacturing base and the implications you see for 
our nation's security interests. We must make it in America. 
Unfortunately, all too often, we do not. For example, Department of 
Defense officials have testified that the propellant for Hellfire 
missiles is no longer going to be produced in the U.S. and that we will 
have to procure it from foreign sources--reportedly China. We are now 
dependent on China for supplies of rare earth minerals, which they 
continue to ration. Those elements are critical to a vast array of 
products, including the guidance system in our Joint Direct Attack 
Munitions (JDAMS). Are you concerned with the decline of our 
manufacturing base? What do you view as critical to our security and 
therefore, should be produced in the U.S.?
    Secretary Panetta. The Department has a deep interest in the health 
of the manufacturing base and the larger industrial base supporting 
defense. Several factors play into actions that are considered to 
ensure DOD maintains a healthy, robust base. First, certain defense 
industrial activities rely on specific labor skills--high-skill jobs 
that depend on experience learning a craft for which future workers 
cannot readily be hired to replace workers laid off today. Second, the 
Department has greater responsibility for maintaining defense-unique 
capabilities, whereas the Department does not need to be as concerned 
to ensure the long-term health of capabilities that draw readily on the 
commercial marketplace. Third, the Department is most concerned with 
industrial capabilities that are the most likely needed in the future; 
the least likely to be superseded by innovation or changes in the 
strategic environment; and the most expensive to reconstitute if a 
capability had to be rebuilt later to replace one lost today for lack 
of demand. The U.S. defense industrial base is critical to equipping 
our military with superior capabilities; and a strong, technologically 
vibrant, and financially successful defense industry is therefore in 
the national interest.
    The Department recognizes that the overall industrial base is 
increasingly global and DOD must deal with the implications and 
mitigate risks when warranted. Buying from a more global environment 
offers many benefits including increasing competition and reducing 
costs; allowing for the introduction of new technologies and concepts; 
and supporting coalition warfighting efforts through increased 
interoperability with allies and partners. On the other hand, while 
there are many benefits, I am well aware that there are also potential 
risks.
    The Department is committed to ensuring sources of supplies, 
whether U.S. or foreign, are reliable. The Department complies with the 
Buy American Act, the Berry Amendment, and other domestic content laws. 
In general, the Department does not support imposing additional 
domestic restrictions on its sources of supply. However, the Department 
has the authority to formally establish restrictions on the use of 
foreign products, when necessary, to ensure the survival of domestic 
suppliers required to sustain military readiness. These foreign product 
restrictions are imposed by administrative action, as opposed to 
statute, and they have been imposed, where necessary, to ensure 
national security.
    In terms of the two examples raised, the Department is currently 
procuring one ingredient--butanetriol (BT)--for the Hellfire missile 
propellant from China. The sole domestic supplier of BT decided to exit 
the business due to a small market and environmental implications. 
After an exhaustive global search for a supplier, the only company able 
to supply the chemical was in China. DOD is actively working with 
industry to develop a domestic source since it became aware of the BT 
source issue in 2007 and continued development efforts show promise. 
Regarding rare earth materials, most of the domestic supply chains are 
intact in the sense that U.S. producers are typically available to make 
rare earth products, components, and systems. The major exception is 
sintered neodymium-iron-boron magnets, for which there is no current 
U.S. production. In the case of the Joint Direct Attack Munitions 
(JDAM) Program, while some potential risks to the supply of neodymium-
iron-boron magnets for the system do exist, the Department believes 
that existing JDAM inventories mitigate risk significantly for that 
particular system at this time, and performance would not be diminished 
by the substitution of different magnets. Beyond the JDAM inventory, 
the Department devoted intensive attention to rare earth elements over 
the past several years and continues to monitor the issue carefully to 
ensure the critical elements upon which our systems depend continue to 
be available to system integrators.
    Mr. Garamendi. Do you believe maintaining anywhere from 100,000 to 
68,000 troops in Afghanistan over the next three years is the most 
efficient and/or effective way to address the threat of international 
terrorism? If so, why? Are there other strategies that might be more 
efficient or effective? General Dempsey, you seemed to refer to a 
network approach; can you please expand on your idea?
    Secretary Panetta. I believe our strategy in Afghanistan is 
critical to the disruption, dismantlement, and ultimate defeat of al-
Qa'ida and to ensuring that Afghanistan does not again become a safe 
haven from which al-Qa'ida and its network of extremist affiliates can 
threaten the United States or our allies. It was in Taliban-controlled 
Afghanistan that al-Qa'ida found the safe haven it needed to conduct 
the attacks on our country ten years ago, and we have a compelling 
national security interest in preventing such a situation from arising 
again.
    As the President announced in June 2011, we are now drawing down 
our 33,000 surge forces, so that by the end of summer 2012 we will have 
a total of 68,000 forces in Afghanistan. We are working closely with 
the Afghans and our NATO Allies and other partners to train and develop 
Afghan forces capable of taking the lead role for security in 
Afghanistan so that Afghanistan can never again be used as a safe haven 
to attack others. We will complete this transition process by the end 
of 2014.
    The end of this transition does not mean the end of our efforts to 
address the threats that emanate from the region, which remains a nexus 
for insurgents and terrorist facilitation networks. A network approach 
links the efforts of US, NATO, and other partners and maximizes the 
effectiveness of Special Operations Forces, intelligence surveillance 
and reconnaissance systems, cyber, and other capabilities to 
collectively attack the insurgent network. Investing in the 
sustainability of the ANSF and negotiating a strategic partnership with 
Afghanistan beyond 2014 will assure Afghanistan--and the region--that 
it will not again be abandoned.
    Mr. Garamendi. Mr. Secretary, as you know several organizations 
have proposed recommendations for Department of Defense savings. My 
staff developed a matrix to compare the various programs which we 
provided to your office. Across the political spectrum there are 
numerous similarities. Therefore, as you consider your proposed cuts 
please tell me and the House Armed Services Committee why those cuts 
that both the left and right agree on, should or should not be made?
    Secretary Panetta. Many of the proposals listed in your matrix are 
under consideration for how the Department will achieve cutting over 
450 billion dollars out of the budget over the next 10 years. 
Everything is on the table. DOD is looking at reducing force structure; 
it is looking at slowing the growth of compensation and benefits; and 
it is pushing further for efficiencies and tightening areas like 
procurement. These are all going to be tough decisions, and the 
Department must pursue savings in areas that were previously considered 
sacrosanct.
    Every decision will entail some form of risk but the Department 
must make the right cuts in the right places to meet this nation's 
security strategy and manage risk. DOD is working hard to deliver in 
the months ahead a coherent, strategy-driven program and budget that 
preserves the best military in the world.

    Mr. Garamendi. Do you believe maintaining anywhere from 100,000 to 
68,000 troops in Afghanistan over the next three years is the most 
efficient and/or effective way to address the threat of international 
terrorism? If so, why? Are there other strategies that might be more 
efficient or effective? General Dempsey, you seemed to refer to a 
network approach; can you please expand on your idea?
    General Dempsey. Following the recovery of surge forces, 
approximately 68,000 U.S. troops and thousands of international forces 
will remain in Afghanistan. These forces will continue to work side-by-
side with over 300,000 Afghan National Security Forces (ANSF) as they 
begin their transition to security lead. Moreover, the ANSF continues 
to demonstrate growth in quantity, quality, and operational 
effectiveness increasing their capacity and capability to counter the 
influence of insurgent safe-havens in Pakistan and limiting the ability 
of those insurgents from re-occupying ungoverned space in Afghanistan.
    However, the insurgency is a complex network that is most 
effectively countered through a network approach. Our approach must 
cast a comprehensive net that includes threads from our interagency 
partners, conventional and special operations forces, ISR, and cyber 
capabilities to find and disrupt the multiple layers of an insurgency. 
Addressing only one facet of the insurgency allows it to continue to 
recover and to adjust.
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MR. RIGELL

    Mr. Rigell. In the hearing, you testified that we have cyber-
attacks coming at us left and right.
    1. To what degree are those attacks planned and executed or in 
close collaboration with foreign governments compared to an individual 
actor or actors?
    2. Would you please identify the top three countries where those 
attacks originate?
    3. Also, if the attack originated from a foreign government, would 
the Department of Defense consider that to be an act of war?
    Secretary Panetta. 1 and 2. [The information referred to is 
classified and retained in the committee files.]
    3. The phrase ``act of war'' is frequently used as shorthand to 
refer to an act that may permit a state to use force in self-defense, 
but more appropriately it refers to an act that may lead to a state of 
ongoing hostilities or armed conflict. Contemporary international law 
addresses the concept of ``act of war'' in terms of a ``threat or use 
of force,'' as that phrase is used in the United Nations (UN) Charter. 
International legal norms, such as those found in the UN Charter and 
the law of armed conflict, that apply to the physical domains (i.e., 
sea, air, land, and space) also apply to the cyberspace domain. As in 
the physical world, a determination of what is a ``threat or use of 
force'' in cyberspace must be made in the context in which the activity 
occurs, and it involves an analysis by the affected states of the 
effect and purpose of the actions in question.
    Mr. Rigell. If the adverse consequences of operating under a series 
of continuing resolutions, as compared to operating under a properly 
legislated budget and appropriations, could be quantified and expressed 
as a percentage (with the percentage representing inefficiencies), what 
would you estimate the percentage and cost to be?
    Secretary Panetta. There are many different aspects of the 
continuing resolution (CR) process that create inefficiencies in the 
Department of Defense. It would be impossible to adequately quantify 
the impacts of operations under repetitive continuing resolutions.
    Each account in the budget is affected by a CR in different ways 
because of the various legal restrictions on use of funds. For example, 
Military Construction accounts (totaling over $13.4 billion in the FY 
12 request) require both Authorization and Appropriation of each 
individual construction project. Since each year's budget contains an 
entirely different set of construction projects, a CR that is an 
extension of the previous year's budget means that all new military 
construction stops--these accounts could be said to be more than 90% 
inefficient during a CR. As another example, in Procurement accounts 
(totaling over $113.0 billion in the FY 12 request), the Department is 
unable to start production of a new item or to increase the rate of 
production of an existing item, despite the fact that DOD planned to do 
so for years, have carefully budgeted the funds, and negotiated the 
contracts for these purchases. For the FY 2012 budget request more than 
30 major programs were precluded from starting or increasing the rate 
of production due to operation under the CR. For these aspects of the 
Department's long range modernization plan, this is virtually complete 
inefficiency.
    The impact on other accounts within the budget is not as easy to 
quantify. There are untold costs associated with contract delays, work 
stoppages/restarts, and discounts forgone. These effects often carry 
into future years, as they impact the long-term costs of projects. 
Additionally, operations under continuing resolution are complex--
beginning with the calculations, and further complicated by the 
interpretation of what the law allows--determining what we can and 
cannot execute is often very difficult. Lack of a National Defense 
Authorization Act (NDAA) also affects the Department's execution during 
a CR because many of these authorities are not included in the CR 
legislation, and the Department is required to cease operations until a 
new NDAA is enacted. I cannot quantify the long-term costs of the CR, 
either in terms of dollars or inefficiencies, but I can assure you they 
are great.
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MR. JOHNSON

    Mr. Johnson. The Army has spent $2.7 billion trying to build an 
intelligence platform, Distributed Common Ground Systems-Army (DCGS-A). 
It is years behind schedule, significantly over budget, and under-
performing.
    A Politico article (``Army's faulty computer system hurts 
operations,'' 6/29/11) detailed some of its failures. It quoted one 
former intelligence official: ``Almost any commercial solution out 
there would be better.'' Another added: ``It doesn't work. It's not 
providing the capabilities that they need.''
    An article in Defense News (``U.S. Army Intel Software Crashes 
During Exercise, 10/22/11) describes another failure during recent 
military exercises:
    ``When American intelligence analysts tried to use the software to 
track simulated North Korean troop movements, the screens on their 
DCGS-A workstations sometimes went black, forcing them to reboot the 
software. . . . ' What happened is the volume of information 
essentially crashed the software,' the senior intelligence official 
said. `We learned to manually do [data retrieval] in chunks of 
information so DCGS would not crash.' ''
    I am concerned that DCGS-A is an incompetently developed program 
that is wasting money and might fail our forces during real conflict, 
risking American lives.
    DCGS-A has been in development for more than a decade, costing 
taxpayers more than $2.7 billion, with an additional $2 billion slated 
to be spent in coming years.
    Version 4 of DCGS-A was supposed to be delivered in 2007/2008 and 
we have spent upwards of $355 million on it. Since it is now October 
2011 and we still haven't seen Version 4 in the field, can you give 
this Committee an update on this project?
    And can you explain to taxpayers whether continued DCGS-A 
development is a good use of scarce DOD resources when other services 
use other tools to accomplish the same objectives at less expense and 
with greater reliability and effectiveness?
    Secretary Panetta. The DCGS-A program is meeting the requirements 
outlined in the Joint Urgent Operational Needs statement and continues 
to improve the intelligence architecture in Afghanistan to increase 
capabilities and support to disadvantaged users. The accelerated DCGS-A 
program of record meets all of the requirements of the Joint Urgent 
Operational Needs (JUON) statement, moreover initial feedback from 
theater indicates that users are pleased with the DCGS-A program.
    As they exist today, stand-alone commercial capabilities do not 
provide access to all DCGS-A data sources and do not interoperate with 
Army mission command systems. Additionally, other proprietary 
capabilities are not interoperable with our Coalition and mission 
partners' systems and do not deliver the broad range of multi-
intelligence, full spectrum capabilities that DCGS-A provides. To date, 
no other Service or stand-alone commercial intelligence capability is 
able to address the operational needs and intelligence requirements of 
our commanders and Warfighters as well as DCGS-A.
    The DCGS-A system is an open architecture, government-owned system 
that allows the Army to integrate the newest capabilities from industry 
while reducing costs by maintaining a common architecture controlled by 
the Government. In direct coordination with several agencies in the 
Intelligence Community, DCGS-A provides a sustainable framework for 
continued modernization as new capabilities and technologies become 
available. The Tactical Cloud Integration Lab at Aberdeen Proving 
Ground, Maryland also provides industry and DOD partners the 
opportunity to collaborate on cutting edge technologies and advanced 
analytics, and to test the viability of integrating their capabilities 
within the DCGS-A enterprise.
    Specific to the JUON in question, the Army established one Secret 
Internet Protocol Router Network (SIPRNet) and one Afghan Mission 
Network (AMN) Cloud node in Afghanistan, with Initial Operational 
Capability (IOC) achieved in April and May 2011, respectively. To 
interoperate with the clouds and to provide enhanced intelligence 
capabilities, the DCGS-A client software required upgrading to Version 
3.1.6. Additionally, the Army added 253 Portable Multi-Function 
Workstations (P-MFWS) and 12 Intelligence, Surveillance, and 
Reconnaissance (ISR) Fusion Servers (IFS) to theater provided 
equipment. With Army units' organic DCGS-A systems, there are 981 P-
MFWS and 67 IFS in support of JUON CC 0419, throughout the theater.
    Data from the worldwide DCGS-A fusion brain architecture is made 
available to the cloud data stores. Within the DCGS-A architecture, the 
IFS provides a subset of data to Brigade Combat Teams, Battalions, and 
some remote locations in theater. This subset of data provides the 
ability to conduct limited analysis while disconnected. When 
reconnected, data feeds begin to update. Additionally, through the 
units' organic communications, disadvantaged users may leverage some 
cloud capabilities due to the low bandwidth queries made possible by 
the ``widget'' web applications and Ozone framework on the P-MFWS.
    In August 2011, PM DCGS-A began the integration of DCGS-A cloud 
software on a series of ``tactical edge node'' servers. Tactical edge 
nodes extend the cloud architecture and provide more robust advanced 
analytics capabilities and even greater storage capacity compared to 
the IFS. The tactical edge nodes will interface with the larger SIPR 
and AMN cloud nodes. This will provide theater users full cloud 
capabilities without requiring constant direct communications. The ISAF 
Joint Command in theater has opted to wait until the release of DCGS-A 
Standard Cloud baseline (V) 1.5.3 in January 2012 for the deployment of 
the initial tactical edge nodes.
    Mr. Johnson. In a July 2, 2010 Joint Urgent Operational Need 
Statement (JUONS), General Michael Flynn, then the top U.S. 
intelligence officer in Afghanistan, wrote that ``intelligence analysts 
in theater do not have the tools required to fully analyze the 
tremendous amounts information currently available in theater,'' that 
``this shortfall translates into operational opportunities missed and 
lives lost,'' and requested a specific ``Advanced Analytical Capability 
in Afghanistan.''
    DCGS-A was available to U.S. forces in Afghanistan at the time 
General Flynn issued this Joint Urgent Operational Need Statement, 
demonstrating that DCGS-A was not meeting the needs of U.S. forces.
    General Flynn specified that the capability needed included ``the 
ability to support low-bandwidth or frequently disconnected users with 
a data sub-set tailored to their area of operations and the 
applications use it, as well as the capability to report and updated 
information when re-connected to the network.'' The JUONS specified 
that ``This data set should update while the user is connected to the 
network and should also feed user reports/work back to the central 
database for wider use.''
    Does DCGS-A currently provide ``the ability to support low-
bandwidth or frequently disconnected users with a data sub-set tailored 
to their area of operations and the applications use it, as well as the 
capability to report and updated information when re-connected to the 
network,'' and can such data set ``update while the user is connected 
to the network and should also feed user reports/work back to the 
central database for wider use''?
    Have DOD efforts to meet the requirements outlined by General Flynn 
in the 7/2/10 JUONS been in compliance with 10 USC 2377 (proven 
commercial alternatives, partial or whole). And have other DOD services 
or government agencies adopted more successful approaches to solve 
these requirements at a lower cost?
    Secretary Panetta. The DCGS-A program is meeting the requirements 
outlined in the Joint Urgent Operational Needs statement and continues 
to improve the intelligence architecture in Afghanistan to increase 
capabilities and support to disadvantaged users. The accelerated DCGS-A 
program of record meets all of the requirements of the Joint Urgent 
Operational Needs (JUON) statement. Moreover, initial feedback from 
theater indicates that users are pleased with the DCGS-A program.
    As they exist today, stand-alone commercial capabilities do not 
provide access to all DCGS-A data sources and do not interoperate with 
Army mission command systems. Additionally, other proprietary 
capabilities are not interoperable with our Coalition and mission 
partners' systems and do not deliver the broad range of multi-
intelligence, full spectrum capabilities that DCGS-A provides. To date, 
no other Service or stand-alone commercial intelligence capability is 
able to address the operational needs and intelligence requirements of 
our commanders and Warfighters as well as DCGS-A.
    The DCGS-A system is an open architecture, government-owned system 
that allows the Army to integrate the newest capabilities from industry 
while reducing costs by maintaining a common architecture controlled by 
the Government. In direct coordination with several agencies in the 
Intelligence Community, DCGS-A provides a sustainable framework for 
continued modernization as new capabilities and technologies become 
available. The Tactical Cloud Integration Lab at Aberdeen Proving 
Ground, Maryland also provides industry and DOD partners the 
opportunity to collaborate on cutting edge technologies and advanced 
analytics, and to test the viability of integrating their capabilities 
within the DCGS-A enterprise.
    Specific to the JUON in question, the Army established one Secret 
Internet Protocol Router Network (SIPRNet) and one Afghan Mission 
Network (AMN) Cloud node in Afghanistan, with Initial Operational 
Capability (IOC) achieved in April and May 2011, respectively. To 
interoperate with the clouds and to provide enhanced intelligence 
capabilities, the DCGS-A client software required upgrading to Version 
3.1.6. Additionally, the Army added 253 Portable Multi-Function 
Workstations (P-MFWS) and 12 Intelligence, Surveillance, and 
Reconnaissance (ISR) Fusion Servers (IFS) to theater provided 
equipment. With Army units' organic DCGS-A systems, there are 981 P-
MFWS and 67 IFS in support of JUON CC 0419, throughout the theater.
    Data from the worldwide DCGS-A fusion brain architecture is made 
available to the cloud data stores. Within the DCGS-A architecture, the 
IFS provides a subset of data to Brigade Combat Teams, Battalions, and 
some remote locations in theater. This subset of data provides the 
ability to conduct limited analysis while disconnected. When 
reconnected, data feeds begin to update. Additionally, through the 
units' organic communications, disadvantaged users may leverage some 
cloud capabilities due to the low bandwidth queries made possible by 
the ``widget'' web applications and Ozone framework on the P-MFWS.
    In August 2011, PM DCGS-A began the integration of DCGS-A cloud 
software on a series of ``tactical edge node'' servers. Tactical edge 
nodes extend the cloud architecture and provide more robust advanced 
analytics capabilities and even greater storage capacity compared to 
the IFS. The tactical edge nodes will interface with the larger SIPR 
and AMN cloud nodes. This will provide theater users full cloud 
capabilities without requiring constant direct communications. The ISAF 
Joint Command in theater has opted to wait until the release of DCGS-A 
Standard Cloud baseline (V) 1.5.3 in January 2012 for the deployment of 
the initial tactical edge nodes.
    Mr. Johnson. Colonel Peter A. Newell wrote in a July 28, 2010 
letter to Congressman Norm Dicks of the House Appropriations 
Subcommittee on Defense that the DCGS-A Cloud would be deployed to 
Afghanistan in November 2010.
    According to Army records, by the end of Fiscal Year 2011, the Army 
will have spent nearly $120 million to develop the DCGS-A Cloud.
    Given that Colonel Newell estimated that the DCGS-A Cloud would 
have been deployed in the field eleven months ago, and we've already 
spent $120 million on its development, I would expect that this system 
is currently widely used by our forces in Afghanistan.
    Can you please provide me with the exact number of U.S. Army BCT 
personnel who are currently using the DCGS-A cloud while deployed in 
Afghanistan?
    Secretary Panetta. The Secret Internet Protocol Router Network 
(SIPRNet) Cloud equipment shipped to theater in November 2010. The 
SIPRNet Cloud achieved Initial Operating Capability (IOC) in April 
2011. The Afghan Mission Network (AMN) Cloud reached IOC in May 2011. 
Thus, the clouds have been available for use for five-to-six months. In 
the DCGS-A architecture in Afghanistan, there are 6,128 unique accounts 
(users) operational in Afghanistan. As of November 2011, there are over 
115 regularly active users of the cloud widgets supported by the cloud 
capabilities in Afghanistan. These users are supporting the 
intelligence requirements for the commanders of seven (7) Brigade 
Combat Teams and 14 Brigade sized combat enablers.
    Mr. Johnson. Finally, Mr. Secretary, I want to address the 
possibility of expanding the DCGS program to serve the Department of 
Justice or the Department of Homeland Security, as some have discussed.
    As a member of the House Judiciary Committee, in light of this 
program's decade-long track record of failure and disappointment, its 
high cost and poor performance, and its flawed underlying technological 
architecture, I'd like the record to reflect that I would have grave 
reservations were the Department of Justice to acquire and use the DCGS 
system.
    Secretary Panetta. Each Service maintains a Distributed Common 
Ground System program of record. Joint Forces Command successfully 
evaluated and exercised multiple Service DCGS programs and their 
interoperability with Coalition Intelligence, Surveillance, and 
Reconnaissance (ISR) systems at the Empire Challenge event in July 
2011. Empire Challenge 2011 proved that the DCGS Integration Backbone 
(DIB) provides timely information with access to all Enterprise 
intelligence dissemination nodes. The DIB filters data to achieve 
relevant results and supports real-time Cross-Domain data queries and 
retrieval across Coalition and other security domains. The joint 
standards that are set and maintained by DIB nodes allow DIB users 
access to terabytes of data from the Services as well as Coalition and 
Agency partners. The whole DCGS enterprise is greater than the sum of 
its parts. Specific to the performance of DCGS-Army, in August 2011, 
the Army Test and Evaluation Command (ATEC) conducted a forward 
operational assessment of DCGS-A in Afghanistan. ATEC concluded that 
DCGS-A supported Warfighter needs by providing access to theater and 
national intelligence collection, analysis, and early warning and 
targeting capabilities. DCGS-A provides access to hundreds of tactical, 
strategic and national data assets on Coalition, Secret and Top Secret 
networks. One key success of the DCGS-A system (like the larger DIB 
network) is that the data is available via a DCGS-A web portal, to 
anyone allowed access to the Secret Internet Protocol Router Network 
(SIPRNet) or Joint Worldwide Intelligence Communications System 
(JWICS). If interested, the Department of Justice and Department of 
Homeland Security could register for accounts and gain access to the 
same information provided to our Warfighters. The DCGS-A brain web 
portal provides limited analytical tools compared to the full suite of 
DCGS-A thick client applications; however, the DCGS-A Cloud widgets on 
the SIPRnet are intuitive and easy to use. Audit information of DCGS-A 
usage shows that DCGS-A provides DIA, CIA, NGA, COIC, JSOC, USASOC and 
other Services with large volumes of data each month. While the 
ingestion of certain types of data regarding the Justice Department or 
dealing with US persons would require special restrictions, the simple 
addition of the DOJ and DHS staff members to our user base would be 
easily established.
                                 ______
                                 
                   QUESTION SUBMITTED BY MR. PALAZZO

    Mr. Palazzo. Recent news reported ``the Pentagon which previous 
warned that reliable military spending figures could not be produced 
until 2017, has discovered that financial ledgers are in worse shape 
than expected and it may need to spend a billion dollars more to make 
DOD's financial accounting credible, according to defense officials and 
congressional sources.''
    Mr. Panetta, this seems opposite of your written statement where 
you believe that the Department can be audit-ready by 2014.
    For months now my colleagues on the Panel on Defense Financial 
Management and Auditablity Reform have been asking what we can do to 
streamline this process and this is the first time I have heard 
anything about additional funds being needed to achieve this goal. 
Could you respond to these reports?
    Secretary Panetta. The article you reference mischaracterized the 
extent of resources expected to be required for Financial Improvement 
and Audit Readiness (FIAR) efforts. As the Department reported in the 
November 2011 FIAR Plan Status Report, it is devoting significant 
resources, approximately $300 million per year, to achieving auditable 
financial statements. DOD is not spending $1B more than reported in our 
recent reports to Congress. I directed DOD Components to revise their 
FIAR plans to achieve auditability in the Statement of Budgetary 
Resources for general funds by 2014. As part of these efforts, 
Components are assessing whether additional resources are required to 
achieve the accelerated goal. Reasonable requests for additional funds 
will be considered and future reports to Congress will reflect any 
updated funding approved.
                                 ______
                                 
                    QUESTIONS SUBMITTED BY MRS. ROBY

    Mrs. Roby. One focus has been about making the defense programs 
more efficient, cost-effective, and with high performance. How do we 
assess research and development programs that often have with it a high 
risk in developing cutting-edge research but at the same time has 
significant and large payoffs?
    Secretary Panetta. The Department's research and development 
program is a balanced investment between higher risk, high payoff 
technology and lower risk, and evolutionary technology. Throughout the 
past several decades, both the Department and the country benefited 
from high-risk defense research; among the advances, there was the 
Internet, stealth technologies, the Global Positioning System, and 
other advanced capabilities. As DOD moves forward to improve 
efficiency, it is important to place higher risk development under 
scrutiny. The Department must continue to develop new, high payoff 
technologies--but it also must be ready to terminate efforts that are 
not cost-effective. One successful model was the way the Defense 
Advanced Research Projects Agency assesses high risk projects with 
interim milestones or development gates. If the research is not 
progressing, the program is stopped. Using this model, DOD is able to 
continue high-payoff projects with enhanced efficiencies.
    Mrs. Roby. One focus has been making the defense program more 
efficient, cost-effective, and with high performance. What impacts, 
both short-term and long-term, would a reduction in current RDTE 
accounts, particularly basic research, have on military capability?
    Secretary Panetta. In this fiscal environment, every program, 
contract and facility will be scrutinized for savings that does not 
reduce readiness or the ability to perform essential missions. These 
cuts must be carefully targeted to avoid a hollow force, to ensure a 
robust industrial base, and to protect the new military capabilities 
required to sustain military strength. Research, development, test and 
evaluation (RDT&E) accounts are a large part of the equation. While the 
Department must be cost conscious, it must also take every possible 
step to protect emerging military capabilities.
    DOD cannot make a linear extrapolation of the impacts of RDT&E cuts 
to the future force; but I can say that without RDT&E investment, 
future military capabilities will be greatly reduced.

                                  
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