[Senate Hearing 112-]
[From the U.S. Government Publishing Office]



 
       DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2012

                              ----------                              


                        WEDNESDAY, JUNE 15, 2011

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 11 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Daniel K. Inouye (chairman) 
presiding.
    Present: Senators Inouye, Leahy, Feinstein, Mikulski, Kohl, 
Murray, Cochran, Shelby, Hutchison, Alexander, Collins, 
Murkowski, and Coats.

                         DEPARTMENT OF DEFENSE

                   Office of the Secretary of Defense

STATEMENT OF HON. ROBERT M. GATES, SECRETARY OF DEFENSE

             OPENING STATEMENT OF CHAIRMAN DANIEL K. INOUYE

    Chairman Inouye. This morning I'd like to welcome Dr. 
Robert Gates, Secretary of Defense, and Admiral Mike Mullen, 
Chairman of the Joint Chiefs of Staff, to testify on the 
administration's budget request for fiscal year 2012.
    Gentlemen, it's my pleasure and privilege to welcome you 
back to your last testimony before this subcommittee, and to 
thank you for your many years of admirable and dedicated 
service to our Nation.
    You entered your current positions during a tumultuous 
period for this country, when we were losing ground in both 
Iraq and Afghanistan, and you agreed to take on what was 
arguably two of the most difficult jobs in the country. And 
your leadership not only turned the tide on the ongoing wars, 
but also maintained the capacity, capability and public 
appreciation for the United States military. You have served 
tirelessly, and you have served honorably. This subcommittee 
and this country are truly thankful to both of you.
    I understand that Secretary Gates has to leave by 2:30 
today, so, in order to have time for testimony and questions, I 
will submit my full statement for the record.
    And I will now turn to the Vice Chairman, Senator Cochran, 
for his opening remarks.
    [The statement follows:]

            Prepared Statement of Chairman Daniel K. Inouye

    Today, I would like to welcome Dr. Robert Gates, the 
Secretary of Defense and Admiral Mike Mullen, the Chairman of 
the Joint Chiefs of Staff, to testify on the administration's 
budget request for fiscal year 2012. Gentlemen, it is my 
privilege to welcome you back to your last testimony before 
this subcommittee and to thank you for your many years of 
admirable and dedicated service to our country.
    You both entered your current positions during a tumultuous 
period for this country when we were losing ground in both Iraq 
and Afghanistan. You agreed to take on what are arguably two of 
the most difficult jobs in the country, and your leadership not 
only turned the tide of the ongoing wars, but also maintained 
the capacity, capability, and public appreciation for the 
United States military. You have served tirelessly, and you 
have served honorably; this subcommittee and this country are 
truly thankful to both of you.
    But, as you know, there is no rest for the weary. Before we 
say farewell, the subcommittee has more business for you both 
and many issues to discuss regarding the budget.
    The Department's fiscal year 2012 base budget request is 
$553 billion, an increase of $40 billion over last year's 
enacted base budget. The Department is also requesting $118 
billion for overseas contingency operations for fiscal year 
2012.
    Secretary Gates, as a part of the fiscal year 2012 budget, 
you insightfully set a goal for the Department to achieve 
efficiency savings of $178 billion over the next 5 years. Since 
that time, President Obama has challenged the Department to cut 
an additional $400 billion over the next 12 years. I'd like to 
get your perspective of this reduction and your assessment of 
the impact this reduction will have on military personnel and 
warfighting capability.
    Since submitting the President's budget, many events around 
the globe have changed. The U.S. military is now engaged in 
operations over Libya, Osama bin Laden is dead, and 
longstanding dictatorships namely in the Middle East and Africa 
are being challenged or have been overthrown in favor of 
democratic governments. Yet our traditional threats remain and 
continue to grow while our attention has been focused 
elsewhere. I'd like to hear your thoughts on future force size, 
structure, and capability that will be necessary to combat 
future threats.
    Your leadership brought about a significant change in the 
way the Department buys weapons. You boldly came into the 
office and challenged the military services, the defense 
industry, and the Congress to cancel programs you deemed to be 
exquisite technologies built for a different war than the ones 
we were fighting.
    Although the enemy's tactics and tools constantly changed, 
you forced the traditionally slow-moving Pentagon bureaucracy 
to respond swiftly with better capabilities, such as systems to 
defeat improvised explosive devices and increasing much needed 
intelligence, surveillance, and reconnaissance assets. I look 
forward to hearing from you both on other lessons that you have 
learned from the last 10 years of war on how to improve the 
Department's acquisition programs.
    Gentlemen, we sincerely appreciate your service to our 
Nation, and the dedication and sacrifices made daily by the men 
and women of our armed services. We could not be more grateful 
for what those who wear our Nation's uniform do for our country 
each and every day.
    Your full statements will be included in the record. I now 
turn to the Vice Chairman, Senator Cochran, for his opening 
statement.

                   STATEMENT OF SENATOR THAD COCHRAN

    Senator Cochran. Mr. Chairman, it's a pleasure to join you 
in welcoming these distinguished witnesses to our subcommittee. 
They have demonstrated through their service--the Secretary of 
Defense, the Chairman of the Joint Chiefs--a skill, knowledge 
and dedication they have to keeping our country safe, and to 
helping protect the security interests of our Nation around the 
world. That's a big job. That is a huge challenge. And, in my 
view, they have provided distinguished leadership, for which 
our Nation is very grateful.
    Chairman Inouye. Mr. Secretary.
    Secretary Gates. Thank you, Mr. Chairman. And thanks for 
the kind words.
    One correction is--12:30.
    And it's in a good cause. I'm meeting with the Director of 
the Office of Management and Budget (OMB) on the Fiscal year 
2012 budget. So, wish me luck.
    Mr. Chairman, members of the sucommittee, I appreciate the 
opportunity to discuss the President's budget request for 
fiscal year 2012--as noted, my last budget testimony before 
this, or any other congressional committee ever. And, this time 
I mean it.
    The budget request for the Department of Defense being 
presented today includes a base budget request of $553 billion, 
and an overseas contingency operations request of $117.8 
billion.
    My submitted statement includes many more details of this 
request, but I would like to take this opportunity to address 
several issues that I know have been a subject of debate and 
concern in recent weeks and months: First, the planned future 
reductions in the size of the ground forces; second, the 
proposed reforms and savings to the TRICARE program for 
working-age retirees; and, third, the budget and the strategy 
choices required to meet the savings targets recently laid out 
by President Obama.
    Nearly 4\1/2\ years ago, one of my first acts as Defense 
Secretary was to increase the permanent end strength of our 
ground forces--the Army by 65,000, for a total of 547,000, and 
the Marine Corps by 27,000, to 202,000.
    At the time, the increase was needed to relieve the severe 
stress on the force from the Iraq war as the surge was getting 
underway. To support the later plus-up of troops in 
Afghanistan, I subsequently authorized a temporary further 
increase in the Army of some 22,000--an increase always planned 
to end in 2000--fiscal year 2013. The objective was to reduce 
stress on the force; limit, and eventually end, the practice of 
stop-loss; and to increase troops' home station dwell time. 
This has worked, and I can tell you that those stop-lossed in 
the Army is now over. There are no Army soldiers stop-lossed.
    As we end the U.S. troop presence in Iraq this year 
according to our agreement with the Iraqi Government, the 
overall deployment demands on our force are decreasing 
significantly. That is why we believe that, beginning in 2015, 
the United States can, with minimal risk, begin reducing Army 
active duty end strength by 27,000, and in the Marine Corps by 
somewhere between 15,000 and 20,000.
    These projections assume that the number of troops in 
Afghanistan will be significantly reduced by the end of 2014, 
in accordance with the President's and NATO's strategy. If our 
assumptions prove incorrect, there's plenty of time to adjust 
the size and schedule of this change.
    These reductions are supported by both the Army and Marine 
Corps leadership. However, I believe no further reductions 
should be considered without an honest and thorough assessment 
of the risks involved, to include the missions we may need to 
shed in the future.
    Let me turn to another issue relating to the Department's 
personnel costs--the proposed reforms to the TRICARE program. 
As you know, sharply rising healthcare costs are consuming an 
ever-larger share of this Department's budget, growing from $19 
billion in 2001 to $52.5 billion in this request. Among other 
reforms, this fiscal year 2012 budget includes modest increases 
to TRICARE enrollment fees, later indexed to the national 
health expenditures, for working-age retirees, most of whom are 
employed while receiving pensions. All six members of the Joint 
Chiefs of Staff have strongly endorsed these and other cost-
saving TRICARE reforms in a letter to the Congress.
    Let me be clear. The current TRICARE arrangement--one in 
which fees have not increased for 15 years--is simply 
unsustainable, and if allowed to continue, the Department of 
Defense risks the fate of other corporate and government 
bureaucracies that were ultimately crippled by personnel costs 
and, in particular, their retiree benefit packages.
    The House approved most of our proposed changes in its 
version of the fiscal year 2012 authorization bill, and I 
strongly urge the Senate to endorse all of our proposals.
    Which brings me to the third and last point--the difficult 
budget choices ahead for the Department. Last spring we 
launched a comprehensive effort to reduce the Department's 
overhead expenditures. The goal was, and is, to sustain the 
U.S. military's size and strength over the long term by 
reinvesting efficiency savings in force structure and other key 
combat capabilities.
    The results of these efforts, frankly, were mixed. While 
the services leaned forward and found nearly $100 billion in 
efficiency savings, efforts to trim overhead costs of DOD 
components outside the military services were not as 
successful. I believe there are more savings to be found by 
culling more overhead, and better accounting for--and, thus, 
better managing--the funds and people we have.
    But one thing is quite clear. The efficiencies efforts the 
Department has undertaken will not come close to meeting the 
$400 billion in savings layed out by the President. To realize 
the projected savings target will require real cuts, given the 
escalating costs of so many parts of the defense budget, and, 
as a result, real choices.
    Here I would leave you with a word of caution: We must not 
repeat the mistakes of the past, where budget targets were met 
mostly by taking a percentage off the top of everything--the 
simplest and most politically expedient approach, both inside 
the Pentagon and outside of it. That kind of salami-slicing 
approach preserves overhead and maintains force structure on 
paper, but results in a hollowing out of the force from a lack 
of proper training, maintenance and equipment, and manpower. 
And that's what happened in the 1970s--a disastrous period for 
our military--and, to a lesser extent, during the late 1990s.
    That is why I launched the, a comprehensive review to be 
completed by the end of this summer to ensure that future 
spending decisions are focused on priorities, strategy and 
risks, and are not simply a math and accounting exercise. In 
the end, this process must be about identifying options for the 
President and for you, the Congress, to ensure that the nation 
consciously acknowledges and accepts additional risk in 
exchange for reduced investment in the military.
    Above all, if we are to avoid a hollowing effect, this 
process must address force structure, with the overarching goal 
to preserve a U.S. military capable of meeting crucial national 
security priorities--even if fiscal pressure requires 
reductions in that force's size. I've said repeatedly I'd 
rather have a smaller, superbly capable military than a larger, 
hollow, less capable one. However, we need to be honest with 
the President, with you, with the American people, and, indeed, 
with ourselves about what the consequences are. A smaller 
military, no matter how superb, will be able to go fewer places 
and be able to do fewer things.
    As we embark on this debate about the future size and 
composition of the American military, it would be well to 
remember that we still live in a very dangerous and often 
unstable world. Our military must remain strong and agile 
enough to face a diverse range of threats--from non-state 
actors attempting to acquire and use weapons of mass 
destruction and sophisticated missiles, to the more traditional 
threats of other states, both building up their conventional 
forces, and developing new capabilities that target our 
traditional strategies.
    Today, I ask your support for a leaner, more efficient 
Pentagon and continued sustainable, robust investments in our 
troops and future capabilities. Our troops have done more than 
their part. Now it's time for us in Washington to do ours.
    In conclusion, I want to thank this subcommittee for all 
you have done to support our troops as well as their families. 
From my earliest days as Secretary of Defense, I have made a 
point of reminding officers--from midshipmen and cadets to 
admirals and generals--that Congress is a co-equal branch of 
government that, under the Constitution, raises armies and 
provides for navies, and now air forces. Members of both 
parties serving in Congress have long been strong supporters of 
our military, and are owed candid--honesty and candor from the 
military, and from the Department.
    I've just returned from my 12th, and last, visit to 
Afghanistan as Secretary of Defense. The progress we have made 
there since President Obama announced his new strategy has been 
impressive. The sacrifices our troops are willing to endure to 
protect this country is nothing short of amazing. And all they 
ask in return is that the country support them in their efforts 
through to success.
    It has been the greatest privilege of my life to lead this 
great military for the past 4\1/2\ years. Every day, I've 
considered it my responsibility to get our troops everything 
they need to be successful in their mission and to come home 
safely. In my visits to the combat theaters, military 
hospitals, and in bases and posts at home and around the world, 
I continue to be amazed by their decency, their resilience, and 
their courage. Through the support of the Congress and our 
nation, these young men and women will prevail in the current 
conflicts, and be prepared to confront the threats that they, 
their children, and our Nation may face in the future.

                           PREPARED STATEMENT

    Thank you, Mr. Chairman.
    Chairman Inouye. Mr. Secretary, I thank you very much.
    [The statement follows:]
                 Prepared Statement of Robert M. Gates
    Mr. Chairman, members of the committee: I appreciate the 
opportunity to discuss the President's budget request for fiscal year 
2012--my last budget testimony before this, or any other, congressional 
committee.
    The budget request for the Department of Defense being presented 
today includes a base budget request of $553 billion and an Overseas 
Contingency Operations request for $117.8 billion. These budget 
decisions took place in the context of a nearly 2 year effort by this 
Department to reduce overhead, cull troubled and excess programs, and 
rein in personnel and contractor costs--all for the purpose of 
preserving the fighting strength of America's military at a time of 
fiscal stress for our country. The goal was not only to generate 
savings that could be applied to new capabilities and programs, but for 
our defense institutions to become more agile and effective 
organizations as a result.
    In all, these budget requests, if enacted by the Congress, will: 
Continue our efforts to reform the way the department does business; 
fund modernization programs needed to prepare for future conflicts; 
reaffirm and strengthen the Nation's commitment to care for the all-
volunteer force; and ensure that our troops and commanders on the front 
lines have the resources and support they need to accomplish their 
mission.
                          reform--efficiencies
    The fiscal year 2012 budget decisions took place in the context of 
a nearly 2 year effort by the Department of Defense to reform the way 
the Pentagon does business--to change how and what we buy, to replace a 
culture of endless money with one of savings and restraint. To not only 
make every defense dollar count, but also become a more agile and 
effective organization in the process. This process culminated in my 
announcement in January that summarized the impact of these reforms on 
the fiscal year 2012 budget.
    The military services conducted a thorough scrub of their 
bureaucratic structures, business practices, modernization programs, 
civilian and military personnel levels, and associated overhead costs. 
They identified potential savings that totaled approximately $100 
billion over 5 years. More than $70 billion is being reinvested in high 
priority needs and capabilities, while about $28 billion is going to 
higher than expected operating costs--``must pay'' bills that would 
otherwise be paid from investment accounts.
    We then looked at reducing costs and deriving savings across the 
department as a whole--with special attention to the substantial 
headquarters and support bureaucracies outside the four military 
services--savings that added up to $78 billion over 5 years.
    Ten billion dollars of that total came from restructuring the Joint 
Strike Fighter program and reducing Army and Marine Corps end strength 
starting in fiscal year 2015.
    The rest of the DOD-wide savings came primarily from shedding 
excess overhead, improving business practices, and reducing personnel 
costs. Key examples include:
  --$13 billion from holding the civilian workforce at fiscal year 2010 
        levels for 3 years, with limited exceptions such as growth in 
        the acquisition workforce;
  --$12 billion through the governmentwide freeze on civilian salaries;
  --$8 billion by reforming military health programs to maintain high 
        quality care while slowing cost growth;
  --$11 billion from resetting missions, priorities, functions for the 
        defense agencies and the Office of the Secretary of Defense;
  --$6 billion by reducing staff augmentation and service support 
        contracts by 10 percent annually for 3 years;
  --$2.3 billion by disestablishing Joint Forces Command and the 
        Business Transformation Agency;
  --$1 billion by eliminating unnecessary studies and internal reports;
  --$4 billion in changed economic assumptions, such as a lower than 
        expected inflation rate;
  --$100 million by reducing more than 100 flag officer and about 200 
        civilian senior executive positions; and
  --$11 billion in a variety of smaller initiatives across the 
        department.
    To better track how and where taxpayer dollars are spent, the 
department is also reforming its financial management systems and 
practices--with the goal of having auditable financial statements by 
the congressionally mandated date of 2017. We are pursuing a 
streamlined approach that focuses first on the information we most use 
to manage the department.
                             choices ahead
    I believe there are more savings possible by culling more overhead 
and better accounting for, and thus better managing, the funds and 
people we have. But one thing is quite clear. These efficiencies 
efforts will not come close to meeting the budget targets laid out by 
the President, much less other, higher targets being bandied about.
    Nonetheless, meeting this savings target will require real cuts--
given the escalating costs of so many parts of the defense budget--and, 
as a result, real choices. That is why I launched a comprehensive 
review last month to ensure that future spending decisions are focused 
on priorities, strategy and risks, and are not simply a math and 
accounting exercise. In the end, this process must be about identifying 
options for the President and the Congress, to ensure that the Nation 
consciously acknowledges and accepts additional risk in exchange for 
reduced investment in its military.
    As we embark on this debate about the future size and composition 
of the American military, it would be well to remember that we still 
live in a very dangerous and often unstable world. Our military must 
remain strong and agile enough to face a diverse range of threats--from 
non-state actors attempting to acquire and use weapons of mass 
destruction and sophisticated missiles, to the more traditional threats 
of other states both building up their conventional forces and 
developing new capabilities that target our traditional strengths.
                  fiscal year 2012 base budget request
    The President's request for the base defense budget is for $553 
billion, which represents about 3.5 percent real growth over the fiscal 
year 2011 defense bill enacted by Congress this year. The four major 
components are: $207.1 billion for operations, maintenance, logistics, 
and training; $142.8 billion for military pay and benefits; $188.3 
billion for modernization; and $14.8 billion for military construction 
and family housing.
                             modernization
    In all, the fiscal year 2012 budget request includes $188.3 billion 
for modernization in the form of Procurement, Research, Development, 
Testing and Evaluation. Key modernization initiatives include:
  --$4.8 billion to enhance ISR capabilities and buy more high demand 
        assets, including the MC-12 surveillance aircraft, Predator, 
        Reaper, and Global Hawk UAVs--with the aim of achieving 65 
        Predator-class Combat Air Patrols by the end of fiscal year 
        2013;
  --More than $10 billion to modernize our heavily used rotary wing 
        fleet;
  --$3.9 billion to upgrade the Army's combat vehicles and 
        communications systems;
  --$4.8 billion to buy new equipment for the reserves;
  --$14.9 billion to buy new fighters and ground attack aircraft;
  --$24.6 billion to support a realistic, executable shipbuilding and 
        investment portfolio that buys 11 ships in fiscal year 2012 and 
        modernizes existing fleet assets;
  --$10.5 billion to advance the modernization portion of the 
        administration's approach to ballistic missile defense--
        including $8.4 billion for the Missile Defense Agency; and
  --$2.3 billion to improve the military's cyber capabilities.
    Questions have been raised about whether we are too focused on 
current conflicts and are devoting too few resources to future possible 
high-end conflicts. This budget should put those questions to rest. The 
fiscal year 2012 base request provides for significant investments at 
the high end of the conflict spectrum, including:
  --$1 billion ($4.5 billion over the Future Years Defense Program 
        (FYDP)) for a tactical air modernization program that would 
        ensure that the F-22 will continue to be the world's preeminent 
        air-to-air fighter. This effort will leverage radar and 
        electronic protection technologies from the JSF program;
  --$204 million ($1.6 billion over the FYDP) to modernize the radars 
        of F-15s to keep this key fighter viable well into the future;
  --$30 million ($491 million over the FYDP) for a follow-on to the 
        AMRAAM, the medium range air-to-air weapon, that would provide 
        greater range, lethality, and protection against electronic 
        jamming;
  --$200 million ($800 million over the FYDP) to invest in technologies 
        to disrupt an opponent's ability to attack our surface ships;
  --$1.1 billion ($2.2 billion over the FYDP) to buy more EA-18 
        Growlers than originally planned, plus $1.6 billion over the 
        FYDP to develop a new jamming system, expanding our electronic 
        warfare capabilities;
  --$2.1 billion ($14 billion over the FYDP) to fund Aegis-equipped 
        ships to further defend the fleet from aircraft and missile 
        attack and provide theater-wide tactical ballistic missile 
        defense; and
  --To improve anti-submarine capabilities, $2.4 billion for P-8 
        Poseidon aircraft ($19.6 billion over the FYDP) and $4.8 
        billion for procurement of Virginia-class attack submarines 
        ($27.6 billion over the FYDP).
    The fiscal year 2012 budget also supports a long-range strike 
family of systems, which must be a high priority for future defense 
investment given the anti-access challenges our military faces. A key 
component of this joint portfolio will be a new long-range, nuclear-
capable, penetrating Air Force bomber, designed and developed using 
proven technologies and with an option for remote piloting. It is 
important that we begin this project now to ensure that a new bomber 
can be ready before the current aging fleet goes out of service.
    The budget request includes $10.6 billion to maintain U.S. 
supremacy in space, in keeping with the recently released National 
Security Space Strategy. This new strategy will help bring order to the 
congested space domain, strengthen international partnerships, increase 
resiliency so our troops can fight in a degraded space environment, and 
improve our acquisition processes and reform export controls to 
energize the space industrial base.
    As the military services were digging deep for excess overhead, 
they were also taking a hard look at their modernization portfolio for 
weapons that were having major development problems, unsustainable cost 
growth, or had grown less relevant to real world needs.
    The Joint Strike Fighter program received special scrutiny given 
its substantial cost and its central place in ensuring that we have a 
large inventory of the most advanced fifth generation stealth fighters 
to sustain U.S. air superiority well into the future. The fiscal year 
2012 budget reflects the proposed restructuring of the F-35 Joint 
Strike Fighter program to stabilize its schedule and cost. The 
department has adjusted F-35 procurement quantities based on new data 
on costs, on likely orders from our foreign nation partners, and on 
realigned development and test schedules.
    The proposed restructuring adds over $4 billion for additional 
testing through 2016. It holds F-35 procurement in fiscal year 2012 at 
32 aircraft and reduces buys by 124 aircraft compared with last year's 
plans. Even after these changes, procurement ramps up sharply to 108 
aircraft by fiscal year 2016. This is the fastest that future 
procurement can prudently be increased.
    The F-35 restructuring places the Marine's STOVL variant on the 
equivalent of a 2 year probation. If we cannot fix this variant during 
this timeframe and get it back on track in terms of performance, cost 
and schedule, then I believe it should be canceled. To compensate for 
any delays in F-35 deliveries, we propose buying 41 more F/A-18s 
between fiscal year 2012 to 2014.
    I also want to reiterate the President's and my firm opposition to 
buying an extra engine for the F-35--a position echoed by the Air 
Force, Navy and Marine Corps leadership. We consider it an unnecessary 
and extravagant expense, particularly during this period of fiscal 
contraction.
    This budget proposes cancelling the Expeditionary Fighting Vehicle 
and reallocating funds to existing Marine ground combat requirements, a 
decision based on the recommendation of the Secretary of the Navy and 
the Commandant of the Marine Corps.
    Ultimately, the Navy and Marine Corps leadership based their 
recommendations on two main principles: affordability and balance. The 
EFV, a program originally conceived in the 1980s, has already consumed 
more than $3 billion to develop and will cost another $12 billion to 
build. The EFV as designed would have cost many times more than the 
system it would replace, with much higher maintenance and service 
costs. If continued over the next two decades, the EFV program would 
consume fully half of all Marine Corps procurement dollars while 
swallowing virtually the Corps' entire ground vehicle budget--
procurement, operations, and maintenance--with all the risk to 
readiness that entails.
    To be sure, the EFV would, if pursued to completion without regard 
to time or cost, be an enormously capable vehicle. But as with several 
other high end programs completed or cancelled in recent years--the F-
22, the Army Future Combat Systems, or the Navy's DDG-1000 destroyer--
the mounting cost of acquiring this specialized capability must be 
judged against other priorities and needs.
    Let there be no doubt--we are committed to sustaining the Marine 
Corps amphibious mission. This fiscal year 2012 request proposes that 
the $2.8 billion previously budgeted to the EFV for the next 5 years 
instead be reinvested towards an integrated new vehicle program for the 
Marine Corps, including:
  --New armor, weaponry and engines, plus a life-extension program for 
        the existing amphibious assault vehicles;
  --The development of a new, more affordable, sustainable and 
        survivable amphibious vehicle;
  --Accelerated procurement of new personnel carriers; and
  --Enhancement of existing Marine vehicles such as the Abrams tank and 
        Light Armored Vehicle.
    Throughout this process, we will harness the lessons learned--in 
terms of engineering, design, and testing--from the development of the 
EFV.
                               personnel
    The fiscal year 2012 budget request includes $142.8 billion for 
military pay and benefits and continues our strong support for troops 
and their families. This includes funding for wounded, ill and injured 
care, enhancing the military healthcare system and supporting military 
families under stress. Examples in this request include: $2.3 billion 
to provide care for our Wounded Warriors and their families; and $8.3 
billion for supporting families, including child care and school 
programs.
    While the department continues to insist on and pay for the highest 
quality healthcare, we are also mindful of sharply rising health 
costs--which have risen over the last decade from $19 billion in 2001 
to $52.5 billion in this budget request. The department has taken a 
comprehensive look at all facets of the military healthcare model--
emphasizing the need to balance the number one priority of continuing 
to provide the highest care and service, while ensuring fiscally 
responsible management.
    One area we have identified are benefits provided to working-age 
retirees under the TRICARE program. Many of these beneficiaries are 
employed full time while receiving full pensions, often forgoing their 
employer's health plan to remain with TRICARE. This should come as no 
surprise, given that the current TRICARE enrollment fee was set in 1995 
at $460 a year for the basic family plan and has not been raised since. 
By comparison, the fees for a comparable health insurance program for 
Federal workers total roughly $5,000 per year.
    Accordingly, we propose a modest increase to TRICARE Prime 
enrollment fees for working age retirees: $2.50 per month for 
individuals and $5 per month for families in fiscal year 2012, and then 
indexed to increases in national health expenditures in future years.
    We are proposing other healthcare initiatives such as efficiencies 
in pharmacy co-pays designed to provide incentives to make greater use 
of generic prescriptions and those ordered by mail. We also seek to 
phase out, over several years, special subsidies offered to a small 
group of hospitals that treat military families and retirees. 
Additionally, we are proposing providing TRICARE-for-Life to all 
Medicare-eligible retirees aged 65 and over, including future enrollees 
in the Uniformed Services Family Health Plan. It is important to note 
that none of these changes would affect healthcare benefits for active-
duty personnel.
                       security assistance reform
    The fiscal year 2012 request includes funding and authorization for 
a key step forward in a critical policy area: helping other countries 
to protect and defend themselves. The Pentagon and the State Department 
have agreed to a 3-year pilot pooled fund--called the Global Security 
Contingency Fund--that will be used to build partner capacity, prevent 
conflicts, and prepare for emerging threats. The proposed fund would 
incentivize interagency collaboration through a new business model. It 
would provide a more agile and cost effective way to reduce the risk of 
future conflicts by allowing our Government to respond to unforeseen 
needs and take advantage of emerging opportunities to help partners 
secure their own territories and regions.
    The request is modest, an initial $50 million State Department 
appropriation, along with a request for authority to transfer an 
additional $450 million into the fund from either department if needed. 
The Department of Defense intends to make significant contributions 
from its own resources into this pooled fund. We will be requesting in 
parallel an authorization for this initiative in the fiscal year 2012 
NDAA.
                    overseas contingency operations
    Finally, this budget request includes $117.8 billion in fiscal year 
2012 to support Overseas Contingency Operations, primarily in 
Afghanistan, and to wind down our operations in Iraq--this is a 
significant reduction from the $159 billion enacted for OCO in fiscal 
year 2011. The request, which fully funds our wartime requirements, 
includes:
  --$86.4 billion for wartime operations and related costs;
  --$425 million for the Commander's Emergency Response Fund;
  --$475 million for the Afghan Infrastructure Fund;
  --$2.6 billion to support counter-IED efforts;
  --$3.2 billion for MRAP vehicles, including the MRAP All Terrain 
        Vehicles developed for Afghanistan;
  --$11.9 billion to replace and restore worn, damaged or destroyed 
        equipment; and
  --$12.8 billion for training and equipping of the Afghan security 
        forces.
                  office of security cooperation--iraq
    I also want to mention a request in fiscal year 2012 for $524 
million for the Office of Security Cooperation--Iraq (OSC-I). The OSC-
I, which will be jointly funded with the State Department, will execute 
our Foreign Military Sales program in Iraq. OSC-I will help ensure the 
continuation of military-to-military relationships that advise, train, 
and assist Iraq's security forces.
                               conclusion
    In conclusion, I want to thank this committee for all you have done 
to support our troops as well as their families. From my earliest days 
as Secretary of Defense, I have made a point of reminding officers--
from cadets to admirals and generals--that Congress is a co-equal 
branch of government that under the Constitution raises armies and 
provides for navies and air forces. Members of both parties serving in 
Congress have long been strong supporters of our military and are owed 
honesty and candor from the military and from the Department.
    It has been the greatest privilege of my life to lead this great 
military for the past 4\1/2\ years. Every day, I've considered it my 
responsibility to get our troops everything they need to be successful 
in their mission and to come home safely. In my visits to the combat 
theaters, in military hospitals, and in bases and posts at home and 
around the world, I continue to be amazed by their decency, resilience, 
and courage.
    Finally, I want to thank this committee once again for all you have 
done to support our troops as well as their families. In visits to the 
combat theaters, in military hospitals, and in bases and posts at home 
and around the world, I continue to be amazed by their decency, 
resilience, and courage. Through the support of the Congress and our 
Nation, these young men and women will prevail in the current conflicts 
and be prepared to confront the threats that they, their children, and 
our nation may face in the future.
    Thank you Mr. Chairman.
STATEMENT OF ADMIRAL MIKE MULLEN, U.S. NAVY, CHAIRMAN, 
            JOINT CHIEFS OF STAFF
    Chairman Inouye. And may I now call upon the Chairman of 
the Joint Chiefs of Staff, Admiral Mullen.

                             DEFENSE BUDGET

    Admiral Mullen. Mr. Chairman, Senator Cochran, and 
distinguished members of this subcommittee, I'm honored to 
appear before you today to discuss the President's fiscal year 
2012 Defense budget.
    As the Secretary laid out, this budget, combined with the 
efficiencies effort that he led, provides for the well-being of 
our troops and families; fully funds current operations in 
Afghanistan and Iraq; and helps balance the global risk, 
through streamlined organizations, smarter acquisitions, and 
prudent modernization.
    The Army, for instance, will cancel procurement of the 
surface-to-air missile and the non-line-of-sight launch system; 
but it will continue production of the joint light tactical 
vehicle, and spearhead the development of a whole new family of 
armored vehicles.
    The Navy will give up its 2d Fleet headquarters, reduce its 
manpower ashore, and increase its use of multi-year procurement 
for ships and aircraft, allowing it to continue development of 
the next generation ballistic missile submarine, purchase 40 
new F/A-18s, four littoral combat ships, and another LPD-17.
    The marines will cancel the expeditionary fighting vehicle, 
and, like the Army, reduce their end strength starting in 2015. 
But they will reinvest these savings to sustain and modernize 
the amphibious assault vehicle and the light armored vehicle, 
even as they advance a new concept of operations and restore 
much of their naval expeditionary skills.
    And the Air Force will be able to continue development of 
the next-generation tanker, a new bomber, and modernize its 
aging fleet of F-15 fighters, all the while finding savings of 
more than $33 billion through reorganization, consolidation and 
reduced facilities requirements.
    None of this balancing will come on the backs of our 
deployed troops.
    We are asking for more than $84 billion for readiness and 
training, nearly $5 billion for increased Israel capabilities, 
and more than $10 billion to recapitalize our rotary aircraft 
fleet.
    These funds, plus those we are requesting to help build our 
partnership capacity in places like Afghanistan and Pakistan, 
Iraq and Yemen, all speak to the emphasis we are placing on 
giving our troops and their partners in the field everything 
they need to do the difficult jobs we've asked of them.

                      MILITARY HEALTHCARE PROGRAM

    We must also give them and their families everything they 
need to cope with the stress and the strain of almost 10 years 
at war. That's why I'm so pleased with the funds devoted in 
this proposal--almost three-quarters as much as the $200 
billion budgeted for operations and maintenance--to personnel, 
housing and healthcare issues.
    As you may know, the chiefs and I penned a rare 24-star 
letter to Congress expressing our unqualified support for the 
military healthcare program changes included in this budget. We 
sought equity across all healthcare programs, with 
beneficiaries and healthcare delivery providers having the same 
benefits and equivalent payment systems regardless of where 
they live or work. That in turn led us to propose increases in 
TRICARE enrollment fees for working-age retirees. These 
increases are modest and manageable, and leave fees well below 
the inflation-adjusted out-of-pocket costs set in 1995, when 
the current fees were established. We sincerely hope you will 
see fit to pass it. It is clearly eating us alive.
    Please know that we will continue to invest in critical 
care areas, to include research, diagnosis, and treatment of 
mental health issues and traumatic brain injury; enhanced 
access to health services; and new battlefield technologies. We 
understand that changes to healthcare benefits will cause 
concern among people we serve, and the communities from which 
we receive care. But we also understand and hold sacred our 
obligation to care completely for those who have borne the 
brunt of these wars, as well as those for whom the war never 
ends.
    I remain convinced that we haven't begun to understand 
completely the toll that war extracts from our people. Just as 
the grandchildren of World War II vets still struggle to 
comprehend the full scope of the horror those men conceal, so, 
too, will our grandchildren have to come to grips with the 
wounds unseen from these wars, unless we get it right. I 
believe the investments we are making in wounded care and 
family readiness will pay off in that regard. But it will take 
time and patience and money--three things we rarely seem to 
possess.
    That brings me back to this particular budget request. With 
limited resources and two wars in progress--three, if you count 
our support to NATO operations in Libya--we should be prudent 
in defining our priorities, in controlling our costs, and in 
slaking our thirst for more and better systems. We should also 
be clear about what the Joint Force can and cannot do, just as 
we should be clear about what we expect from our interagency 
and international partners.
    Our global commitments have not shrunk. If anything, they 
continue to grow. And the world is a lot less predictable now 
than we could have ever imagined. You need look no further than 
the events across the Middle East and North Africa to see the 
truth in that. In fact, I just returned from a trip to Egypt, 
and 1 week before that I was in Pakistan with Secretary Clinton 
as we tried to find ways to move forward our relationship with 
that nation in the wake of Osama bin Laden's killing.
    The challenges in both Egypt and Pakistan are distinct, to 
be sure, but at each stop--and, in fact, in just about every 
country I visit--I've been struck by the degree to which 
civilian and military leaders alike desire to keep our military 
partnerships strong. This desire isn't rooted in the fear of 
revolt or recrimination, but rather, a shared understanding of 
the external threats to their security and ours, which still 
plague the region. Therefore, changes to these relationships in 
either aid or assistance ought to be considered only with an 
abundance of caution and a thorough appreciation for the long 
view, rather than the flush of public passion and the urgency 
to save a dollar. The support we provide many of these 
militaries has helped them become the capable professional 
forces they are and, in that regard, has been of inestimable 
value.
    Of equal or greater value is increased appropriations for 
the State Department, and our request in this budget for 
something called the Global Security Contingency Fund--a 3-year 
pooled fund between the Pentagon and the State Department that 
will be used to build partnership capacity, prevent conflicts, 
and prepare for emerging threats. The request is modest--an 
initial $50 million appropriation--along with a request for 
authority to reprogram an additional $450 million if needed. 
But, what it will buy us is an agile and cost-effective way to 
better respond to unforeseen needs and take advantage of 
emerging opportunities for partners to secure their own 
territories and regions.
    We must get more efficient--absolutely. But, we must get 
more pragmatic about the world we live in. We can no longer 
afford bloated programs or unnecessary organizations without 
sacrificing fighting power. And we can no longer afford to put 
off investments in future capabilities or relationships that 
preserve that power across the spectrum of conflict.
    As you know, the President announced his framework for 
addressing our Nation's long-term fiscal challenges, setting a 
goal of reducing Defense spending by $400 billion. This will be 
hard work and will require difficult choices about matching 
strategy to resources. Those choices will be painful, even 
unnatural for the Services, for the Department, and for the 
Congress. But they are absolutely necessary.
    The President also directed that, before making specific 
budget decisions, the Department of Defense will assess their 
impact by conducting a fundamental review of America's military 
missions, capabilities, and roles in a changing world. 
Secretary Gates and I have begun this review, and will work 
with the service chiefs to ensure we can meet our national 
security priorities, even in the face of fiscal pressure. Our 
review will be based on strategy and risks, not simply 
budgetary math. And our goal will be to ensure that we do not 
repeat the mistakes of the past, nor, at the end of this 
endeavor, find ourselves with a hollow force--a force that 
retains an organizational structure, but lacks the people, the 
training, and equipment necessary to perform the tasks we 
expect from it.
    In my view, then, this proposed budget gives us a good 
start. It builds on the balance we started to achieve last 
year, and represents the best of both fiscal responsibility and 
sound national security.
    I would be remiss, indeed, if I did not close by praising 
the incredible efforts of our troops overseas and their 
families as they finish one war in Iraq, begin to turn corners 
in Afghanistan, and help save innocent lives in Libya. I know 
you share my pride in them and that you will keep them foremost 
in mind as you consider the elements of this proposal.

                           PREPARED STATEMENT

    I, too, would like to thank you for your longstanding 
support of our military, of our families. You have set a 
standard in many ways that those of us who are fortunate enough 
to interact with you appreciate, and I know our troops and our 
families appreciate it, as well.
    Thank you, Mr. Chairman.
    Chairman Inouye. Admiral Mullen, thank you very much.
    [The statement follows:]
            Prepared Statement of Admiral Michael G. Mullen
    Chairman Inouye, Senator Cochran, and distinguished members of the 
Committee, it is my privilege to report on the posture of the United 
States Armed Forces.
    We remain a Nation at war on multiple fronts. In the face of 
daunting challenges, our Armed Forces have successfully carried out 
their far-ranging missions over the past year. They have improved 
security in Afghanistan, continued on a path to soon end the war in 
Iraq, and promoted stability in the Pacific Rim. They have supported 
NATO in its U.N. mission to protect civilians in Libya and have 
provided humanitarian assistance, such as in Japan in the aftermath of 
the recent devastating earthquakes and tsunami. And they displayed 
their characteristic bravery and precision in the May 2 operation 
targeted against al-Qaeda leader Osama Bin Laden, the leader of al-
Qaeda. You can be very proud of your military. However, the cumulative 
stress of 9 years of war is substantial and growing. We will need your 
sustained support, even in the midst of fiscal difficulties, to reset 
the Joint Force so it can continue to protect the American people.
    Our country is fortunate to be served by the best Armed Forces I 
have seen in over 43 years of wearing the uniform. Despite continuous 
deployments and combat operations, our men and women in uniform and 
their families have been resilient beyond all expectations. They are 
patriots who care deeply for this country and serve under very trying 
conditions. They are the most combat experienced and capable force we 
have ever had, and they continue to learn and adapt in ways that are 
truly remarkable. I am continuously humbled as I visit them around the 
country and the world. Time and again, these men and women and their 
families have proven that our All Volunteer Force is the Nation's 
greatest strategic asset.
    This Force cannot thrive without the support of the American 
people. Everything we are and everything we do comes from them. I am 
grateful for the Congress' and the American people's constant reminders 
that the service, heroism, and sacrifices of our service members and 
their families are valued. However, I am concerned that because our 
military hails from a shrinking percentage of the population, some day 
the American people may no longer know us. We cannot allow this to 
happen. With your help, we will endeavor to stay connected and to 
maintain a strong and open relationship.
    As we look to our military's posture and budget, we recognize that 
our country is still reeling from a grave and global economic downturn 
and is maintaining nearly historic fiscal deficits and national debt. 
Indeed, I believe that our debt is the greatest threat to our national 
security. If we as a country do not address our fiscal imbalances in 
the near-term, our national power will erode. Our ability to respond to 
crises and to maintain and sustain our influence around the world will 
diminish.
    Our national economic health is creating real budgetary pressures. 
For too much of the past decade we have not been forced to be fully 
disciplined with our choices. But for the foreseeable future, cost will 
be a critical element of nearly every decision we face. We must now 
carefully and deliberately balance the imperatives of a constrained 
budget environment with the requirements we place on our military in 
sustaining and enhancing our security. We must identify areas where we 
can reduce spending while minimizing risk. This will affect our 
posture, force structure, modernization efforts, and compensation and 
benefits. The Defense Department must and will become more efficient 
and disciplined, while simultaneously improving our effectiveness.
    In April, the President announced his framework for addressing our 
Nation's long-term fiscal challenges, setting a goal of reducing 
defense spending by $400 billion. This will be hard work and will 
require choices that will be painful to many, but it is necessary. The 
President also directed that before making specific budget decisions, 
the Department of Defense assess their impact by conducting a 
fundamental review of America's military missions, capabilities, and 
role in a changing world. Secretary Gates and I have launched this 
review and will work with Service Chiefs to ensure our ability to meet 
our crucial national security priorities even in the face of fiscal 
pressures. Our review will be based on strategy and risks, not simply 
budgetary math, and our goal will be to ensure that we do not repeat 
the mistakes of the past nor at the end of this endeavor find ourselves 
with a hollow force--a force that retains an organizational structure 
but lacks the people, training, and equipment necessary to perform the 
tasks we expect from it.
    In the near-term, the President's fiscal year 2012 Department of 
Defense budget of $553 billion represents a balance of military risks 
and fiscal realities we face today. The return on U.S. defense spending 
over the past two decades has been immense and historic: preventing 
world war between great powers, securing the global commons and the 
free flow of international trade and natural resources, combating 
terrorism across the globe, and protecting the American people and our 
allies. But our operations have come with stresses and strains as well 
as costs to our readiness. If we are to continue to execute the 
missions set out by our strategy, we must recognize that recovering 
from war and resetting the force is costly and will require several 
years of continued investment. Congressional support is required for 
our forces, their families, their equipment and training, and our 
military infrastructure to ensure the success of our ongoing efforts 
and for us to be ready to respond to new and emerging security 
challenges.
    The President's National Security Strategy, the National Military 
Strategy, and the President's Strategy for Afghanistan and Pakistan 
describe our military approaches and ongoing operations in great 
detail. This posture statement will focus on the strategic priorities 
for the military and the Congressional support we need. My priorities 
remain defending our vital interests in the broader Middle East and 
South Central Asia, improving the Health-of-the-Force, and balancing 
global strategic risk.
 defending our vital national interests in the broader middle east and 
                           south central asia
    Over the past year, our Armed Forces have continued to shoulder a 
heavy burden, particularly in the Middle East and South Central Asia. 
The balance of this burden and our wartime focus has shifted, however, 
from Iraq to Afghanistan. This was made possible by drawing down 
military forces in Iraq and transitioning security responsibilities to 
the Iraqis. Meanwhile, we committed additional forces and resources to 
Afghanistan and Pakistan as well as participated in NATO operations in 
Libya.
    Removing Osama Bin Laden from al-Qaeda's leadership is a signature 
achievement, and it came only after years and years of painstaking and 
difficult work by intelligence and military professionals. Although the 
full import will not be known for some time, his death contributes to 
the larger struggle and steady progress we must make toward disrupting, 
dismantling, and ultimately defeating al-Qaeda. As a result of our 
operations with our Coalition, Afghan, and Pakistani partners, and 
extensive cooperation with other partners, al-Qaeda's senior leadership 
in Pakistan is weaker and under greater pressure than at any other time 
since being forced out of Afghanistan in late 2001. They have suffered 
the losses of numerous senior leaders and face significant challenges 
to coordinating operations, maintaining safe havens, and acquiring 
funding. Despite this operational progress, al-Qaeda retains the intent 
and capability to attack the United States and other Western countries. 
The movement's leaders continue to operate in the Afghanistan-Pakistan 
border region, planning operations and guiding the efforts of al-Qaeda 
networks operating out of the Arabian Peninsula, Africa, and even 
Europe. We, in turn, remain committed to our deepening and broadening 
partnerships in the region and to our goal of ultimately defeating al-
Qaeda and creating the conditions to prevent their return to 
Afghanistan and Pakistan.
    We continue to implement our national strategy for Afghanistan and 
Pakistan with great urgency. This past November, we completed the 
deployment of the 30,000 additional U.S. forces, and we are seeing 
signs of improving security on the ground. These forces have allowed us 
to go on the offensive with our Afghan and ISAF partners, force the 
Taliban out of safe havens in its heartland of Kandahar and Helmand, 
better protect the Afghan population, and reduce civilian casualties. 
Our counterinsurgency operations, conducted in close partnership with 
Afghan forces, have reduced the Taliban's influence, reversed the 
insurgency's momentum in key areas of the country, and forced many 
Taliban leaders to flee. Our forces will consolidate recent gains in 
Helmand and Kandahar Provinces and further expand security in other 
critical parts of the country.
    This success against the Taliban and other insurgent groups is 
essential to prevent the return of al-Qaeda, gain time to build the 
Afghan National Security Forces (ANSF), and force insurgents to 
reconcile with the Afghan government on acceptable terms. We expect the 
violence in 2011 to be greater than last year. The fighting this summer 
will be tough and often costly, but it is necessary to sustain and even 
increase the pressure we have been placing on the insurgent groups. We 
cannot allow the Taliban to reorganize and reconstitute as they did in 
2004 and 2005, regain their oppressive influence over the Afghan 
people, and once again provide safe haven to al-Qaeda or its 
affiliates.
    For the success of our military operations to be enduring, it is 
critical that the ANSF be able to provide adequate security for the 
Afghan people. Our greatest success story this past year has been the 
growth and development of the ANSF. With the help of additional ISAF 
trainers, the ANSF added 49,000 soldiers and 21,000 policemen to their 
ranks--an astonishing growth of 36 percent. The ANSF also continue to 
improve on the battlefield and increasingly contribute to the war 
effort. They are fighting beside us and have grown in their ability to 
plan and conduct complex operations. In fact, their expanding 
capabilities and presence have already allowed International Security 
Assistance Forces (ISAF) units to ``thin out'' in some parts of central 
Helmand and Kabul Province. We are on track to begin the transition of 
security responsibilities and drawdown of our forces in July 2011. In 
the coming year, while continuing to grow the ANSF in size, we will 
place greater emphasis on improving its quality, professionalism, and 
self-sufficiency, to ensure that they remain on track to assume the 
overall lead for security in 2014. To this end, the Afghan Security 
Forces Fund remains critical to the building of the ANSF's capabilities 
and to the ANSF's eventual assumption of security responsibilities.
    Despite our successes, numerous other challenges remain. Achieving 
sustainable security requires developing Afghan governing capacity, 
countering corruption, cultivating the conditions needed for conflict 
resolution, and neutralizing insurgent sanctuaries in Pakistan. Absent 
these conditions, we will not succeed. Despite a dramatic increase in 
our civilian presence in Afghanistan this past year, improvements in 
sub-national governance and reconstruction have not kept pace with 
progress in improving security. This has impeded our ability to 
``hold,'' ``build,'' and ``transfer.'' For this reason, the Commander's 
Emergency Response Program remains the most responsive means for 
addressing a local community's needs and is often the only tool our 
commanders have to address pressing requirements in areas where 
security is challenged. Along with development projects, we believe 
that new transparency and anti-corruption efforts may counter the 
deleterious effects of Afghanistan's criminal patronage networks, 
mitigate the distortive effects of international aid and development 
programs, and ultimately improve the confidence the Afghan people have 
in their government and their governing officials.
    To complement this ``bottom-up'' development, we will support the 
Afghan government's reconciliation and reintegration efforts in order 
to achieve the political solution that is an imperative to sustainable 
peace. Their efforts will only succeed if the Taliban and other 
insurgents believe they have more to gain by negotiating an end to the 
conflict than by continuing to fight. Achieving reconciliation and 
reintegration will take time, skillful diplomacy, and sustained 
military pressure, but we will not achieve a favorable and durable 
outcome unless we meet this challenge.
    Though our operational efforts are focused on Afghanistan, our 
diplomatic efforts have increasingly focused on Pakistan, a country 
critical to our strategy in the region. We must continue to pursue a 
partnership with Pakistan even as we are realistic about the difficulty 
in overcoming years of mistrust. The alternative--drifting toward a 
more contentious or fractured relationship--is far more detrimental to 
U.S. interests in strategically defeating al-Qaeda and ensuring nuclear 
weapons do not fall into terrorists' possession. We therefore should 
remain committed to close coordination, cooperation, and friendship 
with Pakistan.
    It is manifestly in our interest to enable the Pakistani military's 
counterterror and counterinsurgency operations. The series of offensive 
operations undertaken by the Pakistani military in the tribal areas 
expanded dramatically in 2009. There, the Pakistanis have fought 
bravely and sacrificed much--losing thousands of soldiers in the 
process. We have steadfastly supported them in a variety of ways, 
primarily in the development of the counterinsurgency capabilities of 
Pakistan's security forces. This development and the military's 
operations have kept pressure on al-Qaeda's senior leadership and the 
militant groups threatening Pakistan and Afghanistan.
    However, insurgent groups such as the Quetta Shura and the Haqqani 
network continue to operate unhindered from sanctuaries in Pakistan, 
posing a significant threat to NATO and Afghan forces. Our efforts to 
enable the Pakistani Military depend on several critical programs, such 
as the Pakistan Counterinsurgency Fund and Pakistan Counterinsurgency 
Capability Fund and the Multi-Year Security Assistance Commitment 
announced by Secretary Clinton last fall. It is also important that 
through exchange programs, such as the International Military Education 
and Training (IMET) program, we establish relationships with the 
generation of Pakistani officers with whom we had cut ties. In 
addition, because we so heavily depend on Pakistan as a supply route 
supporting our efforts in Afghanistan, Coalition Support Funds remain 
critical to reimbursing the Pakistanis for their assistance in securing 
those supply routes.
    In terms of our broader engagement with Pakistan and the region, 
reducing some of the long-standing enmity and mistrust between India 
and Pakistan would greatly contribute to our efforts. As neighbors, it 
is in both India and Pakistan's interests to reduce the tension between 
them and strengthen their political, security, and economic ties. While 
we acknowledge the sovereign right of India and Pakistan to pursue 
their own foreign policies, we must demonstrate our desire for 
continued and long-term partnership with each, and offer our help to 
improve confidence and understanding between them in a manner that 
builds long-term stability across the wider region of South Asia.
    Another increasingly important aspect of our engagement in South 
Central Asia is the development of the Northern Distribution Network. 
This line of communication has proven critical to maintaining 
flexibility in our logistical support to our efforts in Afghanistan. We 
will continue to work with our partners to ensure access, expand 
throughput, and sustain the viability of redundant supply routes for 
our forces.
    We have ended our combat mission in Iraq, Operation Iraqi Freedom, 
and started a new chapter in our partnership, Operation New Dawn. We 
successfully transferred lead for security responsibilities to the 
Iraqi Security Forces on August 31, 2010. Iraq's military and political 
leaders are responding to the residual, but still lethal, threat from 
al-Qaeda. As a result, and despite a drawn-out government formation 
process, the security situation there remains stable, and the Iraqi 
people are increasingly able to focus on jobs and development. Beyond 
this security transition, the State Department has taken the lead for 
U.S. efforts in Iraq, and our diplomats and other civilians are 
increasingly the face of our partnership with the Iraqi people and 
their government. Sustained funding for our civilian efforts, 
commensurate with the State Department's growing responsibilities--
particularly our development assistance and police training programs--
is needed to ensure we are able to successfully turn our military 
accomplishments into lasting political ones.
    However, the end of the war in Iraq will not mean the end of our 
commitment to the Iraqi people or to our strategic partnership. We must 
focus on the future to help Iraq defend itself against external threats 
and consolidate a successful, inclusive democracy in the heart of the 
Middle East. As we continue to draw down forces through December 31, 
2011, in accordance with the United States-Iraqi Security Agreement, we 
will transition to a more typical military-to-military relationship. We 
will shift the focus of our assistance from Iraq's internal domestic 
security to its external national defense, keeping in consideration the 
interests and sensitivities of all Iraqis as well as Iraq's neighbors. 
While Iraqi security forces have made great improvements, they will 
require external assistance for years to come. The cornerstone of our 
future security partnership with the Iraqis will be a robust Office of 
Security Cooperation, performing both security assistance and security 
cooperation functions, as part of the U.S. Embassy in Iraq. Key to our 
assistance and not squandering our hard won gains will be continued 
support to the Iraqi Security Forces fund through fiscal year 2011, 
IMET and other traditional security assistance programs, as well as an 
extension of Section 1234 authority to transfer equipment from 
Department of Defense stocks.
    Despite the energy we commit to defeating al-Qaeda and to 
stabilizing the situations in Afghanistan, Pakistan, and Iraq, we 
remain vigilant against other security challenges and sources of 
aggression and proliferation throughout this critical region. The 
Iranian regime continues to threaten regional stability. Despite 
growing isolation from the international community and a fourth round 
of increasingly costly U.N. sanctions, the regime has neither ceased 
providing arms and other support to Hezbollah, HAMAS, and other 
terrorist groups nor accepted a verifiable end to its pursuit of 
nuclear weapons. Many of the long-standing potential flashpoints in the 
Levant and the gulf region bear Iran's signature, and the Iranian 
regime is also attempting to seize on opportunities presented by the 
recent unrest in the region.
    That said, strong social, economic, and political tensions pull on 
the region and its people--as evidenced by the turmoil we have recently 
witnessed in Tunisia, Egypt, Libya, Yemen, Syria, and Bahrain. 
Volatility in regional affairs can often follow volatility in domestic 
affairs. Strong military-to-military relationships can help reduce and 
mitigate the risks of instability, but sometimes use of force is 
necessary. The most recent example of this is our rapid response to the 
crisis in Libya. Since mid-March, after Muammar Gaddafi turned his 
armed forces against his own, U.S. forces have participated in the 
NATO-led effort to implement and enforce U.N. Security Council 
Resolution 1973. We provided rapid planning, command and control, and 
electronic attack capabilities for the coalition force that has halted 
the regime's assault on the city and people of Benghazi, and 
subsequently transitioned the leadership responsibility of the effort 
over to NATO.
    We will continue to help counter terrorist threats, deter Iranian 
aggression, and protect our partners from coercive influence. To do 
this we will continue to build the capabilities of our partners. More 
important, we will nurture the development of a regional security 
architecture based on multi-lateral partnerships that address a wide 
range of security issues including counterproliferation, maritime 
security, counterterrorism, air and missile defense, and emergency 
response. As with our other partnerships across the globe, our security 
assistance programs are the cornerstone of our relationships. In 
particular, our Section 1206 and 1208 programs provide a unique and 
necessary flexibility and responsiveness to Combatant Commander 
requirements that we cannot currently get with our Foreign Military 
Financing (FMF) programs.
                   improving the health-of-the-force
    The ``back end'' of war--the continued care of our veterans and 
their families and the resetting of our force--cannot be an 
afterthought, and getting it right will be expensive. Moreover, because 
of the duration of these conflicts, we have begun to reset our units 
even in the midst of conflict. The stress of over 9 years of constant 
warfare has come at a great cost to the Force and its ability to 
continue to conduct operations and respond to other emergent crises. We 
must care for our people and their families and reset and reconstitute 
our weapon systems to restore our readiness, capabilities, and wartime 
effectiveness. This will require a sustained commitment of at least 3 
to 5 years, and could continue well beyond the end of our involvement 
in Iraq and Afghanistan.
Care for our People
    Our foremost focus is on our servicemen and women, their families, 
and their supporting communities--the bedrock of our Armed Forces. They 
each play unique and growing roles in our national security fabric, but 
they have been under great, often unrecognized, stress for the past 9 
years. Over 2 million of our service members have deployed to fight 
overseas. Some have served multiple grueling tours, a great number have 
suffered significant injuries, and thousands have sacrificed their 
lives. Even those serving stateside enjoy only short respites between 
deployments. We have asked a great deal from our people, and we must 
invest in them and their families--through appropriate pay, healthcare, 
family care, education, and employment opportunities--as they are the 
single greatest guarantee of a strong military. And they become our 
best recruiters.
    The many accomplishments of our All Volunteer Force over the past 9 
years of continuous combat operations have been unprecedented. That we 
remain competitive in attracting the country's best talent during this 
period is simply extraordinary. All of our Services in the Active Duty, 
Reserve, and National Guard components continue to have exceptional 
recruiting and retention rates. Ninety-six percent of our accessions 
have earned at least a high school diploma, which helps explain why 
this is one of the finest forces we have ever fielded. Competitive 
compensation and selective bonuses are critical to our ability to 
recruit and retain talent, as are other ``people programs,'' such as 
the new GI Bill, improvements in housing, access to quality schooling 
for military children, mental health counseling, adequate child care, 
and attractive family support centers. All of these programs make the 
harsh burdens of military life easier to bear. I ask for Congress' 
continued support for them in order to sustain the Force while our 
overseas operations continue.
    I also urge Congress to continue funding the programs that will 
create a continuum of healthcare for our veterans and their families 
that seamlessly spans active duty and veteran status. With a focus on 
our enduring commitment, we must continue to improve our active and 
veteran care services, with special emphasis on Wounded Warrior 
Support. We will expand our public and private partnerships and tap 
into the ``sea of goodwill'' toward our veterans found in our Nation's 
communities and civic organizations. That will be important, but it is 
not sufficient. Long-term fiscal support for the Department of Veterans 
Affairs will serve the growing number of veterans requiring care.
    One issue that demands acute national attention is the challenge of 
Traumatic Brain Injury (TBI). The Improvised Explosive Device (IED) is 
the signature weapon of the conflicts in Iraq and Afghanistan and is 
directly responsible for many of these injuries. Many of our heroes 
suffer from severe TBI and have had their lives dramatically changed in 
ways we do not yet fully understand, and over 150,000 others have been 
exposed to events that may have caused moderate TBI. As such, we need 
to aggressively identify the victims of TBI, both within the serving 
force and among our veterans, and the treatment and rehabilitation they 
need and deserve. The effects of these efforts will pay dividends for 
some time, because we can expect to face IEDs in future conflicts as 
well.
    In addition, suicides and the many other stresses and social health 
costs that lag behind war--divorce, domestic violence, post-traumatic 
stress, depression, and even homelessness--are becoming alarmingly 
evident. Suicide rates remain unacceptably high, although programs such 
as the Department's Suicide Prevention Task Force and our improved 
leadership efforts have helped to lower the rates in 2010 in three of 
our four Services. Leaders must remain focused on this issue, as we 
work to improve our systematic understanding of the problem's scope, 
warning signs, and at-risk populations. As a society we must work to 
end the stigma that prevents our service members, veterans, and 
families from seeking early help.
    By more effectively leveraging public-private partnerships, we can 
pursue solutions and treatment for all of these health issues 
afflicting the Force with great urgency and compassion and honor the 
sacred trust our Nation has with all of our combat veterans.
Reset and Reconstitute
    The grueling pace of deployments has not allowed for the training 
needed to keep our forces ready along the entire spectrum of military 
operations and, as a result, our readiness in some mission areas has 
atrophied over the past decade. There are some modest reasons for hope, 
though. The Army now has fewer soldiers deployed than it has had at any 
time since the invasion of Iraq. In addition, this past year we 
completed the increases in the Army and Marine Corps end strengths 
authorized in 2007. As a result, we are beginning to see some 
stabilizing deployment rates and modestly improving dwell times. We 
appreciate the Congressional support to our wartime manning needs that 
has enabled this. However, our overseas contingency operations do 
continue to demand significant numbers of ground and special operations 
forces and low-density, high-demand specialties. For our Army combat 
units, we do not expect to begin to reach our interim goal of 1:2 
deploy-to-dwell ratios until the end of 2012. After reset and 
reconstitution activities and as demand decreases, we expect to begin 
off-ramping some of our recent temporary force level increases.
    However, my concerns about the health of our force go beyond our 
people and training--we must also restore the readiness of our combat 
systems and capabilities, which have similarly been under extraordinary 
stress. In the ``back end'' of previous conflicts, we were able to 
contract our equipment inventory by shedding our oldest capital assets, 
thereby reducing the average age of our systems. We cannot do this 
today, because the high pace and durations of combat operations have 
consumed the equipment of all our Services much faster than our 
peacetime programs can recapitalize them. We must actually recapitalize 
our systems to restore our readiness and avoid becoming a hollow force. 
All of this will force us to be more efficient and disciplined in our 
choices.
    We must focus resources where they matter most, and we will reset 
and reconstitute by prioritizing people, readiness, capabilities, and 
essential modernization to maintain a technological edge. In the short-
term, we will continue previous efforts to reconstitute and expand our 
rotary wing and tilt-rotor capacity in our Combat Aviation units and to 
convert one heavy Brigade Combat Team to a Stryker Brigade. However, 
over a period of years, we will modernize our battle fleet of ground 
combat vehicles, including replacing the Bradley Fighting Vehicle. We 
require enhancements to our manned and unmanned Intelligence, 
Surveillance, and Reconnaissance (ISR) assets, a new bomber program, 
extending the service life of a portion of our F-16 fleet, and 
continuing improvements in our missile defense and electronic warfare 
systems. We hope to modernize and extend the service life of our F/A-18 
fleet and invest in additional P-8A aircraft and tankers. Last, we ask 
for full resourcing of the Air and Missile Defense Radar, the Next-
Generation Jammer, and communications and integrated fire control 
systems designed for operating in contested environments. These 
investments are, without question, costly, but they are critically 
demanded by our current and likely future challenges.
    Just as important as the reconstitution of these combat systems are 
the acquisition processes and production capacities underlying them. 
Our procurement systems remain complex and in need of streamlining to 
help us acquire needed capabilities faster and more affordably. Last 
year we committed to adding 20,000 experts to our acquisition corps by 
2015. In doing so we seek to improve stability in our programs, conduct 
more comprehensive design reviews, improve cost estimates, utilize more 
mature technology, and increase competition in order to make the entire 
process more responsive and effective.
    In addition, as I stated last year, I am concerned about the 
capabilities of our defense industrial base, particularly in ship 
building and space. Our ability to produce and support advanced 
technology systems for future weapon systems may be degraded by 
decreasing modernization budgets as well as mergers and acquisitions. 
Left unchecked, this trend will impact our future warfighting 
readiness. Although we are properly focusing on near-term reset 
requirements, the Department, our industry leaders, and the Congress 
need to begin considering how to equip and sustain the military we 
require after our contemporary wars come to an end.
                    balancing global strategic risk
    Balancing global risk requires maintaining a ready, forward 
presence with available forces that, overall, can meet the full scope 
of our security commitments. To meet these requirements, we must reset, 
sustain, and properly posture a force that includes both our active 
force and our National Guard and Reserve Components. But we must also 
make prudent investments and continuously evolve the force so as a 
whole it can meet the challenges of an increasingly complex global 
security environment.
    For many decades, our overmatch in our general purpose forces has 
underwritten our national security and our prosperity, as well as that 
of our many allies and partners. This credible strength has deterred 
aggression and reduced the likelihood of inter-state conflict like 
those of the 19th and early 20th centuries. With these capabilities, we 
have stood side by side with our allies in the face of belligerent 
aggression, helped secure access and responsible use of increasingly 
contested domains, and provided timely humanitarian assistance in 
response to natural disasters across the globe. However, our recent 
experience reminds us that we must continue to adapt some of our 
systems and tactics to counter anti-access and area-denial strategies, 
which may involve both the most advanced and simplest technologies.
    We already know some of the contours of what our future force will 
need to do. We know that, in addition to the current array of 
aggressive states and transnational terrorists we face, we must adjust 
to a changing global environment impacted by the rise of China and 
other emerging powers as well as the growing worldwide use and 
capabilities of cyber space. Such a world requires an agile, adaptive, 
and expeditionary force. It must ensure access, protect freedom of 
maneuver, and project power globally. It should retain decisive 
overmatch with air, land, sea, and special operations forces and be 
able to operate in degraded space and cyber environments. As such, 
transitioning to this future force will likely involve a greater 
emphasis on ISR, command and control, long range strike, area denial, 
undersea warfare, missile defense, and cyber capabilities. This 
transition will also involve further developing flexible leaders, 
operators, and technicians who are highly proficient and able to fully 
integrate our efforts with our partners from other agencies and other 
countries.
    In addition to maintaining our regular and irregular warfare 
capabilities, we will also continue to rely on secure and stable 
nuclear deterrence. It is also important that we maintain the safety 
and surety of our nuclear forces, even as we seek to reduce them in 
accordance with the Nuclear Posture Review and implement the recently 
ratified New Strategic Arms Reduction Treaty. We need to modernize our 
nuclear force and its supporting infrastructure to ensure that a 
smaller force is nonetheless safe, secure, and effective. Last, our 
missile defense systems should support the stability of our deterrence 
architectures.
    And while we work to reduce, safeguard, and provide confidence in 
our nuclear force and those of treaty signatories, we acknowledge that 
the proliferation of nuclear technology and other weapons of mass 
destruction by state and non-state actors remains one of the most 
significant and urgent worldwide threats. Effectively countering 
proliferation requires strong international partnerships, new 
surveillance technologies, and layered defenses. These are supported by 
ongoing expansion of the Cooperative Threat Reduction Program, 
establishment of a standing joint headquarters for weapons of mass 
destruction elimination, and investments in nuclear forensics 
technology and programs. These relatively small programs can have a 
disproportionately large positive impact on our security.
    Balancing global strategic risk also requires improving our 
capabilities in cyberspace. Today we face a range of threats to our 
computer systems from other states, mercenaries, and even civilian 
hackers, and their ability to wreak havoc cannot be overstated. Lower 
grade cyber threats conducted by organized criminals and talented 
individuals do not necessarily put the Nation at serious risk. But the 
effects of a well coordinated, state-sponsored cyber attack against our 
financial, transportation, communications, and energy systems would be 
catastrophic.
    Though there has been important progress across the government, 
such as the recent release of the International Strategy for Cyberspace 
and the standing up U.S. Cyber Command, more work is needed. Critical 
to Cyber Command's future success will be our ability to recruit, 
train, and most importantly, retain the right people. We must devote 
the same time and attention to cultivating this Nation's future cyber 
workforce as we do to our combat specialists. We must also empower 
Cyber Command and the combatant commands by working with the Executive 
Office of the President and other agencies to develop appropriate cyber 
authorities and by refining our cyber doctrine, tactics, and 
procedures. We will need to engage with NATO allies in the area of 
cyberdefense, as a contributing partner at the NATO Cooperative 
Cyberdefense Center of Excellence in Estonia. Last, we need to actively 
foster public discussion about international observance of cyber space 
norms.
    Balancing global strategic risk requires strong military-to-
military engagement programs. These collaborative efforts engender 
mutual responsibility and include ongoing combined operations, multi-
lateral training exercises, individual exchanges, and security 
assistance. They help demonstrate the United States' responsible 
military leadership in critical regions, reassure our allies, and 
strengthen the international norms that serve the interests of all 
nations. They also foster connections with other governments that 
reinforce our diplomatic channels and have proven critical during times 
of crisis.
    We currently benefit from numerous strong and well appreciated 
military partnerships, such as our North American and NATO 
relationships. For example, at the November NATO Summit in Lisbon, we 
and our allies recommitted to our alliance, ongoing operations, and a 
new Strategic Concept for the next decade. This spring, NATO released 
its Alliance Maritime Strategy and agreed to streamline its Command 
Structure, based in part on lessons learned from ongoing operations 
related to Libya. In Asia, though still underpinned by U.S. bilateral 
alliances, the region's security architecture is becoming a more 
complex mixture of multi-level multilateralism and expanded bilateral 
security ties among states. As the region's military capability and 
capacity increases, we seek new ways to catalyze greater regional 
security cooperation.
    Unfortunately, the global economic downturn is placing pressure on 
the resources of partner nations' security forces. We foresee no 
decrease in the commitment of our partners to us or to any of our 
mutual security efforts, but we must face the reality of less spending 
by our partners on our combined security and stability efforts. Any 
measures we take to strengthen our partnerships, such as the 
Administration's Export Control Reform effort, can only improve our 
collective security.
    We should not engage only with like-minded allies. Military-to-
military engagement, in coordination with other diplomatic efforts, can 
help foster cooperation in areas of mutual interest between nations 
with varying levels of amity. We have seen the fruits of our engagement 
programs in strengthening cooperation in the Middle East, countering 
piracy in the Red Sea and the Straits of Malacca, and countering 
proliferation across the globe. We will seek out military-to-military 
relations even where they have not existed before because sound 
relations can prevent miscommunication and miscalculation that could 
lead to crisis or conflict. In particular, we are nurturing increased 
engagement with China--recently hosting the Chief of the Chinese 
General Staff for the first U.S. visit in 7 years. I intend to 
reciprocate and will visit China in July. China's peaceful, 
constructive rise would have a positive economic and security impact on 
the world, and we encourage continued improvements in transparency to 
ensure that this rise is properly understood. In addition, by 
increasing our military-to-military engagement with China we hope to 
increase understanding and cooperation on a multitude of issues, 
including encouraging North Korea to refrain from further provocation 
and ensuring access to and equitable use of the global commons.
    A significant component of our engagement program is the security 
sector assistance we provide to build the capabilities of our partner 
nations' security forces. These cost-effective programs properly place 
security responsibilities in the hands of other sovereign governments 
and reduce the tactical strain on our own forces by helping to prevent 
conflicts and instability. In many places, across the range of U.S. 
interests, investments in capacity building result in strong 
foundations for the future. These investments are often small but, if 
persistent, can yield a high return. I urge your continued support for 
Theater Security Cooperation programs, Acquisition and Cross-Servicing 
Agreements to lend military equipment for personnel protection and 
survivability (under 1202 authorities), Global Train and Equip 
initiatives (under 1206 authorities), funding for special operations to 
combat terrorism (under 1208 authorities), as well as the many security 
assistance programs managed by the Department of State, including FMF 
and IMET programs.
    However, just as these programs require full funding, they also 
need wholesale reform. Our security assistance structures are designed 
for another era--our authorities are inflexible, and our processes are 
too cumbersome to effectively address today's security challenges in a 
timely manner. I urge your assistance in modifying the laws and 
regulations surrounding security cooperation and assistance to create a 
better coordinated, pooled-resource approach--the Global Security 
Contingency Fund. This approach would create a new business model we 
believe will lead to collaborative programs to respond to emergent 
challenges and opportunities. We should not allow bureaucratic 
resistance to trump operational effectiveness when security sector 
assistance is essential to our national strategy of helping others 
secure and defend themselves.
    On this last point of interagency cooperation, I want to reiterate 
our commitment to comprehensive approaches to our security challenges 
that employ all elements of national and international power in 
coordination. Our future security concerns require a whole of 
government effort, not just a military one, and we serve best when we 
serve hand-in-hand with all of our partners and support, rather than 
lead, foreign policy. As such, we will work closely with the State 
Department and the U.S. Agency for International Development (USAID) to 
support their implementation of the Quadrennial Diplomacy and 
Development Review, particularly in the areas of conflict prevention 
and response. The capabilities and success of our interagency partners 
are inextricably linked to our own. As such, I reiterate my unequivocal 
support to Secretary Clinton and her efforts to fully resource the 
State Department's and USAID's activities and an expansion of its 
diplomacy and development capabilities, particularly in Iraq to support 
the transition from a military to a civilian-led mission. In addition, 
I support interagency cooperation programs and work to expand the 
number of exchanges between the Department of Defense and other 
Executive Agencies to institutionalize an enduring capacity to solve 
global problems using whole-of-government approaches.
                               conclusion
    In the upcoming year, our Armed Forces will build on the past 
year's achievements and continue to provide the common defense our 
Constitution directs with distinct honor and effectiveness. We will 
advance our ongoing efforts and maintain the credibility of our forces 
while learning, adapting, and preparing for new security challenges. We 
know that the military's role in national security will remain 
substantial, and the demands on our servicemen and women will be high. 
However, we also know that we can never let our actions move us away 
from the American people, and that the quality of our work and our 
personal conduct will say far more about who we are and what we stand 
for than anything else we do. In all of our efforts, we will maintain a 
strength of character and professionalism, at the individual and 
institutional levels, that is beyond reproach and continues to be a 
source of pride for our Nation.
    Again, on behalf of all our men and women under arms, I thank this 
Committee, and the entire Congress, for your unwavering support for our 
troops in the field and their families at home during this time of war 
and for our efforts to maintain a strong, agile, well-trained, and 
well-equipped military that can prevail in our current conflicts and 
remain poised to deter or respond to new challenges.

    Chairman Inouye. I'm pleased to note the extraordinary 
attendance of members of the subcommittee. However, as a 
result, I will have to limit the questions and answers to 4 
minutes.
    Secretary Gates, you have made a couple of public 
statements on how to achieve our President's $400 billion 
reduction over the next 12 years. Instead of gutting the 
modernization programs, I know that you would prefer to see 
additional organizational reductions, in addition to changes in 
military pay, retirement, and the healthcare systems.
    Do you wish to elaborate more on these ideas, and any other 
areas that might be reduced?
    Secretary Gates. Mr. Chairman, the four areas that we're 
looking at in terms of how we would come up with $400 billion 
in reductions are, first, as I indicated in my remarks, looking 
for additional efficiencies and changes in bureaucratic 
expenditures, and the way we go about our business, and the way 
we do business on a day-to-day basis. We think there is still 
more money to be extracted out of overhead, but also in 
negotiating contracts on acquisitions, and so on. So, the first 
category is--more cuts in overhead.
    The second category is looking for marginal missions and 
marginal capabilities that can be eliminated. This would be in 
situations where, perhaps, two services have comparable 
capabilities, and we can get by having that capability in just 
one service. Or, there may be missions that we can set aside.
    The third category is the hardest, and it's the one that 
Admiral Mullen and I both talked about in our remarks, and that 
is the comprehensive review to look at what are the options 
that are available in terms of making reductions in force 
structure, and what is the impact of that on the capabilities 
of our forces and our ability to carry out our strategies? And 
how do we adjust our strategies, and how do we evaluate added 
risk by reduced investment in defense?
    One example of this, just to give you the flavor of what 
we're talking about--for many years we have had a strategy of 
being able to wage two fairly major regional conflicts 
simultaneously. If you tell yourself you're willing to accept 
the risk that won't happen, that two conflicts of that 
magnitude would not take place at the same time, but might be 
sequential, if you had to take on two others--then that has 
real impact for force structure.
    I would just note that in terms of assessing risk, between 
2007 and 2009 we, in fact, had two major regional conflicts 
going on simultaneously. So, this is not far-fetched in terms 
of risk.
    The fourth category, then, is, are the issues that, 
frankly, are politically challenging, and that have been very 
difficult for us and for the Congress to take on--working age 
retiree healthcare--and I want to make clear--none of us are 
talking about any impact on healthcare for the active force. 
This is about working-age retirees. Compensation--and 
particularly I would say in that respect, retirement, and 
whether the time has come to look at retirement.
    I think we have two challenges on the retirement side. One 
is about 70 to 80 percent of our force does not stay in the 
service long enough to retire, but they leave with nothing. So, 
if you've served 5 years, or 10 years, or a dozen years, you 
walk out the door with nothing. That doesn't make any sense. 
The private sector is well ahead of us in that respect.
    The second problem is, we get a lieutenant colonel or a 
sergeant first class with 20 years of service--they are at 
their peak, we are at their, they are at their prime--and we 
make it financially silly for them not to retire at 20 years. 
How do you incentivize them to give us another 5 years of 
service? I don't pretend to have the answers to these 
questions, but they are issues that I think we need to address 
both in terms of what's good for the force, but also in areas 
where we could save some money.
    So, those four areas, Mr. Chairman, are the areas that we 
are looking at in terms of how we can find this $400 billion.
    Chairman Inouye. I thank you very much.
    Senator Cochran.
    Admiral Mullen. Mr. Chairman, could I just make two brief 
comments?
    Chairman Inouye. Please.
    Admiral Mullen. First of all, not unlike the Government 
itself, where the Defense Department has roughly one-half of 
the discretionary spending, inside our budget, a little more 
than one-half is discretionary. And so, while we look at 
reductions in the future in where we would take the funds, 
there are obligations that we have that we just fundamentally 
have to fund as we transition to whatever this new budget 
environment is going to be for us.
    And then, second, if we don't come to grips with some of 
the most difficult issues, it is as clear as anything to me 
that the only answer is--we're going to get a lot smaller with 
a chance we could go hollow. We will give us force structure to 
sustain these benefits, to do all those things. And that, I 
think, is very dangerous in the world that we're living in, to 
meet the national, the growing national security requirements 
that I see.
    Chairman Inouye. Thank you very much.
    Senator Cochran.
    Senator Cochran. Mr. Chairman.
    Mr. Secretary, let me ask, in view of the situation in 
Libya, are we learning something about the ability of our 
allies, who volunteer to try to take up the slack in situations 
where we're not moving forward and trying to run a military 
operation? What are we learning from their capabilities or 
inadequacies that give you the most concern?

                      DEFENSE BUDGET CUTS AND NATO

    Secretary Gates. Well, I addressed this last week in 
Brussels in my usual subtle form.
    The reality is that, as they cut their defense budgets, and 
have been--have not been investing in their defense 
capabilities for a number of years, by default, the additional 
burden falls on the United States. So, I think that there is a 
genuine worry that our allies have looked to us to pick up the 
slack, as they cut their defense budgets. And the message that 
I had for them in Europe last week was that a, because of our 
financial problems--and, frankly, a growing number of Members 
of Congress who, for whom the cold war and our connection to 
Europe and to NATO are not in their genes, as they are for me, 
are going to be unwilling to pick up 75 percent of the defense 
burden of the NATO alliance.
    So I think this is a serious problem. It's been a problem 
for some years. But, I think our own financial difficulties, 
and what we're now going to face in looking at the American 
defense budget, brings this issue to center stage in a way that 
it really has not been in the past.
    Senator Cochran. Admiral Mullen, on the same subject, what 
affect does that specifically have on our ability to project 
power to other regions of the world--the Far East, for example, 
areas where we have been involved in actual combat operations, 
the Vietnam era, and what that brings in terms of expense of 
operations and training of our forces? Can you give us an 
assessment of the direct impact on the U.S. Navy?
    Admiral Mullen. Well, I share the Secretary's concerns and 
views with respect to the investment, or, the dramatically 
decreased investment in our NATO partners, or, by our NATO 
partners.
    The affect, or, one of the affects that it's had is, it's 
certainly, they don't have the depth, the resources in some 
cases, to do what their political leadership has directed them 
to do. Although, I also would say that, both in Afghanistan and 
in Libya, NATO is more together than I've seen, in terms of 
commitment, over the course of the last 10 to 15 years. And, 
while they do get criticized, they also stood this operation up 
in incredibly quick fashion. We hadn't operated an air, had an 
air operation like this in a long time. And from my 
perspective, they have executed that well. The resources to do 
it is something we're watching very carefully. And they are, in 
some ways, dependent on us.
    The other thing is, for countries who recently did their 
own strategic review, they found themselves getting rid of 
capabilities that, now that they're in a combat environment, 
they're giving second thought to that. Combat has a way of 
bringing that kind of reality to them--which just argues, for 
me, that we and others have to be very careful in our review, 
given the world that we're living in, about what capabilities 
we decide to either get rid of or trim back.
    Longstanding--where we are right now--and in particular, I 
mean, as you talk about the Western Pacific, Senator Cochran--
we're, we've got tremendous relationships with the Japanese, 
with the Republic of Korean military, we have had with our 
Australian friends, as well as growing relationships with the 
Association of Southeast Asian Nations (ASEAN) countries. And 
so, I'm actually pretty comfortable with where we are right 
now. We've got overseas home-ported forces--as you know, both 
marines and Navy--in fairly significant numbers in that part of 
the world. And that makes a long, a lot of difference in terms 
of stability.
    The pressure over time, though--it gets back to what I 
said--is, if we get into this force structure--part of us, in 
terms of the defense review--and have to reduce our force 
structure, there will be pressure there, which in the long run, 
I think, will start to undermine stability in a place like 
that.
    Chairman Inouye. Thank you.
    Senator Shelby.
    Senator Cochran. Thank you, Mr. Chairman.
    Senator Shelby. Thank you, Mr. Chairman.
    Mr. Secretary and Admiral Mullen, thank you for your 
service.
    Mr. Chairman, I'd like for my opening statement to be made 
part of the record.
    Chairman Inouye. Without objection.
    [The statement follows:]

            Prepared Statement of Senator Richard C. Shelby

    I want to join the Chairmen in thanking both of you for 
your years of dedicated public service. Mr. Secretary, the 
title of a recent book describes the job you will soon be 
vacating as ``nearly impossible.'' Yet, you managed to take the 
helm of the Pentagon at one of the most difficult times in our 
Nation's history and succeed beyond all expectation. You 
successfully prosecuted a war in Iraq that many had assumed was 
lost. You have helped to oversee a surge in Afghanistan that, 
we hope, is turning the tide there, as well. Perhaps even more 
importantly, you have launched a much-needed battle to control 
defense spending in a responsible way that will help reduce our 
national debt while preserving our national security. All of 
these things you have accomplished while retaining the full 
confidence of two very different Presidents and the United 
States Congress. We all are duly impressed by your 
accomplishments, and owe you a sincere debt of gratitude for 
your service.
    Admiral Mullen, you assumed the Chairmanship in 2007, also 
under very difficult circumstances, and have acquitted yourself 
admirably in the post. I have been most impressed by your 
powerful advocacy on behalf of those who wear the uniform. You 
have spoken repeatedly about the strains on the force from a 
decade of persistent conflict, and about the need to care for 
those who have been wounded, physically or psychologically, 
defending our Nation. You have also, properly, placed our 
financial stability on the table as a fundamental issue of 
national security. All would do well to remember your words as 
we try to get our debt under control. Many thanks to you for 
everything you have done for this country.

                 NUCLEAR WEAPONS MODERNIZATION PROGRAMS

    Senator Shelby. Mr. Secretary, last year you transferred 
about $6 billion of your budget authority to the Department of 
Energy to pay for nuclear weapons modernization programs 
because, as I understood it, you're concerned about the neglect 
that had befallen the U.S. nuclear deterrent.
    How concerned are you, now that the House is considering 
appropriations legislation that we would cut the program by 
almost 10 percent from what the President requested and what 
you've already paid for out of your own very tight budget? And, 
what are the implications of failing to fund the modernization 
program here?
    Secretary Gates. Well, I'm very concerned. And, as I 
recall, the actions taken by the House cut about $1 billion 
from this modernization program.
    This modernization program was very carefully worked out 
between ourselves and the Department of Energy. And frankly, 
where we came out on that, also, 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 our weapons systems; to modernize 
them--not in the sense of capability, but in terms of security 
and reliability. And this requires new construction. We have a 
lot of buildings at Los Alamos that date from the Manhattan 
Project. And so, this modernization project is, in my view, 
both from a security and a political standpoint, really 
important.
    Senator Shelby. Mr. Secretary, in my short time--missile 
defense. I understand that the Defense Science Board has 
compiled a report on the concept of what we call Early 
Intercept for Missile Defense, and the report's unclassified 
conclusion is that the Missile Defense Agency (MDA) plans to 
achieve an early intercept capability as part of the phase-
adaptive approach are simply not credible. This is disturbing 
to some of us, since MDA's promise to develop by 2020 an early 
intercept capability for the SOME-3 Block IIB was the central 
justification, as I understood it, of, to cancel the third site 
in Europe and to kill the KEI boost-phase defense program.
    Now it looks like the Nation may be left without an 
inadequate--with an inadequate defense in Europe, and no boost-
phase intercept capability.
    Is the Department re-examining the phase-adaptive approach 
in light of the Defense Science Board? And should the 
Department be looking at ways to use funding currently 
programmed for this SOME-3 Block IIB, to improve the GMD 
system, or, to evolve more rapidly?
    What's your thoughts on that?
    Secretary Gates. We have resources in the 2012 budget to do 
both. To fund----
    Senator Shelby. That's good.
    Secretary Gates [continuing]. The phased-adaptive approach, 
and to strengthen the ground-based interceptor (GBI) program. 
The 2012 budget buys 52 GBIs, both for deployment and for test 
purposes; it makes investments in upgrades to long-range radars 
in Greenland and the United States and Canada.
    We also have money for developmental work in terms of other 
kinds of interception of ballistic missiles. But, I believe 
that the balance between the ground-based interceptor system 
and the money we are investing in that, plus the money that we 
are investing in the phased-adaptive approach--first of all, 
the latter will give us a missile defense capability several 
years earlier than would have been the case with the third site 
in Europe. And, let's be blunt. The third site in Europe was 
not going to happen, because the Czech Government wouldn't 
approve the radar.
    Senator Shelby. Sure.
    Secretary Gates. And so, if it was going to happen at all, 
it would have taken years longer. And we still hadn't 
negotiated the required agreements with the Poles in terms of 
the interceptors. So, I think that the balanced approach 
between the GBIs, the phased-adaptive approach, and the 
developmental work we have underway, plus the additional half 
billion dollars we've added to the budget for fiscal year 2012, 
puts us in a pretty good place on missile defense.
    Senator Shelby. Admiral Mullen.

                            MISSILE DEFENSE

    Admiral Mullen. Just very quickly--and while I am not 
exceptionally close to it in this job, I've been around missile 
defense for the last 15 years--and, the whole issue of boost-
phase intercept is an extraordinarily difficult technical 
challenge. And, at least, if someone's broken through on that, 
I haven't seen that. It doesn't mean we shouldn't seek it, but 
I've seen an awful lot of efforts go after that. And I was very 
supportive of the program adjustments that we made--
particularly with respect to that, because I thought, my view 
was, I thought we were throwing good money after bad.
    Second--and I haven't seen this report, I'll take a look at 
it. And I certainly, I would not, without, push back on it. The 
only thing I can say is, the path through the standard missile 
is the most well-developed, robust, reliable path over time, 
with respect to developing missile defense. And it's, we're 
still almost a decade away. And I have confidence that we can 
continue to pursue that path. It's an incredibly well-tested 
system. The missile you're talking about, I know, doesn't exist 
yet. But, it's a path that----
    Senator Shelby. But it could exist, couldn't it?
    Admiral Mullen. Huh?
    Senator Shelby. It could exist.
    Admiral Mullen. No, I think--yes, sir. I think we can get 
there in that timeframe, based on my understanding.
    Senator Shelby. Thank you, Mr. Chairman.
    Chairman Inouye. Thank you.
    Senator Leahy.
    Senator Leahy. Thank you, Mr. Chairman.
    I want to join the others who have thanked you for the 
extraordinary service you've both shown to this country. You 
came to your roles at very challenging time.
    Admiral Mullen, I appreciate our friendship, and your trip 
to Vermont, you and Mrs. Mullen, when you joined Marcelle and 
me up there to meet with our troops when they were deploying.
    Secretary Gates, I've told you before, but I'll say it here 
publicly. I've enjoyed our friendship of, it must be about 30 
years now.
    With that said, unfortunately there's one issue we don't 
all agree on, and that's the war in Afghanistan. I think like 
most Americans--certainly most Vermonters I talk with, and an 
increasing number of Members of Congress--I think we have to 
dramatically accelerate our withdrawal of troops from that 
country.
    I supported going into Afghanistan for the purpose of 
getting Osama bin Laden after 9/11. And the subcommittee and 
all of us here on the Appropriations Committee have been 
strongly supportive of that.
    I did not support the invasion of Iraq, which distracted us 
from that goal. Iraq had nothing to do with 9/11, and we'll be 
paying for this cost for years to come. We borrowed the money 
to go into that war. It's an extraordinary thing in a war--to 
borrow the money. We're still borrowing the money. At the same 
time, we gave a tax cut for anybody who makes as much as a 
Member of Congress. So, what we said was, we'll let our 
children and our grandchildren pay for these two wars.
    I don't think we can continue to sacrifice so many lives 
and spend billions of dollars a week in a war with no end. I 
think we have to identify achievable goals in Afghanistan. I 
think we have to reduce our military footprint there.
    And then we look at Pakistan. Well, just this morning we 
see word that our putative ally arrested five people on the 
suspicion that they helped the United States to get Osama bin 
Laden. After publicly saying, of course, they wanted us to get 
Osama bin Laden, they arrested people who helped us get him.

                           AFGHAN GOVERNMENT

    Now, we could overlook the problems probably in Pakistan if 
the Afghan Government was any better, but we have President 
Karzai, who can't seem to make up his mind if he's on our side 
or the Taliban. We support them with our tax dollars when at 
the same time we say we've got to privatize Medicare, 
eviscerate education funding, shred social safety net here in 
this country, and stop all the investments that might make our 
industries more competitive.
    It's not a criticism of our military--I've visited them 
there. They are performing extraordinarily well, under very 
difficult circumstances. But, how long do we support 
governments that lie to us? When do we say enough is enough?
    Secretary Gates, I'll start with you.
    Secretary Gates. Well, first of all, I would say, based on 
27 years in the CIA and 4\1/2\ years in this job, most 
governments lie to each other. That's the way business gets 
done.
    Senator Leahy. Do they arrest----
    Secretary Gates. And we ought to----
    Senator Leahy. Do they also arrest the people that help 
us----
    Secretary Gates. Sometimes.
    Senator Leahy [continuing]. When they say they're our 
allies?
    Secretary Gates. Sometimes.
    Senator Leahy. Not often.
    Secretary Gates. And sometimes they send people to spy on 
us. And they're our close allies. So----
    Senator Leahy. And we give aid to them.
    Secretary Gates [continuing]. I mean, that's the real world 
that we deal with. But I would tell you this. First of all, 
this is not a war without end. The Lisbon Summit has made clear 
that the transfer to Afghan security responsibility and 
leadership will be complete not later than the end of 2014. 
Troops will be coming down during that period. The costs of 
these wars is coming down dramatically. The costs of these wars 
will drop between 2011--fiscal year 2011 and 2012 by $40 
billion, and between 2012 and 2013 probably by several tens of 
billions of dollars more.
    And I asked the question--first of all, I think the 
prospects of having a more stable Afghanistan, in terms of a 
country that can defend itself--I'm not talking about a Vermont 
democracy here, but a country that can defend itself----
    Senator Leahy. Neither am I, Mr. Secretary, and you know 
that.
    Secretary Gates. I know. But what I'm talking about is, we 
are not in the business of nation building. What we are trying 
to do is build the Afghan National Security Forces to the point 
where they have the ability to defend that country, and so that 
the Taliban and Al Qaeda cannot reconstitute themselves in that 
country. And I think we are making considerable headway in that 
respect.
    So I think that--I know people are frustrated. The 
country's been at war for 10 years. I know people are tired. 
But people also have to think in terms of stability and in 
terms of the potential for reconstitution. What's the cost of 
failure?

                                PAKISTAN

    Senator Leahy. Do you want to add to that, Admiral Mullen?
    Admiral Mullen. What I would talk about, I think, in this, 
Senator Leahy, and you know I've talked about this many times, 
is Pakistan. And we are in the midst, and have been, of trying 
to, in the middle of this war, with threats that they have in 
their territory, trying to build a relationship that was badly 
broken when we left the last time, when we terminated our 
relationship with them in the late 1980s and early 1990s. And 
we are back. And it's actually my belief that if we--if we were 
to do that again, it may not be 5 years or 10 years, but we'll 
be back in a much more difficult situation. And so seeking to 
support stability in that part of the world to the degree that 
these two countries can evolve is, I think, a goal that we must 
continue to pursue--or the danger associated with a country 
that's got a nuclear arsenal, that is an--that lives next to a 
country that they view as an existential threat, it's just a 
matter of time before we're back.
    So I don't--I don't push back on the challenge associated 
with it. Some of the criticism is more than warranted. Nobody's 
worked that harder than me, very frankly, with the leadership. 
And it's a--it's a conscious decision I think that we have to 
make. And if we walk away from it, it's my view it'll be a much 
more dangerous place a decade from now, and we'll be back.
    Chairman Inouye. Thank you very much, Senator.
    Senator Coats.
    Senator Coats. Thank you, Mr. Chairman.

                        RUNAWAY DEBT AND DEFICIT

    I can't speak for other States, but I can speak for the 
people of Indiana, who are grateful for your lifetime of 
service--not only commitment to public service, but execution, 
brilliantly, in your jobs. You've been a model for us. And I 
thank you, and I know the people of Indiana thank you.
    Second, I would like to, I guess, just reaffirm that, 
Secretary Gates, your statements about one of the greatest, if 
not the greatest, threat to our future security is a runaway 
debt and a trillion dollars deficit on an annual basis, and 
that, if that is not addressed, even the difficulties and scale 
back of, ability to respond to challenges around the world that 
won't go away, are potentially reduced--that's nothing in 
comparison to the strains and stresses that will be placed on 
our ability to do that in the future if we can't get ahold of 
this runaway debt and deficit. So, that ever shrinking part of 
the pie that goes to discretionary and defense spending is 
going to keep shrinking if we don't deal with mandatory 
spending. And I appreciate you speaking out on that basis.

                            HEALTH RESEARCH

    A question that I have goes to where possibly we can get 
some savings. I note that the House Appropriations Defense 
Subcommittee passed out a bill which includes research on a 
number of health issues: $223 million cancer research, $125 
million for traumatic brain injury, $30 million for orthopedic 
research, $15 million for restoration of health research.
    I'm just wondering, are there savings that--that's $393 
million. That's a long way from $400 billion, but it's a fairly 
good chunk of money. Are there savings possible in that 
category where there is duplicative research, paid for by 
Government or conducted by the private industry, which 
addresses the very same issues?
    In the past, Defense has kind of been a go-to place for 
health research that, in many cases, is duplicated elsewhere. 
For instance, orthopedic research. I mean, our State is the 
leader of the world in orthopedic research. Some of the, all 
the leading technology and so forth comes out of the private 
sector for that. I don't know exactly what the military does in 
addition to that, but, I guess the question is, are there 
places like that we can get some--you know, I know it's the 
holy grail not to touch anything having to do with health of 
service members. I'm not suggesting that. I'm simply saying 
there may be some duplications there that we ought to be 
looking at.
    Secretary Gates. I think, you know, any of these things are 
worth looking into in detail. But, and I can't speak to the 
cancer piece of it, but I will say this--I think that we have 
funded some of the leading research being done in the country 
on traumatic brain injury, and probably also on prosthetics, 
and almost certainly on post-traumatic stress. The Congress has 
given us quite a bit of money in those areas in particular. And 
I would argue that, in terms of the practical applications of 
those things, as opposed to pure research, that those funds, I 
think there would be a strong bias to keeping those in the 
Defense budget, because we have a very direct interest in 
making sure that there is progress in, particularly, those 
three areas, because those are the areas in which our service 
members are suffering the most in these wars.

                                  NATO

    Senator Coats. I'll accept that.
    I've got 4 seconds left, so a quick yes or no. Is a 
hollowed-out NATO worse than no NATO? The reality that NATO 
just is not stepping up to its responsibilities--we're going to 
have to do it all anyway?
    Secretary Gates. Well, I would say that a NATO that has 
reduced capabilities is still better than no NATO at all. And, 
I'd just add one point to the chairman's comment--to Admiral 
Mullen's comment earlier. One of the things that has happened 
to our allies is that they really have stepped up in 
Afghanistan. But, the result of that has been that the costs of 
their participation in Afghanistan has brought further pressure 
on the modernization budgets of those European countries. And 
so, it's contributed to their overall narrowing of military 
capability, but partly it's because of the contribution that 
they've made in Afghanistan.
    Senator Coats. Thank you.
    Thank you, Mr. Chairman.
    Chairman Inouye. Thank you very much.
    Senator Mikulski.
    Senator Mikulski. Mr. Chairman.
    Secretary Gates, Admiral Mullen, again, like all of my 
colleagues, thank you for your service. I think the enormous 
turnout of members, and also the fact that we're actually 
staying--staying longer than you--is a tribute, really, to the 
high regard that we regard your service, and your service, 
Admiral Mullen. So, we want to thank you for it from the 
incredible job that you've done keeping America safe, your 
strong support for the military, your many trips to actually 
get out of Washington and listen to the troops and talk to our 
allies.
    And for me, one of the special things was the way--always, 
always, will be the way you responded unflinchingly with the 
Walter Reed scandal, in the way you took ownership, the way you 
ensured accountability and responsibility and corrective 
action. And I want to just thank you for that.
    And I've just watched you with the troops, not only in 
uniform and so on, but in things like the Army-Navy game, where 
you mingled with them. And the wounded warriors had such access 
to you, and the way that they felt that they could approach you 
and talk to you, and the warmth and regard you have. So, I 
think that's what a real inspirational leader is, which is the 
difference in management.
    But let me tell you, your trips, your farewell trips and 
speeches you've given, have been eyebrow-raising, jaw-dropping, 
and for me, a must-do list, from the Eisenhower Library speech 
in which you called for major fiscal reform, to the most recent 
one at NATO. You've dropped more bombs in some of these than 
the Air Force.
    But, let me get to my questions. I'd like to, really, 
follow up on, really, the questions raised about NATO. And many 
of this will have to be done with your successor. What is NATO? 
What are we going to require of NATO members? What actions 
should NATO undertake? When we ask for a coalition of the 
willing, we're going to need a coalition of the capable. Or, 
are we ever going to ask that again?
    But, let me go to something very specific, because those 
are big policy questions to be sorted out. I wonder what your 
thoughts are on an overseas base closing. And, is this the time 
where we look at the major policy and make sure we don't have a 
hollowed-out NATO? Is it time to have an overseas base closing, 
where we bring a lot of assets home, close assets, and so on? 
What would be your thought on that? Because, I think we spend 
about, the President's Commission on Deficit Reduction said we 
could save about $9 billion in that area.
    Secretary Gates. Well, first of all, any overseas base 
reductions will necessarily--first of all, just the practical 
thing--overseas base reductions would require Milcon here in 
the United States, so there would be--at least in the beginning 
it would be more expensive to bring them home than to leave 
them where they are, because they have facilities already 
built. And we do get support from the Germans, the Japanese and 
the South Koreans in supporting those facilities.
    Senator Mikulski. I'm not advocating closing all bases----
    Secretary Gates. I understand.
    Senator Mikulski [continuing]. But that kind of scrub we do 
here.
    Secretary Gates. Well, we've just been through that in the 
Department of Defense, and it's now working its way through the 
interagency in terms of an assessment of our global posture and 
our presence in a lot of these different places. Secretary 
Clinton and I will meet with the Japanese the first of next 
week in our periodic two-plus-two meetings to talk about 
Okinawa and Guam, and Japan, and the force presence there.
    I think that the biggest policy question that I think has 
to be asked is--what kind of a signal do you want to send the 
rest of the world, in terms of America's role in the world? 
And, if we, at the same time, we're cutting our Defense budget, 
and we cut our State Department budget, and State has fewer 
assets to deploy abroad, we have fewer assets to deploy abroad, 
and then we begin to close one or another foreign base, are we 
basically sending the message to the rest of the world--and, I 
would say, to China, to Iran, to North Korea, to a variety of 
other places--the United States is closing up shop and going 
home, and we're headed toward Fortress America again?
    So I think this, as I leave, I think this is a huge 
question for the country to consider, and for you to consider, 
is, what kind of a role do you want for the United States in 
the world? And frankly, I believe, for example, our presence in 
Europe, if--one of the benefits it has brought, in addition to 
the financial benefit of having troops be able to rotate from 
Germany into Iraq and Afghanistan at, actually, less cost than 
from here--but, one of the things it has brought is, if 
anything, it has slowed, I think, this deterioration of the 
NATO military capabilities.
    Senator Mikulski. Because we're there----
    Secretary Gates. Because we're there and we train----
    Senator Mikulski [continuing]. They feel we're glued 
together?
    Secretary Gates. We train with them and we work with them. 
And they have to have capabilities that match us when we're 
doing that.
    Senator Mikulski. Mr. Chairman, may Admiral Mullen respond?
    Admiral Mullen. Just very briefly--and maybe it's just 
because of my roots, and I'm a Navy guy--there's just nothing 
like being there. And you can be there a couple of ways. You 
can live there, or you can rotate there. And what I have found 
in our relationships--I just came back from Egypt, and we've 
had a long relationship with Egypt--but, the mil-to-mil 
relationship we have with Egypt is different than the one we 
have with Japan, because we live with Japan. We interact with 
their families. We know the Japanese people in ways that we 
just don't know other countries. The same is true in Germany. 
The same is true in the Republic of Korea. Extraordinarily 
strong relationships. When we are in a crisis, we can use those 
relationships, I think, to prevent a crisis, or prevent 
escalation.
    So, I don't know if--I certainly wouldn't say that it isn't 
worth a scrub. I just think the presence piece of this is so 
powerful in so many ways, and it's enduring, and it prevents 
conflicts in ways that sometimes we don't think about in the 
short term, when we're looking for savings in moves. It's not--
our investment is significant. I understand that. And, worth a 
scrub. I just think we really need to be careful.
    Senator Mikulski. Thank you.
    Chairman Inouye. Thank you.
    Mr. Kohl.
    Senator Mikulski. Mr. Chairman, I just want to, if I could. 
If I could submit questions for the record, both in terms of 
military health care and, quite frankly, in the follow-up, in 
the undersecretary of acquisition, technology and logistics. 
That's $400 billion. The House is dragging its feet. They've 
reinvented earmarks. And I'd like to have, maybe, three to five 
items out of that area, where you think we should definitely 
stay the course in reducing our expenditures.
    And, I hope somewhere we can get a chance to ask his 
opinion on the House and earmarks.
    Chairman Inouye. We will discuss that.
    Senator Kohl.
    Senator Kohl. Thank you, Mr. Chairman.

                              AFGHANISTAN

    Secretary Gates and Secretary Mullen, we thank you for 
being here today, and we congratulate both of you on a job well 
done. Your leadership has been critical to the progress that 
we've made in Afghanistan, Iraq, and in the global war on 
terror, most recently the death of Osama bin Laden.
    In light of this progress, many Americans are hoping that 
our forces can soon come home from Afghanistan after a decade 
of war. I share this desire to begin withdrawing our forces 
from Afghanistan, beginning with a sizable and sustained 
reduction in forces this summer.
    I'd like to ask both of you about the government of 
Afghanistan and President Karzai. President Karzai seems 
increasingly hostile to the American presence in Afghanistan, 
and his government, as we know, is plagued by corruption.
    My first question is whether you see President Karzai 
playing a positive or a negative role in Afghanistan.
    But I'd also like to hear from both of you about what comes 
after Karzai. Presumably he'll not be President forever. What 
kind of relationships are we building with Afghan leaders from 
other political parties and ethnic groups, both in power, as 
well as in the opposition?
    Mr. Secretary.
    Secretary Gates. Well, first of all, I have spent a lot of 
time with President Karzai over the last 4\1/2\ years. Frankly, 
I think that we have often not done a very good job of 
listening to President Karzai. The problems that he often 
raises in public are problems that he has often raised with us 
1 year or 2 years before in private. And, I'll give a perfect 
example--and that's private security companies. This became a 
crisis in our relationship late last year. We've worked our way 
through it, and he has participated in working his way through, 
in our working our way through this.
    But we knew from Iraq that private security companies are a 
problem in these countries, and we should have begun this 
transition to Afghan oversight of these companies a long time 
ago. So, my point is--yes, he reacts publicly to things that 
are done and said. He's very sensitive to civilian casualties. 
This has been a continuing theme. It's not a surprising theme. 
But, I think you would find, if you talked to our commanders, 
if you talked to the people that I talk to, he is somebody who 
understands the campaign plan, who understands the importance 
of our role, who wants a long-term U.S. relationship with 
Afghanistan after he's President. He told me he plans to step 
down in 2014.
    I will tell you, both our military people and our diplomats 
are in touch with a very broad range of Afghan leaders--and not 
just in Kabul, but all around the country.
    And finally, on the governance side, I would just say, at 
the NATO Defense Ministers meeting late last week, the NATO 
senior civilian representative, Ambassador Gass, reported 
that--he had just gotten back from Afghanistan--75 percent of 
deputy district governors now in Afghanistan are chosen on the 
basis of merit. And he told the defense ministers further that, 
as the provincial governors change, the quality is steadily 
improving.
    So, I think you have the Kabul environment, and you have 
the outside of Kabul environment. And, frankly, it's a lot 
better outside Kabul, in terms of what's going on around the 
country and in terms of governance, than is often reported.
    But it's a relationship from, where we're dealing with a 
President whose country has been at war, like us, for 10 years. 
And, he is very sensitive to the fact the Afghans are exhausted 
with war, too. And so, I find that, when I sit down with 
President Karzai, we have a very productive conversation. And 
it's clear that he buys into what we are trying to do, and that 
we are allies, not occupiers. And he also does see a post-2014 
relationship with the United States going forward.
    Senator Kohl. Admiral Mullen, any comments?

                          SECURITY ENVIRONMENT

    Admiral Mullen. The only thing I'd add is, as the security 
environment continues to improve--and I'd reemphasize what 
Secretary Gates said in terms of what we're seeing on the 
ground--in subdistricts and districts and provinces, it's 
getting better from a governance standpoint which, between 
security and governance, gets you to a point where you can 
start to develop the areas, which is really what the Afghan 
people care about. They're tired of war.
    There is this disparity between Kabul and what we see 
locally throughout the country. And we have to continue to 
engage. This is the elected leader of a country we're heavily 
engaged in, or, with. And, we can't do it without decent 
governance. We can get the security pieces necessary, but it's 
not sufficient, and we have to continue to push on better 
governance, the reduction of corruption, and the development 
piece of this. We're just getting to point, from my 
perspective, in the south, where security has gotten to a point 
where those other pieces can really start to kick in. We're not 
there throughout the country. But, from an overall proof of 
concept, if you will, that this approach is having the impact 
we thought it would, we're there.
    Secretary Gates. The other, one other point I would make 
is, having talked about the rest of the country being better in 
some respects than Kabul, in another respect, Kabul is a model, 
because the Afghans have had the security lead in Kabul for 
over a year now. And that's the transition we're trying to make 
throughout the rest of the country on a district-by-district, 
province-by-province basis. And at this point, about 25 percent 
of the Afghan population live in areas that are now under 
Afghan security lead.
    Senator Kohl. Thank you.
    Chairman Inouye. Thank you.
    Senator Alexander.
    Senator Alexander. Thank you, Mr. Chairman.
    Thank you, Mr. Secretary, Admiral Mullen, for extraordinary 
public service.
    Mr. Secretary, for the historical record, for young people 
who may be planning a career in public service, what's better 
preparation for Secretary of Defense--president of a big 
university, or director of the CIA?
    Secretary Gates. President of a big university.
    As you well know.
    Senator Alexander. Yeah.
    Mr. Secretary, how many, about how many military men and 
women do our European allies have?
    Secretary Gates. About 2 million in uniform.
    Senator Alexander. About how many are available to be 
deployed in an exercise like Libya or Afghanistan?
    Admiral Mullen. I would guess, Senator Alexander, it would 
be in the 10 to 15 to 20 percent in terms of----
    Senator Alexander. Twenty percent?
    Admiral Mullen [continuing]. Any single time. But that 
number can be very deceptive because, for all of us, we find 
out--we have 2.2 million men and women Active and Reserve, and 
we have about 250,000, almost 300,000 people deployed around 
the world right now. And we're going at a pretty good clip.
    Senator Alexander. I thought I'd had heard somewhere that 
they might only have 25,000 or 40,000 troops available for----
    Secretary Gates. What you heard was in my speech last week, 
where I said they'd struggled to maintain 25,000 to 40,000 
troops in Afghanistan.
    Senator Alexander. Mr. Secretary, in the gulf war, the 
first Iraq war, if I remember correctly, other countries paid 
for a large part of that. How much of that did they pay for?
    Secretary Gates. Virtually all.
    Senator Alexander. Yeah. In the Iraq, Afghanistan, and 
Libya war, how much have other countries paid for?
    Secretary Gates. Well, the other countries are essentially 
paying their own way, in the sense of they're paying for their 
own airplanes, and they're paying for their own munitions, and 
things like that.
    Senator Alexander. But, the United States is paying for 
virtually all of Iraq, Afghanistan and Libya. Is that right?
    Secretary Gates. Well, not Libya. But, we certainly have 
paid the bulk of the money in Iraq and Afghanistan.
    Senator Alexander. And was your testimony that, in NATO, 
the United States is supposed to pay what percent of the costs? 
And what percent do we actually pay?
    Secretary Gates. Well, the line that I had was that, up 
until about, well, until the end of the cold war, we paid about 
50 percent of the military costs of the alliance. Since the 
cold war, that has--since 1991, that has risen to about 75 
percent of the total military expenditures in NATO.
    Senator Alexander. Is there a lesson for this President and 
future Presidents, this Congress, as we look back at the gulf 
war and as we prepare for any future military action, that we 
might keep in mind not just getting approval of other countries 
for the, agreeing that we ought to take the action, or to join 
with us and take the action, but to do as was done in 1991 and 
1992, to actually get their commitment to help pay for it?
    Secretary Gates. Well, I think you, we can look at that two 
ways. One is, the answer is absolutely yes. One of the things 
that I pointed out last week at the NATO Defense Ministers 
meeting is that the trust fund to support the Afghan national 
security forces going forward is, in terms of the dollars or 
Euros that have been contributed, is a joke, because it's about 
350 million Euros at a time when the United States is spending 
billions of dollars to support the development of those 
military forces. So, one of the things that I have talked to 
all of our allies about is the fact that it's imperative for 
them to contribute to that trust fund.
    On the other hand, the circumstances of the gulf war were, 
I think, unique, in the sense that the countries we were 
dealing with that felt the most threatened were Kuwait, Saudi 
Arabia, the gulf states and so on. I will tell you that, sort 
of looking back, the two people who led the groups, the teams 
going around to talk to our allies about their contributions 
were led by Secretary of State Baker and Secretary of Treasury 
Nick Brady. And, somehow through the luck of the draw, Baker 
ended up with Saudi Arabia, Kuwait, the gulf states, and so on, 
and Nick Brady had to go talk to the Japanese, the Germans, and 
others. And, let's just say, Nick wasn't nearly as successful 
as Jim was.
    Senator Alexander. Thank you, Mr. Chairman.
    Chairman Inouye. Thank you very much.
    Senator Collins.
    Senator Collins. Thank you, Mr. Chairman.
    Mr. Secretary, since this is your last hearing, it seems 
ungracious to do anything except thank you and heap praise upon 
you for your service. But since you're before a group of 
senators, of course, while we'll do that, we'll also ask some 
questions. But, I do sincerely thank you for a lifetime of 
public service that has made an extraordinary difference to our 
country, and to our troops, in particular.
    I'm very concerned about the $400 billion that the 
President has assigned the Department of Defense for additional 
cuts. You have already made a tremendous effort to squeeze out 
waste and inefficiency, and to reduce unnecessary spending. I'm 
concerned that we could end up with the kind of hollow force 
that you've warned us against, and that was so devastating to 
our troops, and our security, potentially, in the 1970s, and to 
a lesser extent, two decades later.
    Were you consulted by the President or OMB on the size of 
the target--that $400 billion that has been assigned to the 
Department of Defense?
    Secretary Gates. I was informed about it the day before it 
was announced.
    Senator Collins. My concern, Mr. Chairman, is, I believe 
that military requirements have to drive the budget, and not 
the other way around. And----
    Secretary Gates. I will say this, though, Senator. When I 
was informed, I did get immediate agreement that this--before 
any specific budget decisions were made--this comprehensive 
review that the chairman and I have been talking about, would 
be carried out, that we would present options to the President 
and to the Congress that shows relative levels of risk of 
different kinds of cuts and changes in the force structure. So, 
there was agreement immediately to that review before specific 
decisions were made.
    Senator Collins. Thank you. It still seems backwards to me, 
as far as the targets given. You're going to assess the risk of 
various scenarios to meet the target, but that, to me, is the 
opposite of the way we should be proceeding.
    Admiral Mullen, let me switch just quickly to Libya, and 
ask you a question. I personally have a lot of concerns about 
our involvement in Libya and the transition from it being a 
humanitarian exercise, to the goal of having Colonel Gaddafi 
leave and relinquish power.
    Let's assume that that does happen, that Colonel Gaddafi 
does give up power. The Transitional National Council is made 
up almost exclusively of the eastern Libyans, I'm told. And I 
believe it's a real question, whether or not that council could 
effectively govern the country, given the intense regional 
rivalries and tribal nature of Libyan society. But also, I'm 
concerned that we're not really certain who we're dealing with.
    Do you feel confident that we have a plan for what we would 
do post-Gaddafi?
    Admiral Mullen. Just having come out of both Egypt and also 
Europe last week, I'm actually encouraged that there are 
countries and organizations, NATO being one, that are very 
specifically looking at--What after Gaddafi? Because I think we 
need to do that.
    I'm more encouraged, more confident that the more we learn 
about the TNC--and in fact, I also see them now linking to the 
West more than they had in the past--that there are, you know, 
civilian leaders and military leaders who recognize the 
challenge that you just described.
    What I don't, or, I just haven't seen yet, is the kind of 
comprehensive collective view of how they would run the 
country. I think they recognize that internally. Their focus on 
this is improving, but I think we're sort of at the beginning 
of that, and that there is an awful long way to go. So, I'm 
more positive than I was a few weeks ago. There's an awful lot 
that's being brought to the table in terms of international 
focus on this from our government, as well as many governments. 
But I still think we've got a long way to go.
    Secretary Gates. One of the actions taken by the NATO 
defense ministers last week was to resolve that NATO would not 
be in the lead in any kind of a transition, but also that the 
Secretary General would be in communication with the contact 
group and the United Nations, and tell them that it's our view, 
as NATO Defense Ministers, that the planning for this 
transition should get underway now--not wait until Gaddafi 
falls.
    Senator Collins. Thank you.
    And thank you both for your service.
    Chairman Inouye. Thank you very much.
    Senator Murkowski.
    Senator Murkowski. Thank you, Mr. Chairman.
    Gentleman, thank you both for your service.
    Secretary Gates, I, too, echo the high praise that we all 
have for you and for your efforts.
    Speaking about Afghanistan now, going back from Libya 
here--as we deal with the reality of a drawdown coming ahead, 
and the numbers, and all the discussion that goes on there, I'm 
going to make it a little more parochial. We had several 
thousand troops with the 1st Stryker Brigade Combat Team of the 
25th Infantry up in Fort Wainwright just deploy. They moved out 
just this past month. And the concern that I'm hearing from 
some of the folks up North is, well, okay, we want to be in 
that phase where we are withdrawing and coming out of 
Afghanistan. But we're concerned that our loved ones, who have 
just now gone in, are going to be on the back end of that 
withdrawal, so you will have these forces moving out.
    You've mentioned that between now and 2014, the amount of 
money that we will see going into Afghanistan will be, sounded 
pretty dramatically reduced. What assurances can you give to 
those who are just now going into Afghanistan, and who will be 
there through the end of this next year, that their situation 
is not increasingly riskier?
    Secretary Gates. I would make two points. First of all, the 
reduction in cost in Afghanistan, beginning in fiscal year 2013 
and beyond--so fall, let's say, of 2012--is, really correlates 
to the level of troop drawdowns. And so, the amount of money 
that is saved is associated with the number of troops that we 
have in country, not by any skimping on the support----
    Senator Murkowski. Okay.
    Secretary Gates [continuing]. Or the enablers that we have 
there to support the troops we have.
    Second, I have had conversations with the President about 
this, and I will tell you that he and I are both committed 
that, whatever decisions are made, the foremost consideration 
will be to ensure that whatever steps are taken do not put the 
troops that are leaving at greater risk, or the troops that are 
remaining at greater risk.
    Senator Murkowski. Okay. I appreciate that.
    Let me ask you a question about Guam. In light of where we 
are with the budget issues, you responded to a question about, 
to Senator Mikulski, about the overseas bases in Europe. But, 
in light of what we're seeing with the tightening budgets, can 
we expect any significant changes, perhaps in the current 
direction, with regards to the buildup in Guam? Are we going to 
meet that 2014 completion date, that target that has been set, 
given what the cost estimates are at this point in time?
    Secretary Gates. Senator, in all honesty, as I mentioned 
earlier, Secretary Clinton and I will be meeting with the 
Japanese on Monday and Tuesday, and quite honestly, I'll have a 
better answer to your question after we have that meeting.
    Senator Murkowski. Okay. We look forward to that.
    Thank you, Mr. Chairman.
    Chairman Inouye. Thank you very much.
    Senator Murray.
    Senator Murray. Thank you very much, Mr. Chairman.
    Secretary Gates, Admiral Mullen, it's been a great pleasure 
to work with both of you, and I want to thank both of you for 
your tremendous service to this country. It is very much 
appreciated at a very challenging time.
    And Secretary Gates, I look forward to you coming home to 
our home State at some point, and continuing that relationship. 
But, I know you must be looking forward to that.
    Secretary Gates. Fifteen days.
    Senator Murray. Hopefully, the weather's better when you 
get there than it has been.
    Secretary Gates, last Friday, I visited the National Naval 
Medical Center up in Bethesda and had an opportunity to talk 
with a number of our wounded warriors, and their providers and 
caregivers. And as you well know, many of these service members 
have sacrificed life and limb in Afghanistan, and we, as a 
country, are going to be taking care of them, and their 
families, not just today, not just when they return home, for 
but a lifetime.
    As chairman of the Senate Veterans Affairs Committee, I 
take this issue very seriously, and I've been trying to draw 
attention to some of the all too often unseen costs of war, and 
thinking about how we should consider that as part of our 
decision in any long-term conflict.
    I think you know the major components of this long-term war 
have had real and significant impacts. Death from suicides 
among veterans and service members from the war are now on par 
with combat deaths; many of our warriors are facing difficult 
challenges with mental healthcare, as you well know, when they 
return home; and a lot of our service members have served now 
not just two, three or four, but sometimes even five times, and 
the costs of these are real.
    So, while we all talk a lot on this subcommittee about 
rebuilding projects, and Afghan aid, and military resources, 
and all the costs and components of a defense system, I wanted 
to ask you today what you and the Pentagon consider to be the 
biggest costs of this war to our wounded warriors and their 
families--particularly, those costs that we'll be paying for 
for a very long term; and whether that is ever considered in, 
those costs are factored in, when we are making decisions about 
drawing down in Afghanistan.
    Secretary Gates. I would, I mean, I think it is self-
evident that the costs are exactly as you've described them, in 
lives that are shattered, in bodies that are shattered, in 
minds that are shattered.
    I would tell you that one of the things that we've done 
over the last 2 to 3 years is to ensure that all of the funding 
that we have gotten in the past in supplementals and overseas 
contingency operations, dealing with family programs, and with 
some of the medical research we were talking about, and care 
for our wounded warriors--that all of that money has been 
shifted into the base budget, knowing that we will deal with 
this problem for many, many years to come. So, from our part--
in addition to Virginia--we have tried to make sure that these, 
the funds for these programs have been protected, and will be 
protected in the future.
    But it, I cannot say that decisions in terms of drawdowns 
or military strategy are made bearing in mind the cost of the 
soldiers and sailors, airmen and marines, who suffer. It is on 
the minds of everybody who makes those decisions. But, by the 
same token, it is the nature of war, and it is, frankly, one of 
the reasons why, as I told an interviewer a couple of weeks 
ago, I feel like I've become more conservative, more cautious 
about when we use force, because I've seen the consequences up 
front.
    But Admiral Mullen has devoted a huge amount of effort to 
this. He probably ought to say something.
    Senator Murray. Admiral Mullen.
    Admiral Mullen. Senator, first of all, I just appreciate 
your leadership on this because it has to, it has to have a 
voice. And, I actually believe we're just beginning to 
understand the costs.
    Your units--very specifically, I'll use Fort Lewis. I mean, 
we're now, we have more soldiers and airmen at Joint Base 
Lewis-McChord than we've ever had, and they're going to be home 
for a couple of years. Many of those units have had only 1 year 
between deployments up to now. Now, they're going to have two. 
And, I think they've been compartmentalizing challenges, and 
they're going to start unpacking that. And it's going to be 
pretty tough now, that we're back home, and addressing, the 
leadership focusing on addressing the challenges that will come 
with that.
    Medically, in the PTS-TBI world in particular, the more 
quickly we get at the problem, the less likely the damage, or, 
the damage is reduced significantly. And yet, there's still a 
great deal on the TBI side that we don't understand.
    Senator Murray. And it's changing, by the way.
    Admiral Mullen. Right.
    Senator Murray. When soldiers are home after 3 years, and 
we're finding the impacts are different 3 years later----
    Admiral Mullen. Right.
    Senator Murray [continuing]. And they're coming back into 
the system.

                           MILITARY FAMILIES

    Admiral Mullen. Right. There are time bombs set up that we 
know are out there. We just don't know when they're going to go 
off.
    The relationship that the Pentagon has with the Veterans 
Administration (VA) and with communities throughout the country 
has got to get stronger. And we've worked that in ways to try 
to focus on that. And where you and Chairman Inouye and others 
can help is, when we get into budget crunches like this, this 
incredible amount of money that we put into family programs, 
into medical research--it's some of the first money that budget 
types like to take out, historically. We like airplanes before 
we would keep our family programs intact. That's something the 
Secretary of Defense and I have talked about. And, unless we 
watch that very carefully, it will not be there when we need 
it. And so, we have to have it in a way that it is sustained 
over time. Because I think these costs are longstanding. We 
don't understand them as well as we should--not just for our 
members, but also, for our families. We see that time and time 
again.
    Our families have become as much, almost as much as part of 
our readiness, as anything else. And it wasn't that way 10 or 
15 years ago. Always critical. But, without them we would be 
nowhere in these wars.
    And so, leaders have to continue to focus on--what are 
these costs? And, I thought you said it very well--It is to 
repay this debt for the rest of their lives. And we need to 
stay with them, so that we understand what that means.
    Secretary Gates. I would just say that I've told the 
service secretaries and the chiefs to fence two areas in all of 
these budget exercises that we're going through. One is 
training, and the other is all of our family programs, that I 
don't want any money taken out of those.
    Senator Murray. Well, I appreciate that very much. And I do 
think we have to really seriously be considering this, because 
it does impact our troops today. But, it also impacts our 
ability in the future for the next big one, if we've depleted 
all of our resources, and we are not taking care of our folks.
    Admiral Mullen. The other thing--and I know that you know, 
Senator Murray--is, we are, we did it in Vietnam, and we are 
doing it again. We're generating a homeless generation; many 
more homeless female vets, because they're now, I think a 
quarter of a million have served in Iraq and Afghanistan 
incredibly well. And if we're not careful, we'll do the same 
thing we did last time--and we'll pay for them long-term, when 
an up-front investment would really make a difference right 
now. Everybody's got to be----
    Senator Murray. Because we're about to make some of the 
same mistakes we made after the Vietnam war.
    Admiral Mullen. We are.
    Senator Murray. And this country will be paying for it 20 
years from now.
    Thank you, Mr. Chairman.
    Chairman Inouye. Thank you.
    Senator Hutchison.
    Senator Hutchison. Well, thank you, Mr. Chairman.
    And I will add to what has been said already. Washington 
State's gain is Texas' loss. We would take you back in a 
heartbeat if you would come, because you did a great job at 
Texas A&M, and the Bush Library and School.

                           MILCON BUDGET CUTS

    I want to go back to Senator Mikulski's line of 
questioning. We have had an overseas base closing commission. 
And after the last American BRAC, we had the overseas BRAC that 
was going in the same track, and it was decided to bring 70,000 
troops back from certain foreign locations--Germany and Korea 
especially, and then Guam, of course, in question. And now we 
are looking, Mr. Secretary, at a Fort Bliss military 
construction project that has just been completed this year, 
that would take one of the BCTs that was designated to come 
back from Germany--it is prepared and ready for taking that BCT 
from Germany. But, the Department changed the previous decision 
that was going to bring back two BCTs from Germany, to just 
basically say, we're not sure yet. So, you've got the Milcon 
that has been done in America--about $450 million worth--to 
take one BCT back, and on the five-year plan for military 
construction, there is $1 billion to be done in Germany. 
Germany contributes 7 percent of the cost of our Milcon, as 
compared with Japan, that contributes 40 percent.
    So, I would just ask you, as you are leaving in your last 2 
weeks, if you can give serious consideration to the fact that 
we don't get an effort from Germany--$1 billion of military 
construction for changing Army headquarters and bases--couldn't 
that money be saved, rather than saving it out of either 
personnel, or healthcare, or weapons systems that would 
modernize for our troops in America? Can't we take $1 billion 
out of Milcon that was supposed to be taken care of in a 
previous administration? It just seems like there's a 
disconnect from what Senator Mikulski was suggesting, and what 
seems to be an opportunity here.
    Secretary Gates. The President's decision on the posture in 
Germany was that we would come down from four brigade combat 
teams to three. Where the uncertainty is, is in the Army, in 
terms of whether that fourth BCT in 2015-2016 is simply 
disbanded, or whether, in fact, it comes back to the United 
States. The only Milcon that I'm aware of in Germany is the 
consolidation of command, control, communications, computers, 
and intelligence at Weisbaden. The original budget for that was 
$482 million. One-half of that has already been spent. There is 
no money for it, as I understand, in the fiscal year 2012 
budget, but then, there is about another $150 million between 
2013 and 2016.
    So, we'll go back and take another look at that piece of 
it. But, the decision was not made just by the Department of 
Defense, but by the President--that we would, in fact, come 
down by one BCT in Germany.
    Senator Hutchison. The original proposal was two.
    Secretary Gates. Right.
    Senator Hutchison. And in the interim time, I think we all 
believe, or, I'll speak for myself, and, along the lines of 
what you talked about in Europe last week--the Germans have 
fewer than 5,000 troops in Afghanistan. They have rules of 
engagement that are very restrictive. And I would just ask you 
to look at, and perhaps work with the incoming secretary, to 
determine if it is in our best interest to have the places 
ready at Fort Bliss for a BCT? And with the lack of German 
effort, is it in our best interest to keep three BCTs there, 
rather than two, which had been the previous decision?
    And, I certainly support having joint efforts, and working 
with our partners. But, you yourself have said our partners are 
not stepping up to the plate as they should. And I agree with 
you. So, I would just ask if, in your last 2 weeks, you could 
look at this, and could work with Secretary Panetta, to 
determine if it is in our best interests, with the lack of 
effort that the Germans make in Milcon, and the lack of effort, 
frankly, in our NATO alliance, and with the preparation that's 
already been made--$450 million in Milcon here to take the new 
troops back--I'd just ask if you would look at it one more 
time.
    Mr. Secretary, I still have time, if I could just, if 
you're not going to answer that question, then I would just ask 
if we could, if you could elaborate on your view of NATO. And, 
you said that some NATO is better than no NATO. Is there 
something that we could do proactively, besides encouraging our 
allies to be more of a player, an equal player, that would make 
the NATO alliance more effective?
    Secretary Gates. Well, I think one thing where the Congress 
could make a contribution is that, I know that the Congress has 
a variety of parliamentary exchanges with European 
legislatures. And, I think just voicing, both in those 
exchanges, but also, publicly, essentially the message that I 
delivered last week--that the American people are going to 
become increasingly skeptical about this alliance if the United 
States has to bear three quarters of the burden.
    Chairman Inouye. Thank you.

                     ADDITIONAL COMMITTEE QUESTIONS

    Mr. Secretary and Admiral Mullen, thank you very much for 
your candid testimony, but more importantly, for your service 
to our Nation. Your astute vision, and ability to quickly 
implement your vision through others, is a testament to your 
leadership ability, and this Nation is truly in your debt for 
turning the tide in Iraq and Afghanistan, and setting the stage 
for a withdrawal. So, on behalf of the subcommittee, we wish 
you the very best as you transition to the next phase.
    And we will have written questions submitted, if we may.
    Because of the time limitation, we're not able to go 
through the questions and answers.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
            Questions Submitted by Senator Dianne Feinstein
                                pakistan
    Question. In the wake of the death of Osama bin Laden and 
Pakistan's claims that they had no knowledge of his whereabouts, and 
the ousting of United States military trainers from Pakistan, I 
question our financial relationship with Pakistan and their commitment 
to our partnership.
    Secretary Gates, this week you sat down with an interview with the 
Associated Press and urged patience with Pakistan. You have seen 
Pakistan's actions over the past few months. When should our patience 
with Pakistan run out?
    Answer. The United States relationship with Pakistan is far from 
ideal, but we should be working to improve the relationship. Although 
our respective views on how best to counter regional security 
challenges are not always congruent, we do have shared interests in a 
stable South Asia. A comprehensive long-term partnership with Pakistan, 
however, is not just in the interest of regional security, but in the 
United States national security interest as well. Therefore, the United 
States needs to work with Pakistan to overcome the tensions currently 
straining the relationship.
    First, let me be clear that we have seen no evidence that senior 
Pakistani leaders were aware of Osama Bin Laden's whereabouts or 
involved in harboring him. Nevertheless, the raid in Abbottabad has 
created an opportunity for Pakistan's leadership to make choices that 
advance United States and Pakistani shared interests in eradicating 
terrorist networks threatening both countries' interests.
    Since the raid on May 2, senior members of this administration, 
including Secretary Clinton and Admiral Mullen, have had very frank 
discussions with Pakistani civilian and military leadership to make 
clear that the United States will not tolerate safe-havens for 
terrorists, and to urge decisive steps to expand existing United 
States-Pakistani counterterrorism cooperation. In conversations with 
Pakistan's leaders, the administration has been unambiguous regarding 
its expectations for clear, verifiable, and sustained action against 
terrorists operating in Pakistan. Progress on this front will be 
beneficial for Pakistan's security, and will also demonstrate 
Pakistan's commitment to a positive and enduring relationship with the 
United States.
    The fact remains that Pakistan's cooperation is central to United 
States and coalition efforts to defeat al Qaeda and prevent its return 
to the region. Pakistan's participation will also be integral to 
achieving a durable political solution in Afghanistan. More broadly, 
Pakistan is the sixth most populous country in the world, with a 
majority of its population under the age of 30. It possesses nuclear 
weapons, has unresolved border issues with its neighbors, and a weak 
economy. These are just some of the factors that make continued United 
States engagement with Pakistan so important. So even when the United 
States relationship with Pakistan is strained, I believe we should 
continue to communicate clearly our commitment to a long-term 
relationship that is supportive of both countries' interests, and that 
the United States will not ``abandon'' Pakistan or disengage from the 
region.
    Question. What more can we do to improve our relationship with 
Pakistan?
    Answer. Our relationship with Pakistan is currently being tested. 
In Islamabad, and here in Washington, people are asking if both sides 
can maintain an effective partnership. I believe we can. The recent 
turbulence in the United States relationship with Pakistan, although 
troubling, is not insurmountable.
    Pakistan's Government and people harbor concerns that our 
engagement in the region will not extend beyond what is required for 
the success of the United States mission in Afghanistan. Pakistan's 
strategic importance, however, goes beyond United States objectives in 
neighboring Afghanistan. A stable, prosperous, and democratic Pakistan 
is critical to long-term regional prosperity and security. Therefore 
the United States must demonstrate its commitment to a sustained 
partnership with Pakistan that both addresses and extends beyond 
immediate security threats to both countries. Such a commitment does 
not mean we are locked into a specific menu or level of assistance 
funding, but does require that effective and needed assistance be 
available when the two countries' interests intersect.
    Question. Last week General Ashfaq Kayani said in a statement that 
U.S. assistance now being spent to support the military is more 
urgently needed for ``reducing the burden on the common man.'' Why 
should we continue to fund military operations in Pakistan?
    Answer. Pakistan's strategic importance is related to both the 
United States mission in Afghanistan and broader regional and 
international security interests. And although the United States-
Pakistan relationship is not perfect, I do believe it is vital that the 
United States continues to advance a lasting partnership with Pakistan 
in order for it to increase its stability and prosperity over the long 
term. Cooperation--including civilian, law enforcement, and military--
on shared security interests is a necessary component of this 
partnership.
    Since September 11, 2001, Pakistan has been a key partner in the 
fight against terrorism that threatens both countries. In partnership 
with the Government of Pakistan, we have made significant progress 
toward disrupting, dismantling, and ultimately defeating al Qaeda. U.S. 
security assistance has directly enabled Pakistan to conduct its 
counterinsurgency campaign against violent extremists in Pakistan more 
effectively. Our assistance has also allowed for greater Pakistani 
cross-border coordination with International Security Assistance Force 
(ISAF) and Afghan Forces, which has reduced the space in which al Qaeda 
and other militants intent on attacking United States, Pakistani, and 
Afghan interests can operate. Specifically, the Department of Defense 
(DOD) ``train-and-equip'' efforts, supported by the Pakistan 
Counterinsurgency Fund/Pakistan Counterinsurgency Capability Fund, are 
central to United States efforts to build the capacity of the Pakistan 
military and paramilitary forces to enable Pakistan to defeat the 
insurgents within its borders. Coalition Support Fund reimbursements 
also remain a critical enabler in combating terrorism and helping 
Pakistan to sustain its forces in their operations to reduce safe 
havens.
    In short, continued United States support to Pakistan's military 
operations against violent extremists is a clear national security 
interest. Pakistan has made progress against militants operating in its 
territory, though the gains remain tenuous, and the Pakistan military 
has struggled to ``hold'' and ``build'' in the areas it has cleared. In 
all, Pakistan has sacrificed more than 11,000 military personnel in 
this fight, and has also lost upwards of 30,000 civilian lives to 
continued insecurity. So long as Pakistan continues to advance shared 
security objectives, we should continue our support.
                               detainees
    Question. The DOD currently has hundreds of individuals detained in 
Afghanistan that will, at some point, need to be transferred to Afghan 
control, released, charged, or held by the United States in a different 
kind of detention regime than they are at Bagram (now called Parwan).
    What is the Department's plan for handling these detainees in the 
long run?
    Answer. Drawing on our experiences in Iraq will help to ensure that 
the transition in Afghanistan is accomplished responsibly. United 
States forces will remain involved until the Government of Afghanistan 
has the trained personnel and infrastructure to be able to assume 
detention operations. Further, as necessitated by the presence of 
United States and coalition forces who are conducting operations in 
concert with Afghan forces to defeat the Taliban, al Qaeda, and 
associated forces, United States forces may need to maintain some 
detention capacity in Afghanistan, pursuant to the law of war, as long 
as military operations continue.
    Question. What is your assessment of the Afghan justice system and 
its ability to adjudicate these cases?
    Answer. The formal Afghan justice system is still developing. 
Primary issues include a shortage of adequately trained, educated, and 
compensated judges and attorneys, limitations and gaps in the Afghan 
legal code, and in some cases a lack of political will to try, 
prosecute, and incarcerate national security threats in a transparent 
and influence-free manner.
    In support of its goals, the United States--under the leadership of 
the Department of State--conducts a broad range of programs that aim to 
increase the capacity of the Afghan justice system. DOD provides 
support to these efforts through the Combined Joint Interagency Task 
Force 435 (CJIATF-435) and its subordinate command, the Rule of Law 
Field Force--Afghanistan (ROLFF-A).
    Although CJIATF-435 is primarily responsible for United States 
Government detention operations in Afghanistan, CJIATF-435 also trains 
Afghan military police detention guards, and mentors Afghan national 
security prosecutors in preparation for the conditions-based transition 
of detention operations in Afghanistan. CJIATF-435 also has made 
progress in discussions with Afghan officials about a national security 
legal framework that will be necessary for a complete transition to 
Afghan authority.
    Question. How do you compare the status of the Afghan justice 
system to the Iraqi justice system that the United States has helped 
build up?
    Answer. The Iraqi judicial system has historically been more 
advanced than the formal Afghan judicial system, reflecting a more 
centralized and urbanized state and higher literacy and education 
levels in Iraq. In contrast, rural Afghans, who comprise a significant 
majority of the population, often make use of their own community 
justice systems that are outside the purview of the Afghan Government.
    United States forces, in concert with civilian partners, have 
provided support to both the Iraqi and Afghan justice systems, 
including building physical capacity and training correctional 
officials. The United States also has provided training to Iraqi and 
Afghan investigative judges regarding the use of evidentiary files 
prepared to support criminal charges brought against detainees held by 
United States forces. In both countries, we have endeavored to develop 
rule of law systems that are adapted to, and sustainable within, the 
distinct cultural contexts of Afghanistan and Iraq.
                              afghanistan
    Question. There has been a lot of discussion lately about the 
United States presence in Afghanistan and what the drawdown of forces 
there should look like. I am a supporter of a conditions based drawdown 
and do not want to see a hasty withdrawal jeopardize the gains that we 
have made. That being said, I think that because we are 10 years after 
9/11 we need to emphasize that this is not going to be an open-ended 
operation.
    What progress has been made in determining the specific plan for 
withdrawal and how involved has the Afghan Government been in 
determining the metrics to evaluate the withdrawal plans?
    Answer. As you know, during his December 2009 speech at West Point, 
President Obama specified that the surge would not be open-ended, and 
that he would reduce U.S. surge forces beginning in July 2011 based on 
conditions on the ground. The United States strategy in Afghanistan is 
working as designed, and the beginning of a drawdown of the surge 
forces this July is part of that strategy. The momentum has shifted to 
coalition and Afghan forces, and together these forces have degraded 
the Taliban's capability, achieved significant security gains, 
especially in the Taliban's heartland in the south, and set the 
conditions for beginning the transition of security for provinces and 
districts to Afghan lead.
    The United States is working very closely with the Government of 
Afghanistan on the transition process, which will ultimately put the 
Afghan National Security Forces in the lead of security nationwide by 
the end of 2014. The growth of the Afghan National Security Forces 
(ANSF) in quality and quantity over the past 18 months, including the 
additional 100,000 new personnel, is a key part of the progress to date 
that enables the initiation of the transition and the drawdown of U.S. 
forces. The President will take these factors into consideration when 
making his decision about the size and pace of the drawdown.
    Question. Are the Afghans in agreement on the metrics that should 
be used?
    Answer. The Afghans understand that President Obama will decide on 
the size and pace of the drawdown of our surge forces, and that it will 
be based on conditions on the ground. They recognize the substantial 
progress achieved over the past 18 months, including the progress in 
the growth and quality of their own forces and the reversal of the 
Taliban momentum that makes the initiation of the drawdown and the 
transition of several provinces and districts to Afghan security lead 
possible.
    The United States, with our allies, is in the process of building a 
350,000-man ANSF. There has been some conflicting reporting on the 
quality of that force, specifically the Afghan National Police. There 
are increasing reports of infiltrators and Afghan servicemembers 
turning their weapons on coalition forces. I am concerned that we are 
focusing on quantity and not quality.
    Question. How is Afghanistan going to build the security force it 
needs, and will they have the resources to maintain a National Army?
    Answer. The NATO Training Mission--Afghanistan, working closely 
with the Afghan Ministry of Defense and Afghan Ministry of the 
Interior, has made substantial progress over the past 18 months in 
growing the Afghan National Army (ANA) and Afghan National Police (ANP) 
while also improving their quality. U.S. forces and the Afghan 
Government have also helped establish the Afghan local police, which 
are increasingly denying the insurgents' access to rural populations. 
Although there have been instances of infiltration and Afghan 
servicemembers turning their weapons on coalition forces, as well as 
cases of insurgents mimicking the ANA or ANP, overall reporting from 
the coalition units who partner with the ANSF reflects continued 
improvement in the capability and performance of the fielded ANSF.
    Efforts are underway to ensure the long-term sustainability of the 
ANSF. The sustainment effort is in two areas, fiscal and human capital. 
NTM-A and ISAF are scrutinizing all aspects of contracting, 
infrastructure development, equipping, and sustainment to find cost 
savings. Examples include an ``Afghan First'' contracting policy that 
employs Afghan constructions standards, ensuring designs meet cultural 
and socio-economic norms, and are sustainable by Afghan maintenance 
capabilities. In order to set Afghans on the track to self-sustainment, 
DOD and its United States Government partners are working with the 
Afghans to increase revenue generation through activities such as 
collecting taxes from border stations. We project that by 2017 the 
Afghans will be spending $1.25 billion of their own funds on operations 
and maintenance, up from a projected $690 million in 2013. Regarding 
human capital we have been working to develop institutional 
professionalism and individual Afghan capacity across a broad range of 
functions within the force, including operations, leadership 
development and accountability, literacy, gender integration programs, 
transparency and development of an Afghan instructor corps. Our 
literacy training program has just reached a milestone in that the 
100,000th ANSF trooper has successfully completed a literacy course.
    Developing the ANSF remains a central element of our strategy in 
Afghanistan, and sustaining the ANSF will be an essential means of 
securing the results that so many have sacrificed to achieve. While 
Afghanistan's own resources will grow over time, it is also true that 
the international community will need to help sustain the ANSF for some 
time to come. To that end, I recently renewed my challenge to other 
ISAF members that they contribute 1 billion Euros annually to the NATO 
Afghan Nation.
    Question. What is the coalition doing to ensure we are building a 
quality security force that will serve the Afghan people?
    Answer. Coalition forces are heavily focused on improving the 
quality of the ANSF--not just its size--so that the ANSF can operate 
more independently and the Coalition can successfully transition 
security lead to the Afghans. Up until June, the primary focus was on 
building a force to provide immediate security. In June 2011, the last 
of the 97 Infantry Kandaks were fielded. This has allowed ISAF to shift 
its focus to professionalizing the force and building sustainment 
capability. Coalition initiatives to improve quality include partnering 
with ANSF units in the field, programs geared toward increasing 
literacy rates, and addressing leadership shortfalls.
    As of May 31, advisors partner with or mentor 148 of 156 Afghan 
National Army units and 223 of 239 Afghan National Police units. 
Embedded coalition military personnel live and fight with their ANSF 
partners, which enables coalition forces to provide additional on-the-
job training, prevent and address corruption, and demonstrate how a 
professional military conducts its operations.
    Literacy training has also improved ANSF performance and morale and 
the NATO Training Mission--Afghanistan projects more than 50 percent of 
the ANSF will achieve third-grade literacy by 2012. A more literate 
force will increasingly allow the Afghans to develop the necessary 
enablers and combat support systems to develop self-sufficiency.
    Officer and noncommissioned officer (NCO) leader shortfalls have 
been a key impediment in the quality development of the ANSF, but 
leader gaps are also closing. Officer Candidate School, the National 
Military Academy, and strengthened NCO training programs, combined with 
improved Afghan Ministry of Interior and Defense personnel policies 
that are addressing problems of attrition and retention, are enabling a 
new generation of better trained and qualified ANSF officers to ascend 
in the leadership ranks.
                                  iraq
    Question. The U.S.-Iraqi Security Agreement will result in the 
departure of United States military forces from Iraq by the end of 
2011. Both of you have testified that, if asked by the Government of 
Iraq to do so, the United States should keep United States armed forces 
personnel in Iraq. In the absence of that, the Department of State will 
be assuming several of the missions now being conducted by the United 
States military.
    What is your assessment of the likelihood that the Government of 
Iraq will ask United States military forces to stay? By what date would 
that request need to be made?
    Answer. We intend to abide by our commitments in the 2008 U.S.-Iraq 
Security Agreement. The United States would be willing to consider a 
limited United States military presence should the Iraqi Government so 
request; however, to date, no such request has been made. For planning 
purposes, we would like to receive any such request from Iraq as soon 
as possible.
    It remains unclear whether the Iraqi Government will request a 
post-2011 U.S. military presence beyond the Office of Security 
Cooperation--Iraq (OSC-I). The OSC-I will operate under Chief of 
Mission authority and facilitate the transition from a military-led to 
a civilian-led mission by continuing to support development and 
modernization of the Iraqi Security Forces (ISF).
    Question. Do you both still agree that United States forces should 
stay in Iraq if asked?
    Answer. I believe it is in our mutual interest to have a limited 
U.S. military presence to help address ISFs' needs and gaps, if 
requested by the Iraqi Government.
    Question. What types of forces and what mission should they have if 
they do stay?
    Answer. We intend to abide by our commitments in the 2008 U.S.-Iraq 
Security Agreement. There are a number of areas where the ISF could 
benefit from additional assistance, such as intelligence fusion, air 
sovereignty, combined arms training, and sustainment and logistics. 
However, any post-2011 U.S. military presence would require a formal 
request from the Iraqi Government, which we would be willing to 
consider. To date, no such request has been made.
    Question. How limited can our presence be and remain effective?
    Answer. Any discussion of specific military personnel numbers and 
footprint at this point would be premature, as any post-2011 U.S. 
military mission would require a formal request from the Iraqi 
Government. To date, no such request has been made.
    Question. In your assessment, what effect will the departure of 
United States military forces have on the stability of Iraq?
    Answer. The ISF are currently functioning well as a counter-
insurgency force and demonstrating the capability to maintain internal 
security and stability in Iraq. We believe an increase in security 
incidents is possible, but within the capacity of the ISF to handle.
    Question. Will a complete withdrawal jeopardize the progress we 
have made in the region?
    Answer. We believe an increase in security incidents is possible. 
However, ISF have the capacity to counter potential increases in 
security incidents.
    In a recent hearing by the Commission on Wartime Contracting, the 
State Department indicated that it will spend close to $3 billion on 
security forces in Iraq if the U.S.-Iraqi Security Agreement is 
enforced.
    Question. Would keeping United States military forces in Iraq be 
more cost effective than having the Department of State contract out to 
accomplish their expanded missions and their security?
    Answer. It is premature to speculate on any potential cost savings 
for the Department of State from a potential post-2011 United States 
military presence in Iraq. Any post-2011 U.S. military mission would 
require a formal request from the Iraqi Government, which we would be 
willing to consider. To date, no such request has been made.
                                 libya
    Question. This month, NATO agreed to extend the mission in Libya 
for 90 days until the end of September. Press reporting indicates that 
Gaddafi has no intention of peacefully stepping down from power and the 
United Kingdom's most senior naval officer, Admiral Stanhope, said this 
week that the campaign has been a strain on UK forces and big 
compromises will have to be made if the operations are extended any 
longer than 6 months.
    How much money are we spending every day on this campaign?
    Answer. If the current tempo of support operations continues 
through September 30, 2011, the DOD estimates it will spend $1.1 
billion in fiscal year 2011, or approximately $3 million a day from now 
to the end of the fiscal year. The amount pays to fund military 
personnel pay costs, travel and sustainment of personnel, operations 
(e.g., flying hours), expended munitions, supplies, airlift, drawdown 
of DOD supplies (up to $25 million), and a small amount for lift and 
sustainment costs for coalition partners supporting operations in 
Libya. The DOD spent more per day at the beginning of the campaign due 
to a higher level of kinetic operations.
    Question. If NATO terminates the campaign in September and Gaddafi 
is still in power, is there a plan?
    Answer. It is unlikely that NATO will terminate Operation UNIFIED 
PROTECTOR (OUP) until the Gaddafi regime complies with the criteria 
adopted at the April 14 NATO Foreign Ministers' Meeting:
  --All attacks and threats of attack against civilians and civilian-
        populated areas have ended;
  --The regime has verifiably withdrawn to bases all military forces, 
        including snipers, mercenaries and other paramilitary forces, 
        including from all populated areas they have forcibly entered, 
        occupied or besieged throughout all of Libya; and
  --The regime must permit immediate, full, safe, and unhindered 
        humanitarian access to all the people in Libya in need of 
        assistance.
    This resolve was reiterated on June 8, when NATO and Partner 
Defense Ministers issued a statement extending operations for a further 
90 days from June 27, 2011. If, for some reason, NATO does not continue 
OUP into the fall, it is highly likely that a small coalition of 
capable allied and partner nations would continue the mission in Libya. 
Again, we find the scenario of NATO terminating operations to enforce 
U.N. Security Council Resolutions 1970 and 1973 highly unlikely.
                                 china
    Question. We have all been watching as the Chinese military 
continues to expand and modernize their military. We have seen 
concerning developments with the ``carrier killer'' missile and the J-
20 stealth fighter. There are numerous open-source reports of the 
Chinese Army conducting cyber attacks on U.S. entities. Additionally, 
the Chinese continue to flaunt international norms with respect to 
their assertive attempts to expand their maritime territorial claims in 
the East and South China Sea.
    Can you please give us your assessment on the capabilities and 
intentions of the Chinese military?
    Answer. China appears to be building the capability to fight and 
win short-duration, high-intensity conflicts along its periphery. The 
country's near-term focus appears to be on preparing for potential 
contingencies involving Taiwan, including possible U.S. military 
intervention. Its modernization efforts emphasize anti-access and area 
denial capabilities. China is also devoting increased attention and 
resources to prepare to conduct operations beyond Taiwan and China's 
immediate periphery. Beijing's growing focus on military missions other 
than war includes humanitarian assistance, noncombat evacuation 
operations, and counter-piracy support. Lastly, China is strengthening 
its nuclear deterrent and enhancing its strategic strike capabilities 
through modernization of its nuclear forces and improving other 
strategic capabilities such as space and counter-space operations and 
computer network operations. Recent public revelations about its 
advanced fighter program and aircraft carrier underscore the progress 
it is making.
    Question. Can you expand on how the Chinese military expansion has 
affected regional stability?
    Answer. China's economic growth has increased the country's 
international profile and influence, and enabled its leaders to embark 
upon and sustain a comprehensive transformation of the country's 
military forces. China's continued investment in programs designed to 
improve extended-range power projection has the potential to make 
positive contributions in the delivery of international public goods--
such as peacekeeping, disaster relief, and counter-terrorism 
operations--but also increases Beijing's options for military coercion 
to gain diplomatic advantage, advance its interests, or resolve 
disputes in its favor. The pace and scale of China's military 
modernization, coupled with the lack of transparency, raise many 
questions, both within the United States and the Asia-Pacific region as 
a whole, about China's future intentions.
    In addition, China's recent assertive behavior in the South China 
Sea has raised concerns in the region, reinforcing littoral states' 
appreciation for a robust and sustained United States presence. 
Multiple competing territorial claims have existed for decades, but 
China is increasingly confident in asserting its claims in the 
resource-rich region. Although not a claimant to any territory in the 
region, the United States has interests in the South China Sea, and we 
remain committed to the stability and prosperity of Southeast Asia as 
reflected in our extensive bilateral and multilateral engagements and 
defense activities with regional allies and partners.
    Question. Are our forces, particularly those forward based in the 
Pacific Command area of responsibility prepared to counter these 
threats?
    Answer. The U.S. forward presence in the region has played a key 
role in ensuring decades of stability in Asia. The United States will 
continue to be globally postured to secure our homeland and citizens 
from direct attack and to advance our interests around the world. 
Although there are many demands on our forces in the Asia-Pacific, the 
fiscal year 2012 defense budget ensures that we will remain prepared to 
meet challenges and fulfill our security commitments in the region.
    The fiscal year 2012 budget proposal would make a number of 
investments that would enhance the ability of U.S. forces to project 
power into the Asia-Pacific region and elsewhere. Chief among these is 
the commencement of a new long-range bomber program.
    We have worked with--and will continue to work with--our regional 
allies and partners to maintain peace and ensure stability throughout 
Asia. With the fiscal year 2012 budget, we intend to enhance our 
forward presence in the Pacific as the most critical region for long-
term U.S. security. We will make a number of investments to ensure the 
DOD has the necessary capabilities to project power into the Asia-
Pacific region and elsewhere if necessary. Examples include:
  --expanding future long-range strike capabilities;
  --exploiting advantages in subsurface operations;
  --increasing the resiliency of U.S. forward posture and base 
        infrastructure;
  --ensuring access to space and the use of space assets;
  --enhancing the robustness of key Command, Control, Communications, 
        and Computers, Intelligence, Surveillance, and Reconnaissance 
        (C\4\ISR) C\4\ISR capabilities; and
  --enhancing the presence and responsiveness of U.S. forces abroad.
                           taiwan arms sales
    Question. I have expressed concerns in the past about additional 
United States arms sales to Taiwan. Admiral Willard testified at the 
PACOM hearing before this Committee that the military balance in the 
Straits of Taiwan has shifted to the mainland. In my view, we would 
best advance our national interest of peace in Asia by pursuing a goal 
to reduce military posture across the Taiwan Strait.
    What significant action could China take to ease its military 
posture in the strait in a manner that was substantive enough for the 
Pentagon to consider or reconsider the future arms sales to Taiwan?
    Answer. We welcome steps taken by both sides of the Taiwan Strait 
to improve relations. We remain committed to our one China policy based 
on the Three Joint U.S.-PRC Communiques and the Taiwan Relations Act. 
Our one China policy has been consistent for the past eight United 
States administrations. In accordance with the Taiwan Relations Act, we 
do not support independence for Taiwan, but at the same time, the 
United States makes available to Taiwan defense articles and services 
necessary to enable Taiwan to maintain a sufficient self-defense 
capability. If the environment changed, the relationship between China 
and Taiwan continues to improve, and over time, the security 
environment for Taiwan changed, then this would potentially create the 
conditions for reexamining this issue. Of course, this would be an 
evolutionary and a long-term process.
    It is difficult to identify specific steps or actions that could 
change our assessment of Taiwan's defense needs. Actions such as 
removing forces, halting the missile buildup, reducing missile 
stockpiles, or establishing a policy rejecting the reunification of 
China by force would be welcomed steps that could be taken by the 
People's Republic of China (PRC) to improve the security environment. 
However, the Department's assessment of Taiwan's defense needs is not 
predicated on a single Chinese action or even the combination of 
several actions. Our calculus is based on our understanding of the 
totality of the security environment, which not only includes actions 
taken by the PRC, but also those taken by Taiwan.
    In the interim, the DOD will continue to monitor military trends in 
the Taiwan Strait and work with the authorities on Taiwan as they 
pursue defense reform and modernization to improve the Taiwan's ability 
to defend against an attack from the mainland. Organizational reforms, 
improvement in joint operations, the hardening of infrastructure and 
weapons systems, and long-term acquisition management are all 
significant steps that will enhance Taiwan's security.
    Question. Can you identify major steps that the PRC could take, 
such as removing forces, halting the missile build up, reducing the 
missile stock, or establishing a policy rejecting reunification of 
China by force, which could change our assessment of Taiwan's defense 
needs?
    Answer. It is difficult to identify specific steps or actions that 
could change our assessment of Taiwan's defense needs. Actions such as 
removing forces, halting the missile buildup, reducing missile 
stockpiles, or establishing a policy rejecting the reunification of 
China by force would be welcomed steps that could be taken by the PRC 
to improve the security environment. However, the Department's 
assessment of Taiwan's defense needs is not predicated on a single 
Chinese action or even the combination of several actions. Our calculus 
is based on our understanding of the totality of the security 
environment, which not only includes actions taken by the PRC, but 
those taken by Taiwan.
    As documented in the Department's ``Military and Security 
Developments Involving the People's Republic of China'' annual reports 
to Congress, we remain concerned about the pace and scope of China's 
military buildup including its short- and medium-range ballistic 
missiles, cruise missiles, submarines, surface combatants, advanced 
fighter aircraft, integrated air defense systems, and space and cyber 
capabilities. We also remain concerned about the lack of transparency 
surrounding the development of these capabilities.
    In the interim, the DOD will continue to monitor military trends in 
the Taiwan Strait and work with the authorities on Taiwan as they 
pursue defense reform and modernization to improve the Taiwan's ability 
to defend against an attack from the mainland. Organizational reforms, 
improvement in joint operations, the hardening of infrastructure and 
weapons systems, and long-term acquisition management are all 
significant steps that will enhance Taiwan's security.
                              acquisitions
    Question. Cost over-runs and delays seem to plague the Defense 
acquisitions program. The Joint Strike Fighter alone is projected to 
cost 80 percent more than the initial estimates and 30 percent more 
than when the baseline cost was redefined 4 years ago, and I am sure it 
is not the only program in this situation. In the current fiscal 
environment, it is becoming increasingly difficult to justify these 
extreme costs.
    What concrete steps are being taken to reform the acquisitions 
program and when can we expect to see results?
    Answer. On September 14, 2010, with my input and support, Dr. 
Carter, the Under Secretary of Defense for Acquisition, Technology and 
Logistics (USD(AT&L)), launched an initiative called ``Better Buying 
Power'' (BBP). In it, we issued a set of 23 points that indicated how 
we were going to ``get more without more.'' We are implementing BBP 
aggressively and are already experiencing savings on current programs.
    On November 3, 2010, Dr. Carter issued BBP guidance for the Service 
Secretaries and Directors of the Defense Agencies indicating that 
affordability will be treated as a requirement at all Milestones and 
Decision Points for our programs, and program managers will be required 
to demonstrate affordability before being granted Milestone Authority 
to proceed with a program. Independent cost estimates will be used to 
evaluate what a program will cost based on historical data, but program 
managers have been instructed to manage based on what a program should 
cost. The ``should cost'' method is already being used to drive down 
future costs in all acquisition programs.
    Another facet of the BBP initiative is incentivizing productivity 
and innovation in industry partly through use of fixed-price incentive 
(firm target) contracts, where appropriate, where the reward for saving 
as well as the burden of risk is appropriately shared with the 
contractor. The Department is also renewing its commitment to small 
business by increasing its goals and investments and placing greater 
emphasis on new technology.
    In line with President Obama's March 2009 memorandum on Government 
contracting, the BBP initiative promotes real competition as the most 
powerful tool the Department has to drive productivity. The USD(AT&L) 
requires program managers to present competitive strategies to him, 
even when there is not a traditional head-to-head competition. In those 
cases, we will harness competitive energy at the subcontract level 
where contractors can approach program managers with value engineering 
change proposals to achieve program goals in the most cost-effective 
manner.
        counternarcotics spending in mexico and central america
    Question. While the State Department is the primary U.S. agency 
providing security assistance to the Mexican and Central American 
Governments, according to a July 2010 report from the Government 
Accountability Office (GAO), ``In Mexico and Central America, the 
Department of Defense provides support to U.S. and foreign agencies 
with counternarcotics responsibilities which has increased in recent 
years and is separate from that provided under [the] Merida 
[Initiative].''
    How much Defense Department funding will support the Mexican and 
Central American Governments in their counternarcotics efforts in 
fiscal year 2012?
    Answer. The President's budget request for fiscal year 2012 
includes approximately $75.5 million in DOD counternarcotics support to 
Mexico; $4 million for Belize; $9 million for Guatemala; $2.7 million 
for Honduras; $2.1 million for El Salvador (excluding funds to operate 
and maintain the U.S. Navy's Counternarcotics Forward Operating 
Location in Comalapa, El Salvador); $2.7 million for Nicaragua; $2.6 
million for Costa Rica; and $8.2 million for Panama.
    Question. What will that funding be used for?
    Answer. U.S. Department of Defense counternarcotics (DOD CN) 
support includes training, equipment, infrastructure, and information 
sharing. DOD CN programs complement State Department-led security 
cooperation programs, principally the Merida Initiative with Mexico and 
the Central America Regional Security Initiative.
    Cooperation with Mexico concentrates on helping Mexican forces 
improve their tactical and operational proficiency, as well as air 
mobility, maritime law enforcement, communications, and reconnaissance 
capacities. Training includes air operations and maintenance, 
helicopter pilot training, rule of law, tactics for urban and night 
operations, logistics/resources management, maritime operations, ship 
maintenance and repair, search-and-rescue and lifesaving, and 
operational planning. Training includes an emphasis on intelligence-
driven and interagency operations as well as incorporating principles 
of respect for human rights. Equipment includes rigid hull inflatable 
boats, communications equipment, nonintrusive inspection scanners, 
aircraft avionics and sensors, and navigation equipment.
    Cooperation with Central America includes building and equipping 
maritime forward operating sites, maintenance facilities, land border 
crossing control posts and related facilities; providing intercept 
boats, night vision equipment, radar equipment, ground vehicles, 
ballistic flotation vests and other equipment; providing operational 
support for partner country maritime interdiction; and training, which 
incorporates an emphasis on respect for human rights.
    In addition to providing direct support to foreign security forces, 
DOD CN operates, supports, or employs U.S. intelligence, radar, 
communications, computer, air and sea lift, counterdrug detection and 
monitoring, technology development, and related activities. Since these 
DOD activities help reduce drug trafficking and related threats to 
partner countries as well as the United States, they may in part be 
considered indirect support to those countries. This includes the work 
of Joint Task Force--North (JTF-N), which supports drug law enforcement 
agencies in the United States with an emphasis on the United States-
Mexico border region, and Joint Interagency Task Force--South (JIATF-
S), which conducts interagency and international counterdrug detection 
and monitoring operations. El Salvador also hosts a critical DOD CN 
Forward Operating Location to detect and monitor suspected drug 
trafficking.
    Question. How do you coordinate security funding for these 
countries with other U.S. agencies?
    Answer. Policy and strategic coordination are conducted by the DOD 
primarily through Interagency Policy Coordination (IPC) committees and 
related processes chaired by the national security staff which include 
the Office of National Drug Control Policy and the Office of Management 
and Budget (OMB). A variety of working groups support the IPC process. 
DOD requests for Drug Interdiction and Counterdrug Activities 
appropriations are coordinated with other agencies through OMB. DOD 
does not request specific levels of appropriation for CN cooperation 
with foreign countries, but allocates funding from the total 
appropriation provided.
    DOD CN support to foreign countries is requested by U.S. Military 
Groups (or equivalents) after coordination with the U.S. Embassy 
country team. DOD CN support may only be considered if requested by an 
appropriate official of a department or agency that has counter-drug 
responsibilities, as well as by an official of the recipient country. 
Proposals are forwarded to the geographic combatant command (GCC) for 
validation and prioritization and then to the Joint Staff and the 
Office of the Secretary of Defense for consideration. U.S. Northern 
Command and U.S. Southern Command are also responsible for JTF-N and 
JIATF-S respectively, while the U.S. Navy is responsible for the CN 
Forward Operating Location (FOL) in Comalapa, El Salvador. While JTF-N, 
JIATF-S, and FOL Comalapa do not provide capacity-building support to 
foreign countries, they conduct CN detection and monitoring, 
information-sharing, and related international cooperation.
    The Deputy Assistant Secretary of Defense for Counternarcotics and 
Global Threats (DASD CN>) conducts consultations with military 
commands, the Armed Services, Defense agencies, and other U.S. 
Government agencies to ensure that activities are prioritized and 
funded in line with policy and to make budgetary adjustments. Those 
processes are supplemented by a variety of working groups, program 
reviews, and similar mechanisms. The DASD CN> coordinates CN policy 
within DOD and other agencies, and provides policy, program, and 
budgetary guidance and oversight to the military commands, Armed 
Services, and Defense agencies which execute DOD CN activities.
                                 ______
                                 
           Questions Submitted by Senator Barbara A. Mikulski
    Question. Since 1997, there have been 74 Nunn-McCurdy breaches 
involving 47 major defense acquisition programs. The Government 
Accountability Office has identified proven management practices--many 
of which have been incorporated into Department of Defense (DOD) 
policy, but have yet to be fully implemented in practice--that can 
serve as tools to prevent DOD cost overruns. Greater adherence to 
practices at key phases of the acquisition process can help reduce 
weapon system costs, contain pressures for increased funding, and 
better address critical warfighter needs.
    What is being done within the DOD to incorporate better acquisition 
practices?
    Answer. With my support and input the Under Secretary of Defense 
for Acquisition, Technology and Logistics (USD(AT&L)) launched the 
Better Buying Power (BBP) initiative to reform the way we do business, 
affecting all of our acquisition programs. Treating affordability as a 
requirement and applying this standard at every milestone decision will 
have huge impacts to the Department's overall savings and will prevent 
cost overruns. Similarly, the Department's mandatory use of 
competition--even when there is not a traditional head-to-head 
situation--and requiring program managers to present a competitive 
strategy will have profound effects on the cost of weapon systems. The 
Department has set the goal of increasing the amount of contract 
obligations competitively awarded every year.
    The BBP initiative includes various other significant strategies to 
reduce nonproductive processes and bureaucracy, to incentivize 
productivity and innovation in industry, and to improve tradecraft in 
services acquisition, each with detailed focus areas and goals.
    Question. How does the DOD plan to incentivize acquisition program 
managers and contractors to drive down acquisition costs?
    Answer. Since early last year, Dr. Carter, USD(AT&L), has been 
working with the Component Acquisition Executives (CAEs) to craft and 
implement a series of initiatives geared toward gaining greater 
efficiencies and productivity. On September 14, 2010, he issued a 
memorandum for acquisition professionals, ``Better Buying Power (BBP): 
Guidance for Obtaining Greater Efficiency and Productivity in Defense 
Spending.'' He provided additional guidance with an implementation 
memorandum for the CAEs on November 3, 2010. These memoranda establish 
a framework for the enterprise to institutionalize the BBP reforms.
    To incentivize contractors, we are increasing our use of fixed-
price-type contracts with incentives structured to reward performance 
and share risks more equitably between Government and industry. Dr. 
Carter and Mr. Hale, the Under Secretary of Defense (Comptroller), have 
jointly issued guidance addressing conditions when savings are 
realized. The intent is to seek and eliminate low-value-added 
ingredients of program cost and to reward those doing so. Program 
managers' and Program Executive Officers' performance will, in part, be 
evaluated on this basis. Realized savings may mean additional resources 
to enhance their programs, for example, by freeing up funds to buy more 
warfighting capability or quantities. For industry, it means sharing in 
savings realized in the form of increased profit and enhanced corporate 
recognition for delivering value.
    Question. How will the Department measure success in achieving 
reform of its acquisition process?
    Answer. The Department is measuring success by implementation of 
the BBP initiative across the Department's acquisition programs. This 
implementation will result in quantifiable savings for the Department.
    The BBP initiative mandates treating affordability as a 
requirement. Program managers must establish an affordability target as 
a Key Performance Parameter equivalent for all ACAT I Milestone 
programs. The 100 percent application of this standard at all Milestone 
decisions will result in savings. For example, by conducting 
engineering tradeoff analysis with the commencement of the Ohio-class 
replacement--for example, examining the submarine design and evaluating 
what could be changed in the interests of lowering costs--the Navy has 
already reduced the estimated average procurement cost by 16 percent, 
with a goal of reaching a 27 percent reduction. This savings would not 
have been achieved without making affordability a requirement.
    As a part of the BBP initiative, the Department is increasing the 
use of competition to control costs of goods and services. Again, 
success in this initiative will be measured by implementation; for 
instance, every ACAT program milestone acquisition strategy must 
contain a competitive strategy for evaluation at each milestone review. 
Another measurable competition goal of the Department is to increase 
the amount of contract obligations competitively awarded by 1 percent 
every year.
    We expect each program to have aggressive goals. These goals will 
be tracked and monitored to ensure implementation and to harvest and 
share good ideas with broader applicability.
    Continued aggressive application of the BBP initiative will 
continue to bring measurable success in terms of real cost savings to 
the Department.
    Many aspects of wounded warrior care in the military healthcare 
system is in need of reform. The Dole-Shalala Report on military 
healthcare reform has still not been fully implemented. Many wounded 
warriors still find that the Medical and Physical Evaluation Board 
process takes too long, is too adversarial, and is duplicative with the 
VA process. Less than 40 percent of active, reserve, or guard members 
were even ``somewhat'' satisfied with the disability evaluation system 
and less than 50 percent said they ``completely'' or ``mostly'' 
understood the system.
    Question. What is the status of implementing the Dole-Shalala 
Report recommendations pertinent to the reform of the military health 
system?
    Answer. The Dole-Shalala recommendation to reform the disability 
evaluation system requires considerable legislative action to fully 
implement. In the meantime, the DOD and VA have implemented new 
processes to improve and coordinate what was previously two separate 
disability evaluation systems, while preserving DOD's requirement for 
determining fitness for military duty and the VA's requirement to 
compensate for disabling conditions as a result of military service. 
Both Departments are committed to use existing authorities to reform 
and continuously improve existing processes.
    Question. What is DOD's goal for implementing a single disability 
evaluation system with the VA that will ensure when wounded warriors 
are discharged, they do not have to wait months with mo income or 
support to access the VA medical system?
    Answer. In order to address the challenges in the prior systems 
created to address disability evaluation for our wounded warriors, the 
Integrated Disability Evaluation System (IDES) (a joint DOD/VA program) 
was created beginning in November 2007. The DOD goal is that IDES will 
be available at all Military Treatment Facilities (MTFs) by September 
2011. The IDES combines two previously separate and sequential systems 
(the military Disability Evaluation System and the VA Compensation & 
Benefit process) into one concurrent process. This simplifies 
Disability evaluation processes, eliminates duplicate disability 
examinations and ratings and places VA counselors (Military Service 
Coordinators (MSCs)) in MTFs to ensure a smooth transition to Veteran 
status. This eliminates the benefits gap, provides a VA disability 
rating, (amount of benefits they will receive from VA) before leaving 
the service and provides a more simple, seamless, fast and fair 
Disability Evaluation System for servicemembers.
    The US Family Health Plan (USFHP) designed by the Congress in 1996 
provides the full TRICARE Prime benefit for military beneficiaries in 
16 States and the District of Columbia for more than 115,000 
beneficiaries. Beneficiaries are highly satisfied with this healthcare 
option. In 2010, more than 91 percent of USFHP beneficiaries were 
highly satisfied with the care they received, making it the highest-
rated healthcare plan in the military health system. The fiscal year 
2012 President's budget request includes a proposed legislative 
provision that future enrollees in US Family Health Plan would not 
remain in the plan upon reaching age 65.
    Question. Shouldn't DOD be using USFHP as a model to improve access 
to care and achieve better health outcomes? How are you planning to 
utilize the experience of USFHP in expanding these principles across 
the military health system for all beneficiaries?
    Answer. Yes, DOD is currently using USFHP as a model. US Family 
Health Plans, like all TRICARE contractors, have embraced the following 
goals: improved health, a positive patient experience, and responsible 
management of the costs; all in support of the central aim of assured 
military readiness. Their emphasis on preventive care, disease 
management, and enrollment of 30,000 of their 115,000 TRICARE 
beneficiaries in Patient Centered Medical Homes is significant. All 
TRICARE programs now offer preventive care with no copays; disease 
management programs are widely available for those diagnosed with 
chronic illness; and hundreds of thousands of TRICARE patients across 
the Nation are enrolled in Medical Home practices.
    The President's budget initiative would limit enrollment of any new 
patients older than age 65 under the current financial structure. In 
planning to utilize the experience of USFHP in expanding these 
principles across the military health system for all beneficiaries, we 
have encouraged USFHP leaders to continue to care for these patients 
under Medicare and TRICARE for Life. We expect the early investment in 
prevention will result in greater wellness later in life, independent 
of the payment model; that loyal patients will choose to remain with 
their doctors; and the Federal Government will still accrue important 
savings.
    The most recent data for those older than age 65, our dual-eligible 
DOD/Medicare population, shows that satisfaction with the TRICARE For 
Life benefit is equal to the satisfaction of USFHP enrollees. We 
anticipate that this satisfaction will remain equivalent for the long 
term.
    Question. DOD has proposed that, after a certain date, Medicare 
eligible beneficiaries will no longer be able to enroll in USFHP. What 
is DOD's plan to reach out to, and work with CMS and the USFHPs to 
explore options that ensure continuity of care for those beneficiaries?
    Answer. The Department's primary concern is the effect of this 
proposal on the beneficiaries, and we believe that there will be no 
impact on continuity of care. The following plan details how DOD will 
work with CMS and the USFHP's to explore options to ensure continuity 
of care.
    Current enrollees will be grandfathered into the program and will 
see no change in their coverage. For those who enroll in the USFHP in 
the future, they would be transitioned to TRICARE For Life (TFL) upon 
reaching age 65, consistent with other TRICARE Prime enrollees. Under 
TFL, beneficiaries will receive comprehensive healthcare coverage with 
minimal out-of-pocket expenses.
    Although Medicare becomes the primary payer when beneficiaries age 
out of Prime, with TFL paying the difference, USFHP providers accepting 
Medicare can continue to see and treat TFL beneficiaries.
    Providers can also continue to manage care and referrals for their 
primary care patients as well as offer disease management and 
prevention program which are hallmarks of quality patient care.
    The Department remains deeply committed to the continued success of 
the USFHPs. These six plans, covering approximately 115,000 of our 9.6 
million beneficiaries, are a valued part of our military healthcare 
system. We will continue to work with the USFHPs on behalf of all of 
our patients to meet the goals of improved health, a positive patient 
experience, and responsible management of the costs.
                                 ______
                                 
              Questions Submitted by Senator Patty Murray
                 minimum essential security conditions
    Question. The President has made it clear that he intends to 
withdraw troops from Afghanistan in the coming months, and while I am a 
supporter of this drawdown, I am concerned with the security situation 
on the ground for our remaining forces.
    What are the minimum essential conditions in Afghanistan that can 
sustain stability with a minimum level of support from the United 
States and other countries?
    Answer. The ability to transition provinces and districts to Afghan 
security lead while reducing the support required of the United States 
will depend first and foremost on the readiness and capability of 
Afghan forces to provide security to the population relative to the 
threat in each area. Governance and development are also crucial as 
they are ultimately the keys to providing secure communities the basic 
levels of services and economic opportunity that will keep them 
resistant to insurgency. Continuing progress and efforts to dismantle 
and defeat al Qaeda and to degrade the insurgency are also essential to 
achieving these conditions. Finally, we are negotiating a strategic 
partnership with Afghanistan that will help ease uncertainty in the 
region by underscoring the continued United States interest in and 
commitment to Afghanistan's stability and security.
                     joint electronic health record
    Question. However, the agreement to develop a joint electronic 
health record is only one step in a very difficult multi-step process.
    What steps have you taken to ensure that the progress you have made 
on the joint electronic health record continues, and is ultimately 
successful, once you leave the Department?
    Answer. I have taken critical steps with Secretary Shinseki to 
ensure forward progress on the integrated electronic health record 
(iEHR).
  --At the highest departmental levels, we have reaffirmed our 
        commitment, to jointly chair recurring oversight meetings and 
        are establishing a robust governance structure which is 
        essential to the continued success of the iEHR.
  --A critical component of this governance structure is the iEHR 
        Advisory Board, which will include clinical proponents 
        appointed by the Assistant Secretary of Defense Health Affairs, 
        Service Surgeons General, and their clinical counterparts from 
        the VA.
  --Additionally, a Program Executive and the Deputy Director will be 
        selected jointly by the SECDEF and the Secretary of Veterans 
        Affairs (VA). The Program Executive will make decisions related 
        to requirements, design methodologies, application priorities, 
        implementation schedule, and deployment sequence.
                integrated disability evaluation system
    Question. Just last week, I met with an amputee at Bethesda who has 
been in the process of getting his Medical Evaluation Board (MEB) 
completed since January. This is a young man who was severely injured 
several years ago and is ready to leave the service and begin the next 
phase of his life. Six months is much too long for a servicemember to 
languish in this process.
    Will the Department of Defense commit to looking at the overall 
issue of MEB timeliness and come back with a plan to improve the 
process?
    Answer. Yes, DOD agrees that such delays for our transitioning 
servicemembers are unacceptable. The Department is committed to not 
only looking at the MEB timeliness but to improving it.
                            wounded warriors
    Question. I am concerned about the human cost of this war. We have 
invested more than $421 billion in combat operations, but this war is 
fought by people. Last Friday I met with Corporal Todd Nicely, 1 of 3 
quadruple amputees from the wars in Iraq and Afghanistan.
    What efforts are underway to better address the injuries faced by 
dismounted troops?
    Answer. The Department's efforts are underway to continuously study 
the injuries from the current conflict and more effective ways to treat 
them. For example:
  --The Armed Forces Medical Examiner reviews all fatalities to 
        document cause of death and assesses the performance of 
        personal protective equipment (PPE) to document its 
        effectiveness and opportunities for improvement. The Services 
        are continually looking for ways to improve PPE to prevent 
        injury.
  --Combat trauma surgical teams are continually improving their 
        techniques for care. Stateside surgical teams are enhancing 
        limb salvage techniques and improving amputation care.
  --The U.S. Army Surgeon General (SG) recently appointed the 
        ``Dismounted Complex Blast Injury Task Force'' which has 
        studied the causation, prevention, protection, treatment, and 
        long-term care options of these more serious and complex battle 
        injury patterns. The Task Force was comprised of clinical and 
        operational medical experts from the Departments of Defense 
        (DOD) and Veterans Affairs (VA) and solicited input from 
        subject matter experts in both Federal and civilian sectors. 
        Efforts to act upon these recommendations of the Task Force are 
        ongoing.
    Question. Will the DOD commit to working with Secretary Shinseki to 
collaboratively improve the ability of the VA to address some of the 
new prosthetics provided to servicemembers? I am concerned the VA is 
receiving these amputees into their system and they do not have the 
capacity to properly service their new limbs.
    Answer. Yes, the DOD is committed to working with Secretary 
Shinseki. There is already close coordination between the two agencies 
to ensure we meet the needs of our wounded warriors. Our Center of 
Excellence for Extremity Injuries and Amputations will offer 
opportunities to share best practices and technical innovation in 
rehabilitation. Two of the current activities between VA and DOD to 
improve prosthetic care are:
  --evaluation of the new highly technical prostheses and the 
        ``legacy'' less complicated devices; and
  --creating a joint network of prosthetic care to improve service 
        delivery for servicemembers and veterans.
    Oversight of this collaborative work is conducted by the VA/DOD 
Joint Executive Council, composed of leaders from both agencies and the 
Services.
    In addition to our collaborative work on prosthetics, VA and DOD 
participate in many additional joint activities, including processes to 
share healthcare resources, development of clinical practice 
guidelines, joint facility planning, information sharing and electronic 
health record development, integrating the disability evaluation 
systems, improving transitions and coordination of care, and suicide 
prevention efforts. Both agencies are committed to ongoing and 
developing collaborative strategies and coordinated efforts to assist 
servicemembers and veterans.
                                 ______
                                 
             Questions Submitted by Senator Mitch McConnell
    Question. What is the Department of Defense doing to recover 
missing U.S. military personnel in the Global War on Terror?
    Answer. Searching for and rescuing captured servicemembers in the 
Global War on Terror are top priorities for the U.S. military. U.S. and 
coalition forces, along with the Intelligence Community and other 
agencies, continue to make every effort to facility this recovery. Upon 
their return, these servicemembers will undergo a methodical process 
designed to assist those who have experienced the ordeals of capture 
and captivity. In addition, we continue to assist family members during 
this difficult period.
    Question. Please explain the purpose behind the recently directed 
project #1892/AT&L 10-402 Rand Study entitled ``A review of the 
Department of Defense's Plans to Disposal of its Existing Stockpile of 
Chemical Weapons.'' It was reported that $500,000 was spent on this 
project. Please provide the project's justification and cost.
    Answer. The purpose of the RAND Study was to conduct an independent 
review of DOD plans for completing destruction of the remaining 
stockpiles of chemical weapons. Specific areas of review included 
identifying potential schedule and cost efficiencies, determining 
whether the planned acquisition strategy is most advantageous for 
meeting the Government's treaty obligations and other national 
priorities, and examining the current organizational construct of the 
chemical demilitarization program. The study was a key element in 
identifying performance and schedule risks leading to congressional 
notification of a Nunn-McCurdy breach.
    Increased program cost projections justified the review, which will 
ensure appropriate steps are taken to maximize efficiencies in 
completing destruction of the remaining U.S. chemical weapons 
stockpile.
    The RAND Study cost $502,000.
    Question. Please explain why the study ``A review of the Department 
of Defense's Plans to Disposal of its Existing Stockpile of Chemical 
Weapons'' does not mention communication with the Citizens Advisory 
Commissions at either ACWA site when these Commissions were 
specifically established under Public Law 102-484, subtitle G, section 
172 to receive citizen concerns regarding the chemical weapons disposal 
program.
    Answer. The RAND National Defense Research Institute, a federally 
funded research and development center, was commissioned to conduct an 
objective independent review of DOD plans for completing destruction of 
the remaining stockpiles of chemical weapons. The specific tasks 
originally assigned to RAND were:
  --Task 1: Review the pending (January 2010) contract between the 
        Government and the Bechtel-Parsons contractor team for the next 
        construction phase of the Blue Grass Army Depot;
  --Task 2: Conduct a detailed examination of the acquisition strategy/
        business plan for the ACWA program and provide recommendations 
        for improvement;
  --Task 3: Analyze the Government's management structure for running 
        the ACWA and U.S. Army Chemical Materials Agency (CMA) 
        programs; and
  --Task 4: Describe an appropriate close-out plan for CMA sites.
    During the study effort, Task 4, which would have more directly 
involved the Citizens Advisory Commissions, was de-scoped to allow RAND 
to allocate more resources to Task 2.

                          SUBCOMMITTEE RECESS

    Chairman Inouye. So, the subcommittee will reconvene on 
Wednesday, June 22, at 10:30 a.m. for our last hearing, and 
we'll close our books then.
    The subcommittee stands in recess.

    [Whereupon, at 12:35 p.m., Wednesday, June 15, the 
subcommittee was recessed, to reconvene at 10:30 a.m., 
Wednesday, June 22.]
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