    [Senate Hearing 112-80, Part 1]
    [From the U.S. Government Publishing Office]

                                                      S. Hrg. 112-80, Pt. 1

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                   2012 AND THE FUTURE YEARS DEFENSE PROGRAM

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

                                    HEARINGS

                                   before the

                          COMMITTEE ON ARMED SERVICES
                              UNITED STATES SENATE

                          ONE HUNDRED TWELFTH CONGRESS

                                 FIRST SESSION

                                       ON

                                    S. 1253

         TO AUTHORIZE APPROPRIATIONS FOR FISCAL YEAR 2012 FOR MILITARY
    ACTIVITIES OF THE DEPARTMENT OF DEFENSE AND FOR MILITARY CONSTRUCTION,
    TO PRESCRIBE MILITARY PERSONNEL STRENGTHS FOR FISCAL YEAR 2012, AND FOR
                                 OTHER PURPOSES

                                   __________

                                     PART 1

                                MILITARY POSTURE
            U.S. SPECIAL OPERATIONS COMMAND AND U.S. CENTRAL COMMAND
                             DEPARTMENT OF THE NAVY
                          DEPARTMENT OF THE AIR FORCE
                U.S. EUROPEAN COMMAND AND U.S. STRATEGIC COMMAND
                             DEPARTMENT OF THE ARMY
                U.S. NORTHERN COMMAND AND U.S. SOUTHERN COMMAND
              U.S. TRANSPORTATION COMMAND AND U.S. AFRICA COMMAND
                   U.S. PACIFIC COMMAND AND U.S. FORCES KOREA
                     THE F-35 JOINT STRIKE FIGHTER PROGRAM

                                   __________

       FEBRUARY 17; MARCH 1, 8, 17, 29, 31; APRIL 5, 7, 12; MAY 19, 2011

                                   __________

             Printed for the use of the Committee on Armed Services

            Available via the World Wide Web: http://www.fdsys.gov/
    ?

                      U.S. GOVERNMENT PRINTING OFFICE
    68-084                    WASHINGTON : 2012
    -----------------------------------------------------------------------
    For sale by the Superintendent of Documents, U.S. Government Printing Office,
    http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center, U.S. Government Printing Office. Phone 202�09512�091800, or 866�09512�091800 (toll-free). E-mail, gpo@custhelp.com.

                          COMMITTEE ON ARMED SERVICES

                         CARL LEVIN, Michigan, Chairman

    JOSEPH I. LIEBERMAN, Connecticut     JOHN McCAIN, Arizona
    JACK REED, Rhode Island              JAMES M. INHOFE, Oklahoma
    DANIEL K. AKAKA, Hawaii              JEFF SESSIONS, Alabama
    E. BENJAMIN NELSON, Nebraska         SAXBY CHAMBLISS, Georgia
    JIM WEBB, Virginia                   ROGER F. WICKER, Mississippi
    CLAIRE McCASKILL, Missouri           SCOTT P. BROWN, Massachusetts
    MARK UDALL, Colorado                 ROB PORTMAN, Ohio
    KAY R. HAGAN, North Carolina         KELLY AYOTTE, New Hampshire
    MARK BEGICH, Alaska                  SUSAN M. COLLINS, Maine
    JOE MANCHIN III, West Virginia       LINDSEY GRAHAM, South Carolina
    JEANNE SHAHEEN, New Hampshire        JOHN CORNYN, Texas
    KIRSTEN E. GILLIBRAND, New York      DAVID VITTER, Louisiana
    RICHARD BLUMENTHAL, Connecticut

                       Richard D. DeBobes, Staff Director

                   David M. Morriss, Minority Staff Director

                                      (ii)

                                C O N T E N T S

                                  ----------

                        CHRONOLOGICAL LIST OF WITNESSES
                                Military Posture
                               february 17, 2011

                                                                       Page

    Gates, Hon. Robert M., Secretary of Defense; Accompanied by
      Robert F. Hale, Under Secretary of Defense, Comptroller........    15
    Mullen, ADM Michael G., USN, Chairman, Joint Chiefs of Staff.....    25

            U.S. Special Operations Command and U.S. Central Command
                                 march 1, 2011

    Olson, ADM Eric T., USN, Commander, U.S. Special Operations
      Command........................................................   175
    Mattis, Gen. James N., USMC, Commander, U.S. Central Command.....   182

                             Department of the Navy
                                 march 8, 2011

    Mabus, Hon. Raymond E., Jr., Secretary of the Navy...............   261
    Roughead, ADM Gary, USN, Chief of Naval Operations...............   275
    Amos, Gen. James F., USMC, Commandant of the Marine Corps........   294

                          Department of the Air Force
                                 march 17, 2011

    Donley, Hon. Michael B., Secretary of the Air Force..............   433
    Schwartz, Gen. Norton A., USAF, Chief of Staff of the Air Force..   456

                U.S. European Command and U.S. Strategic Command
                                 march 29, 2011

    Stavridis, ADM James G., USN, Commander, U.S. European Command/
      Supreme Allied Commander, Europe...............................   543
    Kehler, Gen. C. Robert, USAF, Commander, U.S. Strategic Command..   587

                             Department of the Army
                                 march 31, 2011

    McHugh, Hon. John M., Secretary of the Army......................   669
    Casey, GEN George W., Jr., USA, Chief of Staff of the Army.......   701

                U.S. Northern Command and U.S. Southern Command
                                 april 5, 2011

    Winnefeld, ADM James A., Jr., USN, Commander, U.S. Northern
      Command and Commander, North American Aerospace Defense Command   757
    Fraser, Gen. Douglas M., USAF, Commander, U.S. Southern Command..   765

              U.S. Transportation Command and U.S. Africa Command
                                 april 7, 2011

    McNabb, Gen. Duncan J., USAF, Commander, U.S. Transportation
      Command........................................................   842
    Ham, GEN Carter F., USA, Commander, U.S. Africa Command..........   852

                   U.S. Pacific Command and U.S. Forces Korea
                                 april 12, 2011

    Willard, ADM Robert F., USN, Commander, U.S. Pacific Command.....   926
    Sharp, GEN Walter L., USA, Commander, United Nations Command/
      Combined Forces Command/U.S. Forces Korea......................   940

                     The F-35 Joint Strike Fighter Program
                                  may 19, 2011

    Carter, Hon. Ashton B., Under Secretary of Defense for
      Acquisition, Technology, and Logistics.........................   999
    Fox, Hon. Christine H., Director, Cost Assessment and Program
      Evaluation, Department of Defense..............................  1009
    Gilmore, Hon. J. Michael, Director, Operational Test and
      Evaluation, Department of Defense..............................  1012
    Van Buren, David M., Principal Deputy Assistant Secretary for the
      Air Force for Acquisition......................................  1017
    Venlet, VADM David J., USN, Program Executive Officer, F-35
      Lightning II Program...........................................  1053
    Burbage, Charles T. ``Tom'', Executive Vice President and General
      Manager, F-35 Program Integration, Lockheed Martin Aeronautics
      Company........................................................  1054
    Sullivan, Michael J., Director, Acquisition and Sourcing
      Management, Government Accountability Office...................  1057

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                   2012 AND THE FUTURE YEARS DEFENSE PROGRAM

                                  ----------

                          THURSDAY, FEBRUARY 17, 2011

                                           U.S. Senate,
                                   Committee on Armed Services,
                                                        Washington, DC.

                                MILITARY POSTURE

        The committee met, pursuant to notice, at 9:30 a.m. in room
    SH-216, Hart Senate Office Building, Senator Carl Levin
    (chairman) presiding.
        Committee members present: Senators Levin, Lieberman, Reed,
    Akaka, Nelson, Webb, McCaskill, Udall, Hagan, Begich, Manchin,
    Shaheen, Gillibrand, Blumenthal, McCain, Inhofe, Chambliss,
    Wicker, Brown, Portman, Ayotte, Collins, and Graham.
        Committee staff members present: Richard D. DeBobes, staff
    director; Christine E. Cowart, chief clerk; and Leah C. Brewer,
    nominations and hearings clerk.
        Majority staff members present: Jonathan D. Clark, counsel;
    Madelyn R. Creedon, counsel; Gabriella E. Fahrer, counsel;
    Richard W. Fieldhouse, professional staff member; Creighton
    Greene, professional staff member; Jessica L. Kingston,
    research assistant; Michael J. Kuiken, professional staff
    member; Gerald J. Leeling, counsel; Jason W. Maroney, counsel;
    William G.P. Monahan, counsel; Michael J. Noblet, professional
    staff member; Roy F. Phillips, professional staff member; John
    H. Quirk V, professional staff member; Russell L. Shaffer,
    counsel; and William K. Sutey, professional staff member.
        Minority staff members present: David M. Morriss, minority
    staff director; Adam J. Barker, professional staff member;
    Pablo E. Carrillo, minority investigative counsel; Daniel A.
    Lerner, professional staff member; Lucian L. Niemeyer,
    professional staff member; Christopher J. Paul, professional
    staff member; Diana G. Tabler, professional staff member; and
    Richard F. Walsh, minority counsel.
        Staff assistants present: Kathleen A. Kulenkampff,
    Christine G. Lang, Brian F. Sebold, Bradley S. Watson, and
    Breon N. Wells.
        Committee members' assistants present: Christopher Griffin,
    assistant to Senator Lieberman; Carolyn Chuhta, assistant to
    Senator Reed; Nick Ikeda, assistant to Senator Akaka; Ann
    Premer, assistant to Senator Nelson; Gordon Peterson, assistant
    to Senator Webb; Tressa Guenov, assistant to Senator McCaskill;
    Jennifer Barrett, assistant to Senator Udall; Anthony Lazarski,
    assistant to Senator Inhofe; Lenwood Landrum, assistant to
    Senator Sessions; Clyde Taylor IV, assistant to Senator
    Chambliss; and Ryan Kaldahl, assistant to Senator Collins.

           OPENING STATEMENT OF SENATOR CARL LEVIN, CHAIRMAN

        Chairman Levin. Good morning, everybody.
        The committee welcomes this morning Secretary of Defense
    Robert Gates and Chairman of the Joint Chiefs of Staff Admiral
    Michael Mullen for our hearing on the Department of Defense's
    (DOD) fiscal year 2012 budget request, the associated Future
    Years Defense Program (FYDP), and the posture of the U.S. Armed
    Forces. We also recognize Secretary Hale and welcome him here
    this morning as well.
        We are thankful to all of you and your families for your
    dedicated service to this Nation and to the soldiers, sailors,
    airmen, and marines at home and in harm's way around the globe,
    and to their families. Your personal commitment to the welfare
    of our troops and their families shines through all that you
    do. The American people are grateful for that and we are
    grateful and eager to help wherever we can.
        DOD, like all Federal agencies, is currently operating
    under a continuing resolution (CR) that expires on March 4,
    2011. If the current CR is extended for the whole year, then
    DOD's base funding of $526 billion for fiscal year 2011 would
    be $23 billion below the original fiscal year 2011 request of
    $549 billion. Secretary Gates will describe to us this morning
    this situation as a crisis on his doorstep. I hope that we will
    soon, as a committee, be in a position to enact a full year
    appropriation at an appropriate level and that the full Senate
    will adopt such an appropriation.
        At a time when we face a budget deficit in excess of $1
    trillion and many in Congress are convinced that we need steep
    spending cuts to put our fiscal house in order, no part of the
    Government, including DOD, can be exempt from close
    examination. The Secretary of Defense has subjected DOD's
    budget to close examination. He has insisted on efficiencies,
    streamlining, cuts, and cancellations that we are told add up
    to $178 billion over the course of the next 5 years. The fiscal
    year 2012 base budget request of $553 billion is $4 billion
    higher than last year's request but is a reduction in
    inflation-adjusted terms. We will be closely scrutinizing the
    Secretary's efficiencies initiative and will be looking for
    additional efficiencies as we move through the legislative
    process.
        The total defense budget, which includes base funding for
    DOD and additional funding for overseas contingency operations
    (OCO)--that total defense budget declines from $708 billion in
    fiscal year 2011 to $671 billion in fiscal year 2012. That
    decline is due largely from our continued withdrawal from Iraq
    which results in the budget for the OCOs falling from $159
    billion in 2011 to $118 billion in fiscal year 2012.
        Even as the defense budget request reflects difficult
    choices, it rightly requests increased funding for military
    personnel and health care, including funding sufficient to
    continue initiatives supporting wounded and sick
    servicemembers, continued research into traumatic brain injury
    (TBI), post-traumatic stress disorder (PTSD), and psychological
    health, and fully funds a variety of family support programs.
    Notably, the budget request would reduce Active Duty Army and
    Navy end strength by 7,400 soldiers and 3,000 sailors,
    respectively. The Army has announced its plan to reduce its so-
    called temporary end strength by 22,000 soldiers over the next
    3 years, followed by an additional reduction of 27,000 soldiers
    between 2015 and 2017. As the Services resize their forces
    according to anticipated demand, we must ensure that any
    reductions avoid unnecessary increased risk or stress on our
    servicemembers.
        The budget request also prioritizes funding for ongoing
    major operations in Afghanistan and Iraq. As Senators Reed,
    Tester, and I heard during our visit to Afghanistan and Iraq
    last month, both of these conflicts are entering critical
    transition periods.
        In Iraq, our forces are implementing the decision by
    President Bush and Prime Minister Maliki, as set forth in the
    2008 security agreement, to withdraw all U.S. forces from Iraq
    by December 31, 2011. As we draw down, our goal is to leave
    behind an Iraq that is stable. Because Iraq will continue to
    need support in meeting its security needs, the budget request
    includes significant funds for starting up the Office of
    Security Cooperation within the U.S. Embassy in Baghdad to make
    our security assistance available to Iraq. The transition from
    a DOD lead to a State Department lead for numerous bilateral
    activities in Iraq can only be successful if the Department of
    State (DOS) and our other civilian agencies receive the
    resources that they need to take on these missions.
        In Afghanistan, July 2011 will mark the date set by
    President Obama a little over a year ago for the Government of
    Afghanistan to take more and more responsibility for Afghan
    security and governance and by July 2011 for the beginning of
    reductions in U.S. forces in Afghanistan. The President's
    decision to set the July 2011 date has increased the urgency,
    as General Caldwell put it, of the efforts of Afghan leaders to
    prepare for this transition. General David Petraeus told us
    that the North Atlantic Treaty Organization (NATO) and Afghan
    officials are preparing to provide President Karzai by the end
    of the month with a recommendation on which provinces and
    districts should be transferred to an Afghan security lead in
    the coming months.
        During our visit to Afghanistan, we saw significant signs
    of progress over the last 6 months, although great challenges
    remain. The Afghan army and police have surged by an additional
    70,000 over the last year and are on track to meet the current
    target of 305,000 Afghan security forces by October of this
    year. President Obama's budget request for fiscal year 2012
    includes substantial resources to continue supporting those
    Afghan forces which will bring closer the day when Afghan
    troops will bear the major responsibility for their nation's
    security, which in my judgment is and always has been key to
    success in Afghanistan.
        On February 15, 2011, in an op-ed that appeared in the
    Chicago Tribune, General Caldwell said that while the
    international community has expended tremendous blood and
    treasure for this just cause, the remarkable story of the surge
    of Afghans, of a people committing themselves to the defense of
    their country, is a reason to hope for a successful long-term
    outcome.
        In an e-mail message to me, General Caldwell, who is in
    charge of training of Afghan forces, followed up that op-ed by
    saying: ``It has become truly the untold story of the last 15
    months. In that time, Afghan men and women have swelled the
    ranks of the Afghan National Security Force (ANSF) to levels
    more than double the U.S. and NATO surge.'' He continued,
    ``While the enormous increase in quantity is significant to the
    security of Afghanistan, our focus on the improvement of
    quality is even more important.''
        The op-ed and the e-mail message to me from General
    Caldwell will be made part of the record.
        [The information referred to follows:]

        Chairman Levin. The administration is also considering a
    proposal to grow the Afghan army by 35,000 men and the Afghan
    police by a similar number, which would bring total Afghan
    security force levels of 378,000 by the end of 2012. These
    additional forces would add important enablers, logistics,
    engineering, and intelligence and others, that would reinforce
    and sustain the transition of responsibility for Afghanistan's
    security to the Afghan security forces. I support this proposed
    increase. I know from our conversations that Secretary Gates
    and Admiral Mullen support it as well. I have urged President
    Obama, as recently as last Friday, to approve that request.
        In the field, Afghan security forces are partnered with
    coalition forces and deployed in the key regions of Helmand and
    Kandahar in equal or greater numbers than coalition forces.
    U.S., Afghan, and coalition forces are taking the momentum from
    the insurgency, particularly in former Taliban strongholds in
    the south. The Afghan army is increasingly in the lead in
    planning and executing operations. That is what the Taliban
    fear the most: Afghan security forces, as opposed to foreign
    forces, out in front providing security for the Afghan people.
    As support for the Afghan army and police grows, lower-level
    insurgent fighters are slowly beginning to reintegrate into
    Afghan society.
        Improving Afghan governance remains a major challenge to
    success. The government in Kabul is largely absent from
    Afghans' daily lives and corruption and mismanagement remain
    major obstacles.
        We must ensure that our forces are prepared to address
    other threats in other places besides Iraq and Afghan. We
    obviously must remain attentive to those threats around that
    region and throughout the world. I outline those threats in
    some detail in the balance of my opening statement, but I will
    put that in the record rather than reading it at this time.
        [The prepared statement of Chairman Levin follows:]

                    Prepared Statement by Senator Carl Levin

        This morning, the committee welcomes Secretary of Defense Robert
    Gates and Chairman of the Joint Chiefs of Staff, Admiral Michael
    Mullen, for our hearing on the Department of Defenses' fiscal year 2012
    budget request, the associated future years defense program, and the
    posture of the U.S. Armed Forces.
        We are thankful to you and your families for your dedicated service
    to the Nation and to the soldiers, sailors, airmen, and marines at home
    and in harm's way around the globe and to their families. Your personal
    commitment to the welfare of our troops and their families shines
    through all that you do. The American people are grateful for that and
    we are grateful and eager to help wherever we can.
        The Department of Defense, as are all Federal agencies, is
    currently operating under a continuing resolution (CR) that expires on
    March 4, 2011. If the current CR is extended for the whole year, then
    the Departments base funding of $526 billion for fiscal year 2011 would
    be $23 billion below the original fiscal year 2011 request of $549
    billion. Secretary Gates will describe to us this morning this as a
    crisis on his doorstep. I hope that we will soon be in a position to
    enact a full year appropriation at an appropriate level.
        At a time when we face a budget deficit in excess of a trillion
    dollars and many in Congress are convinced that we need steep spending
    cuts to put our fiscal house in order, no part of the government,
    including the Department of Defense, can be exempt from close
    examination. The Secretary has subjected the Departments budget to
    close examination and insisted on efficiencies, streamlining, cuts and
    cancellations that, we are told, add up to $178 billion over the course
    of the next 5 years. The fiscal year 2012 base budget request of $553
    billion is $4 billion higher than last years request but is a reduction
    in inflation-adjusted terms. We will be closely scrutinizing the
    Secretary's efficiencies initiative and will be looking for additional
    efficiencies as we move through the legislative process.
        The total defense budget, which includes base funding for the
    Department of Defense and additional funding for Overseas Contingency
    Operations, declines from $708 billion in fiscal year 2011 to $671
    billion in fiscal year 2012. That decline is due largely from our
    continued withdrawal from Iraq which results in the budget for Overseas
    Contingency Operations falling from $159 billion in fiscal year 2011 to
    $118 billion in fiscal year 2012.
        Even as the Defense budget request reflects difficult choices, it
    rightly requests increased funding for military personnel and health
    care, including funding sufficient to continue initiatives supporting
    wounded and sick service members, continue research into traumatic
    brain injury, post-traumatic stress disorder, and psychological health,
    and fully fund a variety of family support programs. Notably, the
    budget request would reduce active duty Army and Navy end strengths by
    7,400 soldiers and 3,000 sailors, respectively. The Army has announced
    its plan to reduce its so-called temporary end strength by 22,000
    soldiers over the next three years, followed by an additional reduction
    of 27,000 soldiers between 2015 and 2017. As the Services for re-size
    their forces according to anticipated demand, we must ensure that any
    reductions avoid unnecessary increased risk or stress on our
    servicemembers.
        The budget request also prioritizes funding for ongoing major
    operations in Afghanistan and Iraq. As Senators Reed, Tester, and I
    heard during our visit to Afghanistan and Iraq last month, both of
    these conflicts are entering critical transition periods.
        In Iraq, our forces are implementing the decision by President Bush
    and Prime Minister Maliki, as set forth in the 2008 Security Agreement,
    to withdraw all U.S. forces from Iraq by December 31, 2011. As we
    drawdown, our goal is to leave behind an Iraq that is stable. Because
    Iraq will continue to need support in meeting its security needs, the
    budget request includes significant funds for starting up the Office of
    Security Cooperation within the U.S. Embassy in Baghdad to make our
    security assistance available to Iraq. The transition from a DOD lead
    to a State Department lead for numerous bilateral activities in Iraq
    can only be successful if the Department of State and our other
    civilian agencies receive the resources they need to take on these
    missions.
        In Afghanistan, July 2011 will mark the date set by President Obama
    a little over a year ago for the Government of Afghanistan to take more
    and more responsibility for Afghanistans security and governance and
    for the beginning of reductions in U.S forces in Afghanistan. The
    Presidents decision to set the July 2011 date has added urgency, as
    General Caldwell put it, to the efforts of Afghan leaders to prepare
    for this transition. General David Petreaus told us that th North
    Atlantic Treaty Organization (NATO) and Afghan officials are preparing
    to provide President Karzai by the end of the month a recommendation on
    which provinces and districts should be transferred to an Afghan
    security lead in the coming months.
        During our visit to Afghanistan last month, we saw significant
    signs of progress over the last several months, though great challenges
    remain. The Afghan Army and police have surged by an additional 70,000
    over the last year, and are on track to meet the current target of
    305,000 Afghan security forces by October of this year. The Presidents
    budget request for fiscal year 2012 includes substantial resources to
    continue supporting these forces, which will bring closer the day when
    Afghan troops will bear the major responsibility for their nations
    security, which is key to success in Afghanistan.
        On February 15, 2011, in an op-ed that appeared in the Chicago
    Tribune, General Caldwell said, While the international community has
    expended tremendous blood and treasure for this just cause, the
    remarkable story of the surge of Afghans, of a people committing
    themselves to defense their country, is a reason to hope for a
    successful long-term outcome. In an email message to me he followed up
    by saying, It truly has become the Untold Story of the last 15 months.
    In that time, Afghan men and women have swelled the ranks of the Afghan
    National Security Force to levels more than double the U.S. and NATO
    surge. He continued, While the enormous increase in quantity is
    significant to the security of Afghanistan, our focus on the
    improvement of quality is even more important. Without objection, the
    op-ed and General Caldwell's email message to me shall be made a part
    of the record.
        The administration is also considering a proposal to grow the
    Afghan Army by 35,000 and the Afghan police by a similar number, which
    would bring total Afghan security force levels to 378,000 by the end of
    2012. These additional forces will add important enablers logistics,
    engineering and intelligence and others that will reinforce and sustain
    the transition of responsibility for Afghanistans security to the
    Afghan security forces. I support this proposed increase, and I know
    from our conversations that Secretary Gates and Admiral Mullen support
    it as well. I have urged President Obama as recently as last Friday to
    approve this request.
        In the field, Afghan security forces are partnered with coalition
    forces and deployed in the key regions of Helmand and Kandahar in equal
    or greater numbers than coalition forces. U.S., Afghan, and coalition
    forces are taking the momentum from the insurgency, particularly in
    former Taliban strongholds in the south. The Afghan Army is
    increasingly in the lead in planning and executing operations. Thats
    what the Taliban fear most: Afghan security forces, as opposed to
    foreign forces, out in front providing security to the Afghan people.
    As support for the Afghan Army and police grows, lower-level insurgent
    fighters are slowly beginning to reintegrate into Afghan society.
        Improving Afghan governance remains a major challenge to success.
    The Government in Kabul is largely absent from Afghans daily lives and
    corruption and mismanagement remain major obstacles.
        We must ensure our forces are prepared to address other threats in
    other places besides Iraq and Afghanistan. We must remain attentive to
    the threats burgeoning from al Qaeda and its affiliates in places like
    Somalia, Yemen, the Horn of Africa, and West Africa. Al Qaeda in the
    Arabian Peninsula (AQAP) has narrowly failed to strike the U.S.
    Homeland on two occasions these narrow misses, which were planned and
    executed by AQAP operatives in Yemen, have inspired them to develop new
    and creative ways to attack the United States and our interests. It is
    critical that we continue to work with our partners in the region to
    increase the pressure on AQAP and its associated forces. As protests in
    the Middle East continue to unfold, it is also critical that we urge
    our partners to as President Obama said earlier this week get out ahead
    of change. If countries like Yemen fail to do this, transitions could
    create a less favorable outcome for their people, for the region, and
    for the United States.
        Earlier this week, the President spoke of the hunger for freedoms
    among the peoples of the Middle East. The committee looks forward to
    hearing from Secretary Gates and Admiral Mullen on: the current
    situation in Egypt and the broader Middle East; our communications with
    Egyptian military leadership and their confidence in their commitment
    to truly democratic elections; and the future of U.S.-Egyptian military
    relations. The Egyptian people have been denied their democratic rights
    for too long and over the few plus weeks the Egyptian people demanded
    those fundamental rights. It is critical that the United States
    supports transition to democratic governance in the Middle East and the
    world.
        Across the Gulf of Aden, in Somalia and the Horn of Africa more
    broadly commerce continues to be impacted by threat of increasingly
    aggressive pirates, as well as certain elements of al Shabab that have
    expanded their violent attacks to include regional targets, most
    recently in July 2010 in Uganda.
        Iran clearly provides a challenge for the United States and the
    international community. While continuing to profess that its nuclear
    activities are for peaceful purposes, all of Irans actions indicate
    otherwise. Iran continues to violate the directives of the
    International Atomic Energy Agency and the United Nations, and refuses
    to enter into meaningful negotiations with the P-5 plus 1 group of
    nations. The sanctions that have been imposed by the United States and
    most of the international community under the U.N. sanctions
    resolutions, as well as domestic laws, have had an effect.
        In recent days, domestically, Iran has demonstrated yet again its
    total disregard for the fundamental rights of its people when it once
    more violently oppressed the political opposition to its tyrannical
    rule. The Iranian people are demanding that their voices be heard, we
    should stand with them.
        I also wanted to highlight Admiral Mullens Guidance for 2011, which
    states that DOD would continue to plan for a broad range of military
    options should the President decide to use force to prevent Iran from
    acquiring nuclear arms. While not the preferred option, it is important
    that Iran understands that military actions remain on the table.
        The Asia-Pacific region also requires increasing attention from the
    administration, Congress, and the U.S. military. Among the challenges
    we face are the unprovoked aggression from North Korea, questions
    raised by the continuing growth and modernization of Chinas military
    capabilities, and the destabilizing influences of violent extremism in
    South and Southeast Asia. As we confront these challenges, we must work
    closely with partners and allies, and make smart decisions about the
    U.S. military's posture, presence, and capabilities throughout the
    region.
        In the area of missile defense, the budget request is $10.7
    billion, an increase of $450 million from last years request, including
    funds for the Missile Defense Agency and the missile defense programs
    of the Army. There are likely to be two major focal points for missile
    defense this year: implementing the Phased Adaptive Approach (PAA) to
    missile defense in Europe, and taking the steps necessary to make sure
    the Ground-based Midcourse Defense system is on a path to being
    effective, reliable, and sustainable.
        On implementation of the European PAA, the key objective this year
    is to deploy Phase 1, which includes deployment of an Aegis Ballistic
    Missile Defense ship to the Mediterranean, and a forward-based radar in
    southeastern NATO Europe. These deployments will provide near-term
    protection against existing and future Iranian missile threats to NATO.
    Numerous capabilities for future phases of the European PAA are under
    development, particularly the enhanced Aegis missile defense elements
    for deployment on land and at sea.
        It is particularly noteworthy that last November at the Lisbon
    Summit, the NATO alliance agreed unanimously to adopt missile defense
    of its territory and population as a core mission, and NATO fully
    supports the European PAA as the U.S. contribution to NATOs missile
    defense mission.
        One of NATOs key objectives in this decision is to seek cooperation
    with Russia on missile defense, through the NATO-Russia Council. As
    President Obama described in his December 18 letter to the Senate on
    missile defense, such cooperation will not in any way limit United
    States or NATO's missile defense capabilities. I hope our witnesses
    today will describe the types of cooperation they believe would be both
    useful and possible.
        As for the GMD system, I would note that the last two flight tests
    have failed to result in intercepts, and we want to make sure that the
    Department is taking the necessary steps to understand and fix the
    problem, and to ensure that the system will work effectively and
    reliably. It remains essential to test our missile defense programs in
    a realistic manner, and to demonstrate that those systems work properly
    before we deploy them.
        Turning to the readiness of our Armed Forces, the fiscal year 2012
    budget request provides adequate levels of funding and an overall
    increase from fiscal year 2011 levels, including support for ongoing
    operations in Iraq and Afghanistan. However, the war funding request to
    reset and reconstitute equipment has decreased from $21.4 billion in
    fiscal year 2011 to $11.9 billion in fiscal year 2012. We must
    recognize that long term reset requirements must be supported with
    sustained funding for several years after forces have withdrawn from
    Iraq and Afghanistan. As operational tempo increases in Afghanistan, it
    is imperative that the vital readiness accounts are protected and fully
    funded.
        Lastly, I applaud the Department for recognizing the need to
    maintain robust funding for science and technology programs that will
    provide the underpinning for the technological superiority of our
    future military capabilities. These efforts, along with supporting a
    capable acquisition workforce and maintaining a vibrant national
    defense industrial base, will be crucial for the successful and timely
    development and fielding of the next generation of cost-effective and
    reliable weapons systems.
        Secretary Gates, Admiral Mullen, we look forward to your testimony.
    Now I will turn to Senator McCain for any opening remarks he may have.

        Chairman Levin. I will turn now to Senator McCain.

                    STATEMENT OF SENATOR JOHN McCAIN

        Senator McCain. Thank you, Mr. Chairman. I want to join you
    in welcoming Secretary Gates and Chairman Mullen and Secretary
    Hale to discuss the President's budget request for fiscal year
    2012 and its impact on the FYDP for DOD.
        Secretary Gates, you were asked to return to public service
    at a time when this country was embroiled in the turmoil of an
    unpopular war and another deteriorating war, and Pentagon
    critics were abounding. Your historic tenure has been marked by
    a surge to victory in Iraq, a new strategy to defeat our
    enemies in Afghanistan, and DOD's lead on humanitarian
    responses around the world. Your service will also be noted for
    the substantial reforms for the defense acquisition process and
    your decisive actions to stop wasting taxpayers' funds on
    unneeded and outdated systems. On behalf of my fellow citizens,
    I want to thank you for your outstanding service. I view you as
    one of the greatest public servants that I have ever had the
    opportunity of serving with.
        Today we are faced again with a demand for change. We are
    facing a harsh reality that runaway Federal spending has put
    this country on an unsustainable path. I agree with Admiral
    Mullen who observes in his written statement ``our debt is our
    greatest national security threat.'' The competing demands for
    our resources and the imperative we face to reduce our debt
    requires Congress to provide more leadership than it has shown
    in the past to restore fiscal responsibility.
        I believe we took a step in the right direction in last
    year's National Defense Authorization Act (NDAA) by stripping
    the earmarks from the bill. Since then, both House and Senate
    have imposed moratoriums on earmarks for 2011 and 2012. I
    commend my colleagues in advance for restraining themselves
    from using earmarks, and I know it is tough for some. Mr.
    Secretary, I hope you will reinforce the President's commitment
    made during the State of the Union Address and recommend a veto
    of any 2012 defense bill that contains earmarks.
        I am concerned about the Joint Strike Fighter (JSF). I know
    that you are. We have had many briefings, many discussions, but
    it has been a source of great frustration to you, to me, and to
    members of this committee, but most of all, it has been an
    incredible waste of the taxpayers' dollars. It hurts the
    credibility of our acquisition process and our defense
    industry. It reinforces the view of some of us that the
    military industrial congressional complex that President
    Eisenhower warned us about is alive and well. I hope that you
    can make your position absolutely clear to the Senate today to
    prevent further wasteful action by Congress that will deny DOD
    the resources it really needs but, at the same time, give us
    the kind of assurance that the F-35 can be put on the right
    track. I believe that as we move to try to reduce the deficit
    and the debt, almost everything is going to be on the table.
        Overall the base budget request of $553 billion is $13
    billion less than the amount projected last year. I commend
    your efforts to get out ahead of the cuts by finding ways to
    improve the efficiency of DOD. Your decisions to reduce the
    number of senior military and civilian officials, freeze
    civilian pay, and halt with some exceptions the process of
    expanding the civilian workforce are sound decisions. I worry
    that we might, however, do some things that might cause us to
    see what we saw in the 1970s and the 1980s. Reducing flying
    hours, deferring aircraft maintenance, and postponing needed
    facility repairs are not true savings, and I fear the
    possibility of a return to what we once knew as a hollow Army.
        I have long said DOD does not deserve a special pass from
    spending the American taxpayers' dollars efficiently. But I
    have also said that the savings we identify must be reinvested
    in critical defense priorities. One example of this
    reinvestment is the increased efforts to combat the trafficking
    of drugs and illicit materials through Mexico. This has become
    an issue of national security. I look forward to working with
    you and our allies in Mexico to combat this scourge.
        Yesterday you stated, regarding the U.S. presence in Iraq
    ``there is certainly on our part an interest in having an
    additional presence, and the truth of the matter is the Iraqis
    are going to have some problems that they are going to have to
    deal with if we are not there in some numbers.'' I agree. We
    are now scheduled to be completely out by the end of this year.
    I think it is time we engage in active discussions with the
    Iraqis as to their future needs as well as any threats there
    might be to our national security if there is a complete
    withdrawal by the end of this year.
        In addition to Iraq, we will still have 98,000 U.S. forces
    in Afghanistan. I expect our troops will remain there until
    they are no longer needed.
        A couple of weekends ago, I was at Munich and our allies
    came up to me and said, you say you are beginning to withdraw
    in the middle of 2011. Why should we not go to our constituents
    and say we are beginning to withdraw? I think one of the worst
    announcements ever made, as far as the conflict in Afghanistan,
    was the statement that we would be beginning withdrawal in
    2011. I am glad to see that 2014 is now the operative year, but
    it still is very unsettling to our allies and encouraging to
    our enemies.
        Success of our mission in Afghanistan must be assured to
    honor the sacrifices of our brave men and women, as well as
    coalition partners who have fought, died, and been injured
    there.
        Mr. Secretary, Admiral Mullen, Secretary Hale, we face many
    challenges in the year ahead which will require your continued
    skill and tenacity.
        I thank you, Mr. Chairman.
        Chairman Levin. Thank you very much, Senator McCain.
        We have a quorum here and in a moment I will ask approval
    of a number of nominations and the committee budget. Before I
    do that, though, I just want to say, Mr. Secretary, I join and
    concur with Senator McCain and his comments about you and your
    tenure here as Secretary of Defense. It has been an
    extraordinary number of years. You have brought great
    capability, objectivity, and thoughtfulness to the job and
    great strength, independence, and courage, and I very much
    commend you for it. I look forward to many more times when you
    will be before this committee, and I am sure that you do too. I
    do not want this to sound kind of like it is anywhere near the
    end of your tenure here. [Laughter.]
        I discussed the matter of the committee budget with Senator
    McCain, and I now would ask the committee to consider and
    approve a Senate resolution authorizing funding for our
    committee from March 1 of this year through February 28, 2013.
    The funding resolution is consistent with the joint majority
    leader and Republican leader's February 3 agreement on
    committee funding and with the funding guidance provided to us
    by the Senate Rules Committee on February 7. This matter is
    time-sensitive. All committees have been asked to report their
    budgets to the Senate by no later than today. So I would now
    entertain a motion to favorably report this resolution.
        Senator McCain. So moved.
        Chairman Levin. Second?
        Senator Lieberman. Second.
        Chairman Levin. All those in favor, say aye. [A chorus of
    ayes.]
        Opposed, nay. [No response.]
        The ayes have it.
        Now, we have some discussion that lies ahead of us on our
    committee rules. I would ask everybody to read those rules
    during the next week, and we will take up the matter of our
    rules on Monday or Tuesday after we return from the recess.
        We also have in front of us 670 pending military
    nominations. All of these nominations have been before the
    committee the required length of time. Is there a motion to
    favorably report those nominations?
        Senator McCain. So moved.
        Chairman Levin. Is there a second?
        Senator Lieberman. Second.
        Chairman Levin. All in favor, say aye. [A chorus of ayes.]
        Chairman Levin. Opposed, nay. [No response.]
        Chairman Levin. The motion carries. Thank you all.
        [The list of nominations considered and approved by the
    committee follows:]

     Military Nominations Pending with the Senate Armed Services Committee
     which are Proposed for the Committee's Consideration on February 17,
                                     2011.

         1. LTG Eric E. Fiel, USAF, to be lieutenant general and Commander,
    Air Force Special Operations Command (Reference No. 138).
         2. Col. Howard D. Stendahl, USAF to be brigadier general
    (Reference No. 139).
         3. LTG Dennis L. Via, USA to be lieutenant general and Deputy
    Commanding General/Chief of Staff, US Army Materiel Command (Reference
    No. 141).
         4. LTG Mark P. Hertling, USA to be lieutenant general and
    Commanding General, U.S. Army Europe and Seventh Army (Reference No.
    142).
         5. MG Susan S. Lawrence, USA to be lieutenant general and Chief
    Information Officer/G-6, Office of the Secretary of the Army (Reference
    No. 143).
         6. MG John M. Bednarek, USA to be lieutenant general and
    Commanding General, First US Army (Reference No. 144).
         7. MG Francis J. Wiercinski, USA to be lieutenant general and
    Commanding General, US Army Pacific (Reference No. 145).
         8. BG Renaldo Rivera, ARNG to be major general (Reference No.
    147).
         9. BG William M. Buckler, Jr., USAR to be major general (Reference
    No. 148).
        10. BG Mark J. MacCarley, USAR to be major general (Reference No.
    149).
        11. In the Army Reserve, there are eight appointments to the grade
    of colonel (list begins with Marc T. Arellano) (Reference No. 150).
        12. In the Army Reserve, there are six appointments to the grade of
    colonel (list begins with Gregrey C. Bacon) (Reference No. 151).
        13. In the Navy, there are two appointments to the grade of
    commander and below (list begins with John G. Brown) (Reference No.
    153).
        14. Col. Arlen R. Royalty, USAR to be brigadier general (Reference
    No. 167).
        15. In the Marine Corps, there are 11 appointments to the grade of
    major general (list begins with Juan G. Ayala) (Reference No. 168).
        16. In the Air Force Reserve, there are three appointments to the
    grade of colonel (list begins with Erwin Rader Bender, Jr.) (Reference
    No. 171).
        17. In the Air Force, there are six appointments to the grade of
    lieutenant colonel and below (list begins with David M. Crawford)
    (Reference No. 172).
        18. In the Air Force Reserve, there are 175 appointments to the
    grade of colonel (list begins with Richard T. Aldridge) (Reference No.
    173).
        19. In the Army, there is one appointment to the grade of
    lieutenant colonel (Sebastian A. Edwards) (Reference No. 174).
        20. In the Army, there is one appointment to the grade of colonel
    (Gregory R. Ebner) (Reference No. 175).
        21. In the Army Reserve there are 10 appointments to the grade of
    colonel (list begins with Curtis O. Bohlman, Jr.) (Reference No. 176).
        22. In the Marine Corps, there is one appointment to the grade of
    major (Timothy E. Lemaster) (Reference No. 178).
        23. In the Marine Corps, there are two appointments to the grade of
    major (list begins with Dax Hammers) (Reference No. 180).
        24. In the Marine Corps, there are two appointments to the grade of
    major (list begins with Richard Martinez) (Reference No. 181).
        25. In the Marine Corps, there are four appointments to the grade
    of major (list begins with William Frazier, Jr.) (Reference No. 182).
        26. In the Marine Corps, there are four appointments to the grade
    of major (list begins with Douglas R. Cunningham) (Reference No. 183).
        27. In the Marine Corps, there are four appointments to the grade
    of major (list begins with James E. Hardy, Jr.) (Reference No. 184).
        28. In the Marine Corps, there are five appointments to the grade
    of major (list begins with Conrad G. Alston) (Reference No. 185).
        29. In the Marine Corps, there are five appointments to the grade
    of major (list begins with David M. Adams) (Reference No. 186).
        30. In the Marine Corps, there are six appointments to the grade of
    major (list begins with Stefan R. Browning) (Reference No. 187).
        31. In the Marine Corps, there are seven appointment to the grade
    of major (list begins with Joel T. Carpenter) (Reference No. 188).
        32. In the Marine Corps, there is one appointment to the grade of
    lieutenant colonel (Roger N. Rudd) (Reference No. 189).
        33. In the Marine Corps, there is one appointment to the grade of
    lieutenant colonel (Lowell W. Schweickart, Jr.) (Reference No. 190).
        34. In the Marine Corps, there is one appointment to the grade of
    lieutenant colonel (Katrina Gaskill) (Reference No. 191).
        35. In the Marine Corps, there are two appointments to the grade of
    lieutenant colonel (list begins with Sean J. Collins) (Reference No.
    193).
        36. In the Marine Corps, there are three appointments to the grade
    of lieutenant colonel (list begins with William H. Barlow) (Reference
    No. 195).
        37. In the Marine Corps, there is one appointment to the grade of
    major (James H. Glass) (Reference No. 197).
        38. In the Navy, there is one appointment to the grade of captain
    (Richelle L. Kay) (Reference No. 198).
        39. In the Navy, there are two appointments to the grade of
    lieutenant commander (list begins with Chris W. Czaplak) (Reference No.
    201).
        40. In the Navy, there is one appointment to the grade of
    lieutenant commander (Scott D. Scherer) (Reference No. 202).
        41. In the Navy, there are two appointments to the grade of
    commander and below (list begins with Carlos E. Moreyra) (Reference No.
    203).
        42. In the Navy, there are 30 appointments to the grade of
    lieutenant commander (list begins with David Q. Baughier) (Reference
    No. 204).
        43. In the Marine Corps, there are three appointments to the grade
    of major (list begins with Timothy M. Callahan) (Reference No. 206).
        44. MG Ellen M. Pawlikowski, USAF, to be lieutenant general and
    Commander, Space and Missile Systems Center, Air Force Space Command
    (Reference No. 210).
        45. MG Michael J. Basla, USAF, to be lieutenant general and Vice
    Commander, Air Force Space Command (Reference No. 211).
        46. MG Rhett A. Hernandez, USA, to be lieutenant general and
    Commanding General, U.S. Army Forces Cyberspace Command (Reference No.
    212).
        47. Col. Johnny M. Sellers, ARNG, to be brigadier general
    (Reference No. 214).
        48. Col. Janson D. Boyles, ARNG, to be brigadier general (Reference
    No. 215).
        49. In the Air Force, there are three appointments to the grade of
    major (list begins with Stephen L. Buse) (Reference No. 216).
        50. In the Air Force Reserve, there are three appointments to the
    grade of colonel (list begins with Thomas J. Collins) (Reference No.
    217).
        51. In the Air Force Reserve, there are four appointments to the
    grade of colonel (list begins with Phillip M. Armstrong) (Reference No.
    218).
        52. In the Air Force Reserve, there are five appointments to the
    grade of colonel (list begins with Lloyd H. Anseth) (Reference No.
    219).
        53. In the Air Force Reserve, there are seven appointments to the
    grade of major (list begins with Kathleen M. Flarity) (Reference No.
    220).
        54. In the Air Force, there are seven appointments to the grade of
    major (list begins with Melina T. Doan) (Reference No. 221).
        55. In the Air Force, there are 12 appointments to the grade of
    colonel (list begins with Villa L. Guillory) (Reference No. 223).
        56. In the Air Force Reserve, there are 14 appointments to the
    grade of colonel (list begins with Alfred P. Bowles II) (Reference No.
    224).
        57. In the Air Force, there are 49 appointments to the grade of
    colonel (list begins with Brian F. Agee) (Reference No. 225).
        58. In the Air Force Reserve, there are 100 appointments to the
    grade of colonel (list begins with Earl R. Alameida, Jr.) (Reference
    No. 226).
        59. In the Army, there is one appointment to the grade of
    lieutenant colonel (Edward J. Benz III) (Reference No. 227).
        60. In the Army Reserve, there is one appointment to the grade of
    colonel (Charles E. Lynde) (Reference No. 228).
        61. In the Army, there are four appointments to the grade of major
    (list begins with Ozren T. Buntak) (Reference No. 229).
        62. In the Army, there are three appointments to the grade of major
    (list begins with Marcia A. Brimm) (Reference No. 230).
        63. In the Army there are 3 appointments to the grade of lieutenant
    colonel and below (list begins with Dustin C. Frazier) (Reference No.
    231).
        64. In the Army Reserve, there are eight appointments to the grade
    of colonel (list begins with Robert L. Bierenga) (Reference No. 232).
        65. In the Army Reserve, there are 12 appointments to the grade of
    colonel (list begins with Don A. Campbell) (Reference No. 233).
        66. In the Marine Corps Reserve, there are seven appointments to
    the grade of colonel (list begins with Ernest L. Ackiss III) (Reference
    No. 234).
        67. In the Marine Corps Reserve, there are 74 appointments to the
    grade of colonel (list begins with Philip Q. Applegate) (Reference No.
    235).
        68. In the Navy, there is one appointment to the grade of captain
    (Jeffrey K. Hayhurst) (Reference No. 238).
        69. In the Navy, there is one appointment to the grade of
    lieutenant commander (Steven D. Elias) (Reference No. 239).
        70. In the Navy, there are two appointments to the grade of
    commander and below (list begins with Amy R. Gavril) (Reference No.
    241).
        71. In the Air Force Reserve, there are seven appointments to the
    grade of colonel (list begins with Steven L. Argiriou) (Reference No.
    242).
        72. In the Air Force, there are two appointments to the grade of
    major (list begins with Richard C. Ales) (Reference No. 243).
        73. MG Vincent K. Brooks, USA, to be lieutenant general and
    Commanding General, U.S. Army Central Command/Third U.S. Army
    (Reference No. 248).
        Total: 670.

        Chairman Levin. We will now call on you, Mr. Secretary.

       STATEMENT OF HON. ROBERT M. GATES, SECRETARY OF DEFENSE;
      ACCOMPANIED BY ROBERT F. HALE, UNDER SECRETARY OF DEFENSE,
                              COMPTROLLER

        Secretary Gates. Chairman Levin, Senator McCain, members of
    the committee, I appreciate the opportunity to appear before
    you to discuss the President's budget request for fiscal year
    2012.
        But first I want to thank the members of this committee for
    your outstanding support of DOD, but especially your support of
    the men and women in uniform serving in a time of war. I know
    you will join me in doing everything to ensure they have all
    they need to accomplish their mission and come home safely.
        The budget request for DOD being presented today includes a
    base budget request of $553 billion and an OCO request of
    $117.8 billion. These budget decisions took place in the
    context of a nearly 2-year effort by DOD to reduce overhead,
    cull troubled and excess programs, and rein in personnel and
    contractor costs, all for the purpose of preserving the global
    reach and fighting strength of America's military at a time of
    fiscal stress for our country.
        In all, these budget requests, if enacted by Congress, will
    continue our efforts to reform the way DOD does business, funds
    modernization programs needed to prepare for future conflicts,
    reaffirms and strengthens our 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.
        My submitted statement includes more details of this
    request.
        Now I want to take this opportunity to address several
    issues that I know have been a subject of debate and concern
    since I announced the outlines of our budget proposal last
    month: first, the serious damage our military will suffer by
    operating under a CR or receiving a significant funding cut
    during fiscal year 2011; second, the projected slowing and
    eventual flattening of the growth of the defense budget over
    the next 5 years; third, the plan for future reductions in the
    size of the ground forces; and fourth, the proposed reforms and
    savings to the TRICARE program for working age retirees.
        I also would express the hope that the Senate will continue
    to reject the unnecessary extra engine for the F-35 as it did
    the last time the Senate spoke to this issue in 2009.
        I want to start by making it clear that DOD will face a
    crisis if we end up with a year-long CR or a significant
    funding cut for fiscal year 2011. The President's defense
    budget request for 2011 was $549 billion. A full-year CR would
    fund DOD at about $526 billion. That is a cut of $23 billion.
    The damage done across the force from such reductions would be
    further magnified as they would come halfway through the fiscal
    year.
        Let me be clear, operating under a year-long CR or
    significantly reduced funding, with the severe shortfalls that
    entails, would damage procurement and research programs causing
    delays, rising costs, no new program starts, and serious
    disruptions in the production of some of our most high-demand
    assets, such as unmanned aerial vehicles (UAV). Cuts in
    maintenance could force parts of our aircraft fleet to be
    grounded and delay needed facilities improvements. Cuts in
    operations would mean fewer flying hours, fewer steaming days,
    and cutbacks in training for home station forces, all of which
    directly impact readiness.
        Similarly, some of the appropriations proposals under
    debate in Congress contemplate reductions of up to $15 billion
    from the President's original fiscal year 2011 request. I
    recognize that given the current fiscal and political
    environment, it is unlikely that DOD will receive the full
    fiscal year 2011 amount. Based on a number of factors,
    including policy changes that led to lower personnel costs and
    reduced activity forced by the CR, I believe DOD can get by
    with a lower number. However, it is my judgment that DOD needs
    an appropriation of at least $540 billion for fiscal year 2011
    for the U.S. military to properly carry out its mission,
    maintain readiness, and prepare for the future, which brings me
    to the proposed $78 billion reduction in the defense budget top
    line over the next 5 years.
        To begin with, this so-called cut is to the rate of
    predicted growth. The size of the base defense budget is still
    projected to increase in real inflation-adjusted dollars before
    eventually flattening out over this time period.
        More significantly, as a result of the efficiencies and
    reforms undertaken over the past year, we have protected
    programs that support servicemembers, readiness, and
    modernization. These efforts have made it possible for DOD to
    absorb lower projected growth in the defense budget without
    sacrificing real military capabilities. In fact, the savings
    identified by the Services have allowed our military to add
    some $70 billion beyond the program of record toward priority
    needs and new capabilities. Of the $78 billion in proposed
    reductions to the 5-year defense plan, about $68 billion comes
    from a combination of shedding excess overhead, improved
    business practices, reducing personnel costs, and from changes
    to economic assumptions. Only $10 billion of that 5-year total
    is directly related to military combat capability. $4 billion
    comes from restructuring the JSF program, a step driven by the
    program's development and testing schedule that would have
    taken place irrespective of the budget top line. The rest,
    about $6 billion, results from the proposed decrease in end
    strength of the Army and Marine Corps starting in 2015, a
    decision I will address now.
        Just over 4 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 to 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
    further temporary increase in the Army of 22,000, an increase
    always planned to end in 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.
        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. Just 3 years ago, we had some 190,000 troops
    combined in Iraq and Afghanistan. By the end of this calendar
    year, we expect there to be less than 100,000 troops deployed
    in both of the major post-September 11 combat theaters,
    virtually all of those forces in Afghanistan.
        This is why we believe that beginning in fiscal year 2015,
    the United States can, with minimal risk, begin reducing Army
    Active Duty end strength by 27,000 and the Marine Corps by
    somewhere between 15,000 and 20,000. These projections assume
    that the number of troops in Afghanistan will be significantly
    reduced by the end of 2014 in accordance with both the
    President's and NATO's strategy. If our assumptions prove
    incorrect, there is plenty of time to adjust the size and
    schedule of this change.
        It is important to remember that even after the planned
    reductions, the Active Army end strength would continue to be
    larger by nearly 40,000 soldiers than it was when I became
    Secretary of Defense 4 years ago.
        I should also note that these reductions are supported by
    both the Army and Marine Corps leadership.
        Finally, sharply rising health care costs are consuming an
    even-larger share of DOD'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 Medicare premium
    increases for working age retirees, most of whom are employed
    while receiving full pensions. All six members of the Joint
    Chiefs of Staff have strongly endorsed these and other cost-
    saving TRICARE reforms in a letter to Congress.
        I understand that any kind of change to these benefits
    prompts vigorous political opposition, but let us be clear. The
    current TRICARE arrangement, one in which fees have not
    increased for 15 years, is simply unsustainable, and if allowed
    to continue, DOD risks the fate of other corporate and
    government bureaucracies that were ultimately crippled by
    personnel costs, in particular, their retiree benefit packages.
        All told, the cumulative effect of DOD's savings and
    reforms, combined with a host of new investments, will make it
    possible to protect the U.S. military's combat power despite
    the declining rate of growth and eventual flattening of the
    defense budget over the next 5 years. As a result of the
    savings identified and reinvested by the Services, our military
    will be able to meet unforeseen expenses, refurbish war-worn
    equipment, buy new ships and fighters, begin development of a
    new long-range bomber, boost our cyber warfare capability,
    strengthen missile defense, and buy more of the most advanced
    UAVs. But I should note this will only be possible if the
    efficiencies, reforms, and savings are followed through to
    completion.
        In closing, I want to address the calls from some quarters
    for deeper cuts in defense spending to address this country's
    fiscal challenges. I would remind them that over the last two
    defense budgets submitted by President Obama, we have curtailed
    or canceled troubled or excess programs that would have cost
    more than $300 billion if seen through to completion.
    Additionally, total defense spending, including war costs, will
    decline further as the U.S. military withdraws from Iraq.
        We still live in a very dangerous and often unstable world.
    Our military must remain strong enough 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
    building up their conventional forces and developing new
    capabilities that target our traditional strengths.
        We shrink from our global security responsibilities at our
    peril. Retrenchment brought about by short-sighted cuts could
    well lead to costlier and more tragic consequences later,
    indeed, as they always have in the past. Surely we should learn
    from our national experience since World War I that drastic
    reductions in the size and strength of the U.S. military make
    armed conflict all the more likely with an unacceptably high
    cost in American blood and treasure.
        Mr. Chairman, I look forward to working through this next
    phase of the President's defense reform effort with you and
    your colleagues in the weeks and months ahead to do what is
    right for our Armed Forces and what is right for our country.
    Thank you.
        [The prepared statement of Secretary Gates follows:]

                   Prepared Statement by Hon. Robert M. Gates

        Mr. Chairman, members of the committee.
        I appreciate the opportunity to appear before you to discuss the
    President's budget request for fiscal year 2012. I first want to thank
    the members of this committee for your support of the men and women in
    uniform who have answered the call in a time of war. I know you will
    join me in doing everything to ensure they have all they need to
    accomplish their mission and come home safely.
        The budget request for the Department of Defense (DOD) being
    presented today includes a base budget request of $553 billion and an
    Overseas Contingency Operations (OCO) request for $117.8 billion. These
    budget decisions took place in the context of a nearly 2-year effort by
    DOD 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 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.

        Before I further summarize the elements of the President's budget
    request, I want to address three issues that I know have been a subject
    of debate and concern since I announced the outlines of our budget
    proposal on January 6:

             First, the serious damage caused to our military by
            operating under a continuing resolution or receiving a
            significant funding cut during fiscal year 2011;
             Second, the projected slowing and eventual flattening
            of growth of the defense budget over the next 5 years; and
             Third, the planned future reductions in the size of
            the ground forces.

        I want to make clear that we face a crisis on our doorstep if DOD
    ends up with a year-long continuing resolution or a significant funding
    cut for fiscal year 2011. The President's defense budget request for
    fiscal year 2011 was $549 billion. A full-year continuing resolution
    would fund the department at about $526 billion. That's a cut of $23
    billion. Similarly, some of the appropriations proposals under debate
    in Congress contemplate reductions of $15 billion and more from what
    the President requested for defense in fiscal year 2011. The damage
    done across the force from such reductions would be magnified as they
    would come halfway through the fiscal year.
        Let me be clear, operating under a year-long continuing resolution
    or substantially reduced funding--with the severe shortfalls that
    entails--would damage procurement and research programs causing delays,
    rising costs, no new program starts and serious disruptions in the
    production of some our most high demand assets, such as Unmanned Aerial
    Vehicles. The reductions would likely fall most heavily on our
    operations and maintenance accounts. Cuts in maintenance could force
    parts of our aircraft fleet to be grounded and delay needed facilities
    improvements. Cuts in operations would mean fewer flying hours, fewer
    steaming days, and cutbacks in training for home-stationed forces--all
    of which directly impacts readiness. That is how you hollow out a
    military--when your best people, your veterans of multiple combat
    deployments, become frustrated and demoralized and, as a result, begin
    leaving military service.
        Consider also that throughout this past decade of conflict, the
    Service Chiefs and Members of Congress have repeatedly voiced concerns
    about the lack of training opportunities for conventional high-end
    combat resulting from the operational demands of Iraq and Afghanistan.
    We are just now beginning to get the kind of dwell-time for our home
    stationed forces to allow that kind of training. If forced to operate
    under a continuing resolution or reduced funding, some of that full-
    spectrum training will not happen in fiscal year 2011.
        Mr. Chairman, I recognize that given the current fiscal and
    political environment, it is unlikely that DOD will receive the full
    amount originally requested for fiscal year 2011. Based on a number of
    factors--including policy changes that led to lower personnel costs and
    reduced activity forced by the continuing resolution--I believe the
    department can get by with a lower number. However, it is my judgment
    that DOD needs an appropriation of at least $540 billion for fiscal
    year 2011 for the U.S. military to properly carry out its mission,
    maintain readiness, and prepare for the future.
        Which brings me to the second issue--the proposed $78 billion
    reduction in the defense budget topline over the next 5 years. To begin
    with, this so-called ``cut'' is to the rate of predicted growth. The
    size of the base defense budget is still projected to increase in real,
    inflation-adjusted dollars, before eventually flattening out over this
    time period.
        More significantly, as a result of the efficiencies and reforms
    undertaken over the past year, we have protected programs that support
    military people, readiness, and modernization. These efforts have made
    it possible for DOD to absorb lower projected growth in the defense
    budget without, as Chairman McKeon warned last month, ``leav[ing] our
    military less capable and less able to fight.'' In fact, the savings
    identified by the Services have allowed our military to add some $70
    billion towards priority needs and new capabilities.
        Of the $78 billion in proposed reductions to the 5-year defense
    budget plan, about $68 billion comes from a combination of shedding
    excess overhead, improving business practices, reducing personnel
    costs, and from changes to economic assumptions. Only $10 billion of
    that 5-year total is related directly to military combat capability. $4
    billion comes from restructuring the Joint Strike Fighter (JSF)
    program, a step driven by the program's development and testing
    schedule that would have taken place irrespective of the budget top-
    line.
        The rest, about $6 billion, results from the proposed decrease in
    end strength of the Army and Marine Corps starting in fiscal year 2015,
    a decision that I will address now. Just over four 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 to 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. 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.
        As we end the U.S. troop presence in Iraq this year, according to
    the agreement with the Iraqi Government, the overall deployment demands
    on our force are decreasing significantly. Just 3 years ago, we had
    some 190,000 troops combined in Iraq and Afghanistan. By the end of
    this calendar year we expect less than 100,000 troops to be deployed in
    both of the major post-September 11 combat theaters, virtually all of
    those forces being in Afghanistan.
        That is why we believe that, beginning in fiscal year 2015, the
    United States can, with minimal risk, begin reducing Army active duty
    end strength by 27,000 and the Marine Corps by somewhere between 15,000
    and 20,000. These projections assume that the number of troops in
    Afghanistan would be significantly reduced by the end of 2014, in
    accordance with the President's strategy. If our assumptions prove
    incorrect, there's plenty of time to adjust the size and schedule of
    this change.
        It is important to remember that even after the planned reductions,
    the active Army end strength would continue to be larger, by nearly
    40,000 soldiers, than it was when I became defense secretary four years
    ago. I should also note that these reductions are supported by both the
    Army and Marine Corps leadership.
        I would note that prior to these budget decisions, the last Marine
    Commandant stated that he believed the Marine Corps was larger than it
    should be for the long term. The current Commandant, General Amos, has
    just completed a comprehensive force structure review for the post-
    Afghanistan security environment that is consistent with the out-year
    reductions projected in the President's budget plan.

                              REFORM--EFFICIENCIES

        These budget decisions took place in the context of a nearly 2 year
    effort by DOD 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.
        Last spring, we launched a comprehensive effort to reduce DOD's
    overhead expenditures. The goal was--and is--to sustain the U.S.
    military's size and strength over the long-term by reinvesting those
    efficiency savings in force structure and other key combat
    capabilities. This process culminated in my announcement last month
    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.
        As I mentioned earlier, $10 billion of that total came from
    restructuring the JSF 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 government-wide 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.

                      FISCAL YEAR 2012 BASE BUDGET REQUEST

        The President's request for the base defense budget is for $553
    billion, which represents a 3.6 percent real increase over continuing
    resolution levels--and about 1.5 percent real growth over the omnibus
    defense bill marked up by Congress last 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 intelligence, surveillance,
            and reconnaissance 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
            (BMD)--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 Advanced Medium-Range Air-to-Air Missile, 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 BMD; 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 JSF 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 JSF 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 short takeoff and
    vertical landing variant on the equivalent of a two 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. The Congress has not spoken with one voice on this matter
    and DOD has been operating this fiscal year under ambiguous guidance at
    best. Given the situation, I decided to continue to fund the JSF extra
    engine effort during this interim period to give Congress the
    opportunity to resolve this matter as part of its ongoing debate on the
    budget.
        However, this also means that the American taxpayers are spending
    $28 million a month for an excess and unjustified program that is
    slated for termination. The President, the military services and I
    continue to oppose this extra engine and, when the current CR expires,
    I will look at all available legal options to close down this program.
    It would be a waste of nearly $3 billion in a time of economic distress
    and the money is needed for higher priority defense efforts.
        This budget proposes cancelling the Expeditionary Fighting Vehicle
    (EFV) 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 health care 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; and

        While the department continues to insist on and pay for the highest
    quality health care, 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 health care 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 $5.00 per month for families in fiscal year 2012, and
    then indexed to Medicare premium increases in future years.
        We are proposing other health care 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 health care 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.
    DOD 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 National Defense Authorization
    Act for Fiscal Year 2012.

                        OVERSEAS CONTINGENCY OPERATIONS

        Finally, this budget request includes $117.8 billion in fiscal year
    2012 to support OCOs, primarily in Afghanistan, and to wind down our
    operations in Iraq--this is a significant reduction from the $159
    billion request 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 mine-resistant ambush protected
            (MRAP) vehicles, including the MRAP All Terrain Vehicles
            developed for Afghanistan; and
             $11.9 billion to replace and restore worn, damaged, or
            destroyed equipment.
             $12.8 billion for training and equipping of the Afghan
            security forces.

                                   CONCLUSION

        All told, the cumulative effect of the department's savings and
    reforms, combined with a host of new investments, will make it possible
    to protect the U.S. military's global reach and fighting strength
    despite the declining rate of growth, and eventual flattening, of the
    defense budget over the next 5 years. As a result of the savings
    identified by the Services and reinvested, our military will be able to
    meet unforeseen expenses, refurbish war worn equipment, buy new ships
    and fighters, begin development of a new long-range bomber, boost our
    cyber-warfare capability, missile defense, and buy more of the most
    advanced UAVs. But, I should note, this will only be possible if the
    efficiencies reforms and savings are followed through to completion.
        Before closing, I want to address the calls from some quarters for
    deeper cuts in defense spending to address this country's fiscal
    challenges. I would remind them that over the last two defense budgets
    submitted by President Obama, we have reformed and rebalanced the
    department's spending habits and priorities, curtailing or canceling
    troubled or excess programs that would have cost more than $300 billion
    if seen through to completion. Additionally, total defense spending--
    including war costs--will decline further as the U.S. military
    withdraws from Iraq.
        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.
        We shrink from our global security responsibilities at our peril.
    Retrenchment brought about by short-sighted cuts could well lead to
    costlier and more tragic consequences later--indeed as they always have
    in the past. Surely we should learn from our national experience, since
    World War I, that drastic reductions in the size and strength of the
    U.S. military make armed conflict all the more likely--with an
    unacceptably high cost in American blood and treasure.
        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 is time
    for us in Washington to do ours.
        Mr. Chairman, I look forward to working through this next phase of
    the President's defense reform effort with you in the weeks and months
    ahead--to do what's right for our Armed Forces and what's right for our
    country.

        Chairman Levin. Thank you very much, Mr. Secretary.
        Admiral Mullen.

    STATEMENT OF ADM MICHAEL G. MULLEN, USN, CHAIRMAN, JOINT CHIEFS
                                OF STAFF

        Admiral Mullen. Thank you, Mr. Chairman, Senator McCain,
    and distinguished members of this committee, I am honored to
    appear before you today to discuss the President's fiscal year
    2012 defense budget.
        Before I do, however, let me just echo Secretary Gates'
    comments about the very real dangers inherent in failing to
    pass this year's budget. The fiscal year 2011 CR, if carried
    forward, would not only reduce our account by $23 billion, it
    would deprive us of the flexibility we need to support our
    troops and their families.
        The Services have already taken disruptive and, in some
    cases, irreversible steps to live within the confines of the
    current CR. Steps that ultimately make us less effective at
    what we are supposed to do for the Nation. The Navy did not
    procure Government-furnished equipment for another Arleigh
    Burke class destroyer. The Army and the Marine Corps have
    curtailed or altogether frozen civilian hiring. All the
    Services are now prevented from issuing contracts for new major
    military construction projects. Some programs may take years to
    recover if the CR is extended through the end of September.
        So I urge you to pass the fiscal year 2011 defense bill
    immediately. Even at a reduced top line, it will provide us the
    tools we need to accomplish the bulk of the missions we have
    been assigned.
        Accomplishing those missions into the future demands as
    well support for the President's fiscal year 2012 proposal. As
    the Secretary has laid out, this budget, combined with the
    efficiency effort he led, provides for the wellbeing of our
    troops and families, fully funds current operations in
    Afghanistan and Iraq, and helps balance global risk through
    streamlined organization, smarter acquisition, and prudent
    modernization.
        The Army, for instance, will cancel procurement of a
    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 second fleet
    headquarters, reduce its manpower ashore, and increase its use
    of multiyear procurement for ships and aircraft, allowing it to
    continue development of the next generation of ballistic
    missile submarine, purchase 40 new F/A-18s, and 4 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. The Air Force will be able to continue
    development of the next 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
    intelligence, surveillance, and reconnaissance (ISR)
    capabilities, and more than $10 billion to recapitalize our
    rotary aircraft fleet. These funds plus those we are requesting
    to help build partner capacity in places like Afghanistan,
    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 have asked of
    them.
        We must also give them and their families everything they
    need to cope with the stress and the strain of 10 years at war.
    That is why I am so pleased with the funds devoted in this
    proposal, almost three-quarters as much as the $200 billion
    budgeted for operations and maintenance (O&M), to personnel
    housing and health care issues. The chiefs and I penned a rare
    24-star letter to Congress this week expressing our unqualified
    support for the military health care program changes included
    in this budget. We sought equity across all health care
    programs with beneficiaries and health care 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
    these increases.
        Please know that we will continue to invest wisely in
    critical care areas to include research, diagnosis and
    treatment of mental health issues and TBI, enhanced access to
    health services, and new battlefield technologies. We
    understand that changes to health care benefits cause concern
    among the 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 born the brunt
    of these wars, as well as those for whom the war never ends.
        I am convinced that we have not begun to understand the
    toll in dollars and in dreams that war extracts from our
    people. As the grandsons and granddaughters of World War II
    vets still struggle to comprehend the full scope of the horror
    those men yet conceal, so too will our grandchildren have to
    come to grips with the wounds unseen and the grief unspoken
    unless, of course, 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 seem so rarely to possess in this town.
        That brings me back to this particular budget request. With
    limited resources and two wars in progress, we should be
    prudent in defining our priorities in controlling 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 Tahrir Square
    to see the truth in that. Foolhardy would it be for us to make
    hasty judgments about the benefits, tangible and intangible,
    that are to be derived from forging strong military
    relationships overseas such as the one we enjoy with Egypt.
    Changes to those 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 buck. The $1.3
    billion we provide the Egyptian military each year has helped
    them become the capable professional force they are and, in
    that regard, has been of incalculable value.
        Of equal or greater value is increased appropriations for
    DOS and our request in this budget for the Global Security
    Contingency Fund, a 3-year pooled fund between DOD and DOS,
    that will be used to build partner 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, yes, but we must also 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 a spectrum of conflict. I have long
    said we must not be exempt in DOD from belt-tightening, but in
    truth, there is little discretionary about the security we
    provide our fellow citizens. Cuts can reasonably only go so far
    without hollowing the force. In my view then, this proposed
    budget 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 lauding
    the incredible effort of our troops overseas and their families
    as they finish one war in Iraq and begin to turn corners in
    Afghanistan. I know you share my pride in them and their
    families and your support has been superb. I know you will keep
    them foremost in mind as you consider the elements of this
    proposal. I thank you for your continued longstanding support
    of our men and women in uniform and their families, and I look
    forward to your questions.
        [The prepared statement of Admiral Mullen follows:]

                Prepared Statement by ADM Michael G. Mullen, USN

        Chairman Levin, Senator McCain, and distinguished members of the
    committee, it is my privilege to report on the posture of the U.S.
    Armed Forces.
        We remain a military at war. Yet, in the face of daunting
    challenges, our Armed Forces have successfully carried out their far-
    ranging missions over the past year. They have disrupted al Qaeda,
    improved security in Afghanistan, continued on a path to soon end the
    war in Iraq, promoted stability in the Pacific Rim, and provided
    humanitarian assistance when disasters struck. However, the cumulative
    stress of 9 years of war is growing and substantial. We will need your
    sustained support, even in the midst of fiscal difficulties, to reset
    the Joint Force needed to protect the American people.
        Our country is fortunate to be served by the best Armed Forces I
    have seen in over 42 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 Congress' and the American people's constant reminders
    that the service, heroism, and sacrifices of our servicemembers 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. 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, and the costs to our
    ability to maintain and sustain influence could be great. To do its
    part, the Department of Defense (DOD) must and will become more
    efficient and disciplined, while improving our effectiveness. We must
    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.
        Going forward our fundamental resourcing problem will be
    identifying where we can reduce spending while minimizing the
    additional risk we will have to take on. For too much of the past
    decade we have not been forced to be disciplined with our choices. This
    must change, and it already has. We have identified a number of
    efficiencies in our budget and have reduced spending, while also
    retaining the combat readiness, force structure, essential
    modernization, and personnel programs we need. We are proud of what we
    have done so far, identifying $100 billion in efficiency savings over
    the next 5 years. But we need to do more.
        Under the Secretary's leadership, DOD has conducted two
    comprehensive reviews of our requirements. First, the Quadrennial
    Defense Review surveyed the strategic environment, identified the
    strategy for the Joint Force, and determined what we need to execute
    that strategy. Second, we reviewed our spending to ensure we can
    achieve the maximum security benefit for every defense dollar. We must
    be careful to not cut defense beyond prudent levels, below which U.S.
    Armed Forces would be unable to execute our defense strategy at
    acceptable risk. Given the challenges and complexity of the security
    environment and the breadth of our national security interest, the
    defense strategy is necessarily global, wide-ranging, and highly
    responsive. This is why it is expensive.
        At about 4.5 percent of GDP, the return on U.S. defense spending
    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. However, our operations
    have come with stresses and strains as well as costs to our readiness.
    For this reason, if we are to continue to execute the missions set out
    by our strategy, we must recognize that returning 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 recently released
    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. We have made steady, albeit uneven, progress
    toward disrupting, dismantling, and ultimately defeating al Qaeda in
    the region, while remaining ready to address other challenges around
    the world.
        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 beginning
    to see signs of improvements on the ground. These forces have allowed
    us to go on the offensive with our Afghan partners, force the Taliban
    out of safe havens in its heartland of Kandahar and Helmand, 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 across the border. 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 coming in 2011 to be greater than last year. The fighting 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.
        For the success of our military operations to be enduring, it is
    critical that the ANSF be able to provide 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 NATO 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 ISAF forces 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,
    cultivating the conditions needed for conflict resolution, neutralizing
    insurgent sanctuaries in Pakistan, and countering corruption. Absent
    these conditions, we will not succeed. Despite a dramatic increase in
    our civilian presence in Afghanistan this past year, improvements in
    subnational 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.
    Successful military and security gains cannot be sustained 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 overcome years of
    mistrust and continue to lay the foundation for a true partnership with
    Pakistan. We made progress this past year by holding a third,
    productive round of Strategic Dialogues in October and by improving
    high- and mid-level coordination on security operations in the vicinity
    of the Afghanistan-Pakistan border. Equally important, we responded to
    last summer's devastating floods with timely aid and humanitarian
    relief. Our assistance eased some of the burden of the Pakistani
    military and demonstrated our enduring commitment to the Pakistani
    people.
        A key component of our partnership is to help 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. Since then, the Pakistanis
    have fought bravely and sacrificed much--losing thousands of soldiers
    in the process. We have faithfully 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
    operate unhindered from sanctuaries in Pakistan, posing a significant
    threat to NATO and Afghan forces. The aftermath of devastating flooding
    continues to place a high demand on the military. 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 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 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 (ISF) on August 31, 2010. Iraq's military and
    political leaders are responding vigorously and professionally 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 continues to improve, 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 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 U.S.-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 ISFs 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 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
    ISF fund through fiscal year 2011, equipment transfer provisions, IMET
    and other traditional security assistance programs, as well as section
    1234 authority to transfer equipment from DOD 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 be the region's greatest state-level threat
    to 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 potential
    flashpoints in the Levant and the Gulf region bear Iran's signature,
    commanding the region's and the world's attention. 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
    Egypt, Tunisia, and elsewhere. Volatility in regional affairs can often
    follow volatility in domestic affairs. However, strong military-to-
    military relationships can help reduce and mitigate the risks of
    instability.
        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 counter-proliferation, maritime
    security, counter-terrorism, air and missile defense, and emergency
    response. As with our other partnerships across the globe, our security
    assistance programs form the keystone 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
    Funding (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 nine 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 service men 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. Hundreds of thousands of our servicemembers 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, health care, 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 health care 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'' towards 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 this past year 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 servicemembers, 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 2012. After reset and reconstitution
    activities and as demand decreases, we expect to begin off-ramping some
    of our recent 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 duration 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.
    Lastly, 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. Your
    support is particularly important this year as we adjust to the impact
    of recent Continuing Resolutions on program starts and growth rates and
    to the $17.9 billion difference between the amount authorized by the
    resolutions and our fiscal year 2011 budget request--$23 billion if
    this becomes a year-long resolution.
        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.
        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, DOD, our industry leaders, and 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 and 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 interstate 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.
        This year I will publish my ``Joint Force 2030,'' which will lay
    out the operating concepts and capabilities of our future force. But we
    already know some of the contours of what that 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.
        Beyond 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. Lastly, 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 understated. 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. We have made headway by standing up U.S. Cyber Command
    (CYBERCOM) and by developing constructs for cyberspace operations, but
    more work is needed. Critical to CYBERCOM'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 cadre of future cyber warriors as we do to our combat
    specialists. We must also empower CYBERCOM 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. Lastly, 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. 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. NATO is
    also poised to release its Alliance Maritime Strategy. 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, increased engagement with
    China could 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, 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 (DOS), 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 that make resources more
    fungible across departments and programs and better integrates our
    defense, diplomacy, development, and intelligence efforts. 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 DOS 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. To this
    end, I reiterate my unequivocal support to Secretary Clinton and her
    efforts to fully resource DOS'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 DOD and other executive agencies.

                                   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 service men 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.
        As we move forward, I remain thankful to Congress for doing its
    part this year to better guarantee our Nations' security. You have
    reminded us of your important role as a steward of our Armed Forces and
    of our mutual respect for our Nation's security, values, and
    servicemembers by approving the Strategic Arms Reduction Treaty and
    repealing the Don't Ask, Don't Tell policy. I am encouraged that the
    repeal of Don't Ask, Don't Tell will enhance the connection between the
    military and the American public, particularly in our relationships
    with some of America's premier universities. We look forward to working
    with you as we implement these initiatives and as you consider other
    pending security agreements, such as the Comprehensive Test Ban Treaty
    and the United Nations Convention on the Law of the Sea. Ratification
    of these two agreements would greatly benefit our national security.
        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 Levin. Thank you so much, Admiral Mullen, for your
    eloquent statement and for your great service. Secretary Hale,
    do you have anything to add before we begin?
        Mr. Hale. No, thank you.
        Chairman Levin. We will have a 7-minute first round. Mr.
    Secretary, you indicated that we are on track to end the
    presence of our combat troops in Iraq by the end of this year
    as decided upon by President Bush. Do you continue to support
    that decision?
        Secretary Gates. Yes, I do.
        Chairman Levin. Are you planning to begin reductions of our
    troops in Afghanistan by July of this year as ordered by
    President Obama with the pace to be determined by conditions on
    the ground? Do you support that decision?
        Secretary Gates. Yes, sir.
        Chairman Levin. Can you tell us why?
        Secretary Gates. Frankly, this was the most difficult part
    of the Afghan strategy, going forward, for me to support. I
    steadfastly, as some on this committee will remember--
    steadfastly--opposed any deadlines in Iraq and so came to this
    with a certain skepticism.
        But I also realized that there is a difference between Iraq
    and Afghanistan in this respect. The truth of the matter is the
    Iraqis want us out of the country as quickly as possible. On
    the other hand, the Afghans, at least a certain number of them,
    would like us to stay forever. They live in a very dangerous
    neighborhood and having U.S. forces there to support them and
    help them often in the place of their own troops is something
    that they would like to see.
        So it seemed to me that we needed to do something that
    would grab the attention of the Afghan leadership and bring a
    sense of urgency to them of the need for them to step up to the
    plate to take ownership of the war and to recruit their own
    young men to fight. I think that the comments that you quoted
    earlier from General Caldwell has illustrated that over the
    last year or so the Afghans have, in fact, done this to a
    considerable degree, particularly in terms of their own troops.
        I must say I was very pleased to have--and I recognize the
    risk of the message we were also sending to our adversaries, to
    the Taliban. However, it seemed to me that if the Taliban was
    messaging to all of their people that we were all leaving, that
    our troops were all leaving in July, that they would be in for
    a very big surprise come August, September, and October when we
    are still hunting them down in very large numbers.
        So on balance--and I will say it was a close call for me,
    but I came to believe that it was the right thing to do.
        I must say I very much support and applaud NATO's decision
    to accept the idea of a full turnover of security
    responsibilities to the Afghans by 2014 because I think that
    bookends the July 11th statement and lets everybody know that
    we are not leaving precipitously. We are going to do this based
    on conditions on the ground, and we will continue to carry the
    fight to the Taliban.
        Chairman Levin. Thank you.
        Admiral Mullen, do you want to add anything to that? Do you
    agree basically with what the Secretary said, or do you have a
    different view?
        Admiral Mullen. No, no. I agree with that. I would say
    again a very tough part of the whole decision process.
    Certainly not the signal that we are not staying is one that is
    of great concern in that part of the region for a long time,
    and at the same time sending the message that we, in fact, are
    going to get to a point where we turn this over to them I think
    was very important. I have seen the effects of that in their
    leadership in the military and the police. It has given them a
    sense of urgency that they did not have before the decision was
    made.
        I also think, with respect to the Taliban specifically,
    with where we are right now, they have a lot more things to
    worry about in terms of just how well they are doing because
    they are not doing very well, and they know we are going to be
    there beyond July. They had a really bad year. That does not
    mean this year will not be tough. It will. It will be very
    difficult on both sides. But we have made a lot of progress
    because we have committed the resources to get this right.
        Chairman Levin. Relative to the size of the Afghan security
    forces, there is a proposal currently under consideration
    within the administration to increase the size of the ANSF by
    around 70,000 personnel. That would raise the target end
    strength for the security personnel of the Afghans to about
    378,000. Now, those forces, as I indicated, would include some
    key enablers, including intelligence and logistics.
        As I also indicated, I spoke to the President now twice on
    this subject and very strongly support the increase that is
    being considered for the reasons which you have just talked
    about and which I talked about in my opening statement in terms
    of the importance of the Afghan security forces taking
    responsibility for security. They are very much supported by
    the Afghan people and they are targeting an enemy that is
    detested by the Afghan people, to wit, the Taliban.
        Our partnering with the security forces has really improved
    many more partnerships between our forces. The training is
    intense and very successful. The operations are joint. We
    witnessed that when we were down in Kandahar.
        So my question to both of you, Secretary Gates and Admiral
    Mullen, is do you support the proposal to increase the size of
    the ANSFs as is being considered?
        Secretary Gates. First of all, I would say that we have all
    recognized from the beginning that being able to turn security
    over to Afghan forces to deal with a degraded Taliban was our
    ticket out of Afghanistan and to accomplish our goal of making
    sure we are not attacked out of there again.
        I think the issue is under discussion within the
    administration. We do have a request from the commander. The
    issue is under discussion in no small part because of the
    question of sustainability. How big an army can we afford? Let
    us not kid ourselves. Nobody else is contributing to this in
    any significant way. We have in our OCO budget for fiscal year
    2012 $12.8 billion to pay for the ANSFs. So the question is how
    long can we afford to do that, and you cannot do that
    indefinitely. So then can you look at an increased number of
    Afghan forces in the same terms as you look at our surge as
    something that is temporary until this problem gets solved, and
    then those numbers begin to go back down again. So this is one
    of the big issues that we are discussing and I expect a
    decision in the fairly near future. But this is really the core
    issue that I think is under discussion.
        Chairman Levin. Admiral Mullen, do you support that?
        Admiral Mullen. I think, Mr. Chairman, you know that the
    recommendation was teed up from somewhere between 352,000 to
    378,000. That is the range. I certainly share the concern the
    Secretary has spoken of in terms of the sustainability of this.
        You also characterized in your opening statement a specific
    recommendation from me. We are still very much in discussion
    inside the administration on where this comes out. As the
    Secretary said, I think in the near future we will have that.
    There are a lot of issues at play here.
        None of us disagree with your assertion or your statement
    about the importance of this part of the mission, training them
    and turning it over to them. It has gone incredibly well over
    the course of the last year. So how fast we can move, how much
    more there should be is still very much in discussion and the
    comprehensiveness of the issues that are associated with this
    are being reviewed as we speak, and I think it will be resolved
    here in the near future.
        Chairman Levin. The bottom part of that range you mentioned
    would represent an increase from the current goal. Is that
    correct?
        Admiral Mullen. Right. We are at 305,000 at the end of this
    year, and 352,000 would be a range from 352,000 to 378,000.
        Chairman Levin. So even if the approval were at the bottom
    of the range, that would represent about a 45,000 increase. Is
    that correct?
        Admiral Mullen. Yes, sir.
        Chairman Levin. So we save a lot of money having their
    forces there trained and equipped rather than our forces in
    terms of relative costs. I think you both would agree to that.
        Admiral Mullen. Yes, sir.
        Secretary Gates. Absolutely.
        Chairman Levin. Thank you.
        Senator McCain.
        Senator McCain. Thank you, Mr. Chairman. Secretary Gates,
    did you recommend to the President the date of July 2011 as a
    date to begin withdrawal?
        Secretary Gates. No, sir, I did not.
        Senator McCain. Did you, Admiral Mullen?
        Admiral Mullen. No, sir, I did not.
        Senator McCain. On the issue of our continued presence in
    Iraq, obviously the casualties have been reduced dramatically,
    but I think it is also obvious that the Iraqi military does not
    have a lot of the technological capability that they need to
    combat this kind of insurgency that is still out there. But
    also, if they want to have an air force, it seems to me they
    need that kind of technical assistance, a number of other areas
    of modernization of their forces. It is necessary. We are not
    talking about continued combat operations on the part of the
    United States, but they do need the kind of technical
    assistance that they will need to maintain their security. Do
    you agree with that?
        Admiral Mullen. Yes, sir.
        Secretary Gates. Yes, sir.
        Senator McCain. So is there any discussion that you know of
    going on with the Iraqi Government concerning the future role
    of the United States in Iraq besides the fact that we are now
    scheduled to leave by the end of the year?
        Secretary Gates. There have been a number of informal
    conversations with the Iraqis about this.
        Our concern, as I indicated yesterday, is principally in
    three areas: intelligence fusion, logistics and maintenance,
    and in air cover in providing the ability to protect their own
    air space. Right now, under current circumstances, as of the
    1st of January, we will have 157 DOD military and civilians,
    along with several hundred contractors, basically processing
    foreign military sales, and that would be it.
        As I have indicated, I think this government is very open
    to a continuing presence that would be larger where we could
    help the Iraqis for a period of time. I am not actually
    concerned about the stability of the country, but I am
    concerned about their ability to address these three issues in
    particular.
        But the fact is we have a signed agreement that President
    Bush signed with the Iraqi Government, and the initiative for
    this needs to come from the Iraqis. My hope is that once they
    sort out who their new defense minister is going to be, which
    has been a problem in putting together their government, that
    then we will be able to move forward with this dialogue with
    the Iraqis. I think it is little bit, frankly, in Iraq like the
    strategic agreement itself in the sense that our presence is
    not popular in Iraq. So the politicians, I think, the leaders
    understand the need for this kind of help, but no one wants to
    be the first one out there supporting it, very much like the
    security agreement itself. So we will continue that dialogue,
    but at the end of the day, the initiative has to come from the
    Iraqis. They have to ask for it.
        Senator McCain. I take it you were pleased with the House's
    decision yesterday on the--what did you call it--the additional
    engine?
        Secretary Gates. The extra engine.
        Senator McCain. Extra. Excuse me. Yes, extra engine. I take
    it you would support efforts over here to do the same.
        Secretary Gates. Absolutely.
        Senator McCain. I share your optimism about our success in
    Afghanistan, which has confounded many of the critics. I also
    share your view that there is a long way to go.
        But do you share that same optimism about Pakistan? There
    have been some very serious disruptions, obviously, with this
    American citizen who is now being held in prison, the whole
    role of private contractors, the continued allegations of
    relationships between Interservices Intelligence (ISI) and the
    Taliban. I am deeply concerned about the situation in Pakistan,
    which obviously is vital to the sustained and long-term success
    in Afghanistan.
        Secretary Gates. Let me just say a word or two and then
    turn to the chairman because he has spent a lot more time in
    Pakistan in the last few years than I have.
        I worry a lot about Pakistan. It has huge economic
    problems. Those problems were significantly aggravated by the
    terrible flooding last year. They have a serious internal
    terrorism threat that is seeking to destabilize Pakistan
    itself. I worry that some of those terrorists might try and
    provoke a conflict between Pakistan and India. So I think that
    there is a lot to be concerned about with Pakistan.
        Senator McCain. There are still sanctuaries in Pakistan.
        Secretary Gates. That said, there are still the
    sanctuaries.
        But I will say the Pakistanis have 140,000 troops on that
    border. These things improve step by step, but not as quickly
    as we would like, but we get to a better place over time. If
    you had asked me 2 years ago if the Pakistanis would withdraw
    six divisions from the Indian border and put them in the west,
    I would have said, impossible. If you would have asked me if we
    would begin coordinating operations on both sides of the border
    with Afghan and ISAF forces on the one side and the Pakistanis
    on the other, I would have said, that is very unlikely.
        They are chipping away at some of these sanctuaries. It is
    very important what they have done in south Waziristan and
    SWAT, but it is a mixed picture, and it is something we just
    need to keep working at. The chairman has worked at it about as
    hard as anybody.
        Admiral Mullen. On the military side, Senator McCain, I am
    more optimistic than I have been. I mean, the Secretary talked
    about the cross-border coordination, the work that we have done
    with them. But on the political side, the economic side, at
    least from my perspective, it looks worse than it has in a long
    time.
        So I share your concern. The vector is going in the wrong
    direction overall for the country. We are very unpopular there.
    You have seen that. It gets highlighted in each crisis. We
    provided extraordinary support for the floods last year--we,
    the military. Then that registers in a popular way shortly. You
    have an incident like the one we are going through right now,
    and our popularity is back down in very small numbers.
        So I do think we have to stay at it. It is where lots of
    terrorist organizations head, not just al Qaeda. They are more
    combined in their efforts than they have ever been. So I do
    think we have to continue to work at it, but I am concerned as
    I have ever been.
        Senator McCain. Thank you.
        Mr. Chairman, just briefly. Anything more on the Wikileaks
    investigation?
        Secretary Gates. Sir, after our last hearing, I went back
    and I had been told that I had to keep my hands off of it
    because of the criminal investigation. But I have been able to
    narrow an area that I have asked the Secretary of the Army to
    investigate in terms of procedures and the command climate and
    so on that has nothing to do with the accused individual, but
    to see what lapses there were where somebody perhaps should be
    held accountable.
        Senator McCain. Thank you.
        Thank you, Mr. Chairman.
        Chairman Levin. Thank you, Senator McCain.
        Senator Lieberman.
        Senator Lieberman. Thanks, Mr. Chairman. Thanks, Secretary
    and Chairman, for your service, for your leadership, for your
    testimony today.
        I believe that the President's budget for DOD is a budget
    that recognizes the times of economic stress we are going
    through particularly with regard to our national deficits and
    debt but also meets our defense needs. I appreciate, Mr.
    Secretary, your advocacy of the budget but also your warning
    that we have to be very careful about cutting too deeply into
    our defense budget.
        I have noticed some change of terminology around here which
    concerns me, which traditionally, as we have discussed the
    various components of the Federal budget, when we get to
    discretionary spending, we distinguish between defense and non-
    defense spending. The defense spending had a more protected
    status, if you will, and I think it was for a good reason,
    which I believe I know you and all of us on the committee
    believe, which is that we have no greater responsibility in our
    national government than to protect our security. It is the
    underpinning of our freedom and our prosperity. So we have to
    be very cautious about cutting below a level that we can
    continue to fulfill that--well, it is really a constitutional
    responsibility to provide for the common defense.
        I have noticed now the difference between defense and non-
    defense discretionary spending in terminology seems to be
    fading, and I think we do that at our peril. So it does not
    mean, obviously, that what everybody at the Pentagon wants we
    are going to say yes to or that we can tolerate wasteful
    spending. I know the two of you have been very aggressive about
    that in the programs you have set forward.
        But I hope as we go forward in these very difficult
    economic times with a lot of stress politically on everybody
    here, that we keep that primary responsibility we have for the
    national security in mind.
        Frankly, without going any further on it, I think for those
    of us who are committed to doing everything we can to continue
    to give you the resources and the men and women in uniform to
    protect our security, it compels us to look much more directly
    and act more boldly on the most expanding part of our national
    deficit and debt, which is the entitlement programs that are
    non-defense.
        So with that invocation, I just want to pick up on what
    Senator McCain said earlier about the input we got at the
    Munich security conference this year. It was quite significant
    to me on Afghanistan.
        The first was I thought there was a real change in opinion
    from our European colleagues, that we really are making
    progress in Afghanistan, and they feel good about it. Normally
    we have been concerned that they would leave the fight before
    we did. They turned the tables on us this time, and they said
    we are committed now through NATO to the 2014 exit date from
    Afghanistan. We are worried that you in America are going to
    begin to leave earlier, and they still have in mind,
    notwithstanding all the transition to 2014, this July 2011
    date. So I would ask you if you would care to respond to that,
    and of course, part of that is just to urge that whatever we do
    in July 2011, be mindful of the effect it will have not only on
    the Afghans and the region but on our European allies.
        Secretary Gates. I would just make two comments.
        First, I had a NATO defense ministers meeting last December
    and it was really quite extraordinary because I do not think I
    have ever seen so many ministers so optimistic about how things
    were going in Afghanistan. I did not encounter a single one who
    was pessimistic or who felt that the effort was for naught and
    that we were not headed in the right direction. So there was a
    level not just of sort of grudging support but a general
    feeling of cautious optimism that we finally had all the parts
    right in this thing, the civilian strategy, the military
    strategy, had the resources there.
        When I took this job there were 12,000-13,000 Europeans or
    other partners in Afghanistan. There are now 50,000. They have
    really stepped up to the plate. Now, we are carrying the bulk
    of the burden, but they are doing a lot as well.
        By the same token, one of my missions in next month's
    defense ministers meeting is to ensure that in fact whatever we
    do in July does not start a rush for the exits on the part of
    our allies, and I would say particularly those who have the
    largest contingents there. There are a lot of countries that
    are making a real contribution, but they have fairly limited
    numbers of people there. I think that our principal allies and
    those who are the principal contributors are probably okay, but
    I need to be able to reassure them that this is going to be
    conditions-based and that it will be gradual.
        The other point I will make to them is it should not be
    mathematical. If we take out 1 percent or 2 percent of our
    troops, or whatever the number is, that does not mean everybody
    gets 2 percent because in some of them 2 percent--when you have
    only 10 guys there, you have a problem. So I think that we need
    to ensure that their forces are taken out on a conditions-based
    arrangement as well. I think this is the challenge for General
    Petraeus.
        The way I think he is thinking about it is that when we
    turn over security responsibility, sort of three things will
    happen to the foreign troops that are there. A few will stay to
    continue to provide a strategic overwatch and safety net, if
    you will. Some will be reinvested in the neighboring district
    where the security is not as good yet, and then some portion
    would be allowed to come home. So I think that that is the
    approach that he is taking, and frankly I have not seen from
    the defense ministers, at least, signs of nervousness or a
    feeling that they would be compelled to make significant
    withdrawals themselves before the timing that they have already
    announced.
        Senator Lieberman. I appreciate that reassurance. What you
    found at the defense ministers meeting is exactly what we found
    in terms of the cautious optimism at the Munich conference.
        I appreciate it. I think you are right on target in your
    focus for the next meeting coming up because it sounded to me
    as if they need that reassurance. I will just tell you that one
    of the people high up in one of our major NATO allies' foreign
    ministry said that they were worried that if we withdrew a
    small proportion of our troops in July, that there would be a
    tendency of their political community to take it in absolute
    mathematical numbers. So for us it is only 1 percent, but let
    us say it is 1,000. They are worried that at home their
    parliament is going to say, well, how about taking out 1,000 of
    our troops as a result.
        Secretary Gates. The interesting thing about particularly
    the Europeans who are in Afghanistan--most of them are in
    coalition governments and most of their publics are opposed to
    their participation.
        Senator Lieberman. Right.
        Secretary Gates. I think it needs to be said these
    governments have shown some real political courage in being
    willing to commit to the alliance and to Afghanistan the forces
    that they have in the absence of political support at home.
        Senator Lieberman. I could not agree with you more.
        Final word. My time is up. But the other thing that I found
    very heartening is that our NATO allies, particularly following
    the meetings you have referred to, have stepped back and
    understand not just that we are doing better in Afghanistan,
    but this is the first time NATO has gone to war. A failure in
    this first time at war, interestingly outside of the geographic
    area of NATO, would have terrible consequences for NATO's
    credibility, and NATO's credibility at this uncertain,
    dangerous time in the world is critically important to the
    stability and security of a lot of other places far from the
    United States, Europe, and Afghanistan. So I think we are at a
    point where the alliance is really moving together in a very
    positive way.
        I thank you very much.
        Thank you, Mr. Chairman.
        Chairman Levin. Thank you, Senator Lieberman.
        Senator Inhofe.
        Senator Inhofe. Thank you, Mr. Chairman.
        I was glad to hear that statement, Secretary Gates, what
    you said about the 17,000 to 50,000. Somehow I had missed that.
    But I am glad to know that more are coming to the table.
        Senator Hagan and I spent New Year's Eve with the troops in
    Afghanistan and had a chance to spend a little time to get out
    to the training area. When we talk about what is going to
    happen in reduction and so forth, a lot of that is going to be
    dependent on the success and the training of the Afghan
    National Army and how they are coming. I was very pleased.
        Senator Hagan and I were both surprised at the Kabul
    military training center, the segregation of infantry and
    artillery and how they are doing that on two sides of the
    mountain. We are used to seeing how we do it in this country. I
    was most impressed with their training.
        To accommodate some of these potential discussions on
    withdrawal, I would just like to know your opinion as to how we
    are coming with that training. Is it ahead of where you thought
    it would be, or are you as impressed as we were when we went
    over and witnessed it?
        Secretary Gates. I think we both should address that
    briefly.
        But I would say that what General Caldwell has done in the
    last year or so I would characterize as nearly a miracle. It is
    not just the numbers. A year ago 35 percent of the recruits or
    the new soldiers, Afghan soldiers, qualified on marksmanship.
    It is now in the 90s. They have a literacy program going for
    officers, for noncomissioned officers (NCO), and even for some
    junior enlisted that is going to make a huge long-term
    difference in Afghanistan. So I think that the quality of what
    they have been doing and the speed with which they have been
    doing it and the ability to accommodate the significant
    increase in the numbers being trained and getting quality
    training has just been really quite extraordinary and I think
    has played a big part in the progress that we have had over the
    last year.
        Admiral Mullen. I would say very briefly, sir, I think the
    number I saw the other day was 24,000 trainees in training
    right now. That number was minimal a year to 2 years ago, I
    mean, literally in the hundreds because all you did was you
    recruit and place a soldier or a policeman in the field.
        What also gets lost here is that there has been an
    extraordinary jump on the police side as well behind the
    military, as it was in Iraq. So we are making a lot of progress
    there.
        I would just commend General Caldwell and all his people
    because they put in the structure. You have seen for yourself
    the kind of training. It has really been an exceptional effort
    over a very short period of time.
        Senator Inhofe. Yes. We even had an opportunity to talk to
    some of the ones who are being trained to be trainers. They are
    excited. They are looking at careers. I was very shocked and
    very pleased.
        As you know from previous meetings, I always bring up the
    1206, 1207, 1208, Commander's Emergency Response Program and
    Combatant Command Initiatives Fund. These are programs that I
    have been very enthusiastic about and I think have been very
    successful. I was pleased that the 1206 funding was increased
    in this budget request from $350 million to $500 million.
        The thing that I am confused about, because I am not sure
    what it means, is this pooled funding. When I first read about
    this, I thought is this returning back to what we were trying
    to get away from, in other words, having more of the
    concentrated commanders in the field, having greater authority,
    and this type of thing. How does the pooled funding work? Would
    either one of you like to share that with me?
        Admiral Mullen. This is actually a $50 million
    appropriation, should it be approved, initially DOS money, with
    an opportunity to reprogram upwards of $450 million between us.
    So there is no specificity that says how much DOS would
    reprogram at this point or how much DOD would.
        What is really critical here--and this goes back to your
    support of 1206, 1207, and 1208--is it gives us the flexibility
    and the ability to meet an emergent sort of this year maybe
    even this month need which, heretofore, we just have not been
    able to do. We see it year after year in country after country.
    So it actually is very consistent with what has happened in
    1206, 1207, and 1208 in terms of the strategic thrust, although
    some of the mechanisms will be a little different.
        Senator Inhofe. That is good. I am glad to hear that
    because I did not want to dilute that program that I think has
    been very, very successful.
        Recently we have heard more and more about China and Russia
    and how much further advanced they are on the fifth generation
    of fighters, the T-50, J-20, or whatever that is over there.
    The decision that we had made to move backwards a little bit or
    move the 124 F-35s out of this 5-year period or delay them--was
    that decision made before we realized that they were perhaps a
    little further along in developing fifth generation fighters in
    other countries that might be sold eventually to people who
    could be our enemies?
        Secretary Gates. I think that, first of all, the way I have
    characterized it, Senator, is that when I was in China,
    President Hu rolled out the red carpet and the People's
    Liberation Army rolled out the J-20.
        They may have flight-tested it a half a year, a year or so
    before our intelligence estimated they would, but the truth is
    it will be quite a while before they have any numbers. The
    latest estimates on the Chinese side would be that by 2020 they
    might have 50 deployed and by 2025 maybe a couple hundred. We
    will have 325 F-35s by the end of 2016, even under the revised
    program, which with the F-22s gives us over 500 fifth
    generation aircraft. We will have 850 F-35s by 2020 or fifth
    generation aircraft by 2020 and about 1,500 by 2025. So there
    is still a huge disparity in terms of these aircraft.
        Frankly--and I do not want to get into it too much in an
    open hearing--this is their first low-observable aircraft.
    Given the challenges that we have had--and we have been at this
    now better than 20 years, frankly, I think they have a long
    road in front of them before this becomes a serious operational
    aircraft in any numbers.
        Senator Inhofe. I am glad to hear that.
        My time is expired but I want to ask a question for the
    record, and it might be more appropriate to respond to it for
    the record. You commented about your visit to the Far East, and
    at that time you were saying North Korea will have developed an
    Intercontinental Ballistic Missile within 5 years. We hear
    about our intelligence estimate talking about Iran's
    capabilities in 2015. I would like to have an update on those
    estimates for the record, if you would do that.
        Thank you, Mr. Chairman.
        [The information referred to follows:]

        The Defense Intelligence Agency (DIA) is coordinating with Senator
    Inhofe's staff to provide the Senate with a briefing on the latest DIA
    and National Air and Space Intelligence Center threat assessments.

        Admiral Mullen. Mr. Chairman, if I could. Back to just a
    specific on the F-35, the Secretary's decision to move those
    aircraft to the right--those are short takeoff and vertical
    landing aircraft. I actually think----
        Senator Inhofe. Those are the Marine version?
        Admiral Mullen. Yes. That actually puts us in a better
    position to deliver the Navy and the Air Force version sooner
    because those two versions are actually doing pretty well in
    testing and development. So I thought it was a wise decision
    and to give the Marine Corps, give us--give the Navy an
    opportunity to work on this airplane for the next 2 years. It
    was at the front of the queue and actually it was holding up
    the development of the other two airplanes.
        Secretary Gates. I would just say that the first Air Force
    variant of the F-35 will go to Eglin in May and others will
    flow through September to begin training, and the Navy variant
    will be at Eglin in fiscal year 2012.
        Senator Inhofe. That is very helpful. Thank you.
        Chairman Levin. Thank you, Senator Inhofe.
        Senator Ben Nelson.
        Senator Nelson. Thank you, Mr. Chairman, and thank you,
    gentlemen, for your service to our country.
        Secretary Gates, for the past several years, the need for a
    new U.S. Strategic Command (STRATCOM) headquarters has been
    under consideration. It has been apparent and identified as a
    requirement. So I have been extremely pleased with the progress
    made toward addressing this vital need. The existing facility's
    shortcomings and problems have put STRATCOM's mission and its
    personnel at some risk. STRATCOM's existing headquarters was
    built in 1957 and it has weathered 5 decades with little
    renovation.
        So for any combatant command, of course, these problems
    would be challenging if they continue to have electrical
    service and cooling water and other problems, but for STRATCOM,
    these facility maintenance matters are just untenable and they
    stand in the way of some of the most important national
    security missions.
        General Chilton, the retiring commander of STRATCOM, said
    it best, that the STRATCOM headquarters is the nuclear command
    and control mode for the United States and that we must make
    the appropriate investments.
        So I am very pleased that this budget represents that and
    wonder if you might have any comments on it and, as well,
    Admiral Mullen.
        Secretary Gates. I just have one comment and that is
    Admiral Mullen and I were there a couple of weeks ago for the
    change of command at STRATCOM, and the building looks a lot
    like it did when I walked in as a 2nd lieutenant in 1967.
        Senator Nelson. The electrical systems are probably the
    same as well. But thank you very, very much. In addition to the
    concerns that have been raised about continuing our
    relationships in the Middle East right now, the fiscal year
    2012 budget presumes that the military, in terms of Iraq, will
    depart on December's plan. We have had a lot of discussions
    here about whether or not it is important to do that or
    appropriate to do that and what kind of assistance and advice
    will we continue to provide the Iraqis. But as we are looking
    at our budget and trying to find ways to economize in DOD, is
    there a plan to have the Iraqis pick up more of the costs of
    any retention that we might have of our personnel there to
    provide the advice and the training that will be required?
        Secretary Gates. Not at this point, Senator. To tell you
    the truth, we have not really done much in the way of the
    budget looking beyond the 31st of December because we are
    assuming that we will come to December 31 and that will be it.
    So we would have to revisit that issue.
        I think we would have to take a look at whether the Iraqis
    could do that. They are running about--even with the price of
    oil where it is, they are devoting about 14 percent of their
    gross domestic product (GDP) to security, and they are running,
    I think, a $15 billion or thereabouts--$10 billion to $15
    billion deficit this year. We should be so lucky. But we really
    have not gone down that road yet.
        Senator Nelson. But if we are in a position to where we are
    requested and we make the decision to continue some
    relationship there, would it be possible to look at that from
    the standpoint of the budget? It is not that I want to drive
    their budget into the ditch any more than I want ours to
    continue to be there. We have to find a way to balance it for
    them and for ourselves as well.
        Secretary Gates. I understand, and we will certainly take
    that into account.
        Senator Nelson. I appreciate that.
        In terms of ISR assets, DOD has put forth spending about
    $4.8 billion on procuring another 110 airframes for the budget.
    Can you speak about what the infrastructure and personnel will
    cost? Maybe this is for Admiral Mullen. The personnel costs and
    the infrastructure costs for adding these additional ISR
    assets.
        Admiral Mullen. I would have to get back to you with a
    detailed response.
        Senator Nelson. Sure.
        [The information referred to follows:]

        Increasing our intelligence, surveillance, and reconnaissance (ISR)
    capabilities in support of combat operations continues to be one of our
    highest priorities. The fiscal year 2012 budget continues development,
    integration, and expansion of ISR enhancements to unmanned platforms to
    deliver critical command/control, persistent ISR, and firepower to U.S.
    and coalition forces. These systems cover the full spectrum of
    capabilities from high-altitude, long-endurance capabilities to hand-
    launched, tactical systems.
        The fiscal year 2012 budget requests $4.8 billion to invest in the
    following ISR capabilities:

             Procure additional Global Hawks (RQ-4)

                     Three aircraft/$1.7 billion

             Maximum Reaper (MQ-9) production

                     48 aircraft/$1.4 billion

             Maximum Gray Eagle (MQ-1) production

                     36 aircraft/$1.0 billion

             Accelerate unmanned maritime unmanned aerial vehicle
            (UAV) (MQ-8 Fire Scout)

                     12 aircraft/$0.3 billion

             Other UAVs: Shadow, Raven, Small Tactical Unmanned Air
            System

                     $0.3 billion

             Procure/sustain MC-12

                     12 aircraft/$0.3 billion

        Each of these investments apply to current programs of record and
    are either in-line with current acquisition strategies or an
    acceleration of existing plans. Each system fits into a planned
    architecture to meet commitments to our warfighters and the Services
    have incorporated the necessary infrastructure and personnel costs to
    support their integration into operations.
        Based on contracting and production schedules, the fiscal year 2012
    investments listed above will deliver and field approximately 1 to 2
    years after receipt of funding. The personnel and infrastructure costs
    will be incurred over several fiscal years as soldiers, sailors,
    airmen, and marines are trained and assigned to maintain and operate
    these systems.
        To match the growth in capacity, balanced investments in operations
    and support (O&S) include:

             An increase in RQ-4 Global Hawk personnel and O&S
            funds by 21 percent in fiscal year 2014 from the fiscal year
            2012 level.
             An increase in MQ-9 Reaper personnel and O&S funds by
            55 percent in fiscal year 2014 from the fiscal year 2012 level.
             An increase in MQ-8 Fire Scout O&S funds by 101
            percent in fiscal year 2014 from the fiscal year 2012 level.
            These funds include contractors operating in conjunction with
            on-board military personnel.
             An increase in ``Other'' UAV personnel and O&S funds
            by 15 percent in fiscal year 2014 from the fiscal year 2012
            level.
             The MQ-1C Gray Eagle is integrated into the Army Force
            Generation Equipping Strategy. Overall, the Military
            Construction costs to field the entire complement of systems
            (not only the fiscal year 2012 systems) totals $522 million.

        Admiral Mullen. Certainly the infrastructure and personnel
    costs are incorporated into the budget and that is how the
    services actually bring it forward. It has become more and more
    significant.
        But I would also say, Senator Nelson, it has just become
    such a critical part not of just what we are doing now but what
    we are going to do in the future. We oftentimes think about the
    future sort of out there by itself, what is going to happen in
    5 or 10 years. One of the things that has happened in these
    wars is there are a lot of capabilities that we have developed,
    rapidly field that will be every bit as relevant in a few years
    as they are right now. ISR probably leads the pack with respect
    to that.
        Senator Nelson. In that regard, we are living the future
    right now as we see it develop around us, and I hope that as we
    do that, we will continue to find a way to do it, obviously, as
    efficiently and as cost effectively as possible but not be
    short on personnel simply because we may end up with fewer
    pilots, but the piloting is obviously done a different way. So
    I hope that you will consider that.
        Also, Secretary Gates, in growing the forces and the
    capacity of the ANSFs, we have talked about the numbers
    increasing and you mentioned sustainability of the numbers and
    the range from the lower and we are adding 40,000 and looking
    at a higher range of 378,000. Can we establish what we think
    would be a sustainable number as we look forward? Because,
    obviously, that is a pretty sizable percent of the population.
    Now, it is good to have people working. There is no question
    about it--fully employed. But do we have some idea of what the
    Afghans can support and sustain into their future? Secretary
    Gates?
        Secretary Gates. The sustainability issue, at least for the
    next number of years, is more what the United States can
    sustain because the Afghans' ability to sustain a military
    force would be a fraction of the size of what they already
    have, much less what they may increase to, which is why I think
    of the size of their force more in terms of a surge like ours
    so that once we have defeated the Taliban or degraded them to a
    point that a smaller Afghan force can keep control where it is
    almost like the Afghan local police or smaller numbers of the
    Army can manage to keep the Taliban or others inside the
    country down to the point where they are not a threat to the
    stability of the government or to the people of Afghanistan.
    They cannot afford a force the size that they already have. So
    I think the only way we can think of it or the way we ought to
    think of it is something that we would be willing to support
    for a few years.
        Senator Nelson. In the short term?
        Secretary Gates. Yes, for a few years. But then it seems to
    me, particularly if there is a political solution to this war,
    as we all believe there needs to be ultimately, that they could
    get by with a significantly smaller force. We probably would
    have to help them even then, but it would be a dramatically
    smaller bill than it is now. If it is a smaller bill, we may be
    able to get other countries to help us as well.
        Senator Nelson. Hopefully, the NATO support would extend to
    providing help for the sustainability into the future because
    until we secure the country, a political solution is going to
    be very difficult.
        Secretary Gates. Just as an example, I mean, the Japanese
    basically pay the salaries for the Afghan national police. That
    is their contribution. They do not have troops there, but that
    is not a small thing that they are doing.
        Senator Nelson. Thank you. Thank you, Mr. Chairman.
        Chairman Levin. Thank you, Senator Nelson. Senator Ayotte?
        Senator Ayotte. Secretary Gates and Admiral Mullen, I want
    to thank you for being here today and commend both of you for
    your long and distinguished service to our country.
        Before I ask any questions, I just want to say that I
    believe our Government's most important responsibility is to
    protect the American people. This is a deeply held personal
    belief for me. I am from a military family. My husband is in
    the Guard and is a veteran of the Iraq war. So I applaud your
    efforts to ensure that our brave men and women in uniform have
    everything that they need to fight and win our wars. Supporting
    our men and women in uniform is certainly a solemn and sacred
    responsibility that we have.
        As we draw down in Iraq and our country confronts a fiscal
    crisis, I think it would be a mistake to drastically cut the
    size of our military or our readiness.
        That said, you appreciate--and I know based on Admiral
    Mullen's comments--that we face a fiscal crisis in this country
    and that we face great challenges in balancing the need to
    protect our country and to make sure that we serve and provide
    for our troops with the need to cut back in all areas. I want
    to commend Secretary Gates for proactively going forward to
    look for efficiencies and billions of dollars in savings. As a
    new member of this committee, I want you to know that I look
    forward to working with DOD to bring reforms forward and
    efficiencies to fruition and also to look for additional cost
    savings.
        I have a question based on having the appearance of
    Secretary Vickers the other day for his nomination, and that is
    that he testified that 25 percent of the detainees that are
    being released from Guantanamo are going back into theater and
    engaging in hostilities again. I wanted to ask Secretary Gates
    whether that is an accurate figure and how that is informing
    our release decisions from Guantanamo.
        Secretary Gates. That is about the right figure based on
    the latest information that I have.
        I would say that we have been very selective in terms of
    returning people. One of the things we have discovered over
    time is that we are not particularly good at predicting which
    returnee will be a recidivist. Some of those that we have
    considered the most dangerous and who have been released or who
    we considered dangerous and potentially going back into the
    fight have not, and some that we evaluated as not being much of
    a danger or much of a risk we have discovered in the fight.
        Then I would say that the NDAA of Fiscal Year 2011 imposes
    some additional restrictions on who we can release, and
    Congress put me in the uncomfortable position of having to
    certify people who get returned, that they are no longer a
    danger. So I will tell you that that raises the bar very high
    as far as I am concerned.
        Senator Ayotte. One of the concerns that I think this
    raises as well is if we are able to capture a high-value target
    in an area where we may not currently be engaged in a direct
    conflict, where are we going to put these individuals if the
    President still goes forward to attempt to close Guantanamo?
        Secretary Gates. I think the honest answer to that question
    is we do not know if we capture them outside of the areas where
    we are at war and are not covered by the existing war
    authorizations. One possibility is for such a person to be put
    in the custody of their home government. Another possibility is
    that we bring them to the United States. After all, we have
    brought a variety of terrorists to the United States and put
    them on trial in Article III courts here over the years, but it
    will be a challenge.
        Senator Ayotte. Would that cause you to make a different
    recommendation to the President on closing Guantanamo given the
    challenges that it presents?
        Secretary Gates. I think we are in the position, frankly,
    that the prospects for closing Guantanamo, as best I can tell,
    are very, very low given very broad opposition to doing that
    here in Congress.
        Senator Ayotte. But we also are not using it to add
    additional detainees there that might be appropriate for
    holding at Guantanamo either, are we?
        Secretary Gates. Not at this point.
        Senator Ayotte. I wanted to ask you about the reset
    equipment for combat within the budget. I am concerned about
    the lower funding levels proposed in fiscal year 2012 to reset
    equipment for combat units returning from deployments. I wanted
    to get your thoughts on that part of the budget.
        On September 11, 2010, the New Hampshire National Guard
    deployed the largest number of guardsmen and women since World
    War II for our State, and these troops will be returning in the
    second half of this year. I know that reset is more than just
    buying equipment. It includes manning time and time to train.
    So restoring readiness levels takes time. But I also know that
    the National Guard units have historically been at the end of
    the food chain in getting new equipment and resources for
    training. This can impact their readiness for Federal missions
    but also can impact their responsiveness to State emergencies.
        So with this in mind, how confident are you in that the
    amounts included in the fiscal year 2012 budget for the
    services for reset will allow all units in the Active and
    Reserve components to be able to address the critical readiness
    needs that we have going forward?
        Secretary Gates. One of the things that has happened over
    the past 4 years that I am very proud of is that when I assumed
    this position, the historic equipment on hand percentage across
    the board for the National Guard was about 70 percent, and when
    I took this job, it was at about 40 percent. It is now on a
    national basis at about 77 percent. What has changed now
    compared with the past, just to your point about the food
    chain, is the Guard now is getting the same kind of equipment
    that the Active Force has. So they are getting much higher
    quality equipment. At the same time, they are getting more
    equipment.
        How fast we can do this for units that are coming back from
    conflict is going to be a challenge because it is a lot of
    money. One of the concerns that I have about the CR is that
    there is some reset money in there, and it is going to be very
    difficult for us to execute. One of the things that we will
    have to do, if we get a year-long CR, we will have to get
    pretty close to shut down the recapitalization of the humvees
    at Red River and Letterkenny depots. So all of these things are
    tied together, but it is going to be a challenge. Until a year
    or 2 ago, we would have testified to you that we will need
    reset money for at least a couple of years after the conflict
    ends, and we think that is probably now a longer period of
    time, longer than 2 years.
        The problem is that when the conflicts end, that reset
    money for the most part has come out of these OCO budgets, and
    finding the dollars for a significant reset after the end of
    the conflict, if we are not getting any OCO funding, I think
    will be a big challenge for us.
        Senator Ayotte. I know that my time is up.
        I thank you very much, Secretary Gates and Admiral Mullen.
    I appreciate it.
        Chairman Levin. Thank you, Senator Ayotte.
        Senator Akaka.
        Senator Akaka. Thank you very much, Mr. Chairman.
        Aloha, Secretary Gates and Admiral Mullen and Secretary
    Hale. I want to thank you all for your leadership and service.
    Secretary Gates, if this is your final budget testimony before
    this committee, I would like to say that I appreciate the
    excellent job that you have done leading our military. I want
    to also thank the brave men and women of our armed forces and
    their families for their service.
        Secretary Gates and Admiral Mullen, I applaud the steps
    taken to care for our servicemembers' mental well-being. I
    believe that taking care of those defending our Nation is a
    responsibility and not a choice. I also believe that the
    healing process should also account for families as well.
        I am interested in hearing your thoughts on the progress
    DOD is making in helping families as a whole as they work
    through the challenges of PTSD, TBI, and other stress-inducing
    situations for families.
        Admiral Mullen. Thanks, Senator Akaka. I know that you have
    focused on these issues, and all of us greatly appreciate that.
    I think we are in a much better position than we were a few
    years ago, but we also have a much better understanding of the
    size of the problem.
        I will speak specifically to families first. While early on
    there was a great deal of focus on spouses, in terms of the
    stress that they have undergone, what I have seen certainly
    over the course of the last couple years is an increasing
    awareness and understanding of the need to address the whole
    family, including the kids, as they have been stressed. I mean,
    if you are in a high-end, high-rotation unit and you were 10
    years old when these wars started, and you had mostly your dad,
    but mom and dad, on their fourth or fifth deployment, you just
    went off to college and you basically almost have not seen your
    dad. There are issues associated with that that I think we are
    going to have to deal with in the long run. A 15-year-old in
    one of these military families--their whole life has been at
    war. That is something a lot of us have never been through.
        So there has been an extraordinary amount of effort placed
    in terms of prioritizing inside each of the Services to get at
    the major issues. It is not just the stress and the mental
    stress. We are short health care providers, although we are up
    dramatically from where we were in 2001. We were in the 1,000
    range in 2001. We are over 7,000 now. We have TRICARE health
    providers that are almost 50,000, but we are still short. The
    country is short, and we have to figure out a better way to
    break through, to join with the VA, another committee I know
    that is near and dear to your heart as chairman, and work
    together with the VA and, quite frankly, with communities
    throughout the country to get at this.
        The last thing I would say is the initiative that the First
    Lady has undertaken and announced with the President about a
    month ago, an extraordinarily important issue focused on
    military families across a number of issues to include this--it
    is wellness. It is education. It is employment. It is child
    care--signed up by all the Secretaries from every department,
    16 of them, is a huge step forward in terms of giving this
    visibility in a way that we just have not had before.
        So I am more optimistic than I have been, but we have some
    substantial steps that need to be taken.
        Secretary Gates. I would like to just mention two things,
    Senator. One is one of the significant changes, I think, we
    have made in the last 3 years or so--we have moved virtually--
    we used to pay for--most of these family programs associated
    with those who are deployed and the challenges that they have
    been facing have been in the supplementals and in the OCO
    funding. We have over the last 3 years moved virtually all of
    that money into the base budget so that long after the war
    funding ends, we will be able to sustain these family-oriented
    programs. This year, I think we have $8.3 billion in the budget
    for these programs, and that is about a $200 million increase
    over fiscal year 2011.
        Senator Akaka. I know your concern goes back also to the
    TRICARE program probably needing more resources than they have
    had before.
        Secretary Gates, I believe that an electronic medical
    record system would be very beneficial to current and former
    military families and members, as well as the health care
    providers. Mr. Secretary, can you provide an update on where
    DOD is on electronic health records?
        Secretary Gates. We will get you an answer for the record
    that has the details.

        Military Health System (MHS) medical facilities use the Armed
    Forces Health Longitudinal Technology Application (AHLTA), the
    Department of Defense's (DOD) current electronic health record (EHR)
    capability, as part of a family of systems. AHLTA generates, maintains,
    stores and provides secure online access to comprehensive outpatient
    records. The current DOD EHR family of systems forms one of the largest
    ambulatory EHRs in the world, with documentation of an average of
    145,000 clinical encounters each day. The MHS is currently executing a
    plan to improve system speed, operational availability and the user
    interface to enhance provider satisfaction until interagency EHR (iEHR)
    capabilities are delivered. Executing this plan allows MHS to meet
    providers' near term needs, while better preparing our applications and
    supporting infrastructure for the EHR Way Ahead.
        The DOD EHR Way Ahead Analysis of Alternatives (AoA) is ongoing.
    Because DOD and the Department of Veterans Affairs (VA) are engaged in
    concurrent EHR modernization efforts, significant opportunities for
    collaboration exist. To achieve common objectives, a DOD-VA EHR Senior
    Coordinating Group has been established. The group, which consists of
    representatives from DOD, VA, and the White House, is charged with
    reaching agreement on a proposed approach to a DOD-VA iEHR.
        The Senior Coordinating Group established six teams to reach
    agreements on proposed courses of action. The six teams are the
    Enterprise Architecture, Data Interoperability, Business Process,
    Systems Capabilities Presentation Layer, and Mission Requirements and
    Performance Outcomes Teams. The agreements reached by the group will
    form the basis for a proposed DOD-VA iEHR approach.
        On February 12, 2011, a high-level common data and architecture
    approach was presented to and subsequently endorsed by the Deputy
    Secretaries of DOD and VA and the Vice Chairman of the Joint Chiefs of
    Staff. Regardless of the alternative selected as a result of the DOD
    AoA, the agreements made by the Departments will apply to the iEHR.
    Additional meetings between Secretary Shinseki and I will occur to
    further define high level plans for the iEHR.

        Secretary Gates. I will tell you we have made a lot of
    progress, but it is not fast enough as far as Secretary
    Shinseki and I are concerned. He and I met, just the two of us,
    about 2 weeks ago to try and accelerate this effort. So he and
    I will meet again with our staffs in the middle of March to
    assess where we are and what needs to be done to move this
    forward and get it done. Then we will have a follow-up meeting
    at the end of April.
        I have found, unfortunately, with these huge bureaucracies,
    whether it is Veterans Affairs or DOD, that things like this
    that are big projects do not move very fast if they do not get
    high-level attention. So Secretary Shinseki and I are both
    committed to making as-fast-as-possible progress on this.
        Senator Akaka. Thank you very much.
        Chairman Levin. Thank you very much, Senator Akaka.
        Senator Collins.
        Senator Collins. Thank you, Mr. Chairman. Secretary Gates,
    Admiral Mullen, I very much appreciate the fact that you opened
    your testimony with highlighting the damaging effects of a
    year-long CR on DOD. I am very concerned about these impacts.
    Senator Bill Nelson and I recently wrote to our leaders
    suggesting that we should be working on the defense
    appropriations bill right now. I made a similar suggestion to
    our leaders last fall, advice that unfortunately they did not
    take.
        But I will say to my colleagues that it is inconceivable to
    me that we have spent the past 10 days debating the Federal
    Aviation Administration reauthorization, not to say that that
    is not important, but it pales in comparison to the urgency of
    acting on the defense appropriations bill.
        So I hope our Senate leaders heard you loud and clear today
    and that we will return next week and make that our first order
    of business. Certainly the impact that you have outlined is a
    disaster, and there is just no need for us to be debating a
    bill that is not urgent when we should be doing a high priority
    bill and certainly the passage of the defense appropriations
    bill is the highest priority. So thank you for your testimony
    on that.
        Admiral Mullen, in your testimony you stated that one of
    the greatest success stories this year has been the growth and
    development of the ANSFs. You went on to say that that has gone
    incredibly well. I understand that that is going well
    generally, and I also understand how imperative it is that we
    build up those forces so that we can eventually leave
    Afghanistan.
        But I want you to know that I am concerned that the focus
    on so rapidly increasing the number of Afghan security forces
    is shortchanging the vetting of those recruits. Recently six
    U.S. military personnel, including Private 1st Class Buddy
    McClain of Maine, were killed by an Afghan border police
    officer. The press have reported that in the past 13 months,
    Afghan personnel have attacked our military personnel or our
    coalition partners six times.
        What are we doing to better vet those Afghan recruits to
    ensure that tragic incidents and attacks like this do not
    occur?
        Admiral Mullen. Certainly it is, Senator Collins, each one
    of them, a tragedy.
        To go to the overall structure, when I go back 12 months or
    15 months with General Caldwell and what we had then versus
    what we have now, we have moved incredibly quickly. But we have
    also focused on the quality of the move, and by that I mean the
    quality of the instructors, the quality of the infrastructure,
    a substantial training program that was virtually nonexistent
    there before. The Secretary talked earlier about the
    improvement in literacy. We are now focused very much on the
    need to both train in specific skill sets, and all of this
    while we are obviously fighting a war, moving pretty quickly,
    moving very quickly to ensure, as best we can, that nothing
    like that in the security forces, the military or the police,
    occurs. I would assure you there is a tremendous amount of
    focus on this with respect to the leadership.
        That said, tragically these things do occur on occasion.
    They did in Iraq. They do in Afghanistan. While we will do
    everything we can to eliminate them, I would not sit here and
    tell you that we will be 100 percent successful with respect to
    that.
        Every one of these is investigated thoroughly. Every one of
    them. In fact, the one to which you refer--I went through this
    with General Caldwell specifically. What happened? What do we
    know about this guy? What was the background? There was not a
    lot there with respect to his background that would have led
    him to specifically take that action to kill our six troops. So
    we take that. We investigate it. We certainly integrate that
    back into what we are doing, but it is a big challenge.
        Senator Collins. Secretary Gates, I applaud you for holding
    accountable both military and civilian personnel who have
    failed to perform adequately. On Tuesday, Senator Lieberman and
    I met with one of the victims of the Fort Hood massacre,
    Sergeant Alonzo Lunsford. He was accompanied by friends and
    family members, as well as other family members who had lost
    loved ones in this attack. The very first question that they
    asked Senator Lieberman and me and the one that I pose to you
    today is when will the supervisors that filed such misleading
    officer evaluation reports regarding Major Hassan be held
    accountable.
        These evaluation reports ignored his increasingly erratic
    behavior, his poor performance as a physician. We know from our
    investigation that one of his commanding officers told the
    people at Fort Hood you are getting our worst, and yet when you
    read the officer performance evaluations, they are glowing by
    and large. So this attack occurred 15 months ago, and what the
    victims and their family members are asking us is when will
    these individuals be held accountable.
        Secretary Gates. At my request, the Secretary of the Army
    has undertaken an investigation to address this specifically,
    and the latest information that I have is that he is nearing
    decisions on this. So I do not have a precise timeline, but I
    think in the very near future he will be reaching his
    conclusions and taking whatever actions he deems appropriate.
        Senator Collins. Thank you.
        My time has expired. I am going to submit some questions
    for the record.
        Admiral Mullen, I do want to mention to you that I am very
    concerned about the increase in suicides among the National
    Guard. I recently had the honor to welcome back a company of
    Maine National Guard men and women who have spent a year in
    Afghanistan. It seems to me we are doing a better job in
    helping the Active-Duty Force which has those resources more
    readily available, but I am really concerned about whether we
    are providing that same kind of support to the Guard and
    Reserve.
        Admiral Mullen. I said this many times. We would be nowhere
    close to where we are in these wars without the extraordinary
    performance of the Guard and Reserve, and they deserve every
    bit the attention that everybody else has gotten.
        Certainly on the suicide issue, it is a huge concern to all
    of us. The Services are working it and, in particular, the
    surge in that over the last year on the Guard side. So there is
    a great deal of effort to try to, first of all, understand it
    and then address it, as we have in the Services as well.
        Senator Collins. Thank you. Thank you, Mr. Chairman.
        Chairman Levin. Thank you, Senator Collins.
        I think Senator Collins speaks for all of us on that issue
    of suicide. Thank you.
        Senator Reed.
        Senator Reed. Thank you, Mr. Chairman.
        Let me begin by associating myself with the remarks of
    Chairman Levin and Senator McCain and others about your
    extraordinary service, Mr. Secretary, to the Nation throughout
    your tenure in difficult times and making difficult judgments.
    Thank you for what you have done and we continue to wish you
    well as you continue to serve.
        Admiral Mullen, I know in October you will finish your
    tour, and I will add that commendation to you for your
    extraordinary service of 43 years in uniform in the U.S. Navy
    and to all your colleagues at DOD.
        Let me emphasize what you all have emphasized. It is
    absolutely critical to fund the defense budget going forward
    not in an ad hoc, every 60 days basis, but over a long period
    of time to provide certainty for programs, certainty for
    strategy.
        But there is another aspect of our national strategy that
    is increasingly important and that is the role the DOS will
    play in Iraq and Afghanistan. Mr. Secretary, I would assume
    that you would stress with the same urgency the need to fund
    those types of DOS programs in Iraq and Afghanistan because
    otherwise what you have accomplished and, more specifically,
    what young men and women in our military forces have
    accomplished could be severely jeopardized and our national
    security severely threatened if we do not follow through.
        A concern that many of us have is that you are able to
    summon an almost reflexive response by the American people when
    you talk about helping men and women in uniform. That same
    response is not elicited when people start criticizing foreign
    aid which this could be labeled. I just think it would be
    helpful if you would comment on this issue of the need also to
    support that effort.
        Secretary Gates. First of all, I would say that for the
    entire time I have been in this job, I have been an advocate
    for more money for the DOS. Actually this dates back to my days
    in the Central Intelligence Agency (CIA) when we had case
    officers collecting information that any good political officer
    in the Foreign Service could get, but there were not enough. So
    it has been a concern of mine all along.
        I would say that right now it is a critically urgent
    concern because if DOS does not get the money that they have
    requested for the transition in Iraq, we are really going to be
    in the soup. We have spent probably close to $800 billion or
    $900 billion, perhaps more importantly, more than 4,000 lives,
    and here we are at the end game and it reminds me of the final
    scene in ``Charlie Wilson's War.'' We have spent billions to
    drive the Soviets out of Afghanistan, and we could not get a
    million dollars to build schools in Afghanistan in 1989 and
    1990.
        The same thing is going to happen in Iraq. If we cannot
    have a transition to DOS and the police training function, if
    they do not have a presence in various places throughout Iraq,
    much of the investment that we have made in trying to get the
    Iraqis to the place they are is at risk in my view. The
    chairman mentioned the need for DOS funding in his opening
    statement. But you would find, I think, extraordinary support
    across the entire DOD for their budget, but more importantly
    our real worry that all that we have gained is potentially at
    risk if we do not have the kind of DOS presence and DOS
    activities in Iraq.
        Here is the other piece of the problem and it goes to the
    CR. DOS cannot spend the money to get ready right now. This is
    getting toward the end of February. There are facilities to be
    built. There are people to be hired, and they cannot do any of
    that. So we are going to run out of time in terms of being able
    to get this accomplished.
        So I hope that the passion in this reflects just how
    strongly we feel about this. This is really, really important.
        Admiral Mullen. Senator Reed, just quickly, you talk about
    Iraq and Afghanistan. This is a global issue. This is not a lot
    of money invested in places around the world that prevent
    conflicts. The military does this. We have to do it with our
    partners in DOS, otherwise we are going back for a lot more
    investment and a lot more casualties.
        Senator Reed. Mr. Hale, please.
        Mr. Hale. Let me just offer a brief additional point. For
    the first time, in fiscal year 2012, State will request a
    budget under the OCO fund. It will be very important for
    Congress to enact that and isolate the money that is associated
    with these operations, so I hope that's favorably received.
        Senator Reed. That's an excellent point, Mr. Secretary.
        Just, with Afghanistan, too, you mention ``Charlie Wilson's
    War.'' We learned a very expensive lesson about not spending
    the million dollars in September 11, 2001, attacks. Frankly,
    particularly with Afghanistan, where at a point we might have
    to relearn that lesson, because the threats that are being
    organized against the United States and our allies are still
    emanating from border regions of Afghanistan and Pakistan,
    unless I'm mistaken. Is that a fair judgment, Mr. Secretary?
        Secretary Gates. Absolutely. The chairman refers to it as
    the epicenter of world terrorism. While al Qaeda has
    metastasized and has branches in Yemen and North Africa and
    elsewhere, the reality is, that border area with Afghanistan
    and Pakistan is still the heart of the problem.
        Senator Reed. Let me make one follow up point about
    Afghanistan, because as the chairman mentioned, we were there
    recently. We are building an increasingly credible force there,
    but it's a force that the government of Afghanistan cannot
    afford indefinitely. It's much cheaper than our troops. But
    this is not just a 2- to 3-year commitment. This has to be a
    multi-year commitment to support their forces in the field. Not
    singly the United States, but the international community. We
    have to start now and build that in. Is, I think, is that
    another point you would agree with?
        Secretary Gates. I made the point earlier. I mean, I think
    that the international community and Afghanistan cannot afford
    a force of 375,000 Afghan National Security Fund (ANSF)
    indefinitely. We have to think of this, I think, more as a
    surge for the Afghans. With a political settlement and with the
    degrading of the Taliban, perhaps the size of the ANSF can come
    down to a point where it's more affordable for us and for
    everybody else. But we have, just as an example, I mean, our
    fiscal year 2012 budget has in the OCO $12.8 billion to support
    the ANSF for 1 fiscal year. We can't sustain that for many
    years. So, a lot depends on being successful by 2014 in getting
    the transition to the Afghans. Even if we have to support it
    for a little after that, if we have most of our troops out of
    there, it's still going to be a lot less money for the American
    taxpayers.
        Senator Reed. Thank you very much. Thank you.
        Chairman Levin. Thank you, Senator Reed. When you go to
    your NATO meeting, I hope that you would also see what support
    we might be able to get for the continuing cost of an Afghan
    army from some of our NATO allies. In that regard it would be
    helpful as well.
        Senator Graham.
        Senator Graham. Thank you, Mr. Chairman. Any chance you'll
    reconsider leaving, Secretary Gates?
        Secretary Gates. No, sir.
        Senator Graham. I didn't think so. I just can't thank you
    enough for what you've done for the country. Admiral Mullen. I
    just want to say something about the administration here. I
    know we have our differences. But when it comes to Iraq and
    Afghanistan, I think the policies you've created, the policies
    the President has supported, have been very sound. We're about
    to reap the benefits of operations that have been tough,
    difficult, sometimes mismanaged, but that's the nature of war.
    We're very close in Iraq. So, I just want to build on what
    Senator Reed said. I'm going to be the ranking member of the
    Foreign Operations Accounts on Appropriations. I'd like for you
    to put in writing to me and Senator Leahy what you said about
    this account.
        Let's give a real world example. What did it mean in terms
    of the Egyptian crisis to have a good dialogue with the
    Egyptian military, Admiral Mullen?
        Admiral Mullen. It was huge. It was the benefits of 30
    years of investment of the interaction that we've had with
    thousands of them in our schools, the values that have rubbed
    off over time with them, the ability to sustain those contacts,
    and then see them act in such a responsible way.
        Senator Graham. I think that's a real world example of
    where 30 years of investment really paid off. This account has
    been reduced to $45 billion in the House. I do share my House
    colleagues' desire to reduce spending, and no account is above
    scrutiny. But the $5 billion that is flowing to Pakistan, Iraq,
    and Afghanistan on the civilian side of the OCO account, what,
    are you telling us that, basically, that should be seen sort of
    as emergency spending and not counted against our baseline?
        Admiral Mullen. I think, I mean, certainly some of it is
    tied to the military. But I think the Kerry-Lugar-Berman piece,
    that's a 5-year program at a billion and a half a year. That
    isn't military, and that's what we were taking about earlier.
    Sustaining that is going to be critical, not just now, but in
    the long term.
        Senator Graham. I guess the point I'm making, we're surging
    on the civilian side as we draw down our troops. The civilian-
    military partnership is essential to holding and building.
        Admiral Mullen. Right.
        Senator Graham. There are funds going to Pakistan, Iraq,
    and Afghanistan on the civilian side that I think will be just
    as important as any brigade, and I would like to treat those
    funds as a national security asset. I will do everything I can
    on the Republican side in the Senate to make sure that we
    protect those funds that you can't hold and build without.
        Admiral Mullen. Sure.
        Senator Graham. Now, here's what a waste the American
    people--we're talking about fiscal austerity at home. What is
    the percentage of GDP spending on defense when you count all
    appropriations?
        Secretary Gates. Well, two facts. First, the base budget
    alone----
        Senator Graham. Right.
        Secretary Gates.--is 3.7 percent of GDP. If you take all
    the war funding for fiscal year 2011, plus the base budget,
    it's about 4.9 percent of GDP.
        Senator Graham. Historically----
        Secretary Gates. But there's another fact that's worth
    noting----
        Senator Graham. Okay.
        Secretary Gates.--and that is that as a percentage of
    Federal outlays----
        Senator Graham. Right.
        Secretary Gates.--with the exception of the late 1990s and
    early 2000s, at 18.9 percent it is the lowest level of Federal
    percentage of outlays since before World War II.
        Senator Graham. Okay. Now, we need to understand that as a
    Congress here, the Secretary of Defense has just told us, and,
    since World War II terms, we're on the very low end, at a time
    when I think the threats to our Nation are growing
    exponentially. Now, as we pull down in Iraq, it is your belief,
    if the Iraqi Government would ask for American troops to be
    left behind to perform the three functions you suggested, it
    would be in our national security interest to say yes?
        Secretary Gates. Yes, sir. I believe that.
        Senator Graham. Now, there's a fourth component--security
    for those who are going to be in the lead. DOS, the Department
    of Justice, Agriculture Department, the police trainers. My
    concern is, if we don't have a sufficient military footprint,
    then DOS literally has to build its own security apparatus,
    which will be in excess of $5 billion. Do you think, all things
    being equal, it would be better for the U.S. military to be
    able to continue to provide security?
        Secretary Gates. Yes, sir, I do. I'm, partly because we
    would also have the helicopters and things like that. The
    private security contractors that State's going to have to hire
    to perform that role will not have some of the, quote, unquote,
    enablers that we have.
        Senator Graham. Well, see, this is the dilemma. We need to
    know this soon. Because DOS needs to build capacity. Do they
    buy helicopters? Do they buy 54 MRAMs? Is it wise to hire a
    private contractor army to replace the American military if the
    Iraqis will allow the American military to perform that
    function. So, the sooner we know the answer to that question,
    the more likely we are to be successful. Because I have grave
    concerns about building a DOS army. So, that's must my 2 cents
    worth.
        Detainees. Admiral Mullen, our special operators are all
    over the world as I speak, is that correct?
        Admiral Mullen. Yes, sir.
        Senator Graham. The threat from terrorism is just not
    confined to Iraq and Afghanistan.
        Admiral Mullen. It is not.
        Senator Graham. What would we do as a nation if we were
    able to capture a high level al Qaeda operative in any country
    outside of Iraq or Afghanistan, let's say, Somalia, Yemen, as
    examples. What would we do with that detainee?
        Admiral Mullen. We don't have an answer to that question.
        Senator Graham. See, now, this is a big deal to me. We're
    in a war, and capturing people is part of a intelligence
    gathering. It's an essential component of this war. Do you
    agree with that, Admiral Mullen?
        Admiral Mullen. Right.
        Senator Graham. It is better to capture someone than it is
    to kill them in a lot of cases, is that correct?
        Admiral Mullen. It is.
        Senator Graham. It's hard to capture someone if you don't
    have a jail to put them. All those on the other side who want
    to stop renditions, we need to come up with an American jail,
    because we're in, the only alternative is to kill them or go to
    renditions. I hope, Mr. Chairman, that sometimes this year
    Republicans and Democrats can have a breakthrough on this issue
    to help our men and women fighting this war, because it is a
    very spot to put the special, a tough spot to put the special
    operators in. Our CIA doesn't interrogate terror suspects any
    longer. These are things we need to talk about and get an
    answer to.
        Afghanistan. Not only is it miraculous what General
    Caldwell has done. It's stunning to me that we're in 2009 and
    10, and 30 percent of the NCO corps in Afghanistan could read.
    When he took over, he tested the Afghanistan army for literacy,
    and on paper, every NCO should read at the 3rd grade level.
    When they tested the NCO corps, 70 percent could not read at
    the 3rd grade level, and he is going about fixing that. So,
    you're dead right. But, we need to know, after 8 years of
    involvement, 90 percent of the Afghan army could not shoot to
    NATO standards 18 months ago. So, after all these years we're
    just finally getting it right. In many ways, we've been in
    Afghanistan with the right formulation for about 18 months. Is
    that a fair statement?
        Admiral Mullen. That's a fair statement, and it's a very
    difficult discussion to have because it was 10 years ago when
    this started.
        Senator Graham. I just want the American people to know
    that we've made mistakes, but we're finally getting it right.
        One last thought. When 2014 comes, I am very optimistic
    that there will be a better Afghan police and army than we have
    today, that we can transition. But I've been discussing among
    my colleagues and others about what an enduring relationship
    with Afghanistan would look like. It is my belief, Mr.
    Chairman, that a political economic and military alliance with
    the Afghan people, at their request, would be incredibly
    beneficial to our long-term national security interest and
    could be a game-changer in the region.
        To both of you, what do you believe the effect of an
    enduring military relationship would be on the future security
    of Afghanistan and the region as a whole if the Afghans
    requested of us to have joint airbases past 2015? Would that be
    something you think it would be wise for us to talk about and
    consider?
        Secretary Gates. Absolutely, Senator. I think that, to go
    to, Admiral Mullen's comments about Pakistan a little while
    ago, there is a big question in the whole region whether we
    will stick around. It's in Afghanistan, it's in Pakistan, it's
    all over the area. A security agreement with Afghanistan that
    provided for a continuing relationship and some kind of joint
    facilities and so on for training, for counterterrorism and so
    on beyond 2014, I think would be very much in our interest. I
    think that it would serve as a barrier to Iranian influence
    coming from the West. I think it would serve as a barrier to a
    reconstitution of the Taliban and others coming from the border
    areas in Pakistan. So, I think it would be a stabilizing, have
    a stabilizing effect, not just in Afghanistan, but in the
    region.
        Senator Graham. Would you also agree that it would give an
    edge to the Afghan security forces in perpetuity over the
    Taliban, and you might, with that kind of a relationship, get
    by with a somewhat smaller army?
        Secretary Gates. Absolutely.
        Chairman Levin. Thank you, Senator Graham.
        Senator Hagan is next.
        We have a vote now on the Senate's schedule for 12:10.
    We're going to try to work around that vote and to work through
    that vote. I'm going to turn the gavel over now to Senator
    Udall, because I have to leave for a few minutes as well. But,
    we're going to try to keep going right through that vote the
    best we can.
        Senator Hagan.
        Senator Hagan. Thank you, Mr. Chairman. I will actually cut
    my own questions short, because I have to preside over the
    capsule that's on the Senate floor at noon. But, I do want to
    say to all three of the individuals here, thank you so much for
    your service and your testimony, and the excellent work that
    you do for our country. I did want to agree with Senator Reed
    and Senator Graham on the concern, and Secretary Gates and
    Admiral Mullen, your concern about the funding for DOS and the
    foreign aid. I think that is critically important. As you both
    said, it certainly was evident as to what has taken place just
    recently in Egypt.
        I did want to talk a little bit about the health of the
    Special Operations Forces (SOF). Admiral Mullen, in your
    prepared remarks you acknowledged the continued stress on the
    force from 9 years of constant conflict. Last week Admiral
    Olson, Commander of the U.S. Special Operation Command (SOCOM),
    told an industry group that difficult and repeated deployments
    of Special Operations personnel are causing some fraying around
    the edges of the force. Admiral Olson also made the point that
    demand for SOF will continue to outstrip supply for the
    foreseeable future.
        Given the demand for these SOFs, not only in U.S. Central
    Command (CENTCOM), but also in other parts of the world, for
    partnership and capacity-building activities, how does DOD
    intend to address the readiness issues identified by Admiral
    Olson? Admiral Mullen and Secretary Gates?
        Admiral Mullen. I think, actually, the force has expanded,
    I think, from, when these wars started, around 30,000 to on a
    way to upwards of 56,000. I think there are insatiable
    appetites and requirements for Special Forces. The vast
    majority of them are in CENTCOM. That said, they actually are
    in many, many countries around the world, and they're making
    investments for the future so that we don't have to go to war
    in other parts of the world. I think his statement about
    fraying around the edges is right. They've been on, had a
    significant number of deployments. I think in Iraq, actually,
    in Iraq and Afghanistan they'll typically be the last forces
    out. So, the pressure is going to continue there.
        We've worked very, very hard both increasing size to
    increased dwell time. But as we do that, quite frankly,
    Petraeus asked for more, because they have such an impact. So,
    we're on a very, we're on a knife edge there with respect to
    this. They're extraordinary in their performance and their
    execution. I consider the Care Coalition, which is the group
    that takes care of wounded families, families of the fallen, to
    be the Gold Standard in our military with respect to how we
    approach that. That said, they're pushed very, very hard.
        From a readiness standpoint, as they come back and dwell
    time will increase, I think we'll be fine in terms of giving
    them the time, and then to be able to disperse them to other
    parts of the world, which we have not been able to do in the
    kinds of numbers and requests, because they've been so tied to
    CENTCOM. So, I think we will be able to meet that. But it's
    going to be awhile until we get on the down side of both these
    conflicts.
        Secretary Gates. I would just add that with the increase in
    SOCOM and their higher level of activity, another one of the
    things that we've tried to do is move a lot of the SOCOM money,
    a lot of the Special Forces money, into the base budget, so
    that once these wars end we are able to sustain the larger
    Special Forces that we have, and properly equip them.
        Senator Hagan. Thank you. The international security
    environment, particularly in cyberspace, continues to evolve.
    Cyber threats to our electrical grid, telecommunications,
    military networks, critical infrastructure, and the financial
    system pose serious concerns to our national security.
        Secretary Gates and Admiral Mullen, what is DOD's strategy
    to recruit, train, and retain cyber specialists, and what is
    the way forward to centralize the military cyberspace
    operations and U.S. Cyber Command (CYBERCOM), and to
    synchronize the defense networks?
        Secretary Gates. I think we've made a lot of progress in
    this area. The creation of CYBERCOM was in important step. I
    directed the Service Secretaries about a year ago to consider
    training in the, in cyber, to be their, one of their highest
    priorities and to ensure that all the spaces that we have in
    our schools for teaching cyber skills be filled at a priority
    level. I think they've made a lot of headway. We have a lot of
    money in this area. This budget for fiscal year 2012 has a half
    a billion dollars for cyber research at the Defense Advanced
    Research Projects Agency (DARPA). So, and I think we're in
    pretty good shape in terms of protecting the dot-mil world.
    This last summer, Secretary Napolitano and I signed a
    memorandum of understanding that give, that begins to move us
    in a direction where we can begin to do better at protecting
    dot-gov and dot-com. The reality is, there was a big debate,
    and it went on in the Bush administration, and it continued in
    this administration, of people who did not, for, did not want
    to make use of the National Security Agency (NSA) in domestic
    cyber protection because of civil liberties and privacy
    concerns. What Secretary Napolitano and I did was arrive at an
    agreement where Department of Homeland Security senior
    officials are now integrated into NSA senior leadership. They
    have their own General Counsel, their own firewalls, their own
    protections, so that they can exploit and task NSA to begin to
    get coverage in the dot-gov and dot-com worlds. This is really
    important. I think it's a start. But we still have a long way
    to go.
        Senator Hagan. Thank you.
        Admiral Mullen, anything to add to that?
        Admiral Mullen. No. Ditto. I mean, it's a huge concern.
        Senator Hagan. Yes.
        Admiral Mullen. A growing threat. A lot has been done.
    Schools are filled. But we have a long way to go.
        Senator Hagan. I think it's good that the schools are
    filled, it's positive. Thank you. Thank you, Mr. Chairman.
        Senator Udall [presiding]. Thank you, Senator Hagan.
        Senator Chambliss is next.
        Senator Chambliss. Thanks very much, Mr. Chairman.
        Gentlemen, I don't know what all this conversation is
    about, about saying great things about you because you're
    leaving. We're planning on you being, both being around here
    for awhile longer to help us make some very critical decisions.
    Whether it's voluntary in your case, Secretary Gates, or your
    time is up, whatever, Admiral Mullen, to both of you, you
    provided a very valuable service to our country over this last
    short term. I'm not even counting the years and years and years
    that both of you have given. So, thank you very much for that
    service. Whether we've agreed or disagreed, you've always
    responded to me in a very professional way. I'm very
    appreciative of that relationship.
        I want to echo what Senator Graham said about this
    detention and interrogation issue. I mean, guys, we have a real
    problem there that needs to be addressed in the short term. I'm
    sure you've probably seen what, the way in which Director
    Panetta responded yesterday to a question I asked him about if
    we did capture bin Laden or Zawahiri. That just highlights the
    fact that we don't have a plan, and we really do have to figure
    out something here. We thought Baghram might be the answer. But
    it looks like it's obviously not long-term. So, we look forward
    to working with you on that.
        I continue to have, Secretary Gates, a TACAIR issue that
    just really bothers me with respect to where we are now. The
    further we get into the F-35, the more I'm concerned about
    this.
        In May 2009, just to go back a little bit, General
    Schwartz, Chief of Staff of the Air Force, testified that the
    military requirement for the F-22 was 240, or 60 more than DOD
    was willing to purchase. That summer there was a concerted
    effort made to strip funding for seven additional F-22s out of
    the NDAA for Fiscal Year 2010. Ultimately, obviously, and
    you've taken a lot of credit for the fact in your budget that
    the F-22 has been terminated and there's a huge savings out
    there.
        First, there was an argument that the F-35 would be more
    affordable than the F-22. Secretary Gates, on July 16, 2009, in
    a speech in Chicago you personally stated that the F-35 would
    be less than half the total cost of the F-22. Since that time,
    the F-35 experienced a Nunn-McCurdy breach due to cost
    increases, and DOD has recently restructured the program again,
    delaying deliveries and again driving up the cost.
        Last month your own Cost Assessment and Program Evaluation
    Office established that the unit cost of a JSF average over
    variance has doubled since the program began to approximately
    $116 million per copy in fiscal year 2010 dollars. Things may
    even get worse. Of note, the price per copy for the last F-22s
    purchased was $130 million.
        Second, regarding the threats the United States may face in
    the future and our ability to maintain air supremacy, you
    downplayed the threat and stated again on July 16, Mr.
    Secretary, of 2009 in that Chicago speech that, and I quote,
    ``China is projected to have no 5th generation aircraft by
    2020.'' Well, I heard what you said earlier in response to
    Senator Inhofe, but the fact is that last month China flew
    their first 5th generation fighter, the J-20, which your own
    intelligence experts predict will reach Initial Operating
    Capability (IOC) with 20 aircraft, a 20-aircraft squadron well
    before 2020. Also, over a year ago Russia flew their 5th
    generation fighter, the PAC FA, which, again, your own
    intelligence experts predict will have an IOC date well before
    2020.
        Third, Mr. Secretary, a year ago in this very room, when
    DOD was in the process of notifying Congress of an F-35 Nunn-
    McCurdy breach, you had just fired the F-35 program manager,
    and I asked you if you were going to revisit the issue of
    additional F-22 production. You responded, and I quote, ``No,
    sir, because the IOCs, based on information that I was given in
    preparation for this hearing, the IOCs for the Services, for
    the arrival of the training squadron at Eglin all remain pretty
    much on track.''
        Even though we do have a plane you say that's on schedule
    going to Eglin in May, and additional planes going in
    September, those are all test airplanes. A few months after you
    made that statement, the IOC date for the Air Force version
    slipped from 2013 to 2016, the IOC date for the Navy version
    slipped from 2014 to 2016, and the Marine Corps version has
    gone from a projected IOC date of 2012, or next year, to being
    on a 1-year probation and not even having an IOC date.
        In light of all these developments, I hope you can
    understand why I am extremely concerned as we go into this
    budget about where we're headed, gentlemen. In light of General
    Schwartz's stated military requirement I need to ask you one
    more time, Mr. Secretary, is DOD considering the purchase of
    any additional F-22s?
        Secretary Gates. No, sir. We are not.
        Senator Chambliss. DOD is spending billions of dollars to
    buy hundreds more 4th generation fighters, F-18s. DOD has
    linked at least some of these additional F-18 purchases
    directly to delays in the F-35 program. I can understand that.
    Can you explain why it makes sense to invest billions of
    taxpayer dollars in buying 4th generation F-18s, which are
    basically useless whenever there's contested airspace, rather
    than buying additional F-22s, which can fly anywhere, anytime,
    in any airspace?
        Secretary Gates. Sir, first of all, let me say about the F-
    35 that the new program manager, Admiral David Venlet, probably
    the best acquisition person we have in uniform, has completed a
    comprehensive tactical baseline review. I think we have, now,
    it, he took several months to do this. I think we have greater
    understanding and granularity in terms of progress on the F-35.
    The reality is, both the Navy and Air Force variants have made
    substantial progress over the last year. The Air Force version
    flew twice as many flight tests as had been originally planned.
        It is training aircraft that are going to Eglin, and both
    for the Air Force and the Navy. We are investing money in
    upgrades to the F-22. There's, there are hundreds of millions
    of dollars in the fiscal year 2012 budget to upgrade the F-22.
    Some of the lessons learned from the F-35 and the F-22 are
    being put into upgrades for our existing 4th generation
    aircraft that our people believe with those upgrades can take
    on the adversary's best aircraft.
        I finally would say that this is China's and Russia's first
    low observable aircraft. We've been at this 20 years. I think
    that they are likely to run into a number of the same
    challenges we did early in our stealth programs. I think that
    our tactical air situation will be in good shape.
        In addition, the Air Force has realized that they can
    upgrade some of their 400 F-16s to give them additional
    capability and sustainment, as well as the early block F-16s,
    and they're upgrading the most recent blocks of F-16s. So, I
    think that combining all these different programs that we have
    in modernizing TACAIR, plus getting on with the F-35, now under
    new management and new leadership, I think that we're in
    reasonably good shape.
        I would finally say, the last procurement that is, has been
    negotiated with Lockheed Martin, the Low-Rate Initial
    Production 4, actually has resulted in a fairly substantial
    decrease in the price of the F-35 for that particular buy, and
    we hope that we can continue that trend.
        Senator Chambliss. There's no question but that you're
    increasing the risk, Mr. Secretary, and I hope that we don't
    get down the road and realize that was too far a reach for us
    from a risk standpoint.
        I have a question that I'd like to ask Admiral Mullen for
    the record, and it's on a little bit different tack. Admiral
    Mullen, we're struggling with this issue of the deficit as well
    as debt reduction long-term. I have quoted you several times,
    as have a number of us, in saying that the number one national
    security interest of the United States is the long-term debt
    that we face. Would you mind just sending us a written
    statement amplifying on that record? Because your opinion, I
    can tell you, resonates around the world with respect to that
    issue. I'm thankful that you stood forward and you made that
    comment. I'd just like you to amplify it for the record.
        Admiral Mullen. I've tried to stay out of trouble in doing
    that. But it really in its simplest form focuses on what I
    believe would be a shrinking national security budget. We are
    now involved in, as we should be, looking at ways to save money
    and do it more efficiently and effectively. But at some point
    in time, the size of our budget could have a dramatic effect on
    the size of our force structure. That's the danger that's
    there, given the national security requirements, which seem to
    be growing, not reducing, not getting smaller.
        [The information referred to follows:]

        The ties between the strength of our economy and our Nation's
    security are inseparable and incontrovertible. We need a vibrant,
    growing economy to exert influence internationally and to provide for
    our military and other defense capabilities. In turn, we need the
    security provided by our national defenses to underwrite our economic
    endeavors and our livelihoods. But today we find both our economy and
    our security threatened by our burgeoning national debt.
        The U.S. national debt is projected to quickly reach levels with
    few precedents for a nation not fully mobilized for war. Continued
    future budgetary pressures could make it extremely difficult for us to
    maintain the size and readiness of our military forces and to promote
    the technological innovation (in all areas not just defense) needed to
    preserve an advantage over our competitors. This could threaten our
    ability to maintain a credible deterrent against potential adversaries
    and to respond to security contingencies--large or small.
        In many ways, these budgetary pressures are a present reality, and
    we in the military have already started tightening our belts and
    working to become a more fiscally responsible Pentagon.
        How we should deal with the looming threat of our national debt is
    a historically necessary conversation. It will involve tough decisions
    with significant trade-offs, opportunity costs, and strategic risks.
    What we do, or don't do, will shape our Nation for decades to come.

        Senator Chambliss. Thank you.
        Senator Udall. Thank you, Senator Chambliss, and thank you,
    Senator Chambliss, for your work with Senator Warner on this
    very important challenge related to our annual deficits and our
    long-term debt. I know there are many senators who are eager to
    work with you in this important mission. Thank you.
        Senator Blumenthal, you're recognized.
        Senator Blumenthal. Thank you, Mr. Chairman.
        I join the chairman, ranking member, and others on the
    committee in thanking you for your extraordinary service,
    Admiral Mullen and Secretary Gates. In particular, for your
    continued commitment to the JSF and the single-engine, and the
    submarine building program, which I know was reiterated as
    recently as yesterday in remarks in Florida. So, I assume that
    will continue. I want to express my thanks. In particular, I'd
    like to focus on one area of your prepared testimony, Admiral
    Mullen, relating to the injuries of many of these young men and
    women returning from these conflicts in Iraq and Afghanistan.
    Specifically, TBIs that are new in their magnitude and number,
    and ask you perhaps to describe more specifically what is being
    done in terms of the treatment, both in-service and veterans.
    Also, what can be done to enlist the growing number of private
    efforts, for example, the Woodruff Foundation, which you may be
    familiar with, that could provide resources.
        Admiral Mullen. One of the areas we've struggled in
    throughout these wars is the stigma issue, will I raise my hand
    and ask for help. On my most recent trip into Afghanistan,
    which was December, I was with the Command Sergeant Major there
    for the 101st, and he relayed to me an extraordinary statistic,
    which essentially had those that were in concussive events,
    essentially they were returning to duty at about 98 percent.
        We have put in place procedures, if you are in a concussive
    event, within 50 meters, et cetera, you get pulled out of the
    fight. One of the reasons that the return to duty rate is so
    high is because we're treating them well literally in the
    battlefield, as fast as possible. If they're asked, they're
    willing, because they're not going to get sent home, they're
    willing to raise their hand and say, I need some help.
        Now, we have a long way to go on stigma, in post-traumatic
    stress, et cetera, in families with the same challenges. But we
    actually have made some progress there. We have, at the same
    time, I have been struck, in the TBI, the difficult ones are
    the mild ones. The most serious are ones that become very
    obvious. But it is the mild ones oftentimes that your, you
    don't see your symptoms for months, or you don't admit you have
    them. It is those who obviously are in the military, those who
    transfer then, who transfer out of the military back to
    communities throughout the country.
        I've also been struck, I'm going to use a comparison, when
    you look at Walter Reed or Balboa, or the Intrepid Center for
    the amputees, and where we are, we're, I would argue, leading
    the world with respect to that. That's just not the case in TBI
    because there's a lot of newness to this that surprised me. We
    know a lot about the brain, but we don't know a lot about how
    these injuries affect the brain. So, we've tried to reach out,
    not just, not to reach and understand it just inside the
    military, but reach experts throughout the country who are
    contributing in ways--there's a Brain Center at UCLA, for
    instance, which has contributed significantly--and to get the
    best minds that we can across, throughout the country to help
    us work our way through this. But, I'm struck that we're in the
    nascent stages of this even at, even in this year, in so many
    ways.
        Senator Blumenthal. Is there a specific command or a
    structure within either the Pentagon or dealing through the VA
    that is coordinating this effort?
        Admiral Mullen. There is, there's not a single point of
    contact. There's, obviously, a significant effort inside the
    Pentagon. We have taken steps to try to work with the VA, and
    then also understand the capabilities that are out in the
    country as we've engaged for those who've transferred back
    home. But there's an awful lot we still have to do to make
    those connections so we're all working it together, which is
    going, which I think would be the most effective. We're just
    not there yet.
        Senator Blumenthal. To take a related subject, I'm sure you
    are familiar with reports about the danger of a combination of
    different pharmaceutic drugs----
        Admiral Mullen. Yes.
        Senator Blumenthal.--in treatment of post-traumatic stress
    and similar kinds of phenomenon. I wonder if you or Secretary
    Gates could describe efforts being made to address those
    dangers.
        Admiral Mullen. Sometimes we're slow to need because we've
    gone through a time where we have, in too many cases, over-
    medicated, too many prescriptions. Not just in the battlefield
    or back here when they get back, but also in the VA. What, in
    particular, the Army has done recently is put in place a much
    more aggressive multifaceted treatment regime which expands
    beyond drugs to yoga, to acupuncture, to other forms which have
    proven positive to support those who've been through the kind
    of combat that they've been through. So, I'm actually
    encouraged by that significant effort put forward now to try to
    back off of that over-medication. That's not in, that's going
    to take us awhile. But, certainly it's a concern we all have.
        Secretary Gates. I'd say there are two additional problems
    here that we have to deal with. One is servicemembers
    stockpiling prescriptions. The second is, the frequency with
    which servicemembers will go outside the military healthcare
    system and get prescriptions. We don't have any visibility into
    that in terms of just how much medication they're taking, or
    how those drugs all interact with one another. So, these are
    all areas that we're aware of and trying to work on. But we
    still have a ways to go.
        Senator Blumenthal. Thank you very much.
        Thank you, Mr. Chairman.
        Senator Udall. Thank you, Senator Blumenthal.
        Senator Shaheen.
        Senator Shaheen. Mr. Chairman. Thank you all for being
    here.
        I want to add my concern to those that have been expressed
    already about the JSF and what is happening with that program.
    I appreciated your comments about the efforts to get the
    program back on track, and I certainly hope that that is
    correct and the program will go forward and it will be
    effective with those efforts to readjust it.
        I also want to commend DOD on your decision to cancel the
    planned purchase and production of the Medium Extended Air
    Defense System (MEADS) program. I'm new here, so I'm still
    getting the acronyms down. But, I think it's important, as DOD
    found, that we can't afford to purchase MEADS and make the
    critical investments that we need to make in the Patriot over
    the next two decades. So, I certainly hope Congress will
    support your decision and press for the continued Patriot
    modernization.
        Admiral Mullen, during the House hearing yesterday you
    touched on something that you just referenced a little bit just
    now in your exchange with Senator Blumenthal, and that is about
    research into what we need to know about brain injuries. You
    talked about the importance of consistent and sustained support
    for research and development in our military budgets. Can you
    talk about whether you feel like the budget that's been
    submitted adequately addresses that to prepare us for the
    future? What have been the most cost-effective efforts that the
    military's used to leverage research and development (R&D) in
    the budget?
        Admiral Mullen. I'll be very specific to focus on Secretary
    Gates because, and he spoke earlier, his frustration that if
    you're a leader of one of these bureaucracies, there are things
    that, if you really want to get it done you're going to have to
    focus on it personally. This is another area, probably 2 years
    ago, 3 years ago, that he made a priority to ensure that we
    actually were growing in science and technology (S&T) and R&D.
    What's happened over the course of the last 2 decades is many
    of the programs we've talked about--I'll use JSF--has R&D
    money, but what it's really become program money, and it's not
    true R&D. So, I think for, particularly as budgets tighten and
    we look to capabilities in the future, we can't buy it all, we
    can't protect against everything. But having a robust S&T base,
    6.1 through 6.5 and 6.6, is really important in terms of being
    ready for things in the future. So, even in these times where
    there's an extraordinary amount of pressure on the budget, and
    I think that will increase, I think we have to continue to get
    that right.
        You talk about most effective. I think the investment--and
    this is not an uncontroversial, sometimes an uncontroversial
    investment--but I've watched DARPA over the many years work,
    and they really reach at some of the, to get at some of the
    most difficult problems. I think we need to be mindful of
    sustaining that investment as well, for example. One other
    comment is, the S&T or the R&D investment in the medical field
    to get at brain research, and that, as I understand this
    budget, that actually is in pretty good shape as well.
        Secretary Gates. I would just amplify that by saying that
    in this budget there is $1.1 billion for and TBI and PTSD
    research.
        Senator Shaheen. Thank you. In New Hampshire we have a very
    significant defense industry that has been doing a lot of
    cutting edge research, and I know that DARPA's role has been
    very important in promoting that research.
        The National Guard and Reserves, as you all have said, has
    played a huge role in allowing us to be effective in Iraq and
    Afghanistan. In New Hampshire, as Senator Ayotte pointed out,
    we've seen the largest deployment of our Guard since World War
    II. I appreciated everyone's expressed commitment, again, to
    the health and well-being of all the servicemen and women and
    their families.
        One of the things that we have done--and Admiral Mullen,
    again, I think you've been briefed personally on the Full Cycle
    Deployment program that we have in New Hampshire, that is a
    model to help families both as they're preparing for deployment
    and when they return, as well as the member who's being
    deployed. This program has been supported by congressionally-
    directed spending--earmarks--which are not likely to continue.
    So, are there, are you looking at models like this as you think
    about developing ways to be most effective in supporting Guard
    and Reserves who are deploying? Are there ways in which, as the
    congressionally-directed spending ends, that we can continue to
    support these kinds of programs that have been so effective?
        Admiral Mullen. Senator, when you speak to this, and as you
    have spoken to the, and the way you've spoken to it, I'm
    immediately reminded of the need to be, build resilience in our
    people and families, literally from the first day they come
    into the Guard, Reserve, or on active duty in all Services.
    We've come to understand that. We've actually made some
    significant progress there, but we still have a long way to go.
    We've built more of it in our members than we have in our
    families, and we need to build it in the families as well.
        I would need to get back to you with a more specific answer
    on, because I want to know more about the, where your program,
    where the New Hampshire program is. Because what we do try to
    do is canvas the field and look at the best programs that are
    out there, and then inspire others to grab those. So, in
    particular, I'd be happy to do that and get back to you. As I
    speak, I really don't know where there resourcing side of it is
    with respect to that kind of, with respect to the program in
    New Hampshire.
        Senator Shaheen. I withdrawal very much appreciate your
    getting back to me. Thank you. My time has expired.
        [The information referred to follows:]

        The New Hampshire Deployment Cycle Support Program (NH DCSP) has
    generated promising results by establishing a support system that
    starts as soon as deployments are identified and directly engaging the
    individual servicemember and his or her family in their community. The
    prevention-based approach allows for assessing risks and resiliencies,
    early action to mitigate those risks, and ongoing support throughout
    the deployment cycle.
        Compared to non-participating New Hampshire Army National Guard
    members, those accessing DCSP have shown to have been more favorably
    impacted across a number of areas: suicides, resiliency, mental health,
    family fitness, readiness to deploy, retention, unemployment, and
    homelessness. Among the prominent outcomes are:

             Of 30 at risk of suicide (28 servicemembers and 2
            spouses), all are using NH DCSP in active prevention with a
            licensed clinician and support team
             Of 77 servicemembers deemed ``at risk'' of not
            deploying due to mental health issues, DCSP intervention
            enabled more than half of those (43) to deploy
             Over a 2-year period, the percentage of DCSP SMs
            choosing to remain in service was four times higher

        Being a publicly- and privately-funded service delivery system that
    includes utilization of social service capacities in all 234 New
    Hampshire communities presents a useful model which warrants emulation.
    As fiscal limitations become more pronounced, the Department of Defense
    will have to weigh support of NH DCSP against other competing
    priorities.

        Senator Udall. Thank you, Senator Shaheen.
        Senator McCaskill is recognized.
        Senator McCaskill. Thank you, as always, for being here.
        I want to say, Secretary Gates, that I know the President
    has an awful lot of hard decisions to make this year. I think
    one of the hardest decisions he has is how he's going to
    replace you.
        Let me start with a topic that is very difficult, I think,
    for you all to get your arms around, and that is the incredibly
    serious allegations that have been made about sexual assault
    within the military. I'm not assuming that the allegations that
    are contained in a lawsuit that was recently filed are true.
    But if we take them as factual, then we have a real serious
    problem, that a woman in our military was raped by more than
    one member of the military, and the video shared around the
    unit of this rape that had occurred. A woman raped and who goes
    to the chaplain, and the chaplain tells her that she needed to
    go to church more, if she would attend church more.
        The rape kits are only kept for a year. I can't think of a
    police department in the country that would only hold onto a
    rape kit for a year.
        I just think that we have to look at this problem in a
    systemic way in terms of, do these women have a safe place they
    can go? Are we gathering the evidence quickly? Or, do we have
    experts available in terms of prosecuting these cases?
        But if someone rapes a woman and the evidence is there, and
    that person doesn't end up in prison, then we have failed. I
    know that you all feel probably as strongly about this as I do.
    But I'd like you to address this and tell me what, who I should
    deal with within the military structure to follow up and make
    sure that we make some obviously very important changes that
    are needed.
        Secretary Gates. Senator, it is a problem. It's a serious
    problem. I have zero tolerance for any kind of sexual assault,
    as do the leaders of all of the Services. I've worked with
    Admiral Mullen and the Service Chiefs and Service Secretaries
    to ensure that we're doing all we can to respond to sexual
    assaults.
        I've engaged, had a number of meetings myself with the
    senior leadership of DOD. I've focused on four areas--reducing
    the stigma associated with reporting, ensuring sufficient
    commander training, ensuring investigator training and
    resourcing, and ensuring trial counsel training and resourcing.
    We've made some progress. We've hired dozens more
    investigators, field instructors, and prosecutors, and lab
    examiners. We've spent almost $2 million over the past 2 years
    training our prosecutors better. Generally, the defendants go
    to somebody who's specialized in this kind of allegation or
    crime, and our prosecutors tend to be generalists, and so we
    don't do very well in the court, and so we've spent this money
    to try and make our prosecutors effective.
        More victims are stepping forward. We have had improvement,
    or, an increase in the number of court-martials. We've gone
    from about 30 percent of alleged violators being court-
    martialed to about 52 percent now. So, at least it's headed in
    the right direction.
        We've expanded the Sexual Assault Response Coordinator and
    Victim Advocate Program ten-fold, from about 300 to 3,000. We
    now have an advocate at every base and installation around the
    world, including in Iraq and Afghanistan.
        I heard some suggestions and comments yesterday in the
    House hearing that I take very seriously and would like to
    pursue. One of them is ensuring the confidentiality of the
    relationship between the victim advocate and a victim,
    ensuring, or, providing a military lawyer for victims.
    Commanders have the authority to move somebody out of a unit.
    I'm worried by the press accounts that that hasn't happened,
    and so they're considering over on the House side legislation
    that would create this as a right for somebody who's been a
    victim so they can get out of a unit where the person who
    attacked them is in the same unit, and so on. So, I think there
    are some ideas that I heard in that hearing yesterday that I
    think are definitely worth pursuing. So, we do take it
    seriously.
        I've taken this seriously, frankly, because sexual assault
    is a problem on university campuses.
        Senator McCaskill. Right.
        Secretary Gates. Texas A&M, just like every big public
    university in America has a problem with this. One of the
    suggestions that I've made to our folks working on this is to
    get in touch with some of the universities that have the best
    prevention programs in the country, to see if we can learn
    something from these universities.
        So, I think we have a broad program to try and tackle this.
    But there is no question that there's more to do. I just invite
    Admiral Mullen to comment.
        Admiral Mullen. I testified over here in 2004. I was a vice
    chief of the Navy on this subject. There was a lot of work that
    needed to be done. It was very obvious in all the Services. I
    testified with my three Vice Service Chiefs. So, I agree with
    what the Secretary said in terms of our having made progress.
    It's not enough. It's completely intolerable. It has to be
    answered, I think, on the sort of the skill side, as well as
    the leadership side. I still hear too many anecdotal stories
    where it's ongoing, including in theater.
        With my wife, we visit VA hospitals, and females talk about
    trying, having come in the military, previously sexually
    assaulted before they came in, coming into the military,
    looking for a safe haven, and finding out that it isn't. It's
    almost, it's an intensity that certainly is not expected.
        This is, Senator, a vastly under-reported offense. So, we
    can see the statistics we have, but it's the ones that we don't
    have that we have to get after as well.
        Senator McCaskill. I guarantee that----
        Admiral Mullen. While we've made a lot of progress, there's
    a lot left to do.
        Senator McCaskill. I guarantee that it's more under-
    reported in the military than it is even on a university campus
    or in the civilian population at large.
        I would just make one suggestion. Having spent many, many,
    many, many hours and days in courtrooms prosecuting sexual
    assault cases as a young prosecutor, I relied heavily on people
    who had specialized in prosecuting those crimes for my
    training. I relied heavily on the victim advocacy network that
    we had on, in terms of rape victims.
        In the civilian sector in any major city you're going to
    have a large group of people with great expertise. I know they
    would volunteer their time to help train and mentor people that
    you need to have this expertise, whether it's people at the
    emergency rooms that are gathering rape kits, having a victim
    advocate with the victim at the hospital when the rape kit, or
    the medical facility, where the rape kit is gathered, whether
    it's victim advocacy. I think you could find, and I've
    mentioned to General Quantock at Fort Leonard Wood that I would
    be happy to assist him getting in touch with this expertise
    that exists out there. I think that these people that do this,
    they aren't rape prosecutors and sexual assault prosecutors
    because they're making big money. They're very much true
    believers and want to help in this regard. The same thing is
    true of the victim advocacy organizations. I think this is one
    where you might be able to get a lot of free training and get
    you guys up to the point where the civilian population has
    gotten over the last 20 or 30 years.
        Thank you for your interest in this. I'll continue to
    follow up. I just want to let you know, two questions that I
    want to do for the record. One, obviously, is continuing, the
    problem we're having auditing the Pentagon. I cannot see how we
    can continue to give you what you ask for if we can't see the
    measurable progress in terms of auditing the Pentagon. I will
    have a series of questions about the financial management
    system that's in place.
        The last thing is pointing out for the record and questions
    for you for the record, that I know the GDP of Afghanistan is
    not large enough to pay for the military we're building. I
    think it's time that we be very, very honest with the American
    people that we're building the Afghan military for the nation.
    It costs what, $12 billion a year? Their GDP isn't even that
    high. So, once we're gone, I think we're going to be on the
    hook to help pay for this military for a long time--cheaper
    than our folks being there. But I think we need to begin to
    talk about the responsibility for paying for this military down
    the line. Because clearly Afghanistan can't afford the army
    we're building.
        Thank you.
        Secretary Gates. Senator, the contact person that you asked
    for is Dr. Clifford Stanley, who is the Under Secretary for
    Personnel and Readiness.
        Senator McCaskill. Thank you very much, Secretary Gates.
    Thank you all for being here.
        Senator Udall. Thank you, Senator McCaskill. Before Senator
    McCaskill leaves, I think we would both agree, Mr. Secretary,
    that you could take one of those difficult decisions off the
    President's desk if you would reenlist for a year or 2 more.
    But we'll leave that decision to you, as it properly should be.
        But I, too, want to thank both of you and Secretary Hale
    for your leadership, and for the courageous decisions that you
    continue to make, and for telling the Senate of the United
    States the truth as you see it.
        I did want to follow up on what Senator McCaskill also just
    mentioned about the GDP in Afghanistan. I think you both know
    that the NDAA for Fiscal Year 2011 required the President,
    through the offices of the Pentagon and DOS, to provide an
    economic strategy for Afghanistan. Could you speak to where we
    are with that process, and how important you think such a
    strategy would be to the overall success? Then, specifically,
    we have the Task Force for Business and Stability Operations,
    and what further role would you see for that particular task
    force?
        Secretary Gates. I'll take the second part of your question
    first.
        This task force is one of those things that creates
    incredible antibodies in the bureaucracy, because it doesn't
    fit anyplace, and, both in DOD and in DOS. I think it's an
    honest answer to say that without in effect the protection of
    the Secretary of Defense, this operation would not, could not
    be sustained.
        My belief is that Paul Brinkley and his team have made a
    huge contribution, both in Iraq and in Afghanistan. It was Paul
    that took the team to Afghanistan, of private sector
    geoscientists and others, and were able to do the estimates of
    the extraordinary mineral wealth that exists in Afghanistan, if
    only there were the security to exploit it. So, I think they've
    made a real contribution, and I hope they will continue to do
    that. But, I think it's fair to say that they face a lot of
    bureaucratic resistance in doing that.
        We talked earlier about the cost of the Afghan security
    forces. That's why I believe--and we've talked about it before
    in this hearing--that we essentially need to look at the size
    of their force as a surge as well, and that once they have a
    political settlement inside Afghanistan, and the Taliban is
    degraded in terms of their capabilities, the need for the
    Afghans to have a smaller military than they have now. Because
    we can't sustain $12.8 billion a year for very long.
        The economic strategy for Afghanistan is, and the task
    force, really go hand-in-hand. I think there's a significant
    effort at the Embassy in terms of trying to entice private
    sector individuals, as well as foreign investors, to invest in
    Afghanistan. But I have to admit that where the economic
    strategy for the country stands, I'm just not certain. I'll
    have to get back to you.
        [The information referred to follows:]

        An economic strategy is an essential component of the overall
    success of the Afghan civil-military campaign plan, by focusing efforts
    and resources in ways that maximize the effects of U.S. assistance in
    Afghanistan, while helping the Afghans become more self-sufficient.
    Such a strategy will build on the good work that the Director of the
    Task Force for Business and Stability Operations, Paul Brinkley, and
    his team have already started in key sectors and provide overall
    direction for developing Afghanistan's capacity for self-sustainment.
        The Department of Defense, the Department of State, and the U.S.
    Agency for International Development have participated in discussions,
    led by the National Security Staff, on the process by which the
    economic strategy report will be produced. The Department of State and
    the U.S. Agency for International Development will play a central role
    in the drafting process, and they will require support from Congress in
    carrying out the important roles they will have in implementing the
    strategy. The Department of Defense will also participate in the
    drafting of the report, as directed by the Executive Office of the
    President, and will pay particular attention to elements of economic
    strategy that support the counterinsurgency campaign in Afghanistan,
    promote economic stabilization, and enhance the establishment of
    sustainable institutions. We plan to complete this report, as required,
    in early July 2011.

        Senator Udall. Admiral Mullen, do you have any comments to
    add?
        Admiral Mullen. I would add only that, again, what Paul
    Brinkley and his team have done has truly been extraordinary in
    both countries, and under incredibly difficult circumstances in
    the countries. Although the circumstances back here may have
    been more difficult. So, how to sustain that is actually an
    open question. I think we do need to do that.
        Senator Udall. Yes.
        Admiral Mullen. That becomes the heart of, I think, sort
    of, the longer-term investment there, not just nationally, but
    internationally.
        Senator Udall. Yes. I, too, would like to add my
    compliments to Mr. Brinkley. I've heard many stories about how
    effective he is, how dedicated he is. So, I hope he understands
    that many of us here on the Hill, Mr. Secretary, know what
    accomplishments he's had.
        Secretary Gates. Well, and to Admiral Mullen's point about
    the conditions in which they have worked, several members of
    Brinkley's team, including Brinkley, have been wounded in
    attacks. So, they've been really out there on the front lines
    trying to work these problems.
        Senator Udall. Could I move to a question about the popular
    uprisings in the Middle East that we're seeing in Algeria,
    Bahrain, Yemen, Libya, and elsewhere? The people are coming out
    on the streets for a variety of reasons. How do you analyze
    those countries' leaders' ability to command their security
    services?
        Secretary Gates. Well, I think it varies from country to
    country. We talked at the beginning of the hearing about the
    discipline and the professionalism of the Egyptian military,
    and the restraint that they exercised under some fairly
    difficult circumstances. In Tunisia, the military also stood
    aside and, basically, did not defend Ben Ali. So, I think in
    each of these countries, though, the circumstances are going to
    be different.
        But the one thing that these armies seem to have in
    common--certainly in Egypt and in Tunisia--is a sense that they
    are a national institution, and even though somebody may have
    been in power for a long time, they see themselves as having a
    special relationship with their people. I know in my
    conversations with Minister Tantawi, we talked often about the
    relationship that the Egyptian army had with the Egyptian
    people, and that it would protect it's people because they were
    the people. He delivered, I think, in an exemplary fashion.
        Just to defend our intelligence folks a little bit, I think
    that they'd done a pretty good job of describing the rising
    temperature in a number of these countries, and the economic
    and social pressures that were building in a number of these
    countries, particularly related to the youth bulge, the 15- to
    29-year-olds who have educations and can't get a job. The petty
    corruption and nepotism makes life difficult for ordinary
    people. Clearly, Ben Ali was quite surprised by what happened
    in Tunisia. He didn't expect to, in 2 weeks to be pushed out of
    power. I think that President Mubarak was in the same
    situation.
        I think that the United States, there's been a lot of to-
    ing and fro-ing about how we've handled this. But the truth is,
    I think the United States has pretty consistently, primarily
    privately but also publicly, encouraged these regimes for years
    to undertake political and economic reform because these
    pressures were building. Now they need to move on with it, and
    there is an urgency to this.
        Events move very quickly. We were talking at one point, if
    Mubarak had given his first speech when he declined to run for
    office again in September, when he changed the government, when
    he promised constitutional reform--if he had given that speech
    3 weeks before, he'd probably still be the president of Egypt.
    So, being able to latch onto the speed with which these events
    are moving, and have people who have seen, relatively, perceive
    a static situation in their countries, to appreciate that it's
    not static, that these pressures are building and they do need
    to get out in front of it, is, I think, what we've been trying
    to do.
        Senator Udall. Yes. Our advice and encouragement may hold
    more weight in this region and other regions of the world, as
    those leaders and those countries look at the example of Egypt
    and Tunisia, perhaps others.
        I have to wonder, Admiral Mullen, Secretary Gates,
    Secretary Hale, what the British intelligence services were
    generating in 1776. I think there are these tipping points that
    you talk about that can't be predicted.
        Thank you again for your service.
        Chairman Levin [presiding]. Thank you very much, Senator
    Udall.
        I just have one additional point and then we'll close it,
    because I know that you folks are running late on your
    schedule. That has to do with the size of the Afghanistan army.
        I want to give you some statistics about comparing the Iraq
    army and the Afghanistan army. I know the situations are
    different. But I still want to give you these statistics.
        Iraq has fewer people than Afghanistan. The Afghan
    population is about 30 million; Iraq about 27 million. But in
    Iraq you have 665,000 Iraqi security forces. In Afghanistan you
    have a goal, 378,000 would be the new target if it was
    accepted. So, it would still be about half the size of the
    Iraqi security force, with more people to secure.
        So, I would, first of all, I think, probably based on that,
    but some other things, not agree that the increase, the
    proposal for the increase would be more than they would need,
    even if over time there would be a lesser need for security.
    Hopefully there will be a lesser need and, obviously, if there
    is you could reduce it. But I wouldn't necessarily plan on
    there being a need for less than 378,000.
        Second, when you describe a surge force, in your mind, Mr.
    Secretary, I would hope that the surge force that you believe
    it should be looked at, as, would be a, that the surge force
    would be the 378, and not the current level. So that it would
    be the additional 70 that would be viewed as the surge, and not
    the current level, which I believe you spoke at, as a surge
    force.
        Secretary Gates. I would tell you, Mr. Chairman, the budget
    that we have submitted would accommodate the additional growth.
        Chairman Levin. All right. That's reassuring.
        Finally, I totally agree, both the need for an objective,
    an honest view about the cost. I think that is essential.
    That's what you pointed to, and rightly so. But I would just
    reiterate my hope that when you meet with your colleagues at a
    NATO ministerial that you really would drive home the fact that
    there's going to be an ongoing need, whether it's at 305,000 or
    whether or not it's at 378,000, that there really needs to be a
    sharing of that burden among our NATO allies. We cannot carry
    the 12 billion alone, I agree with you. But just they way they
    have not, it's been kind of spotty, frankly, in terms of NATO
    support, on the trainer side, not nearly still what we had
    hoped for. But, you're properly giving good grades to those who
    have come through. A lot of our NATO allies really have. Some
    of them have taken greater losses proportionally than we have,
    and we should recognize that.
        But, I really would hope that you would reinforce that they
    are going to need a significant military and a security force,
    that that is the ticket to success, as well as to an exit. Or,
    at least, a significantly reduced number of foreign troops
    which, in turn, is part of success. That they should come
    through financially with some ongoing expected support for the
    Afghanistan security forces. That would be my summary. Admiral
    Mullen?
        Admiral Mullen. Sir, just one quick comment. I've been
    working NATO pretty hard since 2004. I've never seen them more
    together than they have become over the last couple of years in
    this mission. Your comment earlier about, out of area--or,
    maybe it was Senator Lieberman. But I really do think success
    here bodes well for the future of NATO, and not succeeding does
    the opposite.
        Then, second, we've talked a lot about NATO here. Well,
    there are 49 countries total that are providing forces right
    now. So, there are an awful lot of non-NATO contributing
    countries who've made a difference as well, and are very
    focused on sustaining that for a period of time. Some of them
    very small numbers. I understand that. But, they've really made
    a difference, and we appreciate their contributions as well.
        Chairman Levin. Yes. I think, I made the mistake of saying
    NATO when I should have said NATO and other coalition forces.
    You're absolutely right. A number of those non-NATO countries
    have made contributions also way out of proportion to their
    population, way out of proportion to their financial ability. I
    think we should recognize that, and their losses sometimes have
    been out of proportion as well. We do appreciate that.
        We want to thank all of you for coming. Again, we're
    grateful for your service.
        We hope to see a lot more of you than you expect, Secretary
    Gates.
        Admiral Mullen, we always love to have you here, and know
    that you want have too many more visits. But again, we hope,
    know that all of them will be as helpful as this one was this
    morning.
        Secretary Hale, thank you.
        We'll stand adjourned.
        [Questions for the record with answers supplied follow:]

                   Questions Submitted by Senator Carl Levin

                HEALTH AND STATUS OF OUR DEFENSE INDUSTRIAL BASE

        1. Senator Levin. Admiral Mullen, in your posture statement, you
    expressed concern over the capabilities of our Defense Industrial Base
    (DIB) and the ability to produce and support advanced technology
    systems for future weapon systems. What is the Department of Defense
    (DOD) doing to mitigate these concerns?
        Admiral Mullen. In order for the defense industry to remain a
    source of strategic advantage well into the future, DOD and our Nation
    require a consistent, realistic, and long-term strategy for shaping the
    structure and capabilities of the DIB. For example, the fiscal year
    2012 budget request contains resources for two providers of the
    Littoral Combat Ship (LCS), a result enabled by establishing a
    competitive environment in which two competitors have offered
    affordable alternatives. Additionally, the Navy continues to pursue the
    work share agreement on the Virginia class submarine program. Looking
    ahead, the Deputy Secretary of Defense has directed the Under Secretary
    of Defense for Acquisition, Technology, and Logistics (USD(AT&L)) to
    undertake a sector-by-sector, tier-by-tier assessment of the DIB that
    will include space and shipbuilding. This effort will be accomplished
    in full partnership with the Military Services. The results of this
    analysis will allow us to improve our acquisition strategies and
    influence DOD's program and budget review, beginning with the fiscal
    year 2013 cycle. Once completed, DOD will continue to map and assess
    the industrial base on an ongoing basis. Additionally, as the DIB
    evolves through mergers and acquisitions, DOD participates in reviews
    conducted by antitrust agencies and in reviews conducted by the
    interagency Committee on Foreign Investment in the United States to
    mitigate consolidation and ownership concerns. The affects of the
    continuing resolution on program execution and the resultant impacts on
    defense sector production lines remain a concern. What these industrial
    bases need more than anything else is a plan and investment strategy
    with a certainty and predictability that has here to fore been very
    elusive.
        DOD is committed to being more forward leaning in its ongoing
    assessments of the industrial base--refocusing our efforts on our
    future needs, working much more closely with the Services to foster an
    integrated approach to the overall industrial base, and placing
    transparency and dialogue with industry at the forefront of our agenda.

                             ACQUISITION WORKFORCE

        2. Senator Levin. Secretary Gates, while much of the attention in
    the personnel sector has been rightfully focused on deployed
    warfighters and their families, the success of our military largely
    depends upon the effectiveness and reliability of high-technology
    weapon systems that give the U.S. military its premier technological
    advantage. Fundamental to developing and fielding these weapons systems
    is a community of highly trained science and technology (S&T) and
    acquisition personnel in DOD. What will you do to ensure that DOD can
    continue to attract and retain a highly skilled S&T and acquisition
    workforce--especially in today's competitive environment where at the
    national level there is a limited pool of skilled scientists and
    engineers facing competition from industry, academia, and other Federal
    agencies?
        Secretary Gates. DOD continues its initiative to grow the
    acquisition workforce through fiscal year 2015. Significant emphasis
    and progress has been made hiring and supporting the growth of the
    technical workforce, but there is much more work to do in this area.
    For example, the Science, Mathematics, and Research for Transformation
    Scholarship-for-Service program supported 900 students with majors in
    DOD relevant science and engineering disciplines. Three hundred of
    these students transitioned into the DOD workforce. Another 230 are
    expected to transition into the workforce in 2011.

                                 AFGHAN TALIBAN

        3. Senator Levin. Secretary Gates, in a recent interview, General
    Petraeus discussed growing friction between local Taliban fighters
    living in Afghanistan and the Afghan Taliban leadership, who are
    phoning in orders that the local insurgents should continue to fight
    against Afghan and coalition forces through the winter, while the
    Afghan leadership remains in the safety of sanctuaries in Quetta and
    elsewhere in Pakistan. He said we are seeing a degree of discord among
    Afghan Taliban leaders and among the lower-level fighters that we've
    not seen in the past. Do you agree with General Petraeus' assessment
    that there is friction and discord between local Taliban fighters in
    Afghanistan and the Taliban leadership in Quetta, Pakistan, as that
    leadership phones in orders for the lower-level fighters to keep up the
    fight through the winter?
        Secretary Gates. I agree there is tension between Taliban leaders
    in Pakistan and the fighters and commanders who remain in Afghanistan.
    I do not believe current frustration levels are sufficient to degrade
    insurgent capacity or create exploitable fissures. For example,
    increased violence levels this winter indicate that this tension did
    not undermine the insurgents' desire or ability to conduct attacks.

        4. Senator Levin. Secretary Gates, is this level of friction
    something that we've not seen in the past?
        Secretary Gates. Every winter since 2002, DOD observed tension
    between Taliban leaders in Pakistan and the fighters and commanders who
    remain in Afghanistan. This also occurred during the 1980s mujahedeen
    resistance against the Soviets. The tone of reporting this winter
    indicates a heightened level of frustration; however, the multi-faceted
    nature of this issue makes it difficult to make a qualitative
    comparison to previous years.

        5. Senator Levin. Secretary Gates, are we seeing this friction
    contributing to a slow increase in the number of lower-level insurgents
    seeking to reintegrate into Afghan society?
        Secretary Gates. I do not see evidence that tension with Quetta-
    based leaders is eroding local insurgents' motivation to fight or
    increasing lower-level insurgents' willingness to reintegrate. Most
    insurgents are locals fighting for local issues and not necessarily in
    support of Taliban senior leadership; therefore, they are likely to
    sustain their efforts regardless of any frustration with Quetta-based
    leaders. Emergence of a reintegration program that addresses local
    concerns, provides protection for fighters and their families, and
    delivers on promises will make reintegration a more viable option.

                        GLOBAL SECURITY CONTINGENCY FUND

        6. Senator Levin. Secretary Gates and Admiral Mullen, in Admiral
    Mullen's opening statement he made reference to a proposal for a pooled
    Department of State (DOS)-DOD security sector assistance initiative,
    called the Global Security Contingency Fund (GSCF). At the hearing, he
    indicated this initiative would include $50 million from DOS and an
    authority for DOD to transfer up to $450 million into this initiative.
    Are you confident that DOS is committed to making this initiative work
    jointly beyond the tenures of both of you and Secretary Clinton?
        Secretary Gates and Admiral Mullen. Yes. Although I cannot speak
    for our counterparts at DOS or future leadership of either department,
    DOD and DOS are working collaboratively on the development of the GSCF.
    This pilot program is designed to demonstrate the ability of both
    Departments to respond to emerging requirements rapidly (within the
    budget cycle) and in a collaborative manner. The benefit of this
    limited pilot is that it allows future senior leaders to evaluate the
    GSCF's effectiveness and determine if it should be extended beyond its
    initial 3-year term.

        7. Senator Levin. Secretary Gates and Admiral Mullen, do either of
    you have concerns that the joint arrangement will prove too unwieldy?
        Secretary Gates and Admiral Mullen. No. I am aware of this concern
    and would work to address it with the processes and procedures we
    establish. We are applying lessons learned from Section 1206 and other
    programs in developing the notional processes and procedures. At this
    point, we plan to have the GSCF be administered by a small combined
    DOS-DOD fund staff that will provide joint program formulation,
    decisionmaking, and implementation. That staff would bring in relevant
    staff augmentation depending on the expertise needed to meet each
    requirement. Throughout the pilot, I expect the GSCF to undergo
    continual process improvements as it matures.

        8. Senator Levin. Secretary Gates and Admiral Mullen, do either of
    you have any concern that this type of initiative is too much of a
    militarization of foreign policy?
        Secretary Gates and Admiral Mullen. Not at all. The GSCF is
    designed to enable DOD and DOS to respond to a variety of emerging
    global challenges in a collaborative manner. Program formulation for
    military and other security forces would be joint, while programs for
    justice sector, rule of law, and stabilization assistance would be
    formulated by the Secretary of State in consultation with the Secretary
    of Defense. This ensures that the appropriate Departments retain
    primary responsibility for missions within their respective core
    competencies, while benefiting from the cooperation the GSCF structure
    fosters. This is a force-multiplying authority that maintains DOS
    primacy in non-military missions.

        9. Senator Levin. Secretary Gates and Admiral Mullen, does the
    proposal envision that funds transferred into GSCF would be subject to
    the standard reprogramming processes?
        Secretary Gates. Not at all. The GSCF is designed to enable DOS and
    DOD to respond to a variety of emerging global challenges in a
    collaborative manner. Program formulation for military and other
    security forces would be joint, while programs for justice sector, rule
    of law, and stabilization assistance would be formulated by the
    Secretary of State in consultation with the Secretary of Defense. This
    ensures that the appropriate Departments retain primary responsibility
    for missions within their respective core competencies, while
    benefiting from the cooperation the GSCF structure fosters. This is a
    force-multiplying authority that maintains DOS primacy in non-military
    missions.
        Admiral Mullen. The reprogramming of funds into the GSCF would be
    conducted in accordance with the legislative proposal that states that
    this authority to transfer is in addition to any other transfer
    authority available to DOS and DOD. Jointly, the Secretaries of State
    and Defense would provide a quarterly report to the specified
    congressional committees on obligations of funds or transfers into the
    Fund made during the preceding quarter, to include the Committee on
    Armed Services, the Committee on Foreign Affairs, and the Committee on
    Appropriations of the House of Representatives; and the Committee on
    Armed Services, the Committee on Foreign Relations, and the Committee
    on Appropriations of the Senate.

                    MISSILE DEFENSE COOPERATION WITH RUSSIA

        10. Senator Levin. Secretary Gates and Admiral Mullen, you each
    lead a bilateral channel of discussion with your respective Russian
    counterparts in which you are exploring the possibilities for
    cooperation on missile defense. These discussions are consistent with
    similar North Atlantic Treaty Organization (NATO) efforts. Please
    describe why you believe missile defense cooperation with Russia is in
    our interest and what kinds of cooperation you believe are both
    desirable and possible.
        Secretary Gates. The United States seeks to responsibly sustain a
    stable relationship with the Russian Federation as the pace of
    military-technical innovation increases and the global security
    environment evolves. DOD also hopes to enlist Russia's help in
    addressing emerging security challenges from regional actors seeking
    illicit capabilities.
        DOD has made clear that the system it intends to pursue with Russia
    will not be a ``dual-key'' system, and it will not in any way limit
    U.S. or NATO missile defense capabilities. The U.S. concept for missile
    defense cooperation stems from the conviction that NATO must be
    responsible for defense of NATO territory and that Russia should be
    responsible for defense of Russian territory. The United States and
    Russia would operate their missile defense systems independently, but
    cooperatively, including sharing sensor data that may improve the
    ability of both systems to defeat missile attacks. I believe that
    Russian radars could provide data that would improve the capabilities
    of U.S. and NATO missile defense systems, and that U.S. sensors could
    improve the capability of Russia's missile defense systems. Further
    analysis would help to understand how U.S. and Russian interceptor
    systems could be mutually supportive in defending our respective
    territories.
        It is important to note that this process will take time, but I
    believe that meaningful cooperation is possible--cooperation that can
    strengthen the security of the United States and our NATO Allies as
    well as Russia.
        Admiral Mullen. The Military Cooperation Working Group is the
    military-to-military line of communication between me and the Russian
    Chief of Defense. The Missile Defense Sub-Group is the military-to-
    military forum that enables bilateral discussion of missile defense
    cooperation activities, such as joint exercises. These discussions
    correspond to the ones we conduct at the policy and strategic levels,
    as well as in multinational NATO-Russia forums. Although attention is
    presently focused on the European region, Russia and the United States
    share concerns about global ballistic missile threats, such as those in
    Northeast Asia. Our bilateral engagement on missile defense issues is
    intended to shape awareness of these threats and develop cooperative
    long-term responses to them. We have a clear directive to reset our
    bilateral relationship with Russia. While missile defense cooperation
    between Russia and NATO continues to develop, there will remain a clear
    need for the United States and Russia to maintain bilateral dialog on
    critical issues and concerns unique to our two countries.

                    AFGHANISTAN COUNTERTERRORISM OPERATIONS

        11. Senator Levin. Secretary Gates, according to published reports,
    the tempo of counterterrorism operations in Afghanistan by U.S. and
    Afghan Special Operations Forces (SOF) has increased dramatically in
    the last 6 months and demonstrated significant results. Lieutenant
    General Rodriguez stated recently that the Afghan people are playing an
    increasingly important role in the success of these operations by
    ``helping to provide significantly more tips because they see Afghan
    Security Forces out among them more than they ever had because of the
    increase in the number [of Afghan Forces].'' Reportedly, 85 percent of
    counterterrorism operations take place without a shot being fired.
        Do you agree with Lieutenant General Rodriguez that the increased
    presence of Afghan Security Forces has resulted in better intelligence
    because the population is more likely to come forward with information?
        Secretary Gates. Counterterrorism network targeting operations
    increased in the past 6 months, complementing the additional U.S. and
    partner nation forces deployed to Afghanistan during this period.
    Almost all of these operations are conducted jointly with Afghan
    National Security Forces (ANSF). I agree with Lieutenant General
    Rodriguez that partnered operations with the ANSF in all
    counterinsurgency activities result in increased reporting by the local
    population and better intelligence.

        12. Senator Levin. Secretary Gates, what has been the impact of
    this intelligence on the success of counterterrorism operations?
        Secretary Gates. The increased trust and confidence the Afghan
    people have in the ANSFs, especially in the Afghan National Army (ANA)
    and the Afghan Special Forces, has had a significant positive impact on
    the success of counterterrorism (CT) network targeting operations.
    Afghan civilians feel safer and are more likely to provide information
    about insurgent activities when they witness a competent and impartial
    ANSF playing a prominent role in protecting the population and
    degrading the insurgency. This cooperation enables a higher degree of
    success in CT operations, greater precision during the execution of
    these operations, and an increased likelihood of receiving information
    that can be used to plan future operations.

        13. Senator Levin. Secretary Gates, are news reports accurate that
    85 percent of SOF's counterterrorism operations are conducted
    successfully without a shot being fired?
        Secretary Gates. Yes. During the period from February 1, 2010 to
    January 31, 2011, 85 percent of counterterrorism network targeting
    operations were conducted without shots being fired. The quality of
    intelligence that shapes these operations, the careful and deliberate
    planning that precedes each operation, and the unmatched skill of our
    operators with their Afghan partners allows us to successfully capture
    many terrorists without the use of force.

               CONTINUED PRESENCE OF U.S. MILITARY FORCES IN IRAQ

        14. Senator Levin. Admiral Mullen, in your personal and
    professional military view, and from a purely military perspective, if
    the Government of Iraq requested the continued presence of U.S.
    military forces, including combat forces, would you recommend the
    approval of such a request?
        Admiral Mullen. I cannot answer that question without knowing
    exactly what type of presence or mission the Iraqis would like us to
    do. Then, I would have to consider variables like risk to our troops,
    our enduring national interests, our long-term strategic partnership
    with Iraq, our worldwide military commitments, and Iraq's ability to do
    that mission on their own before making a recommendation to the
    President. In the meantime, we remain focused on executing a
    responsible drawdown of our military forces according to our security
    agreement with the Government of Iraq.

                     VIOLENCE AGAINST RELIGIOUS MINORITIES

        15. Senator Levin. Secretary Gates, during my trip to Iraq in
    January, I met with leaders of Iraq's Christian religious minorities
    who expressed their desire to preserve the Christian communities within
    Iraq and the need for greater security so Christians can stay in their
    communities without fearing for their lives. What is your assessment of
    the Iraqi Government's efforts to ensure the safety of its many
    religious minorities?
        Secretary Gates. The Iraqi Government took positive steps to
    protect religious minorities more effectively, particularly since the
    October 31, 2010 bombing of Our Lady of Salvation Church in Baghdad.
    The Iraqi Government increased security at virtually all churches and
    police patrols in minority-dominated areas. The Iraqi police force
    arrested 12 individuals suspected of carrying out the attack on Our
    Lady of Salvation Church, including an al Qaeda operative. The Iraqi
    security forces (ISF) have endeavored to fortify minority religious
    sites and increase check points in minority neighborhoods. This must be
    done with the concurrence of minority populations because some of these
    communities believe increased security may serve to identify their
    facilities as targets. U.S. Forces-Iraq continues to advise, train,
    assist, and equip the ISF to enable them to conduct more effective
    security operations against violent extremist organizations seeking to
    attack minority religious communities. Al Qaeda in Iraq remains the
    most enduring threat to Christians and other minorities because it
    characterizes churches as legitimate targets of jihadist efforts to rid
    the region of western influence, ideology, and theology.

        16. Senator Levin. Secretary Gates, in your view, what more should
    they be doing to improve that protection?
        Secretary Gates. In the process of establishing a professional,
    reliable security service, the Iraqi Government should also improve
    Iraqi rule-of-law institutions, and particularly ensure that the
    property rights of Christians and other minorities are protected by
    these institutions. The Iraqi Government must also continue to
    modernize and professionalize the ISF to ensure that they protect all
    Iraqis impartially. Examples include recruiting and training more
    minority police, and reliably implementing the process of restoring
    property rights to Christians, as well as other minorities, whose lands
    were illegally confiscated when they fled their traditional homelands
    due to sectarian and other anti-minority violence. Since many
    minorities choose resettlement within Iraq, other impediments to
    protection and reintegration include lack of adequate educational and
    economic opportunities in areas to which minorities are moving and
    congregating (such as the Ninewa Plain). These are longer-term
    challenges that supplement, rather than replace, improved police
    interaction with minorities and the equitable administration of
    justice.

        17. Senator Levin. Secretary Gates, are the Iraqis recruiting and
    training any police units that are comprised exclusively of religious
    minorities and, if so, are they deployed exclusively to the areas where
    their respective communities reside?
        Secretary Gates. Iraqis are recruiting and training police cadets
    from the minority communities, which improves police visibility within
    those communities and builds trust between police and minority Iraqis.
    However, as with most national police forces, Iraq does not create
    police units segregated by religious affiliation, which could imply
    uneven standards, complicate overall force integration, and limit the
    ability to deploy such units or individuals to where they may be needed
    to address security concerns elsewhere in Iraq. Matching ISF
    individuals or units to minority-dominated areas is further complicated
    by the fact that minority demographics are in flux and groups within,
    for example, the Christian community, are subdivided among numerous
    denominations (Assyrian, Armenian Orthodox, Chaldean, Jacobite, Arab,
    and so forth) which do not necessarily share objectives.

                             SPACE SYSTEMS FUNDING

        18. Senator Levin. Secretary Gates, the Air Force has proposed to
    incrementally fund the acquisition of two large and critical satellite
    programs, using multi-year, fixed-prices contracting authority that
    will require advanced appropriations. In your view, why is this
    authority needed for these two satellite programs?
        Secretary Gates. DOD requires authority to use advance
    appropriations to fully fund the block buy of Advanced Extremely High
    Frequency (AEHF) satellites 5 and 6 during fiscal year 2012. After
    careful review, DOD determined multiyear procurement authorization is
    not required for this acquisition. For AEHF 5 and 6, the Air Force is
    procuring two satellites, in a block buy, in a single year. The Air
    Force worked closely with the DOD Cost Assessment and Program
    Evaluation (CAPE) office and, based on CAPE independent estimates,
    expects to realize unit cost savings from the bulk buy of piece parts,
    electronic components, and sub assemblies, as well as from a more
    efficient assembly and test process. In order to achieve savings, DOD
    needs to order these satellites in blocks of two. However, fully
    funding both satellites in a single year is not practically achievable
    in today's budget environment. Therefore, I propose a modified approach
    whereby DOD fully funds the satellite block buy over a fixed number of
    years using advance appropriations.
                                     ______

                 Questions Submitted by Senator Daniel K. Akaka

                      REPEAL OF ``DON'T ASK, DON'T TELL''

        19. Senator Akaka. Secretary Gates, on December 22, 2010, the
    President signed legislation that will lead to the eventual repeal of
    ``Don't Ask, Don't Tell''. The Services were directed to provide a plan
    by February 4, 2011, indicating how they will prepare their respective
    Services for the implementation of the repeal. In your opinion, what
    are the biggest challenges the Services face as they prepare for this
    change?
        Secretary Gates. The biggest challenge will be training those
    members who are not co-located with their units or who serve
    intermittently. This is why DOD is moving forward in an extremely
    deliberate and purposeful manner to develop and deploy our training and
    education.

        20. Senator Akaka. Secretary Gates, how are these challenges being
    addressed, and what is the current timeline for certification as you
    see it?
        Secretary Gates. There is no set date for certification. I am
    working closely with the Services to develop multiple ways to train the
    Force. Among various approaches, DOD identified that the most preferred
    approach is with leadership driven face-to-face training. When that is
    not feasible, computer-based training will also be available.
        I continue to work purposefully and responsibly toward
    certification.

                            SOCIAL SECURITY NUMBERS

        21. Senator Akaka. Secretary Gates, on November 5, 2010, the Under
    Secretary for Defense for Personnel and Readiness, Mr. Clifford
    Stanley, sent a Memorandum For Record (MFR) titled, ``Updated Plan for
    the Removal of Social Security Numbers (SSN) from DOD Identification
    (ID) Cards.'' The MFR states that SSNs may not be removed as previously
    indicated in 2009 based on concerns raised by DOD stakeholders. What is
    DOD's position on the removal of SSNs from ID cards issued to retired
    personnel, dependents, and those currently serving?
        Secretary Gates. DOD recognizes the ongoing risks and dangers
    associated with identity theft and the need to protect Personally
    Identifiable Information, such as the SSN.
        In 2007, DOD implemented a three-phase plan to remove SSNs from DOD
    ID Cards. In a November 5, 2010 Under Secretary of Defense for
    Personnel and Readiness Memorandum, DOD updated its implementation
    plan. This was due to concern over interruptions to benefits provided
    to servicemembers, retirees and their families, and it was due to
    adverse impacts to DOD contingency operations. This updated
    implementation plan is, as follows:

             Phase One--The act of removing the printed dependent
            SSNs from all Dependent ID Cards continues, as initiated in
            2008 under the original plan. This phase will be completed by
            the end of 2012. The standard Dependent ID card life cycle
            requires replacement every 4 years.
             Phase Two--The act of removing the SSN from all ID
            cards and replacing it with a DOD ID Number will be implemented
            in June 2011.
             Phase Three--The act of removing all SSNs from
            barcodes on the ID cards remains on schedule, with
            implementation expected in 2012.

        22. Senator Akaka. Secretary Gates, what are the leading
    alternative identifiers which are being considered to replace SSNs?
        Secretary Gates. The SSN will be replaced on DOD ID cards by the
    DOD ID Number. The DOD ID number is a unique, 10-digit identifier
    created upon initial enrollment of the individual into the Defense
    Eligibility Enrollment Reporting System database. The DOD ID Number is
    permanently fixed--it will not change over time or be contingent on
    one's role (e.g. dependent, civilian).
        All individuals eligible to receive DOD benefits--such as
    commissary, exchange, Morale, Welfare and Recreation or TRICARE
    purchased care--will also receive a DOD Benefits Number. The DOD
    Benefits number is an 11-digit number. The first nine digits are common
    to the sponsor. The last two digits indicate the card holder's
    relationship to the sponsor. The DOD Benefits Number has been agreed to
    by the TRICARE Management Activity (TMA) as an acceptable substitute
    for the SSN for management of benefits with no interruption of
    services. Similar to the DOD ID number, the DOD Benefits Number will
    not change over time.

                               LITERACY EDUCATION

        23. Senator Akaka. Secretary Gates, with a 14 percent literacy rate
    among new Afghan recruits, every Afghan soldier and police recruit now
    undertakes mandatory literacy education. By October 2011, 128,000
    Afghan soldiers are projected to be literate to at least the first-
    grade level, further enabling security forces to become self-
    sustaining. What are the overall goals of this program and how is it
    progressing against the baseline plan?
        Secretary Gates. In parallel with DOD's instruction programs for
    ANSF recruits is a drive to educate the ``legacy illiterate'' (i.e.,
    those serving in the ANA who have not had the benefit of literacy
    training). The goal of the literacy program is to bring all ANSF
    personnel up to a basic level of literacy (third grade-level). The
    program employs 1,800 teachers and provides new recruits with 64 hours
    of basic literacy training and an additional 248 hours after they
    complete basic training. As of February 2011, approximately 66,600 ANSF
    personnel have received literacy training; approximately 34,950 ANSF
    personnel have completed first grade-level literacy training, which is
    on track toward achieving the goal of 100,000 personnel completing
    first grade-level literacy training by October 2011; and approximately
    10,187 ANSF personnel have completed third grade-level literacy
    training, with the goal of having 14,028 personnel complete third
    grade-level training by October 2011.
        Literacy remains a major challenge to the development of the ANSF,
    as about 86 percent of new recruits entering the force are totally
    illiterate. NATO Training Mission-Afghanistan (NTM-A) instituted a
    mandatory literacy program in April 2010, and continues to work with
    the Afghan Ministry of Defense and Ministry of Interior to increase the
    literacy of the force.

        24. Senator Akaka. Secretary Gates, please describe the importance
    of this program to the future ability of the Afghan Government to
    succeed.
        Secretary Gates. Literacy education is a key component in the
    development of the Afghanistan National Security Forces (ANSF). Basic
    literacy skills allow Afghan military and police personnel to perform
    their duties, including reading maps, writing reports, and calling for
    military support in the field. Illiteracy can cost lives in combat and
    renders the police ineffective in providing basic public security
    functions. Literacy training is also a major incentive for enlistment
    and retention and increases the comparative advantage that the ANSF has
    over the Taliban in terms of drawing new personnel. Literacy also
    contributes to the overall ability of the Afghan government to succeed
    by strengthening the professionalism of the ANSF and instituting
    longer-term capacity for self-sustainment.

                              ARMY TROOP REDUCTION

        25. Senator Akaka. Secretary Gates, in January, you announced that
    in fiscal year 2015, the Army would decrease its permanently authorized
    end strength by 27,000 soldiers. In addition, the Army will also shed
    22,000 positions by fiscal year 2013, reducing the temporary surge
    numbers. This total reduction of 49,000 is very significant. How will
    this reduction affect the ability of the force to meet future demands?
        Secretary Gates. Two factors will determine how the end-strength
    reduction will impact on the Army's ability to meet future demands: the
    future demand level and the Army's end-strength reduction
    implementation plan. With regard to the demand level, I cannot predict
    with certainty when and where contingencies may occur that will require
    Army forces. I do believe that Army forces will continue to be required
    for a variety of missions, but that near-term demands will not reach
    the high level of commitment seen in recent years. As long as this
    assumption is valid, the Army will be able to implement the planned
    end-strength reductions while meeting demands and improving readiness
    and strategic depth. The Army is continuing to ensure accomplishment of
    its assigned missions, improve operational readiness to meet future
    demands and care for the well-being of its soldiers and their families.

        26. Senator Akaka. Secretary Gates, will this result in a potential
    realignment of combat forces to better support such demands?
        Secretary Gates. The Army is developing options to implement
    directed manpower reductions, while satisfying near-term demands and
    increasing readiness for unforeseen contingencies. The Army will plan
    and implement its end-strength reduction and any associated structure
    adjustments in a deliberate fashion with the intent of achieving a
    balanced and capable force. The Army is continuing to ensure
    accomplishment of its assigned missions, improve operational readiness
    to meet future demands and care for the well-being of its soldiers and
    their families.

        27. Senator Akaka. Secretary Gates, how will it affect our reliance
    on Guard and Reserve Forces?
        Secretary Gates. The Army depends on access to its Reserve
    component to accomplish its assigned missions. The planned Army Active
    component end-strength reductions will have modest impacts on Army
    Reserve component forces needed to support current and anticipated
    operational demand. The Army is developing options to implement the
    reductions, while satisfying near-term demands and increasing its
    readiness for unforeseen contingencies. The Army is continuing to
    ensure accomplishment of its assigned missions, improve operational
    readiness to meet future demands and care for the well-being of its
    soldiers and their families.

                        READINESS IN THE PACIFIC REGION

        28. Senator Akaka. Secretary Gates, the North Korean shelling of
    Yeonpyeong Island, the sinking of the Cheonan, and China's growing
    military capability continue to remind us of the importance of our
    military engagement in the Asia-Pacific region. Given the many demands
    on the defense budget and the recently announced reductions, how does
    the fiscal year 2012 budget impact our military readiness in the
    Pacific region?
        Secretary Gates. America's forward presence in the region played a
    key role in ensuring decades of stability in Asia. The United States
    continues to be globally postured in order to secure the homeland and
    its citizens from direct attack and to advance American interests
    around the world. While there are many demands on U.S. forces in the
    Asia Pacific, the fiscal year 2012 defense budget ensures that DOD
    remains prepared to meet the challenges and fulfill security
    commitments in the region.
        The fiscal year 2012 budget makes a number of investments that
    enhance the ability of U.S. forces to project power into the Asia-
    Pacific region and elsewhere. Chief among these are the commencement of
    a new long-range bomber program and increased procurement of
    conventional cruise missiles across the Future Years Defense Program
    (FYDP).
        At the same time, DOD has worked, and will continue to work, with
    U.S. allies and partners to maintain peace and ensure stability
    throughout Asia. With the fiscal year 2012 budget, DOD intends to
    enhance its forward military presence in the Pacific, invest in base
    resiliency to protect critical infrastructure, and develop new concepts
    of operation for how the United States will project power when
    challenged with emerging capabilities in the future.
        DOD will continue working with Japan to implement the bilateral
    Realignment Roadmap agreement and relocate 8,000 marines from Okinawa
    to Guam in order to offer strategic flexibility, enhance contingency
    response capabilities, and improve peacetime engagement. DOD requested
    $181 million in the fiscal year 2012 budget to support military
    construction to meet the requirements for the Marine Corps relocation
    to Guam.
        DOD will enhance the readiness of our forces in Korea with Tour
    Normalization. This initiative will further the long-term commitment to
    provide greater stability for forward stationed servicemembers and
    their families. For fiscal year 2012, the Army allocated $106 million
    for Tour Normalization, while the other services have not identified
    their allocation amount. DOD will also continue transitioning wartime
    operational control to South Korea by December 2015.
        Finally, DOD also intends to exercise regularly with our allies and
    partners. Examples of these exercises include the annual Ulchi Freedom
    Guardian and Foal Eagle/Key Resolve exercises in the Republic of Korea,
    the Keen Edge/Keen Sword and Annualex exercises in Japan, Talisman
    Sabre with Australia, and the U.S.-Thailand-hosted Cobra Gold which
    attracts partners from across the region. The United States continues
    to be engaged throughout the region. The earthquake, tsunami, and
    nuclear crisis response efforts in Japan are the latest examples, once
    again demonstrating the value of being able to work in close
    partnership in times of critical need.

                    FUTURE ISSUES FOR SECRETARIES OF DEFENSE

        29. Senator Akaka. Secretary Gates, you mentioned that this would
    most likely be your last defense budget hearing before this committee.
    If you were to compile a list of items that ``keep you up at night'',
    what would this list look like? In other words, from your perspective
    as our 22nd Secretary of Defense, what should your successor be told to
    watch out for?
        Secretary Gates. As I previously testified to the House Armed
    Services Committee, thinking about the future, two issues that worry me
    are the defense budget and jurisdictional lines in Congress.
        First, I see a growing disconnect between the missions given to the
    military and the discussion of the defense budget. It is true that, as
    the biggest part of the discretionary Federal budget, DOD cannot
    presume to exempt itself from the scrutiny and pressure faced by the
    rest of our government. It is imperative to eliminate wasteful,
    excessive, and unneeded spending.
        Nevertheless, drastic and ill-conceived cuts to the overall defense
    budget would be operationally catastrophic, and would have little
    impact on the Nation's $1.6 trillion deficit. DOD needs a budget
    baseline with a steady, sustainable, and predictable rate of growth
    that avoids extreme peaks and valleys in defense spending that can be
    enormously harmful to readiness, planning, and financial management.
    Only then can DOD have the right balance between winning the wars of
    today and being prepared for likely future threats. We shrink from our
    global security responsibilities at our peril, as retrenchment brought
    about by short-sighted cuts could well lead to costlier and more tragic
    consequences later--indeed as they always have in the past. The best
    way to support our military personnel is to ensure that they have the
    tools and training they need to prevail against present and future
    adversaries.
        Second, I worry that the increasing integration of national
    security policy and execution in the executive branch are not
    paralleled by the legislative branch of the government. Jurisdictional
    lines in Congress prevent congressional leadership from seeing the
    overall national security picture that the executive branch sees, and
    these lines risk splintering coherent whole-of-government efforts into
    multiple lines of authority and disparate agency budget accounts. It is
    my hope that efforts to achieve needed integration in Congress can
    reinforce our resolve on critical national security policies.
        Third, I am concerned that DOS and the U.S. Agency for
    International Development (USAID) do not have the resources necessary
    to contribute to a more integrated, coherent, and successful civil-
    military strategy. Ensuring support for whole-of-government efforts,
    especially in Iraq and Afghanistan, is critical to creating and
    maintaining secure environments in key regions of the world.

                   LANGUAGE SKILLS AND CULTURAL UNDERSTANDING

        30. Senator Akaka. Secretary Gates, I have long-supported efforts
    to improve the language skills and cultural understanding of our
    military and Federal workforce. The United States must have the
    language skills and cultural understanding to successfully engage in
    this world. Please discuss how DOD's fiscal year 2012 budget ensures
    that our military and civilian workers have the language skills
    necessary to meet its mission.
        Secretary Gates. Baseline funding of $792 million is projected in
    fiscal year 2012 to support language and culture instruction to achieve
    higher proficiencies.
        Programs include the following: increasing pre-accession training,
    education and immersion opportunities at the Service Academies and
    Reserve Officer Training Corps (ROTC); continuing the ROTC Skill
    Proficiency Bonus; providing pre-deployment training for general
    purpose forces; continuing Language Training Detachments to provide and
    sustain commanders' needs for language; regional and cultural training
    for the general purpose forces; continuing support to the Afghanistan/
    Pakistan Hands program; and enhancing English language training for
    partner nation personnel.
        DOD is moving ahead to develop strategic direction, to create
    effective policies and to refine processes for generating language,
    regional and cultural capabilities.

                                ADDICTION ISSUES

        31. Senator Akaka. Admiral Mullen, the Army Inspector General (IG)
    report released in January indicates that between 25 and 35 percent of
    patients assigned to special wounded-care companies or battalions are
    addicted to or dependent on drugs, particularly prescription narcotic
    pain relievers. What steps are being taken to address the issue of
    potential overmedication or addiction within Wounded Transition Units
    (WTU)?
        Admiral Mullen. After receiving multiple briefings from scientists
    and line leaders with a growing concern about drugs, I have come to the
    conclusion that reducing the use of illicit drugs, unprescribed
    pharmaceuticals, and excess alcohol requires an integrated approach.
    Drug abuse is a systems problem that requires a coordinated medical and
    line leadership approach.
        The Army Surgeon General LTG Eric B. Schoomaker established an
    aggressive program to minimize dependence on narcotics to treat pain
    through implementation of the recommendations of the Pain Management
    Task Force. The Task Force membership included a variety of medical
    specialties and disciplines from the Army, as well as representatives
    from the Navy, Air Force, TMA, and Veterans Health Administration
    (VHA). Between October 2009 and January 2010 this task force conducted
    28 site visits at Army, Navy, and Air Force Medical Centers, Hospitals
    and Health Clinics, as well as VHA and civilian hospitals. During site
    visits, leadership and staff were asked to assess pain management
    capabilities, strengths, weaknesses, and best practices at their
    respective facilities.
        The task force developed 109 recommendations that lead to a
    comprehensive pain management strategy that utilizes state-of-the-art/
    science modalities and technologies, and provides optimal quality of
    life for soldiers with acute and chronic pain. Medical providers are
    now informed and encouraged to utilize alternative means of pain
    management wherever possible. Such techniques include development and
    integration into clinical practice of a common Pain Assessment Tool,
    establishing acute pain medicine services across the continuum of care,
    implementing a drug abuse assessment strategy in the primary care
    setting, providing appropriate pain management and clinical pharmacy
    oversight in Warrior Transition Units (WTU), incorporation of pain
    related questions into the WTU Satisfaction Survey, and establishing a
    tiered pain management approach leveraging techniques such as
    osteopathic manipulation, acupuncture, and yoga.
        U.S. Army Medical Command (MEDCOM) has established a number of
    policies that also address this issue, including:

        1.  OTSG/MEDCOM Policy 09-022, WTU High Risk Medication Review and
    Sole Provider Program. This has proven to be a highly successful
    medication reconciliation policy that has reduced adverse events in
    warriors. Providers perform medication reconciliation with each Warrior
    within 24 hours of assignment. Clinical pharmacists monitor and support
    safe and effective medication treatment and review medication profiles
    weekly. Case managers periodically perform clinical risk assessment and
    when assigned. Warriors identified as high risk are closely monitored,
    dispensed smaller quantities of medications, and are assigned to one
    provider and pharmacy.
        2.  OTSG/MEDCOM Policy 09-064, Use of Opioid Medications in Pain
    Management. This policy educates providers regarding the proper
    selection of patients and appropriate treatment with opioid analgesics.
    Primary Care Managers (PCM) will assess patients face-to-face before
    initiating opioid therapy for risk factors and meet with patients every
    60-90 days to monitor clinical response and potential adverse effects.
        3.  MEDCOM published OPORD 10-76, Comprehensive Pain Management
    Campaign Plan (CPMCP) in September 2010, a phased operationalization of
    Pain Task Force recommendations including:

           a.  4.4.1. Establish Regional Medical Commands (RMC) Integrative
    Pain Management Centers and expansion/standardization of non-medication
    pain management modalities.
           b.  4.2.1. Incorporate integrative and alternative therapeutic
    modalities into a patient centered plan of care. Standards are being
    developed in order to expand/establish standards for alternative
    medicine programs (acupuncture, bio-feedback, yoga, osteopathic
    manipulation, and mind-body techniques).

        Additionally, Dr. Stanley and I have had several discussions
    regarding this issue. One outcome of these discussions was a Memorandum
    on ``A Systems Approach to Drug Demand Reduction in the Force.'' In
    this memorandum I made several recommendations that I believe will
    further reduce drug demand. These recommendations included:

             Subsume all DOD drug testing efforts under Readiness
            and fully fund the program
             Fund the expansion of drug testing to include the most
            commonly abused prescription drugs
             Complete the Prescription Drug Verification Portal to
            allow testing labs to instantly verify narcotics prescriptions
            in the TRICARE database

        As recommended, the Drug Demand Reduction Office is now under the
    Deputy Under Secretary for Readiness and has been fully funded,
    including funding to complete the Prescription Drug Verification
    Portal. As of March 2011 the portal was undergoing connectivity testing
    and was scheduled to begin beta testing before the end of the month.
    Additionally, a testing method for benzodiazepines is under development
    and expected to be implemented during the second quarter of 2012.
        It is important, however, to keep in mind that addiction is not the
    same as being prescribed narcotics or controlled substances even over a
    long period of time. Addiction refers to behaviors as a result of using
    or seeking drugs (narcotics) including active behaviors to obtain,
    abuse, and persist in a pattern of abuse in spite of adverse
    consequences. Tolerance and withdrawal may result after 6-8 weeks of
    daily use or years of intermittent use, however this does not equate to
    addiction. Consensus among addiction physicians shows development of
    narcotic dependence when treating pain in the absence of other risk
    factors is rare. Risk factors for addition include:

        1.  Personal history of addiction to opioids or other mood-altering
    substances (i.e. alcohol)
        2.  Family history of substance use disorders
        3.  History of poor medication compliance or abuse
        4.  Co-morbid psychopathology (depression, anxiety, etc) which may
    motivate a patient to self-medicate psychological pain.

        Returning to the importance of line leadership involvement, I am
    also moving forward with a doctrinal change called ``Total Force
    Fitness'' which calls upon line leaders to take a proactive role in
    setting the conditions for healthy lifestyles in the force.
        While the few specific examples I provided represent true progress,
    much more is being done. Task forces continue to study the many related
    issues and researchers continue to explore alternate pain management
    techniques. There will, of course, always be room for improvement, but
    we have made significant strides.

        32. Senator Akaka. Admiral Mullen, what is your overall assessment
    of the effectiveness of these WTUs?
        Admiral Mullen. The WTUs have been effective in helping ensure that
    our most seriously wounded soldiers are receiving the care they require
    and deserve. To some extent, however, WTUs have become victims of their
    own success. While intended to focus on our most seriously injured, the
    WTUs have become the default unit for our less injured soldiers also.
    The Warrior Care and Transition Program (WCTP), overseen by the Army's
    Warrior Transition Command, a Major Subordinate Command of the MEDCOM,
    currently provides care, support, and advocacy for some 17,000 soldiers
    and veterans. This represents a dramatic increase in scope and impact
    compared to what preceded the establishment of the WCTP. WTU plays a
    central role in the management of the care provided to wounded, ill,
    and injured soldiers.
        Although a remarkable amount has been accomplished, the WCTP
    continues to mature and improve through a coordinated medical and line
    leadership effort. Through a vigorous program of organizational
    inspections and assistance visits, the Army's Warrior Transition
    Command continues to identify areas of the program that can be
    improved, as well as best practices that can be implemented across all
    WTUs. Additionally, through the Department of the Army's Inspector
    General Program, Army leadership recently identified 56 recommendations
    for improving the WCTP. The Army, under the leadership of BG Darryl
    Williams, Commander of Warrior Transition Command, is currently in the
    process of implementing these recommendations as part of a program of
    continuous refinement and improvement.
        Additionally, the Army's Warrior Transition Command continues to
    respond to the requirements and recommendations of the ongoing DOD
    Inspector General's review of WTUs. Also, I am aware that the
    Congressionally mandated Recovering Warrior Task Force recently
    received an entire day of testimony from Brigadier General Williams and
    the staff of the Warrior Transition Command on the various aspects of
    WTUs and the WCTP and is now conducting site visits at WTU locations. I
    look forward to the findings and recommendations of the Task Force and
    I am confident Army leadership will continue its commitment both to
    transparency and responsiveness to the findings and recommendations of
    the Recovering Warrior Task Force.
        I commend Army Chief of Staff, General George Casey for his
    leadership in ensuring that the care of wounded, ill, and injured
    soldiers continues to improve and flourish. As Secretary of Defense
    Gates and I have repeatedly stated, after the war itself, we have no
    greater responsibility than to care for those who have been wounded,
    become ill, or been injured in service to their country.

                      PSYCHOLOGICAL EVALUATIONS OF TROOPS

        33. Senator Akaka. Admiral Mullen, upon completing deployments and
    prior to returning to the civilian world, Guard and Reserve members are
    required to undergo a demobilization process to evaluate each member's
    overall health and wellbeing. Oftentimes, mental health issues do not
    surface immediately, but rather after the soldier returns to civilian
    life. What changes do you plan to make in how these men and women are
    evaluated upon return from deployment to better account for their
    psychological wellbeing?
        Admiral Mullen. It is DOD policy that all returning servicemembers
    will receive a Post-Deployment Health Assessment within 30 days of
    their return from deployment with the participation of health care
    providers. In addition, they should receive a Post-Deployment Health
    Reassessment 3 to 6 months following their return. Both of these
    assessments have significant portions focusing on the evaluation of
    psychological well-being, and both of these assessments are required
    for returning Reserve component members.
        In addition, DOD is implementing mental health assessments,
    described below, which will be required for Guard and Reserve members.
    The purpose of the mental health assessment is to identify mental
    health conditions including posttraumatic stress disorder, suicidal
    tendencies, and other behavioral health conditions that require
    referral for additional care and treatment.
        On July 19, 2010, the Assistant Secretary of Defense for Health
    Affairs (ASD(HA)) issued a policy memorandum to the military
    departments to implement the mandatory mental health assessments
    following deployment. The Services have requested that the DOD Reserve
    Health Readiness Program (RHRP) support their Reserve and Guard
    Components by conducting the mental health assessments according to the
    HA policy guidance. RHRP has modified its contract to address the
    requirement telephonically. RHRP providers will use the DOD mental
    health assessment training program and become certified to conduct
    mental health assessments for the Reserve components as specified in
    the ASD(HA) guidance. The Air Force Reserve component expects to be in
    full compliance with the policy no later than April 2011. The other
    Service components are currently working with the RHRP to implement the
    mandatory mental health assessments in their Reserve components as
    quickly as possible.

                 NATIONAL GUARD AND RESERVE SUICIDE PREVENTION

        34. Senator Akaka. Admiral Mullen, DOD appears to be doing a better
    job preventing suicides within our Active-Duty Forces than in the past.
    At the same time, the suicide rates for National Guard and Reserve
    units have increased. Please discuss actions that are being considered
    or implemented to help our Guard and Reserve members in this area.
        Admiral Mullen. The resilience and suicide prevention programs that
    the Services have implemented are also being tailored to fit the unique
    needs of the National Guard and Reserve members and their families. The
    National Guard in each State has programs that are unique to the state,
    which incorporate such approaches as peer support, call centers, or
    embedded mental health providers. For Reserve members and their
    families who have entered the deployment cycle, the Yellow Ribbon
    Reintegration Program provides information and referrals that support
    their health and well-being.
        DOD also has other tools, such as the online Real Warrior Campaign,
    Service-produced video messaging, Military Pathways self-assessment
    tools and the National Resource Directory that can enable remote access
    to support. This is particularly useful to Reserve component members
    and their families since they are dispersed throughout communities
    nationwide and not centrally located at an installation.
        The following are some examples of ongoing National Guard and
    Reserve efforts being made to help members in this area:

             The Air National Guard Psychological Health Program
            has embedded Wing Directors of Psychological Health (WDPHs) to
            provide consultation, information, referral, and case
            management for Airmen and their families. WDPHs work with State
            Directors of Psychological Health, Joint Family Support
            Assistance Program and Military and Family Life Consultants,
            serving as consultants to medical personnel conducting pre- and
            post-deployment assessments of airmen and provide further
            screening, referral and case management as appropriate.

                     The Army National Guard (ARNG) has distributed
                    the Resilience and Risk Reduction Campaign Plan, and
                    the ARNG ``Leader's Guide to Soldier Resilience'' to
                    State leaders to promote the mental, physical, and
                    spiritual health of soldiers and families. These guides
                    complement peer-to-peer support programs, aimed at
                    building a support network for soldiers in between
                    traditional drill periods.
                     The Navy Reserve sponsors a Psychological
                    Health Outreach Program where counselors provide
                    education, referrals, and resources to Navy and Marine
                    Corps reservists and their families, to include those
                    who may be considered suicide risks. This proactive
                    outreach to every corner of the country occurs during
                    the deployment cycle and continues throughout the
                    reintegration period in a variety of venues.
                                     ______

                   Questions Submitted by Senator Mark Udall

                 PRESIDENT'S ECONOMIC STRATEGY FOR AFGHANISTAN

        35. Senator Udall. Secretary Gates and Admiral Mullen, the National
    Defense Authorization Act (NDAA) for Fiscal Year 2011 requires the
    President to provide an economic strategy for Afghanistan, one that
    supports the counterinsurgency campaign and helps create sustainable
    Afghan institutions--but also one that will help the Afghan Government
    eventually be able to pay for its own security. When can we expect to
    see this strategy, and how important do you believe an economic
    strategy is to the success of the overall campaign?
        Secretary Gates. An economic strategy will contribute to the
    overall success of the civil-military campaign plan by helping USAID
    focus its efforts and resources in ways that maximize the effects of
    U.S. assistance in Afghanistan. We have participated in discussions,
    led by the National Security Staff, on the process by which the report
    will be produced. DOS and USAID are part of this process. DOD will
    participate in drafting of the report, as directed by the Executive
    Office of the President, and will pay particular attention to elements
    of economic strategy that support the U.S. counterinsurgency campaign
    in Afghanistan, promote economic stabilization, and enhance the
    establishment of sustainable institutions. DOD will work, as directed,
    to help complete this report as expeditiously as possible, noting the
    complexity and difficulty of the task.
        Admiral Mullen. An economic strategy is a key element of our whole-
    of-government approach to the campaign in Afghanistan in the short and
    medium term. Economic development addresses the drivers of instability
    in key population areas by providing equitable access to basic
    services. A economic strategy is also important to the longer-term
    sustainability of the Afghan state by enhancing the government revenue
    base and building a robust private sector that underpins job creation,
    economic growth and long-term fiscal sustainability.
        In a coordinated interagency effort, DOS, USAID, and DOD are
    working to develop a U.S. strategy to strengthen Afghanistan's economy.
    Other departments and agencies across the U.S. Government, such as the
    Department of Treasury, will also be able to provide useful input to
    the strategy.

        36. Senator Udall. Secretary Gates and Admiral Mullen, what are
    likely to be the basic tenets of that economic strategy--the minimum
    objectives it should meet in order to complement and support the
    overall campaign?
        Secretary Gates. DOD plays a supporting role to DOS and USAID in
    terms of an economic strategy for Afghanistan. I believe that it is
    important, at a minimum, for the economic strategy to address the need
    to expand employment opportunities for Afghanistan's bourgeoning
    population of young people and increase government revenue, giving hope
    that Afghanistan will in the future be able to provide for its own
    security with minimum outside assistance.
        To reach fiscal sustainability and increase economic growth,
    Afghanistan must establish a transparent and accountable regulatory
    regime for managing public resources, including those generated by its
    natural resource base. The economic strategy should also account for
    agricultural growth, which contributes to food security. Finally, an
    economic strategy should make the maximum use of the resources that
    build towards an economic structure which benefits the majority of
    Afghans and does not facilitate the empowerment of a few elites.
        Admiral Mullen. While we would defer to DOS and USAID, who have the
    real expertise on this area, from DOD view it is important that at a
    minimum the economic strategy address the need to provide jobs for
    Afghanistan's bourgeoning population of young people. Additionally,
    this strategy should chart a way forward that gives hope that
    Afghanistan will in the future be able to provide for its own security
    with minimum outside assistance to ensure that Afghanistan is never
    again a safe haven for extremist to attack the United States. The
    strategy should make maximum use of the resources influx we now have to
    build towards an economic structure that benefits the majority of
    Afghans and does not facilitate the empowerment of exploitive elite.
        An economic strategy will be an important element of developing
    Afghanistan's long term fiscal sustainability. It will emphasize the
    need to move from donor dependency to export-led growth.

        37. Senator Udall. Secretary Gates and Admiral Mullen, from a DOD
    perspective, what should be the further trajectory of engagement and
    commitment by the USAID and other elements of the U.S. Government that
    provide civilian assistance?
        Secretary Gates. The U.S. strategy should take into account both
    near-term activities that help stabilize cleared areas, as well as
    longer-term considerations that are more typical of traditional
    development programs. To that end, the U.S. Embassy in Kabul and U.S.
    Forces-Afghanistan recently revised the joint civil-military campaign
    plan, which spells out the integrated civilian and military efforts
    required for our strategy in Afghanistan to succeed. DOS and USAID
    contributed additional personnel through the civilian surge, allowing
    civilians to partner and share expertise with U.S. military units at
    every level of the chain of command, from the national level down to
    the district level. I strongly support USAID's continued assistance to
    the Afghan Government to build effective governance structures and
    effectively deliver services to the Afghan people. Given the importance
    of agriculture to the Afghan economy, USAID agricultural experts along
    with U.S. Department of Agriculture experts have an important role in
    advising Afghans on ways to increase the productivity and income of
    Afghan farmers, and in helping to build the capacity of the Ministry of
    Agriculture, Irrigation, and Livestock.
        Admiral Mullen. USAID and its civilian partners play a critical
    role in Afghanistan, and need more resources to continue to perform the
    challenging task of rebuilding Afghanistan. In areas that are more
    stable, USAID has demonstrated its value by providing longer-term
    economic development projects. We see significant need to preserve and
    expand the programs and activities currently undertaken by USAID to
    support the stabilization effort, build capacity of the government and
    civil society, encourage economic growth, and further the social
    development of Afghanistan. As we continue our efforts to develop
    Afghanistan's economy, we will consider how best to ensure the unique
    capabilities that USAID provides are sustained.
        As we begin to thin out our military presence in areas that we
    transition to ANSFs, we will rely on our civilian partners to take a
    lead role in engaging with Afghan counterparts. The sustainment of
    civilian assistance in Afghanistan will be critical to our strategic
    partnership with the Afghans, and as Secretary Gates recently observed:
    ``Economic development is a lot cheaper than sending soldiers''.
        Note: General Petraeus's testimony on March 15, 2011:

              ``I am concerned that levels of funding for our DOS and USAID
            partners will not sufficiently enable them to build on the
            hard-fought security achievements of our men and women in
            uniform. Inadequate resourcing of our civilian partners could,
            in fact, jeopardize accomplishment of the overall mission. I
            offer that assessment, noting that we have just completed a
            joint civil-military campaign plan between U.S. Forces
            Afghanistan and the U.S. Embassy which emphasizes the critical
            integration of civilian and military efforts in an endeavor
            such as that in Afghanistan.''

                TASK FORCE FOR BUSINESS AND STABILITY OPERATIONS

        38. Senator Udall. Secretary Gates and Admiral Mullen, what further
    role in Afghanistan do you envisage for the Task Force for Business and
    Stability Operations (TFBSO)?
        Secretary Gates. TFBSO is an invaluable element of the United
    States' comprehensive civil-military effort in Afghanistan. TFBSO's
    mission--generating economic growth in conflict areas, specifically in
    Afghanistan, including through the mobilization of private investment--
    is one that no other part of the U.S. Government is currently able to
    perform. I understand the view of some that DOD is not the appropriate
    fit for such a mission, but it is important to note that this work is
    not currently being carried out by any other U.S. department or agency.
        Moreover, senior Afghan officials requested that TFBSO continue its
    activities in Afghanistan, and senior U.S. military and civilian
    leaders in Afghanistan expressed strong support for TFBSO's activities.
    While DOD works to provide options to Congress for the continuation of
    TFBSO's mission, I request your support in continuing the TFBSO program
    so that it may continue performing its vital role.
        Admiral Mullen. The TFBSO has fulfilled an important role in
    Afghanistan. There is a large institutional gap in U.S. capability
    regarding economic development operations in conflict zones. TFBSO has
    demonstrated value to DOD field commanders and U.S. Ambassadors--both
    in Iraq and Afghanistan--as filling a vital need for initiating longer-
    term economic development projects while the countries are, or were, in
    ongoing operations. Specifically, it helps fill the gap between initial
    stabilization and longer-term economic development. We see significant
    need to preserve the programs and activities currently undertaken by
    the TFBSO to support economic stabilization operations in Afghanistan.
    As we continue our efforts to develop Afghanistan's economy, we will
    consider how best to ensure the unique capabilities the TFBSO provides
    are sustained.

        39. Senator Udall. Secretary Gates, please share your views on the
    requirement in the NDAA to provide a plan for transferring TFBSO's
    activities to USAID, whether you would support such a transfer in
    fiscal year 2012, and whether you have any concerns regarding the
    potential transfer of the TFBSO's activities to USAID.
        Secretary Gates. The TFBSO proved to be an invaluable element of
    the United States' comprehensive civil-military effort in Afghanistan.
    TFBSO's mission--generating economic growth in conflict areas,
    specifically in Afghanistan, including through the mobilization of
    private investment--is one that no other part of the U.S. Government is
    currently able to perform. I understand the view of some that DOD is
    not the appropriate fit for such a mission, but it is important to note
    that this work is not currently being carried out by any other U.S.
    department or agency.
        Moreover, senior Afghan officials requested that TFBSO continue its
    activities in Afghanistan, and senior U.S. military and civilian
    leaders in Afghanistan expressed strong support for TFBSO's activities.
    While DOD works to provide options to Congress for the continuation of
    TFBSO's mission, I request your support in continuing the TFBSO program
    so that it may continue performing its vital role.
                                     ______

                   Questions Submitted by Senator Joe Manchin

                             MEDICATION MANAGEMENT

        40. Senator Manchin. Secretary Gates, last week the New York Times
    reported on servicemembers that come home from battle caught in a web
    of misuse and overuse of prescription drugs--in fact, a young man from
    my home State was featured as an example of how the misuse of
    medications can lead to disaster. We send our men and women to war on
    multiple deployments and give them medications to keep them awake, to
    help them sleep, and to help ease the physical and psychological pain
    of being in a stressful environment. As a result, many are coming home
    broken, not healed. We are finding out that the stories behind many
    suicides and unexpected deaths are often complicated by dangerous
    cocktails of drugs.
        It's been nearly 2 years since the Pentagon was directed in Section
    715 of the NDAA for Fiscal Year 2010 to study how medications are being
    used, and misused, to treat the physical and mental wounds of our
    warfighters, and how to decrease the risks to our troops. The study is
    now overdue by almost a year. This problem is costing lives and money.
    When can we expect to receive this critical study on the management of
    medications for physically and psychologically wounded members of the
    Armed Forces?
        Secretary Gates. I appreciate the sensitivity of this issue and
    your concern for a solid prevention strategy. As was indicated in the
    interim report, DOD pinpointed certain effective methodologies that
    identify dangerous combinations of medications. The scope of this study
    is complex and multi-layered, however. It includes both inpatient and
    outpatient care at military treatment facilities, service specific
    WTUs, community-based WTUs, and private sector care.
        Additionally, this protocol must be approved by the Institutional
    Review Board (IRB) that oversees the contractor with whom the
    Department is engaged in for the study. Likewise, DOD needs approval by
    the IRBs of the six multi-Service sites where the contractor would
    conduct focus groups and a review of medication practices.
        The overall IRB process may take up to a year. At this time, DOD
    obtained all of the necessary IRB approvals.
        The site visits are scheduled to take place no later than March 31,
    2011. These site visits are instrumental in formulating a gap analysis
    between current and best practices and in developing policies and
    procedures that will carry out the intent of the legislation. DOD
    anticipates completion of the final report by November 2011.
        Thank you for your continued patience as we develop a comprehensive
    report that is thoroughly responsive to the legislative requirements.

        41. Senator Manchin. Admiral Mullen, please provide more
    information about the growing problem of over-medicating and self-
    medicating soldiers and what resources in the fiscal year 2012 budget
    are being directed toward this problem.
        Admiral Mullen. Increased medication use is a societal problem and
    DOD medicine mirrors civilian practice. This problem has been of
    increasing concern to Dr. Stanley and me. Our ongoing discussions lead
    me to believe that drug abuse represents both a symptom and a problem
    that fuels the worsening of other conditions. Senior military leaders
    have been aware of the acute need to gain better controls on the
    inappropriate use of drugs. However, until recently, we have been
    unaware of the hurdles faced by their subordinate commanders and by the
    DOD drug testing community. We realize that drug demand reduction
    operates within a larger system of readiness and is therefore of great
    importance to the Chiefs.
        Despite growing concerns among commanders that drug use is a
    problem within the ranks, the DOD drug testing programs have remained
    at budget flat line for the past several years and are facing an
    estimated $11 million shortfall. While the abuse of prescription drugs
    has grown substantially since the beginning of the wars, we have only
    been capable of testing a fraction of these compounds. Until recently,
    the main DOD drug testing program was positioned under the TMA while
    its budget was under the Office of the Secretary of Defense (OSD)
    Policy (DASD Counternarcotics and Global Threats) within the
    Counternarcotics Central Transfer Account. This created a dual loyalty
    conflict.
        Compared to the 1980s, when highly effective drug testing in the
    DOD was first launched, there has been a substantial reduction in
    commanders' willingness to take urinalysis positive individuals to
    adjudication. This was certainly a concern heard by VCSA Chiarelli
    during his visits to installations for a suicide prevention task force
    review. Commanders indicated the competing demands of filling ranks for
    deployment and removing drug-using troops made random urinalysis
    untenable for many. Furthermore, the adjudication process is often long
    and is perceived to distract leaders from deployment-specific tasks.
    Rising rates of legal narcotics prescriptions without a seamless
    capability to quickly verify the prescription means that these actually
    cloak the real extent of the problem.
        To help alleviate these problems, I recommended that Dr. Stanley
    take the following actions:

             Subsume the DOD drug testing efforts directly under
            Readiness and fully fund the program to the required levels.
             Complete the Prescription Drug Verification Portal
            (the portal that would allow drug testing labs to instantly
            verify narcotics prescriptions in the TRICARE database).
             Make drug prosecution statistics part of regular unit
            readiness reporting.
             Designate several independent drug testing teams
            (similar to the approach used by the UK MOD) as mobile units
            that can independently obtain specimens at random. This
            encourages commanders to remain compliant and introduces a new
            variable that is likely to improve deterrence.
             Fund the expansion of drug testing to include the most
            common prescription drugs of abuse (particularly
            benzodiazepines e.g. Valium, this is estimated by the Drug
            Demand Reduction Program Office to be a $20 million shortfall).
             Preface these changes with an announcement to the
            force encouraging drug counseling and treatment 90 days prior
            to any launch of a new testing regimen. The objective of the
            program should be to drive inappropriate drug use to their
            lowest possible levels.
             Regularly exchange information between the DOD Drug
            Demand Reduction Program and the ongoing suicide prevention
            programs and the DOD Joint Pain Task Force.

        As previously stated, several of these recommendations have already
    been implemented and others are in progress.
        In addition to the initiatives above, the Army's new policies and
    procedures for identifying and mitigating polypharmacy have reduced the
    risk of over-medication and self-medication. These include:

             OTSG/MEDCOM Policy 10-076, Guide for Enhancing Patient
            Safety and Reducing Risk via the Prevention and Management of
            Polypharmacy Involving Psychotropic Medications and Central
            Nervous System Depressants: Implementation of this policy has
            resulted in improved communication by involving the patient in
            the treatment plan. The provider will review medications at
            each encounter and refer to a clinical pharmacist for a
            comprehensive medication review when the patient is on four or
            more medications with at least one a psychotropic or Central
            Nervous System depressant.
             Revision of MEDCOM Regulation 40-51, Medical Review
            Officers and Review of Positive Urinalysis Drug Testing
            Results: This revision will limit the authorized use of
            controlled substances and clarify the timeframe for determining
            legitimate use of controlled substances.
        Note: As of the date and time of submission. This response does not
    address specific resources included in the fiscal year 2012 budget
    request. A revised response will be provided once granularity on this
    subject is obtained.

                             EFFICIENCY INITIATIVES

        42. Senator Manchin. Secretary Gates, I want to applaud your
    efforts to, as you've said, ``reform the way the Pentagon does
    business--to not only make every defense dollar count, but also to
    become a more . . . effective organization.'' The American taxpayers
    want us to start making the hard choices--to root out every
    inefficiency, cut every bit of waste, and most importantly, change the
    culture of endless money.
        I am still concerned that we do not have the full audit of DOD.
    What are the obstacles preventing this commonsense practice from
    occurring, and what can we do to make it happen sooner?
        Secretary Gates. DOD's massive size and complexity make it
    extremely difficult to achieve full auditability. In addition, DOD
    financial processes were established and ingrained in systems long ago.
    These processes and systems were designed for budgetary accounting--not
    proprietary or commercial accounting called for in the Chief Financial
    Officers (CFO) Act. To meet the commercial accounting standards called
    for in the CFO Act, there is a substantial amount of work to be done,
    including efforts to address the most difficult challenges:

             DOD systems are not integrated--breaking the audit
            trail
             Systems do not collect data at the transaction level
             Many diverse functional organizations must work
            together in end-to-end processes
             Earlier focus was on information of limited value to
            management and was not supported throughout DOD

        Meeting these challenges and improving DOD's business processes
    receive more attention than ever before. DOD is addressing them by
    changing the way it does business. To realize success, DOD is using a
    streamlined approach that focuses on improving and auditing the
    information we most use to manage. Improving the budgetary and mission
    critical asset information used to manage the DOD will allow commanders
    and other leaders to better meet mission needs with available
    resources. I believe this alignment of operational and financial
    objectives is the most effective incentive to improve financial
    management.
        DOD also established long- and short-term goals, set up a
    governance process, and provided funding to the Military Services to
    make process and system improvements. These system improvements,
    primarily made by deploying Enterprise Resource Planning Systems
    (ERPS), have broad operational improvement goals which include
    improving business processes in a way to support audited financial
    statements. DOD also implemented other effective measures such as
    including audit related actions and objectives in Senior Executive
    performance plans. Preparing DOD for financial statement audits is a
    monumental task, but with leadership focus, accountability, and our
    streamlined approach, I believe it can succeed. With this streamlined
    approach I believe that DOD can achieve its goal of meeting this
    objective by 2017.

                                     CHINA

        43. Senator Manchin. Secretary Gates, during the next 5 to 10
    years, how do you see the defense budget changing as a result of
    China's predicted rise as a worldwide provider of strategic minerals,
    consumer goods, and weapons?
        Secretary Gates. The rise of China as a regional political,
    economic, and military power with global ambitions is one of the
    defining elements of the international strategic and security
    environment.
        The primary focus of China's military modernization appears to
    remain on preparing for contingencies in the Taiwan Strait. However,
    China's military is also exploring missions beyond Taiwan. DOD is
    watching carefully, for example, China's development and acquisition of
    weapon systems and capabilities that would classify as intended for
    anti-access and area denial missions. The 2010 Quadrennial Defense
    Review examined operating in an anti-access/area denial environment and
    recommended that the United States pursue effective, affordable, and
    sustainable U.S. defense posture based on a broad portfolio of military
    capabilities with maximum versatility across the widest possible
    spectrum of conflict.
        The President's budget proposal for fiscal year 2012 includes $113
    billion for DOD to procure the capabilities needed to protect the
    United States and its interests in the Asia-Pacific region. Included in
    this amount are funds to invest in new programs, as well as
    modernization efforts for existing equipment. Two specific items of
    note are investments in a new bomber for the Air Force and five
    additional ships for the Navy.
        These investments will enable the United States to sustain our
    forward presence in the Western Pacific and to operate in contested
    areas in the future.

        44. Senator Manchin. Secretary Gates, what does DOD now spend on
    goods from China?
        Secretary Gates. In fiscal year 2010, the DOD purchased a total of
    $123,560 in unspecified miscellaneous commercial, industrial, and
    professional goods and services directly from Chinese industry. DOD
    expects to issue its annual report to Congress on purchases from
    foreign entities shortly, presenting in greater detail DOD purchase of
    goods and services from all foreign countries, including China.
                                     ______

              Questions Submitted by Senator Kirsten E. Gillibrand

                                  AFGHANISTAN

        45. Senator Gillibrand. Secretary Gates, in December 2010 President
    Obama, while discussing the results of his Afghanistan-Pakistan review
    policy, said ``the United States is on track to achieve its goals in
    the war against terrorism against al Qaeda in the Afghanistan-Pakistan
    region.'' The review also stated ``as a result of our integrated
    efforts in 2010, we are setting the conditions . . . to begin a
    responsible, conditions-based U.S. troop reduction in July 2011.'' Now
    that we are about 135 days away from that July 2011 objective, how many
    troops do you think conditions on the ground will allow us to bring
    home this year?
        Secretary Gates. General Petraeus will provide options and make a
    recommendation for the drawdown of U.S. surge forces in the coming
    months. This timing will allow him to take into account important on-
    the-ground considerations, including progress in provinces and
    districts that are being transitioned to Afghan-security lead. This
    analytical process will allow the time needed to provide the President
    the best information to inform his ultimate decision on this matter.
    Until that time, it is too early to say how many U.S. forces will
    redeploy.

        46. Senator Gillibrand. Secretary Gates, you have budgeted in
    fiscal year 2012 for 98,000 troops in Afghanistan--the same force level
    you have today. I understand that you wish to leave yourself wiggle
    room in case conditions on the ground do not permit a timely
    withdrawal, but the American people want to see execution of the
    promise to begin withdrawal this summer. At some point we need to
    reduce our troop presence and turn security over to the Afghan security
    forces. Why could you not have assumed a lower number of troops in
    building your fiscal year 2012 budget?
        Secretary Gates. There is every indication that conditions will
    permit the United States to begin withdrawing forces in July 2011.
    General Petraeus will provide options and make a recommendation for the
    commencement of the drawdown of U.S. surge forces. General Petraeus may
    also recommend, as the transition process continues and the
    responsibility for security in selected regions is transitioned to
    Afghan security forces, that some U.S. forces be reinvested in other
    areas.
        DOD's budget request is driven by numerous factors, including
    assumptions that may need to be reassessed as conditions evolve in a
    dynamic environment. General Petraeus and I continue to assess the
    conditions on the ground so that we may provide options and a
    recommendation to the President, but I believe that it is premature to
    attempt to forecast a budget based on lower U.S. force levels at this
    point in time.

        47. Senator Gillibrand. Secretary Gates, as I assess the situation,
    it seems that 135 days out you are still not confident about conditions
    on the ground. When will you be confident?
        Secretary Gates. I am confident that we are making steady progress
    on the ground. I recently returned from my 13th trip to Afghanistan as
    Secretary of Defense and the progress made by our forces exceeds my
    expectations.
        The President and I trust the judgment of General Petraeus, who
    will provide us options and make a recommendation in the coming months
    for the commencement of the drawdown of U.S. surge forces in July 2011.

        48. Senator Gillibrand. Secretary Gates, if your assumptions are
    ultimately too high, where will the extra funding go?
        Secretary Gates. I will consult with Congress to determine the best
    course of action.

        49. Senator Gillibrand. Secretary Gates, are you planning a similar
    model in Afghanistan that we executed in Iraq--changing composition of
    the forces deployed in Afghanistan, over time, to an ``advise and
    assist mission'' in support of Afghan forces?
        Secretary Gates. The short answer is yes. As the United States
    moves toward transferring lead responsibility for security to the
    Afghan security forces in 2014, I expect to continue to conduct
    training, advising, and assisting activities and joint counterterrorism
    operations, at the request of the Government of Afghanistan, to help
    secure U.S. and Afghan mutual national interests. This is particularly
    helpful in ensuring that Afghanistan is never again a safe haven from
    which terrorists attack the United States. An enduring strategic
    partnership with Afghanistan is important to demonstrate to the Afghans
    and others in the region that the United States is committed to this
    goal.

        50. Senator Gillibrand. Secretary Gates, how much of that progress
    do you expect to accomplish in fiscal year 2012?
        Secretary Gates. The situation in Afghanistan is very fluid.
    Progress is significant but still fragile and reversible. Based upon
    the progress in recent months, however, I am increasingly confident
    that alongside our Afghan and international partners, and with
    Congressional support, the United States will continue to solidify
    security gains and transition lead responsibility for security for
    additional geographic areas to Afghan security forces throughout fiscal
    year 2012. Concurrently, Afghan security forces will continue to
    develop their fighting and support capabilities. I believe that our
    strategic partnership with the Government of Afghanistan, including our
    willingness to train, advise, assist, and equip the ANSF, and to carry
    out joint counterterrorism operations through 2014 and beyond, will
    change the strategic calculus of the Taliban and other actors. Combined
    with our relentless pursuit of mid-level Taliban commanders, the
    increasing competency and professionalism of ANSF will encourage
    greater numbers of fighters to reconcile with the Government of
    Afghanistan and reintegrate into Afghan society.

        51. Senator Gillibrand. Admiral Mullen, in the recently published
    National Military Strategy (NMS) you stated ``we must continue to
    support and facilitate whole-of-nation approaches . . . military power
    complements economic development, governance, and the rule of law.''
    Yet you just said that improvements in Afghanistan's governance and
    reconstruction have not kept pace with improving security. Given the
    Karzai Government's extensive corruption, including the looming
    collapse of the Kabul Bank that pays Afghan military salaries, how do
    you hope to sustain the erosion of al Qaeda and the Taliban's support
    among the Afghan people no matter what successes our troops obtain?
        Admiral Mullen. We will sustain the erosion of al Qaeda and the
    Taliban's support among the people by capitalizing on our successes and
    momentum gained through the winter 2010 campaign. The new Civilian-
    Military Campaign Plan is closely aligned with the Government of
    Afghanistan's National Development Strategy and the Joint Afghan NATO
    Inteqal Board (JANIB) transition plan. Our objectives are oriented
    towards the goals of the Lisbon Conference and transitioning the lead
    for security to Afghan security forces by the end of 2014. There is a
    greater emphasis on interagency coordination and support to our
    civilian partners on provincial and district governance, trade,
    transportation, infrastructure; counter-narcotics programs; customs and
    border-capacity development and sustainable private-sector development.
    There will be an emphasis on civilian and diplomatic efforts throughout
    transition but we now have the right inputs to make the strategy
    successful.

        52. Senator Gillibrand. Admiral Mullen, when I traveled to
    Afghanistan and Pakistan a few months ago I heard repeatedly from our
    commanders on the ground that our mission in Afghanistan is
    inextricably linked to Pakistan's harboring of al Qaeda, Taliban, and
    aligned organizations. U.S.-Pakistani relations have chafed greatly
    over the past year. How are we going to execute a redeployment strategy
    in Afghanistan if Pakistan does not go after the insurgency within its
    borders?
        Admiral Mullen. Our commanders on the ground accurately
    characterize the inextricable linkage of security and counterinsurgency
    operations in Afghanistan and Pakistan. Peace in the region, and our
    mission success, depend on securing populations and denying safe havens
    for terrorist groups on both sides of the border. Given the difficult
    terrain and sophisticated threats in the border area, observers not in
    contact with the Pakistan military may conclude that they are not
    pursuing insurgents on their side of the border.
        The situation on the ground in Pakistan is complex. The Pakistan
    military has made unprecedented progress over the past 2 years in clear
    and hold operations against militants in Khyber-Pakhtunkhwa and the
    Federally Administered Tribal Areas (FATA). In the course of those
    operations, they have lost roughly 3,000 dead and 8,000 wounded among
    security forces fighting militants, with thousands of civilian
    casualties as well. While it is true that the Pakistan military has not
    gone after Afghanistan-focused insurgents to the same degree it has
    taken on those groups targeting their own government this is a function
    both of Pakistan's perceptions about the specific threats and the
    capabilities of the Pakistan military, which are already stretched by
    the need to continue holding areas previously cleared.
        Although our bilateral relations with Pakistan have had difficult
    moments in the past year, there have also been noteworthy positive
    developments such as cooperation between our forces in flood relief
    operations and the development of more formal, robust defense planning
    ties and security assistance. We have also greatly improved operational
    cooperation between our forces in the border regions, reducing safe
    havens in both Afghanistan and Pakistan.
        DOD continues to plan force level reductions in Afghanistan based
    on the increasing capabilities of ANSFs and conditions on the ground.
    As our cooperation and coordination with Pakistan in the border area
    grows and develops, the greater the conditions will be to secure the
    population.

                                   TERRORISM

        53. Senator Gillibrand. Admiral Mullen, in the NMS it states ``the
    intersection between states, state sponsored, and non-state adversaries
    is most dangerous in the area of weapons of mass destruction
    proliferation and nuclear terrorism.'' And then it goes on to say ``the
    prospect of multiple nuclear armed regimes in the Middle East with
    nascent security and command and control mechanisms amplifies the
    threat of conflict, and significantly increases the probability of
    miscalculation or the loss of control of a nuclear weapon to non-state
    actors.'' How confident are you that al Qaeda or associated insurgent
    groups could not acquire or steal a nuclear weapon or nuclear materials
    from Pakistan, that they could in turn use in a nuclear September 11
    scenario?
        Admiral Mullen. The prospect of unsecure nuclear weapons or
    materials, and their acquisition and use by al Qaeda or an affiliate,
    is a serious threat that DOD addresses in the NMS as well as in our
    operational planning efforts. This scenario presents a formidable
    challenge for developing prevention and response strategies; however,
    as preventing nuclear-armed terrorism is a top presidential priority,
    we have a number of initiatives in place to broadly address this
    threat.
        With regard to Pakistan specifically, as the Secretary has said
    before, we are confident in the security of Pakistan's nuclear arsenal.

        54. Senator Gillibrand. Admiral Mullen, how are the growing U.S.-
    Pakistan tensions impacting our ability to protect against that
    scenario?
        Admiral Mullen. The U.S.-Pakistan relationship has endured periods
    of tension as well as periods of cooperative growth in recent years.
    While street protests and negative media coverage frequently complicate
    our work in Pakistan, they do not prevent the cooperative efforts that
    we and our Pakistan military counterparts see as critical to mutual
    security. Compared to 10 years ago, when bilateral relations were
    nearly frozen due to sanctions we have far more robust mechanisms for
    cooperation and dialogue today. The bilateral relationship reflects a
    slow, difficult process of deepening trust and cooperation. Full
    transparency may require years to develop. Progress depends on our
    ability to identify and build upon areas of mutual concern and mutual
    interest; those areas become a platform for effectively preventing
    worst case scenarios from materializing in Pakistan.

        55. Senator Gillibrand. Admiral Mullen, I am very concerned about
    the growing risk of Yemen's collapse, given the recent protests, the
    historical conflicts within and across Yemen's boundaries, and the
    country's dire poverty. A year ago, a bomb attempt conceived in Yemen
    threatened our Homeland. Last year I asked Secretary Gates why we ought
    to focus so many resources on Afghanistan when we face a similar threat
    of an unstable state with Al Qaeda or related elements in Yemen. We
    seem to be addressing Yemen with a target counter-terrorism mission,
    rather than a larger counterinsurgency footprint as in Afghanistan.
    Please explain the strategic difference. Which do you think is more
    effective?
        Admiral Mullen. The largest difference between our strategies in
    these two countries lies in the scope and scale of our efforts. Unique
    threat contexts in each of these countries have shaped our responses.
    We invaded Afghanistan to fight the Islamist Taliban militia and its
    terrorist affiliate, al Qaeda, who held control of most of the country.
    Our efforts in Yemen, on the other hand, are limited to the cooperative
    counter-terrorism assistance we can provide that respects Yemen's
    sovereignty. While the scale and scope of the threat is larger in
    Afghanistan, our significant military presence allows us to conduct
    full-scale military operations. We do not have that liberty in Yemen,
    because we cannot operate within the country without Yemeni permission.
    Instead, the U.S. military seeks to build Yemeni counter-terrorism
    capacity. We have a viable threat in Yemen, and the growing instability
    there may allow for greater terrorist activity, but our ability to
    combat AQAP is confined to our cooperative arrangements with the
    Yemenis. Both our counter-insurgency and counter-terror strategies can
    be effective depending on how and where they are applied. In each of
    these countries, we are working within our resource and legal
    constraints to develop comprehensive approaches to ending terrorism.
    Counter-insurgency efforts in Afghanistan are engaging with communities
    to target enemy insurgents while improving security. In Yemen, we are
    training counter-terrorism forces while pursuing a range of development
    initiatives to reduce the systemic causes of terrorist recruitment.

                                   CYBERSPACE

        56. Senator Gillibrand. Admiral Mullen, the NMS states, ``the
    United States faces persistent, widespread, and growing threats from
    state and non-state actors in space and cyberspace. Should a large-
    scale cyber intrusion or debilitating cyber attack occur, we must
    provide a broad range of options to ensure our access and use of the
    cyberspace domain and hold malicious actors accountable. We must seek
    executive and congressional action to provide new authorities to enable
    effective action in cyberspace''. What are the specific authorities you
    need to support cyberspace operations?
        Admiral Mullen. Foremost, we need to clearly specify the military's
    functions and authorities with respect to both offensive and defensive
    activities in cyberspace, both to protect DOD networks and in support
    of broader national security interests. In the past, network protection
    was reactive, limited to implementing ``fixes'' to network
    vulnerabilities that had already been exploited by threat actors. Such
    a posture is insufficient and cannot be characterized as a effective
    ``defense'' in a domain where offensive action has clear advantage. In
    cyberspace, static defenses are quickly subverted, overwhelmed, and
    defeated. DOD is developing a dynamic, agile, active, and informed
    defensive capability. I am confident that this approach will result in
    more secure, hardened, and resilient DOD networks. Extending similar
    capability to the Nation's critical infrastructure and government
    functions, as called for in the Comprehensive National Cybersecurity
    Initiative, will require an integrated whole-of-government approach.

        57. Senator Gillibrand. Admiral Mullen, in the strategy you state
    that the United States faces growing threats from state and non-state
    actors in cyberspace. Are you saying that you are seeing evidence of
    terrorist groups gaining the capability of launching a cyber attack or
    simply using the Internet for recruitment, motivation, or fundraising?
        Admiral Mullen. Yes. Al Qaeda and associated Violent Extremist
    Organizations (VEOs) aggressively use the Internet to disseminate their
    ideology and propaganda; to radicalize, recruit, and mobilize new
    members; to coordinate operations; and, to generate and distribute
    funds. A VEO's ability to exploit the Internet complicates our
    military's efforts in Iraq and Afghanistan, while posing challenges to
    our domestic law enforcement and Homeland Security initiatives.
    Additionally, I am concerned that these VEOs may eventually acquire and
    use sophisticated cyber tools developed by nation-states, criminal
    organizations, or disaffected cyber specialists whom they may recruit.
    If this occurs, the U.S. Government will not have the luxury of time
    and distance to separate ourselves from the adversary.

        58. Senator Gillibrand. Admiral Mullen, the fiscal year 2012 budget
    requests have $2.3 billion for cyber security. Can you explain the
    components of that number and how it compares to the last 3 years?
        Admiral Mullen. The fiscal year 2012 budget request for cyber
    security of $2.32 billion is made up of core information assurance (IA)
    activities [$2.00 billion], the cyber security/DIB initiative [$0.20
    billion], and Cyber Command (CYBERCOM) headquarters operations [$0.12
    billion] programs. The core IA program includes the following program
    elements: Public Key Infrastructure, Key Management Initiative, and
    Information System Security Program. DOD must protect and defend
    information, information-based processes, and information systems on
    the Global Information Grid at all security levels to meet its
    strategic goals.
        The Department is also working to identify and mature the
    capabilities required to support cyber operations and the stand-up of
    CYBERCOM. The fiscal year 2012 President's budget request for cyber
    security continues to address computer network defense; cyber identity
    and access management; engineering and deployment controls;
    cryptographic key production and management; cross domain capabilities;
    workforce development; and operational resiliency. The fiscal year 2012
    request also initiates the design and construction of a Joint
    Operations Center for CYBERCOM; adds resources to monitor and secure
    classified networks and information; increases manpower to assess cyber
    threats and develop countermeasures; sustains cyber schoolhouses; and
    supports evolution of DIB cyber security activities.
        The enacted fiscal year 2009 and fiscal year 2010 budgets for cyber
    security were for $2.32 billion and $2.35 billion, respectively. The
    fiscal year 2011 budget request was for $2.50 billion. Cost reductions
    in fiscal year 2012 are due to operational changes to include the
    removal of initial/one-time facility and equipment costs for
    establishing CYBERCOM at Fort Meade in fiscal year 2011, and cyber
    security funding transfers into DISA's Working Capital Fund.

                     HOMELAND DEFENSE SECURITY PREPAREDNESS

        59. Senator Gillibrand. Secretary Gates, the NMS states that ``we
    will continue to dedicate, fund, and train a portion of the National
    Guard for homeland defense and defense support of civil authorities.
    Working with Canada and Mexico, we will remain prepared to deter and
    defeat direct threats to our North American homeland.'' What is your
    assessment of the terrorist infiltration threat along our northern
    border and what specific steps are you taking to counter it?
        Secretary Gates. This question is best answered by the Department
    of Homeland Security (DHS), which is responsible for preventing
    terrorist attacks within the United States (6 U.S.C. Sec. &A(b)(1)(A));
    preventing the entry of terrorists and the instruments of terrorism
    into the United States (6 U.S.C. Sec. 202(1)); and securing the
    borders, territorial waters, ports, terminals, waterways, and air,
    land, and sea transportation systems of the United States (6 U.S.C.
    Sec. 202(2)).
                                     ______

                   Questions Submitted by Senator John McCain

                   RISKS ASSOCIATED WITH WITHDRAWAL FROM IRAQ

        60. Senator McCain. Secretary Gates and Admiral Mullen, U.S. troops
    are currently deployed with ISFs and Kurdish peshmerga fighters along
    the disputed internal boundaries between Arab and Kurdish communities.
    These ``Combined Security Mechanisms'' are easing tensions between
    Arabs and Kurds, while contributing to the integration of peshmerga
    units into the ISFs. How risky and potentially dangerous is it for
    these peacekeeping mechanisms to go away at the end of this year, as
    they must under the current security agreement?
        Secretary Gates. The U.S. Government continues to implement the
    U.S.-Iraq Security Agreement fully, including completing the drawdown
    of U.S. forces from Iraq by December 31, 2011. As part of the drawdown,
    U.S. Forces-Iraq (USF-I) is taking steps to mitigate the potential for
    conflict by building confidence at the local, provincial, and national
    levels between security forces and political leaders. USF-I is also
    working closely with DOS to transition the U.S. military's role as a
    mediator and honest broker in northern Iraq to the post-2011 civilian-
    led mission.
        The Combined Security Mechanism (CSM) consists of a series of
    trilateral (U.S. military, ISF, and Kurdish Security Forces (KSF))
    coordination centers and checkpoints to facilitate confidence-building
    and coordination at the local and national levels in areas of northern
    Iraq with Disputed Internal Boundaries. At the same time, Prime
    Minister Maliki's 2009 designation of some KSF units as ``Regional
    Guard Brigades'' allowed USF-I to advise, train, and assist these
    forces so that they are able to integrate into the ISF. USF-I developed
    drawdown plans for ending U.S. participation in the CSMs by engaging
    with Iraqi and Kurdish military leaders to transition this trilateral
    mechanism to a bilateral forum. ISF and KSF modernization efforts also
    increased stability, improved communication, and built confidence among
    leaders in DIBs areas. These efforts will mitigate the impact of U.S.
    forces' drawdown from the CSMs.
        DOS plans to establish temporary Embassy Branch Offices in the DIBs
    to address local and provincial ethno-sectarian tensions. Even so,
    DOS's ability to successfully lead the mediator and honest broker
    missions in northern Iraq depends on full funding of its fiscal year
    2012 budget request. Without full funding, the achievement of the U.S.
    goal to facilitate peaceful, political processes for resolving
    outstanding issues in northern Iraq is at risk.
        Admiral Mullen. Unresolved Arab-Kurd issues, including the
    resolution of Article 140, agreement on a hydrocarbon law, revenue
    sharing, and the status of Kirkuk, remain a primary concern. Tensions
    are elevated within disputed areas and will remain so until these
    issues are resolved. Dialogue among Arab and Kurdish leaders with
    international mediation has been helpful but it is highly unlikely
    issues will be resolved before U.S. military forces leave Iraq at the
    end of the year.
        In the short term, the Combined Security Mechanism is an effective
    stop gap until these broader issues are resolved and provides a
    confidence building measure between the Government of Iraq and the
    Kurdish Regional Government. In coordination with the State Department,
    we have developed plans to mitigate the risk of U.S. forces leaving the
    disputed areas at the end of the year by significantly increasing our
    diplomatic presence in the north. We believe this increased diplomatic
    presence, if fully funded, will help address Arab-Kurd tensions. The
    risk of violent confrontation will increase without an adequately
    resourced replacement for the current U.S. military presence.

        61. Senator McCain. Secretary Gates and Admiral Mullen, please
    explain what comparable civilian arrangement will take over the
    peacekeeping role now played by U.S. troops operating along the Arab-
    Kurd fault lines in Iraq.
        Secretary Gates. DOS's plan for its 2012 civilian-led mission
    prioritizes engagement in northern Iraqi areas with Disputed Internal
    Boundaries by providing for the establishment of Embassy Branch Offices
    (EBOs) in Ninewa and Kirkuk Provinces. The EBOs will be staffed by
    diplomats, development specialists, and representatives from other U.S.
    agencies, such as the Departments of Justice, Agriculture, and
    Treasury, in order to bring a whole-of-government approach to conflict
    prevention and peace building in northern Iraq. The location of the
    EBOs along the Arab-Kurd ethnic fault line reflects the concern that
    Arab-Kurd tensions remain a leading source of instability in Iraq.
    DOS's ability to play a mediating and honest broker role in northern
    Iraq depends on full funding of its fiscal year 2012 budget request.
        Admiral Mullen. As part of the U.S. military drawdown in Iraq, we
    have planned for and are actively transitioning enduring programs to
    the State Department and the Government of Iraq. This includes the U.S.
    role in the trilateral security relationship we share with the ISF and
    the Peshmerga along Arab-Kurd fault lines. While different from the
    military's current role, the State Department will utilize the
    diplomatic tools inherent to its capabilities in mitigating tensions
    between Arabs and Kurds. I am concerned the State Department will
    assume increased risk in this very important role if their funding is
    further decreased.

                                 IRANIAN INTENT

        62. Senator McCain. Secretary Gates, would you agree that the
    highest priority of the Iranian government during this year is to
    prevent any changes to the security agreement with Iraq so as to ensure
    that no U.S. troops will remain in Iraq by January 1, 2012?
        Secretary Gates. Iran would almost certainly oppose a continued
    U.S. troop presence after 2011. I remain troubled by Iran's continued
    support to, and training of, militant groups that target both Iraqi and
    U.S. personnel. The United States encourages Iran to maintain
    constructive and peaceful relations with its neighbor Iraq, with which
    it shares a long history of cultural, religious, and economic ties.
    Iran can be a better neighbor by respecting Iraqi sovereignty, and by
    ending its support to those who support terrorism in Iraq.

                    NUCLEAR WEAPONS STOCKPILE MODERNIZATION

        63. Senator McCain. Secretary Gates, in their proposal to fund the
    remainder of fiscal year 2011, House appropriators cut $300 million
    from the President's request for nuclear weapons modernization. Do you
    agree that it is critical that Congress fund the $624 million increase
    in fiscal year 2011 and that a long-term commitment to the funding
    proposal set forth in connection to the New START treaty, commonly
    referred to as the 1251 report, is of the upmost importance to national
    security and the viability of our nuclear deterrent?
        Secretary Gates. Yes, it is critical that Congress fund the entire
    $624 million fiscal year 2011 increase for the National Nuclear
    Security Administration (NNSA) and sustain the long-term funding
    requirements as laid out in the 1251 Report to Congress, which serves
    as a roadmap to implementing the Nuclear Posture Review (NPR) and New
    START treaty. The treaty is buttressed by credible modernization plans
    and long-term funding for the U.S. nuclear weapons stockpile and the
    infrastructure that supports it. This administration proposes
    significant investments over the next decade to rebuild and sustain
    America's aging nuclear infrastructure--especially the national labs,
    and the science, technology, and engineering base. This funding not
    only begins with a commitment to the long overdue modernization of the
    nuclear weapons infrastructure, it continues ongoing activities and
    starts the studies necessary to sustain and life-extend the nuclear
    deterrent so it remains in a safe, secure, and effective status. In
    addition, the funding augments NNSA activities required to sustain the
    personnel with key critical skills to continue to sustain our nuclear
    arsenal.

                           BALLISTIC MISSILE DEFENSE

        64. Senator McCain. Secretary Gates, while the fiscal year 2012
    budget includes a $200 million increase over the President's fiscal
    year 2011 level, overall FYDP funding is cut by $2.6 billion. Given the
    President's commitment to missile defense as reaffirmed during our
    debate on the New START treaty just a few months ago, how does DOD
    justify significant out-year decreases for missile defense?
        Secretary Gates. The Missile Defense Agency (MDA) budget for 2011
    through 2015 is based on the missile defense priorities set forth in
    the Ballistic Missile Defense Review (BMDR). The MDA budget strategy in
    fiscal year 2012 identified efficiencies and balanced personnel,
    budgetary and management resources within and across its components. In
    instituting efficiency initiatives, the MDA will make greater use of
    competition across its acquisition programs and realize savings through
    a refined approach to contracting for services.

            EVOLUTIONARY ACQUISITION FOR SPACE EFFICIENCY INITIATIVE

        65. Senator McCain. Secretary Gates, while I appreciate the stated
    goals of the Evolutionary Acquisition for Space Efficiency initiative
    for procuring satellite systems, I remained concerned with the overall
    track record of cost overruns and schedule delays for space systems.
    Does DOD intend to follow the requirements set forth by this committee
    on multiyear procurements, to include:

             A certification that the use of such a contract will
            result in substantial savings;
             That the minimum need for the property to be purchased
            is expected to remain substantially unchanged during the
            contemplated contract period;
             That the head of the agency will request funding for
            the contract at the level required to avoid contract
            cancellation;
             That there is a stable design for the property to be
            acquired and that the technical risks associated with such
            property are not excessive; and
             That the estimates of both the cost of the contract
            and that anticipated cost avoidance through the use of a
            multiyear contract are realistic.

        Secretary Gates. The DOD discussed the multiyear procurement
    provisions at length with the White House and congressional staffs. As
    a result of these discussions, DOD determined that multiyear
    procurement authorization is not required for this space system.
    Therefore, the model DOD is implementing is not multiyear procurement.
    The Air Force is procuring two satellites in a block in a single year.
    However, full funding for both satellites in a single year is just not
    practically achievable in today's budget environment.
        I share your concern with the past performance of space programs. I
    am bringing the block buy approach forward to address specific root
    causes of some of those difficulties. The stability that comes with
    buying in quantity, even in quantities of two, will help the prime
    contractors, subcontractors, and parts and supplies vendors. These
    satellites have thousands of often sophisticated components, tens of
    thousands of complex integrated circuits, and many dozens of unique
    designs only found in U.S. factories. The people who design and
    manufacture these parts and subparts are highly talented but small in
    number, and DOD wants to keep them working for its needs. Further, the
    government will realize lower unit costs by buying in quantity and by
    minimizing production line stops and restarts.

        66. Senator McCain. Secretary Gates, in pursing this contracting
    strategy, what sort of accountability does DOD intend to place on the
    prime contractor of these satellite systems?
        Secretary Gates. The best approach for accountability under the
    acquisition strategy for the AEHF communications satellites is the
    fixed-price, incentive fee contract. Government liability is
    constrained if the contractor experiences problems directly related to
    contractor responsibilities within the scope of the contract. Contract
    penalties for unmet milestones or premature failure in on-orbit
    performance will also apply. Along with these provisions, DOD plans to
    bring improved industrial base stability that should help avoid some of
    the conditions that contributed to past cost overruns.
        In addition, designating block buys as subprograms will provide
    congressional insight into actual space vehicle block costs. The
    resulting visibility ensures Air Force and DOD accountability for the
    costs and funding requirements to which they committed at the block
    Milestone Decision.

        67. Senator McCain. Secretary Gates, do you share my concern about
    using these sorts of contracts for these sorts of programs?
        Secretary Gates. While I share your general concern regarding
    accountability and space acquisition management in particular, I think
    there is merit to the block buy approach for AEHF. The AEHF satellite
    program, the first program with which DOD seeks to implement this
    approach, is now a well-defined acquisition program with plenty of
    execution data around which to design a stable production program. The
    operational requirements are well validated; all derived system-level
    specifications are clear; and the experienced government/contractor
    team is in place. Additionally, one satellite has launched, one is in
    storage awaiting launch, and two more are in various stages of
    production. I anticipate the block buy of satellites 5 and 6 to be a
    smooth continuation of the production line. To support these
    contracting efforts, DOD is implementing ``should cost'' analyses to
    gain a much more detailed and thorough understanding of the cost
    structure for AEHF and other space programs. I believe maturity and
    stability lend well to a fixed-price contracting strategy.

        68. Senator McCain. Secretary Gates, how do you intend to ensure
    that these types of contracts are used appropriately and judiciously
    for these programs?
        Secretary Gates. DOD put a great deal of thought into this overall
    approach to include the contracting strategy, focusing on mature
    programs that have reached the production phases of their life cycles.
    Because development is complete, I do not expect unplanned design or
    manufacturing changes. However, an important element of this approach
    is sound obsolescence management. The contractor team will have an on-
    going effort to identify components set to be discontinued or
    superseded. As they identify these parts, their engineers can make
    smart adaptations to the assembly or test before the update affects the
    production flow. On our end, DOD is ensuring the performance
    requirements levied upon these systems do not change, which is critical
    over the duration of the block build. In summary, these conditions go
    hand-in-hand with a fixed-price contracting approach.

                          NUCLEAR TRIAD MODERNIZATION

        69. Senator McCain. Secretary Gates, when released last year, the
    NPR set forth a broad vision that must not be viewed outside of the
    realm of affordability. The cost alone for modernizing both the nuclear
    weapons complex and the triad are substantial, and as we move to reduce
    the size of our nuclear stockpile, this modernization effort becomes
    all the more important. Factoring in the cost of missile defense and
    prompt global strike--both essential and critical, but also costly,
    programs--the overall budget outlook seems to suggest steady increases
    for the foreseeable future. The same defense budget which you recently
    stated will experience at most long-term growth of 1 percent a year
    after inflation. What is the near-term and long-term affordability of
    implementing the NPR?
        Secretary Gates. The 2010 NPR concluded that a Triad of strategic
    forces best maintains strategic stability at reasonable cost, while
    hedging against potential technical problems or geopolitical surprise.
    The 10-year estimate for sustaining the nuclear deterrent
    (approximately $214 billion) was identified in the fiscal year 2012
    Annual Update to the report pursuant to section 1251 of the NDAA for
    Fiscal Year 2010. These costs are larger than the planned overall
    growth of 1 percent per year after inflation. This results from the
    need to begin the activities necessary to replace or sustain all three
    legs of our nuclear Triad over the next 2 to 3 decades. This cost
    projection is considered essential to maintaining our nuclear deterrent
    and is in accordance with the NPR.
        DOD will continue to assess the force size required for an
    effective deterrent. While we work to maintain a safe, secure, and
    effective arsenal, a wide range of efficiency measures also are being
    explored, including a research and development program, which was noted
    in the NPR. This program was initiated to focus on commonality between
    the military departments' requirements and joint, scalable flight-test
    demonstrations. DOD is committed to sustaining and modernizing the
    Triad in an efficient and cost-effective manner while maintaining
    strategic stability and deterrent capability.

        70. Senator McCain. Secretary Gates, the fiscal year 2012 budget
    provides funding for a next generation long-range bomber and the next
    generation ballistic missile submarine; however, little has been said
    about the next generation intercontinental ballistic missile (ICBM)
    which is needed by 2030. When does DOD intend to provide details on the
    funding requirements and timeline for the development, production, and
    deployment of a new ICBM?
        Secretary Gates. The administration plans to sustain the Minuteman
    III ICBM through 2030, as required by section 139 of the NDAA for
    Fiscal Year 2007. Sustainment programs include ICBM Fuze Refurbishment
    for the Mk12A and Mk21 reentry vehicles, Joint Fuze Development on the
    Mk21 and Mk12A replacement, the ICBM Cryptography Upgrade II for
    nuclear surety, the Safety Enhanced Reentry Vehicle program, the
    Propulsion System Rocket Engine Refurbishment Life Extension Program,
    the Environmental Control System Replacement Program, the ICBM Security
    Modernization Program, and the Minuteman Minimum Essential Emergency
    Communications Network Program Upgrade. Other sustainment programs may
    be necessary, and weapon system requirements are being reviewed to
    ensure the viability of the Minuteman III ICBM through 2030.
        The preparatory analysis for a follow-on ICBM capability fielded in
    the 2030 timeframe began in 2011. The Ground-Based Strategic Deterrent
    (GBSD) Analysis of Alternatives (AoA) will assess potential materiel
    solutions including sustaining the current Minuteman III ICBM weapon
    system and supporting infrastructure. During the GBSD AoA review,
    concepts will be evaluated for effectiveness, cost, schedule, concepts
    of operations, and overall risk in meeting operational requirements.
    DOD will recommend a specific way-ahead to the budget for an ICBM
    follow-on in fiscal year 2014.

        71. Senator McCain. Secretary Gates, what about a replacement
    nuclear capable air-launched cruise missile (ALCM)?
        Secretary Gates. The ALCM will be maintained in the inventory until
    the Long-Range Standoff (LRSO) missile capability is fielded. The ALCM
    will undergo multiple service life-extension programs to ensure the
    viability of the propulsion systems, guidance and flight control
    systems, and warhead arming components. DOD intends to field an
    advanced penetrating LRSO missile to replace the ALCM, and the Air
    Force has programmed $0.9 billion for research, development, test, and
    evaluation (RDT&E) over the next 5 years for the development of the
    LRSO.

        72. Senator McCain. Secretary Gates, when should budgets begin to
    reflect the steady increases suggested in the NPR?
        Secretary Gates. In fiscal year 2012, DOD will begin to see more
    substantial progress with NPR-driven modernization recommendations.
    These include:

        (1)  Investments in research, development, and test and evaluation
    of Conventional Prompt Global Strike capabilities;
        (2)  Construction of the Navy's West Coast Explosive Handling Wharf
    to ensure safe missile and warhead off/on loading operations and
    maintenance for Pacific SSBN operations; and
        (3)  The Air Force initiation, as directed, of a program for a new
    long-range, nuclear-capable penetrating bomber.

        The President's fiscal year 2011 and fiscal year 2012 budgets
    include funding of NPR initiatives. The February 2011 update to the
    report submitted pursuant to section 1251 of the NDAA for Fiscal Year
    2010 provides a summary of spending for delivery systems and weapon-
    related activities of the NNSA, which total approximately $214 billion
    from fiscal year 2012-fiscal year 2021.

        73. Senator McCain. Secretary Gates, what are the implications for
    the strategic deterrent if we don't modernize the triad or find we
    cannot afford to?
        Secretary Gates. The United States will sustain a safe, secure, and
    effective nuclear arsenal as long as nuclear weapons exist. The NPR
    calls for making investments in nuclear delivery systems to ensure that
    existing capabilities are adequately sustained with essential upgrades
    and modifications. Such investments, and the NPR's strategy for
    continued delivery system capability, represent a credible
    modernization plan necessary to sustain and support our Nation's
    deterrent.

                       2005 BASE REALIGNMENT AND CLOSURE

        74. Senator McCain. Secretary Gates, as you may know, DOD is
    required by law to complete base realignment and closure (BRAC)
    resulting from the 2005 BRAC round by September 15, 2011. Is DOD on
    track to meet this deadline? If not, why not?
        Secretary Gates. While the Department faces scheduling challenges
    in a few cases, it is working diligently to ensure we satisfy our BRAC
    legal obligations.

        75. Senator McCain. Secretary Gates, in meeting the deadline, will
    you have construction completed on all facilities and infrastructure
    directly and indirectly required to support the BRAC moves?
        Secretary Gates. There are a limited number of direct and indirect
    infrastructure projects on which some elements of construction will
    continue after September 15. The Department is working diligently to
    ensure it satisfies the BRAC legal obligations, even if some
    construction continues past the deadline.

        76. Senator McCain. Secretary Gates, what are the costs incurred by
    DOD to complete all 2005 BRAC actions and any unobligated balances you
    may have?
        Secretary Gates. The overall cost to implement BRAC 2005 is $35.1
    billion. I do not anticipate that the Department will have any
    significant unobligated balances at the end of the BRAC 2005
    implementation period.

        77. Senator McCain. Secretary Gates, in your opinion, should DOD
    conduct another round of BRAC to reduce excess infrastructure? If so,
    when should DOD conduct the next round?
        Secretary Gates. DOD is not currently seeking authority to
    undertake another round of closures and realignments under the Defense
    BRAC Act of 1990, as amended. The Department is currently focused on
    completing implementation of the 2005 BRAC round.

                          STATUS OF THE NATO ALLIANCE

        78. Senator McCain. Secretary Gates, at the NATO Munich Security
    Conference that I attended last month, it was clear that the intent for
    European members of the alliance is to address fiscal constraints by
    slashing their defense budgets, ending drafts, sharing resources, and
    increasing their reliance on American military capabilities. How are
    you addressing concerns the changes could burden the United States by
    reducing the number of European troops available for NATO missions and
    other military efforts around the world?
        Secretary Gates. Over the past 10 years, most European Allies
    increased their deployable and sustainable forces and capabilities, in
    spite of steady declines in defense spending. They accomplished this by
    reducing the size of forces designed primarily for territorial defense,
    and by investing in more capable expeditionary forces. But there are
    obviously limits to how long those Allies can rely on reinvesting the
    savings from force structure reductions to sustain this type of
    transformation. I am now generally urging senior European Ally
    officials to avoid reducing force structure as they consider decisions
    about how to allocate scarce defense resources, and instead to seek
    efficiencies through multinational cooperation and sharing resources.
    Most European Allies have told me that they are not planning to make
    defense cuts that will affect current operational commitments. Of
    course, the realities of the fiscal crisis in Europe and the required
    reductions in defense spending are such that preserving force structure
    and sustaining the current high operating tempo will probably result in
    less investment in future capabilities. As a result, I intend to ask my
    Defense counterparts to commit to increasing defense investment once
    their military operating tempo decreases after the successful
    transition of security responsibility to the Afghan Government.
        I do not believe that Europe has descended into an irreversible
    fiscal crisis. At their next meeting in March, NATO Defense Ministers
    will be asked to agree to Political Guidance for Allied defense
    planners. This planning guidance looks forward 10 years. I intend to
    push hard for no decrease in NATO's level of ambition, continued
    increases in the deployability and sustainability of NATO forces, and a
    long-term recommitment to the benchmarks of 2 percent GDP devoted to
    defense spending and 20 percent of defense expenditures allocated to
    investment in future capabilities.

        79. Senator McCain. Secretary Gates, how is the dynamic nature of
    fiscal decisions by members of the alliance affecting U.S. military
    planning?
        Secretary Gates. DOD must consider the availability and capability
    of NATO forces in its planning process. DOD always seeks to mitigate
    the risks of assumptions in its contingency plans (including
    assumptions about partner participation) by developing multiple options
    for plan execution. DOD is also engaged in regular bilateral dialogue
    with our Allies (particularly with the United Kingdom, Canada, and
    Australia), and in multilateral discussions to clarify planning
    assumptions.
        The NATO Alliance has a particularly well-developed defense
    planning process to assist Allies in identifying NATO needs. This
    process is focused not only on ensuring that Allied military forces
    prevail in current operations, but also on ensuring that NATO can
    implement the November 2010 Strategic Concept, including the ability to
    address 21st century security challenges. This planning process and
    these multilateral discussions inform our national decisions on defense
    planning and resourcing.

        80. Senator McCain. Secretary Gates, will the reduction of forces
    and resources available from other alliance members force the United
    States to have to make adjustments in order to meet treaty obligations?
        Secretary Gates. The reduction of forces and resources available
    from other Alliance members will not force the United States to make
    adjustments in order to meet its obligations under the North Atlantic
    Treaty. In keeping with Article 3 of the Treaty, DOD will continue to
    work with America's Allies through the NATO Defense Planning Process to
    determine the correct mix of forces and capabilities needed to maintain
    and develop our individual and collective capacity to resist armed
    attack, and to maintain the security of the North Atlantic area. In
    addition to treaty obligations, Allied partners agreed in the NATO
    Strategic Concept and other strategic-level guidance that NATO must
    also have the capability to conduct non-Article 5 crisis response
    operations. In the current and projected security environment, meeting
    NATO's level of ambition for crisis response operations and security
    cooperation with partners is likely to require a much greater share of
    Allies' national defense resources than honoring treaty obligations.

        81. Senator McCain. Secretary Gates, the current plan for U.S. Army
    force structure in Europe since 2004 has been to drawn down from four
    to two Brigades Combat Teams (BCT) by 2014 and to close military bases
    at Bamberg and Schweinfurt. This would reduce the Army force posture in
    Europe by 8,000 troops, leaving approximately 36,000 Army forces
    available in theater for missions and training. You are in the process
    of evaluating a request by the Commander of European Command (EUCOM) to
    leave the four BCTs in place. In light of the actions of other European
    nations to reduce their military resources and forces, why would it be
    in the best interest of the United States to reverse our planned
    reductions, reverse base closures, and to maintain additional forces in
    Europe?
        Secretary Gates. As part of a broader review of global defense
    posture, the United States is reexamining our capabilities and force
    structure in Europe ensuring that our country is well positioned to
    support Allies and partners in a 21st century security environment.
    NATO's new Strategic Concept reaffirmed NATO's core commitment to
    Article 5 of the North Atlantic Treaty, as well as its commitment to
    crisis management and cooperative security. Allies must be prepared to
    meet a broad range of 21st century challenges through work in new
    areas, such as missile defense and cyber security, and through
    modernizing traditional capabilities. The United States is committed to
    a defense posture in Europe that meets its enduring commitment to
    NATO's Article 5, ensures a credible deterrent against all forms of
    aggression, and maintains a robust capacity to build Allied and partner
    capacity for coalition operations. The President is making his decision
    about U.S. Army force structure in Europe based on that information.

        82. Senator McCain. Secretary Gates, what does EUCOM gain by having
    44,000 Army personnel in Europe vice 36,000 troops assigned and
    available for theater security cooperation efforts, particularly given
    the realization that the Commanders of Africa Command (AFRICOM),
    Southern Command (SOUTHCOM), or Central Command (CENTCOM) have very
    little or no forces assigned to their commands?
        Secretary Gates. U.S. Army force posture in Europe not only enables
    theater security cooperation, but it also assures our allies; it is the
    cornerstone of NATO; and it supports global requirements, including
    those for operations in Iraq and Afghanistan. Over the past 10 years,
    EUCOM-assigned Army brigade combat teams (BCTs) in particular have
    rotated consistently into the CENTCOM area of responsibility. Forward-
    based forces provide significant flexibility in force management, and
    often are more efficient than U.S.-based forces, as demonstrated most
    recently by the rapid manner in which EUCOM-assigned forces were
    allocated to AFRICOM for Operation Odyssey Dawn. Moreover, CENTCOM
    routinely receives forces assigned outside its area of operations,
    including from EUCOM.

        83. Senator McCain. Secretary Gates, would this decision actually
    validate the intent of the NATO alliance members to increase reliance
    on the U.S. forces and capabilities for their regional security
    requirements?
        Secretary Gates. Almost all of the forces and capabilities
    available to NATO, other than the headquarters that are part of the
    NATO command structure, are provided by member nations and funded
    through their national defense budgets. The principal external
    influences on national defense budget decisions are the NATO defense
    planning process and bilateral consultations. The NATO defense planning
    process allocates force planning targets to nations based on the
    principles of burden sharing and reasonable challenge. When a nation
    fails to achieve its force planning targets due to insufficient defense
    spending, those targets are not reallocated to another nation unless
    other Allies determine that the original allocation posed an
    unreasonable challenge (the challenge is considered reasonable as long
    as it does not require the Nation to spend more than 2 percent of its
    GDP on defense).
        Although nations may use many excuses for not allocating sufficient
    resources to meet NATO objectives, it is unlikely that U.S. decisions
    to support our security commitments will prompt other Allies not to
    support their commitments. In fact, the opposite is normally true. In
    the multilateral reviews of each member's defense plans that occur at
    NATO, peer pressure makes it more difficult for nations to reduce their
    commitment to NATO further, and the most intense pressure comes from
    those nations that are setting an example by meeting their commitments.
    The fact that no Allies have pressed to reduce the NATO level of
    ambition upon which defense requirements are based, nor the goal of
    spending 2 percent of GDP on defense, indicates that they want that
    peer pressure to continue. Although I am never happy when European
    Allies decide to reduce defense spending, I firmly believe that without
    the example set by U.S. leadership within the Alliance, European
    Allies' defense spending would be even lower.

                        COMPETITION AND LIFECYCLE COSTS

        84. Senator McCain. Secretary Gates, both the Weapon System
    Acquisition Reform Act (WSARA) of 2009 and DOD's efficiency initiatives
    espouse guiding principles of increasing competition to lower lifecycle
    costs. While these are commendable goals given the current budget
    crisis, I am concerned with the pace and extent of implementation,
    particularly given recent DOD data that of $366 billion in total DOD
    contract obligations in fiscal year 2010, $188 billion was identified
    as not competed or receiving only one bid. Please provide examples from
    each of the military departments where competition has been used to
    lower lifecycle costs.
        Secretary Gates. Life-cycle cost can be defined as the total cost
    to the government of a program over its full life, including costs for
    research and development; testing; production; facilities; operations;
    maintenance; personnel; environmental compliance; energy; and disposal.
    Competition can be used to reduce costs in each of the individual
    stages but is most effective in reducing procurement/acquisition and
    sustainment costs. The following are some examples of competition
    reducing cost in these areas:

             In the Army, within the Joint Tactical Radio System
            (JTRS) portfolio, the Multifunctional Distribution Information
            System-Low Volume Terminal (MIDS-LVT) radio program is an
            example of how competition has resulted in procurement cost
            savings. During the production phase of the MIDS-LVT program,
            competition has resulted in approximately 60 percent cost
            savings. The initial production cost of the radio was $435,000
            per unit and, through ongoing competition between the two
            approved vendor production sources, the cost per unit has
            steadily decreased to $181,000 per unit. With over 2,600 MIDS-
            LVT units purchased to date, the program has achieved hundreds
            of millions of dollars in procurement savings through the
            successful MIDS-LVT competitive acquisition strategy.
             For the Air Force, the MQ-1 Predator Organizational-
            level maintenance contract is a good example of how competition
            produced acquisition cost savings. The initial contract, issued
            in March 2005, was a sole source award to the Original
            Equipment Manufacturer (OEM), General Atomics Aeronautical
            Systems. This decision not to compete the Organization-level
            maintenance contract was primarily driven by the lack of
            published technical orders. When those technical orders became
            available, the contract was recompeted 1 year ahead of schedule
            and awarded to Battle Space Flight Services. This competition
            resulted in a savings of $102 million. Because of increased and
            accelerated wartime demand, the Air Force is anticipating
            additional savings over the life of the contract. The ability
            to compete between the OEM and the current supplier in the
            future will continue to enable cost savings.
             For the Navy, the most visible example is the LCS
            Program. After receiving proposals from Lockheed Martin and
            Austal USA in early 2010 that were deemed unaffordable, the
            Navy changed its acquisition strategy to an all-or-nothing
            competitive contract award and encouraged the companies to
            establish leaner teaming arrangements. After proposals were
            submitted, the Navy realized they could achieve competitive
            prices, and the requirement was re-solicited for a 10-ship
            contract award to each company. In December 2010, Lockheed
            Martin and Austal USA were each awarded fixed-price incentive
            contracts for the design and construction of 10 ships from
            fiscal year 2010 through fiscal year 2015. The benefits of
            competition; serial production; employment of mature
            technologies; design stability; fixed-price contracting;
            commonality; and economies of scale contributed to reduced life
            cycle costs and a highly affordable ship construction program.
            The approach, self-financed within the program budget by re-
            investing a portion of the greater than $2 billion in total
            savings through the FYDP, enabled the addition of a year of
            ship procurements. The approach also enables the DoN to
            efficiently produce the ships at an increased rate to meet
            operational requirements sooner.

        85. Senator McCain. Secretary Gates, have you found areas where DOD
    can leverage commercial investment in technology, manufacturing, and
    service capability to decrease expenses for lifecycle support
    requirements?
        Secretary Gates. DOD is leveraging commercial technology,
    manufacturing, and service capabilities in many ways to reduce weapons
    system life cycle costs. Since 1998, the USD(AT&L) Commercial
    Technologies for Maintenance Activities (CTMA) program has been
    steadily improving maintenance efficiency and effectiveness by
    integrating proven commercial maintenance technologies into DOD
    maintenance activities. The Military Departments are undertaking a
    variety of initiatives leveraging commercial investments through the
    CTMA program. For example:

             The Department of Air Force implemented a commercially
            developed capability, which replaced legacy pin-to-pin
            continuity procedures with the Enhanced Wiring Integrity System
            (EWIS). The EWIS gives maintainers the ability to check the
            integrity of entire wire bundles within seconds and not only
            detects a fault, but also isolates the fault to within inches
            of its origin to assist the maintainer in rapidly repairing the
            wire. The EWIS is widespread across the Air Force, and it is
            transitioning to the U.S. Navy and Army aviation, as well as to
            the Marine Corps land systems.
             The Department of Navy utilized commercial technology
            employed by airports to detect trace amounts of explosives on
            passengers and luggage to detect contaminate in lubricants and
            hydraulic fluids used across the DOD. The resultant capability
            is being employed on Military Sealift Command vessels where
            this hand-held tool can assess contamination, viscosity, and
            other critical fluid parameters in under a minute per test.
            This capability is in transition to the Army, Navy, and Air
            Force for diesel oils used in ground vehicles and support
            equipment.
             The Department of Army is leading the transition of a
            commercial technology developed for the automotive maintenance
            industry and widely used for commercial airline maintenance.
            This capability, the Automated Process and Inspection Guide
            (AP&IG), provides accurate point of maintenance technical data
            and collects standard inspection and maintenance data. AP&IG
            has: reduced inspection times by 40 percent; reduced repair
            turn times; and improved overall maintenance quality.

        Performance Based Logistics (PBL) is a strategy that has been
    successful in leveraging company investment in technology and services
    throughout commercial industry. This support strategy has transferred
    to many applications across the DOD for Weapon System Sustainment. PBL
    incentivizes the provider to deliver a guaranteed outcome at a fixed
    price. What have traditionally been revenue centers in transactional
    relationships between government and industry become cost centers under
    PBL. PBL strategies can improve both product reliability and processes
    to drive down costs. Industry makes up front investments to lower costs
    by improving the product and streamlining sustainment processes. PBL
    strategies support the warfighter through increased availability,
    reduced logistics footprint, and lower life cycle costs.

        86. Senator McCain. Secretary Gates, how specifically is DOD better
    incentivizing and empowering program managers to bring competition into
    otherwise previously sole-sourced lifecycle programs, whether termed as
    maintenance, repair, and overhaul (MRO); or contractor logistics
    support (CLS); or PBL?
        Secretary Gates. The USD(AT&L) November 3, 2010 memo to the
    Military Departments and Defense Agencies directed immediate action to
    increase competition. The acquisition community is addressing this in
    the development of Weapon System Acquisition Strategies. Specifically,
    the Secretaries of the Military Departments and Defense Agency
    Directors were directed to implement the following:

             Present a competitive acquisition strategy at each
            program milestone: Provide a one-page competitive strategy for
            each Acquisition Category (ACAT) 1D program at each milestone
            as part of the overall acquisition strategy.
             Report to USD(AT&L) in fiscal year 2011 on how their
            military department or agency intends to reduce single-bid
            competitions--negotiations when only one offer is received. At
            a minimum, the report will address market research, restricted
            specifications, and adequate time for proposal preparation.
             Achieve a 2 percent reduction in single-bid
            competitive contracts in fiscal year 2011, with continuing
            reductions thereafter.
             Remove obstacles to competition: ensure contracting
            officers conduct negotiations with all single-bid offerors,
            unless this requirement is specifically waived by the Head of
            Contracting Activity or Military Department Secretary. The
            basis of these negotiations will be cost or price analysis, as
            the case may be, using either certified or non-certified cost
            or pricing data, as appropriate.
             Have their component or agency competition advocate
            develop a plan to improve both the overall rate of competition
            and the rate of effective competition. These plans establish an
            improvement rate of at least 2 percent per year for overall
            competition and an improvement rate of at least 10 percent per
            year for effective competition.
             Require open systems architectures and set rules for
            acquisition of technical data rights: Program managers are to
            conduct a business case analysis in concert with the
            engineering tradeoff analysis presented at Milestone B. The
            business case analysis outlines the open systems architecture
            approach, combined with technical data rights the Government
            pursues in order to ensure a lifetime consideration of
            competition in the acquisition of weapon systems. The results
            of this analysis will be reported in the Acquisition Strategy
            Report and in the competition strategy.
             Increase the dynamic small business role in the
            defense marketplace competition: All competitive and non-
            competitive procurement actions will seek to increase small
            business participation through weighting factors in past
            performance and fee construct.

        These actions apply to all contracts, including MRO, CLS, and PBL
    contracts. The result will be program executive officers and program
    managers developing a competitive strategy early in acquisition that
    spans the program's life and improves the ability to compete MRO, CLS,
    and PBL contracts in sustainment. For example, the Navy undertook a
    specific initiative to engage each program executive officer, program
    manager, and Product Support Manager (PSM) to emphasize real
    competition at every stage of acquisition and sustainment.

             The Navy directed the program executive officers/
            program managers/PSMs to establish a competitive environment
            throughout the life cycle of their programs, and to enable
            better competitive opportunities in the sustainment phase.
            Additionally, program executive officers and program managers
            are reviewing their existing portfolios in pursuit of increased
            competitive opportunities, including consideration of breakout
            opportunities, and expanding open architecture solutions and
            small business opportunities that fosters additional
            competition.
             The Army is emphasizing the conduct of logistics
            analyses early to baseline costs and develop technical data
            requirements that facilitate competition in sustainment
            contracts.
             The Air Force is also taking proactive steps to ensure
            program managers and PSMs correctly identify and pursue data
            rights in their contract negotiations to facilitate competition
            in sustainment. The outcome will be required warfighting
            capability at a reduced cost to the Government.

        87. Senator McCain. Secretary Gates, the committee spearheaded
    legislation which became Section 805 of the NDAA for Fiscal Year 2010
    regarding Lifecycle Management and Product Support, calling for PSMs to
    maximize competition and make the best possible use of available DOD
    and industry resources at the system, subsystem, and component levels.
    Section 805 was implemented through Under Secretary Carter's Directive-
    Type Memorandum on October 6, 2010. Since then, how has competition at
    subsystem and component levels been pursued to reduce lifecycle costs?
        Secretary Gates. Since the issuance of the DTM, the military
    departments continue to implement section 805 and have made significant
    progress identifying PSMs for ACAT I and II programs and issuing the
    guidance. One of the PSM's major duties is to promote opportunities to
    maximize competition while meeting the objective of best-value, long-
    term outcomes for the warfighter.
        To this end, the Defense Acquisition University developed and
    fielded DOD Life Cycle Management and PSM Rapid Deployment training
    with strong attendance across the DOD and the industry acquisition
    community, which specifically addresses increased competition.
        Additionally, the military departments are undertaking a variety of
    initiatives to increase competition. For example:

             The Navy engaged each Program Executive Office (PEO)
            and program manager to establish a solid foundation for a
            competitive environment throughout the life cycle. Therefore,
            the PEOs and program managers are reviewing existing portfolios
            in pursuit of increased competition opportunities, including
            consideration of breakout opportunities at the subsystem and
            component levels to reduce lifecycle costs.
             The Air Force published regulations and guidebooks
            that detail the importance of competition. The Air Force is
            specifically focusing on sole-source contracts for software
            maintenance, as well as engine repairs and parts, to increase
            competition.
             The Army plans to review and refine internal practices
            and processes over the course of the next year that empower the
            PSM to promote competitive opportunities.

                      COST-SHARING FOR MILITARY HEALTHCARE

        88. Senator McCain. Secretary Gates, regarding the administration's
    healthcare reform proposals, I received a letter signed by the Joint
    Chiefs of Staff (JCS) endorsing the administration's reform proposal
    and request that this letter be included in the record. I know that we
    will hear from many other interested stakeholders, and we must consider
    those views as well. Do you agree that we must always remain committed
    to ensuring that the quality of healthcare for our military
    servicemembers, their families, and veterans is never compromised, even
    in tough economic times?

        Secretary Gates. Yes. The performance and the quality of care
    delivered by the Military Health System (MHS) in austere, combat
    environments continue to exceed anything ever witnessed and recorded in
    battlefield medicine. For example, increased survival rates from wounds
    and decreased loss of personnel from disease and non-battle injuries
    are two areas where our medical system established itself as world-
    class.
        Here at home, our MHS is also among the best in terms of quality
    and outcome throughout the Nation.
        I stand proudly and strongly by DOD's commitment to military
    healthcare quality and excellence and will never compromise or waver
    from this standard. This proven commitment to high performance is
    separate and distinct from any potential minor changes in TRICARE
    enrollment fees or copayments. Our MHS rests on a core principle of
    trust with the people DOD serves, and that trust must never be broken.

        89. Senator McCain. Secretary Gates, please explain how the health
    reform proposals that you have put forth fulfill this obligation, and
    most especially for our wounded warriors?
        Secretary Gates. The overall health budget for fiscal year 2012
    represents an increase in the fiscal year 2011 request, as DOD
    continues to invest in initiatives that strengthen the military
    healthcare system for today and into the future.
        DOD continues increasing financial investment in medical research
    and development for its wounded warriors, particularly in the areas of
    traumatic brain injury, psychological health, extremity injuries,
    amputee care, and regenerative medicine. Additionally, DOD is modifying
    significantly the Disability Evaluation System to oversee the
    disability evaluation process in a manner that best meets the needs of
    each servicemember.
        These health reform proposals are intended to secure the long-term
    financial security of the MHS. By introducing this set of reform
    proposals now--reforms that establish internal efficiencies, reforms
    that standardize reimbursement policies to civilian network providers
    and reforms to beneficiary out-of-pocket costs--DOD continues providing
    a comprehensive health benefit for DOD beneficiaries.

        90. Senator McCain. Secretary Gates, what medical index rate would
    DOD plan to use for TRICARE fees and why?
        Secretary Gates. A final decision on the exact medical index has
    not been made. DOD is in ongoing discussions with various stakeholders
    on what might serve as the most appropriate index. The aim is to select
    an index that is transparent, based on actual market costs, relevant to
    the retired population and demographics at issue, clear and
    understandable, and one that reflects foreseeable growth in health care
    costs.

               UNAUTHORIZED DISCLOSURES OF CLASSIFIED INFORMATION

        91. Senator McCain. Secretary Gates, in regard to unauthorized
    disclosures of classified information, do you believe that changes to
    DOD policy (particularly policies governing access to classified
    systems) would be sufficient to prevent another Wikileaks event? If
    not, what other changes would you recommend?
        Secretary Gates. I share your concern regarding the unauthorized
    disclosure of classified information and DOD is reviewing policies to
    mitigate the risk of future disclosures. As DOD continues efforts to
    improve its policies and information sharing capabilities, it will
    strive to implement the mechanisms necessary to protect intelligence
    information without reverting back to pre-September 11 stovepipes. One
    of the major contributing factors in the WikiLeaks incident was the
    large amount of data that was accessible with little or no access
    controls. Broad access to information can be combined with access
    controls to mitigate this vulnerability, without overly restricting
    users from obtaining the information they need.
        One example of an access control mechanism that DOD has begun is to
    issue a Public Key Infrastructure (PKI)-based identity credential on a
    hardened smart card. This is very similar to the Common Access Card
    (CAC) used on the unclassified network. DOD will complete issuing
    500,000 cards to SIPRNet users, along with card readers and software,
    by the end of 2012. This will provide very strong identification of the
    person accessing the network and requesting data. It will both deter
    bad behavior and require absolute identification of who is accessing
    data and managing that access.
        In conjunction with this effort, all DOD organizations will
    configure SIPRNet-based systems to use the PKI credentials to strongly
    authenticate end-users who are accessing information in the system.
    This provides the link between end users and the specific data they can
    access--not just network access. DOD's goal is that by 2013, following
    completion of credential issuance, all SIPRNet users will log into
    their local computers with their SIPRNet PKI/smart card credential.

        92. Senator McCain. Secretary Gates, do you plan to conduct or
    oversee a damage assessment on the Wikileaks disclosures?
        Secretary Gates. DOD conducted an assessment of the disclosed DOD
    information to determine what actions must be taken to mitigate the
    disclosures' effect on U.S. forces, the coalition, and host nation
    partners. At my direction, the Intelligence Review Task Force (IRTF),
    established under the purview of the Defense Intelligence Agency (DIA),
    reviewed every line of the disclosed information and worked with our
    foreign partners and the combatant commands (COCOM) to warn of
    potential danger and mitigate the degree of risk or threat resulting
    from the compromise.
        The IRTF did not conduct a full damage assessment due to the
    interagency nature of the disclosed material and of the risk incurred.
    The Office of the National Counterintelligence Executive in the Office
    of the Director of National Intelligence (DNI) has the mandate to
    conduct damage assessments in these circumstances and is in the process
    of doing so.

        93. Senator McCain. Secretary Gates, what changes need to be made
    in the way that DOD conducts background investigations for security
    clearances?
        Secretary Gates. DOD investigative service provider is the Office
    of Personnel Management (OPM) which conducts 95 percent of all
    background investigations for security clearances across the Federal
    Government, including the majority of DOD investigations. The
    background investigations are conducted utilizing requirements set
    forth in the 1997 Federal Investigative Standards for Background
    Investigations for Access to Classified Information, which are
    promulgated at the national level.
        The Federal Investigative Standards are currently being rewritten
    by a working group composed of representatives from the Intelligence
    Community, DOD, and other executive branch departments and agencies.
    The new Federal Investigative Standards will apply 21st century
    technology using an enterprise-wide approach. These technologies will
    enable more cost-effective and timely case management and information
    sharing.

        94. Senator McCain. Secretary Gates, do you see the need for
    increased counterintelligence scrutiny or investigations of cleared DOD
    personnel?
        Secretary Gates. DOD investigative service provider is the OPM that
    conducts 95 percent of all background investigations for security
    clearances across the Federal Government, including the majority of DOD
    investigations. The background investigations are conducted utilizing
    requirements set forth in the 1997 Federal Investigative Standards for
    Background Investigations for Access to Classified Information, which
    are promulgated at the national level.
        Since DOD investigations are conducted in accordance with the
    Federal investigative standards, we do not believe additional
    investigations are warranted beyond what is required by existing
    policies. When the current personnel security investigation develops
    indicators requiring security, law enforcement, or counterintelligence
    follow-up actions, the information is referred to the appropriate
    organization. DOD policies and legal guidelines concerning law
    enforcement, security, and counterintelligence investigations identify
    what circumstances require investigations.
        DOD policy directs that when counterintelligence, security, or
    other types of investigations are completed on, or derogatory
    information is received regarding personnel with a security clearance,
    the information must be provided to the individual's Commander/
    Director. Finally, DOD is a champion of the Joint Reform Effort, and
    key members of DOD are participating in the development of new
    national-level personnel security procedures, which will integrate
    counterintelligence and security equities into procedures regarding the
    development of derogatory or suspicious information.

        95. Senator McCain. Admiral Mullen, do believe that the Joint
    Worldwide Intelligence Communications System (JWICS) is as vulnerable
    to a Wikileaks-type scenario as the SIPRNET has proven to be?
        Admiral Mullen. Yes, if the threat results from an individual in a
    position of trust who opts to violate applicable U.S. military
    regulations, DOD policy, and Federal law. JWICS does have slightly
    greater security controls than SIPRNET, but there remains a possibility
    that its contents could also be exploited for unauthorized and illicit
    purposes.

        96. Senator McCain. Secretary Gates, if you decide to more tightly
    restrict access to classified data on DOD computer systems, how will
    you make sure that the right people are still getting the information
    they need?
        Secretary Gates. DOD is working to improve intelligence information
    sharing, while ensuring the appropriate protections and safeguards are
    in place. A more resilient information sharing environment can be
    achieved through both technological solutions and comprehensive
    policies.
        Immediately following the first release of documents by WikiLeaks,
    I commissioned two internal DOD studies. The first study, led by the
    Under Secretary of Defense for Intelligence, directed a review of DOD
    information security policy. The second study, led by the Joint Staff,
    focused on procedures for handling classified information in forward
    deployed areas.
        The information security policies that were in place at the time of
    the WikiLeaks disclosures were determined to be adequate. However,
    adherence to and implementation of those policies were found to need
    improvement. Since then, DOD combined five separate policies into a
    single updated version of DOD's Information Security Program policy,
    and the Defense Security Service is developing web-enabled information
    security training that will become part of the mandatory information
    assurance training conducted annually across DOD.
        Results of the Joint Staff study showed that forward deployed units
    maintained an over-reliance on removable electronic storage media, and
    also revealed a limited capability to detect and monitor anomalous
    behavior on classified computer networks.

           EFFICIENCIES INITIATIVES RELATED TO INTELLIGENCE FUNCTIONS

        97. Senator McCain. Secretary Gates, in an August 9, 2010 speech,
    you announced an immediate 10 percent reduction in funding for
    intelligence advisory and assistance contracts. What effect has this
    reduction in intelligence contractors had on the defense intelligence
    enterprise?
        Secretary Gates. Last August, DOD considered an immediate reduction
    in funding for intelligence advisory and assistance contracts, but have
    since conducted a DOD-wide review of our reliance on contractors. As
    the result of this review, funding used to acquire service support
    contracts was reduced 10 percent per year over the next 3 years from
    their reported fiscal year 2010 level. Based on the DOD components'
    allocation of the efficiency achieved by this action, the Military
    Intelligence Program (MIP) was assessed a portion of this reduction.
    Contractor funding reductions in the MIP were absorbed by realizing
    process efficiencies and moving away from higher-priced contractor
    services. The MIP significantly reduced its reliance on contractor
    support. Compared to fiscal year 2010 actuals, MIP contractor reliance
    declined approximately 19 percent.

        98. Senator McCain. Secretary Gates, in a subsequent January 6,
    2011, statement, you mentioned a review of DOD intelligence
    organizations conducted in conjunction with the Office of the DNI.
    Please provide details on the results of that review for the record.
        Secretary Gates. The review of intelligence organizations was an
    integrated effort between DOD and DNI. The analysis team consisted of
    DOD and DNI members and this partnership was critical for success. The
    group reviewed baseline resources across the Intelligence Community,
    identifying areas of major investment and significant recent growth and
    focusing on analytic organizations.
        The decisions made as a result of the review are the following:

        1.  Resize the Geographic COCOM Joint Intelligence Operations
    Centers (JIOCs) for Phase 0/1 operations only.
        2.  Establish a rotational model for DIA support to the COCOMs.
        3.  Disestablish the Defense Intelligence Operations Coordination
    Center (DIOCC) and the Joint Functional Component Command for
    Intelligence, Surveillance, and Reconnaissance (JFCC-ISR).
        4.  Consolidate selected DOD Counterterrorism (CT) functions under
    the Joint Intelligence Task Force for Combating Terrorism (JITF-CT).
        5.  Consolidate selected DOD Counter Threat Finance (CTF) elements
    under a new Joint Intelligence Task Force for CTF (JITF-CTF).
        6.  Track emerging intelligence organizations and develop plans to
    harvest them as they redeploy from theater.

        99. Senator McCain. Secretary Gates, do you agree with the review's
    overall assessment that many new defense intelligence organizations,
    created after September 11, have grown too large and have largely
    duplicated work done elsewhere?
        Secretary Gates. The number of defense intelligence organizations
    has increased since 2001. In the defense arena, large and well-staffed
    intelligence structures now exist in the military departments, in the
    defense agencies, in the COCOMs, and in the theaters.
        The Intelligence Review Study Group (IRSG) identified areas of
    major investment and focused on the analytic organizations within the
    IC. Although the IRSG findings identified areas where efficiencies can
    be gained by consolidating select functions, such as counterterrorism
    and CTF, DOD continues to look for areas to increase efficiency and
    eliminate redundancy. Several efforts are underway to identify Defense
    Intelligence efficiencies and evaluate the impact on intelligence
    support to combat operations, if efforts are reduced or eliminated.
    Ongoing efficiency efforts within DOD include a working group that is
    tracking and reviewing intelligence organizations formed to support
    operations in Afghanistan and Iraq, and to identify which of these
    would be retained as combat operations draw to a close.

        100. Senator McCain. Secretary Gates, you have approved
    recommendations to roll up various defense intelligence organizations
    that focus on counter-terrorism and terrorism finance into two separate
    task forces housed at the DIA. Could these organizations simply be done
    away with?
        Secretary Gates. No, because they provide different specialized
    intelligence that is critical to the current fight in Afghanistan and
    U.S. forces deployed in every theater.
        My efficiency recommendation regarding JITF-CT at DIA focused on
    consolidating analytic functions in one organization to use our
    resources more effectively against adversaries that continue to
    reinvent themselves and reemerge as threats to U.S. forces around the
    world, as recently seen with the attacks on the airmen in Germany. Over
    the past 9 years, JITF-CT provided exceptional support to operational
    forces in Iraq and Afghanistan. The leadership, tradecraft, and
    efficiencies gained by consolidating smaller analytic elements with
    JITF-CT will enhance overall Defense Intelligence capabilities as well
    as DOD contributions to the national counter-terrorism mission.
        Although the Treasury Department has the lead for the overall U.S.
    Government CTF effort, our efficiency studies identified a requirement
    for a focal point within DOD to coordinate and lead the disparate CTF
    efforts that were already in place. Intelligence support to CTF remains
    a core analytic function. Because illicit finance does not exist as an
    end in and of itself, the focused work of DIA analysts in Washington
    and in Afghanistan will continue to assist commanders in the field in
    understanding how adversaries sustain their efforts and help identify
    vulnerabilities.
        By consolidating the CTF mission within DIA, DOD is improving the
    efficiency and efficacy of the Defense Intelligence Enterprise. DIA
    will streamline the CTF mission by consolidating and realigning DOD
    components into a single organization to support both the warfighter
    and the policymaker more effectively.

        101. Senator McCain. Secretary Gates, what organizations within the
    defense intelligence enterprise would you recommend significantly
    reducing or abolishing and what would be the savings to the taxpayer of
    these cuts?
        Secretary Gates. As part of the Reform Agenda, DOD formed an ISRG
    to conduct an extensive examination of the DOD and IC apparatus. The
    ISRG identified the DIOCC and JFCC-ISR as redundant organizations that
    can be eliminated in fiscal year 2012. The ISRG also recommended that
    the AFRICOM, EUCOM, and SOUTHCOM's JIOCs be ``right-sized,''
    commensurate with their current responsibilities for Phase 0/1
    operations. These efficiency initiatives will save DOD approximately
    $32 million in fiscal year 2012.
        I continue to look for areas of redundancy within Defense
    Intelligence. A working group is reviewing existing organizations
    providing intelligence support to counterterrorism and CTF with the
    goal of consolidating those functions under the DIA. I am also
    reviewing intelligence and intelligence-like organizations that have
    formed to support combat operations to identify which of these
    organizations should be retained as combat operations draw down. None
    of these efforts have identified any savings, but savings are possible
    as additional efficiencies are identified.

        102. Senator McCain. Secretary Gates, could further reductions be
    made without harming intelligence support to warfighters in Iraq and
    Afghanistan?
        Secretary Gates. I continue to look for areas in Defense
    Intelligence where we can increase efficiency and eliminate redundancy.
    Several efforts are underway to identify Defense Intelligence
    efficiencies and evaluate the impact on intelligence support to combat
    operations, if efforts are reduced or eliminated. Ongoing efficiency
    efforts within DOD include a working group that is tracking and
    reviewing intelligence and intelligence-like organizations formed to
    support operations in Afghanistan and Iraq, in order to identify which
    of these organizations should be retained as combat operations draw to
    a close.
        I am also reviewing existing organizations providing intelligence
    support to counterterrorism and CTF, with the goal of consolidating
    those functions under the DIA. All Defense Intelligence efficiency
    efforts will ensure that intelligence support to forces conducting
    combat operations will continue as long as that support is required.

                            FORT HOOD INVESTIGATION

        103. Senator McCain. Secretary Gates, the Senate Homeland Security
    and Government Affairs Committee recently issued a report on Fort Hood
    claiming that ``DOD and FBI collectively had sufficient information
    necessary to have detected Hasan's radicalization . . . [but failed] to
    act on it.'' Do you agree with that conclusion?
        Secretary Gates. No. DOD was not notified or otherwise made aware
    of Major Hasan's contact with extremists until after the incident. In
    terms of Major Hasan's professional behavior, the Army is conducting an
    accountability review which will appropriately address what supervisors
    knew about his job performance and whether they acted according to Army
    policies and procedures. That report is being reviewed by the Secretary
    of the Army and should be released in the near future.

        104. Senator McCain. Secretary Gates, do you believe that the
    defense intelligence enterprise has devoted sufficient resources to
    understanding and countering the threat from homegrown violent Islamic
    extremists like Hasan?
        Secretary Gates. Yes. DOD devotes significant resources to
    understanding and countering violent extremism among its military
    personnel. DOD continues to examine how to address the threat
    originating from disaffected individuals within the U.S. Armed Forces
    who may commit violent acts, and best apply the resources available.
    Specifically, the Defense Intelligence Enterprise details personnel to
    the Federal Bureau of Investigation (FBI) Joint Terrorism Task Forces
    (JTTFs) to broaden the understanding of the overall threat within the
    United States to our military forces. DOD also completed a full
    assessment of newly identified JTTF requirements based on the Fort Hood
    incident, and is in the process of resourcing those needs.

        105. Senator McCain. Secretary Gates, do you believe that defense
    intelligence organizations are adequately represented on the FBI's
    JTTF? If not, do you plan to increase that participation?
        Secretary Gates. Today, yes. In the aftermath of the shootings at
    Fort Hood, I determined that DOD's commitment to the JTTFs and guidance
    for sharing force protection information were inadequate. I directed
    the Under Secretary of Defense for Policy to lead oversight of DOD's
    contributions to JTTFs by providing policy guidance, and by developing
    DOD-wide goals and objectives for DOD's JTTF participation. This has
    led to an increase in the Department's contributions to JTTFs through
    the DIA's Joint Intelligence Task Force-Combating Terrorism. This
    enhancement in analytical capabilities and information sharing plays a
    critical role in better understanding the terrorist threat to the
    United States.

        106. Senator McCain. Secretary Gates, what other steps do you plan
    to take to ensure that radicals like Hasan are detected before another
    tragedy like Fort Hood occurs?
        Secretary Gates. On August 18, 2010, I approved Department-wide
    guidance to familiarize leaders with behaviors that may indicate
    radicalization or precipitate violence. I also reinforced to commanders
    that they are expected to exercise sound judgment and consider the full
    range of disciplinary actions when addressing personnel whose behavior
    adversely affects good order, discipline, or unit safety.
        Current DOD policy prohibits behavior that creates a clear danger
    to the loyalty, discipline, or morale of military personnel. The Under
    Secretary of Defense for Personnel and Readiness is revising DOD
    Instruction 1325.06, Handling Dissident and Protest Activities among
    members of the Armed Forces, to ensure it effectively prohibits
    behavior that materially interferes with the accomplishment of the
    military mission or is incompatible with military service. This policy
    authorizes commanders to employ a range of administrative and
    disciplinary actions to stop behavior that is incompatible with
    military service, regardless of the underlying cause.
        DOD made several important steps to improve information sharing and
    its ability to ``connect the dots.'' DOD has drafted a new,
    consolidated information sharing agreement with the FBI. This new
    agreement creates a mechanism for DOD to provide force protection
    threat information requirements to the FBI, ensures threat information
    is reported to senior defense leadership, and reaffirms the already
    excellent working relationships between DOD Provost Marshals and local
    FBI JTTFs and Field Offices to ensure that threat information gets to
    the defense installation that is threatened. Additionally, DOD and the
    FBI established a formal notification process whereby information on
    all counterterrorism investigations with a DOD nexus is forwarded
    appropriately. DOD also utilizes FBI's eGuardian suspicious activity
    reporting system. This secure, unclassified capability enables
    information sharing across DOD, as well as with Federal, State, local,
    and tribal law enforcement partners. This system provides information
    to the FBI's JTTFs.
        In the future, DOD will establish the Law Enforcement Defense Data
    Exchange (D-DEx) in order to allow our Military Criminal Investigative
    Organizations to post, query, retrieve, and share criminal
    investigation and other law enforcement data in one database. Another
    important step is to supplement military personnel health screenings to
    include ``violence risk assessments'' before deployment and three times
    after deployment. These ``violence risk assessments'' are conducted
    person-to-person by a medical provider trained and certified to conduct
    in-depth evaluations. Finally, I have directed the Military Services
    and Investigative Agencies to collaborate with Defense intelligence
    organizations, facilitating access to investigative information on DOD-
    related counterterrorism cases. To most effectively pool DOD's
    resources against this threat, the government must overcome information
    sharing and cultural challenges between investigative and intelligence
    analysis organizations. The combination of enhanced information sharing
    and analytic presence in JTTFs plays a critical role in understanding
    the ``homegrown'' threat to DOD.

                     DOD SUPPORT TO COUNTERDRUG ACTIVITIES

        107. Senator McCain. Secretary Gates and Admiral Mullen, the budget
    submission calls for an increased emphasis on DOD support to Mexico in
    its counterdrug activities--a decision I support fully. What's your
    assessment of the Mexican Government's current capability to confront
    the drug cartels and associated illicit organizations?
        Secretary Gates. In recent years, Mexico significantly increased
    its willingness to confront transnational criminal organizations (TCOs)
    and strengthened capabilities to do so through law enforcement,
    judicialand military support, and by other means. Mexico also launched
    initiatives to promote legitimate economic opportunity that help
    diminish illegal activity. The U.S. Government provides significant
    support to Mexico through training, equipment, information exchange,
    and related cooperation, but Mexican authorities' own efforts have
    achieved most of these improvements. In confronting TCOs, the Mexican
    people suffer grievously from escalating violence, and I support
    Mexico's steadfast resolve to further strengthen the rule of law.
        Although Mexico's capability to disrupt TCOs is increasing, TCOs
    adapt quickly by escalating violence, dispersing geographically, and
    diversifying their criminal activities. As a result, Mexican
    authorities activated the Mexican Armed Forces to help disrupt TCOs,
    and buy time for the civilian agencies to build capacity. Mexico is
    building rule of law capacity through police vetting and training, as
    well as anti-money laundering, judicial, penal, statutory, anti-
    corruption and related reforms.
        Mexico efforts have produced notable successes, including the
    arrest or killing of several TCO leaders as well as key members from
    all seven of Mexico's major drug organizations, while at the same time
    disrupting the TCOs' business environment. Unfortunately, this led to
    increased violence, as the criminals fight for territory. As the
    illegal drug business is disrupted, TCOs are also diversifying into
    other criminal activities and dispersing geographically, including into
    Central America.
        Despite the Mexican authorities' efforts, the country remains the
    primary transit route into the United States for illegal drugs of
    foreign origin, as well as a major supplier of heroin,
    methamphetamines, and marijuana. Mexico is also the primary destination
    for weapons and bulk cash smuggled illegally out of the United States.
    Mexico's sustained interdiction efforts made great progress in reducing
    cocaine movement directly into Mexico from South America to low levels.
    Most cocaine now reaches Central America by air or sea, then transits
    Mexico primarily hidden in private vehicles into the United States over
    land.
        Admiral Mullen. Mexico has identified TCOs as the principal
    security challenge we face in the Western Hemisphere. The United States
    and Mexico understand this is both a shared challenge and
    responsibility between our nations. In recognition of this need, Mexico
    has made great strides in its understanding of TCOs and its capability
    to counter them. However, much work remains as Mexico is yet able to
    overcome the TCOs' grip on Mexico's citizenry, public security and
    economy.
        In collaboration with Mexico, we continue to work toward improved
    information sharing which has enabled the Mexico effort. This has
    manifested itself through the Mexican apprehension of key several TCO
    senior leaders. Mexican armed forces are making strides with their
    public security forces to assume the lead role. These short-term gains
    have not come without a cost; drug-related murders have grown to an
    annual rate of 15,233--a 61 percent increase from 2009 due largely to
    TCO-on-TCO violence. As Mexico's armed and public security forces
    follow and exploit these successes we could very well see violence
    levels continue to increase as TCOs are forced to operate at greater
    risk in an environment increasingly inhospitable to organized crime.
        As Mexico consolidates its successes in establishing the rule of
    law, we must continue to support them as they deal with the TCOs'
    culture of impunity--namely violent intimidation and corruption. In our
    daily interactions, we continually stress the importance that Mexico
    forces integrity must be above reproach. It is these forces that
    represent the government's legitimacy and garner the trust of the
    citizens.
        Mexico has made progress in its capability to confront TCOs but
    will require expansion and deepening of their capabilities and
    institutions as it is anticipated violent intimidation and coercion
    will worsen.

        108. Senator McCain. Secretary Gates and Admiral Mullen, what
    priorities have you identified for DOD to pursue regarding support to
    Mexico?
        Secretary Gates. U.S.-Mexico relations deepened significantly in
    recent years, including with respect to security cooperation on matters
    of mutual concern such as countering TCOs. DOD provides support for
    cooperation under the State Department-led Merida Initiative (MI)
    carrying out programs requested by Mexican authorities. DOD executes
    $415.5 million in MI Foreign Military Financing (FMF) appropriated in
    fiscal years 2008-2009, including provision of helicopters, maritime
    surveillance aircraft, handheld drug and explosives ion scanners, and
    other equipment.
        The DOD counternarcotics (CN) program also compliments MI with
    training, equipment, and information sharing in support of Mexican
    military and law enforcement forces. The DOD CN program also provides
    logistical, analytic, radar, communications and other support to U.S.
    law enforcement agencies' activities. In recent years, DOD's CN support
    to Mexico has concentrated on helping Mexican forces improve tactical
    and operational proficiency, as well as their air mobility, maritime
    law enforcement, communications, and reconnaissance capacities. DOD
    training and information exchanges emphasize interagency-coordinated
    operations, and safeguarding human rights. The DOD CN program allocated
    $51 million in fiscal year 2011 to support Mexico (up from about $3
    million per year before 2009), and is working to reinforce this effort.
    DOD also works with other U.S. agencies and foreign partners to
    integrate cooperation throughout the Americas, recognizing that TCOs
    present challenges to all countries in the region.
        Admiral Mullen. DOD conducts programs as agreed upon by both United
    States' and Mexico's Governments as found in the ``Beyond Merida''
    construct. Principally we seek to support Mexico's efforts to directly
    confront TCOs and disrupt TCOs' capability to conduct organized
    criminal activities, thereby helping Mexico to strengthen the
    capabilities necessary to exploit TCO weaknesses while working to help
    reduce Mexico's security forces susceptibility to TCO intimidation and
    corruption.
        To expand Mexico's capabilities, DOD will focus on accelerating
    Merida Initiative equipment in coordination with DOS as we move beyond
    equipping to truly partnering with our Mexican counterparts to develop
    a clear strategy of military support to law enforcement activities.
        In addition to provision of equipment, DOD will focus on providing
    Mexico with more information sharing thereby helping them develop the
    analytical capacity to exploit TCO network vulnerabilities. We
    recognize that our bilateral efforts with Mexico must be part of a
    wider collaboration with law enforcement agencies as well as diplomatic
    efforts.
        Beyond these immediate priorities we are simultaneously supporting
    the sustainment of our coordinated efforts and building partner
    capacity in all pertinent areas. Our military-to-military efforts must
    maintain a coherent doctrine, conduct coordinated operations with an
    interoperable force, and ensure both adequate and appropriate training
    for the forces committed to the defense of Mexican national
    sovereignty. Personnel and leader development programs are essential to
    ensuring that Mexican initiatives are carefully managed and maintained.
    This type of attention is necessary if we are to capitalize on earlier
    gains in galvanizing public security institutions' credibility and
    longevity in what must be a long-term effort to partner with Mexico to
    defeat transnational organized crime.

        109. Senator McCain. Secretary Gates and Admiral Mullen, drug
    cartels operating from Central and South America have shown an
    increasing ability to adapt and continue their operations. For example,
    the Ecuadorians and most recently the Colombians have apprehended fully
    submersible ``narco-subs.'' Colonel Manuel Hurtado, chief of staff of
    Colombia's Pacific Command, told the Associated Press that he estimated
    the captured narco-sub could hold 8 tons of drugs and has the capacity
    to sail totally underwater and travel to the coast of Mexico without
    surfacing. What trends are you seeing in the region and what priorities
    have you identified for DOD to pursue with regards to its counterdrug
    activities and assistance?
        Secretary Gates. Ecuadoran and Colombian authorities seized
    submersible vessels under construction in Pacific coast jungle areas in
    July 2010 and February 2011, respectively. These authorities cooperated
    fully with U.S. counterparts in studying the vessels, which appear
    intended for fully-submerged operations.
        TCOs continue to rely principally on ``go-fast'' boats to smuggle
    most cocaine from South to North America. Over the last 10 years,
    however, drug traffickers experimented with self-propelled semi-
    submersible (SPSS) vessels, also known as low-profile vessels. SPSS
    vessels achieve considerable stealth by moving very low in the water,
    but cannot actually submerge entirely. The recent emergence of the
    self-propelled fully submersible (SPFS) drug-smuggling threat appears
    to represent a significant evolutionary step.
        DOD and other U.S. Government agencies are refining ways to detect,
    monitor, and interdict SPFS and SPSS craft more effectively. United
    States authorities are also working with Colombian authorities and
    those of other countries to locate the sites where the vessels are
    built, loaded, and launched, as well as to identify the logistical,
    financial, and associated networks that support them. Likewise,
    security cooperation programs with South and Central American
    countries, as well as with Mexico, are critical in strengthening those
    countries' surveillance and interdiction capabilities and their
    capacity to cooperate with U.S. counterparts and with one another.
        Admiral Mullen. Ecuadoran and Colombian authorities seized narco-
    subs in Pacific coast jungle areas in July 2010 and February 2011,
    respectively. Ecuadoran and Colombian authorities have cooperated fully
    with U.S. counterparts in studying the narco-subs, which appear to have
    been intended for limited fully-submerged operations. Drug Trafficking
    Organizations continue to rely principally on ``go-fast'' boats to
    carry over half of all U.S.-bound cocaine. However, the recent
    emergence of the Self-Propelled Fully Submersible (SPFS) drug-smuggling
    vessels represents a significant evolutionary step and demonstrates the
    trafficking organizations' adaptability, resources, and persistence.
        As the lead agency of the Federal Government for detection and
    monitoring of aerial and maritime transit of illegal drugs into the
    Unites States, DOD continues to refine its technology, tactics,
    techniques and procedures to adapt to the law enforcement threat narco-
    subs pose to the United States. Additionally, U.S. authorities are
    working with Colombian authorities and those of other partner nations
    to locate where the narco-subs are built, loaded and launched, domains
    which are much more conducive to intercept. We also partner with like-
    minded countries to identify the logistical, financial and associated
    networks which support such illicit activities. Likewise, U.S. security
    cooperation programs with South and Central American countries, as well
    as with Mexico, are critical in strengthening those countries'
    surveillance and interdiction capabilities, including their capacity to
    cooperate with U.S. counterparts and with each other in the Central
    American region.

                           COMPETITION IN CONTRACTING

        110. Senator McCain. Secretary Gates, I am concerned about what I
    see as a movement by DOD away from competition. The most egregious
    recent example is the Navy's decision to award contracts to both
    bidders in the LCS program--a decision I still believe was ill-advised.
    But, there are numerous others--outside the context major systems.
        In fact, the Congressional Quarterly recently reported that
    ``according to newly available DOD data . . . more than half the
    Pentagon's total budget obligations for contracting last year were
    spent without effective competition or with no competition at all.''
    Are you aware of this report?
        Secretary Gates. DOD actually employed a very effective competitive
    procurement strategy in the case of the LCS. The effects of head-to-
    head competition resulted in competitive pricing from both offerors
    that had not occurred with any previous strategy. This strategy
    promotes competition for DOD by establishing multiple options for
    conducting future competitions. While I have not read the specific
    ``Congressional Quarterly'' report, Dr. Ashton Carter, the USD(AT&L),
    is aware of the issue and made promoting real competition a major
    component of his Better Buying Power Initiative. As part of this
    effort, guidance was issued on November 24, 2010 on ``Improving
    Competition in Defense Procurements.''

        111. Senator McCain. Secretary Gates, how concerned are you about
    this development and how do you intend to address it?
        Secretary Gates. I am concerned about this development and have
    undertaken a major reform agenda in DOD to improve business processes
    and change the way it acquires goods and services to generate greater
    efficiencies and savings. Aspects of this initiative are being
    implemented in the USD(AT&L)'s September 14, 2010 memorandum for
    ``Better Buying Power: Guidance for Obtaining Greater Efficiency and
    Productivity in Defense Spending.'' The goal of this initiative is to
    achieve more efficient, effective, and affordable ways of conducting
    DOD business. Promoting real competition is a focus area within the
    initiative that requires the Military Departments and Defense Agencies
    to develop plans to improve overall and effective competition by:
    reducing the number of single-bid contracts; negotiating better prices
    on single-bid contracts and task and delivery orders; and reducing the
    dollar value of sole-source contracts and task and delivery orders. On
    November 24, 2010 the Director of Defense Procurement and Acquisition
    Policy issued guidance on improving competition in Defense procurement.

        112. Senator McCain. Secretary Gates, since this data was taken
    from DOD sources and should have been available to your staff, why
    wouldn't increasing completion be the cornerstone of any efficiency
    initiative announced by DOD to date?
        Secretary Gates. Competition is the cornerstone of the acquisition
    process and its benefits are well understood. Competition was re-
    emphasized when the USD(AT&L) issued his June 2010 memorandum, ``Better
    Buying Power: Mandate for Restoring Affordability and Productivity in
    Defense Spending'' to underscore the importance of competition. In July
    2010, the Director of Defense Procurement and Acquisition Policy
    established Subcommittee 13 under the Panel on Contracting Integrity to
    address opportunities for more effective competition. In September
    2010, the USD(AT&L) followed his June memorandum with the ``Better
    Buying Power: Guidance for Obtaining Greater Efficiency and
    Productivity in Defense Spending'' to promote real competition, which
    was followed by his November 2010 Implementation Directive that
    requires Military Departments and Defense Agencies to improve the
    overall rate of competition by 2 percent and the rate of effective
    competition by 10 percent. Further direction was provided by the
    Director of Defense Procurement and Acquisition Policy's November 2010
    memorandum ``Improving Competition in Defense Procurements,'' which
    instructs contracting officers to resolicit any solicitation that was
    open for less than 30 days, and if only one offer is received in the
    resolicitation, the contracting officer must conduct negotiations to
    achieve the best value for the DOD.

                              JOINT STRIKE FIGHTER

        113. Senator McCain. Secretary Gates, soon after you announced that
    you wanted to restructure the Joint Strike Fighter (JSF) program again,
    Pentagon officials reportedly said that the program could be delayed by
    1 to 3 more years and cost another $5 billion. Is that true?
        Secretary Gates. Yes. Following the breach of the Nunn-McCurdy
    critical thresholds, rescission of the original October 26, 2001
    Milestone B decision, and program recertification in June 2010, DOD set
    out to reestablish a firm foundation for the JSF program. The new F-35
    PEO conducted an extensive bottom-up Technical Baseline Review (TBR)
    involving more than 120 tactical aircraft experts from both the
    military Services and DOD to evaluate every aspect of the System
    Development and Demonstration (SDD) phase of the program. The TBR
    identified the need for an additional $4.6 billion in resources and
    schedule duration for execution of the SDD phase. In addition to the
    TBR, the PEO will perform a schedule risk assessment this summer, will
    conduct an integrated baseline review, and will prepare the integrated
    master schedule for the program this fall.

        114. Senator McCain. Secretary Gates, what are the new estimates on
    how much the program and each plane will cost?
        Secretary Gates. DOD is currently finalizing its estimates on how
    much the program and each aircraft will cost. These estimates are being
    prepared in support of the planned Defense Acquisition Board (DAB)
    Milestone B recertification review scheduled for May 2011. The cost
    figures resulting from this review will be reflected in an update to
    the Selected Acquisition Report which will be provided to Congress this
    summer, subsequent to the DAB review.

        115. Senator McCain. Secretary Gates, will there be another Nunn-
    McCurdy breach on the program this year?
        Secretary Gates. No, there will not be another Nunn-McCurdy breach
    this year. Although DOD added another $4.6 billion to the development
    program, and the short-term aircraft price will increase resulting from
    the reduction of 124 aircraft within the FYDP, I remain committed to
    procuring 2,443 aircraft in total. I believe that the changes to the
    development program, together with DOD's long-term commitment to
    procurement quantities, provide a reasonable baseline and strong
    foundation for program execution going forward. These changes will not
    result in a Nunn-McCurdy breach.

        116. Senator McCain. Secretary Gates, under your restructure
    proposal, what is the current estimate for the additional time required
    to complete developing the aircraft?
        Secretary Gates. The development phase of the SDD phase ends with
    the completion of development testing, now estimated to be completed in
    fiscal year 2016. This estimate was based on the independent Technical
    Baseline Review involving 120 tactical aircraft experts from the
    Military Services and DOD over a period of months.

        117. Senator McCain. Secretary Gates, you suspended the Marine
    Corps version of the JSF, the F-35B, putting the program in a 2-year
    probationary period--necessary to get the program back on track. At the
    time you stated if cost, development, and schedule overruns could not
    be rectified in that 2-year timeframe, you would cancel the program.
        However, the PEO of the JSF program, Vice Admiral Venlet,
    reportedly said, ``There is no black and white checklist to weigh the
    program's performance against.'' Admiral Venlet reportedly said the
    future of the Marine Corps version of the JSF will not be judged
    against a checklist of hard milestones, but rather by a loose-knit
    series of requirements--ranging from the aircraft's weight, propulsion
    ratios, its ability to operate in a maritime environment, etc. Do you
    agree with Admiral Venlet's assertion? If so, please explain, exactly
    what does probation mean for the Marine Corps version of the aircraft?
        Secretary Gates. ``Probation'' is not a suspension; ``probation''
    is linked to both production and development. First, DOD reduced the
    production of the F-35B Short Take Off and Vertical Landing (STOVL)
    variant to three aircraft in fiscal year 2011, six aircraft in fiscal
    year 2012, and six aircraft in fiscal year 2013. These aircraft numbers
    are the minimum numbers required to sustain the F-35B production and
    engineering workforce, as well as to sustain the supplier base of
    STOVL-unique parts. The F-35A Conventional Take Off and Landing and F-
    35C Carrier Variant (CV) aircraft are not dependent on the F-35B
    development and flight test to complete their development.
        Cost, schedule, and development progress must balance against
    warfighter utility. The Commandant of the Marine Corps reviews the F-
    35B STOVL progress monthly and separately from the monthly Service
    Acquisition Executive (SAE) reviews of the F-35 program as a whole.
    These reviews assess metrics ranging from affordability, weight growth,
    key STOVL performance requirements, technical performance measures,
    flight test status, and risk burn-down plans. These metrics provide a
    holistic view of the F-35B progress. None of them provide ``black and
    white'' decision criteria. These metrics, taken as a whole, will inform
    the Commandant of the Marine Corps and DOD on the continued F-35B
    progress at the end of the ``probation'' period.

        118. Senator McCain. Secretary Gates, what is success and what is
    failure that warrants termination?
        Secretary Gates. Termination is not a ``black and white'' decision.
    It must be viewed from a holistic viewpoint by assessing cost,
    schedule, warfighter utility in performance being delivered, and risk.
    The goal of any acquisition program is an affordable system that
    provides the desired warfighter utility. Warfighter utility is a
    combination of capability delivered in a desirable timeframe. It is
    DOD's job to accomplish this at a reasonable level of risk.
        The Technical Baseline Review conducted by the new F-35 PEO
    establishes a more realistic expectation for the F-35 development
    program. The program is continuing its restructure activities for the
    SDD phase, production activities, and operations and support. The
    program will be assessed monthly by the service acquisition executives,
    the warfighters, and DOD leadership to determine that the balance of
    cost, schedule, and performance goals do not exceed acceptable risk
    levels.

        119. Senator McCain. Secretary Gates, it appears the program office
    has not taken any additional steps to refine the criteria on those key
    goals, or established any further metrics on what needs to be done to
    remedy the F-35B's serious issues to save it from cancellation, if that
    is the right thing to do. As those steps are being taken, it seems to
    me that there should be transparent, clear, and measurable milestones
    against which performance can be measured against plan. Is that your
    vision for determining whether the Marine Corps version of the aircraft
    passes probation?
        Secretary Gates. DOD is providing individual attention to the F-35B
    STOVL variant specific issues to ensure cost and schedule milestones
    are achieved in delivering required warfighter capabilities.
        Specifically, Navy and the Air Force established a battle rhythm of
    monthly Service Acquisition Executive (SAE) reviews with the F-35 PEO
    to assess the overall F-35 program, with additional emphasis on F-35B
    STOVL variant. These monthly SAE reviews examine the F-35 airframe and
    propulsion SDD, production, and sustainment programs with particular
    emphasis on cost/affordability, risk, and schedule. In addition, the
    Commandant of the Marine Corps established a monthly F-35 review
    focused solely on the STOVL variant. This review is also led by the
    Navy SAE. The topics and metrics that are assessed include, but are not
    limited to, the following:

             Cost/Affordability/Earned Value Management (EVM): A
            review of Acquisition Procurement Unit Cost, Program
            Acquisition Unit Cost, Operations and Support costs, and EVM
            cost/schedule indices.
             Risk: Monthly assessment of `Program Risk' with
            explanations about each risk item, their interactions, and risk
            burn-down plans. Assessments include a review of the
            assumptions and environment used to determine the risk
            evaluations.
             F-35B weight/weight growth: weight assessments track
            each pound added to the airframe with an understanding of the
            underlying reasons for the growth. If there are trades that
            need to be made to mitigate weight growth, DoN senior
            leadership/warfighters are to be consulted.
             Key Performance Parameters (KPPs): review of F-35B
            KPPs with a tracking/trending methodology and monthly
            discussions of considerations for a Concept of Operations that
            might help facilitate achievement of F-35 KPPs and program
            goals.
             Airframe Technical Performance Measurements:
            Assessments of reliability, maintainability, combat radius, and
            gross weight (with metrics that indicate the desired value(s),
            the current status, margin, and trends).
             F-35B Flight Test: review of F-35B flight test data,
            to include planned/scheduled test points to be flown versus
            achieved test points flown; scheduled test flights flown versus
            actual test flights flown (delineated by STOVL variant); and
            Clean-Wing Flight Envelope coverage (to assess the progress on
            the envelope cleared for flight as a result of Developmental
            Test and alignment with software delivery).

        As these monthly reviews mature, the Navy will refine key F-35B
    metrics to ensure this essential capability is delivered to the Marine
    Corps warfighters and to enable the Department to make a decision on
    the F-35B STOVL variant probation status.

                                  SHIPBUILDING

        120. Senator McCain. Secretary Gates and Admiral Mullen, another
    area of the Navy's budget that I am very concerned about is the amount
    of funding needed for ship construction going forward. With about half
    of the construction and development dollars being needed to build
    extraordinarily expensive nuclear submarines (for example, right now,
    Ohio class replacement nuclear ballistic submarines are estimated to
    cost at least $7 billion), I am concerned that our commitment to
    building new submarines may be crowding out funding needed to modernize
    the surface fleet. Do you share that concern? If so, how do you intend
    to address it?
        Secretary Gates. DOD recognizes that building the required force
    structure will largely depend on controlling shipbuilding costs
    (including combat systems) within an affordable range. I continue to
    look for further affordability and efficiency opportunities as DOD goes
    forward with the shipbuilding plan, such as revising the acquisition
    strategy for the LCS to maximize the advantage of the competitive
    pricing received and gain a ship within the FYDP. Additionally, prior
    to Milestone A approval for the Ohio replacement submarine, DOD
    evaluated numerous capability trades to reduce costs. As a result, the
    Navy made trades in the number of ballistic missile tubes, the diameter
    of those tubes, the number of torpedoes to be carried, acoustic
    sensors, and other defensive features throughout the design. These
    trades made the submarine more affordable, while maintaining the
    necessary level of capability, resulting in a reduction of the
    projected cost to a target cost of $4.9 billion (fiscal year 2010
    dollars) for the follow on hulls 2-12. These initiatives support DOD's
    ability to provide the capability and flexibility for meeting the
    myriad of missions that the Navy is called upon to execute throughout
    the world every day.
        Admiral Mullen. We developed the shipbuilding plan and this budget
    based on averages of about $15.9 billion per year for the early years
    of the plan, and then about $2 billion more on average for the years in
    the plan when the Ohio replacement submarine is being constructed. This
    will support a force structure of about 313 battle force ships,
    enabling the Navy to meet its global commitments and to support
    contingency operations. We will continue to look for efficiency
    opportunities as we go forward with the shipbuilding plan. This will
    involve decisions such as we have already made by truncating the DDG-
    1000 program to three ships and restarting the DDG 51 production line,
    taking advantage of the aggressive pricing we received on LCS to gain a
    ship within the FYDP, and pursuing a lower cost alternative for the
    Mobile Landing Platform.
        Prior to Milestone A approval for the Ohio replacement submarine,
    numerous capability trades were evaluated to reduce costs. As a result,
    the Navy made trades in the number of ballistic missile tubes, the
    diameter of those tubes, the number of torpedoes to be carried,
    acoustic sensors, and other defensive features throughout the design.
    These trades made the submarine more affordable while maintaining the
    necessary level of capability, resulting in a reduction of the
    projected cost from $7 billion to about $5 billion per boat.

                  FINANCIAL MANAGEMENT AND THE NEED FOR AUDITS

        121. Senator McCain. Secretary Gates, please explain to me how you
    can demand fiscal savings and efficiencies across every sector of
    operations in DOD without the ability to track expenditures in
    financial statements that can be audited?
        Secretary Gates. DOD records and reports expenditures associated
    with budgeted amounts. While not sufficient to meet audit standards,
    this longstanding approach proved to be an effective means of
    responsibly managing public funds entrusted to DOD. There are thousands
    of well-trained financial management professionals in DOD dedicated to
    and motivated by their role in providing the resources to warfighters
    necessary to meet the national security mission of the country. These
    financial managers know DOD missions cannot be executed without timely
    and sufficient resources so are able to track expenditures and report
    to managers with an accurate status. Because of this capability, I feel
    DOD can demand and track savings from specific operations.
        This does not mean that DOD does not take the financial statement
    audit requirement seriously. Financial statement audits are also a key
    indicator to the public that we have reliable financial management
    information. While it is not the intent of financial statement audits
    they are a signal to the public that DOD manages funds legally,
    effectively, and efficiently. I am dedicated to having fully auditable
    financial statements by 2017, the deadline established by Congress.

        122. Senator McCain. Secretary Gates, why is this not your highest
    and most critical efficiency initiative?
        Secretary Gates. The highest priority for DOD's business enterprise
    is to meet the needs of the warfighters executing the national security
    mission. Due to potential budgetary constraints, I directed DOD to
    eliminate or reduce overhead tasks and transfer the related resources
    to meet urgent warfigher needs. In other words, transfer resources from
    tail to tooth. This initiative to improve financial management is part
    of that effort. Improved financial management information will help DOD
    better identify overhead costs and ensure reductions are realized.

        123. Senator McCain. Secretary Gates, how can DOD ensure that
    taxpayer dollars are not being wasted, stolen, or otherwise abused
    without an audit?
        Secretary Gates. I believe that even though DOD cannot currently
    meet commercial audit standards, the public can have confidence that it
    is spending dollars responsibly. That is a primary task of DOD's
    financial management workforce, and DOD has an extensive training
    program to ensure financial managers know the proper rules and
    processes. In addition, there are thousands of auditors reviewing
    programs and payments. These audits find far fewer improper payments
    and appropriation law violations in DOD than in other Federal agencies,
    after adjusting for the size of the budgets. This is true even though
    most other Federal agencies have auditable financial statements.
        As mentioned in an earlier question, this does not mean DOD is not
    fully committed to achieving full financial statement auditability.
    This demonstrated progress will further reinforce confidence in the
    positive financial outcomes we already achieve.

        124. Senator McCain. Secretary Gates, how will you ensure that the
    savings you have proposed will be achieved?
        Secretary Gates. DOD effectively manages operations by tracking
    obligations and expenditures against budgeted amounts. The primary
    control the Department uses to implement savings efforts is to include
    them in the President's budget request. The efficiencies that DOD
    defined in response to my initiative have been included in the
    President's 2012 budget request. DOD has several management controls,
    including regular reviews of obligation rates and detailed program
    budget reviews, to ensure it is executing according to the budget.
    Through these means DOD will ensure that proposed overhead reductions
    are realized.

        125. Senator McCain. Secretary Gates, over the last few years,
    Congress has pushed DOD to reform its financial management practices,
    most recently the NDAA for Fiscal Year 2010, requiring DOD to achieve a
    full, unqualified audit by 2017. The law also requires you to submit to
    Congress semiannual reports that lay out milestones describing progress
    over time. Are you on track to comply with this statutory requirement?
        Secretary Gates. As you recognize, preparing DOD for financial
    statement audits is a monumental task, but with leadership focus,
    accountability, and a streamlined approach, I believe it will succeed.
    To realize success, DOD is using a streamlined approach that focuses on
    improving and auditing the information most used to manage. DOD
    established long- and short-term goals, set up a governance process,
    and provided funding to the Military Services to make process and
    system improvements. These system improvements, primarily deploying
    ERPS, have broad operational improvement goals which include improving
    business processes in a way to support audited financial statements.
        I am dedicated to having fully auditable financial statements by
    2017, the deadline established by Congress. The goal is in our
    Strategic Management Plan and is one of eight high priority items DOD
    committed to the Office of Management and Budget (OMB) to achieve.
    While it is still early to definitively predict success, I believe DOD
    is on track to comply and look forward to reporting progress in the
    semi-annual reports.

        126. Senator McCain. Secretary Gates, given the push for savings,
    can you achieve the audit earlier than 2017? If so, what additional
    resources would you need?
        Secretary Gates. Achieving auditable financial statements is a
    massive undertaking requiring changes to the capabilities of our
    people, processes and systems. Like any major change management effort
    changes take time and a great deal of resources. The extreme size of
    DOD complicates change further and requires more time and resources.
    DOD is already investing significant amounts in improving its financial
    management systems by implementing and integrating ERPS as well as
    investing over $200 million a year in improving people and processes. I
    feel that the resources allocated are appropriate and the significant
    dependency on systems modernization makes achieving the audit earlier
    than 2017 impractical.

                                C-17 GLOBEMASTER

        127. Senator McCain. Secretary Gates, under the continuing
    resolution enacted late last year, has DOD been funding the continued
    production of C-17 cargo-lift aircraft?
        Secretary Gates. No, DOD did not fund the continued production of
    new C-17 aircraft beyond the 10 aircraft appropriated in fiscal year
    2010 by Congress. However, in accordance with Continuing Resolution
    Authority (CRA) guidelines, DOD funded a total of $12.7895 million in
    fiscal year 2011 CRA to support transition to sustainment in
    preparation for shutdown activities.

        128. Senator McCain. Secretary Gates, what are DOD's plans for this
    program in the future under the various appropriations scenarios for
    fiscal year 2011?
        Secretary Gates. DOD determined that the C-17 aircraft already
    procured are more than sufficient to satisfy airlift requirements. As I
    have previously testified, I do not support the addition of more C-17s.

        129. Senator McCain. Secretary Gates, what is your position on the
    inclusion of any funding for continued production of C-17s in the 2012
    defense bill?
        Secretary Gates. Since 2001, DOD conducted four major mobility
    studies, all of which support the conclusion that the C-17 and C-5
    airlift fleet capacity is more than sufficient to meet current and
    foreseeable demands.

        1.  Mobility Requirements Study-05 (MRS-05) (completed in 2001)
        2.  Mobility Capabilities Study (MCS) (completed in 2005)
        3.  Institute for Defense Analyses (IDA) study conducted in 2009 as
    required by Section 1046 of the NDAA for Fiscal Year 2008 (Public Law
    110-181)
        4.  Mobility Capabilities and Requirements Study-2016 (MCRS-16)
    (completed in 2010)

        The most recent study, the MCRS-16, identified the requirement for
    organic airlift as 32.7 million ton miles per day (MTM/D). This level
    of airlift capacity meets the most demanding scenario consistent with
    the Defense Strategy. The current programmed strategic airlift fleet of
    223 C-17s, and 111 C-5s, provides a capacity of 35.9 million ton-miles
    per day. The difference (35.9 MTM/D vs. 32.7 MTM/D) is the equivalent
    of 25 C-17s or 30 C-5As. The MCRS-16 and the aforementioned studies
    clearly show that the Department has more strategic airlift fleet
    capacity than needed. Therefore, I believe that it is not in the
    national interest to include any funds for continued production of C-
    17s in the 2012 defense bill.
        President Obama's comments on releasing his administration's fiscal
    year 2011 budget request included the following statement:

              ``We save money by eliminating unnecessary defense programs
            that do nothing to keep us safe. One example is the $2.5
            billion that we're spending to build C-17 transport aircraft.
            Four years ago, DOD decided to cease production because it had
            acquired the number requested--180. Yet every year since,
            Congress had provided unrequested money for more C-17s that the
            Pentagon doesn't want or need. It's waste, pure and simple.''

        In testimony before the Senate Armed Services Committee, I echoed
    the President, saying that I would not support the addition of more C-
    17s. My position today remains unchanged.

                      SAVINGS-AND-EFFICIENCIES INITIATIVES

        130. Senator McCain. Secretary Gates, given how inherently
    unreliable and defective DOD's financial management processes are, I
    have serious questions about the projected savings of many of the
    efficiencies initiatives. While I certainly commend your attempt to
    find $78 billion in cuts over the next 5 years, I have to question how
    likely is it that DOD will actually realize the savings it says it will
    get.
        What is your assessment of how much of the $78 billion in cuts will
    result in deferment of bills that must eventually be paid, in contrast
    to actual savings from an elimination or a reduction in requirements?
        Secretary Gates. The $78 billion reduction to DOD's projected
    budget over the next 5 years is achievable and will be closely
    monitored and assessed by DOD to ensure savings are fully realized. The
    efficiency initiatives include actions to reduce overall requirements
    commensurate with the lower rate of growth after the $78 billion cut. I
    remain strongly committed to meeting these goals and finding new ways
    to improve how DOD conducts business thereby better using the country's
    scarce resources.

        131. Senator McCain. Secretary Gates, which of the elements of
    savings and efficiencies that you have identified carry the most risk
    of not being realized? Please explain your answer.
        Secretary Gates. Experience tells me that some of these initiatives
    may not proceed entirely according to plan. DOD has no choice but to
    strictly monitor and enforce these efficiencies and make adjustments as
    needed with the understanding that it cannot afford to return to past
    behavior. At this point, there are no elements that I believe are
    especially risky.

        132. Senator McCain. Secretary Gates, please explain what cost-
    based analytical processes and methodologies (such as performance-
    based, mission-based, staffing-profile-based government, military,
    contractor, etc.) are the efficiencies proposals based on?
        Secretary Gates. The majority of these proposals were function or
    mission-based. The intent was to focus scarce resources on functions/
    missions associated with the provision of military capability. DOD took
    an ``unsparing'' look at reducing functions (and costs) associated with
    overhead and administrative positions. Even the reductions in contract
    costs were motivated and enforced with this principle in mind.

        133. Senator McCain. Secretary Gates, I understand that the COCOMs
    and the IC were asked to submit zero-based assessments with
    accompanying recommendations for gaining 10 percent efficiencies.
    Exactly how did OSD review assessments or analyses of those
    submissions?
        Secretary Gates. The entire fourth Estate (OSD, the Defense
    Agencies, Field Activities, and COCOMs), including the IC, conducted a
    zero-based review to identify opportunities to perform more
    efficiently, eliminate unnecessary functions, and reduce costs. My
    Efficiencies Task Force reviewed each of the zero-based submissions
    with a two-fold purpose:

             Develop a baseline of each organization's missions,
            priorities, and resource allocation
             Using this baseline, rebalance resources within and
            across components so that they align better with the most
            critical challenges and priorities within DOD.

        These submissions included a detailed profile of each
    organization's missions, functions, and resources. The rebalancing
    process involved the critical review, analytical assessment and
    evaluation of:

        (1)  baseline data,
        (2)  mission and manpower priorities, and
        (3)  recommendations for organizational restructuring and
    reallocation of resources.

        This process was conducted by members of the Efficiencies Task
    Force, subject matter experts and analysts from responding
    organizations, and was reviewed by program, comptroller, and manpower
    experts.

        134. Senator McCain. Secretary Gates, was a broader portfolio
    review or trade-off analysis performed to understand and balance cost-
    savings with mission performance? If so, please explain.
        Secretary Gates. Yes, this year's program and budget review process
    focused on preserving critical capabilities by making very targeted
    resource allocation decisions. During this cycle, DOD used a series of
    front end assessments to address a variety of portfolio-type reviews
    such as airborne ISR, long-range strike, global posture and tactical
    aviation to better understand the range of options in each area. These
    analyses guided investment decisions, while the efficiencies
    initiatives focused on trading administrative and overhead expenses for
    operational capability--this was a prudent trade.

        135. Senator McCain. Secretary Gates, additionally, how were the
    COCOMs' and the IC's overall annual budget evaluated and compared to
    their unique ongoing mission requirements--to devise an accurate
    estimate of actual expected savings versus annual budget?
        Secretary Gates. Each of these organizations submitted its own
    detailed accounting of personnel and missions in priority order. These
    submissions explicitly considered the organizations' unique and ongoing
    mission requirements. Additionally, every organization also submitted
    its own ideas for how it could operate more effectively and
    efficiently. In some cases it nominated new and better ways of
    performing critical functions. In other cases, it nominated functions
    that were of minimal value for either elimination or downgrading. Such
    missions were typically either redundant or overhead functions. COCOMs
    estimated savings in coordination with OSD budgeting, programming, and
    manpower experts. The IC followed a similar process and considered
    input from both a supply perspective (analysts from intelligence
    organizations) and a demand perspective (combatant commanders).

                           MANAGING FORCE REDUCTIONS

        136. Senator McCain. Secretary Gates, reductions in end strength
    for all the Active-Duty Forces, not just the Army and Marine Corps,
    appear inevitable due to the declining budgets and the rising cost of
    personnel. Next month, the Army will begin a year-long plan to cut
    7,000 soldiers, and from 2013 through 2014, an additional 14,000. And
    that's just the beginning. Cuts of 27,000 in the Army and 15,000 in the
    Marine Corps have been forecast to commence in 2015.
        During the force drawdown in the 1990s, the availability of force-
    shaping authorities, such as early retirement authority and financial
    incentives for those voluntarily retiring or resigning, were essential
    tools in equitably achieving force reduction goals. In the current
    economy, with retention at very high levels, it appears that such
    incentives will be necessary. Do you plan to submit legislative
    proposals that will facilitate the kinds of force cuts that are being
    planned for?
        Secretary Gates. Yes. DOD is carefully examining the authorities
    required to achieve the legislated end strength, while maintaining
    transparency with regard to future requirements. My goal is to submit
    legislative authorities that allow targeted reductions and maximum
    flexibility.
        Leadership is the key to ensuring each individual understands the
    needs of DOD so they can make informed choices. This will be no easy
    task. But I assure you, DOD will continue to recognize the
    contributions of the men and women who served throughout numerous
    conflicts, while ensuring that the military departments and the COCOMs
    meet their missions in an ever-changing global environment.

        137. Senator McCain. Secretary Gates, other than force cuts, and
    putting aside the Defense Health Program momentarily, do you see any
    feasible way to control the costs of personnel as a share of the DOD
    budget?
        Secretary Gates. Yes. In order to control total personnel costs
    across DOD, improvements to the Total Force management of our Active/
    Reserve military, government civilians and contracts for services must
    be considered. This is critical to control personnel costs as a share
    of the budget. To this end, DOD is changing how it strategically views
    the Total Force--both as it executes the mission and plans across the
    FYDP. DOD is scrutinizing the meaning of the ``demand'' for manpower,
    rigorously determining which should be funded and how (e.g., Active/
    Reserve military, civilians, or contracts).
        Total Force Management requires a holistic analysis and
    prioritization of work, and the identification and investment in the
    most effective and efficient component of the workforce to best
    accomplish a specific task. I believe that our military should not be
    considered a ``free'' source of labor by organizations within DOD,
    while the military services alone ``finance'' their recruitment,
    training and development. The true cost of military, government
    civilians and/or contractors depends greatly on individual facts and
    circumstances. DOD must do more to objectively analyze not only the
    demands for manpower but, where appropriate, the best ``Total Force
    solution.'' The separate decisions that affect each component of the
    Total Force must be better synchronized to achieve the desired outcomes
    and to balance operational, fiscal and acquisition risks.
        The solution must not only include the development and promulgation
    of policies, but also ensure that DOD provides managers with the tools,
    resources, training and information necessary to achieve the desired
    outcomes. Finally, current business processes must be better
    synchronized to achieve a more appropriate balance in the workforce,
    aligning inherently governmental activities to military and civilian
    workforces, and commercial activities to the most cost effective
    service provider--be that military, civilian, or contracted support.

                             NATIONAL GUARD BUREAU

        138. Senator McCain. Admiral Mullen, under your leadership,
    significant changes have been made in the way the National Guard and
    all the Reserve components contribute to the decisionmaking process.
    Designating the Guard Bureau as a joint activity and elevating the rank
    of the Chief of the Guard Bureau to a four-star general are just two
    examples of the recognition that the Army National Guard and Air
    National Guard are vital parts of the Army and the Air Force. Despite
    this, we continue to see proposals that the Chief of the Guard Bureau
    be made one of the JCS. What are your views about the proposal to make
    the Chief of the National Guard Bureau (CNGB) a member of the Joint
    Chiefs?
        Admiral Mullen. Over the last 10 years, the National Guard has
    provided crucial elements to our Joint Force and their execution of
    Army and Air Force missions has been stellar. They are appropriately
    represented on the JCS by the respective Army and Air Force Chiefs of
    Staff, so I and the other JCS members unanimously do not support the
    CNGB being made a member of the JCS. Since the CNGB was elevated to the
    four-star rank in 2009, we have included him in our meetings and he has
    contributed valuable perspectives regarding the National Guard,
    particularly its critical, non-federalized homeland defense mission and
    forces. This is congruent with the 2008 NDAA promulgating the CNGB
    fulfilling a statutory role and responsibilities as the principal
    advisor to the Secretary of Defense through me on these unique matters.

        139. Senator McCain. Admiral Mullen, do you think such a change
    would be harmful? Why or why not?
        Admiral Mullen. Adding the CNGB as a member of the JCS would be
    redundant and harmful. Like the other Service Chiefs (the JCS members),
    the Army and Air Force Chiefs of Staff organize, train, and equip their
    Total Force, including their respective National Guard, to present an
    integrated Joint Force to the combatant commanders. They maintain the
    independent departmental authorities and budget with which to do so.
    Adding CNGB to the JCS would disrupt those lines of authority and
    introduce representation inconsistencies. Since the CNGB's
    responsibilities are administrative in nature, making him a member
    would also create the harmful impression that the National Guard is a
    separate Military Service.

                                    EARMARKS

        140. Senator McCain. Secretary Gates, with the recent pledge for
    both chambers to enforce a moratorium on earmarks over the next 2
    years, there is a renewed concern that Members of Congress with special
    interests will go underground to pressure program managers within DOD
    in phonecalls and meetings to steer funds toward their pet projects.
    What processes do you have in place to protect DOD program managers
    from this kind of pressure?
        Secretary Gates. Program managers and contracting officials'
    compliance with the United States Code, the Federal Acquisition
    Regulations, and the President's March 2009 Memorandum for the Heads of
    Executive Departments and Agencies on Government Contracting all serve
    to safeguard the acquisition process from underground earmarks and
    congressional pressure--through requiring competition and transparency.
        Compliance with the many requirements in the acquisition process
    protects program managers from being forced to award contracts
    noncompetitively or under the table. Furthermore, the Department
    demands ethical behavior from its program managers and would expect the
    same of those it deals with in the legislative branch.

        141. Senator McCain. Secretary Gates, what can be done to ensure
    taxpayer funds provided to DOD go to the most critical priorities and
    are not used to satisfy a specific Member interest?
        Secretary Gates. Several actions would provide DOD flexibility to
    ensure that its appropriations go to the military's most critical needs
    or can be realigned to fund unforeseen emergent requirements.

             Eliminate section 8006 in Appropriations bills. That
            section is aimed at ensuring that DOD executes the exact
            funding for specific programs, projects, and activities--as
            listed in the tables in the Explanatory Statement (or Committee
            Print or Conference Report) accompanying a bill.
             Eliminate bill language or General Provisions that
            specify funding for specific programs, projects, or activities.
             Approve the transfer authority requested in each
            President's budget to give DOD enough flexibility to reprogram
            funds to its most critical needs.
             Omit legislative direction that restricts DOD
            reprogramming, such as prohibiting the reprogramming of funds
            added by Congress.
             Reform the process by which congressional oversight
            committees review reprogrammings to facilitate timely
            approval--such as initiating a time limit for review.
             Increase the amount of funds that can be reprogrammed
            below threshold within an appropriations.

        142. Senator McCain. Secretary Gates, is there an opportunity to
    make public the specific requests by Members of Congress made to
    representatives of DOD on issues related to contracts, acquisitions,
    and fiscal obligations?
        Secretary Gates. I believe that would be a counter-productive
    effort and detracts from executing the mission. For the majority of
    earmarks, DOD does not place each earmark on a funding document by
    itself. Most earmarks are incorporated into the funding document for
    activities related to it. DOD funding is executed at the field activity
    level, and requiring these activities to collect information related to
    earmarks would impose a wasteful burden and detract them from focusing
    on efficient management of funds.

        143. Senator McCain. Secretary Gates, in recent years, there has
    been a proliferation of funding grants and other large amounts
    appropriated to DOD for vague requirements (to preclude being called an
    earmark) like $300 million for medical transportation infrastructure in
    the National Capitol Region, $50 million for private museum
    construction, $250 million for repairs to local community schools, and
    $500 million for civilian infrastructure projects on Guam. None of
    these amounts are included in DOD budget requests, nor are they
    considered firm DOD requirements. All of them are added as a result of
    decreases to other DOD accounts. So, it would seem logical that in
    these times of fiscal austerity where DOD is making hard decisions
    about savings and efficiencies, there would be strong opposition to
    congressional efforts to fund them from DOD accounts. But there isn't.
    What is DOD's position on the use of DOD funds for non-DOD requirements
    which are not included in a budget request?
        Secretary Gates. DOD's position is that the President's Budget
    requests what is required to meet our mission requirements each year.
    Upon enactment of an Appropriations Act the Department executes the
    enacted programs, complying with reprogramming and transfer
    authorities.
    Background
        In DOD appropriations bills, Section 8006 and general provisions
    specifying funding for specific items do not give DOD the flexibility
    to decide whether congressional adds are the best use of appropriated
    funds. Congressional adds can only be reduced if they are for Federally
    Funded Research Development Centers, economic assumptions, or excess
    cash balances of the Defense Working Capital Funds, by their
    proportionate share. All other reductions in the DOD appropriations
    bill result in the President's budget baseline taking those reductions,
    thus diverting funding from mission requirements.

        144. Senator McCain. Secretary Gates, if you are presented a
    request for a formal position on a particular spending item of this
    nature, can I expect a firm and unequivocal position from you stating
    why you either oppose or support the spending?
        Secretary Gates. Yes, DOD leaders and I are always prepared to
    state opposition to unrequested changes to the President's budget
    because these changes divert funding from DOD's most pressing
    requirements, as detailed in the budget.
        Beyond this straightforward opposition to changes to the
    President's budget, however, comments on specific congressional adds,
    or any other legislative positions, are the purview of the White House
    and OMB, and DOD follows their lead, and does not provide a position on
    its own.

                                OKINAWA AND GUAM

        145. Senator McCain. Secretary Gates, the road to a reduced U.S.
    presence on the Island of Okinawa has been paved with quite a few speed
    bumps. Not only do we have an irate contingent on Okinawa that has
    already ushered out one prime minister, but the folks on Guam aren't
    exactly excited about the current plan either. I notice that you have
    scaled back the request for funds by almost $300 million for Guam
    construction for fiscal year 2012 from what you had planned last year.
    This is in addition to the $320 million we have deferred in fiscal year
    2011 for a host of reasons.
        You mentioned that you expect to see a decision in the spring of
    2011 on the final location for the Futenma Replacement Facility (FRF)
    on Okinawa. Will this decision be considered the tangible progress
    required by the formal agreement between our Government and the
    Government of Japan? If not, when do you expect Japan to demonstrate
    tangible progress towards completion of the FRF?
        Secretary Gates. I see tangible progress on the FRF, not as a
    single specific event, but rather as a series of steps taken roughly in
    parallel between Japan and the United States, as spelled out in our
    bilateral understandings on realignment. As Japan makes progress on the
    FRF, the United States will take associated steps to move forward on
    Guam. There are a number of different indicators of this progress,
    starting with the decision on the runway configuration that is expected
    at the upcoming two-plus-two meeting with Japan, the issuance of the
    landfill permit, the construction of the sea wall, and progress on the
    landfill itself.
        An essential point of our realignment understanding with Japan is
    that preparations for facilities on Guam need to begin well in advance
    of the actual construction of the replacement facility at Camp Schwab.
    It is necessary to ensure that when the U.S. is satisfied with the
    progress Japan has made on the FRF, suitable facilities will be
    available on Guam allowing the phased relocation of Marines from
    Okinawa, such that any relocation can be sequenced to maintain unit
    cohesion and operational readiness.

        146. Senator McCain. Secretary Gates, in your view, should the
    movement of marines to Guam take place without the demonstration of
    tangible progress regarding Futenma?
        Secretary Gates. The realignment of marines to Guam is dependent on
    tangible progress towards completion of the FRF at Camp Schwab.
        An essential point of our realignment understanding with Japan is
    that preparations for facilities on Guam need to begin well in advance
    of the actual construction of the replacement facility at Camp Schwab.
    It is necessary to ensure that when the United States is satisfied with
    the progress Japan has made on the FRF, suitable facilities will be
    available on Guam allowing the phased relocation of marines from
    Okinawa, such that any relocation can be sequenced to maintain unit
    cohesion and operational readiness.

        147. Senator McCain. Secretary Gates, the Navy's Record of Decision
    related to the environmental impact on Guam released last fall
    conveniently punted on two major issues--potential damage to coral
    reefs in the Apra Harbor and the impact to cultural resources from the
    acquisition of private land for Marine Corps training ranges. Both
    issues, as well as the adequacy of Guam's civilian infrastructure, are
    of significant concern to Guam residents and should be of equal concern
    to DOD. Shouldn't we resolve these issues completely before we continue
    to invest hundreds of millions of dollars in the construction of a new
    Marine Corps base on the island?
        Secretary Gates. These three issues--the impact to coral reefs
    associated with dredging for a proposed nuclear powered aircraft
    carrier transient wharf, the management of cultural resources through a
    Programmatic Agreement, and the adequacy of Guam's civilian
    infrastructure--are of significant concern not only to the Guam
    community but also to DOD. DOD is actively working to address all of
    these issues, but complete resolution will be an ongoing effort
    throughout the buildup process and is not required prior to beginning
    military construction.
        The Navy recently completed additional surveys of the marine
    biology in the alternative sites proposed for the proposed wharf for a
    transient nuclear aircraft carrier. It is anticipated the results of
    these surveys will be outlined in a report due in November 2011,
    allowing for a full assessment of impacts for coral reef resources.
        As to the management of cultural resources, DOD and relevant
    Federal and local regulatory authorities reached agreement on a
    Programmatic Agreement under the National Historic Preservation Act.
    This Programmatic Agreement guides how DOD handles impacts to historic
    properties as the build-up effort moves forward. DOD is requesting $11
    million in PB-12 to fund the development of a repository used to meet
    DOD's commitments for preserving artifacts unearthed during military
    construction.
        Addressing Guam's infrastructure capacity is a priority, as it
    directly affects the construction program and DOD is taking steps to
    address this issue. With the application of Japanese-provided
    financing, Guam's wastewater and power systems will be improved to
    support the relocating marines, the influx of off-island workers needed
    for the ramp-up of military construction, and Guam's long-term
    population growth. DOD contributed $50 million to the Port of Guam and
    $116 million in Defense Access Road funding ($49 million appropriated
    in fiscal year 2010 and $67 million authorized for appropriation in
    fiscal year 2011), both of which contribute to improving infrastructure
    off-base to address construction capacity requirements. In the longer
    term, an interagency effort, led by the Economic Adjustment Committee,
    will continue working with Guam to assess off-base needs and identify
    potential Federal funding solutions.

        148. Senator McCain. Secretary Gates, what is DOD's plan to rectify
    these issues with Guam?
        Secretary Gates. As for the potential impacts to coral, the Navy
    recently completed additional marine biology surveys regarding the
    alternative sites for a transient nuclear aircraft carrier proposed
    wharf. It is anticipated that the results of these surveys will be
    outlined in a report due in November 2011, allowing for a full
    assessment of impacts to coral reef resources.
        Following significant public comments, discussions with Guam's
    leaders, and 3 years of consultations with the Guam State Historic
    Preservation Officer (SHPO), I understand and appreciate the concerns
    regarding cultural resources, and in particular, the potential impact
    to Pagat village and cave from the preferred alternative site for a
    live fire training range complex discussed in the Final Environmental
    Impact Statement. On March 14, 2011 DOD, Guam SHPO, and Advisory
    Council on Historic Preservation successfully reached agreement on the
    Programmatic Agreement that will guide how DOD deals with impacts to
    historic properties as the build-up effort moves forward. As part of
    the Programmatic Agreement, DOD committed that access to Pagat village
    and cave will remain unfettered and that these sites would not be
    within the footprint of the live fire training range complex, should
    the Navy select the Route 15 site in a forthcoming Record of Decision
    for training on Guam. DOD is requesting $11 million in PB-12 to fund
    the development of a repository used to meet the Department's
    commitments for preserving artifacts unearthed during military
    construction. As the military build-up continues, DOD will remain
    engaged with these stakeholders to avoid, protect, and mitigate impacts
    to cultural resources.
        Improvements to Guam's infrastructure are necessary to support the
    relocating Marines, off-island workers needed to ramp up the
    construction program, and Guam's long-term civilian population growth.
    Japan-provided financing will be applied to make improvements to off-
    base power and wastewater systems, and to the Navy's water system on-
    base. In its fiscal year 2011 budget, Japan requested $415 million of
    its required $740 million contribution in utilities financing. The
    projects funded by the fiscal year 2011 financing include upgrades to
    the Northern District and Hagatna wastewater treatment plants, and
    water production, treatment and transmission on-base. In the meantime,
    efforts to address improvements to Guam's roadways and port are
    underway. Through the Defense Access Road program, DOD will fund
    improvements to Guam's public roadways ($49 million appropriated in
    fiscal year 2010 and $67 million authorized for appropriation in fiscal
    year 2011). DOD also contributed $50 million to the Port of Guam,
    which, when coupled with $54 million in financing from the U.S.
    Department of Agriculture, will improve the port's capacity to support
    the needs of the buildup. DOD continues to work with other Federal
    agencies through the Economic Adjustment Committee to identify and
    assess Guam's needs and look for Federal funding solutions to address
    the island's infrastructure issues.

        149. Senator McCain. Secretary Gates, we have been asking DOD for a
    master plan of the details of construction projects and total costs for
    3 years, to no avail. Can we get that masterplan, a revised timeline,
    and a total estimate cost to complete the move of 7,000 marines and
    their families to Guam?
        Secretary Gates. I understand Congress's concerns regarding the
    total cost of the Guam realignment and DOD is committed to providing an
    accurate picture of current costs. DOD is currently working to develop
    an updated estimate, and this estimate will be provided to committee
    staff prior to mark-up.

                                     KOREA

        150. Senator McCain. Secretary Gates, on September 23, 2010, you
    directed U.S. Forces Korea and the Services to proceed with full tour
    normalization for Korea, as affordable, but not according to any
    specific timeline. You stated that ``full tour normalization in Korea
    will further our long-term commitment to support our forward stationed
    troops and their family members.'' Do you have an estimate of the total
    costs required to implement this decision? If so, please provide it.
        Secretary Gates. I understand the importance of tour normalization
    from an operational and quality of life perspective and DOD is working
    to better understand the costs of tour normalization. As the costs come
    into better focus, DOD will determine the timing for moving forward.

        151. Senator McCain. Secretary Gates, is DOD on track to provide a
    plan by March 31, 2011, detailing schedules and costs?
        Secretary Gates. Yes.

        152. Senator McCain. Secretary Gates, on November 23, 2010, an
    unprovoked and premeditated artillery barrage by North Korea on a South
    Korean island killed two South Korean marines, wounded at least 19
    other people, and set buildings and forests ablaze, the first time in
    years that North Korea has trained the firepower of its 1.1 million-
    strong military on South Korea's civilian population. This attack,
    coupled with a new revelation about the North Korean nuclear program,
    prompted one media outlet to call Korea ``a massive strategic challenge
    in one of the most dangerous corners of the world.'' Given the increase
    in uncertainty surrounding the security environment on the peninsula,
    are you still committed to stationing U.S. military family members in
    Korea?
        Secretary Gates. DOD is committed to stationing U.S. military
    family members in Korea under the Tour Normalization Initiative. DOD
    intends to proceed as affordable, but not according to any specific
    timeline. Tour Normalization in Korea will further DOD's long-term
    commitment to provide greater stability for forward stationed
    servicemembers and their families. U.S. Forces Korea, in coordination
    with U.S. Pacific Command, the military departments, CAPE, and other
    relevant OSD organizations, are working to provide a feasible,
    affordable and secure plan to continue toward full Tour Normalization.

        153. Senator McCain. Secretary Gates, would families have the
    option of not being stationed in Korea? If so, would they incur any
    personal expense?
        Secretary Gates. If Korea Tour Normalization is fully implemented,
    the assignment tour length for a majority of the locations will be 36-
    months accompanied and 24-months unaccompanied. Military families will
    still have the option of not accompanying their sponsor to Korea. In
    this case, the family can remain where they currently reside, or move
    to a place they designate in the United States at government expense.
    If the family does not reside in government housing and is entitled to
    housing allowance, their housing allowance will be as authorized for
    the locality where they have chosen to reside.
                                     ______

                 Questions Submitted by Senator Scott P. Brown

                             NATIONAL GUARD BUREAU

        154. Senator Brown. Secretary Gates and Admiral Mullen, what are
    your thoughts on providing to General McKinley, CNGB, a three-star
    position to serve as his deputy?
        Secretary Gates. This matter will be under review until the fall
    2011.
        Admiral Mullen. I fully support re-establishing the Vice CNGB at
    the rank of lieutenant general. Doing so would enable the CNGB to
    better administer his diverse duties and expansive portfolio that
    includes the unique non-federalized homeland defense equities of the
    National Guard. This action would be more purposeful to the National
    Guard than making CNGB a member of the JCS.

                           CYBERSECURITY CAPABILITIES

        155. Senator Brown. Secretary Gates, you have proposed $2.3 billion
    to support improved cybersecurity capabilities within DOD and greater
    joint planning efforts between the military and DHS. Are we dangerously
    vulnerable to cyber intrusions and cyber attacks as a result of our
    dependence on critical infrastructure?
        Secretary Gates. The United States is vulnerable to cyber
    intrusions and potential cyber attacks on its critical infrastructure.
    The capabilities of state and non-state actors to exploit, disrupt, or
    even destroy our critical information systems are increasing.
        Almost every aspect of civilian life depends on access to the
    Internet and other data-transmission networks. With our reliance on
    cyberspace comes vulnerability. Because so many of our civilian and
    military functions depend on computer networks, any large-scale
    interference with our networks represents a potentially significant
    threat to national security.
        DOD has invested heavily in information technology--$38.4 billion
    requested for fiscal year 2012--because information technology is a
    force multiplier for military, intelligence, and business operations.
    DOD has more than 15,000 networks and seven million computing devices,
    across hundreds of installations in dozens of countries around the
    globe. Our networks are attacked thousands of times each day, and
    scanned for vulnerabilities millions of times each day. We know that
    more than one hundred foreign intelligence agencies are attempting to
    get into DOD's networks.
        The departments and agencies of the public sector, as well as the
    private sector, rely upon cyberspace to accomplish their missions
    successfully. Because of the cross-cutting nature of the cyber threat,
    U.S. Government departments and agencies must work together to protect
    U.S. networks and systems. Our cybersecurity initiatives and
    investments will enable DOD to protect its networks more effectively
    and to support DHS and other agencies in achieving their cybersecurity
    missions. (As a point of clarification, when we consider the full range
    of DOD's cybersecurity investments, including CYBERCOM, the Defense
    Cyber Crime Center, and the $2.3 billion requested for information
    assurance, our comprehensive request for fiscal year 2012 is $3.2
    billion.)
        Cybersecurity is a top-tier national security issue for the United
    States. We have made progress in strengthening our cybersecurity, but
    more must be done. DOD looks forward to working with DHS and other
    interagency partners, and with Congress, to improve the protection of
    U.S. networks and systems.

        156. Senator Brown. Secretary Gates, if the United States is hit by
    a catastrophic cyber attack--as Central Intelligence Agency (CIA)
    Director Panetta described as the next Pearl Harbor--are we prepared to
    respond?
        Secretary Gates. DOD is prepared to protect defense critical
    infrastructure/key resources from a catastrophic cyber attack and to
    respond should such an attack occur. As described in the 2010
    Quadrennial Defense Review Report, DOD is taking several steps to
    strengthen capabilities in cyberspace, including:

        (1)  developing a more comprehensive approach to DOD operations in
    cyberspace;
        (2)  developing greater cyber expertise and awareness;
        (3)  centralizing command of DOD cyber operations; and
        (4)  enhancing partnerships with other agencies and governments.

        Pursuant to Homeland Security Presidential Directive-7 (Critical
    Infrastructure Identification, Prioritization, and Protection), DOD is
    working with its private sector partners in the DIB to facilitate
    vulnerability assessments and to encourage risk management strategies
    to protect against and mitigate the effects of attacks.
        DOD is also working closely with its Federal partners to assist in
    ensuring the protection of critical infrastructure and the preparedness
    of the national cyberspace response system to deal effectively with
    cyber attacks. DHS developed a National Cyber Incident Response Plan,
    in which DOD is a key partner, to help ensure resiliency in the face of
    changing threats and associated technologies. In general, DOD defers to
    the DHS to evaluate the current preparedness of the national cyberspace
    response system.

        157. Senator Brown. Secretary Gates, from your perspective, do we
    have the necessary resources to prevent such an attack and who would be
    in charge of such a response?
        Secretary Gates. The United States possesses capabilities to help
    prevent a major cyber attack, but they must be enhanced significantly
    to cope with a rapidly advancing threat from both state and non-state
    actors. DOD continues to work with DHS and others in the U.S.
    Government to leverage existing authorities and develop new interagency
    processes and capabilities to prevent a cyber attack. DOD is also
    working with DHS and other agencies to identify additional authorities
    that may be needed to defend the Nation against cybersecurity threats
    most effectively.
        In the event of an attack, the President has emergency authorities
    to direct a unified, national response. Outside of emergency
    Presidential authorities, DHS is responsible for coordinating the
    national effort to improve the cybersecurity of U.S. critical
    infrastructure. DOD is responsible for the security of its networks, is
    assigned additional responsibilities for all national security systems,
    and is the Federal agency responsible for coordinating with the DIB to
    identify and defend against cybersecurity threats. If directed by the
    President, DOD can use its capabilities to support DHS and to protect
    U.S. Government systems, as well as the private sector systems on which
    the U.S. Government relies.

                           IRANIAN NUCLEAR CAPABILITY

        158. Senator Brown. Secretary Gates, today Iran is producing higher
    enriched uranium and is moving closer to possessing the weapons-grade
    uranium needed for a nuclear weapon. What is your assessment of Iran's
    nuclear intentions?
        Secretary Gates. The Iranian nuclear program and Iran's intentions
    remain issues of paramount interest and concern, and we continue to
    watch them very closely. At this time, DOD believes that Iran is not
    nuclear weapons capable. DOD also assesses that Iran is keeping open
    the option to develop nuclear weapons, in part by developing various
    nuclear capabilities that bring it closer to being able to produce such
    weapons, should it choose to do so. We do not know, however, if Iran
    will eventually decide to build nuclear weapons. As new information
    becomes available, and as the Iranian nuclear program evolves, we will
    reevaluate and reassess Iran's ultimate intentions and potential
    capabilities.

        159. Senator Brown. Secretary Gates, do you agree that a nuclear-
    armed Iran poses an unacceptable risk to the United States?
        Secretary Gates. A nuclear-armed Iran is unacceptable. I remain
    committed to preventing Iran from acquiring a nuclear weapon. A
    nuclear-armed Iran would be highly destabilizing to the Middle East,
    and could have significant implications for U.S. interests. However, no
    one can say with certainty how the situation might unfold. A nuclear-
    armed Iran could provide other States in the Middle East with the
    impetus to pursue nuclear programs. Iran also could become more
    emboldened in its actions throughout the region, most notably by
    expanding its support for proxies. A nuclear-armed Iran could also
    cause strategic instability that could eventually lead to a regional
    conflict.
                                     ______

                   Questions Submitted by Senator Rob Portman

                                ALTERNATE ENGINE

        160. Senator Portman. Secretary Gates, with the recent vote against
    funding the JSF second engine, the House moved a step closer to
    awarding one company a sole source contract for $100 billion lasting 30
    years. This seems remarkably shortsighted and this fight for a
    competitive process is not over. The Government Accountability Office
    (GAO) has stated that: ``DOD experience with other aircraft engine
    programs, including the F-16 fighter in the 1980s, has shown
    competitive pressures can generate financial benefits of up to 20
    percent during the life cycle of an engine program and/or improved
    quality and other benefits.'' In other words, by funding the JSF
    competitive engine, we have the chance to save about $20 billion over
    time. I am concerned that the short-term financial benefits of
    terminating the alternative engine will be dwarfed by the long-term
    costs of a sole-source contract for an engine that is 50 percent over
    budget.
        I believe the F-35 will replace five aircraft currently in the Navy
    and Air Force fighter fleet (F-16, F/A-18, AV-8, A-10, and F-117). It
    is my understanding that by 2030, the F-35 will make up about 90
    percent of the U.S. tactical fighter force. Would you please comment on
    whether or not there is historical precedent for being so dependent on
    one aircraft?
        Secretary Gates. Being a tri-service program with eight
    international partners, the scope of the JSF program is without
    precedent. While the scope and number of tactical aircraft the JSF
    program represents is large, having a single type model series aircraft
    to fulfill a mission requirement is not without precedent.
        For example, the Air Force will gradually replace the legacy fleet
    of F-16s and A-10s as it transitions to a predominantly 5th Generation
    fleet. In the 2030 timeframe, the Air Force will still operate a
    significant number of legacy tactical assets. Assuming the Air Force
    maintains its current fighter force levels, only 58 percent of the Air
    Force tactical fighter force will be F-35As in 2030; combined with the
    F-22 fleet, 63 percent of the Air Force fighter inventory will be 5th
    Generation platforms. The Air Force continues to assess its fighter
    force structure and will evaluate alternatives to replace additional
    legacy platforms as they reach the end of their service lives.
        The Navy's mission of airborne command and control is fulfilled
    solely by E-2D/E-2C while search and rescue, anti-submarine, and anti-
    surface warfare are fulfilled by MH-60 variants. The Navy's tactical
    aviation projected aircraft inventory in 2030 will be comprised of six
    Type Model Series (TMS) aircraft: F/A-18E/F, F-35C, F-35B, EA-18G, the
    next generation air dominance aircraft, and the replacement for the EA-
    18G. Of these aircraft, F-35s are expected to comprise roughly 65
    percent of the Navy tactical aircraft inventory.

        161. Senator Portman. Secretary Gates, given our future dependence
    on the F-35, does the failure to have a back-up engine present a risk
    to our forces?
        Secretary Gates. I believe that the interests of the taxpayer, the
    military, our partner nations, and the resource integrity of the
    overall F-35 program are best served by not pursuing a second engine.
    The benefits which might accrue with a second engine are offset by
    additional cost. Additionally, logistics complexity will divert
    precious modernization funds from more pressing developmental
    priorities.
        The F135 engine program completed over 12,000 hours of engine
    ground testing, more than 4,300 hours of engine specific flight
    testing, and over 850 hours of aircraft flight tests on three variants.
    As in any development program, there were technical challenges and
    those that have arisen are understood and modifications are in
    progress. Throughout SDD, the engine continues to be monitored and any
    necessary modifications to ensure safety, reliability, and
    specification deficiencies will be made. Dedicated F135 flight testing
    will demonstrate performance throughout the flight envelope.
        Continued funding for the F136 engine carries cost penalties to
    both the F135 and F136 engines in the form of significant upfront
    investment cost, reduced production line learning curves, and less
    efficient economic order quantities. DOD concluded that maintaining a
    single engine supplier provides the best balance of cost and risk. I
    believe the financial risks associated with a single source engine
    supplier are manageable, and are less than the investment required to
    fund a competitive alternate engine.

        162. Senator Portman. Secretary Gates, in your testimony you state
    that in regard to funding the second engine, ``the Department has been
    operating this fiscal year under ambiguous guidance at best.'' And that
    given the situation you ``decided to continue to fund the JSF extra
    engine effort during this interim period to give Congress the
    opportunity to resolve this matter as part of its ongoing debate on the
    budget.'' But isn't it the case that OMB concluded that the F-35
    alternate engine funding must be funded in fiscal year 2011 even under
    the temporary continuing resolution?
        Secretary Gates. On December 21, 2010, OMB Director Lew did inform
    Senator Brown of Ohio that the then in-effect CR ``would continue
    fiscal year 2010 funding, terms, and conditions for the entire Federal
    Government.'' Subsequent CRs also continued extending the funding,
    terms, and conditions of the 2010 appropriations. However, consistent
    with standing OMB guidance on the point, Director Lew also indicated
    that DOD was expected to not impinge on congressional full-year funding
    prerogatives for fiscal year 2011. Because funding need not be made
    available in the course of any single period covered by a continuing
    resolution if sufficient opportunity to fully execute would be
    available upon the enactment of an appropriation act at the end of a CR
    period, the protection of the Congress's fiscal prerogatives does not
    require funding in any single CR.

        163. Senator Portman. Secretary Gates, do you believe that you have
    a choice as to whether or not to fund the alternate engine under a
    continuing resolution?
        Secretary Gates. During the period of the existing CR, I believe
    that DOD has the discretion to issue a stop work order on the alternate
    engine program, and given the circumstances the department may
    determine that it should issue a stop work order. A stop work order is
    temporary in nature and may not exceed 90 days unless extended by
    agreement between the government and the contractor.
                                     ______

                  Questions Submitted by Senator Susan Collins

                      U.S. FAMILY HEALTH PLAN RESTRICTIONS

        164. Senator Collins. Secretary Gates, the President's budget
    request precludes enrollment in the U.S. Family Health Plan (USFHP) for
    beneficiaries who reach 65 years of age. According to the transcript I
    saw and the budget briefing, it is my understanding that DOD is
    committed to working with the impacted hospitals on this issue to
    ensure that the quality of care is not impacted. I also understand that
    no current enrollee in this plan would be affected in terms of their
    quality of care or health care costs. Are these accurate
    characterizations of DOD's position?
        Secretary Gates. Yes. Current enrollees are not affected by this
    change.
        The Department continues working with the six health plans to
    ensure that quality of care is not affected for current or future
    enrollees. Upon reaching age 65, USFHP enrollees may opt to enroll in
    Medicare Part B and receive the TRICARE for Life (TFL) benefit as a
    supplement to their Medicare coverage. The proposal does not result in
    a beneficiary's loss of provider access, as long as the USFHP providers
    continue to accept Medicare patients. This proposal provides equitable
    treatment for all Medicare-eligible retirees by offering a nationwide
    uniform plan. Most retirees do not live in one of the USFHP service
    areas, and their only option for health care is Medicare and TFL
    (requiring payment of their Medicare Part B premium). They and all
    others enrolled in USFHP will be taken care of.

                          SHIPBUILDING INDUSTRIAL BASE

        165. Senator Collins. Admiral Mullen, separate from the concerns
    about the continuing resolution in the short-term, I noticed in your
    written testimony that you raised concerns about maintaining the
    capability of the shipbuilding industrial base in the long-term.
    Clearly, stability in requirements, procurement plans, and buying ships
    at cost-efficient rates go a long way to achieving the necessary force
    structure and save money. I am also encouraged that a second DDG-51
    ship was included in the fiscal year 2014 budget as I had recommended
    to sustain a DDG-51 procurement rate of at least two ships per year,
    which should be closer to three ships per year. DDG-1000's construction
    is also proceeding very well at Bath Iron Works, and I look forward to
    Admiral Roughead's visit on the 23rd of February to see first-hand the
    ship's and yard's progress. Please elaborate on the specific concerns
    you have for the shipbuilding industrial base.
        Admiral Mullen. As I stated last year, I am concerned about the
    capabilities of our DIB, particularly in shipbuilding 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. To ensure that DOD can
    continue to rely on a dynamic defense market to meet shifting
    requirements, robust competition is vital for producing high quality,
    affordable, and innovative products.
        My other concern regarding the shipbuilding industrial base has to
    do with ship design and production. Six major U.S. shipyards build
    nearly all of the Navy's warships, and while they consistently build
    extremely capable ships, their production rate pales in comparison with
    production rates of leading international shipyards. This places U.S.
    shipyards at somewhat of a disadvantage because serial design and
    stable production are critical factors to the incorporation of leading
    shipyard technologies and decreased cost for DOD. The Virginia class
    submarine and the T-AKE auxiliary program show the benefit these
    factors can have on shipbuilding cost. Both programs enjoyed
    significant cost reductions and improved production schedules as a
    result of serial production and a stable design.
                                     ______

                   Questions Submitted by Senator John Cornyn

                             INSTABILITY IN MEXICO

        166. Senator Cornyn. Secretary Gates, last month, General Michael
    Hayden, a former CIA Director, described the crisis next door in Mexico
    as one of six national security challenges that would ``keep him awake
    at night'' if he were still in government. At this time, the U.S.
    Government does not seem to have a coherent, meaningful strategy in
    place to help the Mexican Government regain control over its country
    and defeat the drug cartels. What do you see as the risks to our own
    national security if the Mexican drug cartels are not defeated?
        Secretary Gates. In 2008, the U.S. Government began coordinating
    assistance to Mexico under the Merida Initiative with the goal of
    supporting Mexico's efforts to build capacity to combat TCOs,
    strengthen the rule of law and respect for human rights, reduce
    violence, and stem the flow of drugs north and arms and illicit money
    south. We recognize that, moving forward, U.S. efforts should:

        (1)  reinforce progress made in disrupting cartels;
        (2)  begin institutionalizing Mexican capacity to act on public
    safety and security issues;
        (3)  help Mexico meet the challenges of securing its borders while
    facilitating trade and travel; and
        (4)  promote respect for human rights, the rule of law, and a
    culture of lawfulness. Although none of these are easy, we know we are
    making slow but steady progress.

        I admire President Calderon's government for the brave stand taken
    against TCOs that seek to operate with impunity inside Mexico. Although
    Mexico increased efforts to counter the TCOs, TCOs responded with
    increased violence as they fight for turf and attempt to intimidate law
    enforcement officers and the Mexican public. Although I am concerned
    about the escalating violence in Mexico, I am confident that Mexico's
    democracy is strong and that the government maintains control over its
    territory.
        As DHS Secretary Napolitano noted recently, we do not have evidence
    that TCO violence is spilling across the border into the United States.
    Still, these dangerous organizations have linkages to illicit groups
    operating inside the United States, including drug traffickers and
    gangs that pose health, law enforcement, economic, and security
    challenges to cities and towns throughout our Nation. Although Mexico
    called upon its armed forces to support Mexican law enforcement efforts
    to combat TCOs, it continues to see the problem as a law enforcement
    issue, as do I. DOD, along with interagency partners, is working
    closely with Mexican counterparts to support its efforts to dismantle
    TCOs, and DOD will continue to provide assistance as requested by
    Mexico.

        167. Senator Cornyn. Secretary Gates, the Mexican government
    reports that over 34,600 people have been killed in drug-related
    violence in Mexico since December 2006, including 15,000 deaths in 2010
    alone--representing a 60 percent increase over 2009. What common
    threads do you see between the cartel-driven unrest in Mexico and the
    insurgency-driven violence in Iraq and Afghanistan, which our troops
    have been battling for most of the past decade?
        Secretary Gates. The challenges facing Mexico are quite different
    from those confronting Iraq and Afghanistan. Specifically, the TCOs
    operating in Mexico are not attempting to overthrow the Mexican
    Government, but instead are fighting for turf and to create a space in
    which to carry out their illicit activities. As such, Mexico is dealing
    with a law enforcement challenge; DOD is providing support to Mexico as
    well as U.S. law enforcement entities in their unprecedented efforts to
    confront this challenge, but is not directly engaged in the fight.

        168. Senator Cornyn. Secretary Gates, in your opinion, how can the
    U.S. Government, and in particular DOD, better support our Mexican
    partners?
        Secretary Gates. Under President Calderon's leadership, Mexico is
    bravely confronting the grave security threats posed by TCOs operating
    within Mexican territory. At Mexico's request, through the Merida
    Initiative and complementary programs, the U.S. Government, including
    DOD, is providing support to Mexico to face these challenges.
        Under Merida and other cooperative programs, DOD provides training,
    information sharing, and operational support to Mexican military and
    other security forces, as well as to U.S. law enforcement agencies'
    activities with regard to Mexico. DOD is working with Mexican partners
    to find areas in which to increase cooperation. In recent years, DOD
    concentrated on assisting Mexican forces to improve tactical and
    operational proficiency, as well as air mobility, maritime law
    enforcement, communications, and reconnaissance capacities. DOD
    provided non-intrusive inspection equipment for mobile checkpoints and
    eight Bell 412 transport helicopters for the Secretaria de la Defensa
    Nacional. Also, DOD is working to deliver three UH-60M Blackhawks and
    four Construcciones Aeronauticas SA (CASA 235) maritime surveillance
    aircraft. DOD support focused on helping Mexican security forces learn
    to mount intelligence-driven and interagency-coordinated operations, as
    well as on safeguarding human rights in the context of military
    operations in support to law enforcement.
        Moving forward, I believe the Department can best support our
    Mexican partners by preparing to respond quickly to requests for
    continued assistance from Mexico. Domestically, the United States must
    also commit to confronting issues on our side of the border that
    contribute to the challenges facing Mexico--namely the illicit
    trafficking of arms from the United States into Mexico and our
    country's demand for illegal drugs. The United States and Mexico have a
    shared responsibility in the fight against TCOs, and our success will
    depend on our continued partnership.

                 INTERAGENCY COORDINATION ON NATIONAL SECURITY

        169. Senator Cornyn. Admiral Mullen, in your written testimony, you
    asked for Congress's help in modifying the laws and regulations
    surrounding security cooperation to create an approach that better
    integrates our defense, diplomacy, development, and intelligence
    efforts. In terms of geographic organization, DOS has six regional
    bureaus and DOD has six different regional COCOMs, which are not
    demarcated along the same lines on the map. At the same time, the IC
    defines world regions utilizing a third set of lines on the map. In
    your opinion, does this lack of common demarcation of the world's
    regions by these Federal agencies hamper effective interagency
    cooperation and coordination on national security?
        Admiral Mullen. It is true that there is not a common demarcation
    of the world's regions among Federal agencies. Many of these
    differences are the result of historic ties and relationships, and the
    unique focus of each agency. While these differences may create some
    challenges, they do not hamper effective interagency cooperation and
    coordination on national security. In some cases, the different
    regional demarcations are beneficial to interagency cooperation and
    coordination. Whenever lines of demarcation are created or utilized on
    a map, issues may be created or exist that affect both regions, but are
    missed due to their cross-boundary nature. By utilizing differing lines
    of demarcation between the agencies, the impact of these seams within
    an organization is minimized by working with other agencies to
    formulate a cohesive foreign policy.
        Additionally, I have a statutory responsibility under Title 10
    U.S.C. 161 to review the Unified Command Plan (UCP), which includes the
    COCOM areas of responsibility, not less than every 2 years, and
    recommend any changes to the President through the Secretary of
    Defense. This is a thorough review that includes inputs from Office of
    Secretary of Defense, combatant commanders, and the Services. The draft
    UCP is then reviewed by the interagency via the National Security Staff
    prior to receiving Presidential approval. In this process, I have not
    received any indication that I should recommend a change to the
    President to more closely align our regional designations with that of
    other Federal agencies or that such a realignment would overcome any
    existing shortfalls in interagency coordination.

                             INDIA AND AFGHANISTAN

        170. Senator Cornyn. Secretary Gates and Admiral Mullen, India has
    committed some $1.3 billion and 3,500 Indian personnel to relief and
    reconstruction efforts in Afghanistan to date, in recognition of the
    fact that stability in Afghanistan is crucial to its own security. As
    noted in Admiral Mullen's testimony, the enduring success of our
    military operations in Afghanistan is dependent on the ANSF being able
    to provide security to the Afghan people. However, reports indicate
    that NATO still faces a shortage of 740 trainers needed by this summer
    in order for the ANSF to be ready to take the lead by 2014. Given the
    clear and immediate demand for more trainers and training options in
    Afghanistan, as well as India's willingness to provide substantial
    support to stability and security efforts in the region, should we
    encourage India to expand its role and help train the Afghan security
    forces?
        Secretary Gates. The United States and India have shared interests
    in a stable and prosperous South Asia region and in preventing
    Afghanistan from again becoming a safe haven for terrorists.
        In the past, India provided scholarships for ANSFs personnel to
    study in India, and is currently exploring options to train Afghan
    women police in India.
        I welcome these efforts, and encourage India to consider further
    assistance in Afghanistan through priority infrastructure projects,
    additional training and education assistance, and technical assistance
    to the agriculture sector. I also encourage India to continue to engage
    the Afghan government to identify further areas of cooperation.
        During President Obama's visit to India in November 2010, he and
    Prime Minister Singh committed to intensify consultation, cooperation,
    and coordination to promote a stable, prosperous, and independent
    Afghanistan. They agreed to collaboratively assist the people of
    Afghanistan by identifying opportunities to leverage our relative
    strengths, experience, and resources, including joint projects on
    agriculture and women's economic development. Eighty-five percent of
    Afghans derive their income from agriculture, and Afghan women continue
    to lack economic, social, and political opportunities.
        The shortfall of 740 trainers currently identified by the NATO NTM-
    A for filling the NATO's Combined Joint Statement of Requirements
    includes a number of specific capabilities that only certain allies and
    partners possess. DOD is currently working to match these specific
    capacities with the NTM-A requirements.
        Admiral Mullen. India already plays a role in training the ANSF.
    They have provided training in India to over 400 ANA personnel, are
    currently training 90, and have offered training for another 192 this
    year. Expansion of further training efforts must be closely coordinated
    with NTM-A and Afghanistan to ensure it meets the needs of the ANSF.
    Regional political military considerations should be carefully weighed
    when considering any expansion of an increased role for the Indian
    military in the development of the ANSF, especially the introduction of
    Indian Trainers to Afghanistan.

                           F-35 JOINT STRIKE FIGHTER

        171. Senator Cornyn. Secretary Gates, the fiscal year 2012 DOD
    budget request includes a major restructuring of the F-35 program that
    cuts 124 aircraft from the FYDP, postponing production of these
    aircraft until after 2016. I am concerned with the resulting impact to
    unit cost to the remaining aircraft in the FYDP, and I believe this
    poses the most immediate problem to our Services and our international
    partners. What actions will you take to ensure that the restructuring
    of this critical fifth-generation fighter program does not itself lead
    to a substantial spike in unit cost?
        Secretary Gates. In the short-term, I acknowledge there will be an
    increase in unit costs as a result of the reduction of 124 aircraft
    within the FYDP. DOD is currently assessing the magnitude of this
    increase in support of the DAB review scheduled for May 2011, and will
    report these figures as part of an update to the Selected Acquisition
    Report this summer following completion of the DAB review. Despite the
    reduction of aircraft within the FYDP, DOD remains committed to
    procuring 2,443 aircraft in total, and this commitment will serve to
    lessen the short-term spikes in unit procurement costs. The reduction
    of aircraft procurement within the FYDP is prudent given the extension
    of the development program, and the need to properly manage the risks
    of concurrent development and procurement.

        172. Senator Cornyn. Secretary Gates, were our international
    partners consulted on the announcement surrounding the restructuring of
    the F-35 program? If so, what has been the reaction of our allied
    partners, and do you believe this decision will impact when or how many
    F-35 aircraft our international partners will ultimately buy?
        Secretary Gates. The international partners in the JSF F-35 Program
    are integral to our collective effort and were consulted prior to the
    announcement regarding the restructuring of the program. The partners'
    reaction to the announcement was positive. They appreciated the fact
    senior leadership in DOD took the time to contact them ahead of the
    formal announcement. There is no indication at this time that the
    decision to restructure the JSF F-35 Program will affect the number of
    aircraft the partners will ultimately buy or when the buys will occur.

                                   B-1 FLEET

        173. Senator Cornyn. Secretary Gates, how are your fiscal year 2012
    proposed budget cuts to the B-1 bomber fleet consistent with your
    message about the need to sustain the current military force structure
    during a time of war?
        Secretary Gates. The B-1 fleet faces potential grounding due to
    diminishing manufacturing sources and other sustainability issues.
    Taking a minimal reduction in fleet size garners savings to increase B-
    1 fleet viability through modernization efforts.
        The Air Force conducted a review of current bomber force structure,
    existing capabilities, and future power projection requirements in
    determining the risk associated with a B-1 fleet reduction. The results
    of this review, combined with high-fidelity modeling and simulation
    analysis conducted by Air Force Studies and Analysis, indicate a
    reduction of six B-1 aircraft leaves a more capable fleet that meets
    the requirements in currently approved OSD analytic agenda scenarios.
        A modest B-1 reduction, while modernizing the remaining fleet, is a
    wise reinvestment strategy providing a capabilities-based bridge to the
    future long range strike platform.

        174. Senator Cornyn. Secretary Gates, how much of the savings
    obtained from this cut will be reinvested in sustaining and improving
    the current B-1 fleet, to include enhancements such as a new radar
    system?
        Secretary Gates. The retirement of six B-1s provides a total
    savings of $61.9 million in fiscal year 2012 and $357.3 million over
    the FYDP in procurement and sustainment funding. Of these savings, the
    Air Force is reinvesting $32.9 million in fiscal year 2012 and $125.4
    million over the FYDP, into critical B-1 sustainment and modernization
    programs to ensure the health of the remaining fleet. These programs
    include procurement and installation of Vertical Situation Display
    Upgrade and Central Integrated Test System sustainment efforts, Fully
    Integrated Data Link capability upgrade and procurement of critical
    initial spares for these modifications.
        The ongoing Radar Maintainability and Improvement Program will
    replace two unsupportable Line Replaceable Units within the current
    radar system. The Air Force is assessing the remaining components of
    the B-1 radar with consideration to both supportability and
    performance. DOD applied the remainder of the savings from the B-1
    reduction to other Air Force and DOD priorities to include continuing
    to strengthen the nuclear enterprise and investing in Building
    Partnerships capacity.

        175. Senator Cornyn. Secretary Gates, the B-1 bomber has repeatedly
    been cited by senior U.S. military commanders as the premier bomber in
    Afghanistan. General David Petraeus has emphasized that, ``The B-1 is a
    great platform in at least two respects. First, it carries a heck of a
    lot of bombs, substantial ordnance. Second, it has very good
    intelligence, surveillance, and reconnaissance capabilities. And it can
    loiter for a good time, when it's not being used to drop bombs . . . ''
    How will the proposed cuts to the B-1 fleet impact B-1 operations in
    Afghanistan in the years to come?
        Secretary Gates. There will be no negative impact to operations in
    the Afghanistan theater. The fiscal year 2012 budget request reduces
    the B-1B force structure by six primary aircraft authorizations leaving
    60 B-1Bs in the Air Force inventory. This provides additional funds to
    improve the existing B-1B fleet, including the central integrated test
    system, fully integrated data link, and vertical situation display
    unit. These initiatives will help bridge the gap until the next
    generation strike aircraft is operational. However, investing in a new
    penetrating bomber is critical to maintaining our long-range strike
    capability in the face of increasing risk associated with anti-access
    and area-denied environments.

        176. Senator Cornyn. Secretary Gates, why was the B-52 fleet, which
    currently numbers 76 aircraft and does not provide nearly the utility
    of the B-1 in current operations in Afghanistan, not similarly reduced?
        Secretary Gates. The answer is two-fold. First, the dual missions
    of conventional and nuclear capabilities of the B-52 provide the
    flexibility to meet COCOM requirements that the conventional-only B-1
    does not provide. Second, the B-52 fleet maintains better maintenance
    statistics and requires fewer operational upgrades than the B-1;
    therefore, the Air Force was able to provide those upgrades without
    sacrificing force structure to pay for sustainment and upgrades.

                               LONG-RANGE STRIKE

        177. Senator Cornyn. Secretary Gates, the fiscal year 2012 DOD
    budget request includes $197 million in Air Force RDT&E funding to
    begin development of a new long-range bomber (Long-Range Strike) that
    we are told would be penetrating, carry precision-guided conventional
    weapons, and be nuclear-capable. Yet last month, Secretary of the Air
    Force Michael Donley told reporters that while the new bomber would be
    able to carry nuclear weapons, it would not be immediately certified
    for nuclear missions.Why will the new bomber not be certified at the
    outset to carry nuclear weapons?
        Secretary Gates. The new bomber will be nuclear capable. The Air
    Force will design and build the system to balance capability priorities
    with the need to responsibly and affordably mature a new system.
    Detailed timelines for certification will be developed as the program
    matures.

        178. Senator Cornyn. Secretary Gates, what plans, if any, are being
    made to enable the B-2 to be certified to deliver a nuclear ALCM?
        Secretary Gates. The Air Force is planning to integrate the LRSO
    weapon, which will replace the current nuclear ALCM, on the B-2.

                     GROUND-BASED MIDCOURSE DEFENSE SYSTEM

        179. Senator Cornyn. Secretary Gates, there are now 30 Ground-Based
    Interceptors (GBI) deployed in Alaska and California to defend against
    Iran and North Korea, but the administration has purchased only 52 GBI
    missiles. Following the last two Ground-based Midcourse Defense (GMD)
    system flight test failures, the MDA is down to only 20 GBI missiles,
    which is not enough to continue development and improvement of the GMD
    system, to conduct annual reliability flight testing, and to maintain
    spare missiles for emergency deployment. Yet the fiscal year 2012
    budget includes a reduction of $186 million to the GMD system from
    fiscal year 2011 levels, while the proposed 5-year funding for GMD is
    $1 billion less than that proposed in the fiscal year 2011 budget
    request. Given the administration's commitment to continue development
    and improving this important capability, how are these reductions
    justified when additional testing and GBI missiles are needed?
        Secretary Gates. The change from fiscal year 2011 to fiscal year
    2012 in the President's 2012 budget of $185 million reflects
    efficiencies introduced by the Department and the MDA. One of the focus
    areas of the efficiencies is cost savings through contract competition
    in the Ground-Based Midcourse Defense program. Another key efficiency
    was the consolidation of test events to achieve stated test objectives
    with fewer events. These efficiencies execute the same program scope
    with fewer program dollars, while continuing to meet the strategic
    goals and timelines laid out in the BMDR to ensure the United States
    has a reliable and proven system for homeland defense.

                                IRAQI AIR FORCE

        180. Senator Cornyn. Secretary Gates, in your testimony, you cited
    the Iraqi Air Force's ability to protect its own air space as one of
    three primary areas of U.S. concern with Iraqi military capabilities as
    DOD prepares to withdraw the last U.S. troops at the end of 2011. What
    steps have you taken to enable the Iraqi Air Force to take over this
    key mission, including training and equipping efforts?
        Secretary Gates. The Iraqi Air Force is on track to achieve minimal
    essential capabilities by the end of 2011 in all mission categories
    except airspace control; intelligence surveillance and reconnaissance;
    and fixed-wing airlift. With continued support from U.S. advisors and
    adequate resourcing from Iraq, improvements in accessions, airlift,
    flying and technical training, air staff effectiveness, combat support,
    and command and control should demonstrably contribute to internal
    security while setting the stage for contributing to external defense
    as well.
        Iraq funded several Foreign Military Sales (FMS) cases that provide
    both fixed and rotary wing pilot and ground crew training, including
    training to prepare pilots for a fourth generation fighter aircraft.
    Additionally, Iraq funded FMS cases that are currently providing
    aircraft as well as air surveillance radars.

        181. Senator Cornyn. Secretary Gates, the Iraqi Government had
    clearly been preparing to purchase 18 American-made F-16s until this
    week, when they announced they would postpone their planned purchase in
    order to shift funding to other non-military priorities. What steps are
    you taking to complete this critical F-16 purchase to help bring the
    Iraqi Air Force's air defense capability to proficiency?
        Secretary Gates. GoI requested the purchase of 18 F-16s. However,
    due to a number of competing priorities that must fit into a limited
    Iraqi budget, the Iraqis were not able appropriate funds for an F-16
    procurement program in the 2011 budget that was recently approved by
    the Council of Representatives. Funds initially earmarked in the 2011
    budget request to buy F-16s were shifted to provide critical human
    services in the final Council of Representatives approved budget.
        The most recent F-16 Letter of Offer and Acceptance tailored to
    meet Iraqi funding constraints expired on January 31. USF-I leadership
    continues to engage in discussions with Iraqi leadership on the details
    of a possible F-16 sale. This continues to remain a top U.S. Government
    and Iraq priority.

                                 NATIONAL DEBT

        182. Senator Cornyn. Admiral Mullen, in your written testimony, you
    state: ``I believe that our debt is the greatest threat to our national
    security.'' Reckless fiscal policy is not the typical focus of our
    military's threat analyses but, frankly, I could not agree more with
    your assessment. Last Congress, I introduced a bill called the Foreign-
    Held Debt Transparency and Threat Assessment Act, which would have
    required regular assessments from the GAO on the national security
    risks of the ballooning national debt. In addition to the sheer size of
    our national debt (now more than $14 trillion), I am also deeply
    concerned about our clear dependence on foreign governments such as
    China to fund our deficit spending, so my bill would also require the
    President to report quarterly to Congress on the national security
    risks posed specifically by foreign holdings. Do you agree that having
    this type of analysis is critical to both our fiscal and national
    security policies?
        Admiral Mullen. The ties between the strength of our economy and
    our Nation's security are inseparable and incontrovertible. We need a
    vibrant, growing economy to exert influence internationally and to
    provide for our military and other defense capabilities. In turn, we
    need the security provided by our national defenses to underwrite our
    economic endeavors and our livelihoods. But today we find both our
    economy and our security threatened by our burgeoning national debt.
        In my position, my concerns about our debt stem from its long-term
    effects on our Nation's fiscal standing and the difficult trade-offs
    associated with restoring our fiscal health, rather than the holders of
    our debt. As such, I have taken no position on the nature of the
    holders of this debt.
                                     ______

                  Questions Submitted by Senator David Vitter

                             MISSILE DEFENSE BUDGET

        183. Senator Vitter. Secretary Gates, on February 16, 2011, you
    testified before the House Armed Service Committee: ``I do know that
    the overall budget for missile defense is going from $10.2 billion to
    $10.7 billion, so we're putting another $500 million into it. And there
    is money for more--more Aegis ships, more of the transportable radars
    like we have in Egypt--like we have in Israel and Japan right now,
    and--and then there are also continuing investments in the Ground Based
    Interceptor system.''
        Of the $500 million increase for missile defense, only $219 million
    is going to the MDA, whose budget increases from $8.4 billion in fiscal
    year 2011 to $8.6 billion for fiscal year 2012. Despite the $200
    million increase for MDA, 5-year funding for MDA declines by $2.6
    billion between fiscal year 2011 and fiscal year 2015, as compared to
    last year's budget request. Funding for the GMD in fiscal year 2012 is
    reduced by about $185 million, as compared to fiscal year 2011. Funding
    for the GMD program over fiscal years 2012 to 2015 is reduced by
    approximately $590 million, as compared to last year's budget request.
    Why does the MDA budget decline by $2.6 billion between fiscal years
    2011 and 2015?
        Secretary Gates. The MDA budget for 2011 through 2015 is based on
    the missile defense priorities set forth in the BMDR. The MDA budget
    strategy in fiscal year 2012 identified efficiencies and balanced
    personnel, budgetary and management resources within and across its
    components. In instituting efficiency initiatives MDA will make greater
    use of competition across its acquisition programs and will realize
    savings through a refined approach to service contracting.

        184. Senator Vitter. Secretary Gates, why does the GMD budget
    decline by $185 million in fiscal year 2012 and by $2.6 billion between
    fiscal years 2011 and 2015?
        Secretary Gates. The change from fiscal year 2011 to fiscal year
    2012 in the PB12 budget of $185 million is reflective of efficiencies
    introduced by the Department and MDA. One of the efficiencies focus
    areas is cost savings through contract competition in the GMD program.
    Another key efficiency was the consolidation of test events, achieving
    stated test objectives with fewer events. These efficiencies execute
    the same program scope with fewer program dollars, while continuing to
    meet the strategic goals and timelines laid out in the BMDR to ensure
    the United States has a reliable and proven system for homeland
    defense.
        The $2.6 billion change between fiscal years 2011 and 2015 reflects
    the change in funding for MDA as a whole, not GMD specifically.
        The MDA budget for 2011 through 2015 is based on the missile
    defense priorities set forth in the BMDR. The MDA budget strategy in
    fiscal year 2012 identified efficiencies and balanced personnel,
    budgetary and management resources within and across its components. In
    instituting efficiency initiatives MDA will make greater use of
    competition across its acquisition programs and will realize savings
    through a refined approach to service contracting.

                      MEADS AIR AND MISSILE DEFENSE SYSTEM

        185. Senator Vitter. Secretary Gates, I applaud you for your
    decision not to proceed to procurement of the Medium Extended Air
    Defense System (MEADS) air and missile defense system. As noted in the
    DOD memo, the program is substantially over budget and behind schedule;
    and it would take an extra $974 million to $1.16 billion just to
    complete the design and development. But I understand that the decision
    is to still proceed to spend approximately $804 million to implement a
    proof-of-concept effort. I am concerned that this would mean spending
    hundreds of millions of limited dollars on a system that we will not
    procure. What is the basis for continued funding on a program that DOD
    will ultimately not procure?
        Secretary Gates. Although the DOD has decided not to procure MEADS,
    the Department determined the technology being developed in the program
    will be useful for other DOD programs. The DOD explored viable
    potential courses of action, including:

        (1)  Terminating the program immediately, if the DOD could obtain
    the required consent of the other Participants in the MEADS program
    under the legally binding Memorandum of Understanding (MOU) among the
    Federal Ministry of Defense of the Federal Republic of Germany, the
    Ministry of Defense of the Republic of Italy, and the Secretary of
    Defense of the United States of America on behalf of DOD concerning
    Cooperation on a Project for Design and Development (D&D) of a MEADS
    (D&D MOU);
        (2)  Working with the other D&D MOU Participants to continue MEADS
    development within the agreed funding limits set forth in the D&D MOU;
    or
        (3)  Working with the other MEADS D&D MOU Participants to complete
    the planned D&D phase by amending the D&D MOU to add the additional
    funding and time required to develop and test the system fully for
    production and fielding.

        The DOD decided that the best option available under the MOU is to
    continue to participate in the D&D phase within the funding limits set
    forth in the D&D MOU. This decision ensures the DOD: will fulfill its
    obligations under the D&D MOU; will avoid a situation where the DOD may
    be viewed as reneging on its international obligations; will avoid
    requiring the DOD to pay termination costs we expect would be
    comparable to the cost of completing the ``proof of concept'' effort
    under the D&D MOU; and, will facilitate the maturation of key
    technologies useful to the DOD in other programs.

        186. Senator Vitter. Secretary Gates, I applaud you for your
    decision not to proceed to procurement of the MEADS missile defense
    system. As noted in the DOD memo, the program is substantially over
    budget and behind schedule. It would take an additional $974 million
    just to complete the design and development of the program. It does not
    make sense to continue to waste $800 million on a system we are not
    going to procure. Will DOD go back to the drawing board and try to find
    a way to ring out some additional savings out of this $800 million for
    MEADS?
        Secretary Gates. The DOD will continue to explore opportunities to
    minimize cost. The Department explored viable potential courses of
    action, including:

        (1)  Terminating the program immediately, if the DOD could obtain
    the required consent of the other MEADS partners under the MOU among
    the Federal Ministry of Defense of the Federal Republic of Germany, the
    Ministry of Defense of the Republic of Italy, and the Secretary of
    Defense of the United States of America on behalf of DOD concerning
    Cooperation on a D&D Project of a MEADS (D&D MOU);
        (2)  Working with the other D&D MOU Participants to continue
    development of MEADS within the agreed funding limits set forth in the
    D&D MOU; or
        (3)  Working with the other MEADS D&D MOU Participants to complete
    the planned D&D phase by amending the D&D MOU to add the additional
    funding and time required to develop and test the system fully for
    production and fielding.

        The DOD decided to continue to participate in the D&D phase within
    the funding limits set forth in the D&D MOU. This decision ensures the
    DOD: will fulfill its obligations under the D&D MO; will avoid a
    situation where the DOD may be viewed as reneging on its international
    obligations; will avoid requiring the DOD to pay termination costs we
    expect would be comparable to the cost of completing the ``proof of
    concept'' effort under the D&D MOU; and, importantly, will facilitate
    the maturation of key technologies useful to the DOD in other programs.

        187. Senator Vitter. Secretary Gates, DOD's memo indicates that it
    will be necessary to allocate funds for Patriot upgrades. At a minimum,
    will DOD work to reallocate funds for design and development for
    upgrades to the Patriot system?
        Secretary Gates. Yes. The Army is working to determine specific
    actions to mitigate the loss of MEADS. The Army will then reallocate
    funds originally programmed for MEADS beginning in fiscal year 2014 to
    improving the Patriot system.

        188. Senator Vitter. Secretary Gates, in the memo accompanying your
    recent decision not to proceed to procurement of MEADS, you
    specifically highlighted the Army's inability to afford to procure
    MEADS and make required Patriot upgrades as rationale for the decision.
    In light of your decision, can you provide your assurance that DOD will
    accelerate Patriot modernization efforts?
        Secretary Gates. Yes. The Army is working to determine specific
    actions to mitigate the loss of MEADS. The Army will then reallocate
    funds originally programmed for MEADS beginning in fiscal year 2014 to
    efforts accelerating improvements to the Patriot system.

                       CONVENTIONAL PROMPT GLOBAL STRIKE

        189. Senator Vitter. Admiral Mullen, you recently stated, ``U.S.
    senior military leaders monitored very closely all provisions related
    to conventional prompt global strike (CPGS) throughout the recent START
    treaty negotiation process''. Do you believe there is a current clear
    commitment to deployment that allows for adequate U.S. missile
    defenses?
        Admiral Mullen. Yes. The START treaty allows for deployment and
    further development of conventional strike weapons, which are designed
    to hit targets any place in the world in 60 minutes or less. Any
    warhead--nuclear, high explosive, or high speed kinetic--on an ICBM or
    submarine-launched ballistic missile (SLBM) would be counted under the
    New START treaty central limits. However, deployment of CPGS does not
    impede our ability to provide for adequate U.S. missile defenses.

        190. Senator Vitter. Admiral Mullen, additionally, condition 6 of
    the New START Resolution of Ratification called on the President to
    clarify its planning and intent in developing future conventionally-
    armed, strategic-range weapons systems (aka, CPGS). The February 2,
    2011, report on CPGS, pursuant to Condition 6, lists three efforts
    under development (hypersonic technology vehicle (HTV), advanced
    hypersonic weapon (AHW), and conventional strike missile CSM)), at a
    cost of some $2 billion between now and 2016 for research and
    development. Is it still the policy of the administration, as per the
    2010 NPR, to develop and field CPGS capabilities? If so, is it the
    intent of the administration to make a deployment decision anytime
    soon?
        Admiral Mullen. Our plan is to continue to strengthen our
    conventional capabilities as we reduce the role of nuclear weapons in
    deterring non-nuclear attacks. We are continuing to plan for and
    develop contributions by non-nuclear systems to U.S. regional
    deterrence while preserving reassurance goals by avoiding limitations
    on missile defenses and maintaining options for using heavy bombers or
    long-range missile systems in conventional roles. The success of a CPGS
    fielded capability will be dependent on progress made through the
    continued RDT&E of critical technologies, formal establishment of
    follow-on Service acquisition programs, and a concurrent effort to
    improve the Nation's ISR capabilities.

        191. Senator Vitter. Admiral Mullen, the February 2 report states
    that ``conventionally armed SLBM and conventionally armed ICBM concepts
    with traditional ballistic trajectories are not currently being
    pursued,'' and that ``DOD at present has no plans to develop and field
    these systems.'' Given that these are the most mature technologies, why
    isn't the administration pursuing conventionally armed SLBMs and ICBMs
    as a near-term CPGS option?
        Admiral Mullen. While CPGS capabilities are currently limited, the
    current RDT&E approach is consistent with the department's vision of
    developing enhanced conventional technologies and capabilities that
    will minimize political and operational risks associated with fielding
    and employment in the future. The HTV -2 and AHW technology experiments
    along with the CSM demonstration are expected to provide more flexible
    operational characteristics that will not count (New START treaty)
    against a smaller triad of strategic nuclear capabilities. It will also
    be important to discriminate these capabilities from current ICBM or
    SLBM employment.

        [Whereupon, at 12:42 p.m., the committee adjourned.]

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                   2012 AND THE FUTURE YEARS DEFENSE PROGRAM

                                  ----------

                             TUESDAY, MARCH 1, 2011

                                           U.S. Senate,
                                   Committee on Armed Services,
                                                        Washington, DC.

            U.S. SPECIAL OPERATIONS COMMAND AND U.S. CENTRAL COMMAND

        The committee met, pursuant to notice, at 9:34 a.m., in
    room SD-106, Dirksen Senate Office Building, Senator Carl Levin
    (chairman) presiding.
        Committee members present: Senators Levin, Lieberman,
    Nelson, Webb, Udall, Hagan, Manchin, Shaheen, Blumenthal,
    McCain, Inhofe, Wicker, Portman, Ayotte, and Cornyn.
        Committee staff members present: Richard D. DeBobes, staff
    director; and Leah C. Brewer, nominations and hearings clerk.
        Majority staff members present: Jonathan D. Clark, counsel;
    Jessica L. Kingston, research assistant; Michael J. Kuiken,
    professional staff member; Jason W. Maroney, Counsel; William
    G.P. Monahan, counsel; Michael J. Noblet, professional staff
    member; and William K. Sutey, professional staff member.
        Minority staff members present: David M. Morriss, minority
    staff director; Adam J. Barker, professional staff member;
    Christian D. Brose, professional staff member; and Lucian L.
    Niemeyer, professional staff member.
        Staff assistants present: Christine G. Lang, Hannah I.
    Lloyd, and Brian F. Sebold.
        Committee members' assistants present: Vance Serchuk,
    assistant to Senator Lieberman; Carolyn Chuhta, assistant to
    Senator Reed; Ann Premer, assistant to Senator Nelson; Gordon
    Peterson, assistant to Senator Webb; Jennifer Barrett and Casey
    Howard, assistants to Senator Udall; Roger Pena, assistant to
    Senator Hagan; Lindsay Kavanaugh, assistant to Senator Begich;
    Joanne McLaughlin, assistant to Senator Manchin; Ethan Saxon,
    assistant to Senator Blumenthal; Anthony Lazarski, assistant to
    Senator Inhofe; Lenwood Landrum, assistant to Senator Sessions;
    Clyde Taylor IV, assistant to Senator Chambliss; Joseph Lai,
    assistant to Senator Wicker; Charles Prosch, assistant to
    Senator Brown; Gordon Gray, assistant to Senator Portman; Adam
    Hechavarria, assistant to Senator Ayotte; Ryan Kaldahl,
    assistant to Senator Collins; and Dave Hanke, assistant to
    Senator Cornyn.

           OPENING STATEMENT OF SENATOR CARL LEVIN, CHAIRMAN

        Chairman Levin. Good morning, everybody.
        The committee meets this morning to receive testimony from
    Admiral Eric Olson, Commander, U.S. Special Operations Command
    (SOCOM), and General James Mattis, Commander, U.S. Central
    Command (CENTCOM).
        Today's hearing continues the committee's review of the
    missions and operational requirements of our combatant
    commanders in light of the priorities set out in the
    President's fiscal year 2012 budget request.
        Nowhere will the President's budget priorities have a
    greater impact than with the soldiers, sailors, airmen, and
    Marines in the CENTCOM area of responsibility (AOR). The men
    and women of CENTCOM and SOCOM have been engaged in major
    military operations for nearly a decade. Yet, in Afghanistan
    and Iraq, our troops' morale is high. They are dedicated to
    their mission and serving with courage and distinction.
        We have asked so much of them. They have done everything we
    have asked and more. That includes not just the servicemembers
    themselves, but the families who have served our Nation at home
    while their loved ones serve overseas. Admiral Olson and
    General Mattis, on behalf of this committee, please pass along
    our gratitude to the troops serving under your commands.
        Admiral Olson, it is my understanding that you plan to
    retire this year after an exceptional career in which, among
    other things, you became the first Navy SEAL to attain the rank
    of four-star admiral, and you have led SOCOM with great
    distinction. Thank you for your outstanding service and that of
    your family.
        The Department of Defense (DOD), as are all Federal
    agencies, is currently operating under a Continuing Resolution
    (CR) that expires in a few days. Last week, Secretary Gates
    described this as a crisis on his doorstep.
        I hope that we will soon be in a position to enact a full-
    year appropriation at an appropriate level. I hope, General
    Mattis and Admiral Olson, that you will help the committee
    better understand the impact of proceeding by CR on the forces
    operating under your command.
        In Iraq, CENTCOM is continuing to oversee the drawdown of
    U.S. forces, as agreed upon by President Bush and Prime
    Minister Maliki in the 2008 security agreement, which requires
    all U.S. forces to be withdrawn from Iraq by December 31st of
    this year. Because of the ongoing reduction of our general-
    purpose forces in Iraq, the importance of the role performed by
    our Special Operations Forces (SOF) as a force multiplier,
    continuing to build the capacity of Iraqi counterterrorism
    forces and enabling their operations against al Qaeda in Iraq
    and other terrorist groups, is even more important.
        As we reduce our presence, we must make sure that our
    special operators receive adequate support, including
    intelligence, medical evacuation, and quick-reaction forces.
    The transition in Iraq also means that the State Department
    will take over the lead for numerous activities in Iraq
    previously implemented by DOD, including training the Iraqi
    police.
        We would be interested in hearing from our witnesses this
    morning your views on the importance of providing adequate
    resources to the State Department and other civilian agencies
    to the success of that transition.
        In Afghanistan, it is essential that President Obama holds
    to his decision to set July 2011 as the date for the beginning
    of reductions in U.S. forces in Afghanistan.
        Secretary Gates told this committee a few weeks ago that he
    supported the decision to set the July 2011 date because it was
    necessary to ``grab the attention of the Afghan leadership and
    bring a sense of urgency to them of the need for them to step
    up to the plate to take ownership of the war and to recruit
    their own young men to fight.''
        Admiral Mullen said at the same hearing that the July 2011
    date ``has given the Afghans a sense of urgency that they
    didn't have before the decision was made.''
        The Afghan National Army (ANA) and Afghan National Police
    (ANP) have added 70,000 Afghan National Security Forces (ANSF)
    over the last year and will meet the current target of 305,000
    ANSF by October of this year. A large, capable, effective
    Afghan security presence is what the Taliban fears the most
    because it would demonstrate that--contrary to the Taliban's
    propaganda, the war against the Taliban and al Qaeda is a war
    the Afghan people believe in and it is being fought by an
    Afghan security force that they believe in, rather than a war
    waged by foreign occupiers, as Taliban propaganda would have
    it.
        The administration is now considering a request to grow the
    ANA and ANP by between 45,000 and 70,000 people, which would
    bring the total ANSF levels to a range of 352,000 to 378,000 by
    the end of 2012. I have twice recently urged President Obama to
    approve this request for additional Afghan troops.
        It is a key to the success of our mission and to faster
    reductions of U.S. troops. It is also far less costly in terms
    of U.S. casualties and taxpayer dollars than keeping large
    numbers of U.S. forces in Afghanistan. I hope our witnesses
    this morning will tell us whether they support the request to
    build the ANSF by up to an additional 70,000 personnel.
        The presence of safe havens for terrorists across the
    Afghanistan border in Pakistan continues to pose a security
    threat to Afghanistan and to the region. While U.S.-Pakistan
    military cooperation has improved in some respects, the
    Pakistani army has not yet gone after the sanctuaries for the
    Haqqani network in North Waziristan or the Afghan Taliban in
    and around Quetta, Pakistan.
        Over the past month, the status quo in the CENTCOM AOR has
    changed dramatically, and this change appears to be ongoing.
    The protests in Egypt, Bahrain, Jordan, Iran, Yemen, and other
    countries are examples of what President Obama has correctly
    called a ``hunger for freedom.''
        Many in the Middle East have been denied their democratic
    and human rights for too long, and the past month is a clear
    demonstration of the people there demanding those rights. The
    United States needs to make constantly clear it supports those
    seeking to exercise their fundamental rights in the Middle East
    and around the world.
        The committee looks forward to hearing from General Mattis
    on his assessment and views on these protest movements, how our
    security, how our counterterrorism operations, and how our
    strategic goals are impacted by the events in the Middle East,
    and how, if at all, the nature of our military-to-military
    relationships might change in the region as a result of these
    events.
        In the waters off the coast of Somalia, the flow of
    international commerce continues to be impacted by the threat
    of increasingly aggressive pirates. Just last week, four
    Americans were murdered at the hands of more than a dozen
    pirates bent on extracting ransoms in exchange for their lives.
    The committee looks forward to hearing from our witnesses about
    their assessment of this threat and about ongoing U.S. anti-
    piracy operations.
        Iran provides the greatest challenge to the United States
    and the international community. While continuing to profess
    that its nuclear activities are for peaceful purposes, its
    actions indicate otherwise. The sanctions that have been
    imposed by the United States and most of the international
    community under the United Nations (U.N.) sanctions resolutions
    as well as domestic laws seem to be having some effect, but
    they need to be maintained and ratcheted up.
        Admiral Mullen's guidance for 2011, which states that DOD
    would ``continue to plan for a broad range of military options
    should the President decide to use force to prevent Iran from
    acquiring nuclear arms,'' needs to be reiterated. While not the
    preferred option, it is important that Iran understand that
    military actions remain on the table.
        I am concerned about the fraying of our SOF, as you have
    put it, Admiral Olson. While our SOF have seen rapid growth
    over the past decade, the demand for such forces and their
    unique skills will continue to outpace supply for the
    foreseeable future.
        This committee stands prepared to support SOCOM's efforts
    to provide the best-trained and best-equipped special operators
    to our combatant commands, and we look forward to hearing from
    you on this matter.
        Thank you again, both of you, for your testimony today.
        Let me now turn this over to Senator McCain.

                    STATEMENT OF SENATOR JOHN McCAIN

        Senator McCain. Thank you, Mr. Chairman.
        Let me thank our witnesses for joining us this morning.
        Admiral Olson, thank you for your many years of courageous
    and outstanding service to the United States Navy and to the
    Nation.
        General Mattis, as always, we look forward to your straight
    talk and candid views on the issues that are so important to
    us.
        This hearing couldn't come at a more important time.
    Senator Lieberman and I have spent the past several days
    visiting some key countries within the CENTCOM AOR, including
    Lebanon, Jordan, and Egypt, as well as some equally critical
    countries that influence events within the AOR, such as
    Morocco, Tunisia, and Israel.
        In addition, we are all, obviously, focused on the tectonic
    changes that are shaking countries and governments in Yemen,
    Bahrain, Iran, and, of course, Libya. That is to say nothing of
    Iraq, Afghanistan, and Pakistan, which remain the focus of our
    military and diplomatic efforts.
        Not since the fall of the Soviet Union have we seen a wave
    of change destabilize more critical countries all at once than
    we are now witnessing. Indeed, the old bargains that have
    defined regional order in the Middle East for the past several
    decades are now collapsing in front of us.
        This is, of course, deeply unsettling, but it is also an
    unprecedented opportunity to support the people of the Middle
    East in shaping a new regional order that is all at once
    reflective of their aspirations, conducive to our interests,
    and consistent with our values. The people of the Middle East
    are playing the leading role in this historic endeavor, but
    America's Armed Forces are playing an indispensable role,
    strengthening and defending our friends while deterring and
    defeating our enemies.
        2011 will be a consequential year for CENTCOM and SOCOM.
    Among the vital strategic issues that were in play this year,
    we face the beginning of the North Atlantic Treaty
    Organization's (NATO) transition of responsibility for security
    in Afghanistan to local and national Afghan forces amid
    strained and even deteriorating U.S.-Pakistani relations.
        We face hard choices about the future of U.S. defense
    assistance to Lebanon after Hezbollah's use of coercion to
    become the dominant actor in the government. We face the
    Iranian regime's desires to develop a nuclear weapons
    capability and to exploit the current regional instability to
    expand its hegemonic ambitions.
        We face the destabilization of critical counterterrorism
    partners like Egypt, Jordan, Yemen, and Bahrain, where the
    headquarters of U.S. Fifth Fleet is now caught up in the
    broader debate over the people of Bahrain's political future.
    Of course, we face the prospect of a complete withdrawal of all
    U.S. troops from Iraq by the end of the year, despite
    increasing evidence and recent testimony by the Secretary of
    Defense suggesting that such a plan is not consistent with
    Iraq's continuing security needs or our enduring interests at
    this time.
        Amid these and other challenges, this year will also
    require increased vigilance on the part of our SOCOM, for the
    changes sweeping across North Africa, the Middle East, and
    South and Central Asia may open up new ungoverned spaces that
    could be exploited by our enemies. While our special operators
    continue to perform with remarkable resilience and success, the
    effects of nearly 10 years of sustained operations and repeated
    deployments appear to be straining this elite force.
        Admiral Olson, as the chairman has said, we are concerned
    by your recent comment that our SOF are showing signs of
    ``fraying around the edges.'' It is important that you lay out
    today what steps are being taken or need to be taken to
    mitigate this strain. We are also interested in SOCOM's
    progress in meeting growth targets mandated by the Quadrennial
    Defense Review, as well as any associated issues, such as
    training or facility constraints that you are facing.
        We continue to see al Qaeda and affiliated movements
    attempting to expand their reach through the Maghreb, the Horn
    of Africa, the Arabian Peninsula, Central Asia, and beyond. We
    are all eager for the assessments of both our distinguished
    witnesses about the capabilities of these groups to threaten
    America's friends, allies, interests, and Homeland.
        What is critical to note is that the historic changes now
    reshaping the broader Middle East are a direct repudiation of
    al Qaeda and its terrorist allies. The people of this dynamic
    and crucial region are rising up to change the character of
    their governments, but the revolutions they are making are
    largely defined not by violence, but by peaceful protests.
        They are inspired not by intolerant and extremist
    ideologies, but rather by demands for greater freedom,
    democracy, opportunity, and justice. More than any weapon of
    war with which this committee must concern itself, it is these
    principles and the changes they are inspiring that will
    ultimately defeat our terrorist enemies.
        If only for that reason alone, these universal values and
    those now struggling for them deserve our full support.
        Thank you, Mr. Chairman.
        [The prepared statement of Senator McCain follows:]

                   Prepared Statement by Senator John McCain

        Thank you, Mr. Chairman. Let me thank our distinguished witnesses
    for joining us this morning. General Mattis, Admiral Olson, thank you
    for your many decades of faithful service to our Nation, and on behalf
    of our entire committee, please convey to the brave men and women you
    lead how grateful we are for their sacrifice, and that of their
    families.
        This posture hearing could not come at a more important time. I
    have spent the past several days visiting some key countries within the
    U.S. Central Command (CENTCOM) area of responsibility, including
    Lebanon, Jordan, and Egypt--as well as some equally critical countries
    that influence events within the AOR, such as Morocco, Tunisia, and
    Israel. In addition, we are all obviously focused on the tectonic
    changes that are shaking countries and governments in Yemen, Bahrain,
    Iran, and of course Libya. That is to say nothing of Iraq, Afghanistan,
    and Pakistan, which remain the focus of our military and diplomatic
    efforts.
        Not since the fall of the Soviet Union have we seen a wave of
    change destabilize more critical countries all at once than what we are
    now witnessing. Indeed, the old bargains that have defined regional
    order in the Middle East for the past several decades are now
    collapsing in front of us. This is of course deeply unsettling, but it
    is also an unprecedented opportunity to support the peoples of the
    Middle East in shaping a new regional order that is, all at once,
    reflective of their aspirations, conducive to our interests, and
    consistent with our values. The people of the Middle East are playing
    the leading role in this historic endeavor, but America's Armed Forces
    are playing an indispensable role--strengthening and defending our
    friends, while deterring and defeating our enemies.
        2011 will be a consequential year for CENTCOM and Special
    Operations Command (SOCOM). Among the vital strategic issues that are
    in play this year, we face the beginning of the North Atlantic Treaty
    Organization's transition of responsibility for security in Afghanistan
    to local and national Afghan forces, amid strained and even
    deteriorating U.S.-Pakistani relations.
        We face hard choices about the future of U.S. defense assistance to
    Lebanon after Hezbollah's use of coercion to become the dominant actor
    in the government.
        We face the Iranian regime's desire to develop a nuclear weapons
    capability and to exploit the current regional instability to expand
    its hegemonic ambitions.
        We face the destabilization of critical counterterrorism partners
    like Egypt, Jordan, Yemen, and Bahrain, where the headquarters of U.S.
    Fifth Fleet is now caught up in the broader debate over the people of
    Bahrain's political future.
        Of course, we face the prospect of a complete withdrawal of all
    U.S. troops from Iraq by the end of the year, despite increasing
    evidence and recent testimony by the Secretary of Defense suggesting
    that such a plan is not consistent with Iraq's continuing security
    needs or our enduring interests at this time.
        Amid these and other challenges, this year will also require
    increased vigilance on the part of our special operations command--for
    the changes sweeping across North Africa, the Middle East, and South
    and Central Asia may open up new ungoverned spaces that could be
    exploited by our enemies.
        While our special operators continue to perform with remarkable
    resilience and success, the effects of nearly 10 years of sustained
    operations and repeated deployments appear to be straining this elite
    force. Admiral Olson, I am concerned by your recent comment that our
    Special Operations Forces are showing signs of ``fraying around the
    edges.'' It is important that you lay out today what steps are being
    taken to mitigate this strain. We are also interested in SOCOM's
    progress in meeting growth targets mandated by the Quadrennial Defense
    Review, as well as any associated issues such as training or facility
    constraints that you are facing.
        We continue to see al Qaeda and affiliated movements attempting to
    expand their reach through the Maghreb, the Horn of Africa, the Arabian
    Peninsula, Central Asia, and beyond. We are all eager for the
    assessments of both our distinguished witnesses about the capabilities
    of these groups to threaten America's friends, allies, interests, and
    Homeland.
        What is critical to note, however, is that the historic changes now
    reshaping the broader Middle East are a direct repudiation of al Qaeda
    and its terrorist allies. The people of this dynamic and crucial region
    are rising up to change the character of their governments, but the
    revolutions they are making are largely defined not by violence, but by
    peaceful protests. They are inspired not by intolerant and extremist
    ideologies, but rather by demands for greater freedom, democracy,
    opportunity, and justice. More than any weapon of war with which this
    committee must concern itself, it is these principles, and the changes
    they are inspiring, that will ultimately defeat our terrorist enemies,
    and if only for that reason alone, these universal values and those now
    struggling for them deserve our full support.

        Chairman Levin. Thank you very much, Senator McCain.
        Admiral Olson, let us start with you.

     STATEMENT OF ADM ERIC T. OLSON, USN, COMMANDER, U.S. SPECIAL
                           OPERATIONS COMMAND

        Admiral Olson. Good morning, Chairman Levin, Senator
    McCain, and other distinguished members of the committee.
        I do thank you for this opportunity to appear before you to
    present the current posture of SOCOM.
        We, at SOCOM, recognize that we were created by Congress
    and that our ability to meet our Nation's high expectations is
    due, in large part, to this committee's continued strong
    support.
        I am especially pleased to share this hearing with my
    friend and teammate, General Jim Mattis. General Mattis'
    headquarters and mine are coincidentally located on the same
    base in Tampa, and we and our staffs work together quite
    closely.
        With your permission, I will submit my written posture
    statement for the record and open with some brief remarks.
        Chairman Levin. It will be made part of the record in full.
        Admiral Olson. The lingering threat of violence in Iraq,
    the fragility of the progress in Afghanistan, the complexity of
    our relations with Pakistan, the decentralization of al Qaeda's
    network, the revolutionary activity across the Maghreb and into
    the Middle East, the various destabilizing elements in Latin
    America, Africa, and Southeast Asia, the increased intertwining
    of violent extremism and criminality, and the persistence of
    piracy are all among the many daily reminders that we live in a
    world that poses many security challenges and some
    opportunities.
        The SOF are universally recognized as key to our Nation's
    ability to address all of these and others. As the Commander of
    SOCOM, I am responsible and accountable for the readiness of
    all Army, Navy, Air Force, and Marine Corps SOF.
        With a dedicated budget and through my component
    commanders, I select, organize, train, equip, and deploy these
    forces to serve all of the Geographic Combatant Commanders.
    Though with 85 percent of our deployed forces currently in the
    CENTCOM area of operations, my colleague to my left is, by far,
    the largest customer of our product.
        We include many forces of legend: Green Berets, SEALs,
    Rangers, Air Force Air Commandos, Army Night Stalker Aviators,
    Combat Controllers, Pararescue Jumpers, Combatant-craft
    Crewmen--today's version of Marine Raiders--and others. The
    active duty practitioners of Civil Affairs operations and
    Military Information Support Operations are also in our ranks.
    These are special operations careerists.
        But they are backed by a magnificent assortment of
    administrative, intelligence, communications, engineering,
    logistics, and other specialists who serve in special
    operations units on a less permanent basis. At our various
    headquarters, we also include over 300 representatives from at
    least 15 other agencies within and beyond DOD, providing a
    senior-level counsel and staff-level expertise that
    significantly broadens and deepens us.
        I am convinced that the forces we provide to the Geographic
    Combatant Commanders are the most culturally attuned partners,
    most lethal hunter/killers, and most responsive, agile,
    innovative, and efficiently effective advisers, trainers,
    problemsolvers, and warriors that any nation has to offer. In
    fact, we have become the model for many others.
        Our value comes from both our high level of skills and our
    nontraditional methods of applying them, which is to say that
    our principal asset is the quality of our people. Whether they
    are conducting a precision raid, organizing a village police
    force, arranging for a new school or clinic, or partnering with
    counterpart forces, they do so in a manner that has impressive
    effects.
        In Afghanistan and Iraq especially, it is undeniable that
    they have had impact far above their relatively small numbers.
    They are in dozens of other countries every day, contributing
    to regional stability by training and advising counterpart
    forces. This balance of direct and indirect operations must be
    carefully managed. But because SOF live in both of these
    worlds, we become the force of first choice for many missions.
    As Admiral Mullen said a couple of weeks ago, SOF are typically
    first in and last out.
        I am very proud of these forces, as we all should be. But I
    also acknowledge there are challenges. Key among them is how to
    meet the increasing global requirement for their capabilities.
        We can't grow them more than a very few percent per year,
    but the demand is outpacing the supply. Since September 11, our
    manpower has roughly doubled, our budget has roughly tripled,
    and our overseas deployments have quadrupled.
        I have said that this great force is beginning to fray
    around the edges. The fabric is strong. The weave is tight. It
    is not unraveling, but it is showing signs of wear.
        Partial solutions include finding a process that will
    habitually assign units from the Services to train and deploy
    with SOF, ensuring that our needs for local training ranges are
    fully met, providing buildings and facilities at the standard
    that our force needs and deserves, investing more broadly in
    the types of enabling capabilities that will relieve SOF from
    sending our own people to perform functions that could be
    performed by others, and expanding the Services' inventory of
    specific assets that are so essential to today's complex and
    irregular warfare.
        We must ensure that our force has the specialized equipment
    and advanced training that they need to survive and succeed in
    the complex, ambiguous, and often violent environments in which
    we ask them to serve.
        Underlying all of it is the need to look after our people
    and their families. We must rehabilitate and return to duty
    those of our wounded who can, care for those of our wounded who
    can't, along with their families and caregivers, and provide
    enduring support to the families of those who have died in
    action.
        I ask for your action to approve a defense budget for
    fiscal year 2011 and for your support for the fiscal year 2012
    budget proposal. I also ask that you fully fund the special
    operations budget, particularly as conventional forces begin to
    draw down from major operations, because our forces will most
    likely be reallocated at the same levels to areas with pent-up
    demand for our unique capabilities.
        Thank you for the opportunity to appear before you today.
    You have reason to take great pride in what the men and women
    of SOF are accomplishing around the world, today and every day.
        I remain humbled by my opportunity to command this
    formidable force and to provide it to answer our Nation's most
    daunting security needs. As I appear before you in this
    capacity for the fourth and very likely the last time, I thank
    you for affording me the profound honor of serving my country
    in this way.
        I stand ready for your questions.
        [The prepared statement of Admiral Olson follows:]

                  Prepared Statement by ADM Eric T. Olson, USN

        Mr. Chairman and distinguished members of the committee, thank you
    for this opportunity to provide an update on the U.S. Special
    Operations Command (SOCOM). Our Special Operations Forces (SOF) give us
    much cause for great pride and it is my deep privilege to represent
    them to you, and especially to do so for the fourth time as their
    commander.
        My intent today is to describe the current status, activities and
    requirements of SOF. I'll begin by briefly describing SOCOM and its
    assigned SOF.
        As many of you know, SOCOM is a creation of Congress, legislated
    into being in 1986. A relatively small number of Army, Navy, and Air
    Forces units designated as SOF were assigned to SOCOM, with Marine
    Corps forces joining the Command just over 5 years ago.
        Before the establishment of SOCOM, the Nation's SOF had generally
    not been treated as a top priority. They now thrive under the focused
    attention of a single headquarters and a dedicated budget. In the 24
    years since SOCOM was established, SOF have repeatedly proven their
    value, often under extraordinarily demanding conditions.
        In many ways, SOCOM is a microcosm of the Department of Defense
    (DOD), with ground, air and maritime components, a global presence, and
    authorities and responsibilities that mirror the Military Departments,
    Military Services, and Defense Agencies. We take pride in the diversity
    of our people and our mission.
        One of our headquarter's functions is to synchronize DOD planning
    against terrorists and their networks globally. This is complex work
    that connects us across DOD and into other U.S. Government departments
    and other nations' military forces. The effects of this are manifested
    in a series of planning documents that guide specific actions by the
    Services and combatant commands.
        Primarily, SOCOM organizes, trains and equips SOF and provides
    those forces to the Geographic Combatant Commanders under whose
    operational control they serve. The Command also develops special
    operations strategy, doctrine and procedures for SOF employment and
    develops and procures specialized equipment for the force.
        Our key subordinate commands are U.S. Army Special Operations
    Command, Naval Special Warfare Command, U.S. Air Force Special
    Operations Command, Marine Corps Forces Special Operations Command, and
    Joint Special Operations Command. Within these commands are the
    legendary Special Forces or Green Berets, SEALs, Air Commandos,
    Rangers, Night Stalker helicopter crews, and the modern version of
    yesterday's Marine Raiders. Our force also includes the active duty
    practitioners of Civil Affairs Operations and Military Information
    Support Operations, and all of the instructors, logisticians,
    administrators, analysts, planners, communicators, doctrine writers,
    and other specialists who are key to our ability to meet our Nation's
    needs. Most are active duty military, but we depend heavily on our
    Guard and Reserve units and the government civilians and contractors
    who perform duties that don't require a uniformed servicemember.
        We now total close to 60,000 people, about a third of whom are
    career members of SOF, meaning those who have been selected, trained,
    and qualified to earn the Military Occupational Specialty or skill code
    identifier of a SOF operator.
        The activities of the force are as varied as its character. From
    high-risk, high-intensity counterterrorist raids; to meticulous
    intelligence analysis; to providing first response during a natural
    disaster; to launching from submerged submarines; to training and
    accompanying foreign counterparts; to working with local leaders to
    determine what will bring value to their village; to providing
    supporting precision fires to fighting troops from orbiting aircraft--
    SOF personnel are in vital roles, in key places, performing essential
    tasks.
        Our presence is generally small and agile, inherently joint and
    persistent. Our formations normally include an array of attached
    capabilities that are necessary to optimize the force--including female
    Cultural Support Teams, Tactical Air Controllers, Military Working
    Dogs, interpreters, maintenance and repair personnel, Explosive
    Ordnance Disposal technicians and others. SOF rarely dominate an area
    with their mass, so they must work with indigenous forces and the local
    civilian population to accomplish their missions. This is often
    complicated, demanding and high-risk.
        Each of the Geographic Combatant Commanders who will appear before
    you is well served by the SOF that are deployed to his region, although
    the balance is heavily weighted towards U.S. Central Command (CENTCOM).
    In fact, about 85 percent of deployed SOF are directly engaged in
    Operations New Dawn and Enduring Freedom. I will defer to the regional
    commanders to highlight the contributions of SOF in their theaters. I
    will just say here that, although the precision counterterrorism
    missions certainly receive the most attention, SOF are conducting a
    wide range of activities in dozens of countries around the world on any
    given day--at the request of the host government, with the approval of
    the U.S. Ambassador and under the operational control of the U.S.
    Geographic Combatant Commander.
        To support these forces and activities, SOCOM invested in many
    specialized programs and equipment. As the commander responsible for
    the preparation and readiness of SOF, I focus on developing and
    sustaining operational skills and capabilities, training and
    maintaining the quality of the force, caring for its families, and
    ensuring that our people have the right equipment in sufficient
    quantity. I also carefully monitor global military and political trends
    in my role as the senior advisor on the employment of SOF.
        Among SOCOM's most important functions is the management of Major
    Force Program-11 (MFP-11). MFP-11 is provided to the Commander of SOCOM
    to address requirements that are ``SOF-peculiar'' in nature, and it is
    the essential fuel that enables SOF to meet the Nation's needs. It
    provides for the conduct of advanced and unique training, the timely
    and flexible fielding of equipment, and the capability to rapidly and
    effectively project our force. In fiscal year 2012, the request for
    MFP-11 funds totals $10.5 billion in baseline and Overseas Contingency
    Operations (OCO) funding. This is an increase of 7 percent over the
    fiscal year 2011 request, and every dollar is necessary to meet the
    ever-increasing demands placed on our SOF.
        At the forefront of budget discussions is the acknowledgment that
    many of the current expenditures funded by OCO are, in fact, part of
    SOCOM's baseline requirement in the ``new normal.'' This was
    highlighted by the Department last year when a commitment was made to
    eventually move funding required to execute OCOs into the baseline as
    part of the Secretary of Defense's initiative to ``rebalance'' the
    force. However, SOCOM will continue to rely on OCO funding over the
    next few years as the phased transfer to the base budget occurs. For
    example, in the fiscal year 2012 budget submission 34 percent of the
    total MFP-11 request is OCO funding. For some higher intensity SOF
    elements, the OCO percentage is greater than 75 percent. SOCOM will
    carefully prioritize and manage the OCO to base transition. Overall, we
    are in a fiscally satisfactory condition, but the force requires
    continued support. The President's budget request for fiscal year 2012,
    if approved, is an essential step towards meeting the growing demand on
    our force by providing SOCOM the resources required to sustain critical
    programs and initiatives. Now, I would like to highlight some of these
    key efforts.

                                    PROGRAMS

        SOCOM continues to expand and recapitalize its rotary and fixed-
    wing aviation fleets. This year we began modification of the last of
    the originally planned 61 MH-47G helicopters, while starting
    procurement of 8 additional MH-47Gs. We are also fielding the first of
    72 planned MH-60M helicopters as part of our recapitalization of MH-60
    K/L platforms. The tilt-rotor CV-22, having demonstrated its
    capabilities on multiple deployments, must remain on plan to ensure
    enhanced future mobility capabilities for SOF. SOCOM's MC-130Ws,
    rapidly modified with a Precision Strike Package utilizing SOF's Joint
    Acquisition Task Force (JATF), are providing armed overwatch and
    mobility to deployed SOF as an interim augmentation to our Vietnam-era
    AC-130 gunship fleet. We are on a path to ultimately recapitalize the
    gunships with AC-130J models. The MC-130J program is on track to
    replace our aging MC-130Es and MC-130Ps. Our Non-Standard Aviation
    Program is delivering a variety of smaller aircraft to provide intra-
    theater airlift capacity and we continue to grow our aviation foreign
    training capability in support of the Geographic Combatant Commanders'
    engagement plans.
        SOCOM is also modernizing its maritime mobility systems. We will
    award competitive prototype contracts later this year for Combatant
    Craft-Medium as replacements for the Naval Special Warfare Rigid Hull
    Inflatable Boat. We have realigned resources from the Advanced SEAL
    Delivery System and the Joint Multi-Mission Submersible to fund the
    development of a family of Dry Submersibles as part of our undersea
    mobility strategy. These will be launched from surface ships or Dry
    Deck Shelter-equipped submarines. As part of this modernization
    program, we will explore expansive and flexible approaches that are
    supportive of the Secretary of Defense's intent to streamline
    acquisition processes and accelerate delivery times.
        SOF continue to rely on a wide range of ground mobility vehicles,
    often leveraging Service and Department investments. Modified to meet
    the wide variety of SOF mission sets and provide enhanced crew
    protection, vehicles such as the MRAP have been essential to SOF teams
    operating in dispersed and rugged terrain throughout the CENTCOM area
    of responsibility (AOR). These vehicles, as well as our other ground
    mobility systems, will remain relevant well into the future as we
    synchronize our long-term sustainment strategy with the Services.
        We continue to invest in airborne manned and unmanned Intelligence,
    Surveillance, and Reconnaissance (ISR) programs, relying heavily on the
    Services to expand capabilities and capacity that benefit DOD across
    the board. SOCOM is moving toward a relatively small number of manned
    and unmanned ISR systems; essential processing, exploitation, and
    dissemination (PED) capabilities; and supporting communications
    architectures.
        One of the most noteworthy improvements within special operations
    over the last few years has been the growth of advanced communications
    and networking capabilities through our expeditionary SOF Information
    Enterprise (SIE). As our portion of the Department's Global Information
    Grid, the SIE provides network independence while maintaining
    connectivity into the global interface, and links SOF across the globe
    into a common network. This connectivity shortens the decision cycle
    for SOF operators worldwide and allows more rapid information sharing.
    The research and rapid development of these types of technologies is an
    inherent strength of special operations.
        SOCOM, inherently joint in all it does, is in a unique position to
    leverage and apply Service and Department Science and Technology (S&T)
    efforts to rapidly field new technologies on the battlefield. SOCOM's
    ``Rapid Exploitation of Innovative Technologies for SOF'' program,
    enables innovative new capabilities to be developed and inserted
    quickly into the battlefield-advanced ''talk and jam'' capabilities for
    SOF vehicles; mobile repair and maintenance ``shops in a box''; to
    solar panel energy technology that supports SOF in remote locations.
    SOCOM also seeks to expand its biomedical research and development
    activities. To date, SOCOM has pushed ``state-of-the-art'' combat
    medicine with modest resources through the Tactical Combat Casualty
    Care program. However, we also have great need to explore innovative
    methods of treating our wounded members so that they may be
    reintegrated and returned to duty as rapidly as possible.
        As a force that operates from the tropics to the Arctic regions,
    from under water to high elevations, and from peaceful areas to violent
    combat zones, SOF serve as an ideal ``control group'' for Service R&D
    investments that can result in significant benefits across DOD.
        SOCOM's development of the JATF concept enabled accelerated
    acquisition and fielding of urgent SOF capabilities. First demonstrated
    on the MC-130W Dragon Spear program, SOCOM expanded use of the JATF
    concept to address many emerging requirements of SOF warfighters.
    Innovative approaches such as the JATF, coupled with a professionally
    trained and certified SOF acquisition corps that stays in close and
    frequent contact with the operators, continue to ensure that SOCOM
    remains as a vanguard of rapid acquisition within DOD.
        SOCOM's acquisition planning, collaboration, and continuing
    dialogue with the Services continues to improve as we become more
    efficiently effective while rapidly moving capabilities to the
    warfighter. SOCOM, in conjunction with the Under Secretary of Defense
    for Acquisition, Technology, and Logistics initiated a series of
    Acquisition Summits with the Military Department Acquisition Executives
    to minimize programmatic disconnects and to better align requirements,
    co-sponsorship opportunities, funding efficiencies, and contracting
    actions among MFP-11 programs and Service-related/dependent programs.
    These periodic meetings offer a level of transparency among all our
    accounts that enables us to seek common solutions for Service-wide
    requirements and to better invest in SOF-peculiar modifications or
    special capabilities. This forum identified several opportunities,
    which if supported by Congress, would enable more efficient execution
    of SOF unique acquisitions.
        SOCOM is making a significant investment in Military Construction
    (MILCON) to address shortfalls resulting from fielding new
    capabilities, a growing force structure and aging infrastructure that
    was inherited without a future recapitalization budget. To address the
    shortfall, the Command's 2012 budget submission is based on a MILCON
    roadmap that identifies over 300 prioritized requirements valued at
    more than $5 billion between 2012 and 2025. Specifically, our fiscal
    year 2012 submission includes 33 of these projects, valued at $631
    million across 8 States and representing 9 percent of the Command's
    projected base budget request--a near record level. This investment
    demonstrates a commitment to addressing our critical infrastructure
    needs. To continue this effort, the Command's new Strategic Planning
    and Programming Guidance raised the MILCON funding minimum from 4 to 6
    percent to support this priority in future budgets.
        A congressional action that enhanced the effectiveness of our force
    is our Section 1208 authority. This authority to reallocate limited
    MFP-11 funds remains a key tool used by widely dispersed SOF to
    leverage indigenous forces in support of counterterrorism operations.
    SOCOM is appreciative of the increase to $45 million provided by
    Congress in the National Defense Authorization Act for Fiscal Year
    2011, as it provides us the ability to support ongoing operations with
    a measure of flexibility should a contingency arise. Continuation of
    Section 1208 authority provides enhanced effectiveness to our force
    both strategically and tactically.

                                  INITIATIVES

        Our primary challenge is the need to carefully manage the growth of
    SOF, even in these periods of high demand, in order to ensure the
    continued quality the Nation expects. I have stated in my last three
    posture hearings that SOF's organic manpower growth should be in the
    range of 3-5 percent per year. That is the pace we have sustained to
    great effect over the past several years and our fiscal year 2012
    budget submission continues this pace. But 3-5 percent growth within
    SOCOM will not answer the increasing demand for our force unless it is
    matched by the Military Services' commitment to attach supporting and
    enabling forces at a commensurate rate. SOF units must include a
    limited amount of these enabling forces to ensure rapid response to
    emerging requirements, but we were designed and intended to rely on the
    Services to meet most of our combat support and combat service support
    requirements. In order to establish a predictable demand signal for
    these Service-provided capabilities, SOCOM is proposing changes to the
    way we build, train, deploy, and sustain a fully enabled force.
        To better build the SOF team, we are developing a force generation
    system that engages the existing Service systems. In 2011, SOCOM will
    strive to create a SOF Force Generation system that will be
    synchronized with the Services, matching their capabilities with our
    Special Operations core units in time to provide fully optimized force
    packages to the Geographic Combatant Commanders. For elements organic
    to SOF, such as our Civil Affairs and Military Information Support
    Operations, we will expand their capacities to meet the increasing
    demand for their capabilities.
        Another challenge we face is how to effectively prepare and train
    the force to achieve enhanced interoperability with the General Purpose
    Forces (GPF). Currently in the CENTCOM AOR, SOF is executing the
    counterterrorist strike mission and the Village Stability Operations
    mission; two of the primary lines of operation underpinning the
    Afghanistan strategy. SOF's key role in both is creating opportunities
    for enhanced interoperability with the GPF such as the deployment of
    the 1ST Battalion, 16TH Infantry, now assigned to the Combined Joint
    Special Operations Task Force-Afghanistan; a sea change in SOF-GPF
    relations. Currently, we are developing initiatives that will increase
    inter-operational effectiveness prior to the deployment phase of the
    operation.
        In 2011, we will continue to review and coordinate changes to
    Service personnel policies to further incentivize language pay for key
    languages such as Pashto, Dari, and Arabic. We will work to develop
    courses of action that allow SOF reliable and predictable access to
    Service resources such as training ranges for our ground and aviation
    elements. The shortage of readily available, local ranges currently
    hampers SOF's ability to meet deployment training timelines and causes
    our operators to ``travel to train,'' further increasing their already
    excessive time away from home.
        Understanding the operational context of the environments in which
    we operate is a hallmark of SOF. Developing this knowledge and
    experience within our force, and understanding the value of ``micro-
    regional'' expertise allows SOF to conduct its activities with more
    predictable outcomes. While immersion opportunities enhance our
    regional sophistication, our training can never develop the level of
    nuanced understanding possessed by indigenous populations. To gain this
    high level of cultural knowledge, SOCOM will continue to strongly
    support DOD's Military Accessions Vital to the National Interest and
    the Army's Intermediate and Advanced Language Programs to recruit and
    access the requisite expertise provided by native speakers.
    Additionally, our attached female Cultural Support Teams (CSTs) allow
    us to reach key elements of the population in some environments which
    was not previously possible. This concept of attaching females to SOF
    units is effective and long overdue; we are urging the Services to
    recognize the capabilities of CSTs as essential military skills.
        Finally, our efforts to become more innovative include studying the
    best practices of other organizations. For example, we are inspired by
    the ability of the World War II's Office of Strategic Services to
    rapidly recruit specialized talent, develop and acquire new
    technologies and conduct effective global operations within the period
    of its relatively brief existence.
        To further our engagement with our international allies and
    partners, and within the U.S. interagency community, SOCOM will
    continue to expand the Special Operations Liaison Officer (SOLO) and
    Special Operations Support Team programs. Both of these outreach
    efforts provide SOF experts to support and enhance their host
    organizations while serving as SOF liaisons. Our priority is to assign
    SOLO officers wherever a foreign partner has, or is planning to
    establish, a SOCOM-like headquarters.
        Joint operations and special operations are two growing trends in
    many of our partner nation military forces. One manifestation is the
    recent establishment of the NATO SOF Headquarters. In accordance with
    the 2010 National Defense Authorization Act, the Secretary of Defense
    designated SOCOM as the lead component for this Headquarters--a role we
    will embrace and expand in an effort to advise and assist an
    interoperable network of global SOF.
        Importantly, we remain committed to caring for our servicemembers
    and their families. I am concerned about the effects of 9 years of
    focus on combat operations on the well-being of our extended special
    operations community. To support the wounded and injured and their
    caregivers, the Command remains committed to our Special Operations
    Care Coalition and the Tactical Human Optimization, Rapid
    Rehabilitation and Reconditioning Program. Both programs are focused on
    long term care, rehabilitation and reintegration of our warriors. In an
    additional effort to be predictive and preventive, I established a
    ``Pressure on the Force'' Task Force to survey and analyze the effects
    of repetitive combat deployments over nearly a decade. Necessarily
    relying on soft data, collective experiences and commanders' instincts,
    it will try to determine what initiatives might help ease the strain
    and contribute to long-term retention and force stability. I expect to
    receive the recommendations from this team within 90 days.
        In conclusion, I will reinforce what I believe are the top
    challenges to the Command. As the Chairman of the Joint Chiefs of Staff
    recently stated, `` . . . the first forces in are typically Special
    Forces. The last ones out are going to be Special Forces.'' As we
    expect to remain the force of first choice for many military
    operations, SOCOM must:

        1. Carefully and deliberately meet the ever-increasing demand for
    SOF.
        2. Improve and expand our tactical and operational level skills,
    equipment and systems.
        3. Preserve our proposed budget levels and authorities.
        4. Find better structures and processes to obtain Service-provided
    capabilities.
        5. Continue to improve our acquisition speed and agility.
        6. Better understand the people and conditions in the places we go,
    whether to assist or fight.
        7. As our most solemn duty, look after the health and well-being of
    this magnificent force from whom we ask so much.

        Today's SOF are the most capable, best prepared SOF in history.
    Their ingenuity, perseverance, spirit and skill continue to inspire and
    amaze. In significant ways, they have emerged from the shadows to make
    visible and dramatic impacts of great magnitude. It is my honor to have
    served within SOF for the last 37 years and to represent this
    extraordinary force today before this committee.
        As always, our success is only possible because of your continued
    support and advocacy. Your approval of the President's budget request
    will help ensure our continued ability to address some of our Nation's
    most daunting security challenges.

        Chairman Levin. Thank you so much, Admiral.
        We, again, are grateful to you, the men and women you
    command, for all that you and they do. We have that pride,
    which you made reference to at the end of your statement, in
    them and in you.
        General Mattis.

       STATEMENT OF GEN. JAMES N. MATTIS, USMC, COMMANDER, U.S.
                            CENTRAL COMMAND

        General Mattis. Thank you, Mr. Chairman, Senator McCain,
    distinguished members of the committee.
        I appreciate the opportunity to discuss the posture and
    priorities of CENTCOM, testifying alongside a friend and
    shipmate of many years, Admiral Eric Olson, Commander of SOCOM.
        I have submitted a written statement and request it be
    accepted into the record.
        Chairman Levin. It will be made part of the record.
        General Mattis. Thank you for supporting our troops and
    their families who carry the brunt of the physical and the
    emotional burden in this 10th year of war. Our forces today are
    among the most dedicated and skilled professionals I have
    served alongside in my 39 years in uniform, and they constitute
    a national treasure.
        I also recognize the commitment and sacrifices of our
    international partners, who operate with us from the waters off
    Somalia to the mountains of Afghanistan, where the largest
    warfighting coalition in recent history is engaged with troops
    from 49 nations united in the fight against our common enemy.
        The strategic landscape of the broader Middle East has been
    altered by recent events in Tunisia, Egypt, Libya, and
    elsewhere. We see pressure on government institutions from the
    aspirations of people seeking improved economic and social
    conditions. Young people born in the information age are
    exchanging ideas in real time.
        While the long-term impact of this unrest is unknown, it
    presents as many opportunities as it does challenges. The
    changes that we are seeing will manifest differently in each
    country. People are seeking their rights and, for the most
    part, doing so peacefully and bravely.
        It is too early to say how it will all turn out. It is
    important that we work today with the people and the
    governments throughout the region. We don't want to see this
    change slide into a new form of authoritarianism.
        So while there is both opportunity and danger, it requires
    unrelenting engagement by our Nation. The central challenge for
    us, I believe, is how to make common cause with our friends
    throughout the region.
        There is one clear lesson we can draw from the dramatic
    changes underway. Now, more than ever, we must remain
    relentlessly engaged with our military partners in this region.
    While we know each country is different, we remain committed to
    strengthening our military bonds and advancing our mutual
    interests in peace and opportunity for all.
        Notably in Egypt, we have clearly seen the benefit of
    mature military-to-military relationships. The Egyptian armed
    forces continue to demonstrate exceptional discipline and
    restraint under trying circumstances.
        As Admiral Mullen recently noted, our assistance has helped
    the Egyptian military become the professional force that it is
    today, just as our military has learned a great deal from our
    Egyptian counterparts, who have contributed a stabilizing
    influence in this time of transition.
        Of course, we cannot achieve our broader objectives in the
    region through military means alone. Our efforts require
    coordination and a spirit of collaboration between highly
    integrated civilian military teams. Our civilian colleagues
    need your full support, even in this difficult fiscal
    environment, to undertake their essential role in today's
    complex environment.
        Robust resourcing for the State Department's mission is one
    of the best investments for reducing the need for military
    forces to be employed. Together, our military leaders and our
    diplomats not only represent a symbol of America's enduring
    commitment to the region, but they also build trust through
    partnerships that have an important stabilizing effect when
    trouble looms.
        CENTCOM's main effort is in Afghanistan, where, along with
    our Afghan and coalition partners, we are making undeniable
    progress, though some of our gains at this time remain fragile
    and yet reversible. Al Qaeda in the border region between
    Afghanistan and Pakistan is under the most pressure they have
    experienced since 2001. Over the past year, our enemies have
    lost leaders, battle space, maneuver room, and the initiative.
        The enemy's strategy has been undercut by the clear
    commitment of the international community and the Afghan
    Government to begin this summer a process of fully transiting
    responsibility to Afghan lead by 2014. I support the ongoing
    analysis for further growth for the ANSF, the greatest success
    of our last year their quantifiable and qualifiable growth in
    capability.
        The range of growth being considered is from 45,000 to
    70,000. With the improving quality in combat performance by the
    ANSF, we are seeing the enemy's worst nightmare coming of age.
        The transition process will start with a limited
    conditions-based withdrawal this year. Our overall campaign is
    on track in Afghanistan. Our successes, as General Petraeus has
    stated, entailed hard fighting and tough losses. I am sure that
    there will be tough fighting ahead as the enemy tries to regain
    the initiative.
        Finally, we must also redouble our efforts to address
    challenges in the areas of governance and development in
    Afghanistan.
        Turning now to Pakistan, we are strengthening and deepening
    our security partnership with Islamabad, even as we work to
    overcome years of mistrust and misunderstanding on both sides.
    The Pakistanis have shifted a quarter of their army, 140,000
    troops, to their western border, and we are now conducting
    hammer and anvil operations in close coordination with them on
    opposite sides of the border.
        Pakistan's military has conducted significant
    counterinsurgency operations in the past decade and especially
    the past 2 years, and they have suffered 2,757 troops killed
    and 8,549 wounded while also responding to urgent humanitarian
    needs following devastating floods in 2010.
        In Iraq, we are helping a new, more stable country emerge
    in a turbulent region. Our commitment there is transitioning
    from a military to a civilian-led effort. I will note that the
    transition underway in Iraq has been enabled in large part
    thanks to the vital commitment and support of Congress for our
    troops on the ground, and I want to personally offer my thanks
    to you.
        As we transition to civilian lead in Iraq, it is essential
    that the State Department be sufficiently resourced to solidify
    relationships between the United States and Iraq for the
    future. At CENTCOM, we need congressional authorities that
    enable us to continue advising, training, and equipping our
    Iraqi partners through the new Office of Security Cooperation-
    Iraq.
        Looking ahead, we will redeploy our military forces from
    Iraq this year, unless asked to stay by the Iraqi Government
    and the U.S. Government concurs. I anticipate al Qaeda in Iraq
    and Iranian-sponsored proxies will attempt to attack us and
    detract from this milestone by executing sensational attacks in
    the coming months.
        Next, Iran. The greatest threat to long-term regional
    security is a defiant Iran in its current state. We are
    countering the malign activities of the regime while bolstering
    relationships with our partners.
        Iran continues to rebuff international efforts for
    engagement. It continues to coerce its own population and
    pursue activities disruptive to regional peace and stability,
    including supplying arms to militant proxies in Iraq and
    Afghanistan and supporting Hezbollah in Lebanon.
        But for the vibrant people of Iran, the regime is no giant.
    The regime's actions have thrown the economy into disarray,
    destroyed rapport with the bulk of the world, and spread hate
    and discontent across the region, steadily eroding any
    international support the regime could once muster.
        Despite the shrinking nature of the regime, I have no
    reason for optimism about Iran's pursuit of nuclear weapons
    capability, its growing ballistic missile arsenal, and present
    destabilizing course.
        Across the region, we are disrupting al Qaeda and other
    violent extremist organizations. We are actively focused on the
    threat of extremism in Yemen, especially al Qaeda in the
    Arabian Peninsula (AQAP), the group that has twice attempted to
    attack our Homeland in recent years.
        With our international partners, our SOF are putting our
    most violent enemies and related networks under increasingly
    intense pressure. At the same time, the populist-inspired
    changes that are taking place across the region undercut the
    message of al Qaeda and other extremist groups, highlighting
    the bankrupt philosophies of terrorists who use violence and
    contribute nothing but mayhem to the innocent.
        As Senator McCain just noted, the populist-inspired changes
    are a direct repudiation of the violent extremists because
    these young folks today have achieved more change in 10 weeks
    than 10 years of al Qaeda's murderous campaign.
        That is a snapshot of our major ongoing operations. We are
    focused on a number of other important mission areas to include
    countering piracy. There can be no more stark reminder about
    the need for more proactive diplomatic, legal, and military
    efforts against pirates than the brutal murder of four
    Americans by pirates last week.
        This is a defining moment for the people of the region and,
    by extension, a critical moment for CENTCOM to remain engaged
    with our partners and to clear away obstacles to peace and
    prosperity. On that note, while Israel and the Palestinian
    territories are not in my assigned theater, lack of progress
    toward a comprehensive Middle East peace affects U.S. and
    CENTCOM security interests in the region.
        I believe the only reliable path to lasting peace in this
    region is a viable two-state solution between Israel and
    Palestine. This issue is one of many that is exploited by our
    adversaries in the region, and it is used as a recruiting tool
    for extremist groups.
        The lack of progress also creates friction with regional
    partners and creates political challenges for advancing our
    interests by marginalizing moderate voices in the region. By
    contrast, substantive progress on the peace process would
    improve CENTCOM's opportunity to work with our regional
    partners and to support multilateral security efforts.
        We recognize you face tough decisions in this constrained
    fiscal environment. In all of our activities at CENTCOM, we
    honor the obligation to be the best stewards possible of our
    Nation's monetary resources. CENTCOM has established stringent
    control mechanisms to execute our fiscal authorities and to
    apply increasingly effective oversight of all programs.
        Finally, Mr. Chairman, Senators, we must never forget the
    families of those who gave their last full measure in defense
    of liberty.
        Thank you once again for your support of our men and women
    serving in the CENTCOM AOR, and I am prepared to answer
    questions.
        [The prepared statement of General Mattis follows:]

                Prepared Statement by Gen. James N. Mattis, USMC

                                  INTRODUCTION

    A Command at War
        U.S. Central Command (CENTCOM) oversees operations alongside our
    allies, partners, and friends in a critically important region of the
    world. CENTCOM is engaged throughout the greater Middle East and South
    Central Asia across the full spectrum of warfare, standing against
    violent aggression and the tyranny of militant extremists, while
    contributing to the broader conditions for peace, stability, and
    prosperity.
    Recognizing our Troops, Civilians, and Partners
        Our troops and their families carry the brunt of physical and
    emotional burdens in this 10th year of war. Today, over 200,000
    American troops and tens of thousands of civilians are deployed to the
    CENTCOM area of responsibility (AOR). These men and women--all
    volunteers, no less--defend our freedoms with great courage in the face
    of a murderous enemy on harsh terrain. Our troops stand together with
    tens of thousands of our international partners, conducting coalition
    operations from the waters off Somalia to the mountains of Afghanistan,
    where the largest warfighting coalition in recent history is engaged.
    Operating in a Dynamic Region
        The CENTCOM AOR is more dynamic than I have seen it since first
    serving there in 1979. Across our theater, we are required to maintain
    a degree of military flexibility such as we have seldom seen before. At
    the same time, given the financial realities in Washington, we require
    ourselves to exercise the utmost degree of stewardship over every penny
    we spend. To operate in this context successfully, we seek to build
    strong military-to-military relationships with our partners,
    recognizing that CENTCOM's actions represent a tangible signal of
    America's continued, long-term commitment to the security and
    prosperity of this area.
        Throughout the region, we see institutions of government responding
    to the aspirations of youthful populations. As the people in the region
    have made their voices heard, regional militaries have so far
    demonstrated their professionalism, exercising a capability that did
    not arise by accident or overnight. The strong security relationship
    between the United States and our partners is decades in the making and
    has helped them become the professional forces they are today--and in
    the process made our forces better as well. While we seek to understand
    the unique circumstances that our partners confront, CENTCOM remains
    committed to supporting the efforts of our military counterparts and to
    strengthening the security partnerships that have proven critical
    during this period of political unrest. We do this first by listening,
    learning, and understanding, and continue by engaging with our partners
    based on mutual respect and shared interests.
    Our Mission
        Overall, amidst these conditions, we remain committed to carry out
    our mission:

              With our national and international partners, CENTCOM
            promotes security cooperation among nations; responds to
            crises; deters or defeats state and non-state aggression;
            supports development and, when necessary, reconstruction in
            order to establish the conditions for regional security,
            stability, and prosperity.

    Snapshot of Operations
        Our main effort is Afghanistan--and progress there is indisputable,
    even if some of our success is fragile and reversible. We and our North
    Atlantic Treaty Organization (NATO) and coalition partners are
    conducting a comprehensive yet focused counterinsurgency campaign to
    ensure Afghanistan does not once again become a sanctuary for
    transnational extremists. Our forces are part of a 49-nation
    international coalition, led by the NATO International Security
    Assistance Force (ISAF), and united behind President Karzai's goal of
    transitioning the lead of security tasks from the international
    community to Afghan security forces by the end of 2014. In full
    partnership with the Afghan Government, we are inflicting unprecedented
    damage on al Qaeda (AQ) and associated extremist groups--a reality
    recently affirmed by President Obama's Afghanistan-Pakistan Annual
    Review. Moreover, we confound our enemies by demonstrating our
    unambiguous commitment to our long-term strategic partnership with
    Afghanistan.
        Meanwhile, in Pakistan, we continue supporting Pakistan's military
    efforts against extremists operating from and threatening that country
    and Afghanistan, while contributing to the broader U.S. goal of growing
    our strategic partnership with Islamabad. The recent U.S.-Pakistan
    Strategic Dialogue and a number of development assistance programs
    sponsored by the Department of State are good examples of how the
    United States is attempting to build trust with the Pakistani people
    and government.
        In Iraq, following 7 years of hard fought gains, we are drawing
    down our troops as we transition full security responsibilities to our
    Iraqi partners. The enemy in Iraq is capable of dramatic attacks but
    has proven unable to muster a significant threat to the Iraqi
    Government. In coordination with the U.S. Department of State, CENTCOM
    is standing up the Office of Security Cooperation-Iraq to conduct
    sustained security assistance and cooperation activities with the
    Government of Iraq. We are planning an organization manned and
    positioned to support the long-term U.S. objectives in Iraq as
    determined by the Iraqi and American Governments, in order to best
    advance our civilian-led relationship for the future.
        In the broader CENTCOM region, our forces are conducting a theater-
    wide campaign alongside our partners in pursuit of AQ and its extremist
    allies. Meanwhile, we remain continuously poised and postured to
    respond to crises and to conduct contingency operations, while
    continuing to forge partnerships in the region and increase the
    security capacity of our partners. We continue to rely on our capable
    and flexible amphibious forces. For example, over a 36 hour period last
    September, the 15th Marine Expeditionary Unit delivered aid to the
    flood-ravaged people of Pakistan, provided close air support from the
    skies over Afghanistan, and rescued pirated crews in the Gulf of Aden.
    Three months later, two-thirds of our Marines Expeditionary Unit
    deployed to Afghanistan on 3 day's notice.

                          OVERVIEW OF THE CENTCOM AOR

    Nature of the AOR
        The CENTCOM AOR is comprised of 20 countries spanning over 4
    million square miles in 3 diverse subregions from Egypt and the Levant,
    to the Arabian Peninsula (including the Gulf nations), and Central and
    South Asia. These regions are home to a half-billion people practicing
    all of the world's major religions and speaking more than 18 major
    languages. Several countries with economic challenges have burgeoning
    populations--184 million people in Pakistan, 80 million in Egypt, and
    77 million in Iran. In 12 of the 20 countries in the region, 30 or more
    percent of the population is between the ages of 15 and 24 (at 39
    percent, Yemen ranks at the top in this category). In most of those
    countries, another 30 percent of the overall population is under 15.
    This youth bulge represents tomorrow's future leadership and the
    region's greatest challenge in terms of education, employment and
    expectations.
        The CENTCOM AOR is a region of rich history, distinct culture, and
    great potential, encompassing the proud traditions of a wide variety of
    ethnic groups, including: Arab, Azeri, Baluch, Gilaki, Hazara, Kurd,
    Lur, Mazandarani, Qashqai, Pashtun, Persian, Talysh, Turkmen, and
    Uzbek, among others. The AOR contains more than half of the world's
    proven oil reserves and nearly half of its natural gas. As a result,
    the region contains some of the world's busiest trading routes linking
    Europe, Africa, and East Asia to the Gulf. This trade is essential to
    continued global economic prosperity and growth. The region's trading
    routes contain three of the world's major maritime choke points,
    including the Strait of Hormuz, the Suez Canal, and the Bab al Mandeb
    Strait joining the Red Sea to the Gulf of Aden. But while the region
    contains abundant energy resources, supplies of water and the
    availability of arable land are limited and increasingly scarce.

    External Influences on the CENTCOM AOR
        The region retains its historical tradition as a social, economic,
    and cultural crossroads, attracting nations and non-state actors
    seeking to advance their interests and influence regional events. Among
    a host of external influences on the CENTCOM AOR, the most significant
    include:

             Middle East Peace: Lack of progress in achieving
            comprehensive Middle East peace affects U.S. and CENTCOM
            security interests in the region. It is one of many issues that
            is exploited by our adversaries in the region and is used as a
            recruiting tool for extremist groups. The lack of progress also
            creates friction with regional partners and creates political
            challenges for advancing our interests by marginalizing
            moderate voices in the region. As Secretary Gates noted in July
            2010, ``the lack of progress in the peace process has provided
            political ammunition to our adversaries in the Middle East and
            in the region, and . . . progress in this arena will enable us
            not only to perhaps get others to support the peace process,
            but also support us in our efforts to try and impose effective
            sanctions against Iran.'' In December 2010, Secretary Clinton
            observed ``the conflict between Israel and Palestine and
            between Israel and its Arab neighbors is a source of tension
            and an obstacle to prosperity and opportunity for all of the
            people in the region.'' By contrast, substantive progress on
            Middle East peace would improve CENTCOM's opportunities to work
            with our regional partners and support multilateral security
            efforts. Speaking about the need for Middle East peace at the
            Manama Dialogue in December 2010, King Abdullah of Jordan
            observed ``Our region will not enjoy security and stability
            unless we solve the Palestinian-Israeli conflict, and Arabs and
            Israelis find peace. The stakes are high. As a solution
            continues to elude us, faith in negotiations, as the only path
            to peace and justice, is eroding. If hope is killed, radical
            forces will prevail. The region will sink into more vicious
            warfare and instability . . . threatening security far beyond
            the borders of the Middle East.''
             Bordering Powers. China, Russia, Turkey, and India--
            each of which lie outside but border the CENTCOM region--
            represent four great gravitational forces influencing various
            countries in the AOR. China pursues its many energy-related
            interests throughout the region, extending influence from its
            traditional partnership with Pakistan, to a $3.5 billion
            investment in Afghanistan's Aynak Copper Mine, to building
            pipelines for oil and gas from Kazakhstan to Turkmenistan.
            Chinese activities in the region may begin to compete with the
            regional interests of Russia, which maintains a network of
            security, economic, and social ties with Central Asian nations
            and beyond. India's influence impacts the strategic
            calculations of Pakistan and, to some extent, virtually every
            other country in the CENTCOM AOR. Turkey increasingly asserts
            its interests in the region in keeping with its emergence as a
            considerable force within the international community. All four
            of these nations have unique relations with Iran, affecting the
            international approach to the Iranian situation. We remain
            attentive to these dynamics as we seek to ensure that we work
            effectively across U.S. Government and combatant command seams
            to improve our unity of effort.
             Somalia. State failure in Somalia has enabled
            extremist and criminal elements to proliferate and spread
            northward into the Horn of Africa and Yemen and other areas of
            the CENTCOM AOR. At the same time, widespread poverty in
            Somalia creates incentives for young men to pursue the
            lucrative enterprise of piracy. Additionally, lack of
            governance permits extremists to freely migrate to Yemen,
            providing opportunities to al Qaeda in the Arabian Peninsula
            (AQAP). In the past year, the Somalia-based terrorist group al-
            Shabaab successfully maintained control of most of southern
            Somalia and radicalized factions of this group have sought
            alignment with AQ in the Arabian Peninsula and in Pakistan.

    U.S. Interests in the Region
        Given the centrality and volatility of the CENTCOM AOR, the United
    States and nations around the world retain significant interests in the
    region. Among others, significant U.S. interests in the region include:

             Security of U.S. citizens and the U.S. Homeland
             Regional stability
             Promotion of effective and legitimate governance,
            human rights, the rule of law, and sustained economic growth
            and opportunity, and
             Free flow of commerce and trade within the region,
            through strategic maritime chokepoints, and via land-based
            trade routes to international markets

    Threats to U.S. Interests in the Region
        Violence, instability, and underdevelopment represent the primary
    threats to U.S. interests in the region. Some areas face uneven or even
    dismal economic development, often coupled with endemic corruption.
    Social and economic friction have led to or exacerbated a number of
    deep-rooted and longstanding disputes over territory, resources, and
    power, many of which remain unresolved due to a lack of adequate
    security arrangements on the local or national level. Some areas will
    face increasing competition for food, water, mineral deposits, oil, and
    other natural resources. The region is also defined by tensions and
    sectarian rivalries between many ethnic, tribal, and religious groups.
    Such conditions create the potential for broader violence, particularly
    in the absence of effective governance and indigenous security forces,
    ultimately giving rise to violent extremist organizations that have
    attacked us and our friends. We have seen the dangers present within a
    security vacuum, where institutions fail to facilitate mediation,
    partnership-building, and open dialogue between feuding groups, or to
    put down violent extremists.

    Connecting Our Strategic Challenges
        The challenges of the CENTCOM AOR are inextricably linked and
    mutually reinforcing--and thus cannot be treated separately. We have
    seen a symbiosis, for example, between extremist groups and other
    factions that, in aggregate, tend to strengthen each other and which,
    if left unchecked, tend to threaten wider areas of territory and the
    stability of civilian governments. Areas in the CENTCOM region,
    especially those with a rapidly expanding population of youth, are left
    vulnerable to (and often become the victim of) a worsening spiral of
    conditions, whereby young people forego meager, but legitimate
    opportunities for employment and turn, instead, to a range of criminal
    activities, including piracy, arms smuggling, human trafficking, and
    narcotics--fueling violent extremist organizations bent on destroying
    the lives of innocent people. State and non-state actors operating with
    malign intent can readily exploit such conditions, with the most
    dangerous scenarios involving a mix of insufficient governance, weapons
    proliferation--especially Weapons of Mass Destruction (WMD)--the
    influence of hostile states, and the free flow of extremist elements
    across national borders as well as free range in cyberspace. In some
    cases, disenchantment with globalization's efforts coupled with a
    desire to belong to a movement with a clarion call of purpose can
    provide the excitement for young men (and increasingly women) to take
    on a violent role in an extremist organization.

                                PRINCIPAL TASKS

        In light of these many challenges, we continuously assess our
    strategic and operational approaches in order to achieve our desired
    national interests of security, stability, and prosperity in the
    CENTCOM AOR. CENTCOM is focused on the following tasks:

             Supporting the Mission in Afghanistan
             Partnering with Pakistan
             Countering the Destabilizing Activities of Iran
             Enabling Transition in Iraq
             Strengthening Partnerships in Central Asia
             Building Partner Capacity and Pursuing Cooperative
            Activities
             Disrupting Violent Extremist Organizations
             Combating Weapons of Mass Destruction
             Countering Piracy

    Supporting the Mission in Afghanistan
        Instability in Afghanistan and Pakistan
        Afghanistan and Pakistan are inextricably linked, connected by a
    porous border region historically providing free movement and safe
    haven to groups traversing the Durand Line. The senior leadership of AQ
    and associated extremists groups--groups that are intent on carrying
    out attacks on innocent civilians worldwide--plan, prepare, and direct
    operations from this region, making it of critical interest to the
    security of the United States and our allies. Currently AQ in the
    border region is under the most intense pressure they have experienced
    since 2001.
        A Clear Objective and a Sound Strategy
        With our NATO and coalition partners, we are working to achieve our
    core goal of preventing Afghanistan from once again becoming a
    sanctuary for al Qaeda and associated transnational extremist groups.
    President Obama's Afghanistan-Pakistan Annual Review affirmed the core
    elements of our strategy in Afghanistan, the first imperative of which
    is to improve the overall security environment and to reduce violence
    levels in Afghanistan. After regaining the initiative from the enemy,
    our forces act as a bulwark behind which the Afghan National Security
    Forces (ANSF) and the roots of Afghan governance can grow.
        Aiming Toward a Common Strategic Vision
        Our military objectives and strategy in Afghanistan support the
    developing strategic vision between the political leadership of the
    United States and Afghanistan, as reflected in Vice President Biden's
    comments alongside President Karzai in January: ``It is not our
    intention to govern or to nation-build. As President Karzai often
    points out, this is the responsibility of the Afghan people, and they
    are fully capable of it. We stand ready to help you in that effort. We
    will continue to stand ready to help you in that effort after 2014.''
    Success in Afghanistan is an Afghan security force able to protect the
    people with a government that meets the needs of the people and
    prevents safe haven for international terrorists.
        The Campaign Plan
        We have increased efforts in virtually every facet of the
    comprehensive yet focused civil-military campaign in Afghanistan. As
    one part of that effort, we have executed an unprecedented pace of
    counterterrorist operations to capture or kill insurgents using
    enhanced intelligence largely enabled by conventional ground forces.
    Our efforts range from major combat operations (in Helmand and
    elsewhere, for example), special mission unit operations allowing no
    safe haven to the enemy, and concurrent bottom-up and top-down
    initiatives (exemplified by expanding Village Stability Operations).
        The breadth of our current operations squelches the enemy's ability
    to recuperate and threaten the Afghan people. Our forces have partnered
    with the Afghan security forces to increase their capabilities; to
    expand border security; to conduct robust detainee operations and rule
    of law activities; to address and counter corruption by working with
    the Afghan Government to target criminal patronage networks; and to
    interdict the flow of illegal weapons and narcotics to deny criminals
    and insurgent groups a critical source of their operational revenue. We
    are capitalizing on our expanded security footprint in the winter
    months to retain the initiative, suffocate the enemy, and increase
    momentum into the start of the traditional fighting season. Ultimately,
    we are working to create an Afghanistan that is hostile to our enemies
    and denies them the support of the population, making it untenable for
    insurgents to return from their winter safe havens. This is the essence
    of counterinsurgency operations. While we will face tough fighting this
    spring, the enemy's situation continues to worsen day-by-day.
        The Right Inputs
        The overall international effort in Afghanistan has transformed
    from an economy of force mission 3 years ago to a focused and
    reinforced civil-military counterinsurgency campaign, largely assuming
    its full strength in September 2010. U.S., coalition, and partner
    nations have worked hard to apply the right mix of organizations,
    approach, and resources in Afghanistan. Last year at this time, we had
    less than 270,000 American, coalition and Afghan forces on the ground
    in Afghanistan. This year, we have more than 370,000 total security
    forces (American, coalition and Afghan) in the fight, and 109,000
    Afghan security forces are projected to be added by this time next
    year. Beyond the additional organizations put in place on the ground in
    Afghanistan, the Pentagon's Joint Staff Pakistan Afghanistan
    Coordination Cell and CENTCOM's Afghanistan Pakistan Center of
    Excellence are better organizing our resources at home and providing
    mission-critical reach-back support to deployed forces. The CENTCOM
    Center of Excellence will provide the cadre of regional experts for the
    long haul as we transfer to Afghan lead in 2014 and commit to a long-
    term partnership with Afghanistan and Pakistan.
        Enemy Violence and Coalition Progress
        Despite the enemy's efforts to disrupt progress in Afghanistan, we
    have achieved the major military objectives we set out to accomplish in
    2010 and made considerable progress with respect to governance and
    development. As Secretary Gates noted after his December 2010 trip to
    Afghanistan: ``The bottom line is that in the last 12 months, we have
    come a long way. Frankly, progress--even in the last few months--has
    exceeded my expectations.'' We recognize, however, that progress and
    violence coexist in this type of war. Our enemies continue to conduct
    attacks heavily focused on non-combatants and to intimidate the
    population and maintain relevancy, albeit decreasing, in newly-cleared
    areas. Enemy-initiated violence is increasingly localized. From
    November 2010 until 31 January 2011, 57 percent of the violence in
    Afghanistan has been concentrated in 12 of 401 districts. Notably, the
    key districts of Maiwand in Kandahar Province and Lashkar Gah in
    Helmand Province--which are critical to our efforts to link the Helmand
    and Kandahar security bubbles--are no longer among the top-12 most
    violent districts. The elevated levels of violence is less a reflection
    of increased insurgent capability and more the result of increased
    Afghan and ISAF operations in areas previously considered insurgent
    strongholds. The enemy is not adapting well to this development. While
    we make progress, our enemies continue to make grievous mistakes, to
    include: purposefully killing innocent Afghans; leaders fleeing into
    Pakistan and leaving subordinates to fight; and killing nearly 5,000
    Afghans in the first 10 months of 2010 (more than three quarters of all
    civilian casualties in that period). We highlight the ruthless actions
    of the enemy, and in recent months Afghan leaders and human rights
    groups have stepped forward to condemn insurgent-initiated violence.
        Road to Transition in 2014
        We and our North Atlantic Treaty Organization (NATO) and other
    Coalition and ANSF partners are improving security for the Afghan
    population, increasing the size and quality of the ANSF, and supporting
    efforts to improve governance and development throughout Afghanistan.
    At last November's NATO Summit in Lisbon, we undercut a key pillar of
    the Taliban's strategy by affirming the long-term resolve of the United
    States and international community to accomplish the mission in
    Afghanistan. We are united in support of President Karzai's goal of
    Afghan forces assuming security responsibilities from the international
    community by the end of 2014. In partnership with the Afghan
    Government, we are working toward President Obama's goal of beginning a
    drawdown of U.S. forces from Afghanistan beginning in July of this year
    at a pace determined by conditions on the ground. The process for
    identifying, assessing, and transitioning areas of Afghanistan is based
    on recommendations from the Joint Afghan-NATO Inteqal (Transition)
    Board (JANIB) to the Government of Afghanistan. ISAF is working closely
    with JANIB as we begin the process of transition and methodically move
    forward in our campaign.
        ANSF Support
        Most importantly in the security arena, our investment in the ANSF
    is working and the growth of the force is on track. The remarkable
    quantity growth of ANSF (rising by an unprecedented 70,000 personnel
    while facing a determined enemy) is now being matched by quality
    improvements in the force. NATO Training Mission-Afghanistan is
    supporting the efforts of the Afghan Government to build leaders at all
    levels, to increase literacy, and to improve capability and training
    capacity. Combined, these programs increase the quality of the force,
    ultimately helping to reduce attrition, enhance recruitment, and
    contribute to sustainability. Meanwhile, we are helping the ANSF to
    overcome remaining challenges in the recruitment of medical staff and
    other enablers, as well as increasing the participation of females and
    recruiting more southern Pashtuns. In league with Admiral Stavridis
    (Commander, U.S. European Command and Supreme Allied Commander Europe),
    we are trying to reduce our shortage of trainers.
        ANSF in the Lead
        The ANSF is increasingly in the lead of operations in many areas of
    Afghanistan. In southern Afghanistan, the ANSF took the lead in mid-
    2010 for an operation in Malajat, Kandahar City--with support from ISAF
    for additional combat power, close air support and other enablers--
    resulting in the capture or killing of several dozen insurgents and the
    establishment of a new model for Afghan-led operations. The ANSF also
    provided well over half of the combat power for the latter phases of
    Operation Hamkari, clearing the insurgency's most vital safe havens in
    southern Afghanistan. In northern Afghanistan, Afghan National Army and
    Police conducted joint operations throughout December 2010 with ISAF
    forces in northern Balkh Province, and Afghan National Police have
    demonstrated considerable capacity by capturing insurgents and
    discovering caches of weapons in U.S.-Afghan partnered operations in
    Kunduz Province. Additionally, ANSF now leads security efforts in 14 of
    15 of Kabul's districts, and have executed coordinated security plans
    for several events, including the June Consultative Peace Jirga, the
    July Kabul conference, August Independence Day events and the January
    seating of the Parliament all without incident, at odds with the
    insurgents' claims that it would seek to disrupt them.
        Local Security Initiatives
        Beyond national level security efforts, the Afghan Government has
    steadily expanded the local security initiatives designed to squeeze
    extremist elements from their traditional safe havens and cut off their
    lines of communication. Clearing operations in key terrain districts
    have shifted operational-level momentum and altered village-level
    calculus in remote areas. Local elders in dozens of villages throughout
    Afghanistan have conducted jirgas to assume increased responsibility
    for their own security, and U.S. and coalition forces have supported
    the Ministry of Interior's efforts to fortify Afghan villages. The
    Afghan Local Police (ALP) program represents one of the most promising
    endeavors to wrest local areas from insurgent influence. The ALP and
    other Village Stability Operation initiatives work from the bottom-up
    and the top-down, connecting the support of local communities with the
    capacity of the central government and coalition partnerships. The
    Taliban has revealed their concerns that the ALP represents a direct
    threat to their existence and operational ability. Today, there are a
    total of 63 ALP sites--24 of which the Ministry of Interior has site
    validated--and approximately 4,000 ALP are now assigned. These local
    efforts buttress security in areas with limited ANSF presence,
    complementing the progress made elsewhere (and in ALP locations) by
    conventional ISAF and ANSF. Given the initial success of the ALP
    program, the Ministry of Interior wants to increase the program beyond
    the current projected number of 10,000 with our reinforced special
    operations forces providing oversight and mentoring.
        Popular Support
        Since 2003, AQ and the Taliban have tried with some success to
    expand their strength and influence in much of the country. In 2010,
    coalition and Afghan forces applied additional resources in all aspects
    of the campaign to change the security landscape in much of the
    country. As security improves in key areas and we are better able to
    protect the people, Afghanistan's population has increasingly supported
    efforts to bring development and basic services to their areas. In
    recent months, in particular, Afghan security forces have assumed more
    of the load in the fight, village elders have encouraged young men to
    join the Afghan police, and insurgents in several areas have begun to
    put down their weapons and integrate into society. Reintegration
    efforts are bearing fruit due to the concerted effort of the Afghan
    Government both at the local and national level and the support of
    coalition forces (aided, of course, by the momentum in our campaign).
    In terms of reconciliation, the process is led by Afghans, with ISAF
    partnering with ANSF to set security conditions and dash the enemy's
    hopes of victory. These are progressive steps toward building
    irreversible momentum in our overall campaign.
        Rule of Law Progress
        Unlike our enemies, we continue to support the legitimate efforts
    of the Afghan Government to improve the Rule of Law for Afghanistan's
    more than 29 million inhabitants. U.S. Forces-Afghanistan's Joint Task
    Force/Combined Interagency Task Force 435 and our Afghan partners have
    achieved considerable progress in the last year: transferring detainees
    to the state-of-the-art detention facility in Parwan; implementing
    transparent and robust internment processes; strengthening judicial
    guarantees for detainees; and expanding robust reintegration programs
    that include literacy and vocational training. Moreover, we have
    established robust efforts to combat corruption at all levels, even as
    we implement best practices to reduce the challenge of corruption in
    contracting and in every aspect of our campaign.
        Infrastructure Initiatives
        We are also pursuing infrastructure initiatives--for example,
    building roads, rail, and installing electrical grids and transmission
    lines--to capitalize on Afghanistan's potential as a Central Asian
    economic hub. A regional transport network facilitates the creation of
    private sector jobs and provides additional incentives for reconcilable
    elements of the insurgency to abandon the fight. Ultimately, such
    economic development reduces the need for U.S. forces and underpins
    long-term transition activities and is fundamental to a sound
    counterinsurgency campaign.
        Congressional Support
        Congressional leadership continues to play a critical role in
    enabling our efforts in Afghanistan, including the Afghanistan Security
    Forces Fund (ASFF), the Commander's Emergency Response Program (CERP),
    the authorization of an infrastructure program, and the Afghanistan
    Reintegration Program (ARP). Above all, we rely on the ASFF to enable
    the eventual full transition of security tasks to a robust, trained
    ANSF capable of preventing the resurgence of insurgent safe havens in
    Afghanistan. In terms of the CERP, our Commanders on the ground
    continually comment that the CERP funds are invaluable in carrying out
    operations toward our strategic objectives in Afghanistan, undercutting
    the enemy's information operations and legitimacy. In 2010, CERP funded
    more than 8,300 projects, including, for example, transportation
    initiatives to improve freedom of movement throughout Afghanistan;
    agriculture production across Afghanistan involving the repair and
    improvement of irrigation canals and wells and providing farmers with
    higher-quality seeds and fertilizers; education projects such as the
    services of more than 200 local Afghan education outreach coordinators;
    and water and sanitation projects to install three high-production
    groundwater wells that will increase the accessibility of potable water
    to over 850,000 Afghans in Kandahar City. Apart from CERP, the new
    Afghanistan infrastructure program enables us to work together with the
    U.S. State Department to undertake high-priority infrastructure
    projects to address critical needs for Afghan security, governance, and
    development. The Afghanistan Infrastructure Fund will be the vehicle
    for the Defense Department's contribution to this integrated program.
    To enable our reintegration efforts, we continue to execute the ARP
    using funds in support for the Government of Afghanistan's Peace and
    Reintegration Program.
        Challenges Ahead
        Much work remains to achieve our goals in Afghanistan. We face a
    resilient and determined enemy. The United States and the international
    community are positioned to favorably influence reform and synchronize
    Rule of Law development to counter corruption within the Afghan
    Government. Despite considerable progress in many areas in 2010, we
    recognize that there will be hard work ahead as we continue to fight
    along with our Afghan partners. But, by progressively and steadily
    executing our sound and validated strategy, I believe we can set the
    conditions to succeed in Afghanistan.

    Partnering with Pakistan
        Strategic Partnership
        We recognize, of course, that any solution in Afghanistan must
    address the regional context. CENTCOM supports President Obama's goal
    of strengthening the U.S.-Pakistan strategic partnership through
    nascent yet improving military-to-military cooperation with Pakistan.
    As Secretary Clinton and other leadership has noted, we must
    concentrate on the efforts Pakistan is taking. They have made very
    significant moves for going after the terrorist within their own
    country.
        Over the past year, CENTCOM has strengthened and deepened our
    security cooperation with Pakistan by supporting our counterparts
    through CENTCOM's Office of Defense Representative-Pakistan (ODRP).
    ODRP is focused on assisting Pakistan's counterinsurgency efforts and
    this past year, led the U.S. interagency effort to provide disaster
    relief and Humanitarian Assistance to areas affected by the flooding.
    Additionally, in support of our long-term partnership with Pakistan,
    the CENTCOM Center of Excellence continues to deploy subject matter
    experts and provide unique reach-back support to ODRP and Special
    Operations Command-Pakistan (Forward) in order to deepen analysis and
    to provide greater interagency fidelity on critical issues.
        Threats in Pakistan
        The potential for instability in Pakistan and the free movement of
    extremists in the Afghanistan-Pakistan border region continue to pose a
    serious threat to regional and global security. Pakistan's tribal areas
    remain the principal sanctuary for al Qaeda and a safe haven for other
    extremist groups, enabling them to threaten the population and
    coalition forces in Afghanistan, the people and government in Pakistan,
    and U.S. and Western interests globally. The Afghanistan-Pakistan
    region also faces significant humanitarian concerns, including refugees
    and Internally Displaced Persons (IDPs) from decades of conflict.
    Additionally, roughly three million Afghan refugees still live in
    Pakistan, having been displaced by the Russian invasion into
    Afghanistan 30 years ago.
        U.S. Humanitarian Assistance
        Last summer's historic flooding in Pakistan was devastating--
    effectively equivalent in scope to flooding the entire East Coast of
    the United States. The United States responded to the floods by
    providing historic levels of Humanitarian Assistance. In all, U.S.
    rotary and fixed wing aircraft transported more than 40,000 displaced
    persons and delivered more than 26 million pounds of aid supplies to
    the people of Pakistan. U.S. helicopters flew more than 5,000 flight
    hours during the relief operation. The U.S. Government provided Zodiac
    boat kits to the Pakistan Military for use in rescue operations, and
    provided eight 50 meter bridges to replace bridges swept away by the
    floods.
        U.S. Support to Pakistan Military
        On the security front, continued U.S. assistance is critical to
    enabling Pakistan to conduct effective counterinsurgency operations.
    Our forces carry out important partnership and engagement activities in
    support of the Pakistan military's improving counterinsurgency
    capabilities. As one important example, ODRP supports Pakistan's
    Frontier Scouts by providing training support and enabling further
    counterinsurgency operations. U.S. personnel also assist in the
    procurement of materials and equipment needed to build infrastructure
    in support of education, power, and food.
        Pakistan Operations and Sacrifice
        Pakistan's military has made impressive strides in combating
    militants in the FATA, while dealing with the effects of large-scale
    flooding that devastated much of the country. Over the last year, the
    enemy has lost battlespace to the Pakistan military's sustained efforts
    to move against the enemy strongholds. Pakistan's military has suffered
    more than 2,500 casualties (enduring more than 500 personnel killed in
    action and more than 2,000 wounded in action) since the start of
    offensive operations against extremist elements in the Khyber
    Pashtunkhwa and the FATA. Since June 2009, the Pakistan Military has
    been involved in nearly continuous operations against militants in the
    Khyber Pashtunkhwa and the FATA. In total, the Pakistan Military has
    deployed upwards of 140,000 troops along Pakistan's western border with
    Afghanistan, a significant portion of which were drawn from Pakistan's
    border with India.
        Regional Context
        Our efforts to support Pakistan fit well within the broader
    regional context. We recognize that Pakistan's longstanding tensions
    with India are an important part of Pakistan's strategic decisionmaking
    calculus and military force posture. However, the presence of extremist
    sanctuaries in Pakistan significantly impacts our progress in
    Afghanistan, and with the Pakistan military's help we are taking
    important steps to improve cross-border operations. To address existing
    challenges along the Afghanistan-Pakistan border, coordination between
    ISAF, Afghan security forces, and the Pakistan Military continues to
    improve, especially in the area of Intelligence, Surveillance and
    Reconnaissance (ISR). In Regional Command East, we are planning
    coordinated operations with the Pakistan Military. The Pakistan
    Military recently began clearing insurgent safe havens in Mohmand
    Agency across the border from Kunar Province--where insurgents have
    initiated a number of attacks to undermine recent security gains in
    Afghanistan. While Pakistan's operations are acting as the ``hammer''
    on their side of the border, combined Afghan and ISAF forces are poised
    to defeat displaced insurgents, acting as the ``anvil.'' Afghan Border
    Police and other combined security forces are manning outposts along
    the border and armed drones and close combat aviation are monitoring
    previously-identified mountain passes that insurgents will likely use
    as they seek sanctuary in Afghanistan.
        Congressional Support
        Multi-year security assistance is critical to our efforts in
    Pakistan. We appreciate continued congressional support for the
    Pakistan Counterinsurgency Capabilities Fund, which serves as a key
    enabler of the Pakistan's military operations against extremists. The
    fund also provides for a range of partnership activities with
    potentially transformational long-term effects on our relationship with
    Pakistan if they can be sustained.

    Countering Iran's Destabilizing Activities
        Iran's Destabilizing Activities
        In view of Iran's destabilizing behavior and its persistent pursuit
    of a nuclear weapons capability, the Iranian regime's current stance
    represents the greatest long-term threat to the region. Iran continues
    to rebuff efforts for engagement, further alienating and isolating
    itself from much of the rest of the region and from much of the
    international community. The actions of Iran's leadership squander the
    potential of its own educated populace and sacrifice the free exchange
    of ideas for the short-sighted interest of preserving an increasingly
    harsh and oppressive regime. Recently, Tehran equated the Egyptian
    protests to the 1979 Islamic Revolution in Iran, making a fanciful and
    wholly false connection.
        The Iranian regime relies on the Islamic Revolutionary Guard Corps-
    Qods Force (IRGC-QF) to extend influence and create instability across
    the region through persuasion, coercion, aggression, and targeted
    messaging. In fact, Iran continues to fund, arm, train, and equip a
    network of agents, surrogates, and proxies in Iraq, Lebanon, Syria,
    Gaza, Afghanistan and elsewhere across the region. In the pivotal
    region of the Levant, Iran seeks to expand its influence, in part by
    enabling Lebanese Hezbollah and Hamas in order to weaken legitimate
    governance, limit economic development, and undermine security
    partnerships. Additionally, Iran delivers weapons and provides military
    training to surrogates in an effort to target Israel (a nation Iran's
    leadership have vowed to destroy) and undercut the Middle East Peace
    Process. Of urgent concern, the IRGC-QF continues to equip militants in
    Iraq and Afghanistan that attack U.S. and coalition forces and
    undermine stability and governance in each of these countries. The
    recent January 2011 large caliber Improvised Rocket Assisted Mortar
    (IRAM) attack against U.S. forces in Iraq demonstrated Iran's malicious
    intent, and ability to escalate violence when they desire.
        Iran's Pursuit of Nuclear and Ballistic Missile Weapons
        In spite of a fourth round of United Nations sponsored sanctions,
    Iran appears determined to mature its nuclear weapons program--an
    ambition that could lead to the proliferation of illicit nuclear
    materials and spark a nuclear arms race in the region. Admiral Mullen
    reinforced this point in December 2010, observing: ``I see Iran
    continuing on this path to develop nuclear weapons, and I believe that
    developing and achieving that goal would be very destabilizing to the
    region.'' Iran also continues to expand and improve its arsenal of over
    2,200 ballistic missiles and long-range rockets, and of approximately
    225 fixed and mobile launchers, making it the largest ballistic missile
    and long-range rocket force in the Middle East. Iran can use these
    ballistic missiles and rockets, combined with increasing naval
    capabilities, to threaten global commerce.
        Countering Destabilizing Iranian Activities and Keeping Peace with
            our Partners
        Firmly nested within the broader approach of the U. S. Government
    toward Iran, CENTCOM is committed to countering Iran's destabilizing
    and coercive activities by building confidence with our partners in the
    region. As one example, we are working together with our Gulf
    Cooperation Council partners and other nations to advance Integrated
    Air and Missile Defense. We also conduct activities to reassure our
    friends in the region that we are with them, preclude conflict, and
    deter Iran's destabilizing activities, while at the same time standing
    ready to conduct contingency operations.

    Enabling Transition in Iraq
        Looking Ahead in Iraq
        The year ahead in Iraq presents a significant opportunity for the
    United States to solidify our long-term support to this keystone of
    regional stability. Our continued investment in Iraq is critical at
    this juncture, especially given the significant commitment we have made
    in lives and treasure. Now is not the time to be penny wise and pound
    foolish with respect to our mission in Iraq. Nested firmly inside the
    State Department's vision for an enduring U.S.-Iraq strategic
    partnership, CENTCOM is setting conditions to build on the shared
    sacrifices between our countries.
        The Situation in Iraq
        Iraq faces lingering ethnic and sectarian mistrust, tensions
    between political parties, and strained governmental capacity to
    provide basic services. Al Qaeda in Iraq (AQI) remains committed to
    undermining the Iraqi Government and is capable of carrying out
    orchestrated, high profile attacks. Likewise, Iranian-inspired and
    equipped proxies continue to be a threat to Iraqi security and
    governance. While the security situation in Iraq is vastly improved
    since the peak of sectarian violence there in mid-2007 (violence is
    currently at all-time lowest levels since 2003), Iraq continues to face
    significant political, economic, and security challenges. Over the
    coming year, several factors will determine Iraq's strategic direction,
    including the continuing development of Iraqi Security Forces (ISF),
    the effectiveness of the nascent governing coalition, and the degree to
    which the country is influenced by Iran and threatened by AQI and Shi'a
    militia elements.
        U.S. Forces-Iraq
        From now until the end of this year, U.S. Forces-Iraq (USF-I) is
    continuing to partner with ISF during this historic period of
    transition. USF-I is undertaking a range of activities, foremost among
    these strengthening the ISF, transitioning security-related activities
    to Iraq and the U.S. interagency, and contributing to border management
    and ministerial development.
        Establishing the Office of Security Cooperation-Iraq
        Through USF-I and in partnership with the Embassy country team, we
    are planning the initial stand-up of the Office of Security
    Cooperation-Iraq (OSC-I) in June of this year and expect it to be fully
    operational by this October. OSC-I is the cornerstone of our long-term
    mission to build partner capacity with the ISF. Additionally, the OSC-I
    will ensure the continuation of the military-to-military relationships
    that advise, train, and assist Iraqi Security Forces.
        Iraq's Regional Integration: Iraq is now at a crossroads, poised to
    emerge as a positive force for the region after posing security
    challenges for its neighbors in past decades. Baghdad's selection as
    the location to host the Arab League Summit is a significant testament
    to Iraq's re-emergence in the region. Iraq also accepted Egypt's
    invitation to participate as an observer in CENTCOM's largest exercise,
    Bright Star. Jordan has also exerted considerable positive influence in
    Iraq, training over 1,500 Iraqi Army officers, a number of Iraqi Air
    Force pilots, and posting a Jordanian defense attache in Baghdad, in
    addition to hosting a program to provide extensive training to Iraqi
    police. Additionally, Jordan, Saudi Arabia, and Kuwait have aided the
    economic reintegration of Iraq into commercial activity and regularly
    scheduled transportation networks. Finally, the United Arab Emirates
    have trained Iraqi police officers in a joint program with Japan and
    Germany.
        Iraq's constructive integration into the region will also help
    blunt destabilizing Iranian influence. If left vulnerable to Tehran's
    meddling, Iraq's sovereign future would be imperiled. At the same time
    that Iran reconstructs shrines, provides electrical power, and
    constructs schools and clinics in Iraq, Iran also undermines Iraqi
    political processes, facilitates violence against innocent Iraqi
    civilians, and provides lethal support to extremist groups targeting
    U.S. forces. For the United States and the international community, a
    sovereign Iraq under a stable and inclusive government is fundamental
    to regional stability.
        Congressional Support
        The support of Congress is critical to facilitating an effective
    transition in Iraq and in setting the conditions for an enduring U.S.-
    Iraq partnership. We seek congressional support in obtaining the
    appropriate authorities in fiscal year 2011 to begin immediate facility
    and site work for the OSC-I to reach full operating capability by
    October 2011. This is an area of critical need as we work to meet our
    aggressive timelines. The Iraqi Security Forces Fund (ISFF) critically
    enables Iraq to set a foundation for its internal and external defense
    capabilities and provides Iraqi Minister of Interior police forces the
    training and equipment necessary to maintain internal security without
    assistance from the Ministry of Defense. Additionally, the ISFF enables
    Iraqi Army counterinsurgency capabilities and enhances cooperation
    between the government of Iraq and Kurdish police forces to ensure the
    consistency of police training and equipment standards throughout Iraq.

    Strengthening Central Asian Partnerships
        In Central Asia, CENTCOM is committed to strengthening
    relationships based on those shared interests and goals that we have in
    common with the Central Asian States of Kazakhstan, Kyrgyzstan,
    Tajikistan, Turkmenistan, and Uzbekistan. While our nations seek to
    improve broader economic conditions, CENTCOM is working with our
    partners to address the migration of extremists in certain areas of
    Central Asia and to counter the trade of illicit narcotics and human
    trafficking. Often these activities are interrelated.
        Northern Distribution Network: Over the past 2 years, the
    development of a robust transportation network has been the most
    expansive area of cooperation with our Central Asian partners. Our
    collective agreements with Kyrgyzstan, Kazakhstan, Uzbekistan, and
    Tajikistan together constitute a logistical system termed the Northern
    Distribution Network (NDN) used to supply coalition operations in
    Afghanistan and taking pressure off the Pakistan lines of supply. This
    diverse network supports the transit of about half of all sustainment
    cargo to Afghanistan using a variety of sea, air, and land routes. The
    remaining supplies are flown directly into Afghanistan, trans-shipped
    from sealift to airlift, or arrive via surface routes through Pakistan.
    Ultimately, the development and expansion of the NDN and its associated
    infrastructure will facilitate long-term economic growth in the region,
    representing a new opportunity for export of Central and South Asia raw
    materials and exchange of goods in the international marketplace.
        Enhancing the Northern Distribution Network
        Future NDN efforts are centered on partnering with certain
    countries to permit two-way flow of all types of wheeled vehicles and
    associated repair parts, and to increase shipment of cargo already
    permitted on the NDN (such as building materials). In terms of airlift,
    Manas Transit Center in Kyrgyzstan is a key Central Asian location that
    supports aerial refueling and passenger transit missions.

    Building Partner Capacity and Pursuing Cooperative Activities
        Cooperation Based on Shared Interests
        The investment we make in our military-to-military engagement to
    build the capabilities of our partner nation security forces is a
    critical component of the whole-of-government efforts in the region.
    These cost-effective efforts properly place security responsibilities
    in the hands of other sovereign governments and help to prevent
    conflicts and instability. With a long-term perspective, CENTCOM
    carries out partnership activities designed to build strong security
    capacity and relationships with our friends in the region.
        Training
        CENTCOM's training and exchanges with our partners are critical to
    our regional cooperation. CENTCOM has spearheaded the establishment of
    several Training Centers of Excellence hosted in partner nations,
    providing world-class mission-specific training for our allies and
    partners. Existing Centers of Excellence include an Air Warfare Center
    and an Integrated Air and Missile Defense Center in the United Arab
    Emirates (UAE); the King Abdullah Special Operations Training Center in
    Jordan; a NATO Partnership for Peace Combat Engineering and INTERPOL
    Counter Narcotics Center hosted in Kazakhstan; and an extensive array
    of associations with the other countries' Professional Military
    Education programs. Developing Centers include a U.S. Naval Forces
    Central Command (NAVCENT) Maritime Center hosted in Bahrain; a new
    Explosives Ordinance Disposal school with future Center of Excellence
    in Saudi Arabia; a proposed Near East South Asia (NESA) branch Center
    of Excellence in Bahrain; and the Gulf Region Communications, Computer,
    Command, and Control (C4) Center of Excellence hosted by the Bahraini
    Minister of Communications.
        Exchanges
        CENTCOM manages and conducts focused engagement programs with
    specific partner nations located throughout the AOR in support of the
    CENTCOM Theater Security Cooperation Plan. The objective is to
    understand our friend's views and to strengthen relationships and
    regional organizations to defeat violent extremist networks or
    situations that threaten the security interests of the region and the
    United States. This includes capacity building. Additionally, CENTCOM
    Headquarters in Tampa, FL is host to over 193 coalition partners from
    58 allied nations who make significant contributions to our efforts,
    and receive invaluable experience interacting with both U.S. forces and
    our allies.
        Equipping
        We also provide equipment and security assistance to our regional
    partners. These activities are among the most important practical steps
    we can take to demonstrate CENTCOM's enduring commitment to our
    partners--and to enable interoperable forces in the fight. I ask for
    continued congressional support of these efforts, including Global
    Train and Equip, as well as the many security assistance programs
    managed by the Department of State, including Foreign Military
    Financing, Foreign Military Sales, and International Military Education
    and Training Program. As Admiral Mullen noted in his testimony, our
    security assistance authorities are inflexible, and process are too
    cumbersome to effectively address today's security challenges in a
    timely manner. We encourage ongoing efforts to streamline the Foreign
    Military Financing process in order to cement training and sustainment
    relations with our critical partners. Accomplishing our mission at
    CENTCOM requires that we demonstrate our responsiveness to the requests
    of our partners when we alone should not carry the increasing costs of
    defending the international order.
        Exercises
        The final pillar of CENTCOM's partnership activities is our
    military exercise program. Exercises bolster interoperability between
    our forces and those of our partners. Each year, our component commands
    conducts more than 50 exercises with our partner nations in the region,
    including 5 overseen by CENTCOM component commands.
        The Long-Term Value of our Exercise Program
        The Combatant Commanders Exercise and Engagement program provides
    critical support to CENTCOM joint training support, exercise and
    engagement requirements in support of national-level strategic
    priorities, readiness, and building partnerships within the AOR. Since
    the beginning of our operations in Afghanistan in 2001, CENTCOM has
    seen reductions in our exercise program due to ongoing combat
    operations within the AOR. As combat operations are completed or
    reduced, restoring sufficient funding levels is critical to support
    engagement activities with our partners. Without restored funding
    levels, CENTCOM could lose the advantages gained from a robust exercise
    engagement program, affecting future access and presence within the AOR
    and our Theater Security Cooperation Plan. In the interim, we will work
    imaginatively to make the best use of our exercise budget.

    Disrupting Violent Extremist Organizations across the Region
        Terrorists in False Religious Garb
        The CENTCOM AOR is home to numerous Violent Extremist Organizations
    (VEO) comprising a network that, in its own right, represents a
    considerable threat to the U.S. Homeland, U.S. and Western interests,
    and our allies in the region. The most significant of these is AQ. AQ
    seeks to impose its morally bankrupt ideology worldwide, and has
    regional affiliates across the Arabian Peninsula, in Iraq, the Maghreb,
    and in Somalia (al-Shabaab), with associates including Tehrik-e Taliban
    Pakistan (TTP), the Afghanistan Taliban, and Lashkar-e-Tayyiba (LeT).
    The growing cross-organizational cooperation between VEOs replicates
    mafia syndicates. The organizational success of VEOs is frequently
    abetted by operating with near impunity in cyberspace.
        Attacking VEOs
        Along with our interagency and regional partners, CENTCOM continues
    to develop and implement theater-wide responses in the cyber and
    physical domains to disrupt and degrade militant networks. Over the
    past year, interagency efforts have resulted in designating al Qaeda in
    the Arabian Peninsula (AQAP) and TTP as foreign terrorist
    organizations, obtaining a number of Treasury designations, Justice
    Department arrest warrants, Interpol notices, and placing over 100
    individuals and entities on the U.S. Department of Commerce Denial
    List. Thanks to Congressional funding, the Defense Department Rewards
    Program has been used by commanders in Iraq and Afghanistan in fiscal
    year 2010 to capture more than 700 high-value individuals, insurgents
    and terrorists.
        Preventing Security Vacuums
        In the long-term, CENTCOM is working as a part of an integrated
    civil-military effort to prevent security vacuums that foment extremism
    and provide sanctuary to VEOs.
        In Yemen, we have forged a tight bond between CENTCOM and our
    Embassy team in Sana'a to address the heightened threat of AQAP through
    long-term counterterrorism capacity-building. AQAP cemented its role as
    a viable and enduring threat to the U.S. Homeland by following-up the
    failed attempt to bomb Northwest Airlines flight 253 on 25 December
    2009 with the ``printer cartridge'' parcel bomb plot in late October
    2010. Radical cleric Anwar al-Aulaqi publicly spearheads AQAP's
    campaign against the West, most notably by creating Inspire magazine in
    an effort to encourage Western-based Muslims and enable ``lone wolf''
    style attacks.
        In Lebanon, the Lebanese Armed Forces (LAF) has had to navigate a
    challenging environment in which it does not yet have the monopoly of
    violence in much of the country. Our assistance has had substantive
    impact on the ground to include helping the LAF deploy four brigades to
    the south since 2006 in support of United Nations Security Council
    Resolution (UNSCR) 1701--taking up space where Hezbollah had been.
    Additionally we have increased the capacity of the LAF Special
    Operations Forces that won a hard fought battle in 2007 against the al
    Qaeda affiliated Fatah al-Islam movement in the Nahr al-Bared
    Palestinian refugee camp in Northern Lebanon. The LAF sustained almost
    200 killed and 2,000 wounded in this operation. We value our close
    relationship with the LAF officer corps based on mutual respect and
    confidence. We continue to monitor the government formation process in
    Lebanon and will need to examine the final composition, policies, and
    behaviors of the next government before making any decisions regarding
    our relationship, including security assistance, while recognizing that
    continued engagement with the LAF is an important step in securing its
    status as an apolitical, non-sectarian, and professional organization.
        In Syria, the regime's continuing support for terrorist
    organizations prevents CENTCOM from developing a military-to-military
    relationship and limits the scope of U.S. engagement. Consequently, we
    view the recent return of a U.S. Ambassador to Damascus as a vital
    piece of our regional security architecture. We stand ready to support
    Ambassador Ford's diplomatic efforts to produce a more constructive
    relationship with Syria however we can, and we urge the Senate to
    confirm his nomination so that he may continue his important work
    beyond 2011.
        Across the region, Theater Security Cooperation activities work
    against the ability of Iran and extremist elements to destabilize the
    region. Absent these programs, there is an increasing potential for
    security vacuums to arise and open the door to greater influence from
    Iran or violent actors. Our cooperative efforts with regional partners
    are essential to the long-term effort to address these threats.
        Countering the Enemy's Use of the Information Environment
        Our enemies are using every available lever of the information
    environment to promulgate and reinforce their ideology--and, in league
    with our interagency partners, CENTCOM is committed to countering the
    efforts of our adversaries. Our enemies operate within cyberspace (and
    its associated relevant physical infrastructure) to plan, coordinate,
    recruit, train, equip, execute and garner support for operations
    against the United States, its allies, and interests. The recruitment
    of Umar Farouk Abdullmutallab, the unsuccessful Christmas Day Bomber,
    demonstrates our adversaries' ability to reach across borders, promote
    their narrative, and defy traditional military constructs to achieve
    their objectives. Clearly, in the information age, our military must
    adapt to this new domain of warfare. We ask for the support of Congress
    to fund our programs that attempt to counter the enemy in the
    information domain, just as we need funding to disrupt violent
    extremists in the physical domain.
        CENTCOM Activities in the Information Environment
        Consistent with the guidance provided by Secretary Gates last
    December, we conduct Operation Earnest Voice (OEV), which synchronizes
    and oversees all of our Information Operations activities. OEV seeks to
    disrupt recruitment and training of suicide bombers; deny safe havens
    for our adversaries; and counter extremist ideology and propaganda.
    Full funding of OEV supports all activities associated with degrading
    the enemy narrative, including web engagement and web-based product
    distribution capabilities. The effective engagement of our enemies in
    cyberspace requires the ability for us to conduct a full-spectrum of
    traditional military activities against them in that domain, including
    all aspects of Information Operations and Strategic Communication. We
    coordinate with the Joint Staff, the Interagency, the Intelligence
    Community, and our coalition partners to examine the adversary's use of
    cyberspace and identify techniques, tactics and procedures we can use
    to counter the adversary in the cyber domain.

    Combating Weapons of Mass Destruction
        Risk of Weapons of Mass Destruction
        At CENTCOM, we recognize the serious risk and potentially
    devastating ramifications of a terrorist group, violent extremist
    organization, or state actor acquiring, proliferating, or using Weapons
    of Mass Destruction (WMD). The nexus between extremist groups, malign
    state actors, and WMD remains a critical concern throughout the AOR and
    presents a clear danger to our partners, allies, and the U.S. Homeland.
    CENTCOM remains vigilant in executing the nonproliferation, counter
    proliferation, and foreign consequence management pillars of America's
    National Strategy for Combating WMD.
        Countering Proliferation and Combating Weapons of Mass Destruction
        Countering the proliferation of WMD-related material is a
    fundamental aspect of CENTCOM's overall efforts to combat WMD. In
    concert with our regional partners, CENTCOM is involved with the
    interagency effort to curtail the ability of adversaries to finance the
    acquisition of WMD-related items and to deny malign actors the ability
    to transport suspect dual-use materials across national borders. To
    this end, CENTCOM plays a key role in containing Iran's evident drive
    for nuclear weapons in violation of the Nuclear Non Proliferation
    Treaty by actively enforcing United Nations Security Council
    Resolutions that sanction the Iranian regime. CENTCOM also supports the
    interdiction and counter proliferation framework under the
    Proliferation Security Initiative (PSI). CENTCOM's mainstay program for
    Combating WMD engagement is the Cooperative Defense Program (CDP). The
    CDP provides a series of bilateral and multilateral engagement
    activities to improve U.S. and partner nation interoperability while
    strengthening partner nations' combating WMD capabilities.

    Countering Piracy
        The Real and Growing Threat of Piracy
        Somali-based pirates continue to prey upon international shipping
    in the Gulf of Aden, Red Sea, and on the high seas well into the Indian
    Ocean. Pirates are using previously captured vessels as mother ships to
    conduct successful attacks as far as 1,400 nautical miles from the
    Somali coast. The number of successful pirate attacks has risen from 42
    in 2008, to 51 in 2009, to 68 in 2010. Pirates now hold nearly 700
    hostages for ransom. Multi-million dollar per ship ransoms ensure
    piracy remains lucrative for pirates and others involved in this
    criminal enterprise.
        A Model for International Cooperation
        CENTCOM works with international partners to help patrol the region
    and to work with interagency partners to gain the prosecution of
    captured pirates (though we currently lack an international legal
    framework to detain and prosecute pirates). Piracy is a threat to all,
    and has promoted international military cooperation that serves as a
    model for cooperation in other areas. We acknowledge, however, that
    military action is only one part of the solution, but an essential
    element nonetheless. NAVCENT coordinates the efforts of over 25
    contributing nations to combat piracy at sea and coordinates with
    European Union (EU) Task Force Atalanta and NATO Standing Naval
    Maritime Group in Operation Ocean Shield. Pakistan is currently in
    command of Combined Task Force 151, the international coalition to
    combat piracy. NAVCENT also hosts a monthly Shared Awareness and De-
    confliction (SHADE) conference in Bahrain to foster multi-national
    cooperation and to encourage maritime industry to adopt best practices
    to defend vessels against piracy. In addition to Coalition, NATO, and
    EU representation, the conferences also include civilian maritime
    organizations, and delegates from China, Russia, Japan, and India.

                               STRATEGIC APPROACH

        Many of our challenges are interconnected and require comprehensive
    long-term solutions, prompting us to adopt an overall approach that is
    cooperative, integrated, and enduring. As we undertake a diverse range
    of operations and activities, three principles guide our efforts:
        Adopting Cooperative Approaches by Partnering Based on Shared
            Interests
        First, we must adopt cooperative approaches to solving shared
    challenges. America's strength and security depends on our ability to
    help our friends in the region defend themselves, underscoring the
    importance of CENTCOM's initiatives to build partner capacity and
    pursue bilateral and multilateral initiatives. Starting from our shared
    interests, we must capitalize on the comparative advantages of all
    participating nations--for instance, by taking advantage of unique
    geography or specialized capability. Ideally, such efforts would
    combine the political, economic, and security spheres of those who
    choose to participate, strengthening the whole to be greater than the
    sum of the parts. Our efforts to develop effective solutions for
    Integrated Air and Missile Defense in the Gulf Region represent a
    significant example of the kind of cooperative efforts that are
    necessary to deter and defeat our common threats. As mentioned above,
    the international coalition to counter piracy in the Somali Basin is a
    model for multilateral cooperation in the region that not only
    addresses piracy but also offers opportunities for engagement in other
    areas.
        Our ability to cooperate with our partners depends to a great
    extent on trust. As a consequence of the confidential diplomatic and
    military reporting made public by Wikileaks, we must patiently
    strengthen trust with our partners over time. We are up front with our
    partners about this episode--which has informed our enemies about
    supportive leaders as well as our tactics, techniques, and procedures.
    We remain committed, as ever, to forthright communication in pursuit of
    our shared objectives. We are reinforcing our efforts to ensure the
    security of our communications and focusing on enhancing mutually
    reinforcing objectives with allies and partners.
        Integrating Our Efforts by Implementing Civil-Military Solutions
        Second, the wars we are fighting today require intensively
    integrated, comprehensive approaches from the highest to the lowest
    levels, embracing diplomatic, information, military and economics in an
    interwoven effort that builds synergy. Promoting security and stability
    in the CENTCOM AOR cannot be achieved through military means alone. We
    must therefore look beyond just the traditional application of military
    power and integrate all elements of national power to address our many
    challenges. CENTCOM's experience has shown that military might alone is
    not sufficient to deal with the challenges we confront along with our
    partners. Diplomacy and Development are just as vital as Defense in
    securing our national interests. CENTCOM support efforts to address the
    underlying conditions of instability that fuel current conflicts.
    Successful application of these instruments of national power, in turn,
    depends on our ability to achieve harmony within our civil-military
    relationships. As such, it is a security concern for us when diplomatic
    posts go unfilled in the region.
        The overlapping forces at work in the CENTCOM AOR--those
    originating from within and outside the region--require exceptional
    cross-combatant command cooperation and coordination. We have achieved
    progress across AOR geographic seams, exemplified by cooperation with
    PACOM on matters dealing with China and India and cooperation with
    European Command on Russia, Turkey, and the Middle East Peace Process.
    CENTCOM, and PACOM regularly synchronize efforts to combat mutual
    challenges such as piracy, proliferation of WMD, and support to
    countering VEOs. Additionally, we continue to work closely with U.S.
    Africa Command to address the state-failure in Somalia, as well as
    share critical assets to meet time-critical force requirements.
    Together we have established a counter-piracy Joint Operating Area in
    the Somali Basin. We team with U.S. Cyber Command to support global
    relationships in cyberspace and U.S. Northern Command to protect U.S.
    borders and domestic security. In all, the cross-combatant command
    effort is going very well.
        Supporting Enduring Solutions by Demonstrating Long-term Commitment
        Finally, our approach to the region must be enduring. Following
    through with our long-term commitments in the AOR improves the depth,
    breadth and quality of our relationships in the region and increases
    the likelihood of cooperation at the outset. In this region of the
    world, we are judged by our actions, not words. Individual instances of
    demonstrated trustworthiness on our part resonate throughout the region
    for decades. Enduring solutions to the problems that we face also
    depend on stability, steady economic growth and development in
    governance. To that end, CENTCOM supports our partners' long-term
    efforts to grow economically and to develop effective and legitimate
    institutions of government.

                              RESOURCING THE FIGHT

        Beyond the critical funding authorities highlighted above,
    accomplishing our mission requires that we fully and efficiently
    resource the following critical enablers. We appreciate Congressional
    support to provide our warfighters on the battlefront with the tools
    they need to accomplish their challenging missions. As we adapt to a
    thinking adversary, we recognize the need to accelerate our acquisition
    processes to enable us to out-maneuver our enemies. We also recognize
    the obligation to be good stewards of our nation's monetary resources.
    CENTCOM has established stringent control mechanisms to execute our
    fiscal authorities and to apply the most effective oversight possible
    of all of our programs.
    Intelligence, Surveillance, and Reconnaissance
        An Indispensable Tool
        There is a considerable and justifiable appetite for ISR
    capabilities in the CENTCOM AOR. In Afghanistan, persistent ISR
    capabilities represent one of the most important and effective force
    multipliers and contribute directly to protecting our troops from the
    threat of improvised explosive devices through ISR. In cooperation with
    the ISR Task Force, we have augmented ISAF forces with a greatly
    increased capability to counter the Taliban and understand the
    environment in which we operate. Additionally, as we drawdown our
    forces from Iraq, we are adjusting the apportionment of ISR in a
    measured way to ensure that we retain adequate capability to support
    our force in Iraq while we provide the necessary resources to
    Afghanistan and elsewhere. We continue to refine our ability to fully
    integrate U.S. and coalition ISR to deny transnational extremist
    organizations safe haven, training bases, or staging areas to conduct
    attacks.
        Enhancing ISR Capabilities
        We greatly appreciate the support of Congress and the Under
    Secretary of Defense for Acquisitions and Technology in meeting the
    ongoing demand for more rapidly delivered ISR collection, exploitation,
    and dissemination capabilities. Interrelated with our ISR needs, we
    recognize a need to further enhance integration and synergy between
    aviation and ground elements that is critical to Combat Air Support and
    counterinsurgency doctrine. We support a limited objective experiment
    to refine the requirement for a manned, armed ISR asset attuned to the
    unique challenges of counterinsurgency in Afghanistan. Continued
    investments in ISR technology, infrastructure, architecture, tools, and
    personnel (particularly trained ISR managers) help us to build on the
    significant gains we have achieved in the CENTCOM AOR--and enable us to
    use the arsenal of ISR capabilities currently in the field.
        Critical Intelligence Capabilities
        Human intelligence and counterintelligence are just as important as
    technical solutions to remotely gather intelligence, especially in the
    conduct of operations in wars among the people. Such intelligence
    activities are inherently government functions that require a long lead
    time to develop. CENTCOM is posturing for sustained application of our
    human intelligence capabilities to afford us insights into adversary
    plans and intentions. CENTCOM is posturing for sustained application of
    our human intelligence capabilities to afford us insights into
    adversary plans and intentions. We are also reshaping our
    counterintelligence forces to face threats from hostile foreign
    intelligence services and VEOs that employ sophisticated cyber
    techniques and trusted insiders to penetrate our networks and
    compromise our operations.

    Improving Force Protection and Countering Improvised Explosive Devices
        The Enemy's Weapon of Choice
        Now and for the foreseeable future, the enemy is using Improvised
    Explosive Devices (IED) to kill and maim our troops. These devices
    remain the greatest risk facing U.S. and coalition forces deployed to
    Afghanistan and Iraq, as well as a threat to U.S. interests and
    regional stability throughout the CENTCOM AOR. In Afghanistan, IED
    attacks account for more than 60 percent of the U.S. and coalition
    force casualties, though IED casualties have steadily decreased over
    the past 6 months. The flow of lethal aid, migration of IED technology
    and materials, and development of new tactics techniques and procedures
    represents a global threat. Homemade explosives, which now account for
    an estimated 85 percent of all IEDs, coupled with the proliferation of
    commercially available IED materials and commercial grade explosives
    make them relatively cheap and easy to build and employ.
        Ongoing Interagency C-IED Efforts
        CENTCOM counters the threat of IEDs by working together with all
    Services and the Joint IED Defeat Organization (JIEDDO). The Services
    continue to equip U.S. and coalition forces with the latest technology
    to mitigate and defeat IEDs. Thanks to Congress and the Department of
    Defense, CENTCOM and our national and international partners have
    delivered and fielded an unprecedented number of Mine Resistant Ambush
    Protected family of vehicles throughout Afghanistan. These vehicles
    have proven critical to safeguarding the tactical mobility of our
    warriors in harm's way. CENTCOM, in conjunction with the C-IED Senior
    Integration Group, and JIEDDO have recently fielded a variety of C-IED
    enablers that have proven to save lives on the battlefield. As a
    result, we are finding and clearing more IEDs in Iraq and Afghanistan--
    at a rate above 60 percent for the last 12 months and 70 percent over
    the last quarter of 2010. These improvements are due in part to more
    tips from the population, better tactics, and additional enablers,
    including the effective use of additional ISR provided by the Services
    to counter this threat.
        Attacking the Network
        We are going after the entire IED network and insurgent supply
    lines. Many of our recent successes have come in the use of persistent
    systems emplaced throughout significant threat areas to help develop
    insights into the local area. We are concurrently protecting the force
    using trained dogs, mine rollers, jammers, and handheld devices; the
    Marines in southern Afghanistan now employ nearly one dog per squad,
    and soon we will have more than 200 working dogs in Afghanistan. Along
    with the Services, JIEDDO, and academia we will continue to do
    everything in our power to ensure our servicemembers and coalition
    partners have the best technology and training available to defeat the
    IED threat.
        Supporting Additional C-IED Efforts
        We continue to call on the defense industry to provide innovative
    solutions to counter the threat of IEDs. Critical airlift and airdrop
    sorties dramatically reduce the number of servicemembers exposed to the
    IED threat. In fact, the number of pounds of supplies airdropped in
    Afghanistan has doubled every year since 2005, with an astonishing
    recovery rate of better than 98 percent. Not all critical movements can
    be completed by air however. We ask that Congress continue to fund
    those organizations that provide research and development for the
    evolution of new and existing counter-IED systems and technologies,
    especially in areas of predetonation, IED stand-off detection, and non-
    lethal weapons to deny the enemy the ability to deliver or emplace
    IEDs. We also ask that Congress provide the flexibility to rapidly and
    proactively counter new, emerging, and future threats that are either
    present on the battle field or potential threats that represent
    vulnerability and would be difficult to counter.

    Unity of Command and Control of C5 Networks
        Coalition, Command, Control, Communications, and Computer (C5)
    networks that meet the challenging demands of our troops in theater are
    essential to CENTCOM. Currently, the command and control of networks
    available to our deployed forces is divided among Services, agencies,
    and combatant commands, resulting in degraded and delayed actions that
    have allowed our adversaries to exploit this fundamental cyber
    shortfall for too long. One bright network spot, however, is the Afghan
    Mission Network, which enables U.S. and coalition forces and civilians
    to remain connected and synchronized on the battlefield and linked to
    supporting assets throughout the world. We seek congressional support
    to enable effective integration and extension of networks to wherever
    we fight, from maritime environments to the aerial layer and over
    rugged mountainous terrain.

                                   CONCLUSION

        In closing, we greatly appreciate the support of Congress on behalf
    of America's military personnel serving in the CENTCOM region. The
    stalwart Americans in today's force have been fighting two wars for
    nearly 10 years in the CENTCOM AOR. With remarkable spirit, they look
    beyond the ambiguity and longevity of today's complex, demanding
    operations and answer their country's call. Their courage, character
    and commitment in the face of repeated deployments are inspiring. As
    their commander, I am proud to serve alongside them. Thank you very
    much for your unflagging support of our troops in harm's way and their
    families here at home.

        Chairman Levin. Thank you very much, General Mattis.
        We will try a 7-minute first round for questions.
        General, you made reference to Pakistan and noted that
    they, indeed, have gone after some terrorist groups, and they
    have suffered losses in that process. What you did not make
    reference to, though, is what troubles us a great deal. What
    troubles you, I am sure, too, and our leadership, is the
    failure of the Pakistanis to go after terrorist groups in North
    Waziristan and in Quetta, and those are the groups that cross
    the border and attack our force, coalition forces, and the
    Afghan people.
        Why is it, in your judgment, that Pakistan is not going
    after those terrorist groups, including the Haqqani network in
    North Waziristan and the Quetta Shura?
        General Mattis. Mr. Chairman, there have been disconnects
    where we have not always seen eye-to-eye with Pakistan. Part of
    the reason these groups exist is, together with Pakistan, we
    helped create some of them.
        Any attempt to look at Pakistan's security interests must
    include their difficult relationship with India. Over the
    years, I believe that Pakistan got into a position where the
    very groups that, in some cases, we helped to give birth to,
    became part of the landscape, the Kalashnikov culture, for
    example.
        In many cases, they have moved against these areas, and not
    all of it has been cost-free. As I noted, they have lost
    thousands of troops, killed and wounded. Especially telling is
    the number of junior officers they have lost, indicating an
    aggressive effort against these areas.
        I think, too, it is the most difficult terrain I have ever
    operated in, in my 39 years in uniform. The Pakistan military's
    movement against these folks is continuing. We are now into our
    24th month of unrelenting campaign against them.
        Chairman Levin. But the Pakistanis have not gone after the
    two groups that are giving us the most trouble in Afghanistan.
    Have you pressed on the Pakistan military the importance of
    going after those groups?
        General Mattis. Yes, sir, I have.
        Chairman Levin. There has been a request, as you have
    indicated, to increase the size of the ANSF. You made a
    reference to the request that is under consideration to be an
    increase between 45,000 to 70,000 above the goal set for
    October of this year, which will be met. That target of 305,000
    is already met or will be met easily by October.
        Now when you made reference, when you say you support
    further growth of ANSF, did I understand you then to support
    the growth beyond the October 2011 target of 305,000 and
    somewhere between 45,000 and 70,000 personnel is the target
    that you support?
        General Mattis. Yes, sir, I do. I think, though, we have to
    look at whether or not we can sustain it. I believe that
    President Karzai last week came out of his National Security
    Council and said that he now supports it, and that
    recommendation, of course, will have to be considered by the
    NATO Council.
        Chairman Levin. Right. Now I made reference repeatedly to
    the importance of the July 2011 date for the beginning of
    reductions of American forces in Afghanistan. We heard, as I
    indicated in my opening remarks, from Secretary Gates and
    Admiral Mullen a week or 2 ago that they support the reduction
    beginning in July 2011 of U.S. forces with the pace to be
    determined by conditions on the ground.
        General Mattis, do you support the decision to set the July
    2011 date as the beginning point of reductions in U.S. forces
    in Afghanistan?
        General Mattis. Mr. Chairman, I do support it. I would like
    to say that I support it because it undercuts the enemy's
    narrative. When they say we are there to occupy Afghanistan,
    this helps to deny the enemy that moral victory. I think, too,
    that because it is a conditions-based drawdown that begins this
    year, I am comfortable with it from a military point of view.
        Chairman Levin. Thank you.
        Admiral Olson, do you support that date as the beginning of
    U.S. reductions?
        Admiral Olson. Mr. Chairman, I do. As a beginning to thin
    out the force in order to accomplish a full transition
    eventually.
        Chairman Levin. Admiral, what has been the effect of the
    Afghan Local Police (ALP) effort that the special ops folks are
    so deeply involved in, in the villages of Afghanistan where
    you, working with the Afghans' military and police, are working
    at the local village level to create these local police units?
    Can you tell us about these programs?
        How successful are they? What is the partnership
    arrangement with the Afghans in the operations between our
    special operations people and the ALP?
        Admiral Olson. Mr. Chairman, that is a matter, of course,
    under General Mattis's operational control, but I was just able
    to visit a couple of these ALP sites last week, and my sense is
    that this is having real value at a micro regional level. This
    is an Afghan Government program that is administered within the
    Ministry of the Interior. It is at the local level under the
    district governors, and it is local leaders who recruit and
    select those who will be members of the ALP forces.
        The role of SOF in this is to move to these remote regions
    in small numbers, establish the personal relationships that are
    so important to gain credibility as an advising force, and then
    provide some training and mentorship to these ALP as they gain
    the ability to defend their villages.
        In my opinion, this has had quite a powerful effect
    locally. These are not roaming armies by any means. These are
    certainly locals who have organized themselves under local
    leadership to protect their own neighborhoods.
        Chairman Levin. The partnering issue?
        Admiral Olson. Sir, the partnering is in that there is a
    small team of U.S. forces in a village that is then the
    naturally partnered force with the ALP in that village. They
    stay for months at a time there, and so this becomes a very
    strong partnership. But again, it is an Afghan Government-
    administered program with the U.S. forces strongly supporting
    it.
        Chairman Levin. Are Afghans with us in any operation that
    we are involved in?
        Admiral Olson. Sir, in all of the operations that are
    conducted in Afghanistan, there are Afghans involved.
        Chairman Levin. Thank you very much.
        Senator McCain.
        Senator McCain. Well, thank you Mr. Chairman.
        As a follow-up to the chairman's question, does it concern
    you, General Mattis, that the defense ministers of various
    allies who have troops and commitments in Afghanistan have said
    to me that, ``Well, if you are going to begin to withdraw, we
    will begin to withdraw as well.'' Is that of concern to you?
        General Mattis. It would be, sir. It is why we have to
    engage with them.
        Senator McCain. So we expect them to stay, while we
    withdraw?
        General Mattis. I think what we want them to do is, as we
    look at the transition process, Senator McCain, we make certain
    in their area that we follow the transition guidelines, and in
    some cases, that may mean withdrawal. In some, it may mean that
    they reinvest the people that they have achieved some success
    with into another area. Maybe that they go into training, that
    sort of thing.
        But there is no misunderstanding that the Americans are
    carrying the bulk of this fight, over 100,000 troops, and I
    think that our commitment is pretty straightforward, both
    fiscally and troop wise.
        Senator McCain. I know Libya is not within your AOR, but
    would you venture an opinion as to the difficulty of
    establishing a no-fly zone?
        General Mattis. My military opinion is, sir, it would be
    challenging. You would have to remove the air defense
    capability in order to establish the no-fly zone.
        So no illusions here. It would be a military operation. It
    wouldn't simply be telling people not to fly airplanes.
        Senator McCain. Declaration of a no-fly zone to the enemy
    would have a significant deterring effect on their desire to
    fly. I think we know that to be the case.
        General Mattis. Yes, sir.
        Senator McCain. Obviously, the events in Bahrain are of
    great concern to you and all of us. How much Iranian
    involvement have you seen in these? I fully understand this is
    a popular uprising, but isn't it into some respects a proxy
    conflict between Saudi Arabia and Iran?
        General Mattis. I think the current Tehran regime is
    incapable of trying to let other nations just take care of
    their own issues. They have to meddle and create mischief.
        The Bahrain situation I think is a legitimate popular
    effort. But I am under no illusions that the Iranians would not
    try to take advantage of this issue or any other, whether it be
    in Lebanon or anywhere else in the region.
        Senator McCain. The loss of the Fifth Fleet headquarters
    would be a significant setback?
        General Mattis. It would be. But right now, sir, from even
    the opposition, our sailors who live out in town, driving to
    and from work, have encountered zero anti-Americanism. I was
    just there about a week ago, and there is no hostility directed
    towards Americans right now--obviously not from the government
    with whom we have been very good friends for 40, 50, 60 years,
    but not from the opposition either.
        It has been heartening, actually. The DOD school has been
    open every day. We are on about the 12th day with no violence.
    So it is not right now something that concerns me.
        Senator McCain. Given the long-term needs of Iraq, how are
    the deficiencies of the Iraqi Security Forces--such as
    maintenance, readiness, intelligence fusion, and particularly
    the building of an air force--going to be addressed absent U.S.
    troops?
        General Mattis. You hit the three points that we are
    concerned with. Under logistics, it is maintenance as well, how
    they keep their gear going. The intelligence fusion and the air
    sovereignty are critical.
        I think right now there are going to be loose ends unless
    the Iraqis ask us to stay and work on these issues. Those loose
    ends would be difficult for them to overcome on their own, sir.
        Senator McCain. Hezbollah is now the dominant actor in the
    government of Lebanon. Do you think the United States should
    continue providing military assistance to the Lebanese air
    forces, armed forces, or is it something we should wait and
    see? What is your view of that situation?
        General Mattis. Well, we saw Hezbollah use threats of
    violence to undercut the government. We are all very much aware
    of that. The new government is still in formation, and we will
    have to take a very close look at how it is organized and how
    it is formed to deal with Lebanon's future.
        I think that an inclusive government is the only option
    that works with the various confessional groups that try to
    share power there. But I believe right now, if we look at the
    example of Egypt, and we look at what happened where we were
    able to maintain, under some criticism that Congress came under
    for giving us the amount of money that we gave to the Egyptian
    military, but we were able to maintain a relationship there
    that paid off, I think, when it came time to see them either
    ethically use their position to help the people of the country
    or what we see in Libya.
        So as we look at Lebanon, where they have never lost track
    of any of the equipment that we have given to them yet--the
    equipment given to the Lebanese armed forces, I think we should
    look at the quality of the government as it is put together,
    recognize that the military can actually be a bulwark against
    malign influence, and act in our best interest once we have
    made that analysis.
        Senator McCain. Have you seen the news reports that a
    number of people were arrested in Iraq as a result of
    demonstrations?
        General Mattis. I have. Yes, sir. The ones on, I think, the
    26th? Yes, sir.
        Senator McCain. So it is of concern that they would be
    arresting demonstrators in a country we expect them to allow
    demonstrations?
        General Mattis. Sir, the demonstrations were not as large
    as we expected, but they were spread all over the country. The
    demonstrations, by and large, were peaceful. The Iraqi Security
    Forces were out, and al Qaeda did not take advantage. I don't
    think they could take advantage of this opportunity to kill
    more innocent people.
        In the midst of that, there were some people who did things
    like stone troops. There were about as many people injured on
    the Iraqi Security Force side, around 50, as there were injured
    total and killed, unfortunately, on the demonstrators' side.
    Those appear to be contained in each case where government
    buildings were stormed. Prime Minister Maliki has said that he
    will investigate each death, each injury, and make certain they
    know what happened in each case.
        So I think right now what we saw was, by and large, a very
    restrained use of force by the Iraqi Security Forces in regards
    to the demonstrators. There was no opening fire on them. It was
    a much more restrained effort. I don't know what all the
    investigations are going to show yet, Senator, but I would like
    to get back to you once I see what we can find through our
    intel sources.
        [The information referred to follows:]

        In coordination with U.S. Forces Iraq, we have determined the
    protests drew approximately 27,000 Iraqi citizens to 43 demonstrations
    across the country. Protestors directed many of their grievances at
    provincial governments. The largest demonstrations were in the cities
    of Baghdad, Mosul, Basrah, and Fallujah. Individual demonstrations
    ranged from a few hundred up to 8,000 protestors. While the protests
    were largely peaceful, 14 of 43 turned violent, usually after the
    demonstrators attempted to enter or damage government buildings.
    Current reporting has determined that 119 Iraqis and 4 journalists were
    detained across Iraq on the day of 25 February. At this time, I do not
    know the specifics of each arrest.
        In several cases, security forces responded to violent
    demonstrators with small arms fire. Prime Minister Maliki has initiated
    investigations to determine what happened in these instances. In total,
    11 Iraqi citizens were killed; 72 citizens were injured, and 45 members
    of the Iraqi Security Forces were wounded.

        Senator McCain. Thank you very much.
        Thank you, Mr. Chairman.
        Chairman Levin. Thank you, Senator McCain.
        Senator Lieberman.
        Senator Lieberman. Thanks, Mr. Chairman.
        Thanks to both of you. General Mattis, thanks for your
    service. Admiral Olson, also let me join those who are thanking
    you for your extraordinary career of service to our country and
    the time particularly in which you have been the leader of
    SOCOM, and through you really to thank everyone who serves
    under you in that command.
        This is a remarkable group of Americans who I have had the
    privilege to meet as I have traveled around, particularly to
    battle zones. Honestly, every day they are performing critical
    and dangerous missions with a remarkable degree of skill,
    bravery, and I would say patriotism, and also, of course,
    effect.
        A lot of that has grown and developed under your watch. I
    can't thank you enough for that, and thank all of them.
        Let me just give you an opportunity to develop a little
    more your metaphor that the fabric is strong, but around the
    edges there may be a little fraying of the SOF. What are the
    specific shortfalls that you would like to see us address to
    make sure that the whole fabric is as strong as you and we want
    it to be?
        Admiral Olson. Thank you, sir.
        I got an email not too long ago from an operational
    commander forward who said, ``Sir, the good news is that the
    demand for SOF is higher than ever. The bad news is the demand
    is higher than ever.''
        As 100,000 U.S. troops came out of Iraq, only fewer than
    1,000 were from SOF. At the same time, we saw a requirement to
    move more than 1,500 into Afghanistan. This is the force that,
    as you said, has earned its way to real importance in terms of
    executing strategies in those conflicts.
        It is at the point where for some elements of our force,
    time at home with their families has become the abnormal
    condition. They have to adjust to being home rather than adjust
    to being away. It is those elements of the force that I am
    seeking to provide some relief for in terms of 1,000 programs.
        There is no magic answer to this. It is gaining a greater
    understanding of what the real issues are. It is shaving where
    we can the number of days that they are away from home for
    training when they are not forward deployed. It is putting more
    predictability into their lives. It is relieving every special
    operations member of any job that can be performed by anybody
    else.
        I do believe that the Services--Army, Navy, Air Force, and
    Marine Corps--could invest in capabilities that would provide
    more habitual, more timely support to SOF. We are in those
    discussions with each of the Services.
        I do believe that the quality of the training, the
    equipment, and the facilities that we provide them is certainly
    a factor in ensuring that this force, in which we have invested
    so heavily for 10 years, will still be with us 10 years hence.
        Senator Lieberman. Well, I appreciate that answer, and I am
    sure the members of the committee look forward to working with
    you and your staff to see if we can help you with some of
    those.
        General Mattis, as Senator McCain said, we had the
    opportunity to travel through some of the Arab world last week
    where these remarkable changes are occurring. My own feeling is
    that while you are right, there is both opportunity and
    challenge, that the opportunity here is greater.
        It is really remarkable to see these peaceful revolutions
    occur, which have to make both the leaders of al Qaeda up in
    the mountains feel that history may be passing them by, but
    also represent a real direct threat to Iran, which I think you
    correctly and characteristically bluntly identify as our
    greatest long-term threat in the region.
        I want to just come back to Libya briefly because I was
    interested that in some of our visits with young people and
    others in Tunisia, Egypt, where these revolutions have
    succeeded, they are watching how the world responds to
    Gaddafi's brutality to his own people. Because they are taking
    it as a sign of if Gaddafi can survive, they worry that other
    leaders in the Arab world will similarly try to repress
    revolutions.
        I know the administration is considering a range of options
    now with regard to Gaddafi. I know Senator McCain asked you
    about the no-fly zone. Have you, in your CENTCOM role, been
    asked to prepare for any activities relating to Libya,
    including, for instance, the provision of humanitarian
    assistance, medical supplies, food, to people in the liberated
    areas of Libya?
        General Mattis. Senator, as you understand, this comes
    under Africa Command's (AFRICOM) AOR.
        Senator Lieberman. Yes, sir.
        General Mattis. I have dispatched ships under the order of
    the Secretary of Defense that could provide options to the
    President. Yes, sir.
        Senator Lieberman. That is reassuring to hear. I know it is
    the AFRICOM. But obviously, you have a lot of assets in the
    region, and I am encouraged to hear that they are moving to be
    available.
        Going back to Iran, for some period of time, there was a
    certain uncertainty, if I can put it that way, about the extent
    to which the Iranians were assisting the terrorists and
    extremists in Afghanistan against us. It was clear that they
    were assisting the Shia extremists in Iraq and, unfortunately,
    have a lot of American blood on their hands as a result.
        Could you tell us a little more now about the state of our
    conclusions about what the Iranians are doing to help the
    Taliban or other anti-government, anti-American forces in
    Afghanistan?
        General Mattis. I can give you an incomplete answer,
    Senator. They have given low levels of ammunition, money, that
    sort of support, improvised explosive device components, to our
    enemies in Afghanistan. At one point, the Taliban and Iran were
    very much at odds with each other, to include the Taliban
    killing a number of Iranian diplomats there in northern
    Afghanistan.
        But the reason I say I am giving you an incomplete answer
    is we are keeping a very sharp eye on some recent information
    we have to see if they are, in fact, elevating their support,
    which would be very, very unwise for them to do.
        Senator Lieberman. Thank you, sir. My time is up.
        Chairman Levin. Thank you, Senator Lieberman.
        Senator Inhofe.
        Senator Inhofe. Thank you, Mr. Chairman.
        Again, we would all echo the remarks about your service,
    Admiral Olson. You certainly will be missed.
        When we are talking about the withdrawal of troops in
    Afghanistan, occasionally the President talks about conditions
    on the ground. I am not sure just what is going to happen, what
    these timetables are.
        But I would say this. I have had the opportunity, going all
    the way back to the fall of 2003 when it happened to be the
    Oklahoma 45th over in Afghanistan helping the ANA to train
    themselves, and they were doing really a great job. But each
    year when, we go back and see it, we see this improvement in
    training. I think this really has to be recognized.
        I don't see Senator Hagan here now, but she and I were
    there spending New Year's Eve in Afghanistan and had a chance
    to go down to the Kabul military training center. It is almost
    like looking at a training center here in the United States. I
    am talking about the separation between artillery and infantry,
    how they are doing it.
        We had individual interviews, with interpreters, where just
    at random we would select people, and we saw the enthusiasm
    they have for their quality of training. So I see really great
    improvements in the quality of training over there, and that
    was my personal observation.
        General Mattis, are you as excited about that as I am?
        General Mattis. Sir, the success of this last year,
    especially as we see the Afghan forces coming of age, very much
    is depending upon the training, the superb training, and it is
    going exactly as you say. We now have metrics in place where we
    measure them. Then we are seeing the improved capability in the
    field. It has to be the enemy's worst nightmare.
        Senator Inhofe. Yes, I would say that is true. When we talk
    to these individuals, they want this to be a career.
        When I saw the position that the Egyptian military is going
    to be in during this new transition or whatever we are going
    into right now, I was somewhat pleased with it. One reason is
    that I have been a staunch supporter up here, probably the most
    staunch supporter, of the International Military Education and
    Training (IMET) program and what it has meant. With Egypt, it
    even goes further because we are talking about 3 decades now
    that they have done this.
        My feeling was that one of the great benefits of the IMET
    program is that it develops a relationship between the military
    of other countries. I have seen this throughout Africa and
    elsewhere, which is why we have been wanting to expand it. So I
    felt pretty good about that.
        I noticed that in 2010, our Egypt IMET program was at about
    $2 million and dropped down to about $1.5 million in 2011. I am
    trying to get the figure now as to what is requested for 2012.
        I would like just to get you on the record on your feelings
    about the IMET program and how much that has benefited us,
    particularly with the situation right now as it is in Egypt.
        General Mattis. Senator, I think the IMET program is a
    strategic asset to us, where we bring those officers to our
    country. They go through training and education here. We then
    go on joint exchanges with them back in their country,
    exercises and all, and we see it pay off there.
        But there is a longer-term payoff, and that payoff is when
    I walk into a room as a brigadier general back in 2001, and the
    first discussion I have with a half dozen officers is them
    telling me the best year of their life was in Maxwell Air Force
    Base or in Fort Leavenworth--and we immediately start from a
    position of common understanding. I think this is a strategic
    asset to us that we should certainly maintain full support for.
        Senator Inhofe. All right. I appreciate that.
        Do you echo those sentiments, Admiral Olson?
        Admiral Olson. Absolutely, sir. You can sign me up as a
    member of the IMET fan club. I was in a position long ago, a
    part of the implementation team of IMET in Tunisia, and that
    country was particularly well served by IMET.
        Senator Inhofe. Yes. We were just a couple of days ago with
    Prime Minister Netanyahu. He was referring to the earthquake
    that is taking place right now. When Senator Lieberman was
    talking about the commands, it occurred to me that when we were
    in Stuttgart, we were with European Command, AFRICOM, and
    CENTCOM. You have three commands, really, right now that are
    dealing with this problem.
        Are you guys all talking to each other? Do you feel there
    is no problem in that you are dealing with an earthquake that
    has taken place in three commands?
        General Mattis. Sir, we have a very close working
    relationship, and there is strong collaboration between us.
        Senator Inhofe. Yes.
        Admiral Olson, we also had the opportunity of spending some
    time in Djibouti, and Admiral Losey, I guess it was, spent
    quite a bit of time with us. I was certainly impressed with
    what they are doing there.
        When I look at your statement, it says, ``We now total
    close to 60,000, about a third of whom are career members of
    SOF, meaning that they have been selected, trained, and
    qualified to earn the military occupational specialty or skill
    code identifier of the SOF.''
        Now that would be a third of the 60,000. Tell me a little
    bit about the other two-thirds that are not included in this
    category.
        Admiral Olson. Yes, sir. They are the full range of
    enabling, technical, supportive capabilities--engineers,
    logisticians, administrators, intelligence analysts,
    maintenance crews, and the like--that make the rest of it all
    possible. We are a broadly capable force. We do have our own
    airplanes, our own helicopters, our own boats, our own mini
    submarines. So, this requires a supporting crew that has to be
    quite expert as well.
        Senator Inhofe. Well, we are concerned about your
    resources, that you have them, because we know what your
    mission is and what you have been able to do. Is everything
    going all right in terms of retention and recruiting?
        Admiral Olson. Sir, the recruiting is good. The recruiting
    has been pretty consistent over the last decade, even
    consistent across the 9/11 attacks. Retention has been pretty
    good. It has been above the service averages in almost every
    category.
        Senator Inhofe. Which is very good, too.
        Admiral Olson. Yes, sir.
        Senator Inhofe. Yes.
        Admiral Olson. We are beginning to see at the mid-grade
    level, sort of the 8 to 10 years of service point, a slight
    leveling off of the retention.
        Senator Inhofe. All right. Thank you.
        My time has expired. But if you, maybe for the record,
    could elaborate a little bit on your numbers that you have
    right now as you look into the future and how this--whether the
    60,000 is going to be--increasing it, if that is going to be
    adequate, for the record.
        Admiral Olson. Sir, for the record, in my opinion, it is
    adequate. I believe that the key to special operations
    capability beyond our current numbers is mostly in terms of
    supporting special operations from the much broader range of
    capabilities within the department, with habitually assigned
    units that are timely in their response, that understand what
    special operations is and how to support special operations
    requirements.
        I am calling this the ``special operations force generation
    concept'' and working with each of the services on how they can
    contribute to that and how we can contribute to their force
    generation cycles, as that is appropriate.
        The specific answer to your numbers question is that--and I
    am on record before this committee now in 3 previous years as
    saying we should not, we ought not grow more than 3 to 5
    percent per year in our manpower because of the quality that we
    need to maintain as we do that. We are projected to do that for
    the next 3 or 4 years.
        Senator Inhofe. That is good. Thank you.
        Chairman Levin. Thank you, Senator Inhofe.
        Senator Nelson.
        Senator Nelson. Thank you, Mr. Chairman.
        Also let me add my appreciation, Admiral Olson, for your
    service and best wishes for your future.
        IMET is a very important part of what I would hope to be
    our outreach to the world in a way that makes good sense. I
    have had military officials from Egypt in my office before who
    have been here getting the IMET training, and I have been
    impressed with their appreciation and their understanding of
    what kind of military--or what the military should do in
    connection with government.
        My question would be do you think that the difference
    between the way the military has behaved in Libya and the way
    military behaved in Egypt is, at least in part, due to their
    IMET training?
        General Mattis?
        General Mattis. I think there is no doubt it has
    contributed, sir. Each nation has its own history, its own
    culture. But I think the ethical performance by the Egyptian
    military was impacted by their time spent in our schools over
    these last decades.
        Senator Nelson. The same would be true in the case of
    Tunisia as well?
        General Mattis. Yes, sir.
        Senator Nelson. Do we have any plans to try to expand the
    program? I know resources are tight right now. But one of the
    best ways of avoiding future expenditures is to have ethical
    military operatives in other countries. Are there any plans
    that you are aware of to expand this to perhaps some other
    countries where there is an interest?
        General Mattis. I am not aware of plans to expand it. Of
    course, the Secretary of Defense can open the door to different
    countries at different times, give them more school seats, that
    sort of thing. I think it would be a resourcing issue. You
    would have to have more instructors, more classrooms, this sort
    of thing. I think it is worth looking at, but I am not aware of
    any plans right now to do so, Senator.
        Senator Nelson. Well, we will try to take this up with the
    Secretary. I appreciate, though, your response.
        General Mattis, I have been a strong proponent of
    benchmarks with metric measurements for Afghanistan and
    Pakistan. I had support for those in Iraq as well, and I am
    interested in your evaluation of the benchmarks.
        The last report was in November 2010, and it is my
    understanding the next report will be provided in April of this
    year. So perhaps I am a little ahead of the report progress. I
    would like to know whether or not the report in November stated
    that the assessment of governance in focus districts showed
    that 38 percent of the population lived in the areas rated as
    having emerging or full-authority Afghan governance.
        It reflects no change through March 2010. I wonder are we
    trending up, or are we flat-lined, or are we trending down at
    this point? I am talking about both Pakistan and Afghanistan.
    There may be a difference in each of the countries.
        General Mattis. Oh, there is significant difference, sir.
    Let me address Afghanistan, where General Petraeus and
    Ambassador Eikenberry lead our effort in supporting the Afghan
    governance. I will tell you that this is receiving a lot of
    attention. We are making progress.
        I believe it is lagging behind the security effort. I think
    that is somewhat understandable. You don't get governance in
    until you get enough security that people can, without concern,
    carry out the governmental functions.
        At the same time, we are dealing with a country that
    probably took several hundred billion dollars' worth of damage
    during decades of war, according to the International Monetary
    Fund. When you translate that into the human damage and the
    damage to the people, the education system, this sort of thing,
    it is a long, hard slog to create the kind of governmental
    organizations and the right people who can then create the kind
    of progress that will reflect in those metrics, sir.
        The Pakistan military is where I have most of my
    connections. But from what I read, I have concerns about
    Pakistan's governance and their ability to meet the needs of
    their people. I believe right now that President Karzai may
    actually be in a better position on this than the political
    leadership in Pakistan.
        Senator Nelson. Both Afghanistan and we depend on the
    Pakistani military and the Pakistani Government to be able to
    take care of those largely isolated areas--I guess Swat and the
    particular areas there--where there are safe havens for al
    Qaeda, the Taliban, and other hostile operatives. That makes it
    much more difficult for us to be able to contain and degrade
    and defeat that enemy. Is that fair?
        General Mattis. It is very fair, sir. Again, it is the
    Federally Administered Tribal Area (FATA), which
    constitutionally is under a different sort of governance even
    within Pakistan.
        Further, I think the impact of the floods this year--we
    served alongside the Pakistan military that performed very well
    providing relief and life-saving efforts. But those floods,
    which were enormous in their impact--the worst in a hundred
    years--I don't know that once the Pakistan military had done
    what they could do in terms of saving the people from those
    floods, that there was a sufficiently robust governmental
    response then to help those people put their lives back
    together.
        Senator Nelson. So the attitude towards the government may
    not be as strong as it could be if the government had a strong
    follow-up response?
        General Mattis. I believe you are right. I don't have the
    data. I haven't looked at it specifically. But I believe you
    are correct, Senator.
        Senator Nelson. Okay. My final question, General, is that
    as we trend out of Iraq and we come upon December 31, there is
    some concern that maybe the Iraqi Government will ask us to
    remain. I don't have any indication of that, but just a general
    concern that perhaps their security is not sufficient for them
    to be able to self-govern.
        If that is the case--and I asked this of Secretary Gates
    recently. If that is the case and we are in a position where we
    might make the decision to stay, I would hope that we would do
    so, recognizing that from that point forward, that we would
    expect the Iraqi Government to pick up a bigger share of the
    cost that we would incur.
        It is my understanding they are dealing with a deficit
    there, just as we are here. But it only adds to our deficit. If
    I have to choose between mine and theirs, you know what I am
    going to choose. If that happens, I would hope that we would be
    thinking about how we can make certain that the Iraqi
    Government picks up a bigger share of any costs that we would
    incur going forward.
        That is less a question more than a wish. In that regard, I
    hope that you will keep that in mind because, obviously, it
    will come indirectly under your jurisdiction. Have you had any
    thoughts about that? Should we be asked to stay?
        General Mattis. I haven't looked specifically at your
    point. However, there is clearly an increasing sense of
    responsibility by the Iraqi Government toward resourcing their
    own security forces. I think that would be a natural part of
    the negotiations between the two governments if we were asked
    to stay.
        Senator Nelson. Yes, I would hope that we would make that a
    part of the negotiations because that is what we would have to
    do. We can't just assess it. We would have to have a common
    agreement.
        General Mattis. I have it, sir. Thank you.
        Senator Nelson. Well, thank you, General Mattis, and thank
    you for your service and all the men and women under your
    command. We appreciate their continued sacrifice and service,
    and their families as well. Thanks.
        Thank you, Mr. Chairman.
        Chairman Levin. Thank you, Senator Nelson.
        Senator Ayotte.
        Senator Ayotte. Thank you, Chairman.
        I also want to commend Admiral Olson and General Mattis for
    your distinguished service to our country. Please express our
    gratitude to all the troops that serve underneath you for all
    that they are doing to protect our country.
        In recent hearings, Secretary Gates as well as Secretary
    Vickers have testified that approximately one out of four
    detainees who have been released from Guantanamo have gotten
    back into the fight. Admiral Olson or General Mattis, could you
    tell us a little more about what are the details regarding some
    of these detainees who are joining the fight?
        Have there been examples where some of these detainees have
    actually injured or killed American troops that have been
    returned back into the fight?
        General Mattis. Senator, the best data we have would show
    approximately 25 percent have either returned, and we can
    confirm it, or we strongly suspect they have returned.
        Twenty-five percent is a concern to all of us involved in
    this war because it reinforces the enemy. It gives people some
    degree of credibility because they have been in our hands. They
    have gotten out.
        So, yes, ma'am, it is a big concern.
        Senator Ayotte. Have there been examples where some of
    these detainees who have returned to the fight have actually
    injured our soldiers or killed our soldiers?
        General Mattis. I don't have a specific example of that.
    However, for example, we know one of them is the number two
    person in AQAP. Clearly, he is engaged in trying to do so. If
    he hasn't, it is just because he hasn't been successful yet,
    but his intent is exactly what you are suggesting.
        Senator Ayotte. He is obviously directing members of al
    Qaeda to kill American troops. That is a deep concern, given
    that we released him from our detention facility.
        I am deeply concerned about our policy toward detainees and
    release back into theater, and I think that the least we can do
    for our troops is to hold those who are dangerous and not allow
    them to get back into theater to harm our troops. It is
    certainly something that I look forward to continuing to work
    with others in the Senate to make sure that we have a sensible
    detention policy that doesn't allow these terrorists to get
    back into theater.
         General Mattis, I know that we have emphasized that, of
    course, Libya is not directly in your responsibility. However,
    you mentioned that recently you have dispatched ships to
    provide options and assets in the region itself.
        Last week, there were many nations who were sending
    military aircraft and ships to Libya in order to evacuate their
    own citizens that were in Libya. As I understand it, we sent
    and chartered a civilian ferry to try to take the civilians
    that were in Libya, U.S. citizens, to get them out of Libya.
    Yet that ferry actually couldn't depart port for 2 days due to
    high winds and waves.
        Are you aware whether certain nations, including Germany
    and Great Britian, actually sent military assets to be able to
    get its citizens out of Libya?
        General Mattis. Senator, I am not aware of the specifics
    here. As you will understand, I have been a little busy in my
    own theater. But I think what you are saying is about right,
    but I can't confirm it.
        Senator Ayotte. Do you know if we had wanted to, whether we
    could have sent military assets to be able to get our civilians
    out of Libya, as other countries did?
        General Mattis. Ma'am, again, I don't keep the
    Mediterranean picture. I am not current on it. So I don't know
    what ships or aircraft were available at what time and where
    they were and what airfields were open. I really can't give you
    a good answer on that.
        Senator Ayotte. Okay. But you are now, of course, sending
    some of our CENTCOM assets over to assist in that area, as you
    testified earlier?
        General Mattis. Yes, ma'am. We have. Those were to give
    whether it be humanitarian or whatever options the President
    may want. Those assets have been sent through the Suez Canal.
        Senator Ayotte. Had you been asked to do that last week, is
    that something you would have been able to do earlier last
    week, as opposed to where we are now?
        General Mattis. Yes. Well, ma'am, the way it comes to me is
    not as a request, frankly. I get orders. But, yes, ma'am, we
    can do it on order. Obviously, I have my own requirements in
    the theater. It is always a balancing act that the Secretary
    has to go through between different combatant commanders.
        Senator Ayotte. General, you would have certainly had the
    capability of doing it last week, as opposed to where we are
    right now?
        General Mattis. Yes, ma'am.
        Senator Ayotte. Thank you very much. I appreciate both of
    you testifying before the committee today.
        Admiral Olson and General Mattis, thank you so much for
    your distinguished service to our country.
        Chairman Levin. Thank you, Senator Ayotte.
        Senator Webb.
        Senator Webb. Thank you, Mr. Chairman.
        General, Admiral, greetings. I am hoping that you can help
    provide us a little bit of focus in terms of how we are going
    to approach similar situations in the future.
        Not long after September 11, a coalition of Afghan forces,
    assisted by a handful of special operators, Forward Air
    Controllers, kicked out the Taliban in a matter of a few weeks.
    We were the enablers, for lack of a better term, not the
    instruments or the creators, of societal change in that
    evolution.
        We took a different approach in Iraq. We are taking a
    different approach today in Afghanistan. We have undertaken a
    duty, I understand, what I would call the concept of negligence
    in the law. Once you undertake a duty, if you don't see it all
    the way through, you are guilty of negligence. At the same
    time, we need to really start looking at the future in terms of
    how we are going to use our military.
        Secretary Gates made a speech at West Point recently,
    indicating that, in his view, this troop-heavy concept read
    pretty much nation building is not a model that should be
    applied in the future with respect to issues of international
    terrorism. At the same time, General Casey, over the past day
    or 2, mentioned that he wouldn't be surprised to see 100,000
    Army soldiers deployed in these types of operations 10 years
    from now.
        I would like to hear your thoughts on where should we be
    moving here in terms of the use of our ground troops in issues
    of combating international terrorism? General?
        General Mattis. Senator, I think, as we look toward the
    future, I have been a horrible prophet. I have never fought
    anywhere I expected to in all my years.
        I believe that we have to take each situation on its own,
    and we have to define the problem to a Jesuit's level of
    acceptability. It has to be defined to a point that the
    solution is very clear in terms of what is the strategy we must
    adopt. The strategy, of course, is what are the ends, and what
    are the means to get there?
        The one caution I would give, having studied this problem,
    is that we cannot marry one preclusive view of war and preclude
    other types and say we just won't do that because the very
    nature of war is the enemy will gravitate toward our perceived
    weakness. We are going to have to have a force that has a
    built-in shock absorber, basically can go anywhere and do
    anything, at the same time have a moderating impact on our own
    strategy, so we don't try to go anywhere and do everything.
        It has to be a vital national interest, and we have to make
    sure we have a force that is a general-purpose force that does
    not allow the enemy to think that we are leaving some form of
    warfare uncovered and then works against us in that direction.
        Senator Webb. I wouldn't disagree with you on that at all.
    At the same time, I can recall having written a piece the day
    after September 11, discussing how to deal with international
    terrorism, and two of the concepts in that--you build your
    strategy off of operational concepts and the enemy that you are
    facing.
        Two of the clear concepts in that was, number one, you have
    to maintain your maneuverability, and, number two, when you are
    fighting a mobile enemy, you are at risk whenever you occupy
    territory and then have to defend the territory that you are
    occupying. I think that those are the decision points moving
    toward the future.
        Admiral, do you have any thoughts on that?
        Admiral Olson. Sir, I think when the enemy is a ponderous,
    state-sponsored, uniformed, organized fighting force, it may
    require a similar force to defeat it. But I think that is less
    likely in the future. I agree with Secretary Gates on that.
        We are much more likely to see the less regular kinds of
    warfare--the cyber warfare, the terrorist warfare, the non-
    state sponsored warfare--to which the best solution is often
    enabling another country's forces to deal with it in that
    region and being, as you said, the supporting force, not the
    supported force in that fight.
        Senator Webb. Again, clearly, in terms of international
    terrorism, the whole operational concept is to not align
    themselves with a state.
        By the way, I would not in any way disagree with what
    General Mattis just said about keeping all your options on the
    table. But it just seems to me with the variety of threats that
    face us right now, the type of response that we have made over
    the past 8 or 9 years is not a workable model. It concerns me a
    good bit.
        General, I want to ask you a question about Pakistan. I
    have raised a number of questions over the past 2 years about
    the transparency of our funding in terms of assistance to
    Pakistan. Are you comfortable with the transparency of the
    money that is going into Pakistan, and that you know where it
    is going?
        General Mattis. I am, Senator; they don't do it by
    computer. So it is all written out by hand, and we track it
    right down to the end user.
        I have some of the most aggressive colonels and majors you
    can imagine in Islamabad working under my vice admiral there
    who track this, and we routinely reject requests from them for
    reimbursement.
        I know it is not where they just walk in with a bill and we
    pay it. Sometimes the ones we want more evidence of outweigh
    the numbers that we just accept and say, ``Yes, we know you did
    these things. So we are going to pay you.'' For example, fuel
    for our forces and that sort of thing that comes in.
        So, yes, I think we do have a very good feel for whether or
    not we are reimbursing real costs vice any fraudulent costs.
        Senator Webb. We have seen news reports that Pakistan has
    doubled its nuclear arsenal in recent years, as we have been
    providing assistance in other areas. Do you have any worries
    that our assistance to Pakistan has allowed them to fund
    programs such as their nuclear program?
        General Mattis. I am confident there is no direct funding
    going to their nuclear program because of my confidence in
    tracking the costs we are reimbursing them for now. Obviously,
    they have their own funding, and whether or not they would
    spend some of that elsewhere, if we weren't reimbursing----
        Senator Webb. Right. I understand that direct money would
    not be going over there. The concern that I have is that if we
    are funding programs that they otherwise would be funding and
    they are able to take that money in order to increase their
    nuclear arsenal, it is not a healthy situation for the region
    and for us, in my view.
        Thank you, Mr. Chairman.
        Chairman Levin. Thank you very much, Senator Webb.
        Senator Wicker.
        Senator Wicker. Thank you, Mr. Chairman.
        Thank you, gentlemen.
        General Mattis, let me follow up on a line of questioning
    Senator McCain began. I was not in the room at the time, but I
    understand that he got a brief answer to this so-called day of
    rage in Iraq.
        Let me see if I could explore this a little further. In
    particular, I would point out a Washington Post Foreign Service
    story that appeared on Saturday, February 26, in which it is
    reported that Iraqi Security Forces detained hundreds of
    people, including prominent journalists, artists, and
    intellectuals, in demonstrations that brought thousands of
    Iraqis to the streets and ended with soldiers shooting into
    crowds.
        It goes on to say that this involved more than a dozen
    demonstrations across the country that killed at least 29
    people, as crowds stormed provincial buildings, forced local
    officials to resign, freed prisoners, and otherwise demanded
    more from a government they only recently had a chance to
    elect.
        Is this, in your judgment, General, an isolated incident?
    Or is it an example of the contagion that is sweeping the
    entire region? What does it say about the popular support of a
    government which recently was subject to election?
        I understand the complications after the elections of the
    government being formed in a very fragile manner without a
    clear consensus. How accurate is this depiction? How worried
    should we be that this country, where we have invested so much
    of our blood and treasure, might be just as unstable as some
    other regimes?
        General Mattis. Senator, I can't comment directly on the
    accuracy of the story because the word that I have is there
    were dozens of demonstrations. But I take that as a positive
    sign. Those did not happen 15 years ago under Saddam.
        It is a nascent democracy. It is the one that has been
    through a very violent era. A critical part of our training of
    the Iraqi Security Forces has been the ethical use of force.
    They are also still operating against a very capable terrorist
    enemy.
        For example, the minister of defense of al Qaeda in Iraq
    was killed on that day--I believe it was on that day--by Iraqi
    Security Forces. It was a very good event for us.
        Senator Wicker. Was he part of the protests?
        General Mattis. He was not. But my point is that the enemy
    operates in this country, even as the people are trying to
    exercise their freedom to protest. I believe, from what I am
    told, that the number of Iraqi Security Forces injured and the
    number of demonstrators injured and killed is about the same.
        The reason I bring that up is that that is oftentimes an
    indicator of whether or not a military just opened fire on a
    crowd. You open fire on a crowd with an automatic weapon, and
    the casualties are going to be significantly higher than the
    ones reported either by the government or by the newspaper
    article.
        Frankly, I wasn't ready for your question. I need to go
    back and check and see if I missed something in our assessment
    of what happened that day. I need to get back to you, Senator,
    because the numbers you are citing are higher than what I was
    told.
        Senator Wicker. I see.
        General Mattis. In most cases, it was when a government
    building was attacked, and most of the injured soldiers were in
    place, were injured by rock throwing. So that is the kind of
    the framework I am looking at it through.
        Senator Wicker. So I can expect you to supplement your
    answer on the record, and I appreciate that.
        [The information referred to follows:]

        In coordination with U.S. Forces Iraq, we have determined the
    protests drew approximately 27,000 Iraqi citizens to 43 demonstrations
    across the country. Protestors directed many of their grievances at
    provincial governments. The largest demonstrations were in the cities
    of Baghdad, Mosul, Basrah, and Fallujah. Individual demonstrations
    ranged from a few hundred up to 8,000 protestors. While the protests
    were largely peaceful, 14 of 43 turned violent, usually after the
    demonstrators attempted to enter or damage government buildings.
    Current reporting has determined that 119 Iraqis and 4 journalists were
    detained across Iraq on the day of 25 February. At this time, I do not
    know the specifics of each arrest.
        In several cases, security forces responded to violent
    demonstrators with small arms fire. Prime Minister Maliki has initiated
    investigations to determine what happened in these instances. In total,
    11 Iraqi citizens were killed; 72 citizens were injured, and 45 members
    of the Iraqi Security Forces were wounded.

        Senator Wicker. As to the larger question, though, sir, of
    whether we need to be concerned about this government falling,
    much as governments in the region have toppled and are toppling
    one by one, what is your informed judgment as to the larger
    question?
        General Mattis. Well, the election was very close. It took
    months--I think 8, 9 months--to actually get a government
    formed. In close elections in a parliamentary system, that is
    understandable. I think it is still a work in progress.
        The performance of the Iraqi Security Forces during that
    long period, when there was just basically a caretaker
    government at work, gives me some degree of confidence that the
    security forces can protect this nascent democracy as it grows
    its roots. But one or two elections doesn't make a democracy,
    as we all know, and there is a lot of work that still has to be
    done. Right now, I do not think that it is in danger of
    falling.
        Senator Wicker. To what extent are the supporters of Mr.
    Allawi supportive of the government as it finally emerged?
        General Mattis. I think that is still a work in progress as
    well, as we see where Mr. Allawi falls out in the organization
    of the government. I spoke with him about 2 months ago in
    Baghdad, and he was still relatively positive at that time that
    he was going to have a meaningful role. That would bring the
    people you are referring to onboard with him.
        Since then, it has been difficult to see progress, but I
    think it is always slower than we want to see. I think there is
    still progress along those lines, but I don't know where it is
    going to fall out right now. I think it is still too early to
    say.
        Senator Wicker. Finally, to what extent do we need to be
    concerned about Iran attempting to influence the foreign policy
    of Iraq?
        General Mattis. I have no doubt that Iran will attempt to
    influence the foreign policy and domestic policy of Iraq.
        Senator Wicker. Is this a serious problem or simply one of
    the many concerns that we have?
        General Mattis. I think Iran is going to be left behind by
    this contagion, as you described it, sweeping across the
    region, as they find that people are not interested in
    exchanging one authoritarian for one like in Tehran. So I think
    they have as much to worry about from this contagion.
        Actually, I think, in many cases, the Iraqi people are
    quite capable of making up their own mind without Iranian help,
    and that will continue to manifest. I am not naive about Iran's
    intent here.
        Senator Wicker. I hope you are correct. Thank you.
        Chairman Levin. Thank you, Senator Wicker.
        Senator Hagan.
        Senator Hagan. Thank you, Mr. Chairman.
        I certainly want to thank Admiral Olson and General Mattis
    for your excellent service to our country. Thank you so much.
        The Marine Corps Forces Special Operations Command (MARSOC)
    was established in 2005 and is headquartered at Camp Lejeune in
    North Carolina. Some have suggested that MARSOC personnel
    should be special operations for life, rather than rotating
    through the command on a rotational basis as they are currently
    doing.
        They argue that this would help SOCOM create and retain
    personnel within the special cultural and language skills that
    are critical for success in irregular warfare and the foreign
    internal defense missions.
        Admiral Olson, what is your assessment of the progress made
    in standing up and growing MARSOC, and how are they unique
    within the SOF? Could you also give me your thoughts on whether
    the Marine operators should be special operations just for
    life, just as in the Army?
        Admiral Olson. Thank you, ma'am.
        First, I would say we can be very, very proud of the way
    that MARSOC has been established. It did just celebrate its
    fifth birthday last month, and they have made tremendous
    progress.
        They have been deployed at the battalion level now for over
    a year with tremendous effects in western Afghanistan and
    earning an awful lot of respect from the forces with which they
    serve. It has been a very close partnership between SOCOM and
    the U.S. Marine Corps in building the MARSOC to the extent that
    it has so far.
        The Commandant of the Marine Corps has recently approved a
    military occupation specialty for those who have been through
    selection and advanced training to be members of the MARSOC,
    which will help us track and retain selected members of that
    community. I do believe that SOF for life is a concept that
    ought to be limited, that there is great value to circulation,
    that it is good for SOCOM to circulate people through its
    community back out into the big services and to bring people
    from the big services into our community so that we are not
    guilty of spinning a cocoon too tightly around ourselves in the
    special operations community.
        I am quite comfortable with the way it is going now. Even
    those who are in for sort of one tour in the MARSOC, that is
    now at least a 4-year tour and in some cases 5 years, which
    goes beyond some of the other services in many cases.
        Senator Hagan. Thank you.
        On February 17, Secretary Gates indicated during his
    testimony before this committee that it is unsustainable for
    the United States to fund a sizable ANSF indefinitely. He
    suggested that perhaps the United States could temporarily fund
    the ANSF as a sort of surge in security assistance and then
    reduce that as conditions in Afghanistan improve and as the
    ANSF becomes more capable.
        General Mattis, can you elaborate on what Secretary Gates
    discussed on February 17?
        General Mattis. I can, Senator. If you look at what has
    happened with the Taliban, beaten down badly in 2001, was able
    to regain its balance and come back strongly, and then over
    this last year or 2, we have reversed their successes.
        So we have surged our own military. NATO has surged. The
    troop-contributing nations have--about 100,000 United States,
    about 50,000 non-U.S. coalition. We have about double that on
    the part of the Afghans.
        What you are seeing is we are going into a critical time,
    and we are going to have to fight it out. As the enemy loses--
    and they will lose--we will succeed. Then there is going to
    come a point where you don't need as many international troops
    and eventually, perhaps, not as many Afghan troops and police
    because the enemy has been taken down. So the idea that
    Secretary Gates explained about a surge right now shows the
    normal ebb and flow that could result as a result of this kind
    of war, as the enemy's fortunes start going backwards.
        Senator Hagan. You said that you thought the ANSF could
    also, at some point, reduce its numbers?
        General Mattis. Well, I believe that at some point after
    the country gets more mature, it has more opportunity for young
    people. So there is not the breeding ground there for young
    guys to go join the extremists. Then the demand, the
    requirement for the size of those forces could well drop off.
        Senator Hagan. Thank you.
        Admiral Mullen has indicated that the longstanding U.S.
    military-to-military relationship has contributed to the
    professionalism of the Egyptian military. Experts have
    indicated that it is important to sustain Egypt's annual
    military aid because regardless of how events unfold in Egypt,
    the military will likely preserve its unique position within
    the governing system.
        They have also argued that freezing military aid to Egypt
    undermines the leverage that our Government has to promote an
    effective transition and to persuade the Egyptian armed forces
    to abide by the peace treaty with Israel.
        General Mattis, what is your position on the future of the
    U.S.-Egyptian military-to-military relationship? How might
    restructuring the foreign military financing allocation to
    Egypt impact our strategic objectives in the country, as well
    as the Egyptian-Israeli peace treaty?
        General Mattis. Senator, I believe that we should remain
    relentlessly engaged with the region. This is not the time to
    pull back.
        I am on the phone, for example, with General Anan, the
    chief of defense of the Egyptian military, on a routine basis.
    I have seen him in Egypt. There is a degree of professional
    respect there that allows us to have very candid discussions.
        He has been very proud of the fact that they are a
    caretaker military government. They are going to move quickly
    toward elections. I don't think you can disconnect that from
    the experiences of his officers, who have spent years in our
    country going through schools. I think that right now the
    military-to-military relationship and the ethical performance
    of the Egyptian military are very tightly tied together.
        This has to do with regional peace. This has to do with
    Middle East peace, as you know so well from decades of peace
    between Egypt and Israel. I endorse what we are doing right
    now, and I think we should continue.
        Senator Hagan. As far as the treaties, do you feel
    confident that they will abide by these treaties?
        General Mattis. Yes, ma'am, I do. It is in Egypt's best
    interest as well. But I am hesitant to get into the political
    arena and start forecasting things.
        Without a doubt, our military-to-military relationship, I
    think, is helpful in terms of being a stabilizing force and, I
    might add, with a force that used its authority in an ethical
    manner when a crisis came.
        Senator Hagan. They did. Thank you.
        My time has expired.
        Chairman Levin. Thank you, Senator Hagan.
        Senator Blumenthal.
        Senator Blumenthal. Thank you, Mr. Chairman.
        I join in thanking both of you, Admiral Olson and General
    Mattis, for your service and the service of the courageous and
    dedicated men and women under your command. I want to ask a
    couple of questions about those men and women who are serving
    and sacrificing so courageously.
        Admiral Olson, last year, I believe you testified that the
    SOCOM's Care Coalition was supporting 2,800 wounded SOF
    officers through a clearinghouse that works to increase the
    likelihood of their returning to service or having lives
    afterward. I think that clearinghouse exemplifies one of the
    SOF truths, which is that humans are more valuable than
    hardware, an emphasis that I certainly appreciate.
        I wonder if you could share with the committee an update on
    what SOCOM is doing to manage the kind of care, medical care,
    counseling, and other kinds of care that are necessary for
    these wounded warriors?
        Admiral Olson. Thank you, Senator.
        I thank you for highlighting the Care Coalition. It was
    actually mentioned by Admiral Mullen as the gold standard for
    DOD, and we are quite proud of it.
        Part of the true value of the Care Coalition is that the
    population with which it works is small enough that the
    relationships are personal. So that when somebody calls the
    Care Coalition for some help, a wounded or a family member,
    they are known to the Care Coalition. It is difficult to scale
    this up too much, but so far, it is within a manageable level
    that has been quite effective.
        What they do is serve as advocates for the wounded and
    their families. They connect those who have need with those who
    are willing to provide for needs. So your term ``brokering''
    and ``broker house'' is an accurate one.
        In addition to that, we are investing more heavily than in
    the past in rehabilitation facilities, in physical therapy
    experts, and technicians at the unit level so that those who
    need that frequent assistance have access to it on a daily
    basis. That has been hugely effective in accelerating the
    ability of our people to return to duty.
        It is reality that the instinct of virtually all of our
    wounded is to ask ``How soon can I get back to my unit?'' So,
    providing them accelerated opportunity to do that has become
    very important.
        Senator Blumenthal. Admiral Mullen testified not long ago
    before this committee about the difficulty of identifying some
    of the wounds, particularly when they involve traumatic brain
    injury or post traumatic stress. Can you give the committee
    your assessment of how adequate, how effective the means are to
    diagnose and identify those kinds of problems?
        Admiral Olson. Senator, frankly, I think we are very
    inadequate. I think the data does not collect in a meaningful
    way the information that we need to not only be responsive but,
    perhaps more importantly, to be proactive and preventive in
    dealing with those who have suffered psychological trauma as
    well as physical trauma.
        I have established what I call the ``pressure on the force
    task force.'' This is a tiger team that is going from unit to
    unit now. I will get a report back from them in about 90 days.
    What I have asked them to do is ignore the data and do sensing,
    rely on leaders, intuition, on the experience of teammates, and
    spend real time with the families, to include the children, to
    gain an understanding of what really is happening in the force.
        I don't want to get out ahead of that because I don't want
    to taint the responses to the surveys. But I do look forward
    very much to receiving the recommendations from that team.
        Senator Blumenthal. Your testimony speaks very powerfully
    to the potential of new developments actually on the
    battlefield as well as afterward in medical advances, potential
    research and development, and technology and so forth. Can you
    elaborate on that and also give us your assessment on whether
    the resources in the 2012 budget are adequate for that purpose?
        Admiral Olson. Sir, I would ask that the 2012 budget be
    supported. I don't have a strong sense of the adequacy
    precisely, but I believe that there is enough request in the
    budget to give us room to move with respect to that.
        In terms of medical advances, I do believe that biomedical
    research is a very important undertaking for the military, that
    we have experiences that are unlike civilian medicine and that
    any investment in military biomedical research is a good
    investment.
        Senator Blumenthal. Thank you.
        General Mattis, in light of what we are seeing in the world
    today, the recent transit through the Suez Canal of Iranian
    naval vessels, the ongoing attacks by Somali pirates, and other
    developments that affect our lines of communication and
    transport at sea, I wonder if you could share your views on the
    adequacy of the Navy's funding request with respect to
    submarine operations and undersea warfare for this fiscal year
    and the next.
        General Mattis. Senator, I have not looked at the Navy's
    request because, as a combatant commander, I only look at
    whether or not they are filling my requests with those ships
    they have today. I am somewhat in the current fight. I will
    tell you that I get what I need when I ask for it.
        But clearly--CENTCOM's future will be an increasingly naval
    future. It will not be one in which we have significant numbers
    of ground troops on the ground in various locations. So, how do
    we maintain a Navy that has the reach and can sustain our
    influence, reassure our friends, and temper any mischief by our
    enemies, make certain that they realize there is a cost? I
    think that is critical in the CENTCOM future.
        Senator Blumenthal. Thank you very much. My time has
    expired, but I just want to thank both of you.
        Thank you.
        Chairman Levin. Thank you, Senator Blumenthal.
        Senator Manchin.
        Senator Manchin. Thank you, Mr. Chairman.
        I want to thank both of you. I just returned from
    Afghanistan and Pakistan. I can't tell you how impressed I was
    at the quality of people that we have--our men and women, all
    of you who are leading them, and the job they are doing.
        With that being said, I am going to ask some questions. We
    will try to keep the answers as brief as possible to try to get
    through these.
        First of all, I will ask both of you, are we fighting a war
    on terror, or are we nation building? I will start, Admiral,
    with you.
        Admiral Olson. My responsibility is in both arenas. We
    present the SOF in two flavors. One is simply the strike
    flavor, the man hunting, the hunting aspect of
    counterterrorism. But at the same time, we are out in the
    villages and remote areas, working with locals to develop their
    own resources and look after their own neighborhoods.
        Senator Manchin. General?
        General Mattis. Sir, we are fighting a war that is unlike
    conventional war. It requires both counterterrorism and
    counterinsurgency efforts. Part of that would be seen as nation
    building, but you have seen it in action over there. Whatever
    it is called, it checkmates the enemy's designs.
        Senator Manchin. The other thing I would ask is the size.
    Can you all identify the size of our enemy and how much our
    enemy is being funded by--their cost of their operation against
    us?
        General Mattis. Identify the size of the enemy?
        Senator Manchin. Is there 10,000 of them versus 100,000 of
    us? Are they getting $100 million, and we are spending $100
    billion?
        General Mattis. I will have to take the question for the
    record, sir. There is a syndicate of organizations. Al Qaeda
    has been--pretty much been pushed down, beaten down. They are
    in a kind of hang-on up in the FATA right now.
        Haqqani network is still robust, kind of their special
    forces. They are linked to the Taliban in Afghanistan, who are
    also linked to the Taliban in Pakistan. It is a syndicate. It
    comes together. It goes apart. It fights each other. It fights
    us. It is hard to get an exact count. It will take me a little
    time, but I will get you our best estimate on each of those
    groups in that syndicate.
        [The information referred to follows:]

        [Deleted.]

        General Mattis. As far as the cost, I think it is very
    difficult to evaluate the cost. But clearly, I think we have to
    look in the future to how do we become cost imposing, use cost-
    imposing strategies on an enemy, rather than being in the
    position that you just described.
        [The information referred to follows:]

        In coordination with the AF/PAK Center of Excellence at U.S.
    Central Command, the U.S. Special Operations Command Joint Intelligence
    Center Special Operations Command estimates that the Taliban and
    insurgent forces inside of Afghanistan is between 22,000 to 32,000
    fighters.

        Senator Manchin. Let me just say, if I can, the best I
    could decipher from what we were getting information is I think
    it is fair to say that we have about 10 to 1 of the troops
    superior. We have about 10 troops for their 1 identified. We
    spend about $10 for their $1. It looks like money is not going
    to win this war. Is that a fair statement, Admiral?
        Admiral Olson. Sir, I would have to take, for the record,
    your numbers to confirm or deny that. I do believe that the
    presence in a variety of capacities and the whole of nation
    approach to Afghanistan is very important. I do believe that it
    is less expensive to fund an insurgency than a
    counterinsurgency, certainly.
        Senator Manchin. If I may ask this question, and this will
    be to you, Admiral. I was so impressed with special ops. We
    were privileged to go through a briefing and watch how they
    operate.
        With that being said, do you believe that you all are able
    to identify the Haqqanis and Quetta Shura tribes, if you will,
    and their location within Pakistan and your inability to go get
    them or them to assist you in getting them? Is there any break
    in that whatsoever?
        Admiral Olson. Sir, I would say that Pakistan is a
    sovereign nation and will, as sovereign nations do, act in its
    own best interests first. It does not see itself as threatened
    by those groups, as our forces feel they are threatened by
    those groups. We are willing to assist Pakistan at the rate
    that they are willing to accept our assistance, sir.
        Senator Manchin. So, basically, we have an ally who truly
    is not acting as an ally. This is just from an outsider's
    opinion and looking at the operation of our people being at
    risk, knowing where the enemy is, and we can't do anything
    about it.
        Admiral Olson. Sir, I would say that in many ways Pakistan
    is behaving as a great ally and taking much risk upon
    themselves. But there is perhaps more that can be done. I think
    that the senior-level dialogues that are taking place are very
    productive in this regard.
        Senator Manchin. To both of you, do you know if the
    literacy rate in Afghanistan has improved at all over 10 years?
        General Mattis. Yes, it has. I would have to get you the
    numbers, sir. It is also one of the primary recruiting tools
    for the Afghan army. But today, we have significantly higher
    education. I will get you the numbers that can verify this.
        Senator Manchin. The numbers that I received show that
    literacy in Afghanistan is still only 28 percent.
        General Mattis. Sir, well, considering that during the
    Taliban's control, they didn't build a single school and they
    have been trying to blow up the ones we are building, it has
    been difficult. But we are making progress, sir. I will get you
    the numbers.
        [The information referred to follows:]

        Afghan literacy rates have indeed improved and are currently
    trending upward under International Security Assistance Force (ISAF)-
    led development efforts. In 2008, the Department of State estimated the
    adult (over 15 years old) Afghan literacy rate at 43 percent for males
    and at 12 percent for females. In September 2009, an ISAF assessment
    estimated the adult Afghan literacy rate had climbed to 50 percent (+7
    percent) for males and 14 percent (+2 percent) for females.
        Based on the October 2010 Congressional Report on Progress Toward
    Security and Stability in Afghanistan, most literate Afghans are
    concentrated in the cities. In rural areas, 90 percent of women and
    more than 60 percent of men remain illiterate. Under the Taliban regime
    girls were not allowed to go to school and fewer than 900,000 boys were
    enrolled. During the same period, university enrollment was only 7,881
    students. In stark contrast, nearly 7,000,000 students are now enrolled
    in primary and secondary education facilities (with 37 percent of them
    being female) and university enrollment has grown to 62,000.

        Senator Manchin. I would ask both of you this question,
    too. Do you believe that al Qaeda still poses a threat to the
    United States of America? If that is still correct, since they
    are not a presence in Afghanistan, with all of our resources
    and so much of our money has been dedicated to that arena,
    where are they now, and what are we doing to be able--are we
    capable of taking the fight to them, wherever it may be?
        Admiral Olson. Sir, I think al Qaeda is struggling. I think
    that its leadership is less experienced. I think its ranks are
    more fractured than any time in the last decade, and they
    certainly have distributed. There is AQAP, al Qaeda in the
    Maghreb, al Qaeda in Iraq, and other al Qaeda associated groups
    in the region. So there is a requirement to continue taking the
    fight to where they are, sir.
        Senator Manchin. General?
        General Mattis. They are a threat. They are under terrible
    pressure right now. They have gone to ground in the epicenter
    of this effort, which is up in the FATA, but they have also
    distributed down into AQAP. They have been hit hard in Iraq,
    but they are still a threat to the Iraqi Government. We see
    links going down into Somalia with al-Shabaab.
        Senator Manchin. With the tremendous budget concerns we
    have within our own nation, if changes are made or adjustments
    are made to the operation as we know it in Afghanistan today,
    do you think it will affect the outcome at all, if we reduce
    the funding?
        General Mattis. Absolutely, it will, sir. It must. I mean,
    right now, we have, just in the last year and a half, gotten
    the resources, personnel, training, Commander's Emergency
    Response Program (CERP) funds, that sort of thing correct. We
    are right now approaching the time when we are going to see the
    results of all that.
        We are already seeing the results, but they are going to be
    very telling shortly.
        Senator Manchin. Admiral?
        Admiral Olson. Sir, Afghanistan SOF are operating at the
    edge of their people and at the edge of their budget. Any
    reduction in either would be detrimental to the effect, sir.
        Senator Manchin. Thank you.
        Chairman Levin. Thank you, Senator Manchin.
        Senator Udall.
        Senator Udall. Thank you, Mr. Chairman.
        Good morning, gentlemen. Thank you for your patience and,
    of course, for your service.
        I would like to pursue further discussion about the
    sanctuaries in Pakistan with this lead-in. General Mattis, I
    was in Malajat last October. I know you spoke to, in your
    testimony, what had happened there and the positive
    developments. Fort Carson troops were there from my home State
    of Colorado. So it was particularly special to be there, and it
    was very impressive.
        My fear is that it is only a matter of time before
    insurgents reappear. Their refuge in that part of Pakistan is
    only about 4 hours from Kandahar. It is just my sense is as
    long as the enemy has sanctuaries, we are fighting with an arm
    tied behind our back.
        General, you have spoken to why Pakistan isn't doing more
    to eliminate the sanctuaries. If they can't or won't address
    them, do you believe that the International Security Assistance
    Force (ISAF) and Afghan forces working together can make enough
    progress on the security front to overcome the challenges
    presented by the sanctuaries?
        Admiral Olson, I would welcome your thoughts as well after
    the General has spoken to this.
        General Mattis. Sir, the area the troops from your State
    were operating in is, obviously, close to the border area. It
    is subject to being impacted by the enemy coming out of safe
    havens.
        It is not that the Pakistanis have done nothing here. They
    have lost thousands of troops. They have had almost 30,000 of
    their civilians murdered by these enemies, and they are
    probably in a position of saying, ``I don't want to create more
    enemies right now than I already have.'' They are engaged in
    years of the longest campaign and the most costly campaign that
    they have faced.
        I think that, while it is not perfect, we have to remind
    ourselves that the only thing more difficult than fighting with
    allies is fighting without allies. Thank God, we have the 49
    nations alongside us, fighting in Afghanistan right now.
        With Pakistan, I think we have to look at both what they
    are doing and continue to try and close the gap in our
    understanding with what they are not doing. We are very candid
    in our discussions with the Pakistani leadership about this,
    and we will continue to work it.
        However, in the area that you are referring to, that kind
    of open ground coming from Kandahar over towards the border,
    General Petraeus, thanks to the increase that the President
    authorized, now has a surveillance brigade from the Army that
    is watching over that area.
        In other words, it is not just a thoroughfare. The enemy is
    going to have a very difficult time come spring when they try
    to reintroduce their troops back into the areas of Helmand and
    Kandahar, where they have lost the initiative.
        We are aware of the situation. We are adapting to it, and
    the Pakistanis are doing a lot. There is more they could do,
    but there is more we could be doing as well. This is the normal
    give-and-take of war, sir.
        Senator Udall. Admiral Olson?
        Admiral Olson. Sir, we wish they would do more. Perhaps
    they could do more. But I don't pretend to understand the
    internal dynamics within Pakistan, certainly the strategic
    implications of their decision-making process, to be too
    critical of them.
        Senator Udall. Yes, they do have their hands full. I do
    know there is a school of thought that counterinsurgencies have
    never been successfully completed if the insurgents have
    sanctuaries, and we need to continue to worry that concept.
        If I might, General, Admiral, I would like to talk about
    some of the analysis that right now we are in a strategic
    stalemate in Afghanistan. That is a better situation, some
    would argue, than we had a year or 2 or 3 ago. By that, I mean
    neither side can achieve its aims through the use of arms
    alone.
        A follow-on thought is that we will have difficulty
    preserving our gains just because we are visitors, if you will,
    to the area, without entering into some sort of negotiations. I
    know there are still disagreements among many in Afghanistan,
    both in the Afghan community and in ISAF, what those
    negotiations look like, how quickly they should happen, and
    what they might accomplish.
        My opinion is--and I have heard this from the military
    leadership in our country and the civilian leadership--that the
    way home is through a political process and political solution,
    ultimately. How do we incentivize the process further and make
    reconciliation and reintegration move more quickly?
        General Mattis. Senator, I do not think we are in a
    strategic stalemate right now. If I was before you a year ago,
    I probably would have accepted that. I think that the enemy is
    now in a worsening situation. What we are doing is our strategy
    is that we have a military component. You have seen that.
    Everyone knows what that is--reinforced, well-trained troops,
    better strategy. I can go on. Then you have a civilian
    component. Those two are married together into a combined
    civilian-military effort.
        Additionally, there is a diplomatic effort to end the war.
    Taliban are going to have to say we will abide by the
    constitution, break with al Qaeda and stop using violence. They
    are welcome back in.
        The reconciliation process has to be a process that is
    owned by the Afghans because they are the ones who have to
    reconcile. We can support it. We should support it. The
    international community is supporting it.
        Reintegration is the bottom up, reconciliation being the
    top down. Reintegration is where we are getting young fellows
    to come over to our side, and there is a process to bring them
    onboard.
        So you are seeing right now a strategy of how do you
    incentivize it? First point, make certain the enemy doesn't
    think they are going to win. That is what we have had to
    reverse in the last year. Then the diplomats have more of a
    chance to get these other efforts--reconciliation,
    reintegration--going. I hope that answers your question.
        Senator Udall. Admiral Olson, do you have any additional
    thoughts?
        Admiral Olson. Sir, I certainly agree with what General
    Mattis said. I would say that I do think we are on a path to
    being able to negotiate from a position of strength. I do
    believe that negotiation can accelerate the termination of a
    conflict, but you have to be able to do it from a position of
    strength.
        Senator Udall. Speaking of negotiations, General, India and
    Pakistan are reportedly negotiating again over such tough
    topics as Kashmir and economic integration. I assume you and
    Admiral Willard share perspectives and are working together.
        Would you comment on the opportunity there? My opinion, if
    India and Pakistan could reach the point at which they had a
    little warmer relationship, it would help our efforts in
    Afghanistan.
        General Mattis. I completely concur with you. Admiral
    Willard and I are in routine contact with one another, as we
    make certain that seam between the two combatant commands does
    not become a gap in our efforts to work together.
        At the same time, this India-Pakistan reconciliation has to
    be something that they take responsibility for. So we are more
    in a mode of making certain that what we are doing militarily
    is never seen as contrary to that trend.
        Senator Udall. My time has expired. Two brief comments. I
    met with some returning civilian and military leaders from
    Afghanistan. Interesting ideas taking shape, which is that the
    Afghan civilian sector ought to surge into the Afghan rural
    communities. That is not a new idea to you, but I wanted to
    continue to acknowledge. I know the chairman has really pushed
    on that front as well.
        Then, second, listening to you, I was reminded of President
    Lincoln's great comment that it always seemed like in war the
    best generals were working for the newspapers. Listening to you
    two today, I think the best generals and admirals are working
    for the American people. So, thank you.
        Chairman Levin. Thank you very much, Senator Udall.
        I just have a couple questions for a second round, and then
    we are going to adjourn over to the Capitol Visitor Center,
    room 217, for a closed session. There has been a request by at
    least one Senator for that. We should start there, hopefully, 5
    minutes to 12:00, if no one else has any additional questions
    here.
        I just have two questions. One, General, is the question of
    whether or not you expect that President Karzai will be
    announcing later this month the first phase of provinces and
    districts for transition to Afghan security responsibility
    based on the joint recommendations of ISAF and Afghan
    officials. That is what Defense Minister Wardak told me was
    likely to happen, when he met with me in my office. Is that
    your understanding?
        General Mattis. It is, Mr. Chairman. I believe it will be
    on March 21.
        Chairman Levin. All right. The other question relates to
    the camp in Iraq, Camp Ashraf, where there are Iranian
    dissidents who are being continually harassed in various forms
    by agents of Iran and also by some of Maliki's people as well.
        Now, one of the issues there are the loudspeakers,
    apparently large numbers of loudspeakers, which blare
    propaganda into that area. I am wondering whether you have
    taken this issue up, General, with Prime Minister Maliki and
    whether we are pressing this issue because that kind of
    psychological abuse is unacceptable. Have you raised this with
    Prime Minister Maliki?
        General Mattis. I will raise it with him, sir.
        Chairman Levin. Has it been raised before, do you know?
        General Mattis. I don't know.
        Chairman Levin. Okay. Will you make sure that it is raised?
        General Mattis. I will.
        Chairman Levin. Any other questions? If not, we are going
    to adjourn right away to that classified session.
        We thank both of you again for your service. We will see
    you over at the Capitol Visitor Center.
        [Questions for the record with answers supplied follow:]

                   Questions Submitted by Senator Carl Levin

                VILLAGE STABILITY OPERATIONS/AFGHAN LOCAL POLICE

        1. Senator Levin. Admiral Olson and General Mattis, General
    Petraeus and others have emphasized the importance of the Village
    Stability Operations (VSO) and Afghan Local Police (ALP) programs to
    the strategy in Afghanistan. Under the ALP, Special Operations Forces
    (SOF) are working with local villagers to empower communities to create
    their own protection force answerable to the local elders and under the
    oversight of the Ministry of Interior. General Petraeus has discussed
    the possibility of dramatically increasing the size of both programs to
    more effectively undercut Taliban influence in rural areas while also
    better connecting these areas to the central government. What has been
    the effect of these programs on rural Afghan populations and what has
    been the response from the Taliban?
        Admiral Olson. VSO and the associated ALP program have offered the
    Afghan Government its first steps toward legitimacy in key rural areas.
    By contributing to local governance, VSO provides the mechanism by
    which the Government of the Islamic Republic of Afghanistan is able to
    address security, economic, judicial and developmental grievances. This
    has improved popular confidence in the Afghan Government and the
    various Afghan Security Forces. It has significantly impacted Taliban
    safehavens, freedom of movement, recruiting and operational
    effectiveness in the micro-regions where it has been implemented. As a
    result, the Taliban are increasing their efforts to intimidate
    communities and individuals participating in the VSO and ALP programs.
        General Mattis. [Deleted.]

        2. Senator Levin. Admiral Olson and General Mattis, do you believe
    the availability of U.S. Special Operations teams is a limiting factor
    in expanding these programs to a point where they can have a strategic
    impact in Afghanistan?
        Admiral Olson. The SOF teams have a strategic impact even in small
    numbers, but the demand is outpacing the supply.
        General Mattis. No. While the VSO/ALP mission initially required
    SOF's unique capabilities, the program is now mature enough for
    conventional forces to conduct with SOF oversight.

                    AFGHANISTAN COUNTERTERRORISM OPERATIONS

        3. Senator Levin. Admiral Olson and General Mattis, according to
    published reports, the tempo of counterterrorism operations in
    Afghanistan by U.S. and Afghan SOF has increased dramatically in the
    last 6 months and demonstrated significant results. Lieutenant General
    Rodriguez stated recently that the Afghan people are playing an
    increasingly important role in the success of these operations by
    ``helping to provide significantly more tips because they see Afghan
    Security Forces out among them more than they ever had because of the
    increase in the number [of Afghan Forces].'' Reportedly, 85 percent of
    counterterrorism operations take place without a shot being fired. Do
    you agree with Lieutenant General Rodriguez that the increased presence
    of Afghan Security Forces has resulted in better intelligence because
    the population is more likely to come forward with information?
        Admiral Olson. Yes. This is one of the reasons that SOF operations
    are partner led and U.S./Coalition missions are no longer unilateral.
        General Mattis. Yes. Locally provided intelligence has increased
    based on the growth of both Afghan National Security Forces (ANSF) and
    International Security Assistance Forces. A more secure environment has
    reduced the threat of retribution and allowed for the establishment of
    numerous community-based self-defense programs, multiple ``tip lines''
    to harvest indigenous information, and 74 new local police sites that
    collectively provide actionable intelligence.

        4. Senator Levin. Admiral Olson and General Mattis, what has been
    the impact of this intelligence on the success of counterterrorism
    operations?
        Admiral Olson. Further deployment of ANSF has led to better
    intelligence collection. Not only is the local population more likely
    to report information to the ANSF, the pairing of ANSF and coalition
    partners can greatly assist in guiding collection focus and methods.
    Specifically, the partnership of Afghan National Army (ANA) Special
    Forces with U.S. Special Forces teams has greatly increased the
    Operational Detachment Alpha's ability to understand the human terrain
    and socio-cultural dynamics at the village and district level.
    Similarly, Afghan National Civil Order Police has seen success in
    manning checkpoints throughout southern Afghanistan. Their lasting
    presence along major roadways helps the Conventional Forces to better
    understand local populations and have demonstrated an ability to
    support counter IED initiatives in southern Afghanistan.
        General Mattis. These operations have facilitated Coalition and
    Government of Afghanistan efforts to secure the Afghan populace. The
    enhanced security environment has paid great dividends and fostered
    popular support and trust in the ANSF, leading to more intelligence
    tips from the people.

        5. Senator Levin. Admiral Olson and General Mattis, are news
    reports accurate that 85 percent of SOF counterterrorism operations are
    conducted successfully without a shot being fired?
        Admiral Olson. Our data for 2010 indicates that, of about 2,000
    counterterrorism operations, 86 percent did not include gunfire.
        General Mattis. [Deleted.]

                 AIRLIFT SUPPORT FOR SPECIAL OPERATIONS FORCES

        6. Senator Levin. Admiral Olson, one of the most frequent concerns
    related to deployed SOF is the lack of rotary wing airlift to support
    their missions, especially in Afghanistan. The two primary concerns are
    that U.S. Special Operations Command (SOCOM) uses its organic rotary
    wing airlift almost exclusively to support kill/capture
    counterterrorism missions and that airlift support from the General
    Purpose Forces is rarely available. This leaves special operations
    personnel performing counterinsurgency missions with very little direct
    support. The 2010 Quadrennial Defense Review (QDR) mandates some action
    on this issue by increasing SOCOM's organic capabilities and by
    dedicating a limited number of Navy helicopters to support of SOF. Do
    you believe the actions directed by the QDR will address SOCOM's
    airlift needs?
        Admiral Olson. The actions directed by the QDR adequately addressed
    SOCOM's longer term organic helicopter needs. Surge operations still
    require allocation of General Purpose Force helicopters to support SOF
    operations. Further, foreign training requirements may place an
    additional demand on SOF rotary wing capabilities.

        7. Senator Levin. Admiral Olson, do you believe additional
    capabilities should be grown within SOCOM or provided by the General
    Purpose Forces?
        Admiral Olson. SOCOM's programs of record, and those we have
    planned across the Future Years Defense Program (FYDP), combined with
    General Purpose Forces provided by the Service Departments, are
    adequate to fulfill the current and anticipated airlift support
    requirements.

                  INTELLIGENCE SUPPORT FOR INDIRECT ACTIVITIES

        8. Senator Levin. Admiral Olson and General Mattis, some observers
    contend that the National intelligence agencies focus their assistance
    to the Department of Defense (DOD) in Afghanistan on special operators
    engaged in direct action operations against the Taliban. As a
    consequence, it is alleged, General Purpose Forces and SOF engaged in
    indirect activities, including VSOs and population security, receive
    less intelligence support. Do you believe SOF performing primarily
    indirect missions in Afghanistan receive adequate intelligence support?
        Admiral Olson. Yes, intelligence support is generally adequate and
    responsive.
        General Mattis. Yes. All general purpose and SOF are provided the
    intelligence support required to accomplish their assigned missions.

        9. Senator Levin. Admiral Olson, how is SOCOM working to build its
    organic intelligence gathering and exploitation capabilities?
        Admiral Olson. SOCOM is focused on developing an organic airborne
    Intelligence, Surveillance, and Reconnaissance (ISR) capability with a
    corresponding Processing, Exploitation & Dissemination (PED) capacity.
    The SOCOM J2 (Intelligence) and J6 (Communications) have teamed to
    design and build a robust Special Operations Information Enterprise
    (SIE) that will facilitate the movement, sharing, and coordination of
    information across theaters of operations, from tactical users to
    strategic decisionmakers. The intent is to fully integrate with the
    Service developed Distributed Common Ground Station (DCGS) family of
    networks, which will enable the rapid sharing of critical information
    in a joint-combined operating environment.
        SOCOM leads DOD in the employment of Identity Intelligence tools,
    tactics, techniques and procedures. Partnering with the Biometric
    Identity Management Agency and the ISR Task Force, we received $79.9
    million the past 2 years and developed a $26 million (FYDP) training
    program at Fort Bragg, NC, resulting in the fielding of 1,426 biometric
    systems that led to 2,686 tiered Watchlisted and IED associated persons
    of interest. Our Sensitive Site Exploitation (SSE) program leverages
    biometrics, forensics and document/media exploitation as mission
    enablers to defeat terrorists and their networks. SOCOM is also a
    leader in tagging, tracking, and locating technology, as well as in
    providing SOF with a world-class reconnaissance, surveillance, and
    target acquisition capability that includes still/video, sensor trigger
    and unattended ground sensors/unattended maritime sensors (UGS/UMS).

                    SPECIAL OPERATIONS PERSONNEL MANAGEMENT

        10. Senator Levin. Admiral Olson, some have argued that you, as the
    Commander of SOCOM, should have greater influence on personnel
    management issues which are generally within the purview of the
    Services, but which directly impact the assignment, promotion,
    compensation, and retention of SOF. Do you believe you are adequately
    empowered to influence the personnel management decisions of the
    Services as they apply to SOF?
        Admiral Olson. Until recently, no. However, DOD Directive 5100.01,
    Functions of DOD and its major components, approved by the Secretary of
    Defense on 21 December 2010, requires the Services to ``coordinate''
    personnel policies with SOCOM, and this has the potential to improve
    SOCOM's influence in this regard.

                           UNDERSEA MOBILITY STRATEGY

        11. Senator Levin. Admiral Olson, last July, SOCOM cancelled the
    Joint Multi-Mission Submersible program and announced a new Undersea
    Mobility acquisition strategy focused on the development and fielding
    of a family of wet and dry combat submersibles to meet the requirements
    of SOF. These actions follow the extremely costly development and
    fielding of the Advanced SEAL Delivery System, which was ultimately
    rendered inoperable by a November 2008 battery fire. Please describe
    the decisionmaking process that led to the change in acquisition
    strategy.
        Admiral Olson. In the programming and budgeting process for fiscal
    year 2012, the Department conducted a detailed review of the JMMS
    program. Based on the review, it was determined that the planned
    program to develop and field a fleet of JMMS was unaffordable due to
    current and expected future competing priorities for SOCOM resources.
    In addition, during the JMMS material solutions analysis, another
    feasible alternative had been identified to develop and field a fleet
    of smaller, less-capable dry combat submersibles that could operate
    from Dry Deck Shelter equipped submarines and surface ships.
    Simultaneously, SOCOM has been looking at alternate commercial
    submersible concepts and experimenting with a commercial-off-the-shelf
    submersible that showed promising results at reduced cost.
        Accordingly, SOCOM revised its undersea mobility acquisition
    strategy to use the funds originally programmed for JMMS to develop a
    fleet of affordable Dry Combat Submersibles (based on commercial
    technologies and practices) and the necessary Dry Deck Shelter and
    submarine modifications to support them. This enables SOCOM to field a
    larger number of undersea vehicles sooner than the original JMMS
    approach.

        12. Senator Levin. Admiral Olson, how would you characterize the
    technological, cost, and schedule risks associated with development of
    a new family of dry combat submersibles?
        Admiral Olson. Technical risk is medium to simultaneously meet the
    ``iron triangle'' of payload, speed, and range requirements due to
    current battery technology. Commercial off-the-shelf and Government
    off-the-shelf silver-zinc battery technologies are rated at Technology
    Readiness Levels 7-9, so they should be reliable. However, they have
    not demonstrated the power required for our ideal submersible in a
    realistic environment. Our Dry Combat Submersible program is focused on
    identifying what is affordable and achievable within current budgets
    and technologies.
        Cost and schedule risk are both assessed as medium level risk based
    primarily upon the risk associated with safety certification. SOCOM is
    using commercial design standards and processes (e.g. American Bureau
    of Shipping) wherever possible to help reduce these risks through a
    more determinant certification process. SOCOM is also working closely
    with the U.S. Navy to properly scope any certifications they require
    for operations associated with nuclear submarine.

        13. Senator Levin. Admiral Olson, how does SOCOM intend to avoid
    the costly development and reliability issues that plagued the
    development and operation of the Advanced SEAL Delivery System?
        Admiral Olson. SOCOM intends to leverage commercial submersible
    design, fabrication, and safety certification methodology to provide
    timely, reliable, and cost-effective capabilities. Design studies are
    also planned to cultivate the submersible industrial base. SOCOM
    intends to use American Bureau of Shipping classed competitive
    prototypes to affirm speed, range, and payload thresholds prior to
    ordering the Dry Combat Submersible-Light lead ship. Additional
    economies will accrue from using proven sonar systems and communication
    systems from our wet SEAL Delivery Vehicles.

        14. Senator Levin. Admiral Olson, what is the appropriate role for
    the Naval Sea Systems Command in the development and acquisition of
    SOCOM's undersea mobility platforms?
        Admiral Olson. SOCOM will use the engineering expertise of Naval
    Sea Systems Command (NAVSEA), its shipyards, and laboratories to
    support the Dry Combat Submersible (DCS) programs, especially in the
    areas of engineering and safety certification. We are working with
    NAVSEA to identify experts and define roles such as the subsea
    engineering found at Naval Surface Warfare Centers. NAVSEA will perform
    system safety certification of all submersibles that will operate from
    submarines. SOCOM will perform system safety certification of any DCS
    submersibles (including prototypes) that will not operate from
    submarines. SOCOM is also using the expertise of commercial engineering
    and safety certification agencies such as American Bureau of Shipping
    (ABS) to provide independent review and classification services for DCS
    programs. ABS has certified 47 submersibles that operate for extended
    periods every day, carrying civilian and non-DOD government personnel
    for research, tourism, and the oil industry.

                    MILITARY INFORMATION SUPPORT OPERATIONS

        15. Senator Levin. Admiral Olson, DOD recently announced that it
    was discontinuing use of the term ``psychological operations'' in favor
    of the term ``Military Information Support Operations.'' Why do you
    believe such a change was necessary?
        Admiral Olson. The U.S. Armed Forces have long recognized the vital
    importance of conveying truthful information to influence foreign
    governments, organizations, groups, and individuals. Military
    information activities in both wartime and peacetime have been
    described as ``psychological warfare'', ``psychological operations''
    and PSYOP.
        In recent years, the term ``psychological operations'' became
    anachronistic and misunderstood. Although PSYOP activities relied on
    truthful information credibly conveyed, to some people PSYOP connoted
    propaganda, brainwashing, manipulation and deceit. In some cases, the
    negative connotations of the term discouraged commanders and our
    civilian interagency partners from making use of military PSYOP
    capabilities to advance national objectives.
        To overcome the stigma of the name and allow DOD to better utilize
    these military information capabilities in an interagency environment,
    the Chief of Staff of the Army, General Casey, and I recommended to the
    Secretary of Defense that we replace the term ``psychological
    operations'' or PSYOP with Military Information Support Operations
    (MISO) to more accurately convey the nature of the activities. The
    Secretary directed DOD to implement the change this fiscal year.

        16. Senator Levin. Admiral Olson, what operational and doctrinal
    impacts do you believe such a change will have?
        Admiral Olson. The change will have no operational or doctrinal
    impacts. It is only an administrative terminology change. The
    definition and all policy, legal, organization, and doctrinal guidance
    previously applied to PSYOP remain in effect for MISO.

                          SPECIAL OPERATIONS MISSIONS

        17. Senator Levin. Admiral Olson, in recent years, SOF have taken
    on an expanded role in a number of areas important to countering
    violent extremist organizations, including those related to information
    and military intelligence operations. Some have advocated significant
    changes to SOCOM's Title 10 missions to make them better reflect the
    activities SOF are carrying out around the world. What changes, if any,
    would you recommend to SOCOM's Title 10 missions?
        Admiral Olson. Over the past year, SOCOM has reviewed the set of
    special operations activities listed in Title 10 through the Strategic
    Capabilities Guidance process. We have identified a set of operations
    and activities that better reflect how SOF supports national
    strategies, global campaign plans, and theater plans. We have also come
    to realize that operations-counterterrorism, counterinsurgency, foreign
    internal defense, and others-often blend in today's complex
    environment. It is now much more difficult to neatly categorize a
    specific operation as one type versus another. Therefore, we see the
    need to differentiate between operations and activities.
        To provide clarity in how SOF executes its missions, we have
    developed a framework for SOF Core Operations and Activities. Core
    Operations are the operational contexts within which SOF operate, often
    in concert with conventional forces and interagency partners. Core
    Activities, however, are unique capabilities that SOF apply in
    different combinations tailored for an operational context. A core
    special operation activity is a stand-alone, operationally significant,
    military capability that SOF can apply independently or in combination
    as part of a global, Geographic Combatant Command, or joint force
    commander's campaign or operation. I will be reviewing the revised list
    of operations and activities over the next few months with SOF senior
    leaders. The revised list, which could possibly become the basis for a
    Title 10 legislative proposal, includes the following:
    Core Operations:
            Combating Weapons of Mass Destruction
            Counterinsurgency
            Counterterrorism
            Foreign Internal Defense
            Stability Operations
            Support to Major Combat Operations and Campaigns
            Unconventional Warfare
    Core Activities:
            Advise and Assist
            Civil Affairs Operations
            Hostage Rescue and Recovery
            Intelligence Preparation of the Environment
            Interdiction and Offensive Weapons of Mass Destruction
            Operations
            Military Information Support Operations
            Operational Preparation of the Environment
            Reconnaissance and Surveillance
            SOF Combat Support and Combat Service Support
            Strikes and Raids
            Support to Insurgency

                         COUNTERING RADICAL IDEOLOGIES

        18. Senator Levin. Admiral Olson, in 2005, Ayman al-Zawahiri, al
    Qaeda's second-in-command, declared that ``We are in a battle, and more
    than half of it is taking place in the battlefield of the media.'' The
    new National Military Strategy lists ``countering violent extremism''
    as the first National Military Objective and stresses the importance of
    long-term ``whole of nation'' approaches to countering extremism beyond
    short-term activities of killing and capturing extremists. However,
    earlier this year, a non-partisan study highlighted the lack of a U.S.
    strategy to counter radical ideologies that foment violence (e.g.
    Islamism or Salafist-Jihadism). What is SOCOM's role in supporting
    efforts by the geographic combatant commands to counter the spread of
    violent extremist ideology and the radicalization of vulnerable
    populations?
        Admiral Olson. SOF, specifically MISO support the geographic
    combatant commands in countering VEO ideologies and radicalization of
    vulnerable populations through several means. SOCOM Military
    Information Support units have been deployed in direct support of U.S.
    military operations in Afghanistan (OEF), Iraq (New Dawn), and the
    Philippines (OEF-Philippines) from the onset of those operations, often
    in collaboration with coalition forces and other U.S. Government
    Agencies.
        Outside the areas of conflict, SOCOM deploys Military Information
    Support Teams (MISTs) to countries supporting military objectives to
    erode support for extremist ideologies and deter tacit and active
    support for VEOs. Deployed at the request of both the GCC and the
    respective U.S. Ambassador, MISTs provide the GCCs with a direct
    engagement tool to improve partner nation capabilities to combat VEOs
    and resist the spread of their associated ideologies.
        SOCOM also resources and manages two effective trans-regional
    military information support programs: the Trans-Regional Web
    Initiative (TRWI), and the Regional Magazine Initiative (RMI). Both
    programs provide the GCCs a capability to conduct influence operations
    to directly address VEO ideology, facilitation, and radicalization
    without putting boots on the ground.
        In addition to forces provided and programs executed, SOCOM also
    supports the GCCs by providing direct planning support.

        19. Senator Levin. Admiral Olson, to what degree does SOCOM draw
    upon research conducted by DOD's Minerva and Human Social Cultural
    Behavioral Modeling programs?
        Admiral Olson.
    Minerva Research Initiative (MRI)
        MRI is a DOD-sponsored, university based social science program
    initiated by the SECDEF in 2008. The program's goal is to improve DOD's
    basic understanding of the social, cultural, behavioral, and political
    forces that shape regions of the world of strategic importance to the
    US. SOCOM has been an integral part of two of the five projects: (1)
    `Finding Allies for the War of Words: Mapping the Diffusion and
    Influence of Counter-Radical Muslim Discourse' and (2) `Terrorism,
    Governance, and Development'
        SOCOM has fostered multiple relationships between DOD project
    managers; academics; and SOCOM planners, analysts, and interagency
    personnel.
    Human Social Culture Behavior (HSCB) Modeling Program
        In 2008, OSD established the HCSB modeling program. The mission of
    the 6-year program is to research, develop, and transition
    technologies, tools, and systems to help planners, intelligence
    analysts, operations analysts, and others represent, understand, and
    forecast sociocultural behavior at the strategic, operational, and
    tactical levels. SOCOM representatives have been in close collaboration
    with HCSB project managers to garner better insights regarding
    objectives, identify those projects that are of importance to SOCOM,
    and engage with appropriate academics to ensure they understand our
    interests.
        SOCOM received funding to write a program called ANTHRO ANALYST
    (AA) FOR J2 SOCPAS. AA is an advanced application allowing a user to
    quickly input elevation, population density, and intelligence
    information to generate and predict human terrain as well as habitable
    areas.
        SOCOM attends the Air Force Office of Scientific Research annual
    program reviews and provides updates to appropriate offices and
    directorates within the command. SOCOM continues to leverage the
    projects' findings and to incorporate appropriate information into
    efforts across the command.
                                     ______

                Questions Submitted by Senator Claire McCaskill

                                  CAMP ASHRAF

        20. Senator McCaskill. General Mattis, in recent Senate Armed
    Services Committee hearings on U.S. policy in Iraq, as well as during
    this hearing before the committee, the plight of residents of Camp
    Ashraf in Iraq was discussed. In addition, prominent former government
    officials have recently raised concerns about the welfare of the
    residents at Ashraf, including former Energy Secretary Bill Richardson,
    General Peter Pace (Ret.), and former Attorney General Michael Mukasey.
    The approximately 4,000 Iranian dissidents and their advocates continue
    to allege abuses and harassment by members of the Iraqi security
    services. The harassment includes tactics such as continuous exposure
    to loudspeakers, as Chairman Levin remarked, and up to and including
    serious physical harm against camp residents. To what extent do U.S.
    military forces have contact with the residents of Camp Ashraf?
        General Mattis. U.S. military forces had limited contact regarding
    Camp Ashraf since Government of Iraq has taken over responsibility. In
    the wake of the incident on 8 April that led to a number of deaths and
    injuries, we have requested access to Camp Ashraf but so far have been
    refused by the Iraqi Government. We have been told the Iraqi Government
    is undertaking an investigation on events there, and the U.S.
    Ambassador in Baghdad and General Austin are making clear U.S. policy
    and the way forward with the Iraqi Government

        21. Senator McCaskill. General Mattis, has any U.S. military
    equipment provided to the Iraqi military or security forces been used
    to harass or endanger the residents of Camp Ashraf?
        General Mattis. It is possible that any given Iraqi unit which
    operated in the vicinity of Camp Ashraf may have had some U.S.-provided
    equipment in its inventory, particularly vehicles. Since 2003, the
    United States has provided millions of dollars worth of defense
    equipment to the Government of Iraq which is widely distributed across
    the Iraqi Security Forces.
        Overhead photographs taken during the 8 April 2011 events at Camp
    Ashraf appear to include images of High Mobility Multipurpose Wheeled
    Vehicles (HMMWVs) among the vehicles employed by Iraqi forces. The
    HMMWV, which has been supplied in large numbers to the Government of
    Iraq, is a characteristic U.S. military vehicle. It is possible that
    some at Camp Ashraf on 8 April are among the many which have been
    delivered to Iraq by the United States over the course of the past 8
    years.

        22. Senator McCaskill. General Mattis, what is your opinion of the
    Government of Iraq's willingness and ability to protect the residents
    of Camp Ashraf?
        General Mattis. The events of 8 April that led to a number of
    deaths and injuries are of serious concern. In the wake of that
    incident, we have requested access to Camp Ashraf but so far have been
    refused by the Iraqi Government. Most important is the assurance that
    residents will NOT be forcibly transferred to a country where there are
    grounds for believing the residents would be persecuted, tortured, or
    unfairly put on trial based on their political or religious beliefs.
    The Government of Iraq (GoI) has also publicly committed to undertake
    an investigation as to what exactly happened on April 8 that led to a
    number of deaths and injuries. We continue to urge restraint and
    nonviolence as means to facilitate an appropriate solution to the
    situation. I respectfully defer to the Department of State (DOS) for
    any details concerning specific issues.

        23. Senator McCaskill. General Mattis, what is your assessment of
    Prime Minister al-Maliki's long-term plans for Camp Ashraf?
        General Mattis. The Government of Iraq's stated policy is that the
    People's Mujahideen Organization of Iran must leave Iraq by the end of
    2011 with the cooperation of the United Nations and international
    organizations. DOS is working to find a negotiated settlement to the
    situation. I respectfully defer to DOS for any details concerning
    specific issues.

                        AFGHAN NATIONAL SECURITY FORCES

        24. Senator McCaskill. General Mattis, during his testimony on
    DOD's 2012 budget request, Secretary Gates stated that he was still
    uncertain how the United States was going to continue to train and fund
    the ANSF once U.S. forces have withdrawn or been reduced. I believe
    that investing in ANSF is extremely important to long-term stability in
    Afghanistan. However, I also have concerns that the U.S. Government may
    not have adequately come to grips with just how expensive it will be to
    sustain ANSF over the long term ($12.8 billon is requested for next
    year). The total gross domestic product (GDP) of Afghanistan is about
    $29.8 billion a year, so it is unrealistic to expect the Afghans to pay
    for full ANSF costs anytime soon. What long-term branch plans are being
    developed to sustain the training and funding of the ANSF beyond 2014?
        General Mattis. The international community has acknowledged that
    while the transition of lead security responsibility will be completed
    by December 2014, financial support of the ANSF and other parts of the
    Afghan economy will be necessary past 2014. Senior Civilian
    Representative Sedwell, as recently as February, commented that the
    ANSF will need some level of funding through 2025. U.S. Central Command
    (CENTCOM), in collaboration with other U.S. Government agencies, is
    developing economic initiatives to enable more coordinated and
    effective international community assistance. This effort will help
    transition Afghanistan from an aid based economy to more of a self-
    sufficient, trade based economy putting the Government of Afghanistan
    on a path to meeting the expenditures of a robust ANSF.

        25. Senator McCaskill. General Mattis, what checks and balances do
    you have in place to ensure that U.S. weapons and equipment provided to
    the ANSF are accounted for and do not end up in the hands of the
    Taliban or other terrorist groups?
        General Mattis. In March 2009, the Combined Security Transition
    Command in Afghanistan established a functional organization within its
    command to register and monitor the transfer of equipment to
    Afghanistan. This organization carries out the requirements of Section
    1225 of the 2010 National Defense Authorization Act, which requires the
    Secretary of Defense to certify that a program of registration and
    monitoring is in place in Afghanistan.

        26. Senator McCaskill. General Mattis, given the repeated and
    frequent requests by the United States on the NATO members for
    increasing troop and equipment contributions for ANSF trainers, what do
    you think is an equitable and reasonable cost-sharing for ANSF training
    in terms of manpower and funding?
        General Mattis. The North Atlantic Council has agreed to expand the
    NATO ANA Trust Fund to include funding for sustainment costs. Timely
    provision of these funds will represent a welcome, tangible
    demonstration of fiscal cost sharing. We continue to make a concerted
    effort to increase NATO and other international partner fiscal
    contributions.
        Our coalition partners have made good faith efforts to fill manning
    requirements for ANSF trainers within their capabilities and national
    interests. We will continue to work with our coalition partners, NATO
    and others, to meet the needs of NATO Training Mission-Afghanistan
    (NTM-A).

                         IMPACTS OF MIDDLE EAST TURMOIL

        27. Senator McCaskill. General Mattis, the political upheaval in
    Egypt, Libya, Tunisia, Yemen, and elsewhere in CENTCOM's area of
    responsibility (AOR) is of great concern. Given the rapidity of the
    change and the subsequent fragility of the geo-political status quo,
    there seem to be numerous potential impacts on CENTCOM operations.
    What, if any, impact do you assess the turmoil in the Middle East could
    have on the function of Northern Distribution Network and on the
    logistical tail needed to support coalition operations in the region,
    especially related to fuel and the cost to transport it?
        General Mattis. The current situation in the Middle East is
    expected to have minimal impact on fuels operations supported through
    the Northern Distribution Network since these fuel sources, both crude
    and refined products, originate from Southeastern Europe, Caucasus
    Region, Central Asian States, and Russia.

        28. Senator McCaskill. General Mattis, what is your opinion of the
    effects of the turmoil on some of the more autocratic Central Asian
    leaders, including and especially Islam Karimov of Uzbekistan? Do you
    anticipate any impact on our air or rail transit agreements as they
    stand?
        General Mattis. I view the influence of the changes in the Middle
    East on Central Asian leaders as minimal in the short term due to the
    deep entrenchment of leaders among the social, political and economic
    elite, the existence of little political opposition, and the lack of a
    coordinated social network capability to organize and implement a
    challenge. I consider Uzbekistan to be at low risk for instability
    leading to a change in government. I do not anticipate any impacts to
    our air or rail agreements as they stand.
                                     ______

                   Questions Submitted by Senator Mark Begich

                        RELIANCE ON FOREIGN FUEL SOURCES

        29. Senator Begich. General Mattis, as you noted in your testimony,
    countries in your AOR contain more than half of the world's proven oil
    reserves and nearly half of its natural gas. As a result, this area
    also has some of the world's busiest trade routes. It's also one of the
    world's most volatile regions. I am extremely concerned with the
    national security implications of relying on foreign sources for fossil
    fuels when we have significant reserves in the United States,
    specifically in the State of Alaska. I know DOD buys most of its fuel
    from local refineries in proximity to Iraq and Afghanistan for the vast
    majority of our requirements in the area. In which countries are those
    refineries located?
        General Mattis. Our contracted suppliers that move fuel through the
    various ground lines of communication report that fuel is sourced from
    refineries in Pakistan, Azerbaijan, Russia, Turkmenistan, Bahrain,
    Kuwait, United Arab Emirates, Oman, Iraq, and various European
    countries.

        30. Senator Begich. General Mattis, what would be the impact to
    operations in Iraq and Afghanistan if those refineries no longer could
    meet our needs?
        General Mattis. To mitigate supply chain disruptions, CENTCOM has
    developed redundant and complementary fuel supply capability to satisfy
    fuel demand in both Iraq and Afghanistan. Should supply be reduced
    because of the loss of a refinery or refineries, our supply chain
    managers have the ability to shift fuel orders to alternate sources.
    CENTCOM has established minimum storage requirements at current
    operating and intermediate storage locations to enable us to continue
    operations until alternate means of supply can be implemented.
    Additionally, CENTCOM can implement fuel conservation measures,
    relocate aircraft, and reduce certain operations in order to mitigate
    the effect of reduced fuel availability.

        31. Senator Begich. General Mattis, what would the impact be of a
    Suez Canal or other trade route disruption on operations in CENTCOM's
    AOR?
        General Mattis. The Suez Canal is an important trade route and any
    interruption to current commercial transit through the Suez could have
    an impact on global resupply, as transit times without the use of the
    Suez Canal would increase by approximately 10 days. However, temporary
    closure of the Suez and ensuing disruption to the transit lanes would
    have little to no impact on operations in the CENTCOM AOR. Adequate
    stores of fuel are on hand that would provide a buffer until alternate
    supply routes are established.

        32. Senator Begich. General Mattis, what role do these energy
    resources play in regional and internal instability in your area of
    operations?
        General Mattis. Energy resource problems are prominent in our
    region, particularly in States where meeting growing domestic demand
    for electricity has become more challenging. For some governments, the
    energy resource supply and demand imbalance, and subsequent populace
    discontent, come as States continue converting traditional crude oil-
    based energy industries to those based on more efficient natural gas.
    In other countries, inadequate energy resources and infrastructure
    could have a more lasting destabilizing impact.
        Competition over shared hydrocarbon resources also has the
    potential to undermine regional stability, as challenges to poorly
    defined territorial borders where shared energy resources exist can
    quickly turn historic accommodation to more volatile, intrusive demands
    over ownership.

        33. Senator Begich. General Mattis, in your opinion, does U.S.
    consumption of oil and natural gas from these countries perpetuate
    instability?
        General Mattis. No. In my opinion, just the opposite is true. U.S.
    consumption boosts economic stability in these countries, as this is a
    fundamental exercise of international commerce providing economic
    benefit to a lengthy supply and consumer chain.

        34. Senator Begich. General Mattis, in your opinion, how do recent
    protests, uprisings, and calls for reform in many of the countries in
    your AOR potentially impact availability of energy resources to the
    United States?
        General Mattis. The wave of unrest is currently confined to nations
    that are relatively small oil and gas producers. If the wave migrates
    to larger energy producing regions, energy resource availability could
    be more significantly impacted.

        35. Senator Begich. General Mattis, how would potential disruptions
    impact operations in CENTCOM?
        General Mattis. CENTCOM is well postured to endure an array of
    possible disruptions that may occur. We have ample storage at current
    operating and intermediate storage locations, fuel conservation
    measures, plus the redundant and complimentary fuel supply chain
    capabilities that have been developed.
                                     ______

               Questions Submitted by Senator Kirsten Gillibrand

                              MIDDLE EAST TENSIONS

        36. Senator Gillibrand. Admiral Olson and General Mattis, in
    response to the major uprising against the Qadhafi regime, how would
    you rate the risk that a post-Qaddafi Libya turns chaotic and provides
    a safe haven for al Qaeda and associated groups to exploit?
        Admiral Olson. SOCOM respectfully defers this question to AFRICOM
    as Libya is under their area of concern.
        General Mattis. [Deleted.]

                                      IRAN

        37. Senator Gillibrand. General Mattis, I am concerned, as I know
    you are, with Iran's continuing deployment of hundreds of short- and
    medium-range ballistic missiles that can reach our forces and our
    allies throughout the region. Do you believe you have sufficient
    ballistic missile defense (BMD) capability to defend against this
    threat now and in the future?
        General Mattis. [Deleted.]

        38. Senator Gillibrand. General Mattis, I am concerned with Iran's
    mix of conventional and asymmetric warfare capabilities and the threat
    they pose to U.S. interests in the Gulf. If Iran threatened to close
    the Strait of Hormuz, which as you know would drastically affect the
    flow of petroleum to the world economy, do you have everything you need
    to deter and defeat this threat?
        General Mattis. [Deleted.]

        39. Senator Gillibrand. General Mattis, do we have sufficient
    support from allies to achieve our goals?
        General Mattis. Yes. Our regional partners, in particular the Gulf
    Cooperation Council nations, increasingly recognize the threat posed by
    Iran. We have a shared interest with these partners to counter Iran's
    destabilizing activities, and we have seen an increased level of
    cooperation in that regard. At the same time, we recognize the
    territorial integrity of our partners, continue to act in concert with
    them, and relentlessly engage to support mutually reinforcing
    objectives.

        40. Senator Gillibrand. General Mattis, two Iranian Navy ships were
    permitted by Egypt to sail through the Suez Canal this month. The
    Iranians have said they are traveling to Syria for a training mission.
    While other military ships have travelled through the Canal, since 1979
    no Iranian military ship has done so. What do you think is the reason
    for Iran's activity?
        General Mattis. Iran increasingly asserts its military capability
    across the region in order to expand its influence and to assume the
    role of regional hegemon. Iran's regular navy deployed the two ships
    through the Canal and to the Mediterranean Sea and Syria as part of
    their semi-annual cadet training cruise. These cadet cruises have a
    two-fold mission of training the next generation of naval officers and
    showing the Iranian flag. The cruises included foreign port visits,
    which support Iran's strategic effort to portray itself as a regional
    military power.

        41. Senator Gillibrand. General Mattis, what actions are we taking,
    if any, in response to Iran's activity?
        General Mattis. With respect to Iranian naval vessels transiting
    the Suez Canal, we have not responded with any operational actions,
    though CENTCOM continues to closely monitor such activity. CENTCOM
    maritime operations are clearly observable by Iranian vessels, sending
    a clear message of U.S. presence and readiness, but also a sign of
    commitment to our partners.

                                     PIRACY

        42. Senator Gillibrand. Admiral Olson and General Mattis, last
    week, as you know, Somali pirates killed four Americans on a yacht they
    had captured. Admiral Mullen said in discussing the incident that more
    than 30 warships are involved in the anti-piracy drive underscoring the
    ``significance of the challenge [of piracy] and also the priority in
    terms of focus.'' Despite this presence, Somali pirates continue to
    hijack vessels, and last year they seized 53 ships and took 1,181
    hostages. Admiral Mullen further stated that hunting down the sea
    bandits in such vast waters was like searching for a ``needle in a
    haystack.'' How are you adapting your tactics to deal with what is now
    a more lethal threat to U.S. citizens?
        Admiral Olson. I defer to General Mattis on questions concerning
    how forces under his operational control are employed. SOCOM is
    responsible for equipping SOF and providing the Geographic Combatant
    Commands with fully trained SOF. For counter piracy activities, SOF
    elements are trained to respond to hostage scenarios in a maritime
    environment in a manner that best protects U.S interests and the lives
    of U.S. citizens. SOF is generally not brought in unless there exists a
    lethal threat to U.S. citizens. I believe our current tactics,
    techniques, and procedures, or TTPs, are sound and we have made no
    recent significant changes. However, SOCOM will continue to assess the
    threat and modify our TTP's appropriately.
        General Mattis. We continue to adapt our tactics, as do the
    pirates. The scope and scale of the piracy enterprise has expanded
    considerably in recent years, and represents a challenge to both
    commercial and military elements of the international maritime
    community. Working with our Coalition, European, and NATO partners we
    have established three Naval Task Forces in the region that have placed
    up to 30 military vessels at any given time in key locations to deter
    attempted pirate attacks. Our CENTCOM Maritime Component Commander also
    hosts a bi-monthly Shared Awareness and Deconfliction (SHADE)
    conference in Bahrain to ensure multi-national deconfliction of
    activity and cooperation among all counter piracy activities in the
    region. In addition to Coalition, NATO, and European representation,
    the conferences also include civilian international maritime
    organizations and delegates from non-affiliated countries such as
    China, Russia, Japan, and India.
        In addition to these international military efforts, we continue to
    coordinate closely with the maritime industry on communicating to
    merchant vessels the importance of adhering to the International
    Maritime Organization's Best Management Practices. Statistics indicate
    that the employment of these practices, to include well-trained
    embarked security teams, is a significant deterrent against pirates.

        43. Senator Gillibrand. Admiral Olson and General Mattis,
    considering that this is essentially an international criminal issue,
    do you have the authority to respond?
        Admiral Olson. SOCOM respectfully defers this question to CENTCOM
    and the other combatant commanders as they are responsible for military
    operations within their area of control.
        General Mattis. Yes, we have several counter-piracy authorities.
    Legally speaking, the use of military assets to conduct counter-piracy
    operations is permitted under both domestic and international law. U.S.
    counter-piracy operations in the CENTCOM AOR are conducted pursuant to
    the Counter-Piracy Execute Order and in accordance with the Law of the
    Sea and U.N. Security Council Resolutions pertaining to suppressing
    piracy in the Horn of Africa Region.
        Suppressing piracy has been a traditional maritime military
    activity dating back hundreds of years. Counter-piracy operations are
    conducted to preserve freedom of navigation on the high seas, ensure
    the free flow of commerce, and protect the sea lines of communication.
    Criminal prosecution, albeit an effective tool to keep captured pirates
    from returning to their activities and deterring other would-be
    pirates, is a means to accomplish the military mission of preserving
    freedom of navigation.

        44. Senator Gillibrand. Admiral Olson and General Mattis, the root
    cause of piracy is often a failed state. What do you need from
    diplomatic and developmental resources to address piracy?
        Admiral Olson. SOCOM respectfully defers this question to AFRICOM
    as they are working with Department of State on how to deal with the
    root causes of piracy emanating from Somalia.
        General Mattis. While we can inhibit piracy on the sea with
    military action, ultimately the solution to the problem of piracy lies
    ashore, with stable governments that can control their sovereign
    territory. I fully support ample funding for diplomatic and
    developmental resources as part of an integrated civilian-military
    effort to maintain international support and unity of effort in
    combating issues of mutual concern such as piracy.

        45. Senator Gillibrand. Admiral Olson and General Mattis, what
    steps should the private sector take to protect itself from piracy?
        Admiral Olson. I expect they will follow all Legal options
    available. SOCOM is not in a position to speak about what the private
    sector should or should not do in order to protect itself from piracy.
        General Mattis. The most effective deterrent against pirates is to
    adhere to the International Maritime Organization's Best Management
    Practices. These practices include the use of professional, well-
    trained embarked security teams, adherence to established security
    routes through the region, notification of sailing intentions to the
    United Kingdom Maritime Trade Operations (UKMTO), employing speed and
    evasive maneuvering when approached, and construction of onboard
    fortified citadels.

        46. Senator Gillibrand. Admiral Olson and General Mattis, are you
    concerned that companies may take overly aggressive measures in
    response to piracy?
        Admiral Olson. SOCOM is not in a position to comment on what
    measures the private sector may take or how those measures could impact
    Combatant Command Counter-Piracy efforts.
        General Mattis. No. CENTCOM continues to advocate the importance of
    adhering to the International Maritime Organization's Best Management
    Practices. Statistics indicate that employing these practices, to
    include well-trained embarked security teams, provides a deterrent
    against piracy. The next iteration of Best Management Practices will
    recommend the practice of embarking armed security teams in order to
    prevent ship crew members from performing this function.

                          TERRORISM AND PROLIFERATION

        47. Senator Gillibrand. Admiral Olson and General Mattis, I am
    concerned with reports that Iran is acting as an intermediary with
    North Korea to supply Syria with various forms of weapons of mass
    destruction (WMD) and missile technology. In April 2010, the Obama
    administration called in Syria's ambassador to ask about reports that
    Syria had transferred Scud and Fateh 110 missiles to Hezbollah. With
    the longer-range Scuds and more accurate Fatah 110s, how do you see
    this affecting the strategic balance in the region?
        Admiral Olson. [Deleted].
        General Mattis. I do not believe Hezballah's acquisition of SCUDs
    and Fateh 110s will significantly alter the regional balance of power.
    These new weapons enable Hezbollah to strike deeper into Israeli
    territory and enhance the group's power projection, but Israel already
    defends against comparable missile threats from Syria by maintaining a
    high defensive posture and employing modern air defense and offensive
    systems.

        48. Senator Gillibrand. Admiral Olson and General Mattis, this
    year's National Military Strategy (NMS) states: ``the intersection
    between states, state-sponsored, and non-state adversaries is most
    dangerous in the area of WMD proliferation and nuclear terrorism. And
    then it goes on to say the prospect of multiple nuclear armed regimes
    in the Middle East with nascent security and command and control
    mechanisms amplifies the threat of conflict, and significantly
    increases the probability of miscalculation or the loss of control of a
    nuclear weapon to non-state actors.'' How confident are you that al
    Qaeda or associated insurgent groups could not acquire or steal a
    nuclear weapon or nuclear materials from Pakistan that they could then
    in turn use in a nuclear September 11 scenario?
        Admiral Olson. [Deleted.]
        General Mattis. The nexus of Violent Extremist Organizations and
    WMD proliferation is among my most pressing concerns. CENTCOM, along
    with our interagency partners, conducts a range of activities to combat
    WMD proliferation. With respect to Pakistan, I know Islamabad regards
    its nuclear program as the country's most important strategic asset and
    continues to place highest priority on nuclear security. Its nuclear
    security program is well established and we remain confident in
    Pakistan's ability to safeguard its nuclear weapons and stockpile.

        49. Senator Gillibrand. Admiral Olson and General Mattis, how are
    the growing U.S.-Pakistan tensions impacting our ability to protect
    against that scenario?
        Admiral Olson. [Deleted.]
        General Mattis. At this time, I do not believe the present tensions
    between the United States and Pakistan will significantly impact the
    security of Pakistan's nuclear program. However, continuing tensions
    between the United States and Pakistan could undermine the
    effectiveness of long-term U.S. support to the Pakistan Army, which
    could in turn indirectly impact Pakistan's nuclear program security.
    But at this point such connectivity is spectulative and not based on
    concrete facts.

                                  AFGHANISTAN

        50. Senator Gillibrand. Admiral Olson and General Mattis, when I
    traveled to Afghanistan and Pakistan a few months ago I heard
    repeatedly from our commanders on the ground that our mission in
    Afghanistan is inextricably linked to Pakistan's harboring of al Qaeda,
    Taliban, and aligned organizations. U.S.-Pakistan relations have chafed
    greatly over the past year, particularly recently, and while Pakistani
    military has indeed suffered casualties in their fight against
    insurgency groups, our assessment remains that insurgents enjoy a
    relative safe haven in Pakistan. How are we going to execute a
    redeployment strategy in Afghanistan if Pakistan does not go after the
    insurgency within its borders?
        Admiral Olson. I defer this question to the combatant commander
    since he has operational responsibility for that area.
        General Mattis. Insurgent sanctuaries in Pakistan somewhat limit
    our ability to accomplish the mission in Afghanistan. Despite this
    considerable challenge, we continue to make significant progress in our
    campaign. It is important to note that Pakistan has taken a number of
    difficult steps and has suffered over 30,000 casualties in the fight
    against insurgents in their Northwest.
        Our intent is to simultaneously degrade the enemy's capacity while
    we enhance the capacity of our Afghan and Pakistani partners to a point
    that they can pursue this effort without direct U.S. intervention. Such
    efforts are adversely affected by Pakistani requests that we reduce our
    footprint. Despite the challenges we currently face in Pakistan, we are
    committed to our long-term strategic relationship with them. We will
    continue to transfer the lead for security and governance to our
    partners in accordance with ISAF objectives, the Afghan-led transition
    process, and U.S. national strategy regarding both Afghanistan and
    Pakistan.

                                    LEBANON

        51. Senator Gillibrand. General Mattis, you state that you value
    the relationship with the Lebanese Armed Forces (LAF), and that you
    would like to see how the government develops before making a decision
    regarding continuing U.S. aid to the LAF, despite Hezbollah's role in
    the new government. What factors will you look for with respect to the
    new government in Lebanon and the LAF in order to shape your strategic
    outlook with respect to Lebanon or the LAF, and particularly the
    advisability of continued aid or military-to-military transactions?
        General Mattis. [Deleted.]

                                  CENTRAL ASIA

        52. Senator Gillibrand. Admiral Olson and General Mattis,
    Kyrgyzstan has been a major refueling station for U.S. Forces in
    Afghanistan. The Northern Distribution Network with the other central
    Asian republics has provided us with important logistical support. How
    solid are the military relationships in Central Asia for the United
    States?
        Admiral Olson. All of our SOF military relationships with the
    Central Asian countries fall under the purview of CENTCOM. SOF elements
    under U.S. Special Operations Command-Central Command have established
    good tactical level military relationships with Kyrgyzstan, Kazakhstan
    and Tajikistan through Counter-Narcotics Training (CNT) programs.
        General Mattis. Our military to military relationships in Central
    Asia are generally good and improving, despite being comparatively new.
    I have been encouraged by the support of our Central Asian partners. We
    have made strides in further developing the Northern Distribution
    Network (NDN) over the last year in particular. Of course, our Central
    Asian partners offer support in accordance with domestic concerns. We
    have seen Russia accommodate our NDN efforts, which has helped to allay
    a significant concern among our partners. Central Asian states are at
    times reluctant to provide public or direct support of our efforts
    because of their Soviet-era Afghanistan experiences as well as concerns
    about provoking violent extremist organizations. Continued support for
    our military-to-military programs, IMET, and exercises is critical to
    continuing to improve these relationships. We are committed to
    conducting all military-to-military activities in concert with broader
    DOS strategy and policy within the Central Asian region.

        53. Senator Gillibrand. Admiral Olson and General Mattis, does
    Russia remain neutral with respect to these relationships or does it
    attempt to disrupt them?
        Admiral Olson. [Deleted.]
        General Mattis. Russia's influence is a significant factor in the
    strategic calculus of Central Asian states, but has so far not
    significantly disrupted U.S. policies in the region. Russia supports
    efforts in Afghanistan, most notably by enabling recent enhancements to
    the NDN.
        Russia is concerned about the growth of violent extremism as well
    as the flow of narcotics and other illicit cargo through Central Asia
    into Russia. At the same time, Russia is sensitive to the potential
    expansion of U.S. influence and the prospects of permanent U.S. bases
    in the region, and engages in information operations to counter and
    contain U.S. influence. As Central Asia's most influential trading
    partner, Russia has substantial influence over most of the Central
    Asian nations.
                                     ______

                   Questions Submitted by Senator John McCain

                     COOPERATIVE SECURITY LOCATIONS IN IRAQ

        54. Senator McCain. General Mattis, I have a question about the
    establishment of cooperative security locations in CENTCOM as a vital
    tool for your theater security plans. Assuming the current plan for
    U.S. forces to withdraw from Iraq by December 2011 is carried out, we
    should still want to maintain a positive collaborative relationship
    with the Government of Iraq in a very strategic location of the region
    for our national interests. Is there value to you and the United States
    to establish forward operating sites and cooperative security locations
    in Iraq for future operations?
        General Mattis. While there is potential value to establishing
    security assistance sites and cooperative security locations in the
    CENTCOM region, the establishment must be balanced against many
    factors, to include host nation support, operational need, and possible
    future U.S. funding to develop and sustain these locations.

        55. Senator McCain. General Mattis, would the establishment of
    these locations have an impact on your withdrawal plans?
        General Mattis. The establishment of cooperative security locations
    would not be consistent with the current U.S.-Iraq Security Agreement
    or current U.S. policy for departure of U.S. forces.

        56. Senator McCain. General Mattis, what impediments, if any,
    preclude you from establishing the agreements necessary to establish
    these locations?
        General Mattis. The establishment of cooperative security locations
    is not consistent with the current U.S.-Iraq security agreement, which
    calls for the full withdrawal of U.S. forces by end 2011, and is
    consistent with current U.S. policy. It is also worth noting that the
    current U.S.-Iraq security agreement, which has authorized the U.S.
    military presence in Iraq from January 1, 2009 to December 31, 2011,
    stipulates that ``Iraqi land, sea, and air shall not be used as a
    launching or transit point for attacks against other countries.''

                          THEATER SECURITY COOPERATION

        57. Senator McCain. General Mattis, on the issues of theater
    security cooperation plans, I am aware that you have very few forces
    assigned to you during peacetime. Any exercises or collaborative
    training you plan to accomplish with other nations in your region must
    be supported by rotational U.S. forces sourced from the Services.
    Realizing that it has been some time since you were able to devote any
    significant resources to theater security cooperation in a peaceful
    region, are you comfortable with the arrangement to rely on rotational
    forces for the overwhelming majority of your security cooperation
    requirements? If, not, what changes would you propose?
        General Mattis. Yes. I am satisfied we are meeting our theater
    security cooperation objectives through a robust program of exercises,
    events, and activities across our AOR. The engagements include
    individual training utilizing subject matter experts, fielding
    equipment through Foreign Military Sales and direct commercial sales,
    increasing interoperability via mil-to-mil engagements, and executing
    bi-lateral and multi-lateral training exercises to develop partner
    capability and capacity.
        One area that does present a problem is the need for sufficient and
    sustained Foreign Military Financing and a more responsive Foreign
    Military Sales (FMS) system that delivers urgent operational
    capabilities to meet our partner requirements. Too often, we are not
    able to meet their requirements in a timely manner due to an overly
    complicated foreign military sales system. I strongly support the
    recent initiatives of the Secretary of Defense directed Security
    Cooperation Reform Task Force and believe it is a definitive step in
    the right direction.

                           AFGHANISTAN RECONSTRUCTION

        58. Senator McCain. General Mattis, the Office of the Special
    Inspector General for Afghanistan Reconstruction recently published a
    report questioning the U.S. plan to invest $11.7 billion to construct
    facilities for over 300,000 ANSF. Are you aware of that report?
        General Mattis. Yes. I am aware of the Special Inspector General
    for Afghanistan Reconstruction Audit released on January 26, 2011.

        59. Senator McCain. General Mattis, what are you doing to address
    the concerns raised in the report?
        General Mattis. We are working with the Combined Security
    Transition Command in Afghanistan (CSTC-A) to incorporate the majority
    of the report's recommendations to extend our planning horizon and
    develop long-range operations and maintenance plans. CSTC-A is
    currently updating their guidance documents to incorporate the planning
    principles referenced in the report which should improve the
    identification of future projects and better document their priorities.

        60. Senator McCain. General Mattis, can you provide a long-range
    construction plan to meet the facility requirements for Afghan forces
    with the funds that Congress has provided?
        General Mattis. Afghan National Security Force generation drives
    the timeline for the construction planning and execution. Fiscal year
    2011 and fiscal year 2012 are significant program years for
    construction, with $2.9 billion in fiscal year 2011 and $2.4 billion in
    fiscal year 2012 from the Afghan Security Forces Fund (ASFF). This ASFF
    funded infrastructure must support the diverse requirements of over
    305,000 ANA and Afghan National Police personnel at locations
    throughout Afghanistan.

                              BAHRAIN NAVAL BASES

        61. Senator McCain. General Mattis, given the uncertainty in the
    region, including Bahrain, as well as the crisis we are facing here at
    home with deep deficits, in your opinion, should taxpayer funds
    exceeding $370 million continue to be expended this fiscal year on the
    complete revitalization of our navy base at Manama, Bahrain, and our
    base at Isa, or would a pause be prudent to allow for further
    assessment of our requirements in the region?
        General Mattis. The CENTCOM AOR presents limited opportunity for
    U.S. basing options. Bahrain remains one of our staunchest allies and
    provides us an optimum location. Current and future contingency
    operations in the region dictate the need to spend military
    construction (MILCON) funds now to address shortfalls. The current
    MILCON augments ship berthing space due to severe degradation of pier
    facilities, and provides critical ammunition storage for current and
    future operations. The MILCON program also includes quality of life
    improvements to alleviate overcrowding and provide acceptable living
    standards. Continued execution of MILCON funds in Bahrain is an
    essential CENTCOM mission support requirement and integral to CENTCOM
    Global Defense Posture initiatives. Reduced expenditure of MILCON funds
    in Bahrain will significantly impact operations now and in the future.

        62. Senator McCain. General Mattis, from an operational
    perspective, do you currently have an alternative port to Manama for
    support of 5th fleet? If not, do you believe it would be wise to use
    MILCON funds to develop one?
        General Mattis. No. The U.S. relationship with Bahrain remains
    strong and we do not currently see the need for an alternative port to
    Manama, Bahrain. In the event the situation dramatically changes with
    respect to either the bilateral relationship or U.S. policy, we will
    present options to DOD and Congress.

                          SOCOM MAJOR WEAPONS PROGRAMS

        63. Senator McCain. Admiral Olson, SOCOM has historically relied on
    the modification of service common equipment with SOF-peculiar
    technology as the basis of its equipping strategy--a strategy that has
    proven enormously successful in a number of areas. However, over the
    last several years, the command has undertaken efforts internally to
    develop major weapons programs, some at significant cost, such as the
    Advanced SEAL Delivery System (ASDS), the Joint Multi-Mission
    Submersible (JMMS), and the Special Operations Combat Assault Rifle
    (SCAR). While the specific issues and outcomes associated with the
    development of these three particular programs differ, they have
    brought attention to the ability of SOCOM to develop and ultimately
    field major weapon systems, particularly in an increasingly resource
    constrained environment. Do you believe SOCOM is properly structured to
    successfully undertake the development and fielding of major weapons
    systems?
        Admiral Olson. The structure of the Special Operations Research,
    Development and Acquisition Center (SORDAC) is not staffed or intended
    to be staffed, to support Major Defense Acquisition Programs. For
    programs such as the ASDS or JMMS, SORDAC enters into agreements with
    Service component acquisition offices to support our efforts.
    Traditionally SOCOM relies on the Services to develop major programs
    (e.g. ASDS) so that SORDAC can focus organic capabilities on the
    integration of new technologies, modifying service platforms, and
    developing new capabilities that the Services are not well positioned
    to do. SORDAC has had success in using the Joint Acquisition Task Force
    model to rapidly field new capability by integrating teams from the
    various service offices to meet urgent needs.

        64. Senator McCain. Admiral Olson, what lessons has SOCOM learned,
    not just from the aforementioned programs, but as a whole, in its
    efforts to develop and field systems to satisfy its requirements?
        Admiral Olson. SOCOM has developed its acquisition approach around
    the following four key principles which have enabled the successful
    acquisition of SOF unique equipment: deliver capability to the user
    expeditiously, exploit proven techniques and methods, keep warfighters
    involved throughout the process, and take and manage risks. SOCOM has
    shown that a dedicated corps of SOF acquirers is essential to rapidly,
    agilely, and successfully field SOF unique capability. SOCOM has been
    working closely with the Services to improve the synergy of Service and
    SOCOM acquisition activities through biannual acquisition summits co-
    chaired by the OUSD/AT&L and the SOCOM Commander.

        65. Senator McCain. Admiral Olson, to what degree is SOCOM looking
    to leverage commercially available and proven technology in the
    development of solutions to satisfy SOF-peculiar requirements?
        Admiral Olson. The SORDAC, the SOCOM acquisition arm, balances the
    need for advanced technology with rapid fielding of needed capability.
    In an effort to provide Special Operations deployed forces with
    required assets, SORDAC Program Executive Offices (PEOs), constantly
    evaluate existing technology, service available, and off the shelf
    solutions (commercial off-the-shelf and government off-the-shelf).
    There are a number of venues that provide direct insight into
    technology currently available or technology that will be available in
    the near term. The Technology and Industry Liaison Office (TILO) serves
    as the interface to industry, providing a venue for open dialogue and
    market research in support of the command. SOCOM utilizes the TILO as a
    conduit for industry to present products and services to the command
    for evaluation. Additionally, SORDAC's Science and Technology (S&T)
    Directorate, constantly evaluates technology with a near term potential
    to mature into fielded capability. SORDAC S&T initiated the Rapid
    Exploitation of Innovative Technology for SOF (REITS) program in 2010
    to expedite technology which had the potential to rapidly transition to
    the field. Examples of current technology being evaluated in a Special
    Operations environment through the REITS program are; vehicle shock
    mitigation systems and mobile solar power generating systems. SORDAC
    S&T also sponsors an open experimentation venue which provides an
    opportunity for industry to demonstrate emerging technologies and
    capabilities which could support SOF. Experimentation creates synergy
    among industry partners and connects SOF operators to developers during
    concept assessments. The PEOs continually evaluate existing standalone
    equipment and package them to provide an enhanced capability to meet a
    new capability gap. For example, the Austere Location Force Protection
    Commodity Procurement Project packages off-the-shelf equipment to
    provide an integrated force protection system to support remotely
    deployed SOF Teams. Off-the-shelf equipment is a critical aspect of
    SORDAC's strategy to balance capability that will save lives today with
    the need to provide a technological leap that will provide SOF
    Operators with a significant tactical advantage in the field tomorrow.

                        TRAINING REQUIREMENTS SHORTFALLS

        66. Senator McCain. Admiral Olson, does SOCOM have any shortfalls
    in the availability of training resources, particularly ranges and
    facilities that are affecting the ability of your forces to prepare and
    train for specific deployments and missions? If so, please describe in
    detail these shortfalls and the effect they have on the ability of your
    forces to adequately train for specific deployments and missions.
        Admiral Olson. Many SOF units are unable to conduct all of their
    training requirements at or within close proximity of their home
    stations. Some training requirements, including long-range, full-
    mission profile validation exercises for example, require SOF to train
    at other installations. It is difficult to conduct training missions
    that accurately replicate operations routinely conducted by the
    Combined Joint Special Operations Task Forces in Afghanistan, and
    previously Iraq. These long-range live-fire exercises generally include
    mounted and dismounted ground elements supported by helicopters and
    tactical aircraft. Additionally, SOF units may conduct training with
    SOF-unique weapons systems that require larger Surface Danger Zones
    than weapons systems employed by conventional forces.
        Ever increasing competition with conventional ground and aviation
    units for limited training range resources is adversely impacting SOF
    access to Service-owned ranges. For example, there are a very limited
    number of ground tactical ranges on U.S. Navy installations for Navy
    SOF to train. The majority of ground tactical ranges within the
    Department of the Navy are located on U.S. Marine Corps installations.
    This has challenged Navy and Marine Corps leadership to balance the
    training requirements of Navy SOF with those of Marine Corps units
    vying for use of the same ranges and training areas.
        Unmanned Aircraft Systems (UAS) training continues to be hampered
    by the lack of adequate restricted airspace for SOF to execute fully
    integrated training events in which the full range of ``shoot, move,
    and communicate'' skills are rehearsed with UAS ISR support. Federal
    Aviation Administration Certificates of Waiver and Authorization allow
    limited access to the National Airspace System; however, the
    restrictions placed on UAS flights in these areas do not allow for
    adequate training for SOF.

        67. Senator McCain. Admiral Olson, what is planned to address these
    shortfalls?
        Admiral Olson. SOF is working closely with the Services to develop
    courses of action that allow SOF reliable and predictable access to
    resources such as training ranges for ground and aviation elements.
        SOCOM is currently conducting a range study to examine the specific
    problems SOF is encountering with respect to ranges and training areas.
    The analysis will include SOF range access shortfalls, range saturation
    levels at home station, as well as adequacy of master range plans and
    existing agreements with the Services. Additionally, the study will
    determine if SOCOM components currently have adequate access to
    simulators and range simulation devices that could mitigate their
    requirements for range access. Findings and recommendations from this
    study will be staffed and presented to the SOCOM Commander.
        SOCOM is addressing range and training area issues with each
    Service during scheduled warfighter talks. SOCOM is also hosting
    periodic range conferences and working groups with representatives from
    our components as well as the Services. The intent of these conferences
    is to exchange ideas, information, and seek solutions to any range
    issues identified.
        The Navy has established a range working group with Marine Corps,
    Naval Special Warfare Command, and SOCOM participation to coordinate
    resolution of a request from Navy SOF for increased access to ranges
    and training areas on the west coast.
        U.S. Army SOCOM is working with the Army to determine the
    feasibility of establishing SOF training centers at select ranges on
    Army installations. The Army G3/5/7 is analyzing and modeling Army SOF
    requirements (specifically, long-range mobility full mission profile
    validation exercises) to determine supportability on identified Army
    installations.
        SOCOM and its components are working in numerous areas to bolster
    and support mission training requirements. These include: investment of
    MPF-11 dollars to fund SOF-peculiar modifications of existing ranges
    and facilities; expanded use of nontraditional training areas such as
    contracted facilities; and development of plans for SOF-managed
    training areas.

        68. Senator McCain. Admiral Olson, what can Congress do to help you
    address and improve the specific training requirements for SOF?
        Admiral Olson. DOD faces an increasing challenge from the
    cumulative effect of continuing urbanization and the increasing
    application of environmental requirements to military readiness
    activities--sometimes through novel or overly broad interpretation of
    law. Congress will have to balance the two public goods--military
    readiness and environmental protection. Some issues may require
    congressional action, while others can be relieved by changes within
    the regulatory agencies.
        Under Title 10, U.S.C., ownership of real property--to include
    ranges--is a responsibility of the Services. The Commander, SOCOM
    cannot own real property. SOF units are tenants on installations and do
    not own the ranges on which they operate and train.
        It is therefore critical that Congress adequately fund SOCOM to
    continue using home station, as well as other Service installation
    ranges and training support. Having sufficient resources also allows
    SOCOM to fund range enhancements and improvements, where appropriate,
    to meet SOF-unique training requirements.
        SOF access to Service ranges can be adversely impacted by
    challenges associated with land withdrawal agreements, National
    Environmental Policy Act actions, aviation airspace issues, and
    civilian encroachment on Federal lands. As Service initiatives
    addressing these challenges move forward, congressional advocacy, as
    appropriate, may be warranted.
                                     ______

                   Questions Submitted by Senator Scott Brown

                            IRANIAN NUCLEAR WEAPONS

        69. Senator Brown. General Mattis, today Iran is producing higher
    enriched uranium and is moving closer to possessing the weapons-grade
    uranium needed for a nuclear weapon. Neither economic sanctions nor
    diplomacy have worked to diminish Iran's goal to enrich uranium. The
    President has stated that he intends to ``use all elements of American
    power to prevent Iran from developing a nuclear weapon.'' What is your
    assessment of Iran's role in the CENTCOM AOR?
        General Mattis. Iran's persistent destabilizing behavior runs
    counter to the United States, and more importantly, regional country
    interests. Likewise, Iran uses its Islamic Revolutionary Guards Corp-
    Qods Force to expand soft power influence across the region and beyond
    via religious, cultural and humanitarian outreach, while at the same
    time executing destabilizing activities. Iran's nuclear program is a
    serious, destabilizing factor in the region and is widely believed to
    be part of the regime's broader effort to expand its influence.

        70. Senator Brown. General Mattis, what would it mean for the
    neighbors of Iran and the entire Middle East if Iran were to secure a
    nuclear weapon?
        General Mattis. A nuclear armed Iran would dramatically shift the
    balance of power between Iran and key regional nations. This shift and
    perceived failure of the international community in allowing Iran to
    develop nuclear weapons, would likely spark a regional arms race as
    Iran's neighbors would be apt to redress the balance. In the short
    term, the development of an Iranian nuclear weapon will place
    tremendous pressure on other countries to follow suit. The effects of
    these developments would rapidly extend beyond our region. A nuclear-
    armed Iran would most likely be more assertive and more aggressive with
    regional states, leading to less stability in an already unstable
    region. Possession of a nuclear weapon would likely embolden Iran to
    engage in ``saber rattling'' to intimidate or coerce its neighbors and
    enhance or increase Iran's perceived status as a leader in the Gulf
    region. Iran might not provide nuclear technology or weapons to its
    surrogates, due to concerns over control, accountability, and
    international repercussions. However, those surrogates, with a nuclear-
    armed sponsor, may be emboldened to act more aggressively, though not
    necessarily under Iran's control or on Iran's behalf.

        71. Senator Brown. General Mattis, do you agree that a nuclear-
    armed Iran poses an unacceptable risk to the United States?
        General Mattis. Yes. Iran remains the most significant threat to
    regional stability. Although the United Nations Security Council has
    spoken out against Iranian actions through additional sanctions, the
    regime continues its destabilizing activities globally. A nuclear armed
    Iran would significantly impede our global priorities of preventing WMD
    proliferation, retaining strategic access and ensuring the security and
    free flow of global commerce, especially energy resources. This would
    create a significantly more complex problem for our national security
    team and for the U.S. economy. Also, we could see other countries in
    the region finding it necessary to develop nuclear weapons or
    significantly increase conventional weapons to deter a nuclear armed
    Iran. We should endeavor with our international partners to take strong
    measures to prevent Iran from developing nuclear weapons.

                               TRANSITION IN IRAQ

        72. Senator Brown. General Mattis, do we have a contingency plan in
    place if Iraq security forces are not making progress by the end of
    this year?
        General Mattis. We are currently on track to remove U.S. security
    forces from Iraq by 1 January 2012 and will be ready to support U.S.
    Government led efforts through the Office of Security Cooperation-Iraq.
    If the Government of Iraq requests U.S. forces remain to assist Iraqi
    Security Forces after December 31, 2011, and the U.S. Government agrees
    to such a request, the U.S. military has the capability to assist.

        73. Senator Brown. General Mattis, during the transition in Iraq
    how do we prevent a mass exodus of institutional knowledge from
    occurring as a result of DOS taking over too abruptly?
        General Mattis. The same military personnel with institutional
    knowledge assigned to the Office of Security Cooperation-Iraq are
    currently working closely with our partners in DOS to support a smooth
    transition. We share a common objective for continuity and stability
    during the transition in Iraq. Preparations have been underway for some
    time and began with a comprehensive assessment of what was necessary to
    ensure a successful transition. A plan was developed and went into
    execution in the summer of 2010, including the identification of a
    multitude of tasks that will transition from U.S. Forces-Iraq to the
    U.S. Embassy-Iraq, CENTCOM, and the Government of Iraq, or be
    discontinued altogether.

        74. Senator Brown. General Mattis, what is the psychological
    dimension of the transition in Iraq?
        General Mattis. The psychological impact of the transition in Iraq
    varies. The American public may view the transition as positive. For
    the majority of the Iraqi people, the transition will be a positive
    experience that marks the re-emergence of Iraq in a regional and
    international context. Iraqi nationalism and the emergence of a
    representative government are all positive trends towards a new and
    prosperous future for Iraq. The future security and prosperity of Iraq
    now rests with its citizens. At the same time, some citizens in Iraq
    may view the transition with angst and uncertainty as the U.S.
    transitions from a Defense Department led effort.

        75. Senator Brown. General Mattis, will our Iraqi military partners
    have the confidence and incentives necessary to keep security tight
    after we are gone?
        General Mattis. Current assessments project some gaps in the
    Government of Iraq security capabilities will continue to exist. The
    Iraq Security Forces Fund combined with Foreign Military Sales cases
    directly address required equipment and training to deal with
    capability requirements. With these efforts, some shortfalls such as an
    air sovereignty capability requiring much longer timelines to put in
    place will continue to exist. Our primary strategic objective remains
    assisting the Government of Iraq in building and forging a
    professional, self-reliant, and effective security force capable of
    maintaining internal security and deterring external threats.
                                     ______

                  Questions Submitted by Senator Susan Collins

                    U.S. FINANCIAL COMMITMENT TO AFGHANISTAN

        76. Senator Brown. General Mattis, I understand the number of ANSF
    has increased dramatically in the past year. Pending the funding level
    provided for 2011, we have committed about $20 billion towards training
    and equipping the ANSF in 2010 and 2011. We provided roughly the same
    amount in the preceding 7 years. It is unclear to me that Afghanistan
    has the budget to sustain these forces once we drawdown in Afghanistan
    in 2014 or sometime between now and then. Unlike Iraq, which has
    significant oil revenue, Afghanistan's total GDP is about $30
    billion.\1\ Are we establishing a long-term U.S. financial commitment
    with the Afghan Security Forces Fund, or is there a transition plan
    that ensures Afghanistan sustains their security forces once we have
    trained and equipped them?
    ---------------------------------------------------------------------------
        \1\ CIA World Fact Book.
    ---------------------------------------------------------------------------
        General Mattis. The international community has acknowledged that
    while the transition of lead security responsibility will be completed
    by December 2014, financial support of the ANSF and other parts of the
    Afghan economy will be necessary past 2014. CENTCOM, in collaboration
    with other U.S. Government agencies, is developing economic initiatives
    to enable more coordinated and effective international community
    assistance. This will move Afghanistan from an aid based economy to a
    more self-sufficient trade based economy that will put Government of
    Afghanistan revenues on a path to eventually meet the expenditures of a
    robust ANSF which is capable of both meeting Afghanistan's security
    requirements and achieving U.S. strategic objectives in Afghanistan.

                            SAFE HAVENS IN PAKISTAN

        77. Senator Brown. General Mattis, last week, Admiral Mullen stated
    in his written testimony before this committee that one of the
    necessary conditions to succeed in achieving sustainable security in
    Afghanistan and Pakistan requires neutralizing insurgent sanctuaries in
    Pakistan.\2\ On the next page he testified that ``Insurgent groups such
    as the Quetta Shura and the Haqqani network operate unhindered from
    sanctuaries in Pakistan.'' \3\ Putting these two comments together, it
    leaves me with the impression we are not on a path to success unless
    these safe havens in Pakistan are addressed. How confident are you that
    coalition or Pakistani forces will neutralize these sanctuaries--
    including those sanctuaries utilized by the Haqqani and Quetta Shura
    groups--in the next 12 months?
    ---------------------------------------------------------------------------
        \2\ Mullen Testimony, SASC Hearing, February 23, 2010: Page 6
    ``Achieving sustainable security requires developing Afghan governing
    capacity, cultivating the conditions needed for conflict resolution,
    neutralizing insurgent sanctuaries in Pakistan, and countering
    corruption. Absent these conditions, we will not succeed.''
        \3\ Mullen Testimony, SASC Hearing, February 23, 2010: Page 7.
    ---------------------------------------------------------------------------
        General Mattis. I don't believe Pakistan will reverse its current
    policy within the next 12 months and eliminate sanctuaries enjoyed by
    the Quetta Shura Taliban and Haqqani Network. However, satisfactory
    end-states are attainable in Afghanistan even if the sanctuaries
    persist. Combined counterinsurgency operations beginning in late 2009
    succeeded in ejecting the Taliban from key districts in southern
    Afghanistan despite Taliban sanctuary across the Pakistani border.
    Continued security gains and Afghanistan Government progress in
    security, governance, and development over the next several years have
    the potential to neutralize the Taliban as a strategic threat, even if
    sanctuaries in Pakistan allow insurgents to maintain influence in
    outlying areas and sustain a certain level of violence throughout
    Afghanistan.

                            IRANIAN NUCLEAR PROGRAM

        78. Senator Brown. General Mattis, last month, the quarterly report
    issued by the International Atomic Energy Agency reiterated concern
    about undisclosed nuclear-related activities that Iran has undertaken
    since 2004 related to the development of a nuclear payload for a
    ballistic missile. Will you update the committee on the latest
    estimates for when Iran could develop a nuclear weapon and when it
    could launch an Intercontinental Ballistic Missile?
        General Mattis. The Iranian regime continues to flout U.N. Security
    Council resolutions on its nuclear and missile programs. Iran is
    keeping open the option to develop nuclear weapons in part by
    developing various nuclear capabilities that better position it to
    produce such weapons, should it choose to do so. Iran is technically
    capable of producing enough highly enriched uranium for a weapon in the
    next few years, if it chooses to do so. Iran would likely choose
    missile delivery as its preferred method of delivering a nuclear
    weapon. It continues to expand the scale, reach, and sophistication of
    its ballistic missile forces, many of which are inherently capable of
    carrying a nuclear payload.

                                 PIRACY ATTACKS

        79. Senator Brown. General Mattis, I am alarmed at the sharp rise
    in piracy attacks on the high seas in the last 4 years. According to
    the International Maritime Bureau, the number of pirate attacks against
    ships has risen every year for the last 4 years, and ships reported 445
    attacks in 2010, up 10 percent from 2009. The number of crew members
    taken hostage has increased from 188 in 2006, to nearly 1,200 crew
    members in 2010. The recent killing of four Americans traveling on a
    sailing yacht demonstrates that the pirates threaten the safety of our
    citizens in international waters. In addition, the freedom to safely
    travel on the open ocean enables trade, which is the lifeblood for many
    American jobs. I certainly can appreciate that anti-piracy missions
    require significant resources and present many legal issues because
    most of these instances occur in international waters, but what needs
    to be done to reverse the increasing trend in piracy attacks?
        General Mattis. While we can inhibit piracy on the sea with
    military action, ultimately the problem of piracy must be solved on
    shore, primarily in Somalia with a stable government which can enforce
    the rule of law over its sovereign territory.

                           BALLISTIC MISSILE DEFENSE

        80. Senator Brown. General Mattis, many of us are concerned about
    the number of missiles and ships required to deploy an adequate BMD for
    our Nation and for our allies. The challenge is that in addition to
    protecting the U.S. Homeland, we need to protect our forward based
    troops and our allies. As a result, there are likely going to be a
    demand for BMD assets in European Command, Pacific Command, and
    CENTCOM--which is your AOR. Has CENTCOM established present and future
    requirements for both missiles and launchers regarding BMD in your AOR?
        General Mattis. Yes. We have identified BMD requirements for the
    CENTCOM AOR and they are based on our assessment of potential threats,
    present and future.

        81. Senator Brown. General Mattis, do you expect that the CENTCOM
    requirements for these assets will be fully satisfied now and in the
    future?
        General Mattis. No, I do not. There simply are not enough assets to
    deal with the global threat. As our adversaries improve their
    capability both in quality and quantity, the threat becomes ever more
    challenging and we must continuously re-examine the gap. Hence, we
    advocate for more interceptors now and additional systems as they
    become available. However, we are taking other steps to deal with the
    growing threat. We have engaged our partners and encouraged them to
    invest in their own BMD.
        Our adversaries will likely continue to outpace us in terms of
    sheer numbers of ballistic missiles compared to our interceptor
    inventory. However, we don't need to match them one for one. We believe
    we can establish a credible deterrent by establishing an integrated,
    interoperable, collective defense with our regional partners.
    Therefore, in order to adequately defend against the missile threat in
    our region, we must maximize production capacity, to not only close our
    own capability gaps, but also to enable rapid delivery of these
    critical systems to our partners once they commit to procuring them.

               SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION

        82. Senator Brown. Admiral Olson and General Mattis, the
    information and oversight the Special Inspector General for Iraq
    Reconstruction (SIGIR) has provided over the last several years has
    been invaluable to my colleagues and I to evaluate the U.S. mission in
    Iraq. The most recent SIGIR quarterly report suggests SIGIR has
    experienced some challenge in obtaining detailed information from DOD
    in the course of fulfilling its congressionally mandated
    requirements.\4\ Will you each commit to be forthcoming in providing
    information to SIGIR for adequate reporting of the transition during
    this year?
    ---------------------------------------------------------------------------
        \4\  SIGIR Quarterly Report and Semiannual Report to Congress.
    Pages 5 and 16.
    ---------------------------------------------------------------------------
        Admiral Olson. Yes.
        General Mattis. Yes. CENTCOM has always, and will continue to fully
    support SIGIR to the very best of our ability by providing the detailed
    information they require to execute their oversight functions.
                                     ______

                   Questions Submitted by Senator John Cornyn

                 ROLE OF U.S. GROUND FORCES IN FUTURE CONFLICTS

        83. Senator Cornyn. General Mattis, on February 25, 2011, Secretary
    Gates made the following comment regarding the force structure that
    will be needed in the years ahead: ``The Army also must confront the
    reality that the most plausible, high-end scenarios for the U.S.
    military are primarily naval and air engagements--whether in Asia, the
    Persian Gulf, or elsewhere . . . But in my opinion, any future defense
    secretary who advises the President to again send a big American land
    army into Asia or into the Middle East or Africa should `have his head
    examined'.'' This past week, we had the 20th anniversary of coalition
    forces driving Saddam Hussein's Army out of Kuwait. Clearly, land
    forces played a huge role in Operations Desert Shield and Desert Storm.
    Remarkably, 150,000 coalition ground troops and 1,500 tanks were able
    to push the Iraqi Army out of Kuwait in just 100 hours. Is that type of
    military operation truly a thing of the past?
        General Mattis. I agree with the Secretary that the most plausible
    scenarios for military intervention involve naval and air engagements.
    These forces are particularly well suited to conducting short-notice,
    reactive and expeditionary actions to counter threats to our national
    interests. However, there remain plausible scenarios today where a U.S.
    ally or interests are so threatened by a force that only a joint force
    including robust, integrated land forces would be able to defend our
    partners and U.S. interests, as we saw in Operation Desert Storm. I
    expect this reality will continue to be a dominant feature of my
    Command's AOR and for that reason we must always be able to rely on our
    Army's core land force capabilities.

        84. Senator Cornyn. General Mattis, if such a scenario arose again
    in the near future, would it be possible to drive the enemy out through
    primarily naval and air engagements?
        General Mattis. A combination of air, land, and sea engagements is
    critical in influencing enemy courses of action and their will as an
    opposing force. An example illuminating the limitation of an air power
    only campaign includes the NATO air campaigns over Bosnia in 1995.
    Successful engagements are derived by concurrent balance of forces that
    offer the greatest strategic flexibility while building on momentum to
    create opportunities for rapid achievement of objectives.

        85. Senator Cornyn. General Mattis, would it have been possible to
    conduct the initial phases of Operation Enduring Freedom--in which we
    invaded Afghanistan, inflicted severe damage on the Taliban and al
    Qaeda, and held key ground in Afghanistan--using primarily naval and
    air forces?
        General Mattis. No. During the early phases of combat operation in
    Afghanistan in October 2001, naval and air forces were largely focused
    on disrupting the Taliban and al Qaeda and preventing their use of
    terrorism training camps. However, CENTCOM assessed that the indigenous
    ground forces could not prevail without U.S. and allied assistance on
    the ground.

                           U.S. WITHDRAWAL FROM IRAQ

        86. Senator Cornyn. General Mattis, several startling recent events
    in Iraq call into question the Iraqi Security Forces' ability to
    maintain peace, including violent protests and the bombing of the Baiji
    Oil Refinery--the largest in Iraq. During your testimony, you alluded
    to the possibility that terrorist organizations such as al Qaeda are
    behind this recent unrest. How concerned are you that al Qaeda or its
    affiliates will return to Iraq and take root again following the
    departure of U.S. forces?
        General Mattis. The Al Qaeda in Iraq (AQI) network continues to
    suffer setbacks. AQI efforts to reinvigorate a Sunni support base will
    likely fall short of achieving its objective. The majority of Sunnis in
    Iraq strongly oppose the al Qaeda network for the harsh tactics the
    group imposes. The transition to Iraqi-led counterterrorism operations
    has already taken place and the Iraqi Security Forces have demonstrated
    the ability to aggressively and accurately pursue AQI entities. Iraq
    will undoubtedly face challenges long after the departure of U.S.
    forces; however, the Government of Iraq and its security forces are
    demonstrating the ability to prevent AQI from advancing.

        87. Senator Cornyn. General Mattis, several military and civilian
    leaders have expressed serious concern about the Iraqi Air Force's
    ability to protect its own air space once U.S. forces redeploy home.
    The Iraqis had aggressively pushed to purchase 18 American-made F-16s,
    but they announced postponement of the planned purchase in order to
    shift that funding to domestic priorities. In light of this unfortunate
    delay, what steps have you taken to enable Iraq to adequately defend
    its airspace following the U.S. withdrawal?
        General Mattis. While current intelligence assessments describe the
    threat to Iraqi air sovereignty as minimal, shared contingency planning
    addresses any potential threats and provides a framework for mitigation
    procedures. Iraq has taken the initial steps towards self-reliance in
    air defense with the objective of acquiring two long-range radar
    systems that will provide them a capable early warning system. This is
    the first piece in the development of a sustainable air sovereignty
    posture, of which the F-16 case was to be the next essential step.
    These radar systems, one to be provided through Iraqi Security Forces
    Funding and the other through an FMS case, will provide a foundational
    capability in air defense. We are working with them to have the radar
    capability installed and operational by the end of 2011. CENTCOM also
    intends to conduct military-to-military bilateral contingency planning
    with GoI. The GoI will still need to acquire a capable air defense
    weapon system in the future, whether it is the F-16 or another
    platform. While the GoI will investigate all options, including a like-
    capability from other countries, CENTCOM will continue to encourage a
    U.S. manufactured solution as we believe this will provide the best
    sustainable capability for Iraqi air defense.

                                     PIRACY

        88. Senator Cornyn. General Mattis and Admiral Olson, Somali
    pirates are a lingering threat off the Horn of Africa and now even in
    the Indian Ocean. The February 22 murder of four Americans on a
    private, hijacked vessel near Oman served as a wake-up call. This year
    alone, Somali pirates have mounted over 50 attacks, hijacked several
    ships, and have taken over 200 crewmembers hostage. It appears that
    piracy is increasing in numbers, reach, and determination, despite the
    growing number of U.S. and international assets committed to protecting
    the maritime commons. In your mind, what is the most effective strategy
    to guard against piracy and secure the use of maritime routes off the
    east coast of Africa and throughout the Arabian Sea and Indian Ocean?
        Admiral Olson. SOCOM provides specially trained and equipped forces
    to support the counter-piracy strategies of the geographic combatant
    commanders.
        General Mattis. While we can inhibit piracy on the sea with
    military action, ultimately the problem of piracy must be solved on
    shore, primarily in Somalia with a stable government that can enforce
    the rule of law over its sovereign territory.

                                 SOCOM FUNDING

        89. Senator Cornyn. Admiral Olson, in January, Secretary Gates
    announced several ``efficiency'' cuts, including $2.3 billion from the
    SOCOM budget. At the same time, our Nation asks more than ever of our
    SOF. Recently, you stated ``We are doing more with more, but the more
    we're doing it with doesn't match the more we've been asked to do . . .
    we are beginning to show fraying around the edges.'' You have also
    stated that deployment frequency for SOF is exceedingly high, while
    SOCOM lacks the resources to meet the current demand. Will losing this
    $2.3 billion detrimentally impact SOCOM operations? If so, why?
        Admiral Olson. Senator Cornyn, thank you for affording me the
    opportunity to answer this extremely important question. Secretary
    Gates has directed cost consideration in all we do, and a ``culture of
    savings'' to ensure that we optimize the resources entrusted to us. His
    direction for improving DOD business operations last summer was clear;
    identify our savings and efficiencies initiatives over the next 5 years
    under the notion that those savings would be reinvested. The
    Department's stated goal was to significantly reduce excess overhead
    costs and apply savings to force structure and modernization--not a
    reduction of the DOD topline through efficiency cuts.
        CDR SOCOM's efforts in resourcing tactical units, divesting of
    obsolete and redundant capabilities, and leveraging Service common
    capabilities are consistent with the Secretary of Defense efficiency
    focus. Realigning the $2.3 billion across the FYDP did not have a
    negative impact on SOCOM. In fact, it allowed us to address growing
    capability gaps and improve battlefield performance by invigorating our
    acquisition agenda. SOCOM was able to realign funding towards Undersea
    Mobility and AC-130J Gunship recapitalization. Additionally, we were
    able to realign funding to improve SOF operational readiness and
    improve our human capital strategy. Key efforts such as Foreign
    Language Proficiency Pay, Marine Corps Forces Special Operations
    Command sustainment, flying hours funding, and Warrior Rehabilitation
    were enhanced.

                 INTERAGENCY COORDINATION ON NATIONAL SECURITY

        90. Senator Cornyn. General Mattis, in recent years, our troops in
    Iraq and Afghanistan are increasingly operating in areas outside their
    traditional competencies. We have seen examples of combat commanders
    standing up agricultural unions, dealing with veterinary issues, water
    issues, health issues, human services issues, and conducting elections
    in their areas of operations. While most of these tasks have been
    executed successfully, due in part to the sheer tenacity and
    determination of our military, many have been completed without the
    support and expertise of the relevant U.S. Government agencies. Could
    you comment on what legislative modifications you think are necessary
    in order to improve interagency security cooperation?
        General Mattis. Transitioning our military forces out of Iraq and
    Afghanistan will become more difficult if we cannot maintain assistance
    in the economic and governance areas on the civilian side. Robust
    resourcing for the State Department, the U.S. Agency for International
    Development, and other agency and department missions are some of the
    best investments for reducing the need for military forces to be
    employed.

        91. Senator Cornyn. General Mattis, do you see the need for a more
    comprehensive review or possible reorganization of some government
    agencies to better support our expeditionary military?
        General Mattis. Improved interagency coordination begins with an
    adequate level of resources available to our civilian interagency
    associates and partners. It is vitally important to support and fully
    fund the requests made by these departments and agencies in the 2011
    and 2012 budget requests that address and build the capabilities and
    capacity required for the future success of the National Security
    Strategy. The Quadrennial Diplomacy and Development Review offers
    important contributions to both improving efficiencies and allowing us
    all to better understand how our partners operate.

        92. Senator Cornyn. General Mattis, under current DOD organization,
    Iraq and Afghanistan fall within CENTCOM's AOR. However, within the DOS
    organizational structure, they fall under two separate regional
    bureaus. Similarly, Pakistan and India fall under the same DOS regional
    bureau, but under two different DOD unified combatant commands. These
    problems are not limited to the DOD and DOS maps. It would seem that
    this misalignment of geographic regions between Federal agencies would
    cause inherent challenges in the area of interagency coordination. In
    your opinion, does this lack of common demarcation of the world's
    regions hamper effective interagency cooperation and coordination on
    national security?
        General Mattis. No. Differences in the Areas of Responsibility
    geographic demarcations do not restrict accomplishment of assigned
    missions among COCOMs and civilian leaders across the Federal
    Government, to include diplomatic coordination, interagency
    cooperation, advancing U.S. interests, and protecting U.S. national
    security.

                          IRANIAN INTERFERENCE IN IRAQ

        93. Senator Cornyn. General Mattis, you noted in your testimony
    that Iran's Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) is
    equipping militants in Iraq and Afghanistan who have attacked U.S. and
    coalition forces, undermining stability and governance in both nations.
    Through these actions, Iran has essentially been waging a proxy war
    against U.S. troops. Your testimony also highlights a recent January
    2011 large-caliber improvised rocket-assisted mortar attack against
    U.S. forces in Iraq that, in your words, ``demonstrated Iran's
    malicious intent and ability to escalate violence when they desire.''
    What concerns do you have regarding the potential for the Iranian
    regime to obtain a greater, destabilizing influence in Iraq following
    the planned withdrawal of U.S. troops in December 2011?
        General Mattis. IRGC-QF will likely continue to support Shia
    militant groups in Iraq after U.S. forces withdraw, just as IRGC-QF
    continued to support Lebanese Hizballah after the withdrawal of Israeli
    forces from Lebanon in 2000. IRGC-QF will likely attempt to replicate
    the Hizballah model in Iraq via Shia militia groups such as Kata'ib
    Hizballah, Asaib Ahl al-Haqq and Muqtada al Sadr's Promise Day Brigade.
    Their intent is to have a loyal proxy with legitimate seats in the
    Iraqi Government and a capable, responsive militia. These militia
    groups, backed by IRGC-QF and Lebanese Hizballah, could collectively
    destabilize the security gains made in Iraq should Iran and these
    militias believe increased violence would benefit their interests and
    increase their influence.

        94. Senator Cornyn. General Mattis, in your view, what is the best
    strategy, short of contingency operations, that the United States can
    employ to deter Iran's destabilizing activities in the region?
        General Mattis. I believe the most effective strategy is one that
    mobilizes the international community to implement sufficient
    diplomatic and economic pressure to further isolate Iran forcing the
    regime to change its destabilizing behavior. In the meantime, CENTCOM
    will continue to work through institutions, alliances, and coalitions
    to dissuade Iran from developing a nuclear weapon. To this end, we will
    continue to pursue security cooperation with our allies and regional
    partners while helping to strengthen their defensive capabilities. We
    will also continue to support interagency efforts that blend economic,
    diplomatic, informational, and military tools to deter Iran.

                                  B-1 BOMBERS

        95. Senator Cornyn. General Mattis, the B-1 bomber has been
    operating over Afghanistan in support of our troops on the ground and
    has proven itself a critical component of our long-range strike
    operations overseas. Senior U.S. military leaders have consistently
    acknowledged that the B-1 fleet is doing an outstanding job. In a
    recent confirmation hearing, General David Petraeus stated that the B-1
    is a ``great platform'' and a ``very capable bomber.'' In your view,
    what role has the B-1 fleet played within CENTCOM's AOR, and what
    unique capabilities has it brought to the table, as compared to other
    platforms?
        General Mattis. The B-1 is a very capable combat aircraft that
    combines precision targeting and guided munitions. The B-1 can deliver
    up to 48,000 pounds of munitions and can loiter for 7 hours before
    needing aerial refueling. During the first 6 months of OEF, the B-1
    dropped 38 percent of all weapons delivered while flying only 5 percent
    of the overall sorties. In addition, the bomber dropped twice as many
    precision munitions as the coalition partners combined. In Operation
    Iraqi Freedom, the aircraft flew less than 1 percent of the combat
    missions while delivering approximately 43 percent of the precision
    munitions.

        [Whereupon, at 11:47 a.m., the committee adjourned.]

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                   2012 AND THE FUTURE YEARS DEFENSE PROGRAM

                                  ----------

                             TUESDAY, MARCH 8, 2011

                                           U.S. Senate,
                                   Committee on Armed Services,
                                                        Washington, DC.

                             DEPARTMENT OF THE NAVY

        The committee met, pursuant to notice, at 9:48 a.m. in room
    SD-G50, Dirksen Senate Office Building, Senator Carl Levin
    (chairman) presiding.
        Committee members present: Senators Levin, Lieberman, Reed,
    Webb, McCaskill, Hagan, Manchin, Shaheen, Blumenthal, McCain,
    Inhofe, Wicker, Brown, Ayotte, and Collins.
        Committee staff members present: Richard D. DeBobes, staff
    director; and Leah C. Brewer, nominations and hearings clerk.
        Majority staff members present: Jonathan D. Clark, counsel;
    Creighton Greene, professional staff member; Jessica L.
    Kingston, research assistant; Gerald J. Leeling, counsel; Jason
    W. Maroney, counsel; Thomas K. McConnell, professional staff
    member; William G.P. Monahan, counsel; John H. Quirk V,
    professional staff member; and Russell L. Shaffer, counsel.
        Minority staff members present: David M. Morriss, minority
    staff director; Adam J. Barker, professional staff member;
    Daniel A. Lerner, professional staff member; Lucian L.
    Niemeyer, professional staff member; Christopher J. Paul,
    professional staff member; and Michael J. Sistak, research
    assistant.
        Staff assistants present: Kathleen A. Kulenkampff, Brian F.
    Sebold, and Breon N. Wells.
        Committee members' assistants present: Christopher Griffin,
    assistant to Senator Lieberman; Carolyn Chuhta, assistant to
    Senator Reed; Nick Ikeda, assistant to Senator Akaka; Gordon I.
    Peterson, assistant to Senator Webb; Tressa Guenov, assistant
    to Senator McCaskill; Roger Pena, assistant to Senator Hagan;
    Patrick Hayes and Joanne McLaughlin, assistants to Senator
    Manchin; Chad Kreikemeier, assistant to Senator Shaheen; Ethan
    Saxon, assistant to Senator Blumenthal; Anthony J. Lazarski,
    assistant to Senator Inhofe; Joseph Lai, assistant to Senator
    Wicker; Charles Prosch, assistant to Senator Brown; Ryan
    Kaldahl, assistant to Senator Collins; and Taylor Andreae,
    assistant to Senator Graham.

           OPENING STATEMENT OF SENATOR CARL LEVIN, CHAIRMAN

        Chairman Levin. Good morning, everybody. I want to welcome
    Secretary Mabus, Admiral Roughead, and General Amos to the
    committee this morning to testify on the plans and programs of
    the Department of the Navy in our review of the fiscal year
    2012 annual budget and Overseas Contingency Operations (OCO)
    request of the administration. We are pleased to welcome
    General Amos to his first posture hearing as Commandant and to
    welcome Admiral Roughead for what will probably be his last
    posture hearing before the committee as Chief of Naval
    Operations (CNO).
        We are grateful to each of you for your great service to
    our Nation and for the valorous and truly professional service
    of the men and women under your command, and we're grateful to
    their families for the vital role families play in the success
    of careers and missions of our Armed Forces.
        As we discuss the budget issues here at home, our eyes are
    principally focused on places far from here. Nearly 20,000
    marines are partnered with an equal number of Afghan security
    forces (ASF) in Helmand Province, in the effort to bring
    security and stability to the people of southern Afghanistan.
    The marines have seen some tough fighting in clearing those
    areas of Taliban. They have also performed brilliantly in
    working with ASFs and local Afghan leaders to keep these
    communities free of insurgent control and to help the Afghan
    people build a better future. These efforts are showing
    progress, with villages secured in the central Helmand River
    Valley, market bazaars are reopening, and children are
    returning to school.
        The marines are also helping to establish community watch
    groups throughout Helmand Province, which are enabling local
    villagers to provide for their own security and to prevent a
    return of the Taliban.
        When we met for the Navy posture hearing last year, the
    Marine Corps was completing its drawdown of forces in Iraq and
    was in the midst of its redeployment to Afghanistan. The Navy
    has also been contributing directly to the war effort in U.S.
    Central Command (CENTCOM) as well and has 14,000 Active and
    Reserve sailors on the ground and another 10,000 at sea in
    CENTCOM, including ongoing individual augmentee support to
    operations in Iraq and Afghanistan.
        New challenges have emerged in recent days. Two ships with
    a Marine Expeditionary Unit (MEU) of over 1,000 marines aboard
    are in the Mediterranean. Missile-launching ships are available
    should the President choose to use them to strike Libyan
    targets, including military aircraft, air defenses, airstrips,
    command centers, and bases.
        Before exercising any use of force option, the President is
    appropriately seeking support from the international community,
    in particular the support of other countries in the Arab and
    Muslim worlds and in the region. It has been reported that some
    Arab states are apparently considering coordinating with the
    African Union in support of imposing a no-fly zone over Libya.
    Also, France and the United Kingdom are drafting a resolution
    for possible use at the United Nations (U.N.). Meanwhile,
    discussions are ongoing at the North Atlantic Treaty
    Organization (NATO) headquarters in advance of a defense
    ministerial meeting on March 10 and 11.
        Under the War Powers Act, the administration would need to
    consult with Congress before exercising a military option
    involving the use of force and to notify Congress promptly if a
    decision were made to use force.
        The use and possible use of our forces overseas makes it
    even more important that our budget provides for their success
    and their wellbeing. Our witnesses this morning are faced with
    a number of critical issues that confront the Department of the
    Navy and the budget, such as balancing modernization needs
    against the costs of supporting ongoing operations. We also
    know that you are facing serious complications due to the fact
    that the Department of Defense (DOD) does not have a full year
    budget for the current fiscal year.
        Many of the ongoing challenges facing the Department of the
    Navy (DON) center on acquisition programs. For instance, we
    have had great concerns about cost problems in the shipbuilding
    arena, including the Littoral Combat Ship (LCS) program. Since
    last year, we approved a revised acquisition strategy for LCS
    that will result in $2.9 billion in savings compared to the
    previous shipbuilding plan and has also contributed, at least
    in part, to the fact the Navy is buying additional ships in
    this budget and has added purchases of additional 41 F-18
    aircraft to help address a potential shortfall in tactical
    aviation.
        We will be monitoring closely to ensure that the DON
    actually achieves these savings and gets costs under control in
    other acquisition programs. The Navy has made modest progress
    in achieving the goal of a 313-ship fleet by increasing the
    size of the Navy fleet, and that has increased from a low of
    274 ships in March 2007 to a planned level of 288 during fiscal
    year 2012.
        We need to see more success stories, such as the savings
    from the LCS program or the savings from more efficient
    production of the Virginia-class submarine or the savings from
    the F-18 multi-year program if the Navy is going to make
    continued progress in building the size of the fleet. The
    future strength of the Navy depends on holding firm on these
    cost reduction efforts and expanding them across the whole
    acquisition portfolio.
        The Marine Corps has announced their intention to cancel
    the Expeditionary Fighting Vehicle (EFV) program. DON
    acknowledges the importance of the Marine Corps' amphibious
    assault mission and of the continuing relevance of that mission
    and capability to the Nation's defense. This mission in turn
    depends on an ability to move ashore from 20 to 30 miles out to
    sea with armored vehicles. That has been the purpose of the EFV
    program. So we need to hear this morning on the status of the
    alternatives to the EFV to achieve that mission.
        The Weapons Systems Acquisition Reform Act of 2009 has
    dictated that DOD make significant changes in its regulations
    and procedures governing the acquisition system. While I'm
    certain that this legislation will help correct past problems,
    I also know that we will succeed only through concerted efforts
    within the executive branch to implement that legislation and
    improve past behavior within DOD. We look forward to hearing
    this morning how the Navy is proceeding to implement the
    provisions of that act.
        Another concern surrounds future ship and aircraft force
    levels. As I have previously mentioned, the Navy budget would
    buy an additional 41 F-18 aircraft, but the budget would buy
    fewer Marine Corps and Navy versions of the F-35 Joint Strike
    Fighter (JSF). Additionally, the Navy is planning to conduct a
    Service Life Extension Program (SLEP) on some 150 F-18 aircraft
    already in our inventory. We need to understand the net effect
    of all these changes and how that alters the prospect of having
    empty carrier air wings later in this decade.
        Readiness continues to be a major concern for our
    committee. Without a final fiscal year 2011 appropriations act
    to match this committee's 2011 authorization of additional
    resources for readiness, the Navy readiness posture is in great
    jeopardy. Specifically, the funding needed in this fiscal year,
    in addition to the original budget request, is roughly $60
    million for aircraft depot maintenance and $34 million for ship
    depot maintenance.
        During last year's budget review cycle, this committee
    authorized those additional resources to meet the CNO's
    identified unfunded priorities for fixing shortfalls in the
    Navy aircraft and ship depot maintenance accounts in the fiscal
    year 2011 budget. While the Senate Appropriations Committee
    matched that additional funding, there has been no final
    appropriations act. Delaying the final appropriations act for
    fiscal year 2011 has already had a negative effect on
    readiness. The Navy has cancelled five ship availabilities.
    Further delay on appropriations will result in additional
    cancellations.
        The fiscal year 2012 budget continues an inadequate request
    for ship and aircraft depot maintenance, as I mentioned. For
    these two areas, the Navy budget request is short some $367
    million, which would only exacerbate an already stressed state
    of naval readiness.
        Turning to operational energy issues, I want to commend
    Secretary Mabus for his foresight and aggressive goals and his
    successful testing of alternative fuels from renewable sources.
    The sooner we can free ourselves from the shackles of fossil
    fuels, the better off our Armed Forces will be along with the
    Nation.
        I understand that last year one Marine company deployed to
    Afghanistan with renewable power systems to recharge batteries
    and laptops and energy-efficient lighting for tents, among
    other items. Since then, fuel use has decreased 90 percent and
    two patrol bases now operate entirely upon that renewable
    energy. I congratulate you, Secretary Mabus and the Marines,
    for that initiative.
        I also want to commend Secretary Mabus on his recent
    announcement that DOD will take new steps to enhance
    cooperation on clean energy and energy security by furthering
    last year's Memorandum of Understanding between DOD and the
    Department of Energy.
        Last year's committee report on the National Defense
    Authorization Act for Fiscal Year 2011 contained language
    expressing this committee's concerns with the planned
    relocation of 8,000 marines and their families from Okinawa to
    Guam. We recommended a reduction of $320 million from the
    request for construction of aircraft parking, site preparation,
    and utilities on Guam, since we concluded that these funds were
    budgeted ahead of need. The committee also recommended that
    authorization for the construction of future projects be
    deferred until we were provided with essential and relevant
    information. To date, the committee has not received that
    information on any of these six items that we requested.
        This year's budget request contains $181 million in similar
    projects. DOD has not yet shown that tangible progress has been
    made to implement a final decision on the replacement facility
    that meets the operational requirements for the marines on
    Okinawa, and we should not proceed with such an important,
    costly endeavor until we have complete, detailed information
    and realistic plans. To do otherwise would risk billions in
    taxpayers' dollars and could potentially put our strategic
    posture in a crucial region in jeopardy.
        So we look forward to hearing testimony this morning from
    our witnesses on these and other issues that are facing the
    Navy, and again we strongly commend you on your great service
    to the Nation and on the initiatives that you have taken.
        Senator McCain.

                    STATEMENT OF SENATOR JOHN McCAIN

        Senator McCain. Thank you, Mr. Chairman.
        I thank the witnesses for being here today and I thank them
    for their service to the country. They join us in interesting
    times. There are a lot of issues that are now before us and the
    President and the Joint Chiefs and also our military leadership
    have to handle various situations that are unfolding in the
    world, some of it on a day-to-day basis. So, I'm very
    interested in hearing General Amos' and Admiral Roughead's
    assessments of some of these situations.
        I remain concerned--by the way, in case--I know that our
    witnesses didn't miss it, but the Chinese announced a 12
    percent or 12.5 percent increase in their defense budget. We
    all know that that is not a true reflection of their defense
    spending, and a lot of their recent behavior in my view has
    emphasized the need for a naval presence in that part of the
    world, a very significant one, which may in future years turn
    our attention again to our overall maritime strategy.
        The JSF is an issue that we have been over and over and
    over again both in hearings and with the witnesses. General
    Amos, I would really appreciate it if you would keep us
    informed almost on a monthly basis. Secretary Gates has said,
    as we all know, that the Marine Corps version of the F-35 is on
    ``probation.'' This has really been a--I hate to keep throwing
    around the word ``disgraceful,'' but the cost overruns and
    delays have been unfortunately characteristic of a lot of our
    acquisition problems and challenges over the past several
    years.
        I know, General Amos, that you will keep us informed. But
    we don't want to be surprised about anything that happens with
    the F-35. In these tough fiscal times, we do have an obligation
    to our citizens to make sure that--we always have that
    responsibility, but now in these tough times, that
    responsibility has even been increased.
        General Amos, I appreciate your decision concerning the
    EFV. I know it was a tough one for you and I'll be very
    interested in hearing your views on what we will do instead of
    the EFV in the future, particularly in light of my opening
    comments. Our whole shipbuilding costs are really something
    which is disturbing us. Secretary Mabus, how you're going to
    fit the submarines as well as our other shipbuilding
    requirements all into a very tight budget, I would be very
    interested in hearing how you're going to approach that.
        Finally, on the LCS, I would just quote not my own views,
    but from Norman Polmar. Over the years we learn to respect the
    views of certain individuals who are experts and I would quote
    from an article that Norman Polmar wrote called ``A Crisis in
    Leadership'' in January. He basically said: ``And more
    recently, the Navy has again changed course on the LCS program.
    The program began a decade ago when the Navy awarded contracts
    to two industry teams to develop and build competitive LCS
    designs `at the speed of light.' As successive CNO and surface
    warfare flag officers attested, each team was to build up to
    two ships.'' At the last hearing I went through the numbers of
    the ships that were begun and cancelled, at huge costs.
        ``After competitive evaluation, the Navy would select one
    design to fulfill the requirement for a total LCS force of
    about 55 ships.''
        I go on to quote Norman Polmar: ``Into 2010, the Navy
    continued to praise this approach to the LCS program, even
    though both designs have been late and far above planned costs.
    The design selection also was delayed with the penultimate
    declaration by the Navy's leadership being that the winning
    design would be chosen in November 2010.
        ``Then, without warning, in November the Navy announced a
    `split decision.' The leadership now wants to buy 10 additional
    ships from each builder. The claim is made that the existing
    competition had driven down costs for both designs.
        ``That is a questionable claim in view of the more than
    doubling of the costs of prototypes of both designs, major
    problems in development and producing their mission modules,
    and increased costs of supporting a large number of both LCS
    configurations in the fleet. The two LCS designs have different
    sensors, computers, software, tactical displays, propulsion
    systems, et cetera. Those will cause increased maintenance and
    support costs, increased personnel training costs, and restrict
    flexibility in personnel assignment, an important factor in
    view of the small LCS crew size. The different combat systems
    of the two LCS designs will create problems related to
    operating the mission modules. Developing a new common combat
    system for both designs could cost up to $1.8 billion,
    according to the Congressional Research Service. Adapting one
    of the combat systems to the other design would cost just under
    $1 billion.''
        That's Norman Polmar's view, and we'll see, Mr. Secretary.
    We'll find out. I'll be here for a few more years, and we'll
    see whether your decision was correct, or whether Norman Polmar
    and I were correct, when you made a snap decision in November
    that we had to approve two different shipyards to do the job
    that for years you told Congress and the American people that
    you were going to select one.
        This kind of thing erodes, enormously erodes, the
    credibility of the Navy's plans and programs, at least for this
    member.
        I look forward to hearing from the witnesses and I thank
    them for their service to their country.
        Chairman Levin. Thank you, Senator McCain.
        Secretary Mabus, let me call on you first.
        Secretary Mabus.

     STATEMENT OF HON. RAYMOND E. MABUS, JR., SECRETARY OF THE NAVY

        Mr. Mabus. Mr. Chairman, Senator McCain, members of the
    committee: I have the honor of appearing here today
    representing the sailors, marines, civilians, and their
    families that make up our Department of the Navy. Today the
    Navy and Marine Corps are conducting missions across a full
    range of military operations. They remain the most formidable
    expeditionary fighting force the world has ever known and,
    thanks to your support, they will continue to meet the
    multitude of missions entrusted to them by our Nation.
        As the chairman pointed out in his opening statement, today
    we face an immediate crisis, the absence of a defense
    appropriations bill and the increasingly serious problems of
    operating under a continuing resolution (CR). The pressure of
    the CR has already significantly impacted procurement and
    reduced the resources available to maintain readiness. If the
    CR continues for the entire year, we will be forced to reduce
    aircraft flight hours and ship steaming days, cancel up to 29
    of 85 surface ship availabilities, defer maintenance on as many
    as 70 aircraft and 290 engines, and defer up to 140 maintenance
    and construction projects across the country.
        In addition, lack of legislative action will prevent the
    construction of two Arleigh Burke destroyers, one Virginia-
    class submarine, and one mobile landing platform, prevent
    procurement of two nuclear reactor cores, and delay increased
    funding for the Ohio-class replacement, reduce Marine Corps
    procurement by a third after the Marine Corps rebalances its
    manpower accounts, create a $4.6 billion shortfall in
    operations and maintenance accounts, and create a nearly $600
    million shortfall in combined Navy and Marine Corps manpower
    accounts.
        These measures not only place additional stress on the
    force and on our families; they will weaken the industrial base
    and affect over 10,000 private sector jobs. The disruption to
    our fleet and shore maintenance and modernization schedules may
    take years to recover from and will come at a much greater
    cost. We strongly request congressional action to address the
    implications of the CR.
        This is particularly important when considering that
    submission of the fiscal year 2012 budget was based on the
    fiscal year 2011 request.
        The fiscal year 2012 President's budget request for the
    Navy of $161 billion, an increase of only one-half of 1 percent
    from fiscal year 2011, includes funds this year for 10 ships
    and 223 aircraft. It maintains our commitment to take care of
    our people, build a strong research and development and
    industrial base, and to grow the fleet.
        The $15 billion request for OCO, which represents a drop of
    $3.5 billion from fiscal year 2011, includes funds to sustain
    operations, manpower, infrastructure, as well as procure
    equipment to support operations in Afghanistan.
        During the budget development, we were keenly aware of the
    fiscal position of the country and the necessity to be
    responsible stewards of taxpayers' dollars. The resulting
    request is a strategy-driven document, informed by fiscal
    realities. I think it balances competing requirements and does
    what is best for the country, the Navy and Marine Corps, and
    our sailors and marines.
        We began this budget cycle by examining every aspect of
    what we do and how we do it. Consequently, $42 billion in the
    Navy efficiencies were identified over the 5 years. As a result
    of these efficiencies, we have been able to add one Aegis
    destroyer, three T-AOX fleet oilers, and one T-AGOS ocean
    surveillance ship to our shipbuilding plan. With our dual-block
    LCS strategy, this increases the total number of ships in the
    Future Years Defense Program (FYDP) from 50 to 56, including
    one Joint High-Speed Vessel to be built for the Army.
        The savings allow us to buy additional F/A-18s, extend the
    service life of up to 150 aircraft as a hedge against delays in
    the deployment of the F-35B, and allow us to continue investing
    in unmanned systems, which are becoming increasingly important
    on the battlefield.
        The upcoming year will see the deployment of Fire Scout to
    Afghanistan and continuing testing of the UCAS-D, the
    forerunner of an integrated carrier-based system.
        In 2010, one of the most important efforts was the decision
    endorsed by Congress to pursue the new LCS through a dual-block
    buy procurement strategy. At an average cost of less than $440
    million per ship and with the cost reductions we have seen on
    LCS-3 and -4, the new strategy will save taxpayers $2.9
    billion. This plan is one that's good for the Navy, good for
    taxpayers, good for the country, and demonstrates what can be
    accomplished when sound acquisition principles are followed and
    enforced.
        We heard the message from Congress very clearly. We need
    more ships, but they have to be affordable. The LCS strategy
    supports the industrial base by keeping workers employed at two
    shipyards and is indicative of DOD's push to ensure acquisition
    excellence. The fixed-price contracts used for LCS, I hope,
    will be a model. They are the result of effective competition,
    give the government full ownership of the technical data
    package used in construction, and afford greater congressional
    oversight. With the new strategy, we get more ships, more
    quickly, and more affordably.
        As was pointed out, significant additional savings were
    also achieved through termination of the EFV. It's important to
    emphasize that this decision in no way changes our Nation's
    commitment to amphibious warfare. We have to maintain an
    amphibious assault capability that will put marines ashore
    ready for the fight.
        But the EFV is simply not the vehicle to do this. Conceived
    in the 1980s, the EFV is a two-decade-old solution to a
    tactical problem that has since fundamentally changed. Its cost
    per unit would have consumed half the Marine Corps' total
    procurement from fiscal year 2018 to fiscal year 2025 and 90
    percent of its vehicle-related operation and maintenance
    account.
        In aviation programs, we, as you, are closely monitoring
    the JSF, particularly the Marine Corps variant, the F-35B.
    After a 2-year period of focused scrutiny, we'll be able to
    make an informed recommendation about resolving the technical
    and cost issues.
        Ashore, we continue to confront rising health care costs
    caused by an increasing number of beneficiaries, expanded
    benefits, and increased utilization. To deal with these trends,
    we have to implement systematic efficiencies and specific
    initiatives to improve quality of care and customer
    satisfaction, but at the same time more responsibly manage
    costs. We concur with the recommendations made by the Secretary
    of Defense to ensure fiscal solvency and benefit equity for our
    retirees.
        Finally, we are continuing efforts to invest in and develop
    alternative energy. The latest headlines from around the world
    reinforce the basic point: Energy is first and foremost an
    issue of national security. We cannot allow volatile regions of
    the world to control the price and affect the supply of the
    fuel we use.
        Last year, the Navy and Marine Corps took huge steps
    forward, including, again as was pointed out earlier, flying an
    F-18 Hornet on biofuel, conducting a large expansion of solar
    power, and beginning expeditionary energy initiatives in
    Afghanistan. The Third Battalion, Fifth Marines, was the outfit
    that you talked about, Mr. Chairman, and in the middle of some
    of the heaviest fighting in Helmand Province they have
    demonstrated not only the ability to reduce their use of fossil
    fuels, but also to make them better fighters. One foot patrol
    saves 700 pounds of batteries that they don't have to lug
    through the battlefield, simply by using some of these
    renewable energy devices.
        What we're doing there is already saving lives. We will
    continue these investments this year and will continue to move
    toward our goal of at least 50 percent alternative energy use
    by 2020.
        In closing, I want to thank you again for your support.
    Thank you for always looking out for our sailors, our marines,
    their families, and for your support of efforts to make the
    Navy and the Marine Corps better, stronger, and better able to
    defend our great Nation. It's a solemn privilege to lead the
    naval services during an era of protracted war and of national
    challenge. I have been profoundly moved by the sacrifice and
    devotion that I have witnessed daily in the sailors and marines
    who defend us. The Navy and Marine Corps are and will remain
    ready to do any mission America gives them.
        Thank you.
        [The prepared statement of Mr. Mabus follows:]

                Prepared Statement by Hon. Raymond E. Mabus, Jr.

        Chairman Levin and Ranking Member McCain, I have the honor of
    appearing here today on behalf of the nearly 900,000 sailors, marines,
    and civilians that make up the Department of the Navy. I have appeared
    before this committee on a number of occasions, and I am happy to be
    here again, along with the Chief of Naval Operations (CNO) and the
    Commandant of the Marine Corps, to report on the readiness, posture,
    progress, and budgetary requests of the Department. We consider
    ourselves privileged to lead the dedicated men and women of the
    Department who are selflessly serving the United States all around the
    world.
        Today, your Navy and Marine Corps are conducting missions across
    the full range of military operations. They are engaged in combat in
    Afghanistan, stability operations in Iraq, deterrence and ballistic
    missile defense (BMD) in the Pacific, Arabian Gulf, and the
    Mediterranean, as well as humanitarian assistance and disaster relief
    operations across the globe. Our unmatched global reach, endurance, and
    presence continue to allow the Navy and Marine Corps--in partnership
    with our sister Services--to secure and advance America's interests
    wherever challenges or crises have arisen, as well as operate forward
    to prevent crises from occurring. We remain the most formidable
    expeditionary fighting force the world has ever known, and with your
    continued support, the Navy and Marine Corps will continue to meet the
    multiplicity of threats that endanger international peace and security.
        But today we are very concerned about the absence of a Defense
    Appropriations Bill for fiscal year 2011 and the negative effects of
    operating under a continuing resolution for the remainder of the year.
    We are equally concerned about passage of a bill that reduces the
    topline from the level requested in the fiscal year 2011 President's
    budget. Either course of action significantly impacts the resources
    available to grow the fleet and jeopardizes recent efforts to restore
    and maintain readiness levels commensurate with the standards expected
    of the Navy and Marine Corps.
        Without legislative action, limiting fiscal year 2011 procurement
    accounts to fiscal year 2010 levels will:

             Prevent start of construction of one Virginia-class
            submarine to be built in Groton and Newport News which will
            break the existing multi-year contract.
             Prevent start of construction of one Mobile Landing
            Platform to be built in San Diego.
             Prevent start of construction of one or possibly both
            programmed Arleigh Burke-class destroyers to be built in Bath
            and Pascagoula due to DDG-1000/DDG-51 swap language that
            prevents award of either ship unless both are authorized and
            appropriated.
             Preclude fourth and final increment of full funding
            for construction of CVN-78 (USS Gerald R. Ford) and advance
            procurement for CVN-79.
             Prevent procurement of two nuclear reactor cores for
            refueling of one aircraft carrier and one ballistic missile
            submarine, as well as delay increased funding for research and
            development of the Ohio-class replacement and replacement of
            two Moored Training Ships that provide half of the force's
            nuclear training capability.
             Prevent completion of one Arleigh Burke-class
            modernization.
             Reduce Marine Corps procurement by $563 million. This
            would add to equipment shortfalls generated by 9 years of
            conflict and prevent equipment replacement or purchase of four
            H-1 helicopters, numerous LAVs, MTVRs, LVSRs; tech upgrades to
            counter IED jammers; communication and intelligence equipment;
            tactical fuel systems to power our vehicles and generators;
            engineering equipment to move ammo, gear and supplies; air
            conditioners and heaters to take care of marines and sensitive
            gear; and EOD improvements to protect them.

        Reductions to expected procurement levels will create additional
    stress on the force, as units in service pick up additional commitments
    to cover the seams created by fewer available platforms.
        Likewise, fixing fiscal year 2011 operations to fiscal year 2010
    levels has created a $4.6 billion shortfall in Navy and Marine Corps
    operations, maintenance, and training accounts. Faced with this
    prospect, the Department began efforts in January to mitigate the
    impacts of operating under the continuing resolution, which over the
    course of the fiscal year will cause us to:

             Reduce aircraft flight hours and ship steaming days,
            including a reduction of four non-deployed air wings' flight
            hours to minimal flight-safety levels.
             Cancel up to 29 of 85 surface ship availabilities.
             Defer maintenance on 70 aircraft and 290 aircraft
            engines, bringing the combined backlog of aviation maintenance
            close to 1-year redlines.
             Defer 41 facilities maintenance projects and 89 new
            construction projects in Arizona, California, Florida, Georgia,
            Hawaii, Louisiana, Maryland, North Carolina, Rhode Island,
            South Carolina, Virginia, and Guam. These cuts equal an
            approximate 50 percent reduction and will eliminate, among many
            projects, dry dock certifications, bachelor quarters
            maintenance projects, repairs to explosive handling wharves at
            Bangor and Kings Bay that support ballistic missile operations,
            and modernization projects to support introduction of new
            training aircraft.

        The combined effects of the continuing resolution will directly
    impact the strength of the industrial base and over 10,000 private
    sector jobs at shipyards, factories, and Navy and Marine Corps
    facilities across the country. The degradation or loss of perishable
    skill-sets within our workforce, including many nuclear workers, and
    the disruption to both our fleet and shore maintenance and
    modernization schedules will take 3 years to recover based on
    rotational schedules alone--and only at significantly greater cost than
    requested in the fiscal year 2011 President's Budget.
        Finally, there is almost a $600 million shortfall in Navy and
    Marine Corps manpower accounts. As a result of this shortfall, the
    Services must raid other accounts in order to meet payroll for the
    duration of the year. We are currently living within funding
    constraints by limiting or conducting short-notice permanent change of
    station moves; however, this tactic places significant hardship on our
    military families and is not sustainable over the entire fiscal year.
        We strongly request congressional action to address the
    implications of the Continuing Resolution on our forces and our people
    by taking action to enact the fiscal year 2011 President's Budget.

                            DEPARTMENTAL PRIORITIES

        As I testified last year, there are four imperatives I believe the
    Department of the Navy must address to maintain preeminence as a
    fighting force and successfully meet the challenges of the future. They
    are:

        (1)  Taking care of our sailors, marines, civilians, and their
    families
        (2)  Treating energy as a strategic national security issue
        (3)  Creating acquisition excellence
        (4)  Continuing development and deployment of unmanned systems

        These priorities underpin every action of the Department, from
    supporting current operations to developing the current year's budget
    request, finding efficiencies within the Department, and preparing our
    Navy and Marine Corps for the future.
        Fundamentally, it comes down to a question of resources, of
    ensuring that our people have what they need to do their jobs, ensuring
    the Nation that the Navy and Marine Corps uses our fiscal and energy
    resources wisely, and ensuring that seapower, as a resource, remains
    readily available to meet the Nation's policy requirements and the
    orders of the Commander in Chief.

                     SEAPOWER: A CRITICAL STRATEGIC ENABLER

        It is clear that we live in a time of sweeping change and an era of
    strategic realignment. The President has stated that we ``must pursue a
    strategy of national renewal and global leadership--a strategy that
    rebuilds the foundation of American strength and influence.'' Seapower
    has always been a part of that foundation and will continue to be an
    indispensible asset to American leadership and economic strength in the
    global community of nations. American seapower, as it has done for
    generations, continues to guarantee freedom of navigation and
    international maritime trade, underpinning global economic stability
    and facilitating continued global economic growth. No other component
    of American military power is as flexible or adaptable as seapower. I
    see one of my primary responsibilities as Secretary to be ensuring
    continuation of this responsiveness, flexibility, and adaptability
    through the policies we adopt and in the ships, aircraft, and weapons
    systems that we build.
        Maritime nations have many inherent strategic advantages. Naval
    forces operating in the open ocean provide an effective conventional
    deterrent to those who threaten regional stability or promote
    extremism. Strong expeditionary forces can swiftly respond to crises
    and make potential adversaries pause before committing hostile actions.
    But should deterrence fail, our combat ready naval forces must be
    prepared to conduct sustained combat operations.
        The Navy and Marine Corps are America's ``Away Team.'' They exist
    primarily to protect our Nation far from home and respond quickly to
    crises wherever and whenever they occur. Exploiting their inherent
    mobility and maneuverability at sea, naval forces gather information,
    perform surveillance of seaborne and airborne threats, defend regional
    partners, deter prospective adversaries, interdict weapons of mass
    destruction, disrupt terrorist networks, conduct humanitarian
    assistance and disaster relief, and support the work of American
    diplomacy. This variety of capabilities is a primary feature of
    seapower, and it provides the President and our Nation with unmatched
    flexibility to deter conflict and, if necessary, project power from the
    sea to defend U.S. national security interests. The ability to
    accomplish these tasks without placing a large presence ashore and
    absent concerns of sovereignty is absolutely critical in our world of
    increasingly sophisticated threats and growing geopolitical complexity.
        It is for these reasons, and in order to improve global force
    projection capabilities that the Navy, Marine Corps, and Air Force are
    working on an Air Sea Battle concept to improve joint capabilities and
    cooperation in addressing anti-access/area-denial challenges.
        Unique in history, the blanket of maritime security and stability
    provided by American maritime power is the first to be used for the
    good of the whole world. But in order to ensure continued American
    leadership in issues of maritime policy and security, we strongly
    recommend accession of the United States to the Convention on the Law
    of the Sea, an action that has been similarly and repeatedly
    recommended by multiple Secretaries of the Navy and Chiefs of Naval
    Operation. Accession by the United States would enhance stability of
    the navigational rights inherent to the Convention and would strengthen
    our bargaining position in international discussions of Arctic Policy
    and access to resources and sea lines of communication.

                               CURRENT OPERATIONS

        Over the past year, our forces have successfully navigated the
    world's growing complexity and have consistently demonstrated the
    utility, effectiveness, and flexibility of seapower and maritime
    forces.
        Following completion of the Marines Corps' mission in Iraq, the
    primary operational focus of the Department has been supporting the war
    effort in Afghanistan. Over 30,000 marines and sailors are committed to
    the fight there, working all across the country, with the largest
    concentration operating as Regional Command-Southwest along the Helmand
    River Valley.
        In my visits to the marines on the ground throughout the year, I
    had the opportunity to look firsthand at the progress made by our
    increased presence in Helmand. In December, I visited three Forward
    Operating Bases (FOBs) with increasing levels of stability in three
    separate districts of Helmand: Sangin, Marjah, and Nawa--or as the
    marines put it, I went to look at where the fight is, where the fight
    was, and where there is no fight.
        In Nawa, I saw a strong partnership between the local government,
    Afghan National Police, the Afghan National Army, and our Marines--who
    have built the capacity of their partners so that they may shortly
    assume responsibility for their own security. The district is very
    safe, and because of the success of the counter-insurgency effort, Nawa
    is growing in both political strength and economic activity.
        In Marjah, after successful operations to clear it last spring, the
    markets are open, schools are being built, and a local government is
    working to build capacity. In my visit just 3 months ago, I personally
    walked the streets of Marjah to witness the progress, something that
    even in the summer of 2010 would have been unthinkable. Then, just
    stepping outside the gates of our FOB would have generated a pitched
    battle. Now, it brought out street vendors and men on motorbikes.
        I also went to Sangin District near the Kajaki Dam in Northern
    Helmand, which has been a Taliban stronghold for years and for the past
    few months has been the main effort of the fight in Helmand. Our
    marines in Sangin have been conducting intensive combat and security
    missions in support of the counterinsurgency strategy, and
    concurrently--even in the midst of the fight, have been testing new
    solar energy equipment to expand their operational reach. Together with
    their partners from the Afghan National Security Forces, they have
    taken the fight to the Taliban and are facilitating the Afghan
    Government's reestablishment of local control.
        Elsewhere across Central Command, the Navy has over 14,000 sailors
    on the ground supporting joint and coalition efforts and another 10,000
    sailors at sea supporting combat operations, including from our
    carriers operating in the Indian Ocean, where we are launching
    approximately 30 percent of the strike or close air support missions
    that watch over our marines and soldiers on the ground in Afghanistan.
        In addition to combat operations, the Navy and Marine Corps remain
    globally engaged in a host of other security and stability operations.
    On any given day, more than 72,000 sailors and marines are deployed and
    almost half of our 286 ships are underway, ready to respond where
    needed.
        It was the Navy and Marine Corps that were the first on scene after
    both the devastating earthquake in Haiti and the summer's catastrophic
    floods in Pakistan. Within hours of the January 12th earthquake, both
    Navy and Marine Corps assets were en route to Haiti. A total of over
    10,000 sailors and marines and 23 ships, including the carrier USS Carl
    Vinson, the Bataan and Nassau Amphibious Ready Groups, and the hospital
    ship USNS Comfort ultimately participated in Operation Unified
    Response.
        Halfway around the world, after Pakistan was struck by devastating
    August floods that impacted nearly a fifth of its population,
    helicopters from the USS Peleliu and the 15th Marine Expeditionary Unit
    supported the Government of Pakistan through delivery of 2,000 tons of
    relief supplies and by contributing to the rescue of over 10,000
    people. Later, the ships of the Kearsarge Amphibious Ready Group
    deployed early to provide a continuous U.S. humanitarian presence.
        In response to the administration's strategic direction, the Navy
    is scaling up our BMD force and their deployments to enhance our
    deterrent posture, especially in the defense of Europe. Our multi-
    mission, BMD-capable, Aegis cruisers and destroyers now routinely
    deploy to the Mediterranean and the Arabian Gulf, as well as the
    Western Pacific to extend our deterrent umbrella for our allies. I had
    the opportunity a few months ago to visit the destroyer USS Ramage
    after she completed her first BMD deployment, and I can assure you that
    the sailors on these ships are some of the most professional and
    dedicated men and women in the country, and they are incredibly excited
    about their work. We appreciate Congress' continued support of the
    destroyer and cruiser modernization programs that are bringing
    additional BMD capability to the fleet.
        Our growing BMD capability is complemented by our traditional sea-
    based, strategic nuclear deterrent centered upon our globally deployed
    and proficient ballistic missile submarine force.
        In the Western Pacific, as an integral part of U.S. diplomatic
    actions, several times last year the USS George Washington sortied to
    the South China Sea and the Sea of Japan in response to territorial
    disputes with North Korea and open North Korean provocation. In late
    November, after the North Korean artillery attacks on Yeonpyeong Island
    west of Inchon, the George Washington strike group conducted a training
    exercise with the South Korean Navy in order to demonstrate the
    continuing value and strength of our alliance.
        We are also working to build regional capacity and resolve security
    issues of common international concern.
        In support of our Maritime Strategy, both the Navy and Marine Corps
    routinely engage with nations all around the world to build capacity
    and forge stronger maritime partnerships. In the ``Rim of the Pacific''
    or RIMPAC exercise, 32 ships, 5 submarines, and more than 170 aircraft
    from 14 nations participated in the world's largest multinational
    maritime exercise encompassing every aspect of traditional naval
    warfare.
        Global Partnership Stations in Africa, South America, and the
    Pacific are training hundreds of sailors, marines, and coastguardsmen
    from dozens of nations and are bringing advanced medical and civil
    engineering assistance to those in need. The Africa Partnership Station
    alone has trained with 32 African and European partners since 2007.
    Between them, Pacific Partnership 2010--conducted by the USNS Mercy--
    and Continuing Promise 2010--conducted by the USS Iwo Jima--treated
    over 100,000 patients and conducted over 20 civil engineering projects.
        In the Caribbean and South America, we continue to work with the
    Coast Guard-led Joint Interagency Task Force-South to synchronize
    forces from 13 nations and interdict the flow of illegal narcotics into
    the United States. In 2010 naval forces contributed to the seizure of
    over 133.2 tons of cocaine, 3.2 tons of marijuana, 92 boats and
    aircraft, and $2.7 billion in drug revenue.
        In the Gulf of Aden and western Indian Ocean, the Navy remains
    committed to counter-piracy efforts with approximately 16 partner
    nations. Combined Task Force 151, in cooperation with forces from the
    EU, NATO, and other nations deploying individual units or task groups,
    is operating off of Yemen and in the Somali Basin to protect the safe
    passage of maritime commerce. Where our forces are located, pirate
    activity has fallen, but the areas involved are huge, and as Secretary
    of State Clinton said in April 2009, the solution to Somalia piracy
    lies largely with Somalia, through building its capacity to police
    itself and offering young pirates viable alternatives to that way of
    life. We are treating the symptoms of piracy, rather than its
    fundamental cause: Somalia's failure as a state. Despite the
    international community's commitment, piracy has both continued to
    increase and move further offshore, a measure of pirate resiliency and
    the strong economic incentives that underpin it. Nine of 10 pirates
    captured are ultimately freed as there is often insufficient evidence
    or political will to prosecute them, or to incarcerate them after
    conviction. We strongly endorse additional international efforts to
    address these concerns.

                       FISCAL YEAR 2012 BUDGET SUBMISSION

        Over the past year, I have visited with thousands of sailors and
    marines stationed with our forward operating forces at sea and our
    combat forces in Afghanistan. I can report, based on both the direct
    observations I mentioned and from personal inputs from Joint and
    Combined commanders, that the quality of our sailors and marines is
    superb and we are continuing to protect America's interests abroad. But
    while we are prevailing today, we must also build the foundation for
    the Navy and Marine Corps of tomorrow.
        During the development of the President's fiscal year 2012 budget
    submission our Navy and Marine Corps leadership team made numerous
    difficult tradeoffs to preserve current readiness while better
    posturing the Navy and Marine Corps for the challenges of the future. I
    believe that the result provides a balanced approach that will enable
    the Services we lead to successfully perform our assigned missions,
    even while setting a course for future success. It is important,
    however, to reiterate that the fiscal year 2012 budget was developed
    based upon ultimate passage of the President's fiscal year 2011 budget.
    If the continuing resolution now in place remains the de facto budget
    for the year, or if a Defense Appropriations Bill is passed that
    reduces the amounts requested in the fiscal year 2011 President's
    budget, the proposed fiscal year 2012 budget will not be sufficient to
    recover from delays, cancellations, and mitigations we have been forced
    to put in place this year.
        Over the past year, we have examined every aspect of what we do and
    how we do it in order to eliminate waste and move every resource
    possible toward operations and successfully executing our missions now,
    and in the future. At the direction of the Secretary of Defense, in
    June 2010, the Services were formally asked to continue this process
    through an efficiencies review, which we developed through three
    complementary approaches; buying smarter, streamlining our organization
    and operations, and being more efficient in the way we use, produce,
    and acquire energy. This effort has had a substantial impact on our
    overall budget, allowing us to invest more in our core warfighting
    missions and enhance our acquisition plans. Savings were also derived
    from the Office of the Secretary of Defense (OSD)-mandated, Defense-
    wide efficiencies.
        Since the review began, the Department of the Navy has identified
    approximately $35 billion in self-generated efficiencies over the next
    5 years. When DOD-wide efficiencies are factored in we will achieve $42
    billion in savings. These savings will facilitate adding one guided-
    missile Aegis destroyer, three T-AO(X) fleet oilers, and one T-AGOS
    ocean surveillance ship to our shipbuilding plan, which with our dual-
    block LCS strategy will increase the total number of ships in the
    Future Years Defense Program (FYDP) from 50 to 56, including one joint
    high speed vehicle to be built for the Army, an average of more than 11
    ships per year. We were also able to accelerate a Mobile Landing
    Platform from fiscal year 2015 to fiscal year 2012 and increase R&D
    funding to support the accelerated procurement of the T-AO(X), and the
    development of the next amphibious dock-landing ship (LSD(X)).
        The savings allowed additional investments in the Next Generation
    Jammer to provide greater protection for tactical aircraft, electronic
    warfare systems, ballistic missile sets, and the new air and missile
    defense radar that will equip our DDG-51 Flight III destroyers. The
    savings allowed increased funding for a new generation of sea-borne
    unmanned strike and surveillance aircraft; and gave us the ability to
    buy additional F/A-18s and extend the service life of 150 aircraft as a
    hedge against more delays in the deployment of the F-35B, the Short
    Take-Off and Vertical Landing (STOVL) variant of the Joint Strike
    Fighter.
        We addressed Marine Corps needs by increasing equipment funding for
    units in dwell and for repair and refurbishment of Marine equipment
    used in Iraq and Afghanistan. Based on heavy usage rates, we requested
    $2.5 billion for Marine reset in the fiscal year 2012 OCO request, and
    estimate a $5 billion reset liability upon termination of the conflict
    in Afghanistan. We also added funding for fire and maneuver platforms,
    command and control capabilities, and intelligence, surveillance, and
    reconnaissance.
        We found the $35 billion through a close and systematic review of
    our programs and by cutting excess capacity in our support
    establishment. Over the FYDP, with congressional support we will reduce
    Navy manpower ashore and reassign over 6,000 personnel to operational
    missions at sea; use multi-year procurement and production efficiencies
    to save more than $1.1 billion on the purchase of new airborne
    surveillance, jamming, and fighter aircraft; and disestablish both
    Second Fleet and excess staffs for submarine, patrol aircraft, and
    destroyer squadrons plus one carrier strike group staff.
        Programmatically, one of the most important efficiency efforts was
    the decision endorsed by Congress to pursue the new Littoral Combat
    Ship (LCS) through a dual-block buy procurement strategy. Over the past
    years the message from Congress has been clear, we must build more
    battle force ships as affordably as we can, consistent with the
    statutory requirements laid out in the Weapons System Acquisition
    Reform Act of 2009. We heard that message clearly, and are grateful to
    the administration for its support and to the many Members of Congress
    who worked with the Navy to make the LCS program an example of what can
    be done right when strict acquisition standards are laid out and
    enforced.
        With an average cost of $440 million per ship, and with the cost
    reductions we have seen demonstrated on LCS-3 and -4, the Navy will
    save taxpayers approximately $1.9 billion in fiscal year 2012 to fiscal
    year 2016. More importantly, the fact that prices were so dramatically
    reduced from the initial bids in 2009 will allow us to save an
    additional $1 billion--for a total of $2.9 billion--through the dual
    award of a 10-ship contract to each bidder. This plan is truly one that
    is good for the Navy, good for taxpayers, and good for the country.
        At the recommendation of both the Commandant and myself,
    significant additional savings were also achieved by the Department of
    Defense through termination of the Expeditionary Fighting Vehicle (EFV)
    program. The nation absolutely must retain and rebuild an amphibious
    assault capability that will get marines from ship to shore in a
    protected amphibious tracked vehicle ready for the fight. This is a
    core capability the Marine Corps must have. But the EFV is not the
    vehicle to do this. Conceived in the 1980s, the EFV was the previous
    generation's solution to a tactical problem that has since
    fundamentally changed. Just as importantly, the EFV's cost per unit
    would have eaten up over half of the Corps' total procurement account
    and 90 percent of the Corps' vehicle-related operation and maintenance
    account; the requirements levied on the vehicle outstripped what could
    affordably be achieved.
        We are committed to developing and fielding an effective,
    survivable and affordable amphibious capability that will meet the
    Corps' amphibious requirements. This will be done through upgrading
    existing vehicles, through service-life extensions, and by working with
    OSD and industry to go as fast as possible in the acquisition and
    contracting process to develop a successor program to the EFV, one that
    will meet today's requirements for this critical Marine Corps
    capability.
        We are also closely overseeing the Joint Strike Fighter program. In
    particular, we are providing additional focused attention on the Marine
    Corps variant, the F-35B, which the Secretary of Defense has placed on
    a 2-year probation. During this time, solutions to the unique F-35B
    technical issues will be engineered and assessed while production will
    be held to a minimum sustaining production rate of six aircraft per
    year in fiscal year 2012 and fiscal year 2013. This low-production rate
    is required to ensure continuity in the engineering workforce involved
    in the design and assembly of the F-35B at the prime contractor and key
    vendors without a loss in learning and to sustain the supplier base of
    F-35B unique parts. After this 2-year period of focused F-35B scrutiny,
    an informed decision will be made about how to proceed with development
    and production of this variant, to include the potential for program
    cancellation.
        I want to point out that it is only the F-35B (STOVL) variant that
    is on probation. The F-35C variant, which will be flown off of our
    aircraft carriers, is doing satisfactorily and will be procured by both
    the Navy and the Marine Corps.
        The President's budget request of $161 billion will maintain our
    commitment to take care of our people, build a strong R&D and
    industrial base, and grow a fleet capable of sustaining our preeminence
    as the world's most formidable expeditionary force. The fiscal year
    2012 request of $15 billion for contingency operations includes
    incremental costs to sustain operations, manpower, equipment and
    infrastructure repair as well as equipment replacement to support our
    operations in Afghanistan and elsewhere.
        The fiscal year 2012 President's budget request includes funds for
    10 Navy battleforce ships, including:

             two Virginia-class submarines,
             one Arleigh Burke-class destroyer,
             one Mobile Landing Platform ship,
             one Joint High Speed Vessel,
             one Amphibious Transport Dock Ship, and
             four Littoral Combat Ships.

        In aviation, we have requested 223 aircraft in the fiscal year 2012
    baseline budget, including:

             13 F-35 Joint Strike Fighters for both the Navy and
            Marine Corps,
             24 MH-60R and
             11 P-8As to replace the aging current ASW and maritime
            patrol squadrons,
             18 MH-60S for logistics support,
             one KC-130J,
             25 H-1 variant helicopters,
             30 MV-22 tilt-rotor aircraft,
             28 F/A-18E/F fighter/attack planes,
             12 EA-18G to continue replacing the veteran EA-6B,
             five E-2D Advanced Hawkeyes,
             36 Joint Primary Aircraft Trainers for our student
            aviators, and
             20 Unmanned Aircraft.

        The fiscal year 2012 President's budget request also contains
    funding for the Navy Unmanned Combat Aerial System demonstration and
    continues development of the Broad Area Maritime Surveillance (BAMS)
    unmanned system.
        The individual efficiency initiatives the Department has put in
    place will continue to further streamline our organizations and
    operations, will reshape and reduce both capacity and personnel
    associated with the Department's ``tail,'' and will contribute to the
    dramatic transformation already underway in how the Department does its
    business. More importantly, they will sharpen the operating ``tooth,''
    free up critical resources for maintaining and accelerating our
    shipbuilding and aviation acquisition plan, maximize fleet
    capabilities, and help preserve a strong industrial base.

         TAKING CARE OF SAILORS, MARINES, CIVILIANS, AND THEIR FAMILIES

        The Navy and Marine Corps have continued to recruit and retain the
    high quality men and women we brought into the Services in the past
    years, and 2010 was no exception. Both the Navy and Marine Corps met or
    exceeded their mission quotas and quality standards.
        We recognize that quality of life programs are important for morale
    and the military mission. We recruit sailors and marines, but we retain
    families. We continue to provide a wide array of readiness programs,
    including deployment support services, morale and welfare services, and
    child and teen programs. These award winning career management,
    training, and life-work balance programs are nationally recognized for
    their excellence not only by respected national human resource
    organizations, but even more by the marines and sailors that benefit
    directly from them.
        Medical care for our Wounded Warriors, already outstanding,
    continued to get better throughout the year. Since Operations Enduring
    Freedom and Iraqi Freedom began, over 12,000 marines and sailors have
    been wounded in action. Their service and sacrifice mandates that we
    provide quality care for those who have given so much for our country.
    Our medical community continues to meet this challenge and make
    advances in dealing with the signature wounds of the current wars:
    traumatic brain injuries, mental health issues, amputation, and
    disfiguring injuries, and Navy Medicine continues to reach out to its
    colleagues in both civilian and Veterans Affairs hospitals to improve
    our understanding and improve overall care for our people.
        But care for our Wounded Warriors does not end in the hospital. We
    have undertaken a commitment to bring our Veterans back into the
    workforce of the Department of the Navy through several Wounded Warrior
    outreach programs and hiring conferences. We are not there yet, but we
    are moving towards the goal of being able to say to every Wounded
    Warrior--if you want a job, we have one for you. As a representative
    example, in the past year alone, the Naval Sea Systems Command hired
    200 Wounded Warriors. In 2011 we will continue to make employment
    opportunities for Wounded Warriors a priority for the Department.
        It is important to note that rising health care costs within the
    Military Health System continue to present a fiscal challenge for the
    Department. Like the Secretary of Defense, both I and Departmental
    leadership are particularly concerned that the rate at which health
    care costs are increasing and the relative proportion of the
    Department's resources devoted to health care cannot be sustained; the
    Military Health System is not immune to the pressure of inflation and
    market forces evident in the civilian health care sector.
        The military faces a growing number of eligible beneficiaries,
    expanded benefits, and increased utilization throughout the military
    health care system. As a Department, we must be resolute in our
    commitment to implement systemic efficiencies and specific initiatives
    which will improve quality of care and customer satisfaction but will
    at the same time more responsibly manage cost. We have made progress,
    but there is more to do. We concur with the recommendations made by the
    Office of the Secretary of Defense; we must create incentives such as
    the Home Delivery Pharmacy Program and implement modest fee increases,
    where appropriate, to both ensure the fiscal position of the system and
    ensure equity in benefits for our retirees.
        Taking care of sailors and marines also means aggressively
    addressing the issues of sexual assault prevention and response. Last
    year, you supported the establishment of a new Office of Sexual Assault
    Prevention and Response (SAPRO) reporting directly to me to focus
    attention on the issue, develop effective training, and coordinate
    prevention and response programs across the Navy and Marine Corps.
    However, it is clear through sexual assault surveys that this crime
    remains a significant problem in the Services, and within some
    populations we have seen a negative trend of an increased number of
    assaults. But I can assure you that we are not accepting this trend,
    and we will not rest while any cases of this awful crime continue to
    occur.
        In 2010, the Department moved forward on expanding the
    opportunities for women in the Navy. We established a comprehensive
    plan to integrate women into the submarine force, beginning with our
    ballistic missile and guided missile Ohio-class submarines. This
    summer, the first 21 women officers were selected for nuclear
    training--and they have begun their approximately 15-month training
    pipeline. The first of these officers will get to their boats beginning
    in November 2011.
        We are preparing to move forward with successfully implementing
    Congressional guidance with respect to repeal of ``Don't Ask, Don't
    Tell'' in 2011.
        Overall, the fiscal year 2012 budget reflects a carefully crafted
    request for the fiscal support and resources necessary to sustain the
    force in light of the ongoing demands on our people and their families.
    Thank you for your continuing support.

                         ENERGY SECURITY AND LEADERSHIP

        Energy consumption in the Navy and Marine Corps has become a
    strategic vulnerability, an operational Achilles' heel, and a readiness
    challenge. This has made our energy usage a national security issue of
    rising importance. As a Department, we rely too much on fossil fuels,
    making our forces susceptible to fluctuations in both price and supply.
    Dramatic shifts in cost and availability can be caused by a host of
    manmade or natural events in volatile areas of the world. Those
    potential shocks could have, in turn, strategic, operational, and
    tactical effects upon our forces. A survey of headlines around the
    world today demonstrates exactly the point we are trying to make--
    energy is first and foremost an issue of national security.
        Without sustainable and reliable sources of energy and increased
    efficiency in our platforms, we may find ourselves paying an exorbitant
    price for operating our fleet, training our aviation and ground forces,
    and running our installations that support them. The ability to train
    and prepare forces for deployment could be curtailed. Worse still, our
    naval forces may find that future adversaries target our operational
    dependence on petroleum, as we see in attacks on fuel convoys in
    Afghanistan today. Our dependence on a fragile fuel distribution
    network increases our footprint, drains resources from the tip of the
    spear to supporting logistics lines, and ties up combat forces for
    security. Thus, energy diversity and efficiency are essential to
    maintain our warfighting capabilities and enhance our combat
    effectiveness.
        This is a topic I have spoken on a great deal, in front of this
    committee last year, around the world in speeches to industry and
    military audiences, and in conversations with international leaders.
    Through these events and discussions, it has become clear that energy
    security is not just an American issue--it is an issue that affects
    both our allies and potential adversaries alike. History has taught us
    that competition for resources has been one of the fundamental causes
    of conflict for centuries, and today, competition for energy still
    provides one of the most inflammatory sources of potential conflict.
        Energy, or more specifically denial of energy, could affect many of
    our NATO partners in Europe and indeed the strength of the alliance
    itself. Many of our partners are dependent upon external sources for
    their energy, so for them--denial of energy is a weapon, one just as
    real as the threat of tanks or airplanes.
        For all these reasons, and in order to improve our long-term
    strategic position and enhance the future operational effectiveness of
    our forces, I have charged the Navy and Marine Corps with accelerating
    the exploration and exploitation of new ways to procure, produce, and
    use energy.
        This effort began in October 2009, when I issued my five energy
    goals for the Department, the most important of which commits the Navy
    and Marine Corps to generate at least 50 percent of all the energy we
    use from alternative sources no later than 2020. Alternative sources
    include all renewable forms of energy such as solar, wind, geothermal,
    and ocean energy, as well as biofuels and nuclear energy.
        We are on track to meet all our goals, and throughout 2010, we
    demonstrated progress through many energy programs, partnerships, and
    initiatives. Throughout the year, we successfully conducted both ground
    and airborne tests of an F/A-18 Hornet and MH-60 Seahawk helicopter,
    and ran a Riverine Command Boat (experimental) on renewable biofuel
    blends made from either camelina or algae. Recently, we also completed
    testing of a marine gas turbine engine that will enable us to certify
    our frigates, destroyers and cruisers for biofuel operations. In each
    case, there was no impact on performance and no degradation to engine
    reliability. Together, these tests represent critical milestones for
    the Department's goal of demonstrating the Great Green Fleet in 2012
    and its planned deployment in 2016. In late 2010, the Navy conducted
    concurrent but unrelated tests of a more efficient F/A-18 engine in
    order to generate an increase in the aircraft's range.
        Afloat, as I discussed last year, the USS Makin Island is using a
    hybrid-electric drive to dramatically lower its fuel usage at slow
    speeds, which we estimate will generate life-cycle savings of up to
    $250 million at today's fuel prices. Over the next few years, we will
    continue to move forward with installation of a similar system on new
    construction DDGs and look at the feasibility of retrofitting the fleet
    with these systems in the course of routine shipyard availabilities.
        The Marine Corps is also aggressively exploring energy efficiency
    solutions in its operating forces in theater and in the supporting
    establishment. The Marines realize that energy as a resource influences
    a Commander's operational freedom of maneuver, and its conservation and
    wise use can save lives on the battlefield. Reduced logistics support
    and fewer convoys for expeditionary forces would free up resources and
    limit the exposure of marines to ambush and IEDs. Energy efficiency
    equals better combat effectiveness.
        At home, the Marine Corps demonstrated their traditional spirit of
    innovation by scouring the commercial world for rugged solutions,
    building two Experimental Forward Operating Bases (ExFOB) at Quantico
    and Twentynine Palms. New alternative energy technologies tested at the
    ExFOB deployed this fall with the Third Battalion, Fifth Marines (3/5),
    posted to Sangin District in the north of Helmand Province. Immediately
    upon arrival, they began evaluating expeditionary solar power
    generators at their FOBs and combat outposts to supplement or replace
    fossil fuels. They have done this even while engaged in near constant
    combat against a determined enemy in one of the most hotly contested
    districts of the war.
        When I visited Sangin, I heard first-hand from a Marine First
    Lieutenant about what worked, what did not, and how his marines in
    India Company of 3/5 were using the equipment. Two patrol bases are
    operating entirely on renewable energy, and another with a 90 percent
    reduction. One of the team-portable systems, called GREENS (Ground
    Renewable Expeditionary Energy Network System), is being used to
    provide power for the Operations Center, small radios, and small
    electronic equipment. Across the battalion's operating area,
    manportable SPACES (Solar Portable Alternative Communications Energy
    System) are being used by individual squads to recharge their radios
    and other combat electronics. This capability made it possible for a
    foot patrol to operate for 3 weeks without battery resupply, reducing
    their burden by 700 pounds and saving more than $40,000.
        By deploying these renewable solar energy technologies the marines
    in Sangin have been able to expand their operational reach, eliminate
    or minimize their need for fossil fuels in their generators, and
    dramatically reduce the need for often dangerous logistic support.
        At Camp Leatherneck, the marines have likewise begun a small bio-
    fuel pilot project for Helmand Province, purchasing locally produced
    cotton oil from an Afghan facility to mix with their own fuel. At
    Leatherneck, a standard generator is producing power from a 20-80 mix
    of cotton oil to fuel, yielding a 20 percent reduction in demand for
    fuel, while simultaneously demonstrating to Afghan farmers that there
    are alternatives to opium, and demonstrating to Afghan leaders that
    they can power their own economy from within Afghanistan. I am
    monitoring its progress closely.
        As the ExFOB gets all this feedback from returning marines, our
    expeditionary energy systems and programs will continue to improve and
    we will move even further down the road of energy efficient, combat
    effective forces.
        In addition to these tactical and platform applications, we have
    implemented a number of energy projects at our facilities ashore. We
    are actively exploring for new geothermal resources to augment our
    existing 270 MW geothermal power plant at China Lake. Last year we
    established the Nation's first grid-connected wave buoy at MCB Kaneohe
    Bay, HI. Last December the marines completed a 1.5 MW solar
    installation situated atop six acres of a landfill. The installation
    was unique because the equipment foundations were designed not to
    perforate the membrane covering the garbage below. Our budget request
    asks for continued support of these and similar projects in order to
    enhance our efficiency and maximize our move to greater independence
    and more resilient infrastructure.
        Finally, throughout the year we developed partnerships with a
    number of Federal agencies, states, academic institutions, and industry
    partners including the Departments of Energy and Agriculture, NASA, and
    the Small Business Administration.
        It is precisely because of the spirit of innovation that these
    partnerships embody that our Nation remains a world leader in its
    unrivaled capacity to stimulate and exploit cutting-edge ideas and new
    technologies. The U.S. Navy has always been a technological leader and
    has excelled at embracing change, particularly in propulsion systems
    and energy sources. We moved from wind to coal in the 19th century,
    from coal to oil early in the 20th century, and added nuclear power 60
    years ago. In every transition there were opponents to change, but in
    every case these changes increased our combat effectiveness by an order
    of magnitude.
        I have tasked the Navy and the Marine Corps to once again pioneer
    technological change through alternative energy sources. I am pleased
    with the progress to date, and expect it to sharply enhance the long-
    term strategic agility of our operating forces, as well as better
    posture the Department for an age of fiscal austerity and potential
    energy volatility. I want to stress, however, that every action and
    program we undertake is focused on generating improved warfighting
    capability and strategic flexibility, it is not just change for
    change's sake.

                        CREATING ACQUISITION EXCELLENCE

        Our future combat readiness is dependent upon the design,
    development and acquisition of weapons, platforms, and information
    technology. The current ships and aircraft of the Navy and Marine Corps
    provide decisive advantages over today's threats. But that edge must be
    constantly sharpened and modernized against constantly evolving
    technologies. We must continue to invest in intelligence, precision
    missiles and munitions, networked command systems, stealth technology,
    unmanned vehicles and ground fighting systems.
        To retain our advantage across multiple warfighting areas, we rely
    heavily upon both our dedicated personnel and the expertise resident in
    America's private sector. Throughout my tenure, I have taken the
    opportunity to visit shipyards, aircraft plants, vehicle factories,
    maintenance facilities, and warfare centers for detailed briefings and
    a firsthand look at the people responsible for designing and building
    our fleet and equipping our sailors and marines with vital weapon
    systems and technologies necessary to do their jobs. One cannot fail to
    recognize the creativity, dedication, and skills of our Nation's
    workforce.
        Yet, with government spending increasingly constrained,
    affordability, cost containment and total ownership costs are more
    important than ever. Because acquisition costs are rising faster than
    our top-line and because replacement systems can be more expensive than
    the platforms or weapon systems being replaced, we are putting
    tomorrow's force at risk.
        Both on our own and as a result of Secretary Gates' guidance, the
    Department has devoted considerable effort to finding efficiencies,
    reducing support costs, and scrubbing our acquisition process to
    mitigate this impact. In accordance with the Weapons System Acquisition
    Reform Act passed by Congress in 2009, we have made the requirements
    and acquisition processes more rigorous in order to better manage the
    resources entrusted to us by the American taxpayer, and we are working
    with OSD to develop a streamlined process for acquiring information
    technology in a more responsive manner to better equip the warfighter
    with emerging technologies and ward off the cyber threat.
        This requires constant examination of every single one of our
    policies, practices, priorities, and organizations, with a clear focus
    on controlling cost. Our acquisition community has been extensively
    engaged with industry and the Services to streamline processes, and
    they are ruthlessly evaluating both requirements and the supporting
    analyses in order to get more value out of the overall acquisition
    system.
        The Navy and Marine Corps will continue initiatives already in
    place to improve processes and to instill discipline in procurement. In
    2010, we strengthened our cost estimating group and met statutory
    requirements to obtain independent cost estimates, and we have
    incorporated Defense-wide best practices in the formulation of all our
    major programs. We have made our cost estimates more realistic and are
    using these improved cost and schedule plans to make necessary
    capability tradeoffs and difficult investment decisions at the front
    end of the requirements process rather than during design or
    construction.
        A professional acquisition workforce is a key element in our
    overall acquisition excellence initiative and a driver in our strategy
    to preserve our fighting edge at an affordable cost. Accordingly, and
    with your strong support, we are rebuilding the acquisition workforce
    within government to fulfill Federal oversight of the acquisition
    process and ensure that accountability to taxpayers is the foremost
    concern of our employees. In the last year, the Department has added
    nearly 1,300 acquisition professionals towards the goal of increasing
    the community by 5,090 over the FYDP.
        Our acquisition strategies have been shaped to expand the use of
    fixed-price contracts, leverage competition, and tighten up on the use
    of incentive and award fees to ensure quality systems are consistently
    delivered on budget and on schedule. The new acquisition plan for the
    LCS epitomizes this strategy, and is indicative of the type of fixed-
    price contracts that will be the model for the future. The LCS block-
    buy contracts are the result of effective competition and give the
    government full ownership of the technical data package used in
    construction. This will ensure our ability to pursue competitive
    strategies for LCS Seaframe requirements in fiscal year 2016 and beyond
    and affords greater congressional oversight of the program. With the
    new LCS strategy, we get more ships, at a faster rate, and at less
    cost.
        The LCS dual-block procurement strategy also contributes to meeting
    another acquisition goal of both this Committee and the Navy through
    its strong support of the industrial shipbuilding base. Modernizing
    today's force and recapitalizing the fleet affordably cannot be
    accomplished without a healthy industrial base and strong performance
    by our industry partners. We have worked hard to procure our ships,
    aircraft, and weapon systems at a rate intended to bring stability to
    the industrial base and enable efficient production. The Navy's
    shipbuilding and aviation plans were developed with particular regard
    to maintaining the unique characteristics and strength of the
    industrial base and our efforts have promoted increased competition,
    greater innovation, and better capacity within the base.
        Over the FYDP, we will continue to build upon our progress to date
    and we will work with our shipyards, aircraft manufacturers, weapon
    systems providers and systems integrators to build the best possible
    fleet for the future.

                 DEVELOPMENT AND DEPLOYMENT OF UNMANNED SYSTEMS

        The complex nature of today's security environment, as well as
    current and future anti-access/area-denial threats faced by the United
    States, require that the Navy and Marine Corps continue to advance in
    unmanned systems and exploit the contributions they make to warfighting
    capability. Unmanned systems are unobtrusive, versatile, persistent,
    and they reduce the exposure of our sailors and marines to unnecessary
    threats or dangerous environments. They can perform a vast array of
    tasks such as intelligence, surveillance and reconnaissance,
    hydrographic monitoring, mine detection, targeting, and precision
    strike.
        Navy and Marine Corps unmanned systems have already made key
    contributions to operations in Iraq and Afghanistan. In Operation Iraqi
    Freedom and Operation Enduring Freedom, unmanned aircraft systems have
    flown thousands of flight hours, enhancing the effectiveness of our
    combat operations and undoubtedly saving lives. Unmanned ground
    vehicles employed by the Marine Corps have conducted thousands of
    missions detecting and/or neutralizing improvised explosive devices.
    Off the Horn of Africa, unmanned systems contribute to surveillance and
    tracking of suspected or confirmed pirate vessels.
        The range of tasks that these capabilities may fulfill will grow
    substantially over time. I am determined to ensure that your Navy and
    Marine Corps are at the cutting edge of this military capability.
        Our vision for the future will exploit unmanned systems in every
    domain of our operating environment (sea, air, and land) while
    maintaining an affordable price. The Department's Unmanned Systems will
    move from adjunct capabilities supporting manned systems and platforms
    to providing autonomous, networked, and interoperable independent
    capabilities--much as naval aviation matured from an adjunct to the
    Battle Fleet to a combat capability in its own right in the first half
    of the 20th century.
        We will field unmanned systems in the near term to:

             Provide sensing, influence and effects where manned
            systems are limited by range, endurance or risk.
             Shift from relying primarily on manned platforms to
            accomplish missions to combinations of manned platforms,
            robots, augmented human performance, and remotely operated and
            unmanned systems that make operational sense.
             Increase the combat effectiveness of sailors and
            marines, their platforms and combat organizations to better
            operate against multiple types of threats.

        In implementing this vision, we will embrace Unmanned Systems as
    critical tools in our warfighting quiver of capabilities. We will
    integrate them into everything we do across the full range of military
    operations to enhance our combat effectiveness and efficiency. We will
    invest in the infrastructure to ensure we have the capabilities and
    capacity to properly task, collect, process, exploit and disseminate
    the information so the intelligence data gets to the decision makers
    and warfighters. The initiatives and investments contained in the
    fiscal year 2012 budget request will continue moving us along this
    desired track. I look forward to reporting our progress toward this
    vision throughout the year.

                                   CONCLUSION

        Today I have laid out our strategic posture as well as the goals
    and priorities that guide the Department's investment portfolio and
    future direction. These goals and programs will significantly influence
    our future capabilities and ensure we remain ready to deter regional
    conflict or respond rapidly and decisively to emerging crises. Our
    specific requests are reflected in the President's fiscal year 2012
    budget submission.
        In order to retain a ready and agile force capable of conducting
    the full range of military operations, we must carefully weigh risks
    and apply our available resources efficiently and carefully. This
    year's request reflects our strategy-driven priorities and the
    disciplined trade-offs that you and the American taxpayer expect of us.
    The Department's efficiency efforts have been beneficial in terms of
    enhancing our ability to invest in the future even while preserving and
    extending our force structure.
        This is not a one-time event, as we will continuously work to
    increase efficiencies in every project, program, and operation, afloat
    and ashore. The budget request ensures that we will retain the world's
    most powerful and agile expeditionary force. The CNO, Commandant, and
    myself are committed to that aim and to being effective stewards of the
    Nation's resources.
        As Secretary, I have seen firsthand the selfless courage of our
    young marines and sailors in Helmand; the dedication of our medical
    community caring for our wounded; the professionalism of our surface,
    submarine and aviation sailors; and the incredible technical skills of
    the maintenance crews that sustain them. I have also borne witness to
    the sacrifices of our personnel in hospitals in theater and at the
    National Naval Medical Center. A single visit to Bethesda will make you
    marvel at the resilience of the human spirit and the unflagging
    patriotism of our American service men and women.
        Your Navy and Marine Corps are performing at a high operational
    tempo, at unparalleled levels of skill and dedication, and with
    remarkable results afloat, at depth, aloft, in cyberspace, and ashore.
    Thanks to your support, this level of performance has been sustained
    with the modern platforms, weapons systems, and training necessary to
    underwrite our readiness. Your continued support recognizes and
    sustains the sacrifice of our sailors, marines, civilians, and their
    families. The support of this committee for our key programs and our
    people has been instrumental to operational success of the Navy and
    Marine Corps and maintenance of the world's most flexible instrument of
    national policy--a modernized and ready naval expeditionary force.
        It is a solemn privilege to lead the Naval Services during an era
    of protracted war and national challenge. I have been honored by the
    trust the President and Congress have placed in me, and even more
    honored by the sacrifice and sterling devotion I have witnessed by
    those sailors and marine who go forward into harm's way to defend us.
    Preserving our values and our way of life is ultimately dependent upon
    our being prepared to use decisive force against those who threaten
    them. The Navy and Marines have been ready to do so for 235 years, and
    will continue to be ready. You can count on it.
        Thank you again for your support. Godspeed.

        Chairman Levin. Thank you, Mr. Secretary.
        Admiral Roughead.

     STATEMENT OF ADM GARY ROUGHEAD, USN, CHIEF OF NAVAL OPERATIONS

        Admiral Roughead. Thank you, sir. Chairman Levin, Senator
    McCain, members of the committee: It's my honor to appear
    before you in my 4th year as the CNO, representing more than
    600,000 sailors, Navy civilians, and families who operate and
    live globally. I appreciate your continued support for them as
    they continue to carry out our maritime strategy.
        Our Navy continues to meet operational commitments and
    respond to crises as they emerge. We're engaged in Afghanistan
    and in Iraq, with, as you mentioned, 14,000 sailors on the
    ground in those countries and with 2 aircraft carriers now in
    the CENTCOM area of operations, 14,000 at sea. From the
    carrier, we provide about 30 percent of the fixed wing air
    sorties that fly in support of our troops in Afghanistan.
        Our presence in the Middle East also gives us the
    flexibility to respond to the sweeping changes that we see
    taking place there. But our interests extend beyond that, and
    so do our operations. Today we have about 65,000 sailors and
    about 40 percent of our force deployed. They're globally
    present and they're persistently engaged. They provide
    deterrence in northeast Asia and presence in the western
    Pacific. They conduct counter-piracy operations in the Indian
    Ocean and they're building maritime partnerships in Africa,
    South American, and the Pacific.
        The demand continues to grow for the offshore option our
    Navy and our Marine Corps team provides the Nation. We assume
    the lead for the first phase of the Phased Adaptive Approach
    for ballistic missile defense in Europe and we're working with
    the Missile Defense Agency (MDA) on providing that same
    capability ashore.
        We created the new Information Dominance Directorate on my
    staff, which has enabled us to make better decisions and
    investments in countering anti-access and area denial
    strategies. We recently established the Tenth Fleet, our cyber
    fleet, which has demonstrated its expertise by conducting joint
    and naval operations in the cyber network cryptology and space
    arenas.
        To deliver the above, we've been pushing the fleet hard. We
    have 288 ships today. That's the smallest that we have been
    since 1916, when our interests and our responsibilities were
    nowhere near what they are today. That's why 313 ships remains
    the floor of our future force and why sustaining fleet capacity
    is essential to reaching that floor.
        Since I've become CNO, I've focused on ensuring the Navy is
    ready, that our quality of work and quality of life are
    fulfilling to the men and women of our Navy, and that we place
    underperforming programs back on track. We've introduced
    stability, affordability, and capacity into our shipbuilding
    and aviation plans, and with the assistance of Congress, we
    have advanced capabilities to meet the most likely evolving
    threats.
        We've secured a fixed-price dual award for 20 LCSs. We've
    addressed the strike fighter capacity with a multi-year F-18
    procurement, and pending resolution of the CR, we will build
    two Virginia-class submarines per year, another DDG-51, start
    the Mobile Landing Platform, construct and refuel our aircraft
    carriers as planned, and continue the design of our replacement
    strategic deterrent submarine.
        I'm pleased with our accomplishments and I thank Congress
    for their continued support of our acquisition strategy.
        Our fiscal year 2012 budget request is a balanced approach
    to increasing fleet capacity, maintaining warfighting
    readiness, and developing and enhancing our Navy total force.
    This budget goes beyond ships and aircraft. It enhances
    electronic warfare, information dominance, integrated air and
    missile defense, and anti-submarine warfare capabilities for
    evolving challenges.
        It continues to develop a family of unmanned systems that
    will work in concert with our manned systems to secure access
    and establish maritime superiority when and where we choose. It
    continues our effort over the last 2 years to reduce total
    ownership costs and leverages the opportunity presented by the
    Secretary of Defense's efficiencies to reduce excess overhead,
    improve readiness, and reinvest in warfighting capability and
    capacity that improves the long-term sustainability of our
    force.
        Importantly, it supports the Secretary of Defense's health
    care initiatives included in the President's budget, which
    continue our efforts in health care to improve internal
    efficiency, incentivize behavior, ensure all our beneficiaries
    are treated equitably, and enhance our ability to deliver high-
    quality health care for years to come.
        You can be exceptionally proud of our sailors and Navy
    civilians, who they are and what they do. Today's sailors are
    the best with whom I have ever served. I ask you for your
    strong support of our fiscal year 2012 budget request. I thank
    you for all you do to support the men and women of the U.S.
    Navy, our enduring global force for good.
        Thank you.
        [The prepared statement of Admiral Roughead follows:]

                  Prepared Statement by ADM Gary Roughead, USN

        Chairman Levin, Senator McCain, and members of the committee, it is
    my honor and pleasure to appear before you, in my 4th year as Chief of
    Naval Operations (CNO), representing the more than 600,000 sailors and
    civilians of the U.S. Navy. As we have done for more than 235 years,
    our Navy is forward-deployed around the world protecting our national
    security and prosperity. Today, our dedicated Navy men and women are
    operating globally at sea, on land, in the air, and in space and
    cyberspace. I appreciate your continued support for them and their
    families.
        As the demand for our Navy continues to grow, our Maritime
    Strategy, which I issued more than 3 years ago with the Commandants of
    the Marine Corps and the Coast Guard, continues to guide our Navy's
    operations and investments. Its core tenets are enduring and our Navy
    is executing daily the six core capabilities it articulates for our sea
    Services: forward presence, deterrence, sea control, power projection,
    maritime security, and humanitarian assistance and disaster response.
        With your support, since becoming CNO, our Navy has placed
    underperforming programs back on track; we have introduced stability,
    affordability, and capacity into our shipbuilding and aviation plans;
    and we have advanced capabilities to meet the most likely evolving
    threats. We improved the performance of several programs, most notably
    the Littoral Combat Ship. After cancelling the LCS ships we had planned
    for 2007 because of unacceptable costs, last year we were able to
    secure a price for 20 ships through a dual award strategy that will add
    new and needed capabilities to our Fleet, bring important stability to
    the industrial base, and get us closer to the minimum of 313 ships our
    Navy needs. I thank Congress for their support of this strategy. We
    delivered five new ships in 2010, including one Virginia-class
    submarine, two Arleigh Burke destroyers, and two T-AKE logistics ships.
    We commenced testing and low-rate initial production of the P-8A
    Poseidon Multi-Mission Maritime Aircraft and continued testing and low-
    rate initial production of the E-2D Advanced Hawkeye. Through multi-
    year procurement contracts for F/A-18E/F and EA-18G, and Virginia-class
    submarines, and planned multi-year procurements for the MH-60R/S and E-
    2D, we are introducing affordability in our aviation and shipbuilding
    plans and realizing significant savings. For example, on the Virginia-
    class Multi-Year Procurement alone, the savings has been $3.2 billion.
    We are advancing capability to meet emerging threats, particularly in
    Ballistic Missile Defense (BMD) and information dominance. In BMD, we
    assumed lead for the first phase of the President's Phased Adaptive
    Approach (PAA) for BMD of Europe and we are working with the Missile
    Defense Agency on providing Aegis Ashore capability to support the
    second phase of the PAA. Our newly-established Fleet Cyber Command/U.S.
    10th Fleet demonstrated its expertise conducting joint and naval
    exercises and operations in the cyber, network, cryptology, signals
    intelligence, information warfare, electronic warfare, and space
    arenas. We also achieved the early operational deployment of the MQ-8B
    Fire Scout Vertical Takeoff and Landing Tactical Unmanned Air Vehicle,
    the first successful flight of our Navy Unmanned Combat Air System
    demonstrator, and a memorandum of agreement with the Air Force to
    pursue increased commonality between the Global Hawk and Broad Area
    Maritime Surveillance programs.
        Our Navy continues to meet planned operational commitments and
    respond to crises as they emerge globally. We remain engaged in
    operations in Afghanistan and in Iraq. Our Navy has more than 14,000
    Active and Reserve sailors on the ground and another 10,000 at sea in
    Central Command, including ongoing Individual Augmentee support to both
    operations. Our aircraft carriers provide about 30 percent of the close
    air support for troops on the ground in Afghanistan and our Navy and
    Marine Corps pilots fly an even greater percentage of electronic attack
    missions there.
        Because our national interests extend beyond Iraq and Afghanistan,
    so do the operations of our Navy. More than 40 percent of our Navy is
    underway daily; globally present and persistently engaged. Last year,
    our Navy provided deterrence against North Korea; conducted counter-
    piracy operations in the Indian Ocean with a coalition of several
    nations; trained local forces in maritime security as part of our
    Global Maritime Partnership initiatives in Africa and the Pacific;
    responded with humanitarian assistance and disaster relief to the
    earthquake in Haiti and the flood in Pakistan; and conducted the
    world's largest maritime exercise, which brought together 14 nations
    and more than 20,000 military personnel, to improve coordination and
    trust in multi-national operations in the Pacific. Navy sealift
    continues to deliver the lion's share of heavy war and humanitarian
    equipment in the Central Command and Pacific Command areas of
    responsibility, while Navy logisticians operate the seaport and airport
    facilities that ensure this vital materiel arrives on time. Our sailors
    remain forward throughout the world, projecting U.S. influence,
    responding to contingencies, and building international relationships
    that enable the safe, secure, and free flow of commerce that underpins
    our economic prosperity.
        Our Navy's global presence guarantees our access and freedom of
    action on and under the sea. We are developing with the Air Force and
    Marine Corps the Air Sea Battle concept that will identify the
    doctrine, organization, training, procedures, and equipment needed for
    our Navy to counter growing military threats to our freedom of action.
    This joint effort will inform the conceptual, institutional, and
    material actions needed to employ integrated forces that support U.S.
    operations to project power and influence, protect allies and partners,
    and secure our national objectives in peace and war.
        I remain committed to supporting our Active and Reserve sailors,
    Navy civilians, and their families. Our Navy continues to be recognized
    as a highly-ranked place to work as a result of its workforce planning,
    life-work integration, diversity, and training opportunities. We met or
    exceeded overall officer and enlisted active recruiting goals last year
    and we are accessing a force of extreme high quality. We continue to
    move forward on assigning women into our submarine force, with the
    first women submariners on track to report aboard SSBNs and SSGNs by
    the end of this year. We remain committed to performance as a criterion
    for promotion in our Navy, and have successfully transitioned the
    majority of our civilian personnel out of the National Security
    Personnel System (NSPS). Our remaining NSPS employees are scheduled to
    convert by the end of this year. I appreciate the support of Congress
    for our Fleet and the dedicated sailors, Navy civilians, and their
    families that serve our Nation every day.
        My priorities for the Navy remain unchanged: to build tomorrow's
    Navy, to remain ready to fight today, and to develop and support our
    sailors, Navy civilians, and their families. We continue to advance our
    Navy in each of these areas thanks to your support.
        Our Navy remains the most capable maritime force in the world;
    however, we are stretching our force to meet combatant commander
    demands. Since 2000, our Navy's ship-underway days have increased by
    approximately 15 percent, yet we have about 10 percent fewer ships in
    our Fleet. Greater demand for our forces has led to longer deployments
    and shorter dwell, or turnaround times, which increase stress on our
    sailors and drive up maintenance requirements for our ships and
    aircraft. We are implementing force management measures in the near
    term to stretch the capacity of our 286-ship force to meet increasing
    global requirements while providing the necessary maintenance our Fleet
    needs to reach its expected service life. Our Navy is different from
    other Services in that we reset our force ``in stride''; that is, we
    rely upon regular maintenance of our ships and aircraft, and training
    and certification of our crews between deployments, to sustain our
    force. I thank Congress for their support of our fiscal year 2011
    Operation and Maintenance (O&M) request, which would enable our Navy's
    continuous reset and translate into decades of service for each ship
    and aircraft, a significant return on investment.
        Regrettably, the continuing resolution (CR) for fiscal year 2011
    prevents us from applying the increased fiscal year 2011 O&M funding to
    improve our readiness, and it negatively impacts our ability to procure
    our future Navy and support our sailors, Navy civilians, and their
    families. It has forced us to take mitigation measures that include:
    reducing operations, limiting numerous contracts for base operating
    support, slowing civilian hiring, reducing Permanent Change of Station
    notifications for our sailors from about 6 months lead time to less
    than 2 months, not initiating the Small Business Innovative Research
    program, and delaying procurement contracts for new capabilities and
    existing production lines. Starting this month, we will cancel or scale
    back ship maintenance availabilities in Norfolk, Mayport, and San
    Diego, and cancel more than a dozen Military Construction (MILCON)
    projects in several States. If the CR lasts all year, we will have no
    choice but to make permanent these mitigations and others,
    significantly reducing our operations, maintenance, and training. We
    will be forced to further reduce facilities sustainment, cancel
    training events and additional surface ship availabilities, and defer
    maintenance on our aircraft, which would result in almost a 1-year
    backlog in aviation maintenance. The impact of these actions will
    jeopardize the efforts we made in recent years to restore Fleet
    readiness. Without relief, we will procure only one Virginia-class
    submarine and break the multiyear contract. Agreements made with our
    surface combatant builders, as a result of the DDG-1000/DDG-51 swap,
    precludes us from awarding any DDG-51s in fiscal year 2011 unless both
    ships are appropriated. In addition, without relief, we will delay the
    new start Mobile Landing Platform; we will constrain aircraft carrier
    construction and refueling, negatively impacting operational
    availability, increasing costs, and delaying CVN-79 delivery by up to 1
    year; and we will limit aviation and weapons procurement to fiscal year
    2010 quantities, impacting E-2D and Standard Missile production. A
    full-year CR will also defer essential research and development in
    unmanned aerial systems and significantly delay the design of our
    replacement strategic deterrent submarine and the recapitalization of
    our nuclear operator training infrastructure. It will eliminate our
    ability to source out-of-cycle overseas contingency operations demands
    for increased Fleet presence and activated Navy Reserve sailors.
    Operating under a continuing resolution for a full year at the fiscal
    year 2010 level would have negative effects on our Fleet, on the ship
    and aviation industrial base, and on the many workers who support naval
    facilities. Your support in addressing this critical current and long
    term readiness issue is appreciated greatly.
        Our fiscal year 2012 budget submission achieves the optimal balance
    among my priorities, but it is based on our funding request for fiscal
    year 2011. If the CR lasts all year, we will need to revisit our fiscal
    year 2012 request to properly balance our Navy for today and in the
    future. Our fiscal year 2012 budget request continues to rely on a
    combination of base budget and overseas contingency operations (OCO)
    funding, but it reduces the extent to which we rely on OCO funding for
    enduring missions. Our fiscal year 2012 request continues the effort we
    started 2 years ago to reduce the cost to own and operate our Fleet. We
    leveraged the opportunity presented by the Secretary of Defense to
    significantly reduce excess overhead costs, and apply the savings to
    warfighting capability and capacity, by executing a deliberate,
    thoughtful, and integrated approach to finding efficiencies that
    improve the long-term sustainability of our force. We are taking steps
    to buy smarter, streamline our organizations and operations, realign
    manpower, and pursue energy efficiencies. Through these efforts, and
    with your support, we will improve readiness and warfighting
    capabilities and optimize organizations and operations, including
    increasing the number of ships and aircraft in our procurement plans
    and enhancing or accelerating anti-access capabilities, unmanned
    systems, and energy initiatives.
        Our fiscal year 2012 budget request supports our Maritime Strategy
    and continues to support our forces, take care of our people, rebalance
    our force to meet current and future challenges, and reform how and
    what we buy. Highlights follow.

                             BUILD TOMORROW'S NAVY

        Since the release of our Maritime Strategy, I have stated our Navy
    requires a minimum of 313 ships to meet operational requirements
    globally. This minimum remains valid; however, we continue to examine
    this requirement to address increased operational demands and expanding
    requirements for BMD, intra-theater lift, and forces capable of
    confronting irregular challenges. Our fiscal year 2012 submission funds
    10 ships, including 2 Virginia-class fast attack submarines, 1 Joint
    High Speed Vessel (JHSV), 1 LPD-17, 1 Mobile Landing Platform (MLP), 1
    DDG-51, and 4 Littoral Combat Ships (LCS), which reflects our new LCS
    procurement plan under the dual award strategy. Our submission also
    supports the acquisition of an oceanographic ship. I thank Congress for
    their support of our LCS acquisition strategy and for our shipbuilding
    program. With your support over the last 3 years, we have been able to
    improve the balance among capability, capacity, affordability, and
    executabilty in our shipbuilding plan.
        As I reported last year, I remain concerned about the capacity of
    our Fleet in the future. Starting in the 2020s, many of our existing
    cruisers, destroyers, and submarines will reach the end of their
    service lives. During this period, it will be particularly critical to
    procure sufficient new ships to offset these decommissionings to avoid
    a rapid decline in force structure. In the same timeframe, we will
    begin to procure the replacement for our Ohio-class ballistic missile
    submarine, the most survivable leg of our Nation's nuclear deterrent
    triad. While we have reduced the cost of that submarine substantially,
    our total shipbuilding budget will be pressurized in that decade as we
    seek to recapitalize our surface and submarine forces while sustaining
    warfighting readiness and supporting our people. I am confident our
    near-term force structure plans provide the capability and capacity we
    need to meet demands today, but in this decade we must address how to
    best resource the shipbuilding programs required in the 2020s.
        Our fiscal year 2012 program funds 203 manned aircraft. We have
    increased our procurement of P-8A Poseidon Maritime Patrol Aircraft to
    provide needed anti-submarine warfare capacity to our Fleet and
    facilitate a successful transition from our legacy P-3 Orion aircraft.
    Our fiscal year 2012 submission also procures 28 F/A-18 E/F aircraft,
    extending the F/A-18 procurement through fiscal year 2014 and
    purchasing 41 more aircraft than requested in last year's budget
    submission. I remain committed to the F-35 Joint Strike Fighter (JSF),
    and was pleased to see the first flight of the F-35C last year. The
    timely delivery of the F-35C remains critical to our future carrier
    airwing strike fighter capacity; however, we are procuring additional
    F/A-18 Super Hornets to address the decrease in strike fighter capacity
    we have identified. I thank Congress for their continued support of the
    F-35 program and our overall strike fighter fleet.
        Our Navy is also looking beyond our ships and aircraft and
    investing in information capabilities that span space, cyberspace, and
    the electromagnetic spectrum. We moved boldly last year with the
    establishment of U.S. 10th Fleet and the Deputy CNO for Information
    Dominance. That restructuring has enabled us to focus on enhancing our
    electronic warfare, information dominance, integrated air and missile
    defense, and anti-submarine warfare capabilities. I request Congress'
    support for these programs as they position our Navy to successfully
    conduct operations in an evolving anti-access environment today and in
    the future.
        A viable, highly technical, and specialized industrial base is
    essential to sustaining the capability and capacity of our future Navy.
    Our shipbuilding and aviation industrial base is a strategic national
    asset and a significant contributor to our Nation's economic
    prosperity, employing more than 97,000 uniquely-skilled Americans while
    indirectly supporting thousands more through second- and third-tier
    suppliers. The highly specialized skills in our shipbuilding base take
    years to develop; and, if lost, cannot be easily or quickly
    reconstituted. A viable shipbuilding industrial base, underpinned by
    predictable, level-loaded ship procurement, is essential to meet our
    Nation's naval requirements.
        I remain committed to delivering a balanced and capable Fleet that
    will meet our national security requirements. I seek your support for
    the following initiatives and programs:

                               AVIATION PROGRAMS

    Aircraft Carrier Force Structure
        Our nuclear-powered aircraft carrier fleet is capable of flexibly
    employing capabilities that span from power projection and deterrence
    to humanitarian assistance and disaster response. Our 11-carrier force
    structure is based on worldwide presence and surge requirements, while
    also taking into account training and maintenance requirements. Our
    Navy has put in place measures to minimize the impact of the 10-carrier
    period between the inactivation of USS Enterprise (CVN-65) and
    commissioning of USS Gerald R. Ford (CVN-78). After the delivery of
    CVN-78, we will maintain an 11-carrier force by continuing the
    refueling program for Nimitz-class ships and delivering our Ford-class
    carriers at 5-year intervals starting in 2020.
        CVN-78, which is approximately 20 percent complete, is the lead
    ship of our first new class of aircraft carriers in nearly 40 years.
    These new carriers incorporate an innovative flight deck design that
    provides greater operational flexibility, a nuclear propulsion plant
    that generates more than 50 percent greater energy while decreasing
    maintenance requirements, and a combination of measures that reduce
    manning by more than 1,200 sailors. Among the new technologies being
    integrated in these ships are the Dual-Band Radar, the Electromagnetic
    Aircraft Launch System (EMALS), and the Advanced Arresting Gear (AAG),
    which will enable the carrier to increase its sortie generation rate by
    25 percent and lower total ownership costs. AAG is currently undergoing
    commissioning testing at our land-based testing facility and, in
    December, EMALS successfully launched an F/A-18 aircraft. Both systems
    are on schedule to support delivery of CVN-78 in September 2015.

    Strike Fighter Capacity
        I remain committed to the F-35 JSF program. The timely delivery of
    the F-35C carrier variant is critical to our future carrier airwing
    strike fighter capability and capacity. As a result of delays in the F-
    35 program, we are closely managing our strike fighter inventory to
    address the decrease in strike fighter capacity that is projected to
    peak in 2018 as our F/A-18A-D aircraft reach the end of their service
    life. Our actions include managing the service life of our A-D
    aircraft, extending the service life of our A-D aircraft, buying new F/
    A-18E/F Super Hornet aircraft, and maintaining wholeness in the F-35C
    program. With these measures, we can manage our current strike fighter
    inventory to meet TACAIR requirements.
        F-35 Lightning II Joint Strike Fighter
        The F-35 program gives us the advanced sensor, precision strike,
    firepower, and stealth capabilities our Fleet needs. I continue to base
    our Initial Operating Capability (IOC) timeline for the F-35C on the
    level of capability delivered at the completion of Initial Operational
    Test and Evaluation of the F-35C equipped with Block 3 software. We are
    reviewing the results of the in-depth Technical Baseline Review and
    restructuring of the System Development and Demonstration (SDD) phase
    to determine our IOC. While the overall system demonstration and
    development schedule has slipped, we have not reduced the total number
    of airplanes we plan to buy. Our fiscal year 2012 request procures
    seven F-35C aircraft. We are monitoring the program closely and
    managing our existing strike fighter capacity to meet power projection
    demands until the F-35C is delivered. Procurement of an alternate
    engine for the F-35 increases our risk in this program. The Navy does
    not have a requirement for an alternate engine; indeed, we would only
    take one model to sea. Its additional costs threaten our ability to
    fund currently planned aircraft procurement quantities, which would
    exacerbate our anticipated decrease in strike fighter capacity
    throughout the remainder of this decade.
        F/A-18A-D Hornet and F/A-18E/F Super Hornet
        Our F/A-18A-D Hornet aircraft were originally designed for a
    service life of 6,000 flight hours. Through a life assessment program
    and High Flight Hour (HFH) inspections, which have been in place for 3
    years, we have been able to extend the service life of our legacy F/A-
    18A-D aircraft to 8,600 flight hours. Our fiscal year 2012 budget
    requests funding to pursue a Service Life Extension Program (SLEP) for
    150 F/A-18A-D aircraft, commencing in fiscal year 2012 at a rate of
    about 40 per year, that would further extend the service life of these
    aircraft to 10,000 flight hours. We are also conducting a life
    assessment program for our Super Hornet aircraft to extend their
    original 6,000-hour service life design to 9,000 hours. The F/A-18A-D
    HFH and SLEP are necessary measures to address our strike fighter
    inventory while preserving our investment in F-35C. To further reduce
    risk, we are accelerating the transition of 10 legacy F/A-18C squadrons
    to F/A-18 E/F Super Hornets, and our fiscal year 2012 budget requests
    funding to procure more F/A-18E/F Super Hornets than we requested last
    year. I thank Congress for their support of the F/A-18 program as we
    introduce F-35C into our Fleet.

    EA-18G Growler
        The Navy has been a leader in Airborne Electronic Attack (AEA) for
    more than half a century and AEA is in high demand. AEA provides one of
    the most flexible offensive capabilities available to the joint
    warfighter and is becoming increasingly important as technology capable
    of manipulating the electromagnetic spectrum matures. We are leveraging
    the mature and proven F/A-18E/F Super Hornet airframe to recapitalize
    our AEA capability with the EA-18G Growler. Although the EA-18G
    currently utilizes the same ALQ-99 Tactical Jamming System as the EA-
    6B, we are developing a new system, the Next Generation Jammer, as a
    replacement for the aging ALQ-99. The Next Generation Jammer will
    incorporate a Modular Open System Architecture and improved reliability
    and maintainability to provide a robust, flexible jamming capability
    that can evolve to address emerging threats. The EA-18G is in full rate
    production and we have accepted delivery of 43 aircraft. We have
    transitioned three EA-6B Prowler squadrons to EA-18G Growlers and two
    more squadrons are currently in transition. Our first EA-18G squadron
    deployed in November to Iraq. Our program of record will buy 114 total
    EA-18G aircraft, recapitalizing 10 carrier-based EA-6B squadrons and 4
    expeditionary squadrons, all to be stationed at NAS Whidbey Island. The
    program continues to deliver on schedule and our fiscal year 2012
    budget requests funding for 12 EA-18Gs.

    P-3C Orion and P-8A Poseidon Multi-Mission Maritime Aircraft
        Our P-3C Orion aircraft remain in high demand today across a range
    of missions including Anti-Submarine Warfare, Anti-Surface Warfare, and
    time-critical Intelligence, Surveillance and Reconnaissance. Our
    Maritime Patrol Aircraft (MPA) force is a direct enabler for troops on
    the ground in Central Command while also ensuring access and
    battlespace awareness at sea. Because we are operating our P-3Cs at a
    high rate, about 100 P-3 aircraft have been grounded since February
    2005 for fatigue life and we anticipate continued groundings through
    the remainder of the P-3 program. Through significant Congressional
    support for P-3C wing repairs and sustainment, as of February, we have
    a current inventory of 84 mission aircraft; a 58 percent increase since
    last year. Our fiscal year 2012 budget requests about $100 million to
    continue our P-3C sustainment program. Continued investment in this
    program and in the modernization of our P-3s is critical to ensure we
    retain sufficient capacity to conduct maritime battlespace awareness
    and support to land forces in Central Command, while successfully
    transitioning to the P-8A.
        The P-8A Poseidon Multi-Mission Maritime Aircraft is ideally suited
    for regional and littoral operations, and is our pre-eminent airborne
    capability against submarine threats. Procurement of P-8A will deliver
    needed capacity for these missions. The P-8A is scheduled to reach
    initial operating capability and will begin replacing our aging P-3
    Fleet in 2013. The current delivery schedule enables transition of two
    squadrons per year. Our fiscal year 2012 budget requests funding for 11
    P-8A aircraft. I request Congress' support for the P-8A program
    schedule and for our P-3 sustainment and modernization program, the
    combination of which is essential to our transition to the next
    generation of MPA capability while avoiding future gaps in our MPA
    force.

    E-2D Advanced Hawkeye
        The E-2D Advanced Hawkeye aircraft, will replace the E-2C and
    represents a two-generation leap in airborne radar surveillance
    capability. The E-2D will improve nearly every facet of tactical air
    operations and add overland and littoral surveillance to support
    theater Integrated Air and Missile Defense (IAMD) against air threats
    in high clutter, complex electro-magnetic and jamming environments. The
    airborne radar on the E-2D, with its improved surveillance capability,
    is a key pillar of the Navy Integrated Fire Control-Counter Air (NIFC-
    CA) concept. Four test aircraft have been delivered to the Navy and we
    will commence operational test and evaluation in late 2011. The first
    Fleet squadron transition is planned for 2013, with an IOC scheduled
    for late 2014. Our fiscal year 2012 budget requests six E-2D aircraft.
    We plan to procure 75 aircraft, with the final aircraft procurement in
    2019 and Full Operational Capability (FOC) in 2022.

    MH-60R/S Multi-Mission Helicopter
        The MH-60R and MH-60S are in full rate production. The MH-60R
    multi-mission helicopter replaces the surface combatant-based SH-60B
    and carrier-based SH-60F with a newly manufactured airframe and
    enhanced mission systems. With these systems, the MH-60R provides
    focused surface warfare and anti-submarine warfare capabilities for our
    strike groups and individual ships. The MH-60S supports surface
    warfare, combat logistics, vertical replenishment, search and rescue,
    air ambulance, airborne mine counter-measures, and naval special
    warfare mission areas. We have delivered 85 MH-60R and 187 MH-60S to
    our Fleet and our fiscal year 2012 budget requests funding for 24 MH-
    60R and 18 MH-60S helicopters.

                             SURFACE SHIP PROGRAMS

    Littoral Combat Ship (LCS)
        LCS is a fast, agile, networked surface combatant optimized to
    support naval and joint force operations in the littorals with
    capability to support open-ocean operations. It will operate with
    focused-mission packages to counter mine, small boat, and submarine
    threats in the littorals. The modular design and open architecture of
    the seaframe and mission modules provide the inherent flexibility to
    add or adapt capabilities as new technologies mature or to counter
    threats that emerge beyond the Mine Countermeasures, Surface Warfare,
    and Anti-Submarine missions currently planned for LCS. These ships will
    employ a combination of manned helicopters and unmanned aerial,
    surface, and undersea vehicles.
        USS Freedom (LCS-1) completed her first operational deployment to
    the Southern and Pacific Commands in April 2010, 2 years early. While
    deployed, USS Freedom successfully conducted counter-drug missions and
    validated its open ocean capability, allowing us to learn valuable
    lessons from these real-world operations. USS Independence (LCS-2) was
    commissioned in January 2010 and is currently in Norfolk undergoing
    post-delivery tests and trials. We are seeing demonstrated performance
    and stability in the construction of LCS-3 and LCS-4 that captures
    lessons learned from the first ships. PCU Fort Worth (LCS-3) was
    launched and christened in December and is completing final
    construction. PCU Coronado (LCS-4) is almost 50 percent complete and is
    scheduled to be launched and christened later this year. Both LCS-3 and
    LCS-4 are experiencing minimal change and are scheduled to be delivered
    to the Navy in 2012 on cost and on schedule.
        I thank Congress for approving the Navy's dual award strategy in
    December 2010. This strategy enables the Navy to save over $2 billion
    in acquisition costs and acquire these ships well below the
    congressionally-mandated $480 million cost cap set in 2009. It allows
    our Navy to acquire an additional Littoral Combat ship, increasing
    needed capacity in our Fleet. I am impressed and satisfied with the
    capabilities of both LCS designs and remain committed to procuring 55
    of these ships. Consistent with the dual award strategy, our fiscal
    year 2012 budget requests four LCS seaframes at a total cost of $1.8
    billion. The budget also requests two mission packages in fiscal year
    2012. These packages provide the vital center for LCS's combat
    capability and we have aligned LCS mission module procurement with that
    of our LCS seaframes. I request your continued support as we continue
    to acquire the future capacity and capability the Fleet requires.

    Ballistic Missile Defense
        The Navy's mature and proven maritime BMD capability will play a
    primary role in the first phase of our Nation's Phased Adaptive
    Approach (PAA) for the missile defense of our NATO Allies in Europe.
    Our fiscal year 2012 budget requests funding to increase our current
    BMD ship capacity from 21 ships (5 cruisers and 16 destroyers) to 41
    BMD capable ships by 2016. This planned capacity expansion will
    eventually include all of the Navy's Arleigh Burke-class destroyers and
    nine Ticonderoga-class cruisers. Until we grow our BMD ship capacity,
    our existing BMD ships may experience longer deployment lengths and
    less time between deployments as we stretch our existing capacity to
    meet growing demands.
        As part of the PAA, we are working with the Missile Defense Agency
    to adapt Navy's proven and flexible Aegis BMD capability for use in an
    ashore configuration by repackaging components of the afloat Aegis
    Weapons System into modular containers for deployment to pre-prepared
    forward sites. The Aegis Ashore Missile Defense Test Complex is
    currently under development, with fabrication to begin in Kauai, HI, in
    2013. This complex is a key enabler of the Aegis Ashore capability,
    which will be tested prior to shore placement overseas in 2015. This
    phased approach provides needed technology and capacity to pace the
    threat; it serves as a conventional counter to trends in global
    ballistic missile technology; and it allows for technological
    maturation through 2020.

    DDG-51 Flight IIA and Flight III
        To keep pace with the evolving air and missile defense threats, we
    restarted the DDG-51 Flight IIA production line in the fiscal year 2010
    and fiscal year 2011 budgets with advanced procurement buys for DDG-
    113, -114, and -115. The restarted DDG-51 Flight IIA destroyers provide
    Navy with a proven multi-mission combatant that fills critical
    warfighting needs across the spectrum, and is the first warship built
    from the keel up to conduct maritime BMD. They will be the first Aegis
    ships to be built with the Open Architecture Advanced Capability Build
    (ACB)-12 Aegis Combat System. ACB-12 will allow these surface
    combatants to be updated and maintained with commercial off-the-shelf
    (COTS) technology, yielding reduced Total Ownership Cost and enhancing
    the ability to adapt to future military threats. Our fiscal year 2012
    budget requests funding for the construction of DDG-116 as part of our
    plan to build seven more of the Flight IIA class over the FYDP (an
    increase of one DDG-51 over last year's budget). We also request just
    over $75 million to support research and development for ACB-12, which
    will support the integration of this critical system on DDG-113 and our
    development of Aegis Ashore.
        The follow-on to DDG-51 Flight IIA is the DDG-51 Flight III, which
    will commence with the construction of DDG-123. Flight III ships will
    be tailored for Integrated Air and Missile Defense (IAMD) and include
    the Air and Missile Defense Radar (AMDR), upgraded command and control
    software and hardware, and enhanced electrical power and cooling. Our
    fiscal year 2012 budget requests funding for a total of eight DDG-51
    Class ships, including funding for the first Flight III ship in fiscal
    year 2016.

    Modernization
        To counter emerging threats, we continue to make significant
    investments in cruiser and destroyer modernization to sustain our
    combat effectiveness and to achieve the 35 year service life of our
    Aegis fleet. Our destroyer and cruiser modernization program includes
    Hull, Mechanical, and Electrical (HM&E) upgrades, as well as advances
    in warfighting capability and open architecture to reduce total
    ownership costs and expand mission capability for current and future
    combat capabilities. In addition to HM&E upgrades, key aspects of our
    destroyer and cruiser modernization programs include the installation
    or upgrade of the Aegis weapons system to include an open architecture
    computing environment, addition of the Evolved Sea Sparrow Missile
    (ESSM), an upgraded SQQ-89A(V)15 anti-submarine warfare system, and
    improved air dominance with processing upgrades and Naval Integrated
    Fire Control-Counter Air capability. Our destroyers also receive
    integration of the SM-6 missile, while our cruisers receive
    installation of the AN/SPQ-9B radar and an upgrade to Close-In Weapon
    System (CIWS) Block 1B. Maintaining the stability of the cruiser and
    destroyer modernization program is critical to our ability to provide
    relevant capability and capacity in our future Fleet. Our fiscal year
    2012 budget requests funding for the modernization of four cruisers
    (three Combat Systems and one HM&E) and three destroyers (one Combat
    System and two HM&E).

    DDG-1000
        The DDG-1000 Zumwalt guided missile destroyer will be an optimally
    crewed, multi-mission surface combatant optimized for long-range
    precision land attack. In addition to providing offensive, distributed
    and precision fires in support of forces ashore, these ships will serve
    as test-beds for advanced technology, such as integrated power systems,
    a sophisticated X-Band radar, and advanced survivability features,
    which can inform future ship designs. Following a Nunn-McCurdy breach
    due to the reduction in procurement to three ships, we restructured the
    DDG-1000 program to remove the highest risk technology, the Volume
    Search Radar, from integration into the platform. DDG-1000 is more than
    37 percent complete and is scheduled to deliver in fiscal year 2014
    with an initial operating capability in fiscal year 2016.
    Joint High Speed Vessel
        The JHSV will deliver a new level of organic logistic and maneuver
    flexibility for combatant commanders. JHSV is a high speed, shallow
    draft ship. Its unique design allows the ship to transport medium
    payloads of cargo and/or personnel to austere ports without reliance on
    port infrastructure. JHSV-1 and -2 are currently under construction by
    Austal USA in Mobile, AL and are scheduled to be delivered in fiscal
    year 2012 and 2013. Our fiscal year 2012 budget requests funding for
    the construction of the third JHSV. We are currently developing a
    Memorandum of Agreement with the Army that would transfer programmatic
    oversight and responsibility for the entire JHSV program, including
    operations and maintenance, to the Navy. Upon the signing of the
    agreement, all JHSVs when delivered would be operated by the Navy's
    Military Sealift Command and manned by civilian or contract mariners.

                               SUBMARINE PROGRAMS

    Virginia-class SSN
        The Virginia-class submarine is a multi-mission submarine designed
    to dominate the undersea domain in the littorals, access denied
    environments, and the open ocean. Now in its 14th year of construction,
    the Virginia program is demonstrating its continued ability to deliver
    this critical undersea asset affordably and on time. The Navy continues
    to realize a return on investment in the Virginia cost reduction
    program and construction process improvements through enhanced
    shipbuilder performance on each successive ship. A majority of the
    submarines contracted via multiyear procurement have delivered under
    budget and ahead of schedule, and their performance continues to exceed
    expectations with every ship delivered. I am pleased with the
    accomplishments of the combined Navy-Industry team and anticipate
    additional improvements as we ramp up production to two submarines per
    year, as requested in our fiscal year 2011 and 2012 budget submissions.

    SSBN and Ohio Replacement
        The Navy remains committed to recapitalizing the Nation's sea-based
    strategic deterrent, the most survivable leg of our nuclear triad. With
    a fleet of 14 Ohio-class ballistic missile submarines (SSBN), we have
    been able to meet the strategic needs of the Nation since 1980. This
    class will begin retirement after more than 40 years of service in
    2027.
        The 2010 Nuclear Posture Review reaffirmed that our Nation will
    continue to rely on a reliable and survivable sea-based strategic
    deterrent for the foreseeable future. To ensure the Navy is able to
    meet the Nation's demand in this critical capability, our fiscal year
    2012 budget requests research and development funds for the design of
    the Ohio-class replacement, enabling construction of the class
    beginning in 2019. The Ohio replacement will possess the endurance and
    stealth required for continuous, survivable strategic deterrence for
    decades to come. Appropriate R&D investment is essential to design a
    reliable and survivable submarine capable of deterring all potential
    adversaries. Over the past year, the Ohio replacement program has been
    thoroughly reviewed and all aspects of the program were aggressively
    challenged to drive down engineering and construction costs. Our fiscal
    year 2012 request represents best balance of needed warfighting
    capabilities with cost. The Ohio replacement program will leverage the
    many successes of the Virginia SSN program to achieve acquisition and
    total ownership cost goals. These efficiencies and a record of
    acquisition excellence are critical to minimize risk to our total force
    structure while recapitalizing sea-based strategic deterrence between
    fiscal year 2019 and fiscal year 2033.

                            AMPHIBIOUS WARFARE SHIPS

    LPD-17 Class Amphibious Warfare Ship
        The San Antonio-class LPD (LPD-17) amphibious warfare ships provide
    the Navy and Marine Corps the ability to embark, transport, control,
    insert, sustain, and extract combat marines and sailors on missions
    that range from forcible entry to forward deployed crisis response.
    These ships have a 40-year expected service life and will replace four
    classes of older ships: the LKA, LST, LSD-36, and the LPD-4. Of the 11
    ships in our program of record, 5 ships have been delivered, 3 have
    completed their initial deployments, and 4 are under construction. We
    continue to resolve material reliability concerns with the class and
    apply the lessons learned during initial operation of the early ships
    to those under construction. Quality continues to improve with each
    ship delivered as we work closely with the shipbuilder to address cost,
    schedule, and performance issues. Our fiscal year 2012 budget requests
    funding to procure the final ship in the program.

    LHA Replacement (LHA(R))
        LHA(R) is the replacement for our aging Tarawa-class ships, which
    will reach the end of their extended service life between 2011-2015.
    LHA(R) will provide flexible, multi-mission amphibious capabilities by
    leveraging the LHD-8 design. The America (LHA-6) is now more than 30
    percent complete and on schedule for delivery in fiscal year 2014.
    Beginning with LHA-8, the Navy will reintegrate the well deck into the
    large deck amphibious assault ships. Our fiscal year 2012 budget
    requests funding for research and development to support reintegration
    of the well deck into the design of the large deck amphibious ship and
    the construction of LHA-8 in fiscal year 2016.

    Mobile Landing Platform
        Based on commercial technology, the Mobile Landing Platform (MLP)
    will enable the transfer of equipment, personnel, and sustainment at-
    sea, and delivery ashore in support of a wide range of contingency
    operations. Our fiscal year 2012 budget requests funding for one MLP
    and we intend to procure a total of three MLPs. We expect the first
    ship to deliver in fiscal year 2013 and project initial operating
    capability and incorporation into the Maritime Prepositioning Force
    (MPF) for 2015. In the Maritime Preposition Force, each of our existing
    Maritime Preposition Squadrons will be augmented by one MLP, one T-AKE
    combat logistics ship, and a Large Medium-Speed Roll-on/Roll-off cargo
    ship. The three T-AKE are all under contract with projected delivery
    dates beginning this year and going through fiscal year 2013.

                         INFORMATION DOMINANCE PROGRAMS

    Unmanned Systems
        Our Navy is developing a ``family'' of unmanned systems over, on,
    and under the sea to provide unique capability, in concert with our
    manned platforms, to rapidly secure access and establish maritime
    superiority at the time and place of our choosing. We are developing
    information architecture that will allow us to rapidly assimilate data
    into information for our commanders, enabling shorter decision cycles
    that will give us an advantage in joint and maritime operations.
        Unmanned Aircraft Systems (UAS)
        Our unmanned aircraft family of systems includes the Broad Area
    Maritime Surveillance (BAMS) UAS, which will enhance our situational
    awareness and shorten the sensor-to-shooter kill chain by providing
    persistent, multiple-sensor capabilities to Fleet and Joint Commanders.
    Through our recent memorandum of agreement with the Air Force, we are
    pursuing greater commonality and interoperability between BAMS and the
    Air Force's Global Hawk UAV. Our Vertical Take-off and Landing Tactical
    Unmanned Air Vehicle (VTUAV) is on its second deployment aboard the USS
    Halyburton (FFG-40) and will deploy in an expeditionary role to support
    combat operations in Afghanistan later this year. Our fiscal year 2012
    budget includes about $12 million in research and development funding
    to facilitate development of a weapons-capable VTUAV ready for
    deployment in late fiscal year 2012. Our fiscal year 2012 request also
    includes funding to develop a medium range maritime-based UAS and a
    Small Tactical Unmanned Aerial System that will support a variety of
    ships, Naval Special Warfare and Navy Expeditionary Combat Command
    units, and Marine Corps elements.
        The Navy Unmanned Combat Aircraft System Demonstration (NUCAS-D)
    will prove carrier suitability of an autonomous, unmanned, low-
    observable, carrier-based aircraft. This effort includes maturing
    technologies for aircraft carrier catapult launches and arrested
    landings, as well as integration into carrier-controlled airspace.
    Initial flight tests to demonstrate carrier suitability are scheduled
    to start next year and autonomous aerial refueling demonstrations are
    planned for 2014. We will leverage the lessons learned from operating
    the demonstrator in developing a low-observable unmanned carrier-
    launched airborne surveillance and strike system (UCLASS). The UCLASS
    program will shorten the timeline to find, fix, track, target, engage,
    and assess time sensitive targets. UCLASS will integrate with the
    carrier air wings and increase the flexibility, versatility, and
    capability of the carrier force. We are currently developing the UCLASS
    acquisition strategy with OSD.
        Unmanned Underwater Vehicles
        Unmanned Underwater Vehicles (UUV) provide an innovative
    technological solution to augment manned platforms. Our Navy has logged
    more than 85,000 hours of UUV operations to improve battlespace
    awareness. Our small-body Littoral Battlespace Sensing (LBS)
    oceanographic autonomous undersea gliders have demonstrated the ability
    to conduct 6-month long autonomous operations and will achieve Initial
    Operating Capability this year. Our fiscal year 2012 budget requests
    about $13million for research, development, and procurement of the LBS
    glider. We are also developing Large Diameter UUVs (LDUUV) with the
    capability to autonomously deploy and manage a variety of sensors and
    payloads. The development of these highly capable vehicles will require
    investment in commercially and militarily beneficial alternative energy
    technologies, including refinement of fuel cell technology and cutting
    edge battery technologies. Our fiscal year 2012 budget requests about
    $47 million to develop an LDUUV, and I remain committed to conduct
    fully independent UUV missions with durations of 2 months by 2017. This
    capability will allow full scale employment and deployment of LDUUV
    squadrons in the 2020s.
        Mobile User Objective System
        Our Maritime Strategy demands a flexible, interoperable, and secure
    global communications capability that can support the command and
    control requirements of highly mobile and distributed U.S. and
    coalition forces. Satellite communications give deployed forces a
    decisive military advantage and often offer the only communication
    means to support ongoing operations. Rapidly expanding joint demand for
    more access at ever-higher data rates requires moving beyond our
    current legacy Ultra High Frequency (UHF) satellite capabilities. The
    Mobile User Objective System (MUOS) will help satisfy those demands
    when initial operational capability is reached in fiscal year 2012. The
    first satellite in our planned constellation of five is scheduled for
    on-orbit capability in May 2012. Our fiscal year 2012 budget submission
    continues our investment in MUOS to replace the aging UHF Follow-On
    (UFO) constellation. I request your continued support of MUOS and the
    critical narrowband communication capability it will provide to the
    joint warfighter.

    Next Generation Enterprise Network
        The Next Generation Enterprise Network (NGEN) is a Department of
    the Navy enterprise network that will provide secure, net-centric data
    and services to Navy and Marine Corps personnel after the current Navy-
    Marine Corps Intranet (NMCI) network stands down. In July, Navy awarded
    Hewlett Packard Enterprise Services with the NMCI continuity of
    services contract to transition the Navy out of NMCI and into NGEN.
    NGEN will sustain the services currently provided by NMCI, while
    increasing government command and control of our network and enabling
    secure, reliable, and adaptable global information exchange. The
    initial NGEN contracts are expected to be awarded in the first quarter
    of fiscal year 2012. Our fiscal year 2012 budget requests an additional
    $22 million to support government command and control of our networks
    and improve our network situational awareness and defense.

    Remain Ready to Fight Today
        Our Navy continues to experience a high tempo of global operations
    which I expect to continue even as combat forces draw down in
    Afghanistan. Global trends in economics, demographics, resources, and
    climate change portend an increased demand for maritime power and
    influence. America's prosperity depends upon the seas: 90 percent of
    world trade moves on the world's oceans and underwater
    telecommunications cables facilitate about $3.2 trillion of commerce
    each year. As new trade patterns emerge, such as those that will result
    from the expansion of the Panama Canal and the opening of the Arctic,
    and as disruption and disorder persist in our security environment,
    maritime activity will evolve and expand. Seapower allows our Nation to
    maintain U.S. presence and influence globally and, when necessary,
    project power without a costly, sizeable, or permanent footprint
    ashore. We will continue to maintain a forward-deployed presence around
    the world to prevent conflict, increase interoperability with our
    allies, enhance the maritime security and capacity of our traditional
    and emerging partners, confront irregular challenges, and respond to
    crises.
        High operational demand for our force over the last decade has led
    to longer deployments, lower dwell time, and reduced maintenance time
    for our surface ships. If these trends continue, our force will be less
    ready and less available than it is today because of increased stress
    on our sailors and a reduction in our Fleet capacity as ships fail to
    reach their expected service lives. We have initiatives currently
    underway to address these trends. We are moving approximately 1,900
    sailors from shore billets onto our ships to meet operational demands
    while maintaining acceptable Fleet readiness levels and sailor dwell
    time. To enhance the material readiness of our Fleet, we are improving
    our ability to plan and execute maintenance by increasing manning at
    our Regional Maintenance Centers (RMCs), and by institutionalizing our
    engineered approach to surface ship maintenance, converting the
    successes of our Surface Ship Lifecycle Maintenance initiative I began
    2 years ago into the Surface Maintenance Engineering Planning Program
    Activity. I remain focused on ensuring our Navy has a force that is
    maintained and trained to provide the capability and forward presence
    required in the two areas of interest identified in our Maritime
    Strategy, the Western Pacific and the Arabian Gulf, while preserving
    our ability to immediately swing from those regions and our Fleet
    concentration areas in the United States to respond to contingencies
    globally.
        Our fiscal year 2012 base budget and Overseas Contingency
    Operations (OCO) funding requests balance the need to meet increasing
    operational requirements, sustain our sailors' proficiency, and conduct
    the maintenance required to ensure our ships and aircraft reach their
    full service lives. It does not address the potential impacts of a
    full-year continuing resolution on our ongoing operations and
    maintenance afloat and ashore. Highlights follow of initiatives that
    ensure our Navy remains ready to fight today.

    Depot Level Maintenance
        Our ships and aircraft are valuable capital assets that operate in
    unforgiving environments. Keeping these assets in acceptable operating
    condition is vital to their ability to accomplish assigned missions and
    reach their expected service lives. Timely depot level maintenance,
    based on an engineered assessment of expected material durability and
    scoped by actual physical condition, will preserve our existing force
    structure. Continued investment in depot level maintenance is essential
    in achieving and sustaining the force structure required to implement
    our Maritime Strategy. Our combined fiscal year 2012 base budget and
    OCO funding requests fulfill 94 percent of the projected ship depot
    maintenance requirements necessary to sustain our Navy's global
    presence and 95 percent of our aviation depot maintenance requirements,
    servicing 742 airframes and 2,577 engines. The actual extent of our
    depot maintenance requirements will be determined by the final funding
    levels for fiscal year 2011. I request that you fully support our
    baseline and contingency funding requests for operations and
    maintenance to ensure the effectiveness of our force, safety of our
    sailors, and longevity of our ships and aircraft.

    Shore Readiness
        Our shore infrastructure enables our operational and combat
    readiness, and is essential to the quality of life and quality of work
    for our sailors, Navy civilians, and their families. High operational
    demands, rising manpower costs, and an aging fleet of ships and
    aircraft cause us to take deliberate risk in shore readiness,
    specifically in sustaining our shore infrastructure. We have focused
    our facilities sustainment, restoration, and modernization funds on
    improving our housing for unaccompanied sailors and investing in energy
    efficient building modifications. To source these enhancements, we have
    temporarily cancelled our demolition program and reduced our facilities
    sustainment posture to 80 percent of the modeled requirement. We have
    targeted our shore readiness investments in areas that have the
    greatest impact on achieving our strategic and operational objectives.
    These areas include support to our warfighting missions and
    capabilities, nuclear weapons security, quality of life for our sailors
    and their families, and energy enhancements. We remain on track in our
    Homeport Ashore initiative to provide sufficient accommodations to our
    junior single sailors by 2016, and we continue our support for family
    services. We plan to complete an expansion of 7,000 child care spaces
    in fiscal year 2011, allowing us to meet OSD's mandate of providing
    child care for 80 percent of the potential need in fiscal year 2012.

    Training Readiness
        Our Navy is leveraging modeling and simulation (M&S) extensively
    across the Fleet training continuum to reduce at-sea training
    requirements and associated operating costs and energy use. These
    virtual environments stress critical command and control warfare skills
    and fine tune basic warfighting competencies without going to sea. They
    provide synthetic events that are scalable and repeatable, including
    the ability to train multiple strike groups simultaneously. Synthetic
    training provides a complex, multi-faceted threat environment that
    cannot be efficiently recreated at sea on a routine basis. Ship command
    and control simulations, in conjunction with the Fleet Synthetic
    Training (FST) program, support unit level and integrated pre-
    deployment training and certification, including Joint Task Force
    Exercises, Ballistic Missile Defense Exercises, and LCS qualification
    and certification training. In fiscal year 2012, our Navy's use of
    simulators will reduce steaming days by 603 days for a savings of $30
    million, and flying hours by 5,400 hours, for a savings of $35 million.
    The Fleet has placed FST as a top training priority with the objective
    to increase simulator use and synthetic training to reduce Fleet
    operating costs.
        Although we are maximizing our use of synthetic training, it cannot
    completely replace our need to conduct live training. Simulators cannot
    replicate the physical environment, risks, stress, or experiences that
    live training provides. Naval units must be able to practice and hone
    their skills in the air and at sea. Having the right facilities and the
    ability to practice skill sets in a live operating environment are
    necessary for the proficiency and safety of our sailors and for the
    warfighting effectiveness of our Fleet.
        The proliferation of advanced, stealthy submarines continues to
    challenge our Navy's ability to guarantee the access and sustainment of
    joint forces. Robust anti-submarine warfare (ASW) training with active
    sonar systems is vital for our Navy to effectively address this threat.
    The Navy remains a world leader in marine mammal research and we will
    continue our investment in this research in fiscal year 2012 and
    beyond. Through such efforts, and in full consultation and cooperation
    with other Federal agencies, we have developed effective measures that
    protect marine mammals and the ocean environment from adverse impacts
    of mid-frequency active (MFA) sonar while not precluding critical Navy
    training. We continue to work closely with our interagency partners to
    further refine our protective measures as scientific knowledge evolves.
    It is vitally important that any such measures ensure the continued
    flexibility necessary to respond to future national security
    requirements.
        In January, we announced our plan to initially focus JSF homebasing
    on the west coast in accordance with 2010 Quadrennial Defense Review
    direction and the JSF Transition Plan. We also announced that we are
    suspending work on the Outlying Landing Field (OLF) draft environmental
    impact statement (EIS) planned for the East Coast until at least 2014.
    At that time, we will re-evaluate the requirement for an OLF based on
    our east coast JSF basing and training requirements. We continue to
    experience capacity shortfalls at our current East Coast field carrier
    landing practice sites that present challenges to meeting our current
    training requirements under both routine and surge conditions for
    existing Navy aircraft. We will continue to ensure we meet all our
    training requirements by implementing the measures necessary to use all
    available facilities.

    Energy and Climate Change
        The Secretary of the Navy and I are committed to advancing our
    energy security. I consider energy an operational imperative and I
    established the Navy's Task Force Energy more than 2 years ago to
    improve combat capability, assure mobility, and green our footprint. We
    will achieve these goals through energy efficiency improvements,
    consumption reduction initiatives, and the aggressive adoption of
    alternative energy and fuels. Reducing our reliance on fossil fuels
    will improve our combat capability by increasing time on station,
    reducing time spent alongside replenishment ships, and producing more
    effective and powerful future weapons.
        Our tactical energy efforts fall into two categories: technical and
    behavioral changes that use energy more efficiently, and testing/
    certification of alternative fuels. We are making good progress on our
    efficiency initiatives. The USS Makin Island (LHD-8) uses hybrid
    propulsion and we are installing the same system on LHA-6 and LHA-7. We
    are developing a hybrid electric drive system for the DDG-51 class and
    I anticipate a land-based test as early as this summer. We continue to
    introduce advanced hull and propeller coatings and solid state lighting
    in our ships, and we are developing the Smart Voyage Planning Decision
    Aid to achieve more efficient ship routing. We are also implementing
    policies that encourage sailors to reduce their personal energy usage.
    These incremental initiatives add up to significant efficiency
    improvements.
        Our alternative energy programs are progressing. We are
    aggressively certifying elements of our operational force for biofuel
    use. To date we have operated the ``Green Hornet'' F/A-18 and MH-60S on
    camelina-based JP-5 fuel and the RCB-X riverine craft on algal-based F-
    76 fuel. Operational testing of energy efficiency upgrades to the
    Allison 501k engine completed last month and is a key milestone toward
    certification of our Navy combatants with marine gas turbine engines.
        We have reduced our energy use ashore by more than 14 percent since
    2003, as a result of our energy efficiency efforts, including energy
    efficiency building upgrades, energy management systems, procurement of
    alternative fuel vehicles, and achievement of sustainable building
    standards for all new construction and major renovation projects. Our
    continued investments in advanced metering and energy audits will help
    identify further opportunities for efficiency gains and alternative
    energy use. Our approach remains focused on integrating the right
    technology at the right time in the right place while transforming Navy
    culture and behavior for long term sustainability.
        Since establishing Task Force Climate Change in 2009, our Navy has
    taken several actions to better understand and address the potential
    impacts of climate change on our Navy. We have increased our
    operational engagement in the Arctic, participating this past summer in
    Operation Nanook/Natsiq with Canada. We are re-assessing regional
    security cooperation, through our African, Southern, and Pacific
    Partnership station missions to include consideration of climate change
    adaptation, especially with respect to improving water security. We are
    also participating with the National Oceanographic and Atmospheric
    Administration and other Federal agencies to survey in the Arctic and
    improve our environmental observation and prediction capability
    worldwide. Scientific observations indicate that current changes to the
    climate are occurring on a decadal scale, giving our Navy enough time
    to conduct the studies and assessments necessary to inform future
    investment decisions.

    Second East Coast Carrier-Capable Homeport
        The Navy continues to focus on achieving the 2010 Quadrennial
    Defense Review direction to upgrade the carrier port of Mayport. Much
    like the dispersal of west coast aircraft carriers between California
    and Washington, a second homeport on the east coast to maintain
    aircraft carriers is prudent in the event of a natural or man-made
    disaster in Hampton Roads. The dredging project funded in fiscal year
    2010 is underway and will ensure unimpeded access to Mayport. Our
    fiscal year 2012 budget requests funding for the Massey Avenue corridor
    improvement projects. We plan to request funding for the Wharf F
    recapitalization in fiscal year 2013, and the remaining projects within
    the FYDP, to establish Naval Station Mayport as a nuclear carrier-
    capable homeport by 2019.

    United Nations Convention on the Law of the Sea
        The Navy has consistently supported a comprehensive and stable
    legal regime for the exercise of navigational rights and other
    traditional uses of the oceans. The Law of the Sea Convention provides
    such a regime with robust global mobility rules. I believe it essential
    that the United States become a full Party to the treaty. The
    Convention promotes our strategic goal of free access to and public
    order on the oceans under the rule of law. It also has strategic
    effects for global maritime partnerships and American maritime
    leadership and influence. Creating partnerships that are in the
    strategic interests of our Nation must be based on relationships of
    mutual respect, understanding, and trust. For the 160 nations who are
    parties to the Law of the Sea Convention, a basis for trust and mutual
    understanding is codified in that document. The treaty provides a solid
    foundation for the United States to assert its sovereign rights to the
    natural resources of the sea floor out to 200 nautical miles and on the
    extended continental shelf beyond 200 nautical miles, which in the
    Arctic Ocean is likely to extend at least 600 nautical miles north of
    Alaska. As a non-Party to the treaty, the United States undermines its
    ability to influence the future direction of the law of the sea. As the
    only permanent member of the U.N. Security Council outside the
    Convention, and one of the few nations still remaining outside one of
    the most widely subscribed international agreements, our non-Party
    status hinders our ability to lead in this important area and could,
    over time, reduce the United States' influence in shaping global
    maritime law and policy. The Law of the Sea Convention provides the
    norms our sailors need to do their jobs around the world every day. It
    is in the best interest of our Nation and our Navy to ratify the Law of
    the Sea Convention. We must demonstrate leadership and provide to the
    men and women who serve in our Navy the most solid legal footing
    possible to carry out the missions that our Nation requires of them.

      DEVELOP AND SUPPORT OUR SAILORS, NAVY CIVILIANS, AND THEIR FAMILIES

        Our sailors, Navy civilians, and their families are the backbone of
    our Maritime Strategy. They make us who we are. Their skill,
    innovation, and dedication turn our ships, aircraft, weapons and
    systems into global capabilities that prevent conflict, build
    partnerships, and, when necessary, project combat power to prevail in
    war. Our investment in our sailors, Navy civilians, and their families
    ensures our Navy's continued maritime dominance today and in the
    future.
        Our fiscal year 2012 budget requests authorization and funding for
    325,700 Active and 66,200 Reserve end strength. This request includes
    the migration of more than 1,800 military billets from shore and staff
    activities into the Fleet to man new ships and squadrons, restore
    optimal manning cuts, add needed information technology and nuclear
    operators to our force, and restore billets for fiscal year 2013 to
    extend USS Peleliu in commission. This migration will enhance our
    forces afloat; however, the transition will present challenges to our
    ability to maintain sea-shore flow for some of our enlisted sailors and
    sustain manning levels across the force. We are aware of these
    challenges and believe the transition is manageable. Our fiscal year
    2012 end strength request also begins to move end strength previously
    supported by OCO funding, namely our Navy Individual Augmentees (IAs),
    into our baseline program. We will execute a phased draw down of our
    OCO end strength as we project a gradual reduction of IA demands in
    Iraq and Afghanistan. Should IA demand remain at current levels, or
    increase over time, we will be challenged to meet manning requirements
    for our Fleet. Our Navy continues to size, shape, and stabilize our
    force through a series of performance-based measures designed to retain
    the skills, pay grades, and experience mix necessary to meet current
    and future requirements.
        Our fiscal year 2012 end strength reflects efficiencies in our
    manpower account that reduce excess overhead by disestablishing several
    staffs, but not their associated ships and aircraft, for submarine,
    patrol aircraft, and destroyer squadrons, as well as one Carrier Strike
    Group staff. We are disestablishing the headquarters of Second Fleet
    and transferring responsibility for its mission to U.S. Fleet Forces
    Command. These efficiencies streamline our organizations and allow us
    to reinvest the savings into warfighting capability and capacity.
        I would like to touch briefly on the issue of changes to the health
    care benefit. Navy Medicine has been a leader in implementing pilot
    testing for the Department in a new concept called the Patient-Centered
    Medical Home. Beneficiaries have welcomed Navy Medicine's Medical Home
    Port initiative and it shows in their satisfaction scores. I am
    convinced that our beneficiaries will readily accept very modest
    changes to copayments as long as we continue to invest in these
    transformational approaches to delivering high quality health care. The
    proposals in the President's budget are consistent with our efforts
    over the last several years: a focus on internal efficiency,
    incentivizing the health behaviors we want, and ensuring all of our
    beneficiaries are treated equitably. I request you support these timely
    and appropriate efforts.
        The tone of our force continues to be positive. In 2010, we
    conducted the Navy Total Force Survey, which was the first of its kind
    to assess the work-related attitudes and experiences of Active and
    Reserve sailors and Navy civilians. The survey reported that Navy
    personnel are, overall, satisfied with the quality of their leadership,
    benefits, compensation, and opportunities within the Navy for personal
    growth and development. The survey results reaffirmed what more than 20
    national awards have recognized: that our Navy is a ``Top 50''
    organization and an employer of choice among today's workforce.
        Our fiscal year 2012 budget request represents a balanced approach
    to supporting our sailors and their families, sustaining the high tempo
    of current operations, and preserving Fleet and family readiness.
    Highlights follow of our efforts to develop and support our sailors,
    Navy civilians, and their families.

    Recruiting and Retention
        Our Navy has enjoyed strong recruiting success over the past 3
    years, and we expect this trend to continue through fiscal year 2011.
    Fiscal year 2010 marked the third consecutive year Navy met or exceeded
    its overall enlisted recruiting goals in both the Active and Reserve
    components and we continue to exceed Department of Defense quality
    standards in all recruit categories. We accessed the highest quality
    enlisted force in history last year, with more than 97 percent having
    traditional high school diplomas. Active officer recruiting for fiscal
    year 2010 also exceeded our overall goals. Reserve officer recruiting
    exceeded our fiscal year 2009 levels, but achieved only 95 percent of
    our fiscal year 2010 goal. Reserve medical officer recruiting continues
    to be our greatest challenge as the requirement for medical officers
    has increased by more than 100 percent since fiscal year 2008. We
    continue to explore new avenues for recruiting, including expanding our
    social media engagement to maintain a dialogue with potential
    applicants and influencers nationwide.
        Navy will remain competitive in the employment market through the
    disciplined use of monetary and non-monetary incentives. Using a
    targeted approach, we will continue our recruiting and retention
    initiatives to attract and retain our best sailors, especially those
    within high-demand, critical skill areas that remain insulated from
    economic conditions. We are taking advantage of current high retention
    rates and success in accessions by reevaluating all special and
    incentive pays and bonuses and reducing them where possible. Judicious
    use of special and incentive pays remains essential to recruiting and
    retaining skilled professionals in the current economic environment,
    and will increase in importance as the economic recovery continues. Our
    goal remains to maintain a balanced force, in which seniority,
    experience, and skills are matched to requirements.
        To ensure we stay within our congressionally-authorized end
    strength, we are executing force stabilization measures that include
    Perform-to-Serve (PTS) for enlisted sailors and a series of Selective
    Early Retirement (SER) boards for Unrestricted Line (URL) captains and
    commanders. PTS considers the manning levels in each enlisted rating
    and reviews the record of sailors eligible for reenlistment to
    determine if the sailor should remain in the rating, convert to an
    undermanned specialty, transition to the Reserves, or separate from the
    Navy. The SER boards will address the excess inventory of Active
    component captain (O6) and commander (O5) URL officers in our Navy to
    ensure sufficient senior officers are available at the right time in
    their careers to serve in critical fleet billets. We project
    approximately 100 URL captains and 100 URL commanders will be selected
    for early retirement through this process. With these performance-based
    measures, we expect to meet our fiscal year 2011 authorized Active end
    strength of 328,700 and Reserve end strength of 65,500 by the end of
    the fiscal year. We will be challenged to meet our Active and Reserve
    end strength targets in fiscal year 2012 using existing force shaping
    measures. As a result of continued high retention and low attrition
    across the force, we are facing increasing pressure to use involuntary
    force shaping measures to remain within our authorized end strength.

    Diversity
        Demographic projections estimate that today's minorities will make
    up more than one third of our Nation's workforce by 2020; by 2050, that
    projection increases to about half of our workforce. Our ability to
    access and retain the talents of every component group in our society
    is critical to our mission success. Recruiting and retaining a diverse
    workforce, reflective of the Nation's demographics at all levels of the
    chain of command, remains a strategic imperative and a focus area for
    leaders throughout our Navy. To foster a Navy Total Force composition
    that reflects America's diversity, we are focusing our efforts on
    outreach, mentoring, leadership accountability, training, and
    communication. Our diversity outreach efforts have contributed to our
    2014 U.S. Naval Academy and Naval Reserve Officers Training Corps
    classes being the most diverse student bodies in our history. We have
    increased diverse accessions through targeted recruiting in diverse
    markets, developing relationships with key influencers in the top
    diverse metropolitan markets, and aligning Navy assets and
    organizations to maximize our connection with educators, business
    leaders and government officials to increase our influencer base. We
    continue to expand our relationships with key influencers and science,
    technology, engineering, and mathematics-based affinity groups to
    inform our Nation's youth about the unique opportunities available in
    our Navy. We are also building and sustaining a continuum of mentorship
    opportunities that includes the chain of command, individual
    communities, social networking, peer-to-peer relationships, and
    affinity groups. We will continue to ensure that all sailors are
    provided with opportunities to develop personally and professionally.

    Women on Submarines
        After notifying Congress last year of our intent to assign women to
    submarines, the Secretary of the Navy and I have authorized female
    officers to serve aboard Ohio-class SSBN and SSGN submarines. This will
    enable our submarine force to leverage the tremendous talent and
    potential of the women serving in our Navy. The first 18 female
    submarine officers commenced the standard 15-month nuclear and
    submarine training pipeline in 2010, and will begin arriving at their
    submarines at the end of this year. These officers will be assigned to
    two ballistic missile (SSBN) and two guided missile (SSGN) submarines
    which have the space to accommodate female officers without structural
    modification. The plan also integrates female supply corps officers
    onto SSBNs and SSGNs at the department head level. In December, the
    Secretary of Defense notified Congress of Navy's intent to expend funds
    to commence design and study efforts regarding reconfiguration of
    existing submarines to accommodate female crew members, as well as to
    design the Ohio replacement SSBN with the flexibility to accommodate
    female crew members.

    Don't Ask, Don't Tell
        I am pleased Congress voted to repeal section 654 of title 10,
    U.S.C., commonly referred to as the ``Don't Ask, Don't Tell'' (DADT)
    statute. Legislative repeal affords us the time and structured process
    needed to effectively implement this significant change within our
    Armed Forces. As I testified in December, we will be able to implement
    a repeal of DADT in our Navy. I assess the risk to readiness,
    effectiveness, and cohesion of the Navy to be low. Our implementation
    process will be thorough, but timely. We are preparing the necessary
    policies and regulations to implement this change in law and training
    sailors and leaders at all levels to ensure they understand what repeal
    means to them, their families, and the Navy. Before repeal can occur,
    the President, Secretary of Defense, and Chairman of the Joint Chiefs
    must certify that the change can be made in a manner consistent with
    the standards of military readiness, military effectiveness, unit
    cohesion, and recruiting and retention of the Armed Forces. I will
    provide Navy's input to the certification process and I remain
    personally engaged in this process.

    Sailor and Family Continuum of Care
        We remain committed to providing our sailors and their families a
    comprehensive continuum of care that addresses all aspects of medical,
    physical, psychological, and family readiness. Our fiscal year 2012
    budget request expands this network of services and caregivers to
    ensure that all sailors and their families receive the highest quality
    healthcare available.
        Navy Safe Harbor is at the forefront in Navy's non-medical care for
    all seriously wounded, ill, and injured sailors, coastguardsmen, and
    their families. We have expanded our network of Recovery Care
    Coordinators and non-medical Care Managers to 12 locations across the
    country. Safe Harbor continues to provide exceptional, individually
    tailored assistance to a growing enrolled population of more than 600
    individuals. Over 116,000 sailors and their spouses have participated
    in Operational Stress Control (OSC) training, which actively promotes
    the psychological health of sailors and their families by encouraging
    them to seek help for stress reactions early, before they become
    problems. The Warrior Transition Program (WTP) and Returning Warrior
    Workshops (RWW) are essential to post-deployment reintegration efforts.
    The WTP offers an opportunity for IA sailors redeploying from a combat
    zone to decompress, turn in their gear, and receive tools that will
    help them ease their transition back to their home and families. The
    RWW is designed to address personal stress that may be generated by
    deployment activities and it supports and facilitates the reintegration
    of the deployed sailor with his/her spouse and family. The RWW also
    provides a safe, relaxed atmosphere in which to identify and address
    potential issues that may arise during post-deployment reintegration.

    Stress on the Force
        While the overall tone of our force remains positive, current
    trends suggest that high operational tempo, increasing mission demands,
    lean manning, force shaping, and economic conditions are placing
    increased stress on our Navy personnel. Our fiscal year 2012 budget
    requests increased funding to improve our program manager-level support
    of our suicide prevention and stress control programs.
        Suicide dramatically affects individuals, commands and families.
    Over the last year, we expanded our approach to preventing suicides
    from historic suicide surveillance and annual awareness training to
    include more comprehensive resilience building and tailored suicide
    prevention training, peer intervention, research and analysis. We saw a
    reduction in our number of suicides from 46 in calendar year 2009 to 38
    in calendar year 2010. Our calendar year suicide rate also decreased
    from 13.3 per 100,000 sailors in 2009 to 10.9 per 100,000 sailors in
    2010. Our 2010 suicide rate is below the national rate of 19.0 per
    100,000 individuals for the same age and gender demographic; however,
    any loss of life as a result of suicide is unacceptable. Suicide
    prevention is an ``all hands, all the time'' effort involving our
    sailors, families, peers, and leaders. We continue to work towards a
    greater understanding of the issues surrounding suicide to ensure that
    our policies, training, interventions, and communications are meeting
    intended objectives.
        We are integrating our suicide prevention efforts into the broader
    array of programs we offer to improve the resilience of our force.
    These programs, aimed at reducing individual stress, address issues,
    such as substance abuse prevention, financial management, positive
    family relationships, physical readiness, and family support.
        We continue our efforts to eliminate sexual assault by fostering a
    culture of prevention, victim response and offender accountability.
    Sexual assault is incompatible with our Navy core values, high
    standards of professionalism, and personal discipline. We have
    organized our efforts in this critical area under the Navy Sexual
    Assault Prevention and Response (SAPR) program. The SAPR program and
    the Naval Safety Center and Alcohol and Drug Prevention Program are
    currently developing an integrated approach to sexual assault
    prevention that includes clear leadership communication, bystander
    intervention training for sailors to help them recognize and interrupt
    risky situations, and training for military investigators and lawyers
    on issues specific to sexual assault investigation and prosecution.

    Learning and Development
        Education and training are strategic investments that give us an
    asymmetric advantage over adversaries. To develop the highly-skilled,
    combat-ready force necessary to meet the demands of the Maritime
    Strategy and the Joint Force, we have 15 learning centers around the
    country providing top-notch training to our sailors, Navy civilians and
    members of the other Services. In fiscal year 2010, we completed
    learning and development roadmaps for all enlisted ratings, providing
    sailors with detailed information about the required training,
    education, qualifications and assignments they need to succeed in their
    career fields. We continue to leverage a blended training approach,
    integrating experienced instructors, advanced technology, and state-of-
    the-art delivery systems with modularized content in order to provide
    the right training at the right time in a sailor's career. We are
    balancing existing education and training requirements with growth in
    important mission areas such as cyber defense, missile defense, and
    anti-submarine warfare. Cultural, historical, and linguistic expertise
    remain essential to successfully accomplishing the Navy's global
    mission, and our budget request supports our Language, Regional
    Expertise, and Culture (LREC) program as well as the Afghanistan-
    Pakistan Hands Program sponsored by the Joint Staff. Last year the LREC
    program provided language and cultural training to more than 120,000
    sailors en route to overseas assignments. We recognize the importance
    of providing our people meaningful and relevant education, particularly
    Joint Professional Military Education (JPME), which develops leaders
    who are strategically-minded, capable of critical thinking, and adept
    in naval and joint warfare. Our resident courses at Naval War College,
    non-resident courses at Naval Postgraduate School and in the Fleet
    Seminar program, and distance offerings provide ample opportunity for
    achievement of this vital education.

                                   CONCLUSION

        You can be exceptionally proud of our sailors. They are our
    Nation's preeminent force at sea, on land, and in air, space, and
    cyberspace. While the future is not without challenges, I am optimistic
    about our future and the global opportunities our Navy provides our
    Nation. Our fiscal year 2012 budget request represents a balanced
    approach to increasing Fleet capacity, maintaining our warfighting
    readiness, and developing and enhancing our Navy Total Force. I ask for
    your strong support of our fiscal year 2012 budget request and my
    identified priorities. Thank you for your unwavering commitment to our
    sailors, Navy civilians, and their families, and for all you do to make
    our U.S. Navy an effective and enduring global force for good.

        Chairman Levin. Thank you so much, Admiral, and again,
    thank you for your extraordinary service over the decades.
        General Amos.

    STATEMENT OF GEN. JAMES F. AMOS, USMC, COMMANDANT OF THE MARINE
                                 CORPS

        General Amos. Chairman Levin, Ranking Member McCain, and
    members of the committee: It is indeed my honor to appear
    before you today for the very first time as the Commandant of
    the Marine Corps to articulate the posture of your Corps. Today
    the Corps serves as America's expeditionary force in readiness,
    a balanced air, ground, logistics team of 202,000 Active,
    39,000 Reserve, and 35,000 civilian marines. Our ability to
    serve as our Nation's principal crisis response force is due in
    large part to this committee's and Congress' continued strong
    support. Thank you for that.
        Today, there are over 32,000 marines forward-deployed
    around the world. As we sit here, it's half past 7 in the
    evening in Afghanistan. The rainy season has hit. The evenings
    remain cold and damp in this nation, where 20,000 of our young
    men and women are engaged in full-spectrum combat and
    counterinsurgency operations.
        I'm encouraged by the significant progress they have made
    in the Helmand Province and you have my assurance that this
    effort remains my top priority. Sergeant Major Kent and I spent
    Christmas with our marines and sailors in Afghanistan and I am
    happy to report that their morale is high and their belief in
    their mission is strong.
        Partnered with the U.S. Navy, we are forward deployed and
    forward engaged. This past year alone, our afloat forces
    conducted humanitarian assistance operations in Pakistan,
    Haiti, and the Philippines. They recaptured the pirated ship
    Magellan Star, rescuing its crew from Somali pirates, and
    partnered with allied forces in engagement missions in the
    Pacific Rim, Latin America, Africa, and Eastern Europe.
        Right now over 400 marines from the First Battalion, Second
    Marine Regiment, who deployed last week from Camp Lejeune, NC,
    within 20 hours of notification, are embarked aboard two
    amphibious vessels with a full complement of fixed and rotary
    wing assets. These marines are poised in the Mediterranean,
    prepared to do our Nation's bidding.
        Our role as America's crisis response force necessitates
    that we maintain a high state of readiness. You're either ready
    to respond to today's crisis with today's force today or you
    risk being late and thus irrelevant.
        I am keenly aware of the fiscal realities confronting our
    Nation. During these times of constrained resources, the Marine
    Corps remains committed to being the best stewards of scarce
    public funds. We maintain a longstanding tradition with
    Congress as DOD's penny-pinchers. Our institutionalized culture
    of frugality positions us as the best value for the defense
    dollar. For approximately 8.5 percent of the annual defense
    budget, the Marine Corps provides the Nation 31 percent of its
    ground operating forces, 12 percent of its fixed wing tactical
    aircraft, and 19 percent of its attack helicopters.
        This year's budget submission was framed by my four
    service-level priorities. We will: number one, continue to
    provide the best trained and equipped marines in Afghanistan;
    number two, rebalance our core and posture it for the future;
    number three, better educate and train our marines to succeed
    in increasingly complex environments; and lastly, number four,
    we will keep faith with our marines, our sailors, and our
    families.
        While these priorities will guide our long-term plan for
    the Marine Corps, there are pressing issues facing our Corps
    today that concern me, issues for which I ask Congress'
    continued assistance in solving. Our equipment abroad and at
    home stations has been heavily taxed in the nearly 10 years of
    constant combat operations. The price tag for reset is $10.6
    billion, of which $3.1 billion has been requested in fiscal
    year 2011 and $2.5 billion is being sought in fiscal year 2012.
    The remaining $5 billion will be needed upon the completion of
    our mission in Afghanistan.
        The F-35B Short Takeoff and Vertical Landing (STOVL) JSF is
    vital to our ability to conduct expeditionary operations.
    Continued funding and support from Congress for this program is
    of utmost importance. During the next 2 years of F-35B
    scrutiny, I will be personally involved with the program and
    closely supervising it.
        Both the Secretary of Defense and the Secretary of the Navy
    have reaffirmed the necessity of the Marine Corps' amphibious
    assault mission. We must develop an affordable and capable
    amphibious combat vehicle to project marines from sea to land
    in permissive, uncertain, and in hostile environments. I ask
    for your continued support to reach this goal.
        To ensure the Marine Corps remains a relevant force with a
    capacity and capability to respond to the demands of future
    security environments, we recently conducted a detailed
    internally-driven force structure review. The results of this
    effort provide America a strategically mobile, middleweight
    force, optimized for forward presence, and rapid crisis
    response.
        As we look to the future, the Marine Corps is committed to
    finding ways to be more energy efficient. Since 2009, we have
    aggressively pursued energy-efficient capabilities that will
    make marine units more energy self-sufficient, increase our
    combat effectiveness, and protect the lives of our young men
    and women. Two weeks ago, I signed our new bases to battlefield
    energy planning guidance, with such goals, metrics, and a plan
    for implementation.
        Finally, I would like to comment on the impact of the
    current CR as it has impacted our operations and our programs.
    As of today, $567 million in military construction (MILCON)
    contracts have not been awarded. $2.4 billion of MILCON is at
    risk for the remainder of this year. These projects impact the
    lives of marines, the local economies of the communities around
    our bases and stations, and are projected to generate over
    63,000 jobs from the Carolinas to Hawaii.
        If the CR extends through the entire fiscal year, 13
    bachelor enlisted quarters (BEQ) totaling 5,000 affected spaces
    will not be built, thus stymieing our BEQ modernization
    efforts. These 13 BEQs will allow 8 infantry battalions to move
    out of 50-year-old Cold War barracks.
        Finally, the CR could prove catastrophic to our procurement
    accounts, resulting in the loss of almost one-third of our
    procurement budget capabilities.
        Lastly, you have my promise that in these challenging times
    ahead, the Marine Corps will only ask for what it needs, not
    what it might want. We will make the hard decisions before
    coming to Congress and we will redouble our efforts toward our
    traditional culture of frugality.
        As has been the case for over 235 years, your Marine Corps
    stands ready to respond whenever the Nation calls, wherever the
    President may direct.
        Once again, I thank each of you for your continued support.
    I'm prepared to answer your questions.
        [The prepared statement of General Amos follows:]

                 Prepared Statement by Gen. James F. Amos, USMC

                   AMERICA'S EXPEDITIONARY FORCE IN READINESS

        The Marine Corps is America's Expeditionary Force in Readiness--a
    balanced air-ground-logistics team. We are forward-deployed and
    forward-engaged: shaping, training, deterring, and responding to all
    manner of crises and contingencies. We create options and decision
    space for our Nation's leaders. Alert and ready, we respond to today's
    crisis, with today's force . . . TODAY. Responsive and scalable, we
    team with other Services, allies and interagency partners. We enable
    and participate in joint and combined operations of any magnitude. A
    middleweight force, we are light enough to get there quickly, but heavy
    enough to carry the day upon arrival, and capable of operating
    independent of local infrastructure. We operate throughout the spectrum
    of threats--irregular, hybrid, conventional--or the shady areas where
    they overlap. Marines are ready to respond whenever the Nation calls .
    . . wherever the President may direct.

                                           --General James F. Amos

    America's Expeditionary Force in Readiness
        Today, your U.S. Marine Corps is foremost America's Expeditionary
    Force in Readiness. Established originally by an act of the Second
    Continental Congress on November 10, 1775, your Marine Corps has
    evolved over 235 years into a balanced air-ground-logistics team that
    is forward deployed and forward engaged: shaping, training, deterring,
    and responding to all manner of crises and contingencies.
        Through the ongoing support of Congress and the American people,
    your Marine Corps is a cohesive force of 202,100 Active Duty marines;
    39,600 Selected Reserve marines; and 35,000 civilian marines. At any
    given time, approximately 30,000 marines are forward deployed in
    operations supporting our Nation's defense.\1\ This year, as our Nation
    recognizes a decade since the tragic events of September 11, your
    Marine Corps has been conducting Overseas Contingency Operations for an
    equal amount of time. From Task Force 58 with 4,400 marines launching
    from 6 amphibious ships to secure critical lodgments in Afghanistan in
    late 2001 to our counterinsurgency efforts in the Al Anbar province of
    Iraq and to our current operations in the Helmand River Valley of
    Afghanistan, your marines have been forward deployed in the Service of
    our Nation.
    ---------------------------------------------------------------------------
        \1\ As of December 2010, there were approximately 20,700 marines in
    Afghanistan including marines serving in external billets (e.g.
    transition teams and joint/interagency support, et cetera); 6,200 at
    sea on Marine Expeditionary Units; and 1,600 marines engaged in various
    other missions, operations and exercises. The 30,000 statistic excludes
    over 18,000 marines assigned to garrison locations outside the
    continental United States such as in Europe, the Pacific, et cetera.
    ---------------------------------------------------------------------------
        Yet, during this time the Marine Corps has not been confined solely
    to major combat operations and campaigns. From our rapid response
    aiding fellow Americans and enabling joint and interagency relief
    efforts following Hurricane Katrina's floods, to our noncombatant
    evacuation operation of 14,000 American citizens from Lebanon in 2006,
    to our numerous and ongoing security cooperation missions with nations
    of Africa, Eastern Europe, the Pacific Rim, and Latin America, the U.S.
    Marine Corps continues to demonstrate the agility and flexibility
    expected of America's principal crisis response force. Over the course
    of the past year alone, your brave men and women who wear the Marine
    uniform and who bring a diversity of talent in service to our Nation,
    have simultaneously:

             Waged an aggressive full-spectrum counterinsurgency
            operation in Afghanistan while concurrently increasing combat
            power nearly two-fold (i.e. from 10,600 to 19,400) in
            accordance with the President's December 2009 Afghanistan-
            Pakistan strategy;
             Successfully completed our mission in Iraq, bringing
            stability to Al Anbar province. This achievement was not
            without sacrifice and suffering in that 1,022 \2\ marines gave
            their lives and 8,626 marines were wounded in action;
    ---------------------------------------------------------------------------
        \2\ 1022 deaths = 851 killed in action (hostile) and 171 deceased
    (non-hostile).
    ---------------------------------------------------------------------------
             Partnered with allied forces in engagement missions
            throughout every Geographic Combatant Commander's Area of
            Responsibility;
             Conducted foreign humanitarian assistance and disaster
            relief missions in Pakistan, Haiti, and the Philippines;
             Participated in maritime security operations to ensure
            freedom of navigation along vital sea lines of communication,
            to include the recapture of the vessel Magellan Star and rescue
            of its crew from Somali pirates; and
             Rapidly reinforced U.S. Embassies in Port au Prince,
            Haiti; Conakry, Guinea; Bishkek, Kyrgyzstan; and most recently
            Cairo, Egypt to assist and protect diplomatic personnel amidst
            crises in these foreign capitals.

        Their actions align with the functions of our Corps as seen in the
    new Department of Defense (DOD) Directive 5100.01, Functions of the
    Department of Defense and Its Major Components, and are a critical link
    to the continued prosperity and security of our Nation and the survival
    of our friends, allies, and partners. The performance of your marines
    on the global stage adds to our storied legacy of sacrifice and
    success--under even the most adverse conditions--inspiring a sense of
    pride and confidence in the American public that their marines are able
    to respond quickly, ensuring the Nation's interests will be protected.

    Future Security Environment
        Public law, defense policy, our doctrine and operating concepts,
    and the future security environment shape how we organize, train, and
    equip our forces. As we look ahead, we see a world of increasing
    instability, failed or failing states, and conflict characterized by:

             Poverty, unemployment, urbanization, overpopulation,
            and extremism;
             Competition for scarce natural resources; and
             Rapid proliferation of new technologies to include
            capabilities to disrupt cyber networks, advanced precision
            weaponry, and weapons of mass destruction.

        These troubling socio-economic and geopolitical trends converge in
    the littorals--regions along the world's coastline where the sea joins
    with the land. The majority of the world's population lives near the
    sea. The trend towards accelerated birth rates in the developing world,
    coupled with ongoing migration from rural to urban landscapes, results
    in hyper-populated coastal regions, burdened by the cumulative
    stressors of criminality, extremism, and violence.
        Littoral cities increasingly may assume what some have called feral
    qualities, raising the potential for conflict, providing a measure of
    sanctuary for our adversaries, and posing challenges to governmental
    sovereignty and regional security. It is in this complex environment
    that your U.S. Marine Corps will operate. We stand optimally postured
    to conduct a range of operations for Joint Force commanders, bridging
    the gap between operations at sea and on land.
        Nonetheless, we are committed to the prevention of conflict as we
    are to responding to it. Indeed, 21st century security challenges
    require expansion of global engagement--facilitated through persistent
    forward naval presence--to promote collective approaches to addressing
    common security concerns. Accordingly, forward deployed Marine forces
    will increasingly conduct theater security cooperation activities and
    will build partnership capacity through security force assistance
    missions with our allies and partners around the globe. The goal of our
    engagement initiatives is to minimize conditions for conflict and
    enable host nation forces to effectively address instability as it
    occurs.

    Role of the Marine Corps
        The United States is a maritime nation with global
    responsibilities. With a naval tradition as the foundation of our
    existence, we remain firmly partnered with the U.S. Navy. Forward
    deployed, we retain the ability to come from the sea rapidly to conduct
    missions across the range of military operations. Our persistent
    forward presence and multi-mission capability present an unparalleled
    ability to rapidly project U.S. power across the global commons--land,
    sea, air, space, and cyber.
        Amphibious forces with robust and organic logistical sustainment
    provide a maritime Super Power significant advantages, including the
    ability to overcome the tyranny of distance and to project power where
    there is no basing or infrastructure--a strong deterrent capability for
    our Nation. To Marines, `expeditionary' is a state of mind that drives
    the way we organize our forces, train, develop and procure equipment.
    By definition, our role as America's crisis response force necessitates
    a high state of unit readiness and an ability to sustain ourselves
    logistically. We must be ready to deploy today and begin operating upon
    arrival, even in the most austere environments. The U.S. Marine Corps
    affords the following three strategic advantages for our Nation:

             A versatile ``middleweight'' capability to respond
            across the range of military operations. We fill the gap in our
            Nation's defense as an agile force capable of operating at the
            high and low ends of the threat spectrum or the indistinct
            areas in between.
             An inherent speed and agility that buys time for
            national leaders. Our flexibility and rapid response capability
            present unique opportunities to develop strategic options,
            shape the environment, and set conditions to deploy the full
            capabilities of the Joint Force and other elements of national
            power.
             An enabling and partnering capability in joint and
            combined operations. Our unique forward posture aboard
            amphibious ships, manned by well-trained, uniformed sailors,
            positions us to be the `first to fight.'

    USMC Priorities
        My four service level priorities informed this year's budget
    submission. These priorities were influenced by and derived from a
    number of factors to include our understanding of the 21st century
    battlefield based on lessons learned over nearly a decade at war, our
    examination of the future security environment, our doctrine and
    operating concepts, and our current and future budgetary and
    programmatic requirements.
        These priorities are aligned with the principal recommendations of
    the 2010 Quadrennial Defense Review, meeting its end state of ensuring
    that the Marine Corps is able to ``prevail in today's wars, prevent and
    deter conflict, prepare to defeat adversaries and succeed in a wide
    range of contingencies, and preserve and enhance the All-Volunteer
    Force.'' My priorities also support America's four enduring strategic
    interests as identified in the 2010 National Security Strategy.\3\ To
    that end, we will:
    ---------------------------------------------------------------------------
        \3\ (1) Security of the United States, its citizens, and U.S.
    allies and partners; (2) A strong, innovative, and growing U.S. economy
    in an open international economic system that promotes opportunity and
    prosperity; (3) respect for universal values at home and around the
    world; and (4) an international order advanced by U.S. leadership that
    promotes peace, security, and opportunity through stronger cooperation
    to meet global challenges. 2010 National Security Strategy Pg, 7.

             Continue to provide the best trained and equipped
            Marine units to Afghanistan;
             Rebalance our Corps, posture it for the future, and
            aggressively experiment with and implement new capabilities and
            organizations;
             Better educate and train our marines to succeed in
            distributed operations and increasingly complex environments;
            and
             Keep faith with our marines, our sailors, and our
            families.

        The above priorities guide my long-term plan for the Marine Corps;
    however, there are pressing issues facing our Corps today that give
    cause for concern.

             Equipment: Our equipment abroad and at home station
            has been ``heavily taxed'' in the nearly 10 years of constant
            combat operations. We require funding to reset equipment being
            utilized overseas and to reconstitute home-station equipment
            and modernize for the future. This is critical to maintaining
            readiness throughout the Corps.
             The Short Take-Off and Vertical Landing F-35B Joint
            Strike Fighter: The F-35B is vital to our ability to conduct
            combined arms operations in expeditionary environments.
            Continued funding and support from Congress for this program is
            of utmost importance.
             Amphibious Combat Vehicle: We will begin the
            development of an affordable and capable amphibious combat
            vehicle to replace the recently-cancelled Expeditionary
            Fighting Vehicle program. The capability inherent in a ship-to-
            shore connector is critical to our expeditionary nature, as
            affirmed by the Secretary of Defense.
             End Strength: The drawdown of our Active component
            from 202,100 to 186,800 must be conditions-based, and only
            after completion of our mission in Afghanistan. We must keep
            faith with our Marine Corps family by allowing appropriate time
            and support for those departing the force and to ensure the
            resiliency of our units still engaged in war.
             Family Readiness Programs: Like our equipment, marines
            and their families have been ``heavily taxed'' since September
            11. We will continue to fund family readiness and family
            support programs that are vital to the health and welfare of
            our entire Marine Corps family.
             Amphibious Ships: The Navy and Marine Corps have
            determined a minimum force of 33 ships represents the limit of
            acceptable risk in meeting the 38-ship amphibious force
            requirement for the Assault Echelon. Marines are best postured
            to engage and respond to the Nation's security interests from
            amphibious ships.

        The Marine Corps needs the continued support of Congress in
    confronting these critical issues and the many others discussed below.
    My promise to Congress is that we will do our part by continuing to be
    good stewards of our taxpayers' dollars.

    Fiscal Year 2012 Budgetary Submission
        The Marine Corps maintains a longstanding tradition in DOD as being
    ``Penny Pinchers.'' A prime example of our many noteworthy cost-saving
    measures is our practice of units deploying to Afghanistan utilizing
    equipment sets maintained and repaired in country--a measure saving
    significant funds annually on costs associated with the cycle of
    deployment and redeployment. Our institutionalized culture of
    frugality, streamlined business practices, lean structure, and multi-
    mission capability, position us as the ``best value'' for the defense
    dollar. This fiscal year we are seeking over $40 billion \4\ to fund
    ongoing operations, provide quality resources for our marines, sailors,
    and their families, conduct reset of equipment stressed from nearly 10
    years at war, and prepare our forces for future missions. For
    approximately 8.5 percent \5\ of the annual Defense budget, the Marine
    Corps provides the Nation approximately 31 percent of its ground
    operating forces (Combat, Combat Support and Combat Service Support),
    12 percent of its fixed wing tactical aircraft, and 19 percent of its
    attack helicopters.
    ---------------------------------------------------------------------------
        \4\ This sum includes both ``Blue in Support of Green'' funding,
    Overseas Contingency Operation funding, and other Navy funding for USMC
    needs (e.g. chaplains, medical personnel, amphibious ships, et cetera.)
        \5\ Based on provisions of the National Defense Authorization and
    Appropriation Acts for Fiscal Year 2010.
    ---------------------------------------------------------------------------
        During these times of constrained resources, the Marine Corps
    remains committed to streamlining operations, identifying efficiencies,
    and reinvesting savings to conserve scarce public funds. At the
    direction of the Secretary of Defense in June 2010, the Services
    conducted an efficiencies review and our fiscal year 2012 budget is the
    result of a thorough study of all of our business activities. Already
    one of the most economical of the Military Services, we achieved our
    DOD efficiency goal. We captured overhead efficiency savings by
    focusing on three main efforts:

             Buying smarter through acquiring platforms more
            intelligently
             Streamlining our operations
             Being more efficient in the way we use, produce, and
            acquire energy

        This effort has had a marked impact on our overall budget, allowing
    us to invest more in our core warfighting missions and enhancing our
    acquisition plans. The efficiency initiative drove adjustments to our
    programs and ensured restoration of funding in areas where needed most.
    Additionally, we used funds realized from efficiencies to support
    programs originally not funded. We reinvested savings into critical
    warfighting programs to enhance readiness. We anticipate unit equipment
    readiness to increase by fiscal year 2014 through the purchase of
    additional equipment beginning in fiscal year 2012. This readiness
    increase will allow the Marine Corps to equip, train, and prepare units
    earlier in the pre-deployment cycle. Other expansions that we were able
    to address include enhancing funding for facilities with direct
    operational impact, energy and water investments at bases and
    installations, command and control and logistics programs, and
    equipment modernization.
        In addition to our frugality and aggressive pursuit of finding
    efficiencies to enhance our warfighting capacity inherent in our budget
    request, your Marine Corps remains the first and only military Service
    whose financial statements have been deemed audit ready. We are
    continually striving to be good stewards of the public trust and know
    the ongoing financial audit will serve to both strengthen our financial
    management practices and give us actionable business intelligence to
    support our decisionmaking process in supporting our operational forces
    at home, abroad, and in harm's way.

    PRIORITY #1: CONTINUE TO PROVIDE THE BEST TRAINED AND EQUIPPED UNITS TO
                                  AFGHANISTAN

    Operation Enduring Freedom
        We have made great progress in Afghanistan; this effort remains our
    number one priority until we attain our national objectives. At present
    over 20,000 marines are deployed in Afghanistan. This mission
    ultimately involves almost 60,000 marines, or just under one-third of
    our Active-Duty Force, factoring in deployment, redeployment, training
    cycles and other direct support. We will continue providing forces in
    Afghanistan capable of full-spectrum combat and counterinsurgency
    operations, while balancing our capabilities to perform what the Nation
    will likely ask of us in the future. We will ensure that marines,
    sailors, and the units in which they serve, receive the best possible
    training and equipment to succeed in the many types of missions we are
    conducting in this complex, dynamic environment.
        Our successes within Helmand Province are paving the way for
    economic development and governance. Marine commanders on the ground
    and Afghan officials indicate that freedom of movement for the local
    populace has improved. Bazaars and markets are flourishing; critical
    infrastructure projects are underway. Today, 10 of 13 districts in
    Helmand Province are under the control of the Afghan central
    government. Daily, 135,000 children attend school, which is more than a
    60 percent increase from 2008 levels. Formerly dangerous places like
    Marjah, Now Zad, and Garmsir, untrafficable due to improvised explosive
    devices just 1 year ago, now have significant activity occurring in
    commercial centers. Yet, other challenges remain as we now seek to
    capitalize on our 2010 successes. We are currently expanding battle-
    space northward into other hostile locations such as the district of
    Sangin, where our forces are going ``head-to-head'' with Taliban
    resistance.
        As America's Expeditionary Force in Readiness, we are ready to
    execute any mission assigned in support of crisis and contingency
    response. In addition to our Afghanistan commitment, we continue to
    source forward-based and deployed forces to meet Geographic Combatant
    Commander requirements. In light of our operational demands, and
    through the support of Congress in authorizing our end strength of
    202,100 Active-Duty Forces, our combat units are beginning to realize
    an approximate 1:2 dwell time.\6\ Other units vary at more favorable
    dwell-time levels depending on their mission. We anticipate the 1:2
    dwell ratio for combat units to remain relatively stable provided
    current deployed force levels are not increased; however, increased
    operational demands in Afghanistan or elsewhere may result in dwell
    times inconsistent with fostering a resilient Total Force.
    ---------------------------------------------------------------------------
        \6\ Infantry battalions will continue to remain just below 1:2
    dwell time due to relief in place/transfer of authority requirements.
    ---------------------------------------------------------------------------
        Some marines in select military occupational specialties continue
    to fall into what is known as a high-demand, low-density status. This
    is a key indicator that the combat demand for Marines with these skills
    does not match, or exceeds, the current manpower requirement and/or
    inventory. In addition, there are currently 14 of 211 occupational
    specialties where the on-hand number of marines is less than 90 percent
    of what is required.\7\ Our recently completed force structure review
    addressed all these concerns. We are working actively to recruit,
    promote, and retain the right number of Marines in the right
    occupational specialties thus promoting resiliency of our Total Force.
    ---------------------------------------------------------------------------
        \7\ Our most stressed occupational specialties based on percentage
    of marines beyond a 1:2 dwell are: (1) Geographic Intelligence
    Specialist, (2) Imaging Analyst/Specialists, (3) Signals Collection
    Operator/Analyst, (4) Unmanned Aerial Systems Operator/Mechanic, and
    (5) European, Middle East, and Asia-Pacific Cryptologic Linguists.
    ---------------------------------------------------------------------------
    Training for Full Spectrum Counterinsurgency Operations
        Our comprehensive training program conducted at our premiere desert
    training base in Twentynine Palms, CA, has been credited by leaders
    throughout the Corps with providing a dynamic environment that
    replicates the many tasks, challenges, and requirements required of
    units in a counterinsurgency setting. Our newly-instituted Infantry
    Immersion Trainers are realistic, reconfigurable, and provide
    comprehensive training environments that develop small unit tactics and
    individual skills for deploying infantry squads. The Infantry Immersion
    Trainer supports essential training such as control of supporting arms,
    language, improvised explosive device recognition and defeat measures,
    human terrain understanding and close quarters battle. Introducing
    battlefield effects simulators, culturally appropriate role players,
    and interactive avatars at the Infantry Immersive Trainers teaches
    marines to make legally, morally, ethically, and tactically sound
    decisions under situations of great stress. It also contributes to
    reducing the effects of combat stress. I view this training program to
    be of vital importance to our Operating Forces.

    Equipping for the Afghan Effort
        Marine units are operating in Afghanistan with high rates of ground
    equipment readiness. Through the generosity of Congress, we have
    received funds for the rapid fielding of urgent need items in support
    of our Afghanistan effort. The Mine-Resistant Ambush-Protected (MRAP)
    vehicle program continues to meet urgent requirements while we actively
    pursue vehicle upgrades to outpace emerging threats, enhance mobility,
    and improve vehicle performance. We can accomplish this goal through
    engineering changes and capability insertions in current production,
    planned orders, and fielded vehicles. We have a requirement for 3,362
    vehicles in the family of MRAP vehicles, including 1,454 MRAP All-
    Terrain Vehicles. To date, we have fielded 1,214 MRAP All-Terrain
    Vehicles to our units in Afghanistan and have met the theater
    requirement.
        To date, we have fielded 34 Assault Breacher Vehicles, 5 of which
    are in Afghanistan, to enhance the mobility of the Marine Air Ground
    Task Force (MAGTF). We plan to field a total of 52 Assault Breacher
    Vehicles. Production of the remaining 18 vehicles remains on schedule
    and is fully funded with final delivery scheduled for the second
    quarter of fiscal year 2012.
        In our continuing efforts to find improvised explosive devices by
    all possible means, we are tripling our successful Improvised Explosive
    Device Dog Detection program and are also undertaking a research and
    development effort to train dogs with improved detection capabilities
    with fielding expected this fall. This year, we will have fielded 647
    specially trained Labrador retrievers who work off-leash, supporting
    our infantry units in ground combat operations. We also have fielded a
    wide array of intelligence collection sensors and analytic and
    processing systems to include the Multimedia Archival Analysis System,
    the Ground Based Observational Surveillance System, the Tactical Remote
    Sensor System, the Communication Emitter Sensing and Attacking System,
    and improvements to the Tactical Exploitation Group, to name a few.
        Lastly, in December 2010, we deployed a reinforced company of 17
    M1A1 Main Battle Tanks to join our efforts in Regional Command
    SouthWest to provide increased force protection and firepower. Today,
    these tanks are fully integrated with our forces operating in our most
    highly-contested regions, and are rapidly proving their utility in this
    environment by enabling our marines to increase operational tempo. They
    also demonstrate the commitment of Coalition Forces to the security of
    Southern Afghanistan.

         PRIORITY #2: REBALANCE THE CORPS, POSTURE FOR THE FUTURE, AND
        AGGRESSIVELY EXPERIMENT WITH AND IMPLEMENT NEW CAPABILITIES AND
                                 ORGANIZATIONS

    Posture for the Future and Force Structure Review
        The Marine Corps has deployed MAGTFs in support of irregular
    warfare missions such as our counterinsurgency effort in Afghanistan,
    humanitarian assistance and disaster relief efforts in Pakistan, Haiti,
    and the Philippines, and engagement missions such as our theater
    security cooperation exercises in support of every Geographic Combatant
    Commander.
        Despite these and many other operational successes over the past
    decade, new challenges await us requiring the same spirit of innovation
    and institutional flexibility that have been the bedrock of our Corps
    for 235 years. The 2010 Quadrennial Defense Review highlights an
    expanding need over the next two decades for military forces skilled at
    countering irregular threats,\8\ and the 2010 National Security
    Strategy signals a need for increased engagement activities. Both of
    these thrusts necessitate marines who are not only fighters, but also
    trainers, mentors, and advisors. The 2011 National Military Strategy
    advances the idea that ``strengthening international and regional
    security requires that our forces be globally available, yet regionally
    focused.'' \9\ Likewise, Geographic Combatant Commanders have continued
    to register their growing need for forward-postured amphibious forces
    capable of conducting security cooperation, regional deterrence, and
    crisis response.\10\
    ---------------------------------------------------------------------------
        \8\ ``The wars we are fighting today and assessments of the future
    security environment together demand that the United States retain and
    enhance a whole-of-government capability to succeed in large-scale
    counterinsurgency, stability, and counterterrorism operations in
    environments ranging from densely populated urban areas and mega-
    cities, to remote mountains, deserts, jungles, and littoral regions.''
    2010 Quadrennial Defense Review Report, Pg. 20.
        \9\ 2011 National Military Strategy of the United States, pg. 10.
        \10\ In the past 20 years, U.S. amphibious forces have responded to
    crises and contingencies 114 times--a response rate double that during
    the Cold War.
    ---------------------------------------------------------------------------
        This past fall, we conducted a detailed force structure review to
    develop the optimum mix of capabilities for our role as America's
    Expeditionary Force in Readiness in the post-Afghanistan security
    environment. The force structure review addressed 21st century
    challenges confronting our Nation and its Marine Corps, aiming to build
    on our historic role as the Nation's crisis response force. The review
    sought to provide the ``best value'' in terms of capability, cost, and
    readiness relative to the operational requirements of our forward-
    engaged Geographic Combatant Commanders. The results of that effort
    provide for a strategically mobile, ``middleweight'' force optimized
    for forward-presence and rapid crisis response. We will be light enough
    to leverage the flexibility and capacity of amphibious ships, yet heavy
    enough to accomplish the mission when we get there. Sea-based forces,
    in particular, will be invaluable for discreet engagement activities,
    rapid crisis response, and sustainable power projection.
        Our review also aimed for a force structure that provides
    capability and capacity across the range of military operations, while
    simultaneously providing for resiliency in our Total Force. With likely
    reductions in forward basing and strategic transportation, the
    importance of regionally-focused headquarters and forces, both forward-
    postured and immediately deployable with a minimum of strategic lift,
    is paramount. We have thus built a Joint Task Force-capable
    headquarters at several Geographic Combatant Command locations. As we
    aim to implement signature outcomes of the force structure review,
    marines on a day-to-day basis will be forward-deployed and engaged,
    working closely with our joint and allied partners. When crises or
    contingencies arise, these same marines will respond--locally,
    regionally, or globally if necessary--to accomplish whatever mission
    the Nation asks of us.
        To best meet Geographic Combatant Commander needs and ensure
    optimal configuration as America's Expeditionary Force in Readiness, we
    require Congressional support to reset our equipment, develop new
    organizational structures, and begin implementing initiatives from our
    force structure review. These measures ultimately will improve our
    ability to function within the Joint Force, execute distributed
    operations, command and control in complex environments, and conduct
    persistent engagement missions. As we are entrusted with the resources
    and funding to posture ourselves for the future, we will continue to
    conduct responsible examination required of a disciplined force to
    ensure that we implement every refinement--from the smallest to the
    most sweeping--in a manner that provides the Nation with a lean force,
    capable of rapidly projecting the Nation's power and strategic
    influence.

                                   EQUIPPING

        Reset of the Total Force. Resetting the Marine Corps for the future
    after nearly a decade at war is my number one equipping priority. This
    past year, we completed our mission in Iraq, effecting the retrograde
    of more than 25,000 marines,\11\ 382,000 items of equipment, 10,800
    short tons of aviation support equipment, and nearly 11,000 containers
    from Al Anbar province via Jordan and Kuwait to the U.S. and elsewhere.
    This drawdown of equipment over the course of 1 year was a significant
    logistical and operational achievement. We also accomplished the rapid
    shift of critical equipment from Iraq to Afghanistan in support of the
    deployment of the 2d Marine Expeditionary Brigade. This shift of
    materiel within a theater of operation became one of the largest
    redeployments in U.S. history, both in terms of equipment moved and
    distances involved.
    ---------------------------------------------------------------------------
        \11\ At present, approximately 100 marines remain in Iraq serving
    in individual augment, transition team and other miscellaneous billets.
    ---------------------------------------------------------------------------
        The Marine Corps is currently sourcing highly-trained and ready
    forces to meet global combatant commander requirements.

             Approximately 98 percent of deployed units report the
            highest levels of readiness for their assigned mission.

        However, high deployed-unit readiness has come at the expense of
    home-station, nondeployed units, which have sourced organic equipment
    and personnel to meet the needs of our deployed forces.

             Approximately 68 percent of nondeployed units report
            degraded levels of readiness. The largest contributing factor
            is equipment; approximately 37 percent of nondeployed forces
            report degraded levels of equipment supply. This lack of
            equipment impacts the ability of nondeployed forces to respond
            rapidly to other potential contingencies and represents lost
            core training opportunities early in the deployment cycle in
            preparation for Overseas Contingency Operations.

        The equipment redeployed from Iraq to Afghanistan in support of the
    2009 surge included most of our deployed medium tactical fleet, the
    majority of our fleet of MRAP vehicles, light armored reconnaissance
    vehicles, other hard-to-move equipment, and theater-specific items.
    While shifting this equipment directly to Afghanistan enabled the
    Marine Corps to meet critical operational timelines, it resulted in the
    deferment of previously-planned post-Operation Iraqi Freedom reset
    actions. These same assets comprise a significant portion of the Marine
    Corps' total reset liability and depot maintenance costs. Thus, a
    consequence of delaying reset actions on this equipment is the
    acceptance of considerable risk in the long-term readiness and future
    availability of our ground equipment. In addition, increased usage
    rates of our ground equipment and harsh operating environments over
    these many years at war have resulted in our ground equipment far
    exceeding planned peacetime usage rates by a factor of six.
        It is vital that we reset our equipment from nearly 10 years at war
    to maintain the necessary levels of readiness to posture ourselves for
    the future.

             We estimate the cost of reset for the Marine Corps to
            be $10.6 billion. $3.1 billion has been requested in fiscal
            year 2011 to reduce this liability, leaving a $7.5 billion
            deficit. $5 billion of the $7.5 billion reset liability will be
            incurred upon termination of the conflict in Afghanistan.
            (Note: $2.5 billion has been requested for reset in fiscal year
            2012. These estimates assume no reset generation beyond fiscal
            year 2012 and thus do not include any reset requirements for
            fiscal year 2013 and fiscal year 2014.)

        This funding will support the depot-level maintenance of our
    Operation Enduring Freedom equipment, procurement of combat vehicles
    and major weapons systems, engineering equipment, ammunition
    expenditures, and combat losses. The reset estimate is based on current
    circumstances and will change as operational requirements are re-
    evaluated. Moreover, as long as the war continues, our costs for reset
    will grow accordingly.

    Reconstitution of Equipment
        Our experiences in combat operations over the past decade have
    shown us that our legacy 20th century tables of equipment are
    inadequate with regard to the demands of the modern battlefield. As we
    move towards finalizing our force structure review by conducting a
    thorough Doctrine, Organization, Training, Materiel, Leadership and
    Education, Personnel, and Facilities assessment, we will finalize
    determination on the costs associated with modernization of equipment
    sets necessary to support our future operations.

             However, at this time, our initial estimate of
            reconstituting our tables of equipment is $5 billion, which is
            an amount entirely separate from our reset costs. We have begun
            to address our reconstitution shortfall by requesting $253
            million in fiscal year 2012 for equipment procurement.

        As our force structure review is implemented, we will continue with
    deliberate assessments of the modernization requirements for equipment
    that optimizes our post-Afghanistan posture while simultaneously
    reinforcing our frugal and responsible roots. Our Service
    Reconstitution Equipment Strategy will guide the identification of
    emerging requirements for refining the capabilities of our status as a
    middleweight force, our support to the Geographic Combatant Commanders,
    our service level prioritization, and resource allocation.

    Marine Aviation
        We are transitioning our entire inventory of fixed and rotary wing
    aircraft to support our future force and require ongoing support from
    Congress for this comprehensive aviation modernization effort. The
    continued development and fielding of the short take-off and vertical
    landing (STOVL) F-35B Joint Strike Fighter remains the centerpiece of
    this effort. The capability inherent in a STOVL jet facilitates our
    maneuver warfare doctrine and fills our need for close air support in
    the many austere conditions and locations where we will likely operate
    in the future. Around the world, there are 10 times as many 3,000-foot
    runways capable of handling a STOVL jet as there are 8,000-foot runways
    required of conventional fighter aircraft. Additionally, we maintain
    the organic ability to build an expeditionary 3,000-foot runway in a
    matter of days in support of aviation operations. The capabilities of
    the STOVL F-35B enable the Marine Corps to replace three legacy
    aircraft types--F/A-18, EA-6B, and AV-8B--which once fielded will save
    DOD approximately $1 billion per year in operations and maintenance
    costs. The F-35B program has made significant progress to date
    including 22 successful vertical landings so far this year which is
    more than double that achieved all last year. I am confident that we
    will field this aircraft in accordance with responsible timelines. This
    matter has my unwavering attention, and I am personally overseeing this
    program. With a fully-fielded fleet of F-35Bs, the Nation will maintain
    22 capital ships--11 carrier and 11 amphibious assault--with fifth
    generation strike assets aboard--a significant deterrent and response
    capability for our Nation.
        Our legacy aircraft supporting operational missions are consuming
    service life at a rate up to three times faster than scheduled.
    Averaged across our complete fleet, we are consuming aircraft service
    life at a rate 1.85 times faster than planned. This reality results in
    compressed timelines between re-work events and in earlier retirement
    of aircraft than originally programmed. The majority of our legacy
    platforms are nearing the end of their service lives, and most
    production lines are closed. New aircraft with low average ages and
    robust service life projections are the future of our aviation force
    and its support of Marine Corps and joint operations. As we transition
    to these new capabilities, we are mindful of the need to ensure a
    fully-integrated and networked force to provide Marine aviation to the
    MAGTF and the Joint Force.
        We are exploring the viability of transformational platforms such
    as the Cargo Unmanned Aircraft System. The Cargo UAS will facilitate
    the delivery of logistics to remote locations when weather or threat
    systems preclude manned aviation sorties or overland resupply convoys.
        Our new aircraft will provide increased range, speed, standoff,
    time on station, lift capability, and will be critical to tomorrow's
    MAGTF. By 2020, we will transition more than 50 percent of our aviation
    squadrons to new aircraft and complete fielding of the tilt-rotor MV-22
    Osprey assault support aircraft and the upgraded UH-1Y Huey utility
    helicopter. We will field new close air support platforms such as the
    AH-1Z attack helicopter and the STOVL F-35B. We also will have new
    platforms for intelligence, surveillance and reconnaissance and an
    entirely new family of Unmanned Aircraft Systems. Lastly, we will
    introduce greater lifting power to the MAGTF with a new model of the
    heavy-lift CH-53 cargo helicopter.

    Ground Combat and Tactical Vehicle Strategy
        The priority for our Ground Combat Element is our ship-to-shore
    tactical mobility. The seamless transition of our Operating Forces from
    the sea to conduct sustained operations ashore, in particular to
    support three balanced Marine Expeditionary Brigades (i.e. two sea-
    based Joint Forcible Entry Marine Expeditionary Brigades reinforced by
    a third Maritime Prepositioning Force-based Marine Expeditionary
    Brigade) as well as for conducting irregular warfare missions,
    necessitates an appropriate mix of ground combat vehicles. We are
    focusing our efforts on developing and fielding a family of vehicles
    with a balance of performance, protection, payload, transportability,
    fuel efficiency, and affordability that supports the rapid
    concentration and dispersion of combat power, supports strategic
    deployment concepts and meets our worldwide operational commitments.
        Our Ground Combat and Tactical Vehicle Strategy is currently in its
    third phase of development. Its overall goal is to field a ground
    combat vehicle portfolio structured to support the ground combat
    element. Vehicles in this portfolio include the Joint Light Tactical
    Vehicle, the Marine Personnel Carrier, and a new amphibious combat
    vehicle.
        In the complex future security environment, the execution of
    amphibious operations requires the use of the sea as maneuver space. An
    amphibious combat vehicle is essential to our ability to conduct
    surface littoral maneuver and seamlessly project ready-to-fight Marine
    units from sea to land in permissive, uncertain, and hostile
    environments. As the Secretary of Defense affirmed earlier this year,
    the cancellation of the Expeditionary Fighting Vehicle (EFV) is by no
    means a rejection of the Marine Corps amphibious assault mission.
        The standing, validated requirement for, and development of, an
    amphibious combat vehicle will ensure we continue to develop the right
    platform--at the right price--to support rapid ship-to-shore movement.
    To that end, we are now pursuing an integrated new vehicle program with
    three components, crafted from inception for affordability and
    leveraging the investment made in the EFV. We intend to mitigate risks
    associated with a new vehicle program and to maximize value by use of
    an integrated acquisition portfolio approach. This approach will have
    three synchronized efforts:

             Acceleration of the procurement of Marine Personnel
            Carriers
             Investment in a service life extension program and
            upgrades for a portion of the existing amphibious assault
            vehicles
             Development of a new amphibious combat vehicle

        We intend to manage these complementary capabilities, requirements
    and acquisitions from a portfolio perspective.

                                  NAVY SUPPORT

        The Navy Marine Corps Team. As part of the Joint Force, the Marine
    Corps and the Navy partner to leverage the significant advantages
    provided by amphibious forces--a point reinforced by joint
    doctrine.\12\ The Navy and Marine Corps team will be postured and
    engaged forward to be most operationally relevant to the needs of our
    Nation. Together, we provide the capability for massing potent forces
    close to a foreign shore while maintain a diplomatically sensitive
    profile. When needed, we are able to project this power ashore across
    the range of military operations at a time of our Nation's choosing,
    collectively demonstrating the essence of naval deterrence.
    ---------------------------------------------------------------------------
        \12\ ``Timely response to crisis situations is critical to U.S.
    deterrent and warfighting capabilities. The timeliness of U.S. response
    is a function of U.S. forward deployed forces and prepositioned forces
    with adequate organic movement capability . . . .'' Joint Publication
    3-35, Joint Deployment and Redeployment Operations, 7 May 2007, pg I-8.
    ---------------------------------------------------------------------------
    Amphibious Shipping
        The Marine Corps' requirement to deploy globally, rapidly respond
    regionally, and train locally necessitates a combination of tactical
    airlift, high-speed vessels, amphibious ships, maritime preposition
    shipping, organic tactical aviation, and strategic airlift. The
    inherent flexibility and utility of amphibious ships is not widely
    understood, as evidenced by the frequent--and erroneous--assumption
    that ``forcible entry capabilities'' alone define the requirement for
    amphibious ships. The same capabilities that allow an amphibious task
    force to deliver and support a landing force on a hostile shore enables
    it to support forward engagement and crisis response. In fact the most
    frequent employment of amphibious forces is for steady state engagement
    and crisis response. The Geographic Combatant Commanders have increased
    demand for forward-postured amphibious forces capable of conducting
    security cooperation, regional deterrence, and crisis response
    reflecting the operational value of amphibious forces for missions
    across the range of military operations.\13\ In an era of declining
    access and strategic uncertainty, I anticipate that this upward demand
    trend will continue.
    ---------------------------------------------------------------------------
        \13\ Since September 11, U.S. amphibious forces have responded to
    crises and contingencies at least 50 times, a response rate more than
    double that of the Cold War.
    ---------------------------------------------------------------------------
        Our principal contribution to U.S. Global Defense Posture is our
    ``rotationally responsive'' forces aboard amphibious ships. These
    forces combine the advantages of an immediate, yet temporary, presence,
    graduated visibility, and tailored, scalable force packages structured
    around the MAGTF. Rotational Amphibious Ready Groups/Marine
    Expeditionary Units forward deployed in three Geographic Combatant
    Command areas of responsibility, not only provide the capability for
    crisis response, but also present a means for day-to-day engagement
    with partner nations. Rotational forces also offer additional
    flexibility for decisionmakers in the event that forces are required to
    rapidly re-deploy across divergent regions and conflicts.
        In January 2009, the Navy and Marine Corps agreed that the force
    structure requirement to support a 2.0 Marine Expeditionary Brigade
    lift is 38 total amphibious assault ships. In light of the fiscal
    constraints, the Department of the Navy agreed to sustain a minimum of
    33 total amphibious ships in the assault echelon. This number gives a
    capability needed for steady state operations and represents the
    minimum number of ships needed to provide the Nation with a sea based
    power projection capability for full spectrum amphibious operations--
    including the amphibious assault echelon of two Marine Expeditionary
    Brigades.
        The Marine Corps is committed to the spiral development of the
    America Class LHA (R), which is 27 percent complete. We expect the Navy
    to take delivery of LHA-6 in fiscal year 2014 with availability to
    deploy beginning in fiscal year 2017. In terms of LHA-7, we anticipate
    the contract award in late fiscal year 2011 with fabrication commencing
    the following year. These two ships are maximized for aviation, and I
    believe it is essential that a well-deck be reintroduced in LHA-8 as
    currently planned. The ongoing procurement and commissioning of the
    final two of our planned 11 San Antonio-class LPD-17 ``Common Hull
    Forms'' is critical to providing the lift capacities and operational
    capabilities to support the full range of military operations up to and
    including forcible entry.

    Maritime Prepositioning Assets
        The Maritime Prepositioning Force (MPF) program exists to enable
    the rapid deployment and engagement of a Marine Air Ground Task Force
    anywhere in the world in support of our National Military Strategy. The
    current MPF, which has been employed 55 times since 1985, is composed
    of a fleet of 16 ships divided into 3 Maritime Prepositioning Ships
    Squadrons located in the Mediterranean Sea, Indian Ocean (Diego
    Garcia), and Pacific Ocean (Guam and Saipan). With the restructure of
    the Maritime Prepositioning Force-Future, the Marine Corps and Navy
    have focused on an interim solution to enhance current MPF with three
    new ships to enable future sea-basing concepts. The addition of three
    Mobile Landing Platforms (MLP) and three T-AKE auxiliary dry cargo
    ships to the Maritime Prepositioning Ship Squadrons, coupled with
    existing Large, Medium-Speed, Roll-On, Roll-Off (LMSR) cargo ships,
    will enable the MPS squadrons to conduct at-sea, sea-state three,
    selective offload of vehicles, personnel, and equipment without
    complete reliance on fixed ports ashore. The introduction of MLPs, T-
    AKEs, and LMSRs provide the Navy and Marine Corps team a substantial
    step in enhancing our current sea-basing capabilities.
        The Department of the Navy is currently funding the full MPF
    program of 16 ships through fiscal year 2012; however, the DoN POM-13
    places one Maritime Prepositioning Squadron (6 ships) in a Reduced
    Operational Status beginning in fiscal year 2013. We will continue to
    optimize the MPF program to remain responsive and relevant to
    Geographic Combatant Commander requirements.

    Naval Surface Fire Support
        The Marine Corps has an enduring requirement for fire support from
    naval vessels in the range of 41-63 nautical miles to support
    amphibious operations in the littorals. These fires are needed by
    tactical commanders to maneuver towards battlefield objectives once
    ashore, contributing to joint doctrine for assured access. They serve
    as a component of the balanced and complementary joint triad of fires.
    Yet, unlike tactical aviation and ground fire systems, naval surface
    fires are unique and vital for their volume, lethality, accuracy, and
    all-weather capability.
        Planned reductions in the procurement of certain naval ships along
    with cancellation of specific weapons programs over the past few years
    have led to a deficiency in systems available for naval surface fires.
    Completed in 2009, the Joint Expeditionary Fires Analysis of
    Alternatives identified the optimum U.S. Navy programs to support
    Marine Corps naval surface fire support requirements. This study
    established the baseline capabilities of the current naval surface fire
    support program of record (13nm projectile of the 5-inch gun and the
    Advance Gun System of the DDG-1000) to be insufficient in mitigating
    fire support gaps. The study determined that extended range 5-inch
    munitions would serve as a complementary alternative to the three DDG-
    1000s. Dramatic improvements in 5-inch projectiles can extend the naval
    surface fire support maximum range, across the 106 guns in the surface
    fleet, from 13 to 52 nautical miles with precision, high angle attack
    for use in operations in urban terrain, and potential effectiveness
    against moving targets. We also support ongoing research and
    development of transformational technologies like the electromagnetic
    rail gun with its potential to revolutionize the reach, coverage, and
    responsiveness of ship-based naval gunfire to ranges in excess of 200
    nautical miles.

    Assured Access
        We remain vigilant of burgeoning anti-access/area denial threats
    proliferating around the globe, particularly in the Pacific Rim. The
    family of guided rockets, artillery, mortars, missiles and subsurface
    systems like mines and quiet submarines, pose a challenge to the power
    projection capability of seaborne expeditionary forces and threatens
    DOD's ability to prevent and deter conflicts and prepare for a wide
    range of contingencies.
        Marine Air Ground Task Forces ashore and aboard amphibious shipping
    will support operations to ensure the freedom of action of U.S. and
    Allied forces by establishing expeditionary bases and airfields or
    defending advance bases. Marine Short Take-off and Vertical Landing
    aviation assets will be of particular value in overcoming adversary
    anti-access and area denial capabilities since they can operate from
    short or degraded airfields, can be rapidly dispersed, and can utilize
    both large carriers and amphibious ships for attack, maintenance, force
    protection, and dispersal purposes. The Joint Force Commander can
    leverage these unique capabilities to ensure the sea control necessary
    for the conduct of subsequent joint operations, whether they be power
    projection, forcible entry, or freedom of navigation.
        In this regard, we are partnered with the joint community to
    develop an overarching concept to attain operational access. This year,
    we will employ our wargaming capability in Expeditionary Warrior 2011
    to examine operations designed to overcome anti-access challenges. We
    are partners with the U.S. Navy and the U.S. Air Force in the
    development of the Air-Sea Battle Concept aimed at integrating
    capabilities to defeat these advanced weapon systems in maritime areas
    of strategic interest. We also continue to participate in the U.S.
    Army's Joint Forcible Entry Warfighting Experiment, examining
    capabilities to conduct airborne and amphibious forcible entry
    operations.

                    PERSONNEL AND ORGANIZATONAL INITIATIVES

        People. Today's Marine Corps represents less than 1/10 of 1 percent
    of the U.S. population, and the individual Marine remains our most
    valuable asset. Our 202,100 Active Duty and 39,600 Selected Reserve end
    strength allow us to meet current operational commitments while
    promoting resiliency throughout our Total Force. In fiscal year 2010
    Marine Corps Recruiting Command accessed 1,703 officers (100.18 percent
    of the 1,700 officer goal). Our fiscal year 2011 accession mission is
    1,650 active duty officer accessions with the same goal projected in
    fiscal year 2012. In terms of enlisted accessions, we are exceeding our
    internal quality standards of 95 percent enlisted recruits entering the
    Marine Corps possessing a high school diploma and 63 percent qualifying
    in the DOD I-IIIA mental group categories (DOD quality standards are 90
    percent and 60 percent respectively). We will achieve our mission of
    31,500 enlisted Active component non-prior service recruits in fiscal
    year 2011. Enlistment Bonuses remain vital to meeting the continuing
    requirement for high demand skills. We are continuing to experience
    unprecedented retention in both first-term and career marines.
        We will continue to shape our Total Force to provide the ideal
    grade and military occupational specialty mix needed for sustainment.
    Our force structure review developed ways to increase unit readiness
    within our operating forces to ensure 99 percent manning of enlisted
    billets and 95 percent manning of officer billets. At the close of the
    Future Years Defense Program, we will work with the Secretary of
    Defense on a responsible drawdown of our end strength that is aligned
    with the future mission demands of a post-Operation Enduring Freedom
    security environment. I am determined to ``keep faith'' with our
    marines and their families by designing and executing a responsible
    drawdown from our current 202,100 end strength such that we avoid
    reduction-in-force actions and early retirement boards.
        The Marine Corps is committed to making concerted efforts to
    attract, mentor, and retain the most talented men and women who bring a
    diversity of background, culture and skill in service to our Nation.
    Our diversity effort is structured with the understanding that the
    objective of diversity is not merely to achieve representational
    parity, but to raise total capability through leveraging the strengths
    and talents of each and every marine. The success of our pioneering
    Female Engagement Team program in Afghanistan, which is an offshoot of
    a similar effort we employed in Iraq, is one way that the Marine Corps
    utilizes diversity within our ranks for operational benefit.
        We are currently developing a comprehensive, Service-wide strategy
    on diversity, an effort facilitated through our standing Diversity
    Review Board and a Diversity Executive Steering Committee chartered to
    establish the foundations for diversity success in the Total Force. The
    Marine Corps has established minority officer recruiting and mentoring
    as the highest priority in our recruiting efforts. Along with the other
    Services, we have provided timely input to the congressionally-
    sanctioned Military Leadership Diversity Commission and look forward to
    release of the Commission's final report scheduled for March 2011.

    Marine Air Ground Task Force Enhancements
        To further posture ourselves for the future, we are evaluating the
    internal workings of our MAGTFs to account for the distributed
    operations, decentralized command and control, dispersed forces and
    diffuse threats inherent on the modern battlefield. We are implementing
    a diverse suite of command and control systems within all elements of
    the MAGTF. We continue to work to build the capacity of new
    organizations like the Marine Corps Information Operations Center to
    achieve non-lethal effects in today's irregular and complex
    environments. We are ensuring the rapid analysis, fusion, and
    dissemination of intelligence down to the tactical level by continuing
    implementation of the Marine Corps Intelligence, Surveillance, and
    Reconnaissance Enterprise. We also aim to reorganize our intelligence
    collection and exploitation capabilities, increasing the ratio of
    resources to users. We will also capitalize on the capabilities of
    unmanned aircraft systems via an increase in capacity.
        We are developing regionally-focused Marine Expeditionary Brigade
    command elements that are joint task force capable, with habitually
    aligned subordinate elements, to improve Geographic Combatant Commander
    effectiveness and speed of response. We have recently stood up one such
    element in Bahrain in support of U.S. Central Command. To better
    standardize operations and training for units and staff in our ground
    combat element, we established the Marine Corps Tactics and Operations
    Group, which reached full operational capability in May 2010. Among
    other measures, this organization's mission is to support the
    refinement of our doctrine, including how our infantry companies will
    fight in the future. Building on the successes of the Marine Corps
    Tactics and Operations Group for the ground combat element, we are also
    developing and establishing a Marine Corps Logistics Operations Group
    capability for the Logistics Combat Element along with reorganizing
    Marine Logistics Groups to establish standing Combat Logistics
    Battalions habitually aligned to specific Marine Expeditionary Units
    and infantry regiments.
        Over the past decade, we have become more reliant on equipment sets
    resulting from the emergence of new threats, perhaps most notably the
    improvised explosive device. This trend has resulted in the acquisition
    of some resources that are incompatible with the ethos of an agile,
    expeditionary force. To that end, we have begun an effort known as
    ``Lightening the MAGTF,'' a measure aimed at reducing the size, weight,
    and energy expenditure of our forces from the individual rifleman to
    wholesale components of the MAGTF.
        Sustained combat operations and worldwide theater security
    cooperation and training commitments over the last decade point towards
    an essential requirement for the Marine Corps Reserve to continue
    focusing at the operational, rather than strategic level of warfare.
    Since September 11, our Marine Corps Reserve has engaged continuously
    in combat operations as well as in regional security cooperation and
    crisis prevention activities in support of the Geographical Combatant
    Commanders. This operational tempo has built a momentum among our
    warfighters and a depth of experience throughout the ranks that is
    unprecedented in generations of Marine Corps reservists. In fact,
    today's Marine Corps Reserve is more highly trained, capable, and
    battle-tested than at any time since the Korean War.
        The transition in utilization of the Marine Corps Reserve from a
    strategic to operational Reserve, as affirmed by our force structure
    review, expands our ability to perform as America's Expeditionary Force
    in Readiness. Sharing the culture of deployment and expeditionary
    mindset that has dominated Marine Corps culture, ethos and thinking
    since our beginning more than 2 centuries ago, the Marine Corps Reserve
    is optimally organized, equipped, and trained to perform as an
    Operational Reserve.

    Institutions for Irregular Warfare
        Irregular operations (e.g. Counterinsurgency, Stability Operations,
    Foreign Internal Defense, Unconventional Warfare and Counterterrorism)
    often occur in response to crisis and are executed in austere
    conditions--situations often entailing employment of marines. Our
    experiences countering irregular threats in ``Small Wars'' is a result
    of responding to complex crises involving a mix of security, economic,
    political, and social issues--usually under austere physical
    conditions. Our approach to irregular warfare is based on the
    understanding that people, ideas and organizations--not platforms and
    advanced technology--are the keys to success in operating in complex
    and irregular warfare environments. Naval forces conducting theater
    security operations and security force assistance to build partnership
    capacity also provide the Nation the potential for immediate crisis
    response capability and options for escalation or de-escalation.
    Building on our lessons learned in Iraq and Afghanistan, we are
    developing options to re-organize, consolidate, and strengthen our
    institutions that emphasize our irregular warfare and multi-mission
    capability such as the Center for Advanced Operational Culture and
    Learning, the Security Cooperation Training and Education Center, and
    the Center for Irregular Warfare. The objective is to gain unity of
    effort, increase effectiveness and efficiency, and reduce redundant
    capacity.
        We established the Marine Corps Training and Advisory Group (MCTAG)
    within the past 5 years to train, equip, and deploy Marines for
    Security Force Assistance missions in support of Geographic Combatant
    Commander theater security cooperation plans. The MCTAG provides
    conventional training and advisor support to Host Nation Security
    Forces. This organization also offers planning assistance to Marine
    regional component commands in developing and executing partner nation
    training programs. The MCTAG is scheduled to reach full operating
    capability in September 2011 and to date has directly trained more than
    180 marines and sailors and assisted in the training of more than 600
    marines and sailors, who themselves have conducted in excess of 150
    deployments to more than 50 countries worldwide. The MCTAG has also
    developed programs of instruction to train joint service advisors/
    trainers deploying on theater security cooperation missions as well as
    programs of instruction to train light infantry battalions from the
    Republic of Georgia in executing combat operations in Afghanistan.
        Because the Marine Corps functions in an integrated fashion
    throughout all traditional domains--land, sea, air, and space--it is a
    logical step forward for us to be optimally organized, trained and
    equipped to operate synergistically on the modern battlefield, which
    now includes the cyber domain. As U.S. Cyber Command matures and
    sponsors initiatives to increase cyber operational capacity, we are
    taking deliberate steps to build additional Marine Corps cyber
    capability and capacity to meet joint and service-level demands.
        We see the continued development of organic cyber capabilities,
    capacities, and awareness as a critical element to retain speed,
    precision, and lethality across the entire spectrum of operations. We
    are working to incorporate scenarios into our exercises to increase
    opportunities for marines to leverage cyber capabilities while also
    training marines to operate where cyber-enabled warfighting capability
    may be degraded and/or contested. Additionally, we are integrating
    tailored cyber education into our officer and enlisted professional
    education programs. We are continuing to examine our options for
    recruiting, training and retaining our cyber workforce. This is
    especially challenging given the highly specialized skill sets and the
    competition for such in both the Federal and Private sectors.
        Formed in 2006, Marine Special Operations Command (MARSOC) is
    currently conducting an internal reorganization into three mirrored
    battalions. Upon completion of this reorganization in fiscal year 2014,
    MARSOC will have one regiment consisting of 3 battalions, 12 companies,
    and 48 Marine Special Operations Teams. Since December 2009, MARSOC has
    maintained an enduring battalion-level Special Operations Task Force
    headquarters and 2 companies in Afghanistan along with persistent
    Marine Special Operations Team engagements in other high priority
    regions.
        Since its inception, the Marine Corps has resourced MARSOC with
    significant investments in military construction for training
    facilities, barracks and headquarters. In the near term, MARSOC will
    have 2,678 personnel. Our force structure review recently evaluated
    ways to increase the number of combat support and combat service
    support marines (e.g. logisticians, intelligence personnel, et cetera)
    enabling MARSOC's operations. I intend to add 1,001 marines to MARSOC,
    which will increase its capacity by 44 percent. These marines, who are
    above and beyond the planned fiscal year 2014 personnel increase, will
    better enable it for effective special operations.
        The Marine Corps serves as the DOD Non-Lethal Weapons Executive
    Agent responsible for developing program recommendations and
    stimulating non-lethal weapons requirements. Non-lethal effects are
    part of the DOD portfolio of capabilities that enhance the Joint Force
    Commander's ability to act in a timely manner to detect, deter,
    prevent, defeat, or, if necessary, mitigate the effects of an attack.
    Non-lethal capabilities provide the Joint Force the ability to
    selectively target hostile threats, covered or concealed by civilian
    assets, while avoiding collateral damage. Geographic Combatant Commands
    are registering increased demand for non-lethal weapons options to
    include items such as arresting nets, dazzler lasers, acoustic hailing
    devices, electric stun guns, blunt impact munitions, and non-lethal
    warning munitions. The Joint Non-Lethal Weapons Program continues to
    support joint and combined non-lethal weapons research, development,
    training and exercises in support of all Geographic Combatant Commands.

    Expeditionary Energy
        The Marine Corps is leading the development of expeditionary energy
    solutions for DOD and the Department of the Navy--reducing energy
    demand in our platforms and systems, increasing the use of renewable
    energy, and instilling an ethos of energy and water efficiency in every
    marine. Our priority is force protection--saving lives by reducing the
    number of marines at risk on the road hauling fuel and water. We also
    aim to help marines travel lighter and move faster through the
    reduction in size and amount of equipment and the dependence on bulk
    supplies.
        In February 2011, we issued a ``Bases to Battlefield''
    Expeditionary Energy Strategy Implementation Planning Guidance, which
    sets goals, performance metrics, and a plan for implementation by 2025.
    This strategy supports congressional and Department of the Navy goals
    to increase energy security through the use of alternative fuels and
    energy efficiency. Since 2009 we have aggressively pursued renewable
    energy and energy efficient capabilities that will make Marine units
    more energy self-sufficient, and ultimately increase our combat
    effectiveness.
        Within a year, we stood up an Experimental Forward Operating Base,
    sourced commercial and government technologies, trained an infantry
    company with renewable energy technology, and deployed them to
    Afghanistan in the winter of 2010 where they operated two patrol bases
    entirely on renewable energy. As a result, our forces required less
    fuel and batteries, reducing risk to marines and saving money. This
    year, the Experimental Forward Operating Base will focus on the
    requirements of a major battlefield energy user--the Command Operations
    Center and the Command Element--and will evaluate a second round of
    energy technologies to support expeditionary operations.
        In fiscal year 2012 we are devoting more resources--in current
    programs and new areas--to build a foundation to achieve our goals for
    increased energy efficiency and renewable energy by 2025. As a starting
    point, we anticipate savings of petroleum over the Future Years Defense
    Program in our Overseas Contingency Operations of 100,000 to 150,000
    barrels. For example this year, we are procuring mobile electric power
    sources to achieve 17 percent fuel efficiency using U.S. Army-funded
    development and Marine Corps-funded procurement monies. We are also
    fielding Enhanced Efficiency Environmental Control Units to achieve 15-
    30 percent power efficiency improvements.

    Installation Energy
        We are also devoting more resources to our Energy Investment
    Program than ever before. These funds will be used to implement the
    results of recent and ongoing energy audits at our installations;
    install more efficient systems and reduce overall energy consumption.
    Additionally, new facilities will continue to incorporate the latest
    energy sustainability and efficiency features. This effort aboard our
    installations complements our Corps-wide initiative to develop an
    energy ethos and culture of conservation.

                                    TRAINING

        Training MAGTFs. We are utilizing our Marine Corps Service Campaign
    Plan as a roadmap to strengthen and maintain our core competencies and
    to ensure we remain America's Expeditionary Force in Readiness well
    into the future. This effort also will also help synchronize our
    Service level security cooperation activities in support of national
    strategy and guide the type of training and exercises we must conduct,
    in particular at the Marine Expeditionary Brigade level.
        Our amphibious core competency figures prominently in our Service
    Campaign Plan, and as a result we have undertaken an array of exercise
    planning in this critical skill area. We will soon be conducting a
    MAGTF large scale exercise that will refine our capability to conduct
    amphibious power projection and sustained operations ashore in a joint
    and interagency environment. In late-2010 we conducted Exercise Bold
    Alligator 2011, the first large-scale amphibious training exercise with
    the Navy on the east coast in almost 10 years. This synthetic training
    event practiced planning for forcible entry operations against
    conventional and asymmetric threats and a large scale non-combatant
    evacuation operation. We will take lessons learned from this exercise
    and build upon them for the next iteration of this important exercise
    with the U.S. Navy scheduled in the coming year.
        We are reviewing the core functions of our organizations and, where
    appropriate, adding irregular warfare capabilities to reflect the full
    spectrum of possible employment options as a core task set for the
    Marine Expeditionary Brigade. We view integration with other government
    agencies and coordination with nongovernment organizations as essential
    to our success in irregular warfare and have significantly increased
    interagency participation in numerous exercises and training venues
    such as Expeditionary Warrior-09/10, Emerald Express, Joint Urban
    Warrior-09, and Joint Irregular Warrior-10. We aim to capitalize on our
    current theater security cooperation and partnership capacity building
    activities with our allies and partners in all operational environments
    providing our national leaders with strategic options to shape
    outcomes, prevent and deter conflicts, strengthen ``at risk'' states,
    and deny enemy safe-havens.

        PRIORITY #3: BETTER EDUCATE AND TRAIN OUR MARINES TO SUCCEED IN
          DISTRIBUTED OPERATIONS AND INCREASINGLY COMPLEX ENVIRONMENTS

    Professional Military Education and Small Unit Leader Development
        We are planning more investments in the education of our
    noncommissioned officers and junior officers, as they have assumed
    vastly greater responsibilities in both combat and garrison. This focus
    on education will better train them for decisionmaking during
    distributed operations against more diffused threats over broader areas
    of the battlefield. The primary initiative to address this priority is
    to increase markedly their opportunities to attend resident
    professional military education. We are currently evaluating ways to
    increase throughput at resident professional military education courses
    with options for both constrained and unconstrained manpower and
    resource increases. We are evaluating traditional paradigms relative to
    course lengths and instructional methodology, with the specific
    objectives of tripling throughput at the Expeditionary Warfare School
    (career level) and doubling resident Command and Staff College
    (intermediate level) throughput.
        These key leaders also impact unit cohesion and our overall
    effectiveness in combat. Introducing these leaders into a unit at the
    right time and stabilizing them in a life cycle continuum of a unit
    positively impacts a unit's effective training, performance and
    resiliency during pre-deployment training and post combat. These
    leaders are in the best position to influence our cultural ethos with
    its emphasis on intangible qualities such as esprit de corps,
    integrity, and ``service to country during time of war.'' We are
    currently reviewing manpower policies and models and will ensure these
    key leaders are present and able to lead a cohesive unit throughout its
    life-cycle continuum, including rigorous predeployment training and
    post-deployment actions. This effort will ready our units for any
    fight, whether irregular or combat.
        We also intend to infuse Values Based Training, rooted in our core
    values of Honor, Courage and Commitment, at all levels of professional
    development to foster resilience and to enable effective operations,
    especially in complex irregular environments. Our overall goal is to
    institutionalize efforts to develop more mature, educated, and capable
    non-commissioned officers and maneuver unit squad leaders. As these
    concepts mature, there will be costs in terms of military instruction
    and facilities for which we will require congressional support.

    Regionalization and Specialization
        The increased call for engagement, as seen in our force structure
    review and in strategic guidance, requires marines with improved
    cultural and language skills and formal education. To develop better
    specialization for anticipated future missions and operating
    environments, we will expand our Foreign Area Officer and Regional
    Affairs Officer programs, as well as opportunities to send more
    officers through graduate level training, fellowships and research
    opportunities--ideas supported by findings and recommendations of the
    2010 Quadrennial Defense Review and the 2010 Quadrennial Defense Review
    Independent Panel Report.\14\ This effort will extend to our ``Whole of
    Government'' approach toward irregular warfare as we seek greater
    exchanges and fellowships with the elements of the Interagency.
    ---------------------------------------------------------------------------
        \14\ 2010 Quadrennial Defense Review Report, pg 54; 2010 QDR
    Independent Panel Report, pgs 75-77.
    ---------------------------------------------------------------------------
    Marine Corps University
        We are continuing to implement recommendations of our 2006 Officer
    Professional Military Education Study (the Wilhelm Report) and are
    making significant strides in terms of resources and facilities
    enhancing the campus of the Marine Corps University (MCU). We have
    programmed approximately $125 million in Military Construction between
    fiscal year 2011 to fiscal year 2012 for new academic facilities for
    the Marine Corps War College, Command and Staff College, and the School
    of Advanced Warfighting. In addition, we will expand the Staff
    Noncommissioned Officer Academy at the main campus in Quantico. These
    funds represent only a down payment on a larger commitment to double
    the size of the University campus and to upgrade our enlisted academies
    worldwide. Completion of the MCU master plan will require the
    demolition and relocation of tenant units aboard the campus. Detailed
    documentation of costs associated is ongoing; however, we estimate over
    $400 million is needed to complete the master plan. Our ultimate goal
    is to develop the MCU into a premier institution with world-class
    faculty, facilities, students, and curricula; we will require the
    assistance of Congress in this goal.
     priority #4: keep faith with our marines, our sailors and our families

    Keeping Faith
        We expect and demand extraordinary loyalty from our marines--a
    loyalty to Country, family, and Corps. Our Nation has been at war for a
    decade, placing unprecedented burdens on marines, sailors, families,
    wounded warriors, and the families of the fallen. They have all made
    tremendous sacrifices in the face of danger. We owe them all a
    reciprocal level of loyalty. Our approach to caring for their needs is
    based on the same unwavering faithfulness they have demonstrated to the
    Marine Corps. We will ensure their needs are met during times of
    deployment and in garrison by providing the services, facilities, and
    programs to develop the strength and skills to thrive on the challenges
    of operational tempo. When needed, we will restore them to health. We
    will also transition them back to civilian life, and in the cases of
    our fallen marines, we will support and protect their surviving spouses
    and dependents. We will do this by focusing on several areas this
    fiscal year.

    Combat Stress, Resiliency, Medical, and Mental Health Care
        We continue to advocate for the highest quality medical care and
    facilities for our servicemembers, retirees, and their families. To
    ensure the Department can continue to provide the finest health care
    benefits in the country to our beneficiaries, we fully support the
    medical efficiencies and adjustments in TRICARE included in the
    President's budget proposal.
        The evolving security environment requires a physically and
    mentally resilient marine able to endure extended exposure to
    ambiguous, stressful, and ever-changing situations. Young leaders find
    themselves on the vanguard of a protracted war, adapting to a variety
    of situations and scenarios. To improve their resilience, we are
    working aggressively and creatively to build a training continuum that
    better prepares them for the inevitable stress of combat operations and
    to equip them with the necessary skills required to cope with the
    challenges of life as a marine.
        Instruction founded and focused on our core values helps provide
    some of this resilience, especially in irregular warfare and complex
    environments. A program combining the ``best practices'' of mental,
    emotional and physical fitness will best instill in our marines the
    resiliency needed to endure the stressors of combat and enhance their
    ability to perform effectively across the range of military operations.
    We are developing a comprehensive program to improve the resiliency of
    our marines both in garrison and in combat.
        We are partnered with the Navy to address the Nation-wide dearth of
    qualified mental health care providers, which challenges our ability to
    provide care at some of our bases and stations and, in some cases, to
    our reservists in remote locations. During calendar year 2010, we saw a
    nearly 30 percent decrease in the number of suicides within our Total
    Force.\15\ We are too early in our suicide studies to identify what
    specific initiative(s) have resulted in this dramatic turnaround.
    However, we have implemented a number of measures on multiple fronts.
    Some of these include the following:
    ---------------------------------------------------------------------------
        \15\ Calendar year 2010 suicides = 37 whereas calendar year 2009
    suicides = 52.

             Evocative Peer-led Training Program: ``Never Leave a
            Marine Behind'' suicide prevention program for noncommissioned
            officers and junior marines. We are expanding this training to
            include staff noncommissioned officers and commissioned
            officers this year.
             DSTRESS Line Pilot Program with TRICARE West: ``By
            Marines--For Marines'' call center designed to assist with
            problems at an early stage. The call center is staffed by
            veteran marines, providing anonymous service to all current
            marines, veteran marines, their families, and loved ones.
             Combat and Operational Stress Control and Operational
            Stress Control and Readiness Teams: Utilizing unique training
            programs across the Total Force and ensuring the presence of
            mental health professionals in front-line units as a primary
            prevention tool to help Marines identify and mitigate stress.
             Marine Resilience Study to Assess Risk and Resilience:
            We are participating in a longitudinal research study that will
            examine risk across three domains: biological, psychological
            and social. The outcome of this study will inform our future
            work in the area of building and maintain resiliency across the
            Corps.

        We will continue advocating to the medical community for better
    diagnostic and increased treatment options for marines with severe
    injuries including post-traumatic stress and traumatic brain injury. In
    collaboration with the other Services, we developed a set of events-
    based parameters, mandating that our leaders search out marines who
    have experienced a concussive event. This measure no longer relies on
    identification of impacted servicemembers solely on their willingness
    to seek help on their own initiative. These protocols are in place now
    in Afghanistan, and we are already seeing a culture change in the
    attitude of marines about being treated early for a traumatic brain
    injury.
        We have established an in-theater Restoration Center that brings
    comprehensive concussion diagnosis and management as close to the front
    lines as possible to ensure that appropriate care is available as
    quickly as possible. We are currently developing policy and
    applications to track traumatic brain injury from ``point of injury''
    to ``return to full duty'' separately but in parallel with medical
    documentation. These measures will empower commanders with the
    information they need to monitor the health of a marine who has
    suffered a concussive event and intervene appropriately for the
    duration of a marine's career and long after the initial injury.''

    Transition Assistance
        We believe transition assistance should be a process not an event.
    We have established a goal to make the Marine Corps Transition
    Assistance Management Program more value added for our departing
    marines. From 2009 to 2010, we conducted functionality assessments of
    the Transition Assistance Management Program and the Lifelong Learning
    Program and noted many deficiencies. In response, we established two
    Transition Assistance Operational Planning Teams in 2010 to assess
    existing programs. We have developed an ``end-to-end'' process
    improvement plan that will begin at the point of initial accession into
    the Marine Corps and continue through post separation. We are
    initiating actions and integrating existing capabilities that will most
    directly improve the quality of support provided to marines within 6
    months prior to separation and those who have been separated at least 6
    months.
        Marines have expressed a desire for assistance navigating
    Department of Veterans Affairs benefit processes such as in cases of
    enrollment for and access to education benefits. We will modify
    existing websites to improve access and enhance opportunity for
    separating marines to speak directly to Marine Corps support personnel
    who are trained to remove administrative benefit processing barriers.
    We will improve networking opportunities to help marines find
    meaningful employment and are adapting our current job fairs to support
    increased networking opportunities that will allow them to meet mentors
    and employers.
        Marines have asked for an opportunity to connect with employers and
    learn how to translate their intangible and tangible attributes. Our
    transition workshops will be overhauled to address these needs. Marines
    are also seeking help to simplify enrollment processes for the Post-9/
    11 Montgomery GI bill and to gain access to academic institutions that
    will provide the quality and level of business education and skills
    private industry demands. We have initiated a Leader-Scholar Program,
    which includes academic institutions who value marines' service
    commitment and pledge special enrollment consideration. While the
    support varies from school to school, we now have 75 participating
    institutions with the goal of an additional 25 by the end of this year.
    As we gain momentum, we will continue to change the transition
    assistance program from its current event focus to that of a process
    that reintegrates marines into the civilian sector with the knowledge,
    skills, and abilities to leverage and communicate their Marine Corps
    time and experience.

    Family Readiness Programs
        We increased baseline funding for family support programs beginning
    in fiscal year 2010 to ensure appropriate wartime footing. Programs
    benefitting from this measure include the Unit, Personal and Family
    Readiness Program; Marine Corps Family Team Building Program;
    Exceptional Family Member Program; School Liaison Program; and other
    miscellaneous Marine Corps Community Services Programs supporting
    remote and isolated commands, deployed marines, and independent duty
    marines and families. We are currently conducting a complete review to
    ensure effectiveness and efficiency of these programs. Our goal is to
    determine where expansion may be needed to further assist our families
    and where programs can be streamlined to reduce redundancy.

    Wounded Warrior Care
        Marines continue to suffer numerous wounds, trauma, and injuries
    during operations in combat and during training missions. Many of these
    brave heroes with significant injuries are convalescing at military
    treatment facilities here in the National Capital Region and across our
    Nation at other major military treatment facilities. Our Wounded
    Warrior Regiment provides non-medical care management services to
    wounded, ill, and injured marines and their families. The Wounded
    Warrior Regiment continues to improve existing programs and add new
    support mechanisms. We have increased support to wounded, injured, and
    ill Reserve marines through additional Recovery Care Coordinators,
    enhanced family support at military treatment facilities, and one-on-
    one orientation sessions. We also provide Integrated Disability
    Evaluation System Support through Regional Limited Duty Coordinators
    and Wounded Warrior Attorneys. We have also initiated a mandatory
    Warrior Athlete Reconditioning Program. Outreach is an important aspect
    of the Regiment's nonmedical care delivery and management. The Sergeant
    Merlin German Wounded Warrior Call Center extends support to marines
    and families through advocacy, resource identification and referral,
    information distribution, and care coordination, 24 hours a day, 7 days
    per week.
        The comprehensive care coordination provided by the Wounded Warrior
    Regiment throughout the phases of recovery has been highly successful.
    The results of internal assessments have substantiated that creation of
    the Wounded Warrior Regiment has had a positive impact on the support
    offered wounded, injured, and ill marines and families. The Marine
    Corps will continue to honor the commitment to our Wounded Warriors and
    to help them return to full duty or successfully reintegrate into their
    communities.

    Behavioral Health Integration
        Behavioral health needs since September 11 have become increasingly
    complex with individuals often requiring assistance in a number of
    areas at one time. Marines with more than two deployments have been
    identified as a higher risk population. According to the Joint Mental
    Health Assessment Team, psychological health problems remain steady at
    11 percent of marines for the first and second deployments, but
    increase to 22 percent for those who have deployed three or more times.
    Sixty-five percent of marines are under 25 years old. Associated with
    this young force are high-risk factors that include communication and
    coping skills, isolation, combat-related wounds and substance abuse.
    Drawdown of end strength following Operation Enduring Freedom and
    return to garrison life will likely result in additional behavioral
    healthcare requirements as marines redeploy and adjust to the garrison
    environment. We continue to move forward with our integration of
    prevention and intervention programs initiated in 2009. We have
    established a Behavioral Health Branch at our headquarters for Manpower
    and Reserve Affairs. Headquarters Marine Corps Health Services also has
    created and filled a new billet for a Director of Psychological Health.

    Military Construction
        The Marine Corps maintains its commitment to facilities and
    infrastructure supporting both operations and quality of life. Our
    military construction and family programs are important to success in
    achieving and sustaining our force structure and maintaining readiness.
    For many years, we funded only our most critical facility needs. As a
    result, our installations were challenged to properly house and operate
    the additional forces required to meet our planned end strength
    increase. Between fiscal year 2007 and fiscal year 2010, we received
    $6.9 billion in new construction and design. With this funding, we are
    providing new quality of life facilities, improved operational and
    training facilities, and more modern utility infrastructure systems.
        Our fiscal year 2012 military construction budget request is $1.4
    billion. With these requested funds, we will provide bachelor enlisted
    quarters, aviation support facilities, and improvements to quality of
    life, utilities and infrastructure, and professional military education
    facilities. Additional family housing efforts in fiscal year 2012
    include improvements to existing housing units and funding for the
    operations, maintenance, and leasing of 1,100 units worldwide and
    oversight of 22,000 privatized units.

                                   CONCLUSION

        The U.S. Marine Corps remains the Nation's crisis response force-
    of-choice. Our continued success in Afghanistan and throughout the
    globe is made possible by the loyal sacrifice of our incredible men and
    women in uniform, civilian marines, and our Marine Corps family. The
    personnel, equipment, and training that have given us success over the
    nearly past 10 years at war has come through the ongoing support of
    Congress and the American people. I promise that your Marine Corps
    understands the value of each dollar provided and will continue to
    provide maximum return for every dollar spent.
        In the coming year, we will begin a deliberate transformation into
    a force optimized for the likely threats of the next 2 decades. We
    understand and appreciate the contribution that each marine has made
    for this great Nation, and we recognize the heavy burden it has placed
    on their loved ones. We remain ``Always Faithful'' to our Marine Corps
    family, to Congress, to our chain of command, and to the American
    people.

        Chairman Levin. Thank you so much, General Amos.
        Let's start with a 7-minute first round.
        General, over the weekend there was reported, and it's been
    reaffirmed here today, that 400 marines from Camp Lejeune have
    arrived in Greece. Have they now joined the 1,300 marines of
    the 26th MEU on those two amphibious ships? I know they went to
    Greece, but are they on board those two ships now?
        General Amos. Yes, sir, they're on board and the ships are
    at sea.
        Chairman Levin. Thank you.
        The newspapers reported yesterday--and this goes to both
    you, Admiral Roughead and General Amos--that some of the
    capabilities of the two amphibious assault ships as follows:
    Harrier jump jets that can engage in air-to-ground and air-to-
    air combat, as well as maintain surveillance on ground
    positions. They have attack helicopters on board; transport
    aircraft, including cargo helicopters and the V-22 Osprey, so
    you have a capability there for long-range transport; as well
    as landing craft capable of reaching the Libyan coast.
        Are there any other capabilities, major capabilities, that
    I've left out, and is what I have just described accurate?
    Admiral Roughead, why don't we start with you.
        Admiral Roughead. Yes, sir, those are accurate
    capabilities, and I would say that in addition to that on board
    the large amphibious ships there is a medical team with
    operating room capabilities. So there's significant capacity
    there, and also they're quite well loaded with humanitarian
    assistance items as well.
        Chairman Levin. Thank you.
        General?
        General Amos. Chairman, that's an accurate portrayal of the
    physical equipment and those capabilities therein. That force
    is capable of performing a variety of missions. They're
    trained. They can do everything from a raid to an amphibious
    assault, to a noncombatant evacuation, forcible entry, trap
    mission, those kinds of things. So there's a lot of capability
    that resides in those two vessels.
        Chairman Levin. Thank you.
        Admiral, is it also correct that, in addition to those two
    ships, we have in the Mediterranean ships that are currently
    available that have missile-launching capability against land
    targets?
        Admiral Roughead. Yes, sir, that's correct.
        Chairman Levin. General, let me switch to Afghanistan. Can
    you give us your assessment of what's called the Interim
    Security for Critical Infrastructure, which is a separate
    program I understand from the Afghan local police program? Can
    you tell us about that program, the Interim Security for
    Critical Infrastructure? Is that a name which resonates at all
    with you?
        General Amos. Sir, it does not. I'm going to have to take
    that for the record and get back to you, Mr. Chairman.
        [The information referred to follows:]

        [Deleted.]

        Chairman Levin. It didn't resonate with me either, and we
    read about it and I was curious about it. But if you could get
    us that for the record that would be helpful.
        Secretary Mabus, can you tell us where we are in the
    process of moving marines from Okinawa to Guam, and how we are
    going to complete the program given the strong opposition to it
    in Okinawa?
        Mr. Mabus. Yes, sir. To echo what the Secretary of Defense
    said earlier, we are waiting for substantive movement on the
    Futenma replacement facility by the Japanese before taking any
    major substantive steps of our own. But in the interim we have
    signed the record of decision on the environmental impact
    statement. We held a lot of hearings. We had a lot of
    interaction with the people of Guam.
        My under secretary has been to Guam numerous times to meet
    with the Government of Guam and with the people of Guam, and he
    has identified four overarching goals for Guam.
        First, is a one Guam and one U.S. Government response to
    Guam. Second, is that whatever resources are put there should
    be renewable type energy projects, or a green Guam. Third, is
    that we will be sensitive to cultural matters, such as Pagat
    Cave and Pagat Village, the Guam cultural items that have been
    identified as crucial. Fourth, is that at the end of the day
    that there will be a net negative footprint, so that we will
    use less land for military purposes than we are using today.
        But again, before we take substantive moves to implement
    the road map that was agreed to several years ago we are
    awaiting Japanese Government moves on the Futenma replacement
    facility.
        The last thing I will say is that the Japanese Government
    has deposited the amounts of money that it had committed to
    into our Treasury up until this point.
        Chairman Levin. Now, the Japanese Government moves that you
    refer to include a signature on a document, is that correct?
        Mr. Mabus. Yes, sir, and also something substantive in
    terms of beginning the construction of a replacement facility
    for our Futenma Air Base.
        Chairman Levin. That is what the opposition in Okinawa
    strongly opposes, is that signature on that document, as I
    understand.
        Mr. Mabus. I understand there's opposition to that in
    Okinawa. I also understand there's opposition to Futenma in
    Okinawa.
        Chairman Levin. Right, both. The opposition is so strong--I
    think it was unanimous in the Okinawa legislative body. The
    prospects it seems to me are not great that this is going to
    happen this fiscal year. Can you comment on the likelihood that
    we're going to get the Japanese sign-off on both the
    replacement facility and on the signature for that document?
        Mr. Mabus. I will simply quote what Secretary Gates said in
    previous hearings, which he said that he was hopeful that
    progress would be made soon, and I believe by ``soon'' he meant
    in this fiscal year.
        Chairman Levin. Hopeful, but not necessarily optimistic; is
    that fair?
        Mr. Mabus. I believe his word was ``hopeful.'' I don't want
    to put words in his mouth. But he expressed that he was--I
    can't think of a different word than ``hopeful''--to go
    forward.
        Chairman Levin. All right. Are you personally optimistic
    it's going to happen this year?
        Mr. Mabus. I believe that the Japanese Government
    understands what our position is and that, absent movement,
    that we cannot go forward. So they understand the urgency.
        Chairman Levin. Thank you very much, Mr. Secretary.
        Senator McCain.
        Senator McCain. Thank you, Mr. Chairman.
        General Amos, have you had a chance to look at the air
    capabilities that the Libyans have now as far as fixed wing and
    helicopters?
        General Amos. Senator, yes, sir. I've looked at what they
    have.
        Senator McCain. What has been your assessment?
        General Amos. I think it's modest. I think their greatest
    threat is their helicopter-type forces. That's just my
    assessment standing from afar.
        Senator McCain. Their air defenses?
        General Amos. They have air defenses, sir. I'm unfamiliar
    with the depth of those air defenses, but they have some.
        Senator McCain. But my information--I wonder if you have
    the same thing--they are Soviet-style, somewhat older versions
    of surface-to-air missile capability.
        General Amos. Yes, sir, I believe that's correct.
        Senator McCain. Isn't it true that the air assets are
    concentrated in about four air bases right around Tripoli?
        General Amos. I believe that's correct, Senator.
        Senator McCain. So the air assets, both fixed wing and
    helicopter, are going out of a relatively small area around
    Tripoli, operating out of those areas; is that true?
        General Amos. Yes, sir, predominantly. I believe that's
    correct.
        Senator McCain. Do you have any assessment of the numbers
    of aircraft that they have, both fixed wing and helicopter?
        General Amos. Senator, I just know the general
    capabilities. I've not spent time looking at the precise
    numbers.
        Senator McCain. Has it been your experience in combat that
    if the enemy controls the air above, particularly in terrain
    like Libya, it gives them an enormous advantage?
        General Amos. Sir, I think there are several things that
    will give the enemy an enormous advantage. One is the ground
    movement of forces, vehicles, military on the ground. I think
    it's a very complex environment, where the Gaddafi forces are
    predominantly located. So I think it's more than just aviation.
    I think it's very complex.
        Senator McCain. But you have very little doubt that control
    of the air above, particularly in an untrained enemy, gives you
    an enormous advantage in any conflict? True?
        General Amos. Sir, I would say it would give you an
    advantage. I'm not sure about his air force.
        Senator McCain. Have you heard that Gaddafi is still flying
    in mercenaries in to Tripoli from other countries?
        General Amos. No, sir, I have not heard that.
        Senator McCain. Did you hear that he has two Airbuses that
    are shuttling back and forth?
        General Amos. No, sir, I have not heard that.
        Senator McCain. You have been getting regular briefings?
        General Amos. We do, sir.
        Senator McCain. The ships that are offshore, the Harriers,
    they also have surveillance pod capability?
        General Amos. They do, sir. The Harriers are carrying an
    ISR pod.
        Senator McCain. Do they have jamming capability?
        General Amos. Yes, sir, they do.
        Senator McCain. So we could jam Gaddafi's communications,
    including television?
        General Amos. Sir, excuse me. I misunderstood you. I
    thought you said camera capability. You're talking jamming
    capability?
        Senator McCain. Yes.
        General Amos. They do not.
        Senator McCain. What assets would have those, the jamming
    capability? Airborne Warning and Control System?
        General Amos. Sir, it would be that, and I'd have to refer
    to the CNO, but it would probably be aircraft, EA-6Bs off the
    carrier.
        Senator McCain. Admiral?
        Admiral Roughead. Yes, sir, the jamming that would be
    required, whether for communications or for their air defense
    system, I believe you would require EA-6Bs or the Growlers that
    we're now introducing to the fleet.
        Senator McCain. How far away are those?
        Admiral Roughead. The aircraft carrier USS Enterprise is
    the closest capability. The USS Enterprise is currently in the
    Red Sea.
        Senator McCain. Are there plans to move it?
        Admiral Roughead. At the present time, plans are for her to
    remain in the CENTCOM area of operations, sir.
        Senator McCain. Not move into the Mediterranean?
        Admiral Roughead. There has been no order issued to do
    that, no, sir.
        Senator McCain. General Amos, in the withdrawal from Iraq
    is it your personal opinion that Iraq will be able to take over
    logistics, intelligence, and air sovereignty missions that the
    United States has been carrying out?
        General Amos. Senator, I've always believed that--I can't
    speak to the degree of where they are today because the marines
    are out of there and we're focused primarily in Afghanistan and
    other parts of the world. But we were certainly on a glide
    slope to make that happen.
        Senator McCain. Admiral?
        Admiral Roughead. I believe we are on that path, yes, sir.
        Senator McCain. So you're not concerned about a complete
    withdrawal of U.S. troops from Iraq as far as logistics,
    intelligence, and training of an air force, or a navy? None of
    that is of concern?
        Admiral Roughead. As of my most recent visit there,
    Senator, where I focused primarily on the navy, I see very good
    progress. In addition to that, because that navy will operate
    offshore, our Fifth Fleet that operates in the Arabian Gulf,
    and I believe it will be a very supportive relationship,
    addressing the needs of Iraq from the naval perspective.
        Senator McCain. So they need no other assistance?
        Admiral Roughead. I believe that assistance will continue
    through the way that we interact with all navies in the region
    with our Fifth Fleet headquarters and the ships that deploy
    there, the exercise programs that we have. That will continue
    on with the Iraqi navy, and not have to have people ashore.
        Senator McCain. General Amos, have you been requested to
    identify any drawdown from Afghanistan, to begin the middle of
    July of this year?
        General Amos. Senator, no, we have not been asked to
    identify any forces.
        Senator McCain. So we really have no plans yet that you
    have been made aware of of the beginning of our drawdown in
    Afghanistan?
        General Amos. Senator, all I'm aware of is that there will
    be a drawdown. The President has announced it, beginning in
    July of some forces. The Secretary of Defense spoke about that
    yesterday in Afghanistan. I can't tell you whether it'll be
    marine forces. I would have to defer to General Mattis and
    General Petraeus.
        Senator McCain. I thank you, Mr. Chairman.
        Chairman Levin. Thank you, Senator McCain.
        Senator Lieberman. Thanks, Mr. Chairman.
        Thanks to the three of you for your service and for your
    testimony today. Before I get to my questions, I just want to
    begin by thanking the three of you for the leadership role that
    you're playing in the implementation of the repeal of Don't
    Ask, Don't Tell. Admiral Roughead and General Amos, I recently
    watched the opening portions of training videos that you have
    filmed for sailors and marines, and I just want to express my
    gratitude for the leadership that you display there.
        As you indicate in those videos, this is all about values,
    values that are deep and inherent in your Services, values of
    leadership, discipline, professionalism, and respect. I think--
    and I really thank you, based on looking at these videos, for
    leading your Services, as the two of you have throughout your
    career, by example. I appreciate that very much.
        I want to get to a couple of questions about Libya. I just
    want to pick up from something Senator McCain asked and the
    inference from it, which is, no one's saying that a no-fly zone
    is uncomplicated, but the fact is that we have some experience
    doing this and, though people have said Libya is a large
    country, it is of course a large country, but the activity here
    is mostly along a strip of land along the coast. So if there's
    a decision to do this--and I appreciate what Secretary Gates
    said in his testimony, though it's the part that's less quoted,
    which was that, if asked to implement, hopefully with our
    allies and others, a no-fly zone, we're perfectly capable of
    doing it.
        But the point I want to make from what Senator McCain asked
    is that the air defense systems of the Libyans are modest and
    air capabilities are modest, and the activity, though the
    country is large, is happening mostly along the strip along the
    north of the country, along the coast.
        The question I wanted to ask is this. The chairman and
    Senator McCain have asked about our resources in the region.
    We're all following this very closely. I was interested that
    our Ambassador to NATO, Ivo Daalder, said--has been quoted as
    saying that ``The United States has been conducting round-the-
    clock air and ground surveillance in Libya.''
        I wanted to ask you, Admiral, and you, General, whether you
    have any knowledge about that, and toward what end are we
    conducting that surveillance? Admiral?
        Admiral Roughead. Senator, the ability to monitor the level
    of activity, the disposition of the forces, is something that
    is within our capabilities to do and we have been following the
    fighting that's been taking place through a variety of means
    that we have. So we have some insight into what's going on
    there.
        Senator Lieberman. General, do you have anything to add to
    that?
        General Amos. Sir, I don't. I know that, just as we do in
    many other places around the world where there's hostile action
    taking place, we pay very close attention through a variety of
    means and capabilities.
        Senator Lieberman. Right.
        General Amos. Some national and some organic.
        Senator Lieberman. Admiral, based on what we know or what
    you know, do you think this is now settling into a kind of
    stalemate situation? I know it's always hard to predict--where
    we may end up but, unless something surprising happens, we may
    end up with a long-term civil war type conflict in Libya.
        Admiral Roughead. Having spent some time in the Middle
    East, to include actually living in Libya, I am always hesitant
    to predict what the future may be there. I think it's still a
    very uncertain period that bears watching. Then as some of the
    thoughts are discussed and debated, I believe, at least from a
    military perspective, that looking at what some of those
    details may be ahead of time is very important, issues such as
    a no-fly zone, restrictions on use of force, and what basing
    and access that might be required.
        I think all of those need to be sorted through.
        Senator Lieberman. Understood.
        I understand that, and it's, I believe, been publicly
    acknowledged, that the State Department at least has opened up
    channels of communications with the Temporary National Council
    or provisional anti-Gaddafi Government, which is headquartered
    in Benghazi. As far as you know, is there any military-to-
    military contact going on through DOD with the military
    leadership of the anti-Gaddafi forces?
        Admiral Roughead. I'm not aware of any, sir.
        Senator Lieberman. General, do you know?
        General Amos. No.
        Senator Lieberman. Good enough.
        Let me go to something--Secretary Mabus, I noted in the
    statement you made in your prepared testimony that the F-35C
    variant of the JSF will be procured for both the Navy and the
    Marine Corps. I think it's been the general understanding that
    the Marine Corps would want to see produced and would procure a
    pure F-35B STOVL fleet variant of the F-35, and that in fact is
    the plan that's reflected in the current FYDP.
        Did I read this correctly in your prepared statement, and
    could you speak therefore to the future mix, if that is the
    correct interpretation, of the F-35B and the F-35C in the
    Marine Corps inventory?
        Mr. Mabus. Yes, sir. It has always been true that the F-35B
    was solely a Marine aircraft.
        Senator Lieberman. Right.
        Mr. Mabus. But it's also been true that the C version, the
    carrier version, the naval version, was going to have marines
    flying those as well. Today we have three Marine squadrons
    aboard carriers and we are currently undergoing a tactical air
    integration look across the Navy and the Marine Corps to see
    what the proper mix is of Cs for the Navy and Marine Corps, to
    make sure that we continue that integration and make sure that
    marines continue to fly off carriers in strike fighters, as
    well as in vertical takeoff and landing aircraft.
        Senator Lieberman. General, could you give me your reaction
    to this? Is that mix at this point acceptable to the Marine
    Corps? Am I wrong that you had originally hoped for a pure
    STOVL variant fleet?
        General Amos. Senator, you are correct that that was the
    initial plan. Let me back up just a little bit. We have always
    been fans of tactical air (TACAIR) integration. As the
    Secretary said, we have Marine squadrons right now on Navy
    carriers. On the USS Enterprise right now, we have Marine F-
    18s. So we do that. We like that. It's good for both our
    Services and the naval force.
        But when we set the requirement in for STOVL aircraft, our
    hope was we would be able to some day fly those versions off of
    CVNs, naval aircraft carriers. That's yet to be seen, whether
    that will be possible. So in the meantime, it would seem
    prudent that we would buy some number of C variants, even early
    on, so that we can begin to transition our force there. But it
    will be a proportional number in the overall buy of the STOVL.
    The STOVL is still our primary focus.
        Senator Lieberman. Okay, good enough.
        My time is up. Thank you.
        Chairman Levin. Thank you, Senator Lieberman.
        Senator Wicker.
        Senator Wicker. Thank you.
        Admiral Roughead, let me follow up on Senator McCain and
    Senator Lieberman. Given the testimony that we've received
    today that Libya's air capabilities are relatively modest, that
    their air defenses are concentrated in a relatively small area,
    what would General Gaddafi's options be if the United States
    imposed a no-fly zone? Why would we not expect it to be
    completely successful?
        Admiral Roughead. I think the first question, Senator, is,
    as a precursor, you would be entering into combat operations
    there.
        Senator Wicker. We would be entering into air combat
    operations?
        Admiral Roughead. I think that in addressing a no-fly zone
    you want to suppress or destroy any of the air defense systems
    that could put friendly forces at risk. So that's the first
    element, I believe, of entering into a no-fly zone, is likely
    combat operations on Libya.
        So I think in talking about a no-fly zone there are some
    precursor steps that have to be taken.
        Senator Wicker. What would General Gaddafi's options be?
        Admiral Roughead. To try to defend against that would be
    the primary options. But the fact is that that would be the
    first step that would have to be taken.
        Then it's also the issue of, what forces would be used,
    where are they postured, what are the basing and the overflight
    issues. I think all of those have to be sorted through. We've
    done no-fly zones before and there is a significant
    infrastructure that backs them up, whether it's naval or land-
    based.
        Senator Wicker. That infrastructure is available to us and
    to our allies, is that not correct?
        Admiral Roughead. I think that's a function of the
    countries that would be involved, to make that decision.
        Senator Wicker. Are you involved in the discussions with
    the Secretary of Defense as to whether we proceed with a no-fly
    zone?
        Admiral Roughead. We have had discussions on Libya in the
    tank among the Joint Chiefs, and we are involved in positioning
    our forces to support the efforts that are currently being
    undertaken in Libya. We're looking at the situation there on a
    daily basis.
        Senator Wicker. Thank you very much for getting further
    into the details about that.
        Let me shift gears to Navy Week and mention to both Admiral
    Roughead and to Secretary Mabus how much we appreciate being
    able to host Navy Week in the State of Mississippi during the
    week of March 19 through 27.
        As both of you know, 2012 will mark the 60th anniversary of
    the founding of the Seabees and their presence in Gulfport, MS,
    with our four naval construction battalions based in Gulfport.
    Let me start with Admiral Roughead. What is the past, current,
    and future contribution of the Seabees? What role do you see
    the Seabees playing in your vision of the future of the Navy?
        Admiral Roughead. Sir, as a matter of fact, I was in
    Gulfport last Friday meeting with about 3,000 Seabees. If that
    doesn't energize you, nothing does.
        But the Seabees I think in the Navy are legendary, and I
    would even say, beyond that within the military, for their
    combat engineering skills, their ability to go into unimproved
    areas and provide the facilities that forces need to operate. I
    know they're linked very closely to the Marine Corps in that
    regard. They've been very busy over the past few years,
    particularly in Iraq and in Afghanistan. In fact, we currently
    have as many Seabees deployed now as we did during the Vietnam
    War. So they are extraordinarily busy.
        But they also function in a humanitarian role, where they
    will go into countries and develop infrastructure, train some
    of the indigenous forces that are there. So that's what they
    have been doing, and I see Seabees doing that well into the
    future.
        Senator Wicker. Do you see their role diminishing in the
    future or increasing in the future?
        Admiral Roughead. I think the skills and the talent and the
    competence of the Seabees will prevail. It will be a question
    of how much usage the combatant commanders demand with regard
    to Seabees, combat engineers. Clearly, I would predict that as
    we eventually bring the level of forces down in Afghanistan, of
    course, Seabees are part of that, so they'll be coming out. So
    they're probably at a fairly high level right now. But I think
    the future is yet to be borne out.
        Senator Wicker. Secretary Mabus?
        Mr. Mabus. I concur with everything the CNO said. I visited
    with Seabees in Afghanistan and I've joked with them that if
    you give them a piece of plywood and a Skilsaw they can build
    anything, maybe even our fleet.
        But I do think that the skills that they have for the
    missions that are coming in the future, whether it's combat
    missions or whether, as the CNO pointed out, humanitarian
    assistance mission, partnership-building sorts of things, that
    those skills will be in demand and will be needed.
        Senator Wicker. Thank you very much.
        In the few seconds I have remaining, Secretary Mabus, in
    your verbal testimony and also in prepared testimony, I wanted
    to make sure that we understand precisely what you're saying
    about the effect of a year-long CR. You say it will prevent
    procurement of two nuclear reactor cores. Will it delay it or
    will it prevent it? And prevent completion of one Arleigh
    Burke-class modernization. Are you being precise that it will
    block these two advances?
        Mr. Mabus. If a year-long CR occurs, we cannot spend any
    money on either those nuclear reactors or either of the new
    start Arleigh Burke destroyers.
        Senator Wicker. It will in effect be a delay, would it not?
        Mr. Mabus. That assumes that at some point we are allowed
    to begin spending that money. Under a year-long CR for the
    remainder of the fiscal year, we would not be able to do that.
        Senator Wicker. I understand. I would simply observe there
    are concerns about spending, but I don't see why on a
    bipartisan basis and a bicameral basis we can't decide as a
    Congress to fund the military capabilities of this Nation on a
    permanent basis and then deal with the rest of the
    discretionary budget at a later time. I don't see a reason why
    we shouldn't go forward this week or next week with a full
    defense appropriation aspect of our funding and deal with the
    other aspects of it later on.
        So thank you very much, and thank you all for your service.
        Chairman Levin. Thank you, Senator Wicker.
        Senator Reed.
        Senator Reed. Thank you very much, Mr. Chairman.
        I can't help but follow up my colleague from Mississippi
    and the ranking member of the Seapower Subcommittee by
    commending the Seabees. They were organized in Rhode Island in
    1942 and one of their signature contributions to construction
    was the Quonset hut, named after Quonset, RI. So thank you,
    Senator. I'm glad we could help out the Gulf Coast.
        First, Admiral Roughead and Secretary Mabus, one of the
    critical issues, but it doesn't get a lot of attention, is
    maintenance of the fleet. Could you comment upon the stress
    that you're under now in terms of maintenance? We have seen
    reports that there's an increasing number of failures in the
    Bureau of Inspection Survey, up dramatically from about 3
    percent in the mid-1990s to now 13 percent in terms of ships
    that are coming in and being inspected, and that the life of
    the ships, the DDGs especially, is now 25 to 27 years, not 30
    or perhaps even 40.
        Admiral Roughead, you might start and then, Mr. Secretary,
    your comments.
        Admiral Roughead. Yes, sir. Looking at that when I came
    into this position, I looked at the whole approach to
    maintenance, how are we maintaining our ships. We did several
    things. We reintroduced the engineered based maintenance cycle
    for our ships, put resources to the teams that do that work.
    We're beginning to see the benefit of that now.
        We also are putting more sailors back on the ships. We had
    taken them off. With the generosity of Congress, we were able
    to increase our operation and maintenance funding, so we were
    able to build that up to the point where we're spending
    hundreds of millions of dollars now more on maintenance than we
    were just a couple of years ago. We've taken sailors and put
    them back into our intermediate maintenance activities, so that
    more maintenance can be done proximate to the ships in the
    piers.
        So I think all of that adds into improving the maintenance
    of the ships. We've seen some positive trends in our inspection
    and survey reports and results. So I think we're doing
    substantive things. We're investing the money in the right
    place to improve that ship maintenance.
        Senator Reed. Mr. Secretary?
        Mr. Mabus. Senator, everything, the details that the CNO
    just said, have been put in place and, as he said, we're
    beginning to see some improvements. The Navy, unlike other
    Services, maintenance is our reset. We reset in stride. So if
    we're going to get to the fleet that we need to get to, if
    we're going to get the numbers of ships that we need to get to,
    we simply have to make them get to the end of their normal or
    extended service lives.
        It's one of the things that the CNO has focused on the most
    closely. It's one of the things that I watch most closely. I do
    believe that with some of these efforts, putting more
    intermediate maintenance on the pier, putting more sailors on
    ships, 2,200 more on our ships, with the specific goal of doing
    preventative maintenance, so that when a ship comes in for a
    maintenance period it is more ready and the maintenance will
    mean more.
        Finally, I do want to reiterate one thing that I said about
    the CR. The chairman pointed out that we've already cancelled
    five availabilities. We face having to cancel up to 29 ship
    availabilities, and these, to go to what Senator Wicker said,
    are not postponements. These are cancellations, because we have
    other ships in queue waiting behind them.
        Senator Reed. Thank you, Mr. Secretary.
        Again let me address a question first to General Amos and
    if the Secretary would like to comment. That's on the F-35B.
    It's slipped in terms of its timeframe. There are some
    technical challenges. I had the chance to go down to Pax River
    and talk to your very impressive group of test pilots and
    program managers.
        What is the probability that this is the last major
    schedule change and that we're finally on track? I know that's
    a judgment call, but any advice, since you're an aviator and
    you have great expertise, Commandant? Please comment.
        General Amos. Thank you, sir. Obviously, with that
    introduction, you know I pay very close attention to it. This,
    as I said in my opening statement, is critical to our
    expeditionary capability, and we've talked about that before.
    My sense right now is that the program management has
    absolutely the right guy in there with Admiral Venlet running
    it. I think the oversight at OSD is appropriate. Certainly the
    oversight in the Department of the Navy is appropriate. I will
    promise you, as you and I have talked before, the oversight at
    the headquarters Marine Corps level and at my desk is very
    appropriate.
        So my sense where we are now is that, with the generosity
    of both Congress and the wisdom of Secretary Gates, putting
    more money back into this, trading some tails so that we could
    get this program back on track, things are lined up now for
    success. I'll give you an example of what I'm talking about.
    Right now the STOVL variant, which is the one that everybody
    refers to, has flown 140 percent of its scheduled test flights
    since January 1. So in the last 70 days, the airplane has flown
    40 percent more of its scheduled test flights. It's flown about
    another 200 percent of its scheduled test points. Within each
    flight it's designed to get five or six specific points of
    flight test.
        So it's performing better there. It's already flown I think
    something like four or five times the number of vertical
    landings just this year than it did all last year. I took a
    brief yesterday on the structural issues, the bulkheads, the
    weight gain. These things are progressing well.
        So from my perspective as I look at it, I'm going to pay
    attention to the aircraft performance, how it's doing in
    flight, both in vertical and horizontal flight, the weight
    growth in the airplane, which in a vertical landing airplane is
    very critical. Right now we're on a good glide slope in the
    weight growth, and we're not going to add a pound that I'm not
    aware of to that airplane. We have to talk about it.
        Then, finally, the engineering challenges and the test
    performance. So my sense is I'm optimistic. We are on a 2-year
    watch. It's my hope that we can get off that well before 2
    years, and it's my intent to some time this spring offer to the
    Secretary of Defense a set of metrics that he might consider as
    the threshold for getting the airplane off of probation and
    getting it back into the regular mindset of production.
        Senator Reed. Any comments, Mr. Secretary?
        Mr. Mabus. I can't improve on that answer, Senator.
        Senator Reed. That's why you're such a good Secretary and a
    good lawyer.
        A final question to Admiral Roughead and the Secretary, the
    Ohio replacement program. I know this is a major issue. It not
    only touches the fleet, but also our strategic posture,
    particularly after the recent START Treaty. It's the future of
    deterrence, nuclear deterrence for the Nation. It's the most
    survivable aspect of nuclear deterrence.
        I think you have made significant progress in ensuring that
    we design a ship that is not only capable, but affordable. But
    there's still this issue of sharing the costs, because this
    program is a Navy program, but it has huge, huge implications
    for the overall strategic posture of the United States,
    particularly the deterrence posture with nuclear weapons. So
    why don't you comment on any efforts to provide support, as
    we've done on other programs like the missile defense program
    from DOD, not just from the Navy.
        Admiral Roughead. Yes, sir, and I appreciate the question.
    Clearly the Ohio replacement is, as you said, the most
    survivable. What we're doing is we're building a submarine that
    will be on patrol for this Nation in 2080. So that's where the
    research and development is going, and our focus on stealth and
    mission capability is where we have to go.
        We also know we'll be introducing that submarine at a time
    when there are other significant costs being imposed on the
    shipbuilding budget. While we're early on in the program, I do
    believe that there has to be a discussion about how the
    submarine is resourced in the context of everything else. I
    think we're at the front end of having some of those
    discussions.
        Mr. Mabus. In the research and development that's going on
    now to begin to build the first of the Ohio-class replacements
    in 2019 to go on its first patrol about 10 years later, we've
    already taken a billion dollars a boat out of the cost to build
    this submarine. We're looking to take more money out.
        Right now we're at about $5.4 billion per boat. The number
    needs to start with a four in some way for these boats. But
    even at $4.9 billion per boat, to build 12 of these beginning
    in 2019 and continuing throughout the decade of the 20s will
    require substantial resources that, if they all come from the
    Navy, would put a dent in the rest of our shipbuilding
    programs.
        That's one of the reasons we have put it in and tried to be
    exactly honest and exactly precise about how much this ship
    will cost and what it will do to the rest of the fleet, so that
    these discussions, these debates, and these decisions can be
    made with the facts of what will happen clearly in mind.
        Senator Reed. Thank you.
        Thank you very much, Mr. Secretary, General, Admiral.
        Chairman Levin. Thank you, Senator Reed.
        Senator Collins.
        Senator Collins. Thank you, Mr. Chairman.
        Admiral, first let me join everyone in thanking you for
    your extraordinary service. It's very difficult for those of us
    who have worked with you for a number of years to recognize
    that this is most likely your last Navy posture hearing. I want
    to thank you for your decades of service.
        I want to pick up on the issue that Senator Reed just
    raised. Secretary Gates recently testified that a number of our
    surface ships that were built during the Reagan years will
    basically reach the end of their planned life in the 2020s, and
    that coincides with the time that we will be bringing on the
    new ballistic missile submarine. Obviously, we need both, but
    that new submarine is going to swallow up a great deal of the
    shipbuilding budget.
        I understand that there are several precedents for national
    strategic programs that are funded through defense-wide budget
    lines. For example, ships supporting sealift for all of the
    military Services are funded through the National Sealift
    Defense Fund. As has been mentioned, the MDA budget funds for
    activities related to ballistic missile defense irrespective of
    the military Service involved.
        So if we're going to proceed, as we must, with the new
    submarine, but not harm the shipbuilding budget, which is
    already below the optimum number that you have said repeatedly
    is the floor of 313--I believe we're at only 286 or 287 right
    now--would an alternative worth pursuing be looking at a
    defense-wide budget line, rather than trying to fund this
    submarine out of shipbuilding?
        Admiral Roughead. Thank you, Senator, and thank you for
    your very kind comments. It's been my pleasure to work with you
    over these years, not just as CNO, but even before, and thank
    you for your great support of the Navy.
        But I do believe that, in addition to the points that you
    mentioned, in the 20s we're also going to still be refueling
    our aircraft carriers. To make all of us feel a little bit
    older, we will also in that decade be taking out of service
    some of the Nimitz-class aircraft carriers as they reach the
    end of their 50-year life.
        So there are those two costs that have to get put in there
    as well. So there's a significant pressure on shipbuilding. Yet
    the Nation I believe will still need the global Navy that it
    has today. Whether it's a defense-wide fund or whether there is
    consideration for those expenses that are being taken into
    account, I do believe that that has to be addressed, because if
    it's not taken on and if it's not thought through with a
    solution that's different than what we have today, we as a
    Nation are going to find ourselves shorted in a Navy.
        Senator Collins. I agree with you and I look forward to
    working with you and the Secretary and my colleagues trying to
    come up with a solution.
        Secretary Mabus, it was so appropriate that you began your
    testimony today reminding us of the dire impact on the Navy,
    indeed on all of DOD, of continuing to operate under a CR,
    particularly one that is extended 2 weeks at a time. That
    really is an impossible situation.
        Just last week I filed the defense appropriations bill, the
    entire bill, as a modification to an unrelated piece of
    legislation, to try to emphasize to the Senate leaders that
    this should be our priority, completing work which should have
    been done prior to October 1 of last year.
        You mentioned the dire impact on readiness, the effect on
    our sailors and marines, the fact that we are putting in
    jeopardy as many as 10,000 private sector jobs at a time when
    our economy is very, very weak. But isn't there also another
    adverse impact, and that is that these delays cause disruptions
    in the supply chain that are costly? They're not only depriving
    our soldiers, sailors, marines, and airmen of needed technology
    and equipment, but they're increasing the ultimate costs that
    we're going to pay.
        You're going to have to renegotiate contracts. There are
    disruptions in the supply chain that are costly. Isn't this the
    case where the longer that we operate under a CR, the more
    you're likely to have to pay for needed equipment?
        Mr. Mabus. I think that's absolutely correct, Senator. The
    ripple effects of this, we're beginning to feel some now. The
    longer it goes on, the more those effects take place. Senator
    Wicker pointed out that we're delaying ship starts, perhaps not
    cancelling them. But if you delay ship starts this year, we
    have other ship starts due next year and the year after that,
    and, as I said in my testimony, it will take us years to
    recover from this, from the second and third order effects of
    this and the ripples that go out from it. The supply chain is
    certainly one of them. Breaking multi-year procurements is
    another that we are saving money on today. If we are unable to
    fulfill our part of the multi-year, we'll have to go in and
    renegotiate that, for example on shipbuilding.
        Senator Collins. I think that's a very important point.
    Some of my colleagues who are supporting a CR are arguing that
    it saves money. I think it not only is disruptive, but it's
    going to end up costing us more money in the long run.
        Admiral Roughead, just a very quick final question for you.
    As you may know, Senator Webb and I along with some of our
    colleagues commissioned a recent Government Accountability
    Office (GAO) report that found that the Navy's modernization
    program for our public shipyards, which includes the Portsmouth
    Naval Shipyard in Kittery, have been underfunded. Indeed, the
    Navy's own estimate of the backlog at the Portsmouth Naval
    Shipyard alone exceeds $500 million.
        Are you looking at whether you could use some reprogramming
    or shifting of funds to try to meet some of the more urgent
    needs, which also would translate directly into increased
    efficiency and productivity? So again, it's an investment that
    saves you money in the long run.
        Admiral Roughead. Yes, Senator. We're always looking at our
    MILCON and where do we get the most bang for the buck, and it
    goes beyond the shipyards. But we do look at the shipyards and
    in fact, even though there is what is considered a backlog of
    maintenance, we are investing above the percentage that's
    required by Congress to a certain degree.
        But I'm always looking at projects, individual ones, to
    your point, that if we pay a little bit today maybe we can gain
    in productivity later on, and we're always looking at that.
        Mr. Mabus. Senator, if I might add that one of the
    exemptions to the civilian hiring freeze that DOD announced was
    for shipyards, to meet exactly what you were talking about.
        Senator Collins. Thank you.
        Thank you, Mr. Chairman.
        Chairman Levin. Thank you, Senator Collins.
        Senator Webb.
        Senator Webb. Thank you, Mr. Chairman.
        Admiral, let me add my own congratulations and appreciation
    to you for all the service that you have given our country.
    It's been my pleasure to have known you and worked with you in
    a number of different capacities for a good 15 years or more. I
    appreciate the stewardship that you've shown, even in your
    testimony today, for the people who come after us and what we
    leave behind.
        There's been a number of comments today about the situation
    in Libya. I think it's important for me to at least express my
    support for the position that Secretary Gates has taken on this
    issue, and others in DOD. We all know that military
    commitments, however small, are easily begun and in this region
    particularly very difficult to end. History shows that. This is
    a region full of surprises.
        I, for one, am of the opinion it's not a good idea to give
    weapons and military support to people who you don't know. When
    it comes to the opposition in Libya, we don't know them.
    Secretary Clinton was very clear on that last week in her
    testimony before the Senate Foreign Relations Committee. So
    it's very important, I think, to proceed responsibly and very
    carefully as we approach that particular issue.
        Admiral, I, as you would expect, strongly agree with your
    position about the number of ships that we should be providing
    in the Navy, that 313 should be a floor. I've been very
    concerned and vocal about my worry that we've taken our eye off
    of our strategic forces in general as we have spent so much of
    our money, energy, and people in Afghanistan and Iraq over the
    past 8 or 9 years.
        This is particularly true in East Asia, which I view to be
    the central focus of our long-term strategic goals. We can't
    ignore what the Chinese military has been doing, not only in
    this area but in other areas. They've been very active over the
    last year particularly. But we have an obligation to position
    ourselves properly in terms of our military forces and our
    basing systems.
        In that regard, I'd like to mention my hope that we can do
    a better job on this situation with Okinawa and Guam. As you
    may know, Secretary Mabus, I worked as a military planner on
    this issue many years ago. The attempt at a solution of the
    Okinawan situation as it moves into the Guamanian situation has
    now been on the table for 15 years.
        I was recently last month the keynote speaker at Shimoda
    conference in Tokyo, which was a gathering of the minds in
    terms of how we are going to reshape and strengthen the United
    States' relations with Japan. I can tell you that this issue is
    one of the most serious problems in our relationships with the
    Japanese, but also in Japanese domestic priorities. You can see
    the turbulence that it has put at the very top of the Japanese
    Government because we have not yet resolved this issue.
        It also is one of our principal challenges in terms of the
    structuring of our presence in East Asia. I was out there last
    year on Okinawa and Guam. I think I'm going with the chairman
    next month also on a visit there.
        I just really strongly believe we have to put this on the
    front burner. It's one of these types of issues that, since
    it's not hitting us in the face every day, we tend to push it
    away. But it's now been 15 years. We need answers. Whatever the
    answers are, we need answers for the stability of our
    relationships with Japan and for our future in the Pacific.
        I'm not sure actually who's carrying the ball on this in
    DOD. I think the Marine Corps--at least they're heavily present
    when we go out there and talk to people. But, Secretary Mabus,
    I'm not sure. Who's the executive agent here, and how do we get
    this thing resolved?
        Mr. Mabus. Senator, we're the executive agent for Guam.
    You're right that the Marine Corps is heavily involved. But it
    is not simply a Navy issue. It rises to the top leadership of
    DOD.
        I can assure you from the Marine Corps, from the Navy, and
    from DOD, it's on the front burner. It takes up a large part of
    our focus, for exactly the reasons you talked about. It affects
    our laydown in the entire Pacific. It affects our presence in
    the western Pacific for the next decades. We had an agreement
    with the Government of Japan on a way forward. That agreement
    is several years old now. One of the key components before we
    begin to move is Government of Japan and the Government of
    Okinawa movement on replacing our airfield at Futenma. The
    Marines have to have that air capability on Okinawa regardless
    of what happens going forward.
        So we are focused on it. I will quote Secretary Gates in
    his hearing when he said that he was ``hopeful that progress
    would be made soon on this issue,'' as we all are.
        Senator Webb. This is an enormously complex issue in terms
    of all the moving parts, and I know that there's been some good
    adjustments already in terms of the Marine Corps footprint on
    Okinawa, moving it further away from the industrial areas, and
    also the environmental aspects, particularly on Guam.
        But I can't say strongly enough how important it is we put
    good minds and good leaders on this, for all the reasons that I
    said: the future of our relationships with Japan. I hear it all
    the time when I'm with the foreign ministry, the defense
    ministry in Japan, and with their political leaders, and for
    our future. So I hope we can have some good discussions before
    the chairman and I go to Japan and Guam next month, and maybe
    we can come up with a better way to approach this.
        Thank you, Mr. Chairman.
        Chairman Levin. Thank you, Senator Webb.
        Senator Brown.
        Senator Brown. Thank you, Mr. Chairman. Sorry I was
    bouncing back and forth. I had a Senate Small Business and
    Entrepreneurship Committee hearing as well.
        Mr. Secretary, first of all, and Admiral, thank you also,
    just to reiterate. I appreciate your service and family
    sacrifice.
        Mr. Secretary, just to touch on what Senator Collins was
    saying, the CR, the 2 weeks, do you think that jeopardizes the
    safety and security of our country in any way, that continuing
    on in sporadic means and measures?
        Mr. Mabus. I think that it, as I tried to lay out in my
    opening statement, it has some profound implications for the
    Navy and the Marine Corps. If the CR continues for the whole
    year, as we said, flying hours will go down, ship steaming days
    will go down, the availabilities that we have for maintenance
    for naval ships. The procurement account for the Marine Corps
    could go down by as much as a third.
        We will not be able to meet payroll by the end of the
    fiscal year without moving monies from other accounts, and
    procurement is one of the few places we can get that. In terms
    of shipbuilding, we will not be able to start the second
    Virginia-class submarine, which will break the multi-year on
    that, which will make those submarines more expensive. We will
    not be able to start the two Aegis-class destroyers.
        Senator Brown. In plain English, do you think our safety
    and security is in jeopardy as a result of the delay?
        Mr. Mabus. I think that today the Navy and Marine Corps
    will meet whatever safety and security needs America has. The
    danger is what happens in the future, what happens to us
    because of these shortfalls now.
        Senator Brown. To take it a little step further, do you
    think the lives of our soldiers are in jeopardy as a result of
    the delay. If it continues?
        Mr. Mabus. No, I don't think it risks lives of our marines
    and our soldiers, because the OCOs are being funded. But I do
    think--and I know I'm beginning to sound like a broken record,
    but it's the effects on the future.
        Senator Brown. I understand. I appreciate your honesty.
        One of the best ways, I've always felt, and I've heard
    through testimony from many of you and others, is the open and
    honest competition. With regard to the LCS, the dual
    procurement strategy is a perfect example of that type of
    savings if we strictly enforce competition. Mr. Secretary, can
    you comment on the importance of implementing competition in
    our Nation's acquisition strategy, where appropriate,
    especially when we're deciding to buy massive amounts of
    equipment costing taxpayers billions of dollars over the course
    of several years?
        Mr. Mabus. Competition certainly worked in terms of the
    LCS. When we competed two manufacturers against each other with
    two different variants, the price came down pretty
    dramatically. Now, I will say that the LCS program was unique
    in the sense that we had always planned on having two
    suppliers. We had never looked at this program, regardless of
    how many variants we had, as coming from one shipyard, because
    we wanted to keep competition in the program.
        Senator Brown. You're ultimately going to award a contract
    to one of them, though, based on the specifications, the
    capabilities, and the like, correct?
        Mr. Mabus. Yes, sir. But whoever--if we had down-selected
    to one variant, whichever shipyard won had to give us the
    technical data package, all the drawings, all the engineering,
    so that we would then the next year bid it out to a second
    shipyard. We were always going to have two shipyards competing
    on the LCS.
        Senator Brown. So competition saved $2.9 billion and a 27
    percent reduction on the original cost of that savings
    estimate. The third and fourth ships are scheduled to be
    delivered in 2012 on cost and on schedule. I guess I'm trying
    to wrestle the fact that we have that fair and open competition
    with a relatively small quantity purchase like the LCS and yet
    we're dealing with a $100 billion purchase of over 4,000 JSF
    engines for the U.S. and international partners spanning a
    period of 20 years, which the GAO has twice concluded will save
    the taxpayers $20 billion.
        So I'm wondering if you could explain. Am I missing
    something in terms of having a sole producer of the engine? For
    example, what happens if they decide to raise the price? Why is
    it good for one and not the other? I really haven't gotten a
    good answer.
        Mr. Mabus. Two things set those two programs apart. One is
    what I talked about, about the fact that we always anticipated
    having two different suppliers for the LCS, regardless of how
    many variants we had.
        Second, we have paid for most of the engineering, the
    research and development, the up-front cost of both variants of
    this ship, unlike the alternate engine, which has only paid for
    the research and development upfront costs for one of them. So
    I think there are two major differences between those.
        The last thing I would say is, from the Navy vantage point
    we have rarely had two engines for any of our aircraft, simply
    because of space concerns. We can't carry two engines on our
    carriers. We can't carry two engines on our big-deck amphibs.
    We simply don't have the space for it. We will only be able to
    buy one engine for these aircraft, as we do today for our F-
    18s.
        Senator Brown. One of the things I'm always concerned is
    about cost overruns and delivering weaponry on time. My concern
    is, obviously, about doing that with that particular program.
        I'd like to just shift gears for a minute. I'm thankful, I
    think it's about time, that Harvard and the Navy once again are
    having Reserve Officers' Training Corps (ROTC) on their campus.
    I think it's long overdue. I'm wondering if you could just
    comment on what your feelings are about the importance of ROTC
    on our Nation's campuses?
        Mr. Mabus. I was very happy to sign the agreement with
    Harvard last Friday to bring ROTC back there. As I pointed out
    there, Harvard trails only West Point and Annapolis in Medal of
    Honor recipients. I agree with you, it had been gone for too
    long.
        I believe that ROTC and the ability to have different
    viewpoints coming into our military officer corps, different
    geography, different viewpoints, different backgrounds, is
    absolutely crucial. We're continuing to reach out to schools
    that have, for whatever reason, ended ROTC, to bring it back.
    The military that protects the Nation ought to be reflective of
    the entire Nation.
        Senator Brown. So noted. I'm anxious to see whether and how
    the military science classes will be taking place on or off
    campus, and hoping that they will be fully implemented in the
    ordinary course like every other organization has that
    opportunity.
        But I want to thank you for wrapping that up. I saw you
    smiling a lot in the pictures.
        Admiral and General, I'm okay with you. I know we've spoken
    off-line many times about issues, so thank you for your
    continued service and the good information.
        Thank you, Mr. Chairman.
        Chairman Levin. Thank you, Senator Brown.
        Just on two of the statements that you made in response to
    Senator Brown, if you for the record would confirm or not
    confirm the following: First, that more than half the
    development costs on the second engine have already been sunk;
    second, that the original acquisition strategy did assume two
    engines for the F-35. Can you confirm or not, for the record,
    not now?
        Mr. Mabus. Yes, sir.
        [The information referred to follows:]

        Yes, more than one-half of the F136 development costs are
    sunk-costs ($2.9 billion through fiscal year 2010 of an
    estimated $4.2 billion development program). The estimate
    includes only those costs required to complete development of
    the F136 engine and does not include all TBD costs necessary to
    get the F136 to a competitive procurement posture. With regard
    to the acquisition strategy, yes, the Department of Defense
    assumed two engines as part of the original acquisition
    strategy if funding was available for the F136 program.

        Chairman Levin. It's not my turn yet.
        Senator Hagan.
        Senator Hagan. Thank you, Mr. Chairman.
        I wanted to state how pleased I am to see all three of you
    gentlemen here today and once again thank you for your service.
    My late father-in-law, who passed away a little over a year ago
    at the wonderful age of 96, was a major general in the Marine
    Corps Reserve, and he was always very interested in everything
    that you had to say and your actions, especially during these
    committee hearings.
        But, speaking about the ROTC, my husband participated in
    the ROTC at Chapel Hill, and I think too that it's a wonderful
    movement forward that Harvard has reinitiated their program. So
    I think that's great.
        I did want to ask about the amphibious assault ships. I'm a
    big supporter of the Marine Corps amphibious capabilities. It's
    the bread and butter of the Marine Corps to have the ability to
    conduct forcible entry operations from the sea. I think it's
    important that the Navy not decommission amphibious assault
    ships earlier than their expected service lifespans without
    replacements.
        I'm concerned that the Marine Corps will not have the
    sufficient amphibious capabilities to fully support the
    combatant commanders' requirements within an acceptable level
    of risk. I'm concerned that the Marine Corps will not have the
    sufficient amphibious capabilities to meet the demands for all
    the operational deployments that we're seeing.
        General Amos, can you discuss how the amphibious forces
    have been employed during this past year and talk about how
    this has helped to inform the recently completed force
    structure review?
        General Amos. Senator, I'll be happy to. I'm pretty proud
    of the Navy-Marine Corps team. Just in the last 12 months, you
    remember, just about a month or 2 from now we had 7 amphibious
    ships full of 5,000 marines and sailors off the coast of Haiti.
    When you could only put one airplane or two airplanes on the
    ground in the airport, everything else was clogged, it was the
    naval amphibious force that was providing the relief--water,
    food, medical supplies, evacuation--for 45 days.
        So that's where the last year began. The 15th MEU sailed
    off the coast of Pakistan and supported the Pakistan relief
    operation, flying their CH-53 Echo heavy lift helicopters 400
    miles deep into Pakistan, up to the very northern part of
    Pakistan, to move folks around, provide relief efforts.
        While that was going on, the Harriers off the amphibious
    ships were flying combat sorties into Afghanistan in support of
    the joint force. Interestingly, one of the ships departed, went
    1,000 miles due west, captured the Somalia pirates off the
    Magellan Star.
        About the same time, the 26th MEU, from your great State,
    sailed 30 days early. They hadn't even finished their
    certification yet, and they were able to certify en route. They
    joined the 15th MEU with their three ships to help support the
    Pakistani operations.
        1,400 marines off of the 26th MEU are now ashore in the
    Helmand Province, reinforcing success for our forces on the
    ground there.
        As you've just seen, the 26th MEU sailed two ships up
    through the Suez and into the Mediterranean, now joined by
    marines from your great State as well, the First Battalion,
    Second Marines, poised off of the Mediterranean.
        I haven't counted the 31st MEU in the western Pacific, that
    came on the back side of that super typhoon in the Philippines.
        So lots--there is no shortage of work for the marine
    expeditionary amphibious units. They are very successful.
        Senator Hagan. Certainly.
        Secretary Mabus, in light of those comments, is the Navy
    reviewing and reconciling the amphibious requirements, ship
    retirement schedules, and the 30-year shipbuilding plans?
        Mr. Mabus. Senator, we keep a close eye on that. We have
    extended the USS Peleliu for a year, its retirement date. But
    the amount of effort, the amount of money, and the amount of
    people it would take to continue some of these very old
    amphibious ships now--the people are needed for other ships
    coming on line. The amount of money would take away from the
    newer ships we're building.
        We're building toward, and we're in sight of getting there,
    to having the 33 amphibious ship capacity, 11 big deck amphibs,
    LHAs, LHA(R)s, 11 LPDs, 11 LSDs. If Congress approves our
    shipbuilding plan, we will have 11, 11, 11 by 2017.
        Senator Hagan. Thank you, Secretary Mabus.
        I also understand that the Department's restructuring of
    the JSF program, including the recent 2-year probation of the
    Marine Corps' STOVL, the F-35B. The F-35B is fundamental to the
    expeditionary nature of the Marine Corps and this aircraft is
    also essential to how the Marine Corps deploys and utilizes its
    aviation assets in theater.
        This aircraft also provides the Marine Corps with the
    capability to land on the improvised airstrips and launch from
    the large-deck amphibious assault ships. It also provides the
    Marine Corps with the ability to rearm and refuel in the
    forward operating bases (FOB).
        Currently the AV-8B Harriers are approaching the end of
    their service life and the aircraft and its parts are no longer
    being produced. I know that the Fleet Readiness Center in
    Cherry Point in North Carolina, the engineers there, they
    actually engineer the replacement parts.
        Secretary Mabus and General Amos, what would be the impact
    of terminating the F-35B on the Marine Corps' ability to
    actually project the power that is necessary in some of these
    remote expeditionary environments? What effect will that have
    on the joint force capabilities in theater, as well as the
    Marine Corps' force structure? What would be some of the near-
    term milestones that you would expect for the Marine Corps to
    achieve to get the F-35B back on track?
        Mr. Mabus. Senator, I will give a very brief overview and
    then turn it over to the Commandant, who is far more eloquent
    than I am about the F-35B.
        The Commandant earlier today pointed out that the F-35B is
    a critical capability for the Marine Corps, the vertical
    takeoff and landing, for all the reasons that you have laid
    out. The 2-year intense look at it, or the probationary period,
    I think is going to give us an opportunity to focus on it and
    to make sure that the issues associated with it can be fixed
    within weight limits and cost limits.
        The Commandant has stated that he is now a program officer
    on this, and he gets updates on a very frequent and very
    routine basis. Some of the milestones that we're looking at:
    the number of test flights this year, this calendar year, is at
    about 140 percent of where we expected to be, so we're ahead of
    schedule there. The number of test points on those test
    flights, we're almost 200 percent there.
        They have achieved vertical takeoff and landings, more
    vertical takeoffs and landings so far in the first a little
    over 2 months of this year than they did all of last year. It's
    at least my understanding, and then I'm going to turn it over
    to the Commandant, that the issues associated with the B
    version are engineering in nature, and the question is whether
    those engineering issues can be solved inside weight limits and
    inside financial boundaries, and that that is what we're
    concentrating on.
        General Amos. Thank you, Secretary.
        Secretary, as I said in my opening statement, the way we
    employ our airplanes in the Marine Corps, we're the blue collar
    aviation for the United States of America. We get out, we get
    dirty. We fly in places where there are unimproved strips. We
    did it all the way to Tikrit when we crossed the border in
    March 2003. We had Harriers landing on highways. We flew off of
    narrow roads. We flew off of bombed-out runways and taxiways,
    all the way past Baghdad into Tikrit.
        So that's the way we operate. There are roughly 10 times
    the number of small airports around the world than there are
    larger ones. That fits us. We build our own runways when we
    have to. We have two of them in southern Afghanistan right now.
    One of them was Poys. We built it in about 30 days out of
    aluminum matting, so we could fight the fight for Marja a year
    ago at this time.
        So that's the way we employ it. We also fly them off the
    large-deck amphibious ships. So today, with 11 carriers and 11
    large-deck amphibious ships, our Nation--this is a national
    capability--has 22 capital ships flying TACAIR aviation off of
    them. Now, imagine a couple of years from now being able to
    have F-35Cs on board those 11 aircraft carriers and F-35Bs
    flying off of those 11 large-deck amphibs. So our Nation would
    have for the very first time 22 capital ships with fifth
    generation capability flying off of them.
        So this is more than just the Marine Corps. If we lose the
    F-35B, there is no plan B for fixed wing airplanes on the
    large-deck amphibs. Our Nation's capability to project power
    and influence situations will be cut immeasurably, not in half.
    Certainly there are more airplanes on an aircraft carrier than
    there are--or fixed wings, than there are on an amphib. But it
    would be significant, and there is no plan B for that, ma'am.
        So the F-35B is a requirement. I'm optimistic. What I'm
    seeing now is very encouraging.
        Senator Hagan. Thank you.
        Thank you, Mr. Chairman.
        Chairman Levin. Thank you, Senator Hagan.
        Senator Blumenthal.
        Senator Blumenthal. Thank you, Mr. Chairman.
        I'd like to begin by again thanking all of the three
    witnesses for your very distinguished service to our Nation.
    Admiral, I'm new to the committee, but I'm sorry that I'm here
    for the last of your testimony on this issue, and simply say
    thank you and congratulate you on your extraordinary service to
    our Nation.
        I'd like to pick up, General Amos, if I may, on the last
    answer that you gave. I assume from your testimony that you
    would prefer to see the resources that might be devoted to an
    alternative engine for the JSF devoted instead to the F-35B
    alternative?
        General Amos. Sir, we made a decision, the Marine Corps
    made a decision, in the late 1990s to skip a generation of
    airplanes, to skip a fourth generation of airplanes, going from
    our F-18s, which is what we would call a third generation
    capability, and go on a procurement kind of diet for about 10
    or 12 years to buy the F-35B. So that position has not changed,
    Senator, and that's where we are today.
        We need the airplane. We're confident in it and it fits the
    way we operate our airplanes.
        Senator Blumenthal. You would forego that alternative
    engine, the second engine, as it's been called, and instead
    devote those resources to that plane that you need so much?
        General Amos. Senator, I would, because we are a Navy-
    Marine Corps team and we operate off of naval vessels, and for
    the very same reason that the CNO and the Secretary of the Navy
    articulated earlier, there's just simply not enough room to
    have different types of engines, different types of test
    equipment, tool sets, procedures, and that kind of thing on
    naval vessels.
        Senator Blumenthal. Thank you.
        I apologize if I may seem to be repeating one or more of
    the questions that have already been asked, but I want to
    return to the Virginia-class submarine procurement program, if
    I may, Secretary Mabus and Admiral Roughead. Could you outline
    for us what the impact would be on the procurement program for
    the Virginia-class submarine if there is no budget for the
    fiscal years 2011 and 2012 and we continue with a CR? I have in
    mind particularly the Admiral's testimony that so far the
    submarines have been delivered under budget and ahead of
    schedule. So I'm wondering if there could be continuing
    negotiations, as you've outlined, to continue the two-sub
    procurement program even with a CR.
        Mr. Mabus. Senator, under the rules of a CR as they are in
    place today we could only begin to build one Virginia-class
    submarine this year. We are scheduled to build two, two each
    year for the next 5 years. We have entered into a multi-year
    procurement on the Virginia-class submarine, which has driven
    the price down even further, giving the contractor some
    stability in terms of their base, their training, their
    infrastructure.
        So if we are unable to begin the second Virginia-class
    submarine, which would be the case under the current CR, not
    only would we jeopardize the total number of ships that we
    have; we would also break the multi-year agreement, which would
    cause the cost of those ships to rise. We would have to re-
    enter negotiations because we would not have ordered the number
    of ships we committed to under the multi-year.
        Senator Blumenthal. So even with the best of intentions,
    very likely the cost of that Virginia-class submarine program
    would rise as a result of continuing with the CR, as opposed to
    having a budget in place?
        Mr. Mabus. Yes, sir. If we are not given relief on new
    starts, we will not be able to build the second one and the
    cost would almost certainly rise.
        Senator Blumenthal. General Amos, in the time that I have
    left I'd like to focus on an area that hasn't been covered so
    far, and that is the very impressive part of the report that
    you've given us today on some of the work that's ongoing with
    respect to the diagnosis and treatment of traumatic brain
    injury and post-traumatic stress. I am tremendously impressed
    by the general description that you've given in this report on
    the focus, the increased priority given to this very troubling
    area, and in particular the in-theater restoration center that
    provides comprehensive diagnosis and the proactive outreach
    that the Marine Corps has undertaken whenever any member of the
    Marine Corps is involved in a concussive event.
        I would appreciate further details, perhaps in a later
    session or in written form, whichever you find best to do, and
    invite you now just to provide some additional details if you
    wish. But I would very much appreciate a more detailed
    briefing, because I think that for all the Services this is a
    major challenge going forward in this conflict and setting an
    example for future conflicts.
        [The information referred to follows:]

        The Marine Corps is undertaking a proactive, comprehensive approach
    to address the challenge of Traumatic Brain Injury (TBI)/Post-Traumatic
    Stress (PTS) including prevention, education, early identification,
    treatment, rehabilitation, and reintegration. We are working closely
    with the Defense Center of Excellence, which is the Department of
    Defense lead agency on efforts to improve the prevention,
    identification, and treatment of TBI/PTS. We are actively implementing
    the requirements of Directive Type Memorandum 09-033 regarding mild
    TBI/concussion and have launched a mandatory screening protocol for
    marines exposed to blast events in theater.
        Our Navy medical personnel and leaders are receiving training on
    new event-based protocols and Marine personnel receive TBI/concussion
    training prior to deployment. Marines exposed to a potentially
    concussive event receive a mandatory medical evaluation and
    requirements are in place for Marine leaders to report on personnel who
    are exposed to potentially concussive events. Medical evaluation
    results are documented in medical records, and extra precautions and
    evaluations are in place for marines with repeat/multiple concussions.
        The Marine Corps, with Navy support, has established a Concussion
    and Musculoskeletal Restoration Care Center (CRCC) in theater. This
    center provides front-line care to patients with mild TBI/concussion
    and has dramatically improved identification, diagnosis, treatment,
    outcomes, and return to duty rates. CRCC provides comprehensive
    interdisciplinary care for concussion, psychological health, and
    musculoskeletal injuries. Interdisciplinary services include Family
    Medicine, Sports Medicine, Mental Health, Physical Therapy,
    Occupational Therapy, Acupuncture, and Spiritual therapy.
        Since its inception in August 2010, the CRCC has logged over 8,000
    patient encounters, including evaluation and treatment of over 560
    patients with concussion. Over 96 percent of patients treated for
    concussion at the CRCC have had favorable outcomes with return to full
    duty. In the past, these patients would have required evacuation to
    Kandahar or Bagram hospitals and/or evacuation out of theater.
        Processes are in place to screen all marines for TBI/PTS upon
    returning from deployment. Every marine evacuated from theater for
    injuries receives a TBI screen. This is primarily done via the Post-
    Deployment Health Assessment/Post-Deployment Health Reassessment.
        We are exploring new measures to measure blast exposure and improve
    detection of TBI, including biomarkers, imaging tools, and neuro-
    cognitive testing. The Marine Corps continues to pursue advances in
    personal protective equipment, including next-generation helmet
    technology to mitigate blast effects. Education about TBI has been
    shown to reduce morbidity following injury, and we are making efforts
    to ensure education is provided during predeployment briefs and at all
    levels of leadership training, from small unit leaders up to senior
    leaders.

        General Amos. Senator, I'll be happy to provide you the
    details, in fact, all the members of the committee, because I
    think it's encouraging. It hasn't solved it. The whole
    recognition of what happens to the brain is certainly not a
    mystery, but it is not clear because it doesn't happen in the
    same way to every single person.
        But there was recognition over 2 years ago, and it was
    really a collaborative effort by myself, or by the U.S. Army
    and the U.S. Marine Corps--so I want to give credit to General
    Chiarelli and the Army--to try to figure out what happens to
    the brain when it's rattled as a result of an IED or some type
    of concussive event, and then what are the net effects.
        The net effects are not necessarily long-range PTS, but it
    could be. But clearly there was a correlation between getting
    your brain hit hard with a concussive event and the requirement
    to let the brain rest. In some cases it's 48 hours, in some
    cases it's a week, maybe 2 weeks. But the very best thing you
    can do to prevent further damage is to put that brain in some
    semblance of rest.
        So that's what we did. We built a concussive protocol, the
    one you're referring to in Afghanistan. Marines, soldiers,
    sailors, when that event happens, they come right back into
    what we call the wire. They're looked at by a corpsman if
    that's all we have there. We have cyber technology that allows
    the doctor at Camp Leatherneck to look in the eye of the
    wounded marine or soldier or sailor. Then we eventually will
    move them to that restoration care center at Camp Leatherneck,
    if required.
        The whole idea now is to just provide them the ability to
    step back, let their brain heal, to prevent further damage.
    Marines are tough. We lie. When a young lance corporal is asked
    by his company gunnie, how do you feel, he says: I'm good to
    go; when in fact, the very best thing the leadership can do is
    say: We're going to stop right here, young devil dog, and we're
    going to let you sit inside the wire for a day or so.
        We believe--it's too soon to tell; we don't have the
    empirical data. But we know in our hearts that this is the
    right thing to do. We'll be happy to provide you more
    information.
        Senator Blumenthal. Thank you very much.
        My time is up, but I would like to thank you for returning
    ROTC to Harvard as you've done and simply offer to be helpful
    anywhere on any campus, certainly in Connecticut, where I can
    be helpful if there's any way that we can restore ROTC anyplace
    where it's lacking now.
        Thank you. Thank you all.
        Chairman Levin. Thank you, Senator Blumenthal.
        Senator McCaskill.
        Senator McCaskill. Thank you, Mr. Chairman.
        First, I want to say to you that I am excited about Marine
    Week in St. Louis in June, and I want to thank, commander, your
    decision to come to St. Louis. We will welcome the marines with
    open arms and, since our State has proudly contributed so many
    brave marines over the history of our military, we are thrilled
    to host you for that important event.
        Secretary Mabus, I know that our military is the best in
    the world at combat readiness, but we are really bad at audit
    readiness. I am continuing to be very frustrated with the
    business systems within DOD and the ability for us to get a
    handle on tracking our money and the various services being
    able to be transparent and viewable across systems.
        It is a continuing level of frustration. I do want to
    applaud the Navy and Marine Corps for making some important
    progress on service-level auditability. I know you have been
    working on it, and I know you've identified some net savings by
    improving your financial management processes.
        The program I want to focus in on today is the enterprise
    resource planning. You are slated to spend about a billion
    dollars on that in a supply system called the Global Command
    Support System. The Army is currently fielding a similar system
    called Global Combat Support System-Army. Theirs will cost
    nearly $4 billion.
        Now, I know you share equipment in theater. That is a
    reality of the fight, is the sharing of equipment. But these
    two systems have the same goal, that is tracking supply and
    equipment, but they're not even going to run on the same
    software. The Marines are using Oracle and the Army is running
    on SAP. There's a $3 billion cost differential.
        My understanding is that the two systems as designed are
    not even naturally compatible and that DOD will have to
    continue to pay just to develop interfaces between these two
    systems.
        I get a headache when I think about all the money that we
    have thrown away in the Federal Government on data systems and
    information technology. Now, part of this is unavoidable
    because the technology has developed so quickly that when we've
    tried to develop great big systems, by the time it gets ready
    to be deployed it's already out of date and antiquated.
        Some of it is the nature of the rapid transition we've had
    in this country with technology. But I think particularly
    within the military there is a problem in acknowledging when
    we're throwing bad money after good or when we're setting up
    systems that frankly make no sense in terms of what the
    ultimate goals are.
        Tell me your position on what could be done to make the
    effort at tracking our equipment, at least the ability to track
    it between the two branches of our Services that are sharing
    the same equipment? This is just hard for me to imagine, that
    we're going to continue down this multi-billion dollar road.
        Mr. Mabus. Senator, you and I share a lot of things. One of
    them is I know my first elected jobs and one of yours was as
    State auditor of our respective States. I understand the
    importance not only of auditability, but of these enterprise
    resource systems to track the things we do.
        If you'll also allow me one more moment of personal thing,
    a friend of mine once described my father as someone who threw
    nickels around like they were manhole covers, and I am my
    father's son. I think that we have to be good stewards of the
    taxpayers' money.
        In terms of auditability, what you said, we are making some
    progress on that and we are focused on that. In terms of the
    overall resource, the enterprise resource, that system began
    several years ago to try to get real-time information on things
    like inventory on things like equipment, on things, as it moved
    through the system.
        I'll be very frank. I don't know what the interface issues
    are with the Army. But I will find out, as a result of this. We
    are spending a lot of money to ensure that we can track on a
    real-time basis, not a week later or a month later, what's
    happening to all the assets that the Navy and the Marine Corps
    have.
        We should always look for opportunities, though, to be
    joint, to do things defense-wide.
        Senator McCaskill. As we are making really difficult
    decisions in this government over the next decade and we think
    the hard ones are today and tomorrow and next week, we're going
    to have hard decisions to make for a long time. What would be
    an amazing moment would be for the Army and the Marine Corps to
    sit down, decide whose system is further along, whose system is
    the easiest to be trained on, whose system is going to have the
    least amount of support costs ongoing, and to make a decision
    to use one for both.
        I don't know that it matters whether it's the Marine Corps
    system or the Army system. But it just seems unbelievable to me
    that we are paying for the development of two separate systems
    that don't speak to each other. This would be a moment that we
    could save. Since the Army's is more expensive, I'm hoping that
    yours is the one that could be utilized. This could be a $3
    billion moment, and we're looking for $3 billion moments right
    now.
        This is the kind of thing that I think, until we can
    demonstrate to the American people that we can at least do
    these kinds of savings, I don't think they're going to take us
    seriously on our ability to deal with our long-term debt. So I
    would love to see--and I will be following up with Secretary
    Gates and with Admiral Mullen in terms of seeing how many
    places are there that we could do something like this.
        Now, I know this is hard to do, because you've been working
    on this for a long time, and so has the Army, and there's some
    separateness been going on for several years, and sometimes
    it's not wanting to step in and say, okay, all the money we've
    spent, we're going to abandon that and go forward in a
    different way. But sometimes that's the smartest thing to do.
        General Amos?
        General Amos. Senator, I'm familiar with the GCCS Marine
    Corps software by Oracle. That effort began--let me back up,
    just maybe give you a ray of hope. There is a what we call an
    Army-Marine Corps Board. It's chaired by the three-stars, the
    head of requirements and the comptroller. So it's the budget
    and requirements folks. They meet as required, typically about
    twice a month, and they resolve an awful lot of these issues
    where both Services come up. It can be a helmet, it can be
    something like a service weapon, it can be a piece of
    equipment.
        Now, we all have different--not all our equipment is the
    same, and you know that. But a lot of that compatibility and
    who's going to buy what, what's going to jump on whose program,
    is solved right there at the three-star level. So there is an
    effort that is under way.
        The Joint Requirements Oversight Council (JROC), chaired by
    all the Service Vices and the Vice Chairman, also looks at
    compatibility across the joint force.
        But back to this GCCS, we got halfway through Iraq. We're
    talking about 2006, and the truth of the matter is we had a lot
    of equipment on the ground to satisfy those 35,000 marines and
    sailors. We thought we knew how much we had and we had a
    variety of systems, about 15, that were tracking. We said we
    have to come up with something different. Ergo the birth of the
    requirement from Oracle.
        The system right now, I can't speak to the Army's system,
    but our system is fielding right now in Okinawa and it is
    probably, of all the software efforts we've ever done in the
    Marine Corps and spent a lot of money and been disappointed
    often, this one probably has the greatest hope of all the ones
    we have.
        So let us check with the Army. Let us come back to you with
    a ``here's where we are as two Services.'' We owe you that,
    ma'am.
        [The information referred to follows:]

        The Army and the Marines Corps both used the competitive
    contracting process to select their respective software applications
    based on their specific Service requirements. Although the Army and the
    Marines Corps may share similar logistics requirements, at the highest
    level they differ in terms of: people; process/mission execution;
    technology-interfaces; and data.
        Although at first glance it seems logical and compelling to have
    different Services use the same solution, as the Defense Integrated
    Military Human Resources System taught the Department of Defense, it is
    enormously difficult, expensive, and very high risk. In 2005, the IT
    consulting firm Gartner analyzed this question and concluded it was
    appropriate, cost effective, and logical for the Services to have
    chosen two different solutions. Also, there was never a requirement for
    Global Combat Support System-Marine Corps and Global Combat Support
    System-Army to be interoperable and pass information, so consequently,
    at the present time they don't. However, if such a requirement arose,
    the two systems could be made interoperable through the use of an
    interface.

        Senator McCaskill. I understand that JROC was designed to
    do this, but in other hearings we have had some admissions that
    the culture of JROC had unfortunately too often been, we'll
    give you what you want if you'll give us what I want; that
    there had been some of that, as opposed to, okay, we're going
    to give up what we want and you're going to give up what you
    want and see if we can't do it together.
        I know, because I worked on this in a previous National
    Defense Authorization bill trying to provide maybe some input
    from somewhere other than the branches, because it did appear
    too often that everybody was going along to get along.
        General Amos. Ma'am, having been the Assistant Commandant
    for 27 months and been a member of the JROC, I found it almost
    painful sometimes, how we worked our way through situations.
    But I will also tell you it's more than culture; it's also the
    way we deploy, in other words, the kind of systems we need. The
    software has to support the ability to go aboard ship, to
    deploy expeditionary in places in North Africa, if required. So
    there are some differences. But we owe you an answer, ma'am. I
    understand.
        Senator McCaskill. Thank you.
        Thank you, Mr. Chairman.
        Chairman Levin. Thank you, Senator McCaskill.
        Senator Shaheen.
        Senator Shaheen. Thank you, Mr. Chairman.
        I apologize, Secretary Mabus, Admiral Roughead, and General
    Amos----
        Chairman Levin. Your mike.
        Senator Shaheen. It's on. Is that better?
        Chairman Levin. No. Maybe you better change your seat.
        Senator McCaskill. Change that name tag from Senator
    Manchin.
        Chairman Levin. For your sake, not for his.
        Senator Shaheen. I was assuming it was for my sake, Mr.
    Chairman. [Laughter.]
        --I apologize for missing your testimony. I had to preside
    over the Senate. But I am pleased that you're still here and
    hopefully I won't take too much time.
        I know that Senator Collins earlier today raised the
    question about the backlog of restoration and modernization
    projects at the four public shipyards. It's a major concern to
    Senator Collins, being from Maine, and to me, being from New
    Hampshire, because of the Portsmouth Naval Shipyard. I know
    that a recent GAO report that was requested by Senators Collins
    and Webb made four recommendations to improve the visibility of
    the Navy shipyards restoration and modernization needs and
    quality of life issues.
        I would just hope, Secretary Mabus and all of you, that you
    will take those recommendations very seriously, and look
    forward to working with you to implement those. Specifically,
    as I said, I'm concerned about the Portsmouth Naval Shipyard,
    the fact that no MILCON funds have been allocated to the
    Portsmouth Naval Shipyard by the executive branch in the last 5
    years. So that that means in previous years the shipyard has
    had to rely on congressionally-directed spending, which
    included $39.2 million in fiscal year 2008 and $17.2 million in
    previous proposed fiscal year 2011 spending.
        So given the current spending environment and the
    moratorium that currently exists on congressionally-directed
    spending, or earmarks, how does the Navy intend to support
    critical MILCON investments at Portsmouth and at the other
    public shipyards? Perhaps as part of your answer you could talk
    a little about how you might prioritize those investments and
    support modernization.
        Mr. Mabus. Senator, if it's acceptable to you, I'll let the
    CNO answer this, since he answered Senator Collins, so that we
    can have an absolute continuity of answers.
        Senator Shaheen. Shoot, I was going to see if you could
    answer it the same way. [Laughter.]
        Admiral Roughead. I'm sure he could, Senator.
        The shipyards, particularly our four public shipyards, are
    going to be very critical for us in the future, simply because
    of the amount of nuclear work that we have coming into the
    window. Accordingly, we are looking at what must be done,
    primarily for the safety and security issues, particularly as
    it applies to our nuclear enterprise, and then productivity and
    quality of life.
        Even though we do have the backlog, in point of fact we are
    investing above what has been the congressional level of
    sustainment for the shipyards. But we're always looking at what
    needs to be done for those four areas that I mentioned.
        I would also, being perfectly honest, that as we have
    looked at the level of funding going into the shipyards and as
    circumstances have changed, we're going to have to take a look
    at what the future looks like and how we apportion the MILCON
    money, not just across shipyards, but really across all of the
    facilities that we have.
        But I think the public shipyards are going to be in a very
    good position in the coming years from a workforce standpoint,
    as the Secretary mentioned, being exempt from the hiring
    limitations, but also they're going to be very busy and very
    critical to our future.
        Senator Shaheen. I certainly agree with that and am pleased
    to hear that you're thinking about that. Can I just press you a
    little more on, as you point out, you're going to have to
    prioritize those investments. So have you thought about the
    factors that you'll take into consideration in doing that?
        Admiral Roughead. Yes, ma'am. Clearly, nuclear safety and
    nuclear security are foremost, and that applies to the four
    public yards that we have, and then also the safety of our
    workforce is paramount. So those are the opening arguments for
    me.
        Mr. Mabus. Senator, in terms of setting priorities, the CNO
    mentioned this, there is a civilian hiring freeze at DOD right
    now. Because of the importance of shipyards, we asked for and
    received an exemption for shipyard hiring, so that we can
    continue to maintain our industrial base and the work that the
    shipyards are doing.
        Senator Shaheen. Thank you. I do appreciate that and think
    that was very important. I know that at Portsmouth we've had a
    very competent, productive workforce and we're going to be
    losing many of those folks because many of them are close to
    retirement age. So being able to bring on younger people who
    can start training for those jobs is going to be very important
    to productivity.
        On another issue, Secretary Mabus, I certainly applaud your
    focus on trying to be more energy independent within the
    jurisdiction that you control. I wonder if you could talk a
    little bit more about the kinds of steps that you're taking in
    the Navy to be more energy efficient. It is a critical security
    issue, as you've pointed out, and I think it's important for us
    in Congress and for the public to know that we're moving in a
    direction to make us more energy independent, especially these
    days as we're watching what's happening in the Middle East.
        Mr. Mabus. Thank you, Senator. As you pointed out, you
    don't have to look any further than the headlines to know why
    we need to do this. We've made a lot of progress toward our
    goal, which we're going to reach, of by no later than 2020 at
    least half our energy usage will come from non-fossil fuel
    sources. We've flown the F-18 on biofuels. We've certified our
    helicopters also on biofuels, as well as our Swift boats. We
    are currently working on our large surface combatants in that
    regard.
        We are doing a lot of work on efficiencies. We've launched
    the first hybrid ship. We're looking at putting the electric
    drive that is on that ship on our new builds as well as
    retrofitting some of our DDG-51s.
        On shore, we have vastly expanded our solar capacity. We've
    done stuff like smart meters so that we know where our energy's
    going.
        Finally, I want to particularly brag on the Marine Corps,
    because, like they normally do, they're leaders in this. They
    have established two expeditionary FOBs, experimental FOBs, one
    at Quantico, one at Twentynine Palms, to develop the
    alternative energy that our warfighters need.
        What we import the most into Afghanistan is gasoline. The
    Army did a study that showed that for every 24 convoys of
    gasoline, we lose a soldier or a marine killed or wounded
    guarding that convoy. It also takes marines away from doing
    what they were sent there to do, which is to fight, to engage,
    to rebuild.
        The first unit that took some of these things that
    experimental FOBs designed was 3rd Battalion, 5th Marines,
    which I got to visit right before Christmas in Sangin. Now,
    they're in some of the toughest fighting in Afghanistan right
    now, but even in that fight they have taken solar panels and
    are using them for their command headquarters. They've taken
    these rollable solar panels and stuck them in their packs.
        I was talking to a lieutenant there. A foot patrol now
    saves 700 pounds of batteries that they don't have to take
    because of this. They are reducing dramatically their usage of
    fossil fuels.
        The Commandant has just signed out a requirement, an order,
    that is going to integrate the training on alternative energy
    as part of the routine training that marines get before they
    deploy, so that they'll better be able to use these. But we are
    seeing real advances. We're saving lives, we're using less
    fuel, and we're making marines better fighters just because
    they don't have to lug around so much stuff.
        Senator Shaheen. That's very impressive. Thank you. Perhaps
    you can share some of those technologies with the rest of us in
    government, so that we can be more efficient and more energy
    independent.
        My time is up. Thank you.
        Chairman Levin. Thank you very much, Senator Shaheen.
        I think the figure you used on that point was that that
    unit was saving 90 percent? Is that the right number, of its
    fossil fuel? The fuel used decreased 90 percent with that
    company, I believe.
        Mr. Mabus. That company is saving a lot. It's probably not
    90 percent.
        Chairman Levin. All right.
        Mr. Mabus. But I can get you a very specific number, but
    its energy usage, in some of its combat outposts, it's 100
    percent; they're using nothing but alternative fuels. Overall
    for the unit, it's significant, but I don't think it reaches 90
    percent.
        Chairman Levin. What we will do, following Senator
    Shaheen's suggestion, is to get that experience, if it's not
    already there, to the other, to the Army as well, because we
    have the same issue, goal, with the Army, as Senator Shaheen
    mentioned.
        [The information referred to follows:]

        While deployed to the Sangin Province Afghanistan, India Company
    Third Battalion, Fifth Marines (3/5) operated two patrol bases
    completely on renewable energy, offsetting 100 percent of their
    potential fuel use. Based on reports from Marines in the field it is
    estimated that each patrol base saved 12 gallons per day per location.
    This means that each month these two patrol bases would have offset
    approximately 744 gallons per month (31 days  24 gals) or
    8,928 gallons per year. It is evident that a small savings at a remote
    patrol base has significant impacts over the long term, not to mention
    immediate reduction in risk to our marines moving fuel in a very
    dangerous area.
        In addition to the patrol bases operated by India 3/5, they also
    employed renewable and energy efficient technologies at a company
    location too. At the company location, fuel use was reduced from 25
    gallons per day to 2.5 gallons per day or an initial savings of 90
    percent. Targeting renewable and energy efficient technologies at
    remote outpost immediately reduces the risks to our forces and
    increases our combat effectiveness.

        Chairman Levin. Senator Ayotte.
        Senator Ayotte. Thank you, Mr. Chairman.
        I want to thank the witnesses here today, Admiral Roughead,
    Secretary Mabus, and General Amos, for your distinguished
    service to our country. We're deeply grateful for what you're
    doing. I also want to thank you for all of those that serve
    underneath you, for the sacrifices that they and their families
    are making for our country at a time of conflict.
        I wanted to follow up on, Admiral, on the questions that
    were asked by Senator Shaheen. I wanted to join in her comments
    about the Portsmouth Naval Shipyard and the importance of that
    shipyard. I wanted to ask you specifically about the project to
    consolidate structural workshops at Portsmouth Naval Shipyard.
    This project is a very important one because it would
    ultimately save taxpayers' dollars through efficiency measures
    at the shipyard and it would certainly improve efficiency of
    shipyard operations, reduce cost, and duration of submarine
    maintenance.
        Currently, this project is scheduled to be completed in
    fiscal year 2015. But, given the importance of the project to
    naval readiness and taxpayers' savings that I believe that we
    could accomplish with this, given added efficiencies, I think
    this project should be moved up to fiscal year 2012. Admiral,
    does the Navy's fiscal year 2012 budget proposal include this
    project to consolidate structural workshops at the Portsmouth
    Naval Shipyard?
        Admiral Roughead. Senator, right now it is in the program
    for 2015. But it has several segments to it. To your point, if
    we do it by segment it will actually cost us more money. So we
    can consolidate two of the phases and actually save money, and
    we're looking at the ability to do that because we see some
    potential changes taking place in some other MILCON, and my
    staff knows to look at that, to see if there is the potential
    to pull it up into 2012.
        Senator Ayotte. So if we were to consolidate and pull it up
    into 2012, it actually would result in cost savings, rather
    than segmenting the project, as it is right now?
        Admiral Roughead. The way that I see the project, it would
    cost us about another $8 million if we don't do the
    consolidation.
        Senator Ayotte. So I appreciate that you and your staff are
    looking at this. It also seems to me not only important in
    terms of the shipyard, but a way to save taxpayers' dollars to
    achieve efficiencies at the shipyard with the important work
    that they're doing there.
        Admiral Roughead. Yes, ma'am. I'm always looking for
    efficiencies.
        Senator Ayotte. We deeply appreciate that. Obviously, the
    shipyard is very important in the Navy's mission and we
    appreciate your bringing that forward. I'd be happy to work
    with you on that if you need any assistance.
        Admiral Roughead. Thank you, ma'am.
        Senator Ayotte. Secretary Mabus, in your written statement
    you had noted that rising health care costs within the military
    health system continue to present a fiscal challenge to DOD,
    and you've written that DOD's resources devoted to health care
    costs cannot be sustained. According to a recent March GAO
    report, there are tremendous opportunities to reduce potential
    duplication in government programs among the Services in terms
    of looking at military health care costs. I want you to tell me
    what steps you thought were appropriate to take in addressing
    the findings of the GAO report on duplication.
        Mr. Mabus. I think it's important to separate a couple of
    things here. One is Active Duty health care. There have been no
    changes in terms of amounts of money spent or things like that
    recommended for Active Duty servicemembers. There have been
    recommendations in terms of more service-wide efficiencies that
    the GAO report did on that.
        In terms of my comments that the health care costs were
    going up, were aimed mainly at health care costs for retirees
    under the Medicare age, that the Secretary of Defense has made
    some recommendations on. We fully concur in that. That's where
    our costs are going up. That, I think, will become
    unsustainable in the future.
        The Secretary of Defense on a defense-wide basis has
    recommended that the costs for a single person go up $2.50 per
    month, for a family, $5 per month. We're talking about going
    for a family, from $460 a year to $520 a year in terms of
    premiums--a very modest increase. It's still far, far below
    what a Federal employee who is not a military retiree would
    have to pay.
        There are also overhead reductions in this. We do think
    that there can be some savings in overhead in terms of the way
    we deliver our health care costs. But those two major things,
    we think, are necessary to keep us sustainable just in terms of
    how much money we're spending on health care.
        Senator Ayotte. Mr. Secretary, I just wanted to follow up,
    because obviously with respect to our retirees and our veterans
    we also have a solemn duty to make sure that we follow through
    on the promises that we've made to them with respect to health
    care and other promises, given their service to our country. So
    this committee certainly will be looking at those proposals.
        I also wanted to just follow up on the idea of greater
    coordination to eliminate duplication within the system, to try
    to save administrative costs, and what your thoughts are, and
    what some of the issues that were identified in the GAO report
    were, and what measure you thought that we could take among the
    branches and even within the Navy to try to save some
    administrative costs in that area?
        Mr. Mabus. There are clearly some areas that you can save
    some administrative costs. We're looking not only between
    Services, but also between the Services and the Department of
    Veterans Affairs (VA) system, for example. We're going to an
    integrated disability evaluation system so that a servicemember
    who is disabled doesn't have to go through that twice, once for
    the Service, once for the VA. That saves one step. That
    obviously saves some overhead costs.
        Because of the previous Base Realignment and Closure
    Commission, Walter Reed, and Bethesda are being merged into one
    health care center, and we are actively promoting some savings
    in overhead there. We think that, very frankly, there's too
    much overhead in the joining of those two very critical
    military facilities.
        So you and the GAO are correct that there are efficiencies
    that we can find just in terms of administrative overhead. We
    have found some of them based on the efficiencies that
    Secretary Gates asked us to find. But we are continuing that
    look, not only in health care, but across DOD, but specifically
    in health care.
        Senator Ayotte. Thank you very much for your answer.
        My time is up. I wanted to thank all of you for the work
    that you're doing on behalf of our country. I just offer that I
    certainly am willing to work with you on making sure that we
    achieve these efficiencies so that we continue to support our
    soldiers and those who have sacrificed so much for us.
        Chairman Levin. Thank you, Senator Ayotte.
        In your answer to Senator Ayotte, Mr. Secretary, you made
    reference to the budget's proposed increase in the enrollment
    fees for retirees under 65. When was the last time those fees
    were increased, do you know offhand?
        Mr. Mabus. I believe it was 1995, Senator.
        Chairman Levin. I'm wondering if I could ask you, Admiral,
    and you, General, do you support the budget proposal that those
    fees be increased?
        Admiral Roughead. I do, sir. I think it's appropriate. I do
    not believe it is an onerous cost and I'm fully supportive of
    those changes.
        Chairman Levin. General?
        General Amos. Chairman, I absolutely support them.
        Chairman Levin. Let me ask you about the no-fly zone issue.
    Our NATO allies, including U.K., France, and Italy, are looking
    at U.N. resolutions and what the role of NATO might be in any
    no-fly zone. So that my question is the following: Even without
    direct U.S. involvement, do our NATO allies have the capability
    of implementing a no-fly zone over Libya, presumably with the
    support of members of the international community? Do they have
    the capability of dealing with any threat by the Libyan air
    force, such as it is, and by Libyan air defenses, such as they
    are?
        Admiral Roughead. Senator, I think that whatever group
    comes together if, in fact, this were to proceed would have to
    look at the individual capabilities of that country or those
    countries and see what it was. But the NATO air capability is
    significant, sophisticated. I think you have to see what the
    final outcome is.
        Chairman Levin. So that in terms of the specific
    capabilities of those air forces even without our involvement,
    you're not able to say now whether or not they could
    successfully carry out that mission?
        Admiral Roughead. Senator, I think the capabilities reside
    within the NATO air forces. It's who comes together and
    contributes what that would determine the effectiveness of that
    package.
        Chairman Levin. On the question of Guam and Okinawa, you
    mentioned, Mr. Secretary, that there need to be some Japanese
    Government decisions. Do you know whether there are any
    discussions or negotiations scheduled with the Japanese
    Government relative to that issue?
        Mr. Mabus. I know that Secretary Gates in his previous
    discussions earlier this year was very frank with the Japanese
    Government on what those decisions need to be, and I think that
    the Japanese Government understands exactly what actions need
    to be taken before we can begin to take some substantive steps.
        Chairman Levin. Do you know whether there are any scheduled
    negotiations or discussions?
        Mr. Mabus. No, sir, I don't.
        Chairman Levin. That's fair. If there are, would you let us
    know?
        Mr. Mabus. Yes, sir.
        Chairman Levin. Senator Webb mentioned that the two of us
    will be heading out that way in about a month and that we
    should know the status. We'll be briefed, obviously, by you and
    your folks before we go, but on that issue particularly, if
    there's anything scheduled, if you'll let us know.
        [The information referred to follows:]

        In response to the request for notification of negotiations
    scheduled between the United States and Government of Japan, although a
    2+2 (Secretary of Defense, Secretary of State, Minister of Defense,
    Minister of Foreign Affairs) had been tentatively scheduled for April
    29 in Washington, due to the senior level focus of the Government of
    Japan and especially the Ministry of Defense, on managing the response
    to the natural disaster and nuclear crisis, this meeting has been
    postponed. We are seeking acceptable dates for all parties in the near
    future. We do not yet have a firm timetable from the Japanese for the
    landfill permit process, but in our judgment they remain committed to
    the Roadmap, both for the Guam move as well as the Futenma Replacement
    Facility and Okinawa.

        Chairman Levin. Admiral Roughead, you've testified on a
    number of occasions about your support of the United States
    signing onto the U.N. Convention on the Law of the Sea
    (UNCLOS). You reiterate that support in your written statement
    this morning. I think, Mr. Secretary, you've also testified
    before this committee in support of our supporting that treaty
    and acceding to it.
        Is there anything that's happened in the last year that has
    either changed or strengthened either of your positions on
    that? Mr. Secretary, let me start with you.
        Mr. Mabus. It has strengthened my idea that we should
    accede to this treaty, for a couple of reasons. One is, as
    other nations who are signatories try to restrict our freedom
    of navigation, we are less able to push back with as much force
    as we should be able to were we a signatory to this. I think
    that you're only going to see that increase, as it has over the
    past year.
        Second, I've seen firsthand some of the implications of the
    Arctic and the perhaps ice-free Arctic in the next couple of
    decades. The only way we can have a claim to an outer
    continental shelf area that we can explore for minerals, that
    we can use as part of our exclusive economic zone, is if we are
    signatories to the UNCLOS.
        Those two things have strengthened my stand that we very
    much need to be signatories.
        Chairman Levin. Admiral?
        Admiral Roughead. I would echo those statements, Senator. I
    think we are letting an opportunity and time pass us by. On top
    of those two, where the claims in the Pacific in particular
    have the potential to become more contentious. The opening of
    the Arctic, where resolution of claims and disagreements will
    be done through UNCLOS, we will not be there.
        On top of that, I would submit that our international
    leadership to those countries that view the seas the same way
    that we do, that as they come together to address these issues
    we are not there, and they look to us for that leadership and
    we are abrogating that leadership.
        Chairman Levin. Thank you.
        Mr. Secretary, I indicated to you that there was a couple
    of questions on that second engine that I asked you to respond
    to for the record. In addition to those two questions, let me
    add a third and a fourth just for the record, if you would. One
    would be how much development money has gone into the first
    engine and what is the $400 million, I believe, additional
    request for the Pratt engine development due to the business
    case, and how much total has gone into that engine in terms of
    development costs.
        Finally, I have a long question which I'll get to you both,
    both you, Mr. Secretary, and you, Admiral, about this issue of
    special support requirements if there is a second engine. It's
    a lengthy question raising issues with your responses. I think
    also you, General, responded on that as well. So I would ask
    all three of you to take a look at that question that I will
    get to you, and then you can submit your answer for the record.
        [The information referred to follows:]

        Mr. Mabus, Admiral Roughead, and General Amos. The F135 and F136
    engines constitute two different designs by two different
    manufacturers. The large size of the F135 and F136 (approximately 18.7
    feet and weighs 9,300 lbs in its container) necessitates greater
    sparing aboard ships as neither the assembled engine nor the power
    section module can currently be replenished underway. Similarly, due to
    the weight and height of critical engine spares, it is not feasible to
    store all Joint Strike Fighter (JSF) engine spares in legacy store
    rooms or stack them aboard ships as is done for the legacy system. This
    would necessitate work-around in hangar deck spaces normally reserved
    to store and maintain tactical aircraft. Adding an alternate engine
    makes the shipboard logistics even more challenging as it is not a one-
    for-one exchange.
        While the F136 engine would be interchangeable, there are several
    engine components that are not interchangeable. The fan, gear box, and
    power section modules are unique by F135 and F136 propulsion systems.
    Only the augmenter and exhaust nozzle modules are common by F-35
    variant. Supporting two engines would require unique spares, unique
    support equipment, and unique training. The JSF specification only
    requires engines to perform to specified criteria and physically fit
    into the F-35. Maintenance/repair technical requirements are different,
    requiring different instructions and training with differences in
    assembly hardware and special tools for off-aircraft repair.
        [Deleted.]

        Chairman Levin. I must leave. Senator Ayotte, you're more
    than welcome to take the gavel and conclude if you have
    additional questions, if that's all right. I'll hand it to you
    on the way out.
        Thank you all. All three of you have performed
    extraordinary service for this country. Admiral, since this is
    probably your last appearance here, I just want to reinforce
    what my colleagues have said about you and that service. We
    just wish you well if we don't see you again.
        Admiral Roughead. Thank you, Senator. It's been my honor.
        Chairman Levin. Mr. Secretary, thank you, and General,
    thank you both.
        Senator Ayotte [presiding]. I just have a couple of brief
    questions and then I will wrap this up for sure. I appreciate
    your patience.
        Admiral Roughead, I wanted to ask you about the maintenance
    portion of the budget. Secretary Gates said on March 4 that a
    lot of our surface ships that were built in the Reagan era will
    be aging out in coming years pretty quickly. In your written
    testimony you've echoed this concern, saying: ``Many of our
    existing cruisers, destroyers, and submarines will reach the
    end of their service life.''
        I notice in the budget proposal for fiscal year 2012 you've
    funded ship depot maintenance at 94 percent, and wanted to hear
    from you if you could provide some examples of what type of
    maintenance would not be accomplished at that level versus 100
    percent maintenance level, understanding that in order for us
    to preserve our fleet we are probably going to have to be doing
    additional maintenance, given the aging of the fleet.
        Admiral Roughead. Yes, ma'am. Thank you. We are spending
    much more on maintenance now than we did just a couple of years
    ago. So with the support of Congress, we've been able to boost
    that up.
        As we got into putting the final touches on the budget,
    because we have done that little bit of a boost-up and we
    looked at ship availabilities, maintenance periods, and the
    ones that are not included in there are not the complex types
    of work. They tend to be smaller availabilities. Clearly they
    don't include any nuclear work, nor do they include any of the
    work that's done in the public shipyards. These are all
    availabilities in the private sector, relatively small, and I
    believe that where we have been--some of the changes that we're
    putting into place with regard to putting more sailors on ships
    and in maintenance centers, that I consider this a reasonable
    approach to take.
        Senator Ayotte. Thank you very much, Admiral.
        General Amos, I had a question about our detention policy.
    I had the privilege of going over to visit some of your
    soldiers in January. I also want to say the work being done by
    the Marines is just tremendous and so wanted to commend you for
    your leadership and also just thank the soldiers that serve
    underneath you.
        If tomorrow we were able to capture the number two in al
    Qaeda in the Arabian Peninsula, that was actually formerly a
    detainee at Guantanamo--I believe his name is Saeed al-Shehri--
    where would we put him?
        General Amos. Senator, that's way above my pay grade. I
    wouldn't know where we would put him. Truly, the truth of the
    matter is that that would be resolved at a level with much
    discussion. In fact, I doubt if the Commandant of the Marine
    Corps would even be part of that discussion. It would be at the
    very highest levels of our government.
        Senator Ayotte. One of the concerns that I have is that
    I've heard testimony now from Secretary Gates as well as
    Secretary Vickers that because we're in a position where the
    President wants to close Guantanamo, there is no detention
    facility to put that type of high-value target that we have
    under our control. Are you aware of a facility we would have
    under our control that would be appropriate and not located in
    the United States, to be able to not only interrogate that
    individual, but make sure that he doesn't again rejoin the
    battlefield?
        General Amos. Ma'am, I am not aware of another facility.
        Senator Ayotte. Thank you very much. I appreciate all of
    you being here and I'm sure you're all anxious for lunch, so I
    will conclude this hearing. I thank you all for your service to
    our country. This hearing is adjourned.
        [Questions for the record with answers supplied follow:]

                   Questions Submitted by Senator Carl Levin

           IMPLEMENTATION OF THE REPEAL OF ``DON'T ASK, DON'T TELL''

        1. Senator Levin. Secretary Mabus, last December, Admiral Roughead
    testified that, ``with the exception of the moderate risk associated
    with projected retention in some Navy irregular warfare specialties, I
    assess the risk to readiness, effectiveness, and cohesion of the Navy
    to be low. Based on my professional judgment and informed by the inputs
    from our Navy, I recommend repeal of 10 U.S.C. section 654.'' General
    Amos testified: ``based on what I know about the very tough fight in
    Afghanistan, the almost singular focus of our combat forces as they
    train up and deploy to theater, the necessary tightly woven culture of
    those combat forces that we are asking so much of at this time, and
    finally the direct feedback from the survey, my recommendation is that
    we should not implement repeal at this time.'' Since that hearing, the
    Department of Defense (DOD) and the Navy have been working on policy
    changes and developing training plans needed to implement the repeal.
    What are your observations of how Navy personnel are dealing with
    possible repeal of Don't Ask, Don't Tell (DADT)?
        Mr. Mabus. Our Master Mobile Training Teams and command leadership
    teams continue to provide regular reports capturing the ``tone of the
    force'' during this training period. Feedback from our sailors
    indicates the training they are receiving is comprehensive, well-
    delivered, and effective. Additionally, we have not observed any
    impacts to readiness, effectiveness, cohesion, recruiting, or
    retention.

        2. Senator Levin. Admiral Roughead and General Amos, what are your
    current assessments of the risk to readiness, effectiveness, and
    cohesion in the Navy and Marine Corps if DADT is repealed?
        Admiral Roughead. I assess the risk to readiness, effectiveness,
    and cohesion in the Navy to be low and acceptable. According to the
    results of the Comprehensive Review Working Group servicemember survey,
    approximately 76 percent of sailors believe the impacts on
    effectiveness, readiness, unit cohesion, and morale will be neutral or
    positive. There is approximately 24 percent who believe the impact of
    repeal will be negative. I am mindful of the concerns expressed by
    these individuals. However, I believe their concerns can be effectively
    mitigated through engaged leadership, effective communications,
    training and education, and clear and concise standards of conduct.
    Since we have begun training, our commanders have reported no impacts
    to readiness, effectiveness, or cohesion. I have the utmost confidence
    in the ability of the men and women of the U.S. Navy to implement this
    change in the law while setting a positive tone, creating an inclusive
    and respectful work environment, and maintaining high standards of
    conduct, mutual respect, and military decorum.
        General Amos. I currently believe the risk is low to moderate.
    However, we will not know the actual impact of repeal until it is
    effected. During the current training phase, we have not observed
    significant anxiety or push-back from our marines. I am confident that
    Marine leaders at all levels will ensure our Corps understands the
    impending change and will ensure that marines treat each other with
    dignity and respect, thereby mitigating any impact on readiness,
    effectiveness, and unit cohesion.

        3. Senator Levin. Admiral Roughead and General Amos, please
    describe the status of training and education of sailors and marines
    regarding the repeal of DADT.
        Admiral Roughead. Navy is on track to meet our training completion
    goal of 1 July 2011 for all naval personnel. Commander, U.S. Fleet
    Forces has been appointed the Executive Agent for delivery and tracking
    of DADT training. Master Mobile Training Teams have been deployed to
    our Fleet worldwide to deliver training to our command leadership teams
    (commanding officer, executive officer, command master chief). These
    individuals will be responsible in turn to conduct the training for all
    personnel within their command. To date, more than 90 percent of our
    command leadership personnel (Tier 2) have been trained and are
    conducting training Navy-wide for all remaining personnel (Tier 3).
    Specific training for recruiters, military law enforcement, chaplains,
    legal, Fleet and Family Support Centers, personnel support
    professionals, housing, senior human resource personnel, equal
    opportunity, and Naval Criminal Investigative Service (NCIS) personnel
    (Tier 1) has been commenced and will be completed by the 1 July 2011
    deadline.
        General Amos. The Marine Corps is complete with Tier 1 (special
    staff) and Tier 2 (leadership) training. As of 30 June 2011, Tier 3
    (Marines) training is 95 percent complete. Our primary method of
    instruction is face-to-face where leaders are able to interact with
    their marines, provide information and then have a frank and open
    discussion about any questions or concerns they may have.

        4. Senator Levin. Admiral Roughead and General Amos, have you
    discovered any unanticipated issues as you initiated the training? If
    so, how are you addressing these issues?
        Admiral Roughead. Navy has not experienced any unanticipated issues
    during the training process. Feedback from our sailors indicates the
    training they are receiving is comprehensive, well-delivered, and
    effective. Additionally, we have not observed any impacts to readiness,
    effectiveness, cohesion, recruiting, or retention during the training
    period.
        General Amos. We have not observed any significant unanticipated
    issues during training. The framework for the training is very
    comprehensive and anticipates many common questions and concerns.

                  SEXUAL ASSAULTS IN THE NAVY AND MARINE CORPS

        5. Senator Levin. Secretary Mabus, 17 current and former service
    men and women recently filed a lawsuit in Federal Court alleging that
    DOD ``failed to prevent plaintiffs and others from being raped and
    sexually assaulted.'' Four of the plaintiffs were from the Navy and two
    from the Marine Corps. Among other things, the plaintiffs allege that
    DOD failed to investigate rapes and sexual assaults and failed to
    prosecute the perpetrators. Some reports suggest that up to one-third
    of the women serving in the military are victims of sexual assault.
    What is your assessment of the Navy's Sexual Assault Prevention and
    Response (SAPR) program?
        Mr. Mabus. Nothing has a more corrosive effect on readiness, good
    order, and discipline than sexual assault. We seek nothing less than a
    culture of gender respect where sexual assault is completely eliminated
    and never tolerated. The ``Navy Sexual Assault Prevention Summit''
    brought together senior military and civilian Navy leaders to interact
    with recognized experts in the field. I established a new Navy Sexual
    Assault Prevention and Response Office (DON-SAPRO), led by a Senior
    Executive Service civilian who reports directly to me. DON-SAPRO is my
    primary agent for developing Secretariat-level policy and for
    monitoring, coordinating, and assessing the Navy-wide efforts to
    prevent sexual assaults.
        The Department of the Navy and its two military Services--the U.S.
    Navy and the U.S. Marine Corps continue our commitment to reduce the
    incidence of sexual assault, provide compassionate support to sexual
    assault survivors, and focus on prevention. Senior department
    leadership provide a consistent top-down leadership message,
    underscored by their actions that sexual assault is incompatible with
    our core values. Examples of the many initiatives taken by the Navy in
    fiscal year 2010 include:

             ``Bystander Intervention'' pilot programs at four
            locations--educated sailors and marines on recognizing and
            interrupting risky situations. Further implementation is
            planned for fiscal year 2011.
             Engaged a nationally-recognized civilian expert to
            advise departmental efforts on sexual assault prevention and to
            help update sexual assault training curricula.
             Expanded training for military investigators and
            prosecutors and sponsored ``Sexual Assault Investigation and
            Prosecution'' mobile training teams.
             The Marine Corps has revised its training curriculum
            for Noncommissioned Officers (NCOs), Sexual Assault Response
            Coordinators (SARCs), and Victim Advocates (UVAs/VAs).

        6. Senator Levin. Secretary Mabus, have you made any changes in the
    Navy to improve accountability for Navy personnel who commit sexual
    assaults?
        Mr. Mabus. Sexual assaults are crimes that devastate victims,
    undermine teamwork, threaten unit cohesiveness, and ultimately reduce
    fleet readiness. Navy has a ``zero tolerance'' sexual assault policy.
    Expectations of senior leadership for SAPR are outlined in policy and
    in Naval and Marine administrative messages sent worldwide.
        Navy Judge Advocate General (JAG), Marine Corps Judge Advocate
    Division, and NCIS partnered to review cases, analyze characteristics
    of typical cases, and develop best practices for investigation,
    evaluation, and prosecution of sexual assault cases. Trends were
    evaluated to determine the type of training necessary to improve the
    quality of investigation and prosecution of sexual assault cases. This
    training was then delivered using mobile training teams throughout the
    Navy and Marine Corps.
        Specific Department and Service-level initiatives:

             Hired two Sexual Assault Litigation Specialists
            (nationally recognized experts)
             Developed new courses: Prosecuting Alcohol-Facilitated
            Sexual Assault; Sexual Assault Litigation and Mentoring Skills;
            and Trial Advocacy taught by AEquitas
             Navy JAG Corps implemented the Military Justice
            Litigation Career Track
             Marine Corps Trial Counsel Assistance Program
            implemented
             Judge Advocate Division conducted Marine Corps-wide
            Victim Witness Assistance Program (VWAP) training
             Ensured sexual assault and VWAP were addressed in all
            leadership training venues
             Developed joint-service DVD on sexual assault
            prosecution
             Expanded NCIS training for Family and Sexual Violence
            Special Agents
             DON Sexual Assault Advisory Council established in
            policy requiring senior leadership participation from all key
            SAPR stakeholders
             Ongoing SAPRO team site visits and fleet-wide SAPR
            Workshops (CONUS and OCONUS) focus on leadership and command
            responsibility for SAPR
             SAPR definitions and reporting requirements were added
            on Navy advancement exams
             DON Sexual Assault Prevention Summit scheduled for May
            2011 with DON senior leadership, Regional and Installation
            Commanders, and senior enlisted leadership will focus on
            prevention and management of sexual assault cases

        7. Senator Levin. Admiral Roughead and General Amos, what measures
    have you taken as service chiefs to provide a safe environment for
    sailors and marines so that they do not have to fear being sexually
    assaulted by fellow servicemembers?
        Admiral Roughead. Navy continues to maintain a zero tolerance
    policy toward sexual assault. My goal is to eliminate sexual assault by
    fostering a culture of prevention which includes effective education
    and training, a 24/7 response capability to ensure victim support,
    reporting procedures available worldwide, and accountability that
    enhances the safety and well being of all. As CNO, I have implemented
    the following measures:

             Increased oversight. In September 2009, I appointed
            Deputy Chief of Naval Operations, Manpower Personnel Training
            and Education (N1) as the Executive Agent (EA) for the Navy
            SAPR program to provide high level oversight and assessment
            through regularly scheduled program reviews in which key
            stakeholders provide inputs on critical SAPR measures of
            performance and are briefed on the program's effectiveness. To
            ensure accountability down to the local level, Navy implemented
            Sexual Assault Coordinating Committees in fiscal year 2010.
            These organizations provide local oversight of the SAPR program
            at each installation.
             Policy update. Navy's SAPR policy has been revised and
            will be released in the near future. The revision has been
            issued to improve servicemember confidence in the Navy's SAPR
            program and to improve the rate and level of victim
            participation in the legal process. The revision has two
            significant changes that enhance guidance and factors for
            commanders to consider about the collateral misconduct of
            victims of sexual assault and increases the required
            information dissemination throughout the chain of command
            following a sexual assault and through the legal resolution.
             Raising Awareness and Enhanced Training. Navy has
            engaged with other governmental agencies and internal agencies
            to raise sexual assault awareness, increase victim and
            servicemember confidence, promote Bystander Intervention (BI),
            and ultimately reduce the occurrence of sexual assaults. Navy
            has also incorporated SAPR into training curricula at all
            levels, beginning at the accession points for officers and
            enlisted. It then is reinforced through our specialty school
            curriculum and our leadership school curriculums. The Navy
            hired a highly-qualified expert who adds critical expertise to
            the development of the overall Navy Prevention strategy with
            the intent of identifying gaps across the continuum of
            training, prevention, and response initiatives.
             Synchronized messages. Navy develops and delivers
            consistent and concise messages through social marketing media
            channels, Navy Administrative Messages and Sexual Assault
            Awareness Month events. Messaging is also coordinated with the
            Navy Safety Center to focus on the link between alcohol misuse
            and sexual assault.
             Bystander Intervention. Navy is completing analysis of
            a 9-month bystander intervention pilot program which was
            focused on the elimination of sexual assault incidents. This
            program leveraged peer-to-peer training using real life
            scenarios. Evaluation of a fleet-wide roll out will be included
            in the analysis.
             Victim Support. Navy provides 24/7 response for sexual
            assault victims through trained Victim Advocates (VA) and
            Sexual Assault Response Coordinators. Navy is also fully
            engaged in the roll out of the Office of the Secretary of
            Defense (OSD) sponsored Safe Helpline, a resource which
            provides expert support to military victims of sexual assault
            via telephone, text, or chat.

        General Amos. The Marine Corps has taken aggressive actions to
    heighten awareness about sexual assault and make prevention a
    leadership issue. Commanders are responsible for creating a safe
    environment and a climate of respect for all marines. We have also
    taken measures to highlight the Sexual Assault Prevention Response
    Program by partnering with industry experts, promoting a strong
    prevention campaign, implementing a 24/7 Helpline to support victims of
    sexual assault, and increasing visibility of this issue in the field.
    We are also utilizing Bystander Intervention as a training tool to
    create an understanding that every marine has an inherent duty to be
    actively engaged in preventing sexual assaults.

                          SUPPORT FOR WOUNDED WARRIORS

        8. Senator Levin. Secretary Mabus, wounded sailors and marines
    deserve the highest priority for support services, healing and
    recuperation, rehabilitation, evaluation for return to duty, successful
    transition from Active Duty, if required, and continuing support beyond
    retirement or discharge. In your view, what are the most critical
    shortcomings in our providing care for our wounded warriors?
        Mr. Mabus. Recognizing and appreciating the sacrifices of wounded,
    ill, and injured (WII) servicemembers and their families remain a
    priority of the Navy. Through the Bureau of Medicine and Surgery's WII
    Warrior Support, the Navy Safe Harbor Program, and the Marine Corps
    Wounded Warrior Regiment, we take care of our own by serving WII
    sailors and marines who are in Active Duty, Reserve, and veteran
    status.
        The past 2 years, I have designated November as our Warrior Care
    Month. Last year, our theme was ``Focusing on Abilities--Supporting
    Wounded Warriors throughout Recovery, Rehabilitation, and
    Reintegration.''
        Since 2001, we have had over 12,000 marines and sailors wounded in
    action in Operation Iraqi Freedom (OIF), Operation Enduring Freedom
    (OEF), and Operation New Dawn (OND). Historic advances in military
    medicine have resulted in personnel surviving injuries that would have
    been fatal in any previous conflict. That is good news. Our leading
    military treatment facilities (MTF) are helping them recover and
    rehabilitate.
        It is said that critical to reintegration is finding a fulfilling
    career. But for some of our returning brothers and sisters in arms,
    reintegration to the workforce in the face of the current economic
    downturn poses a significant challenge. In addition to weeks, months,
    or years of recovery, our wounded sailors and marines face the
    potential travesty of unemployment. Over 140,000 veterans of OIF and
    OEF are unemployed, or underemployed, with approximately 5,000 WII
    servicemembers joining the unemployment rolls every year--that is 4 new
    WII servicemembers every day.
        Building resumes, getting the training and education required, and
    finding a civilian career remain a challenge for our wounded warriors,
    despite many initiatives across government and the service branches to
    support returning personnel. We need to better coordinate the
    employment effort. At the Navy, we are making progress in this area. We
    are streamlining the Navy's wounded warrior hiring process and
    expanding our Wounded Warrior Training and Education programs. We have
    established a Wounded Warrior Hiring and Support Initiative tasked to
    develop solutions to improve wounded warrior hiring and support within
    the Navy. The initiative aims to increase the number of wounded
    warriors hired into the Navy, the Federal Civil Service, and the
    private sector. But there is more to be done. We need to ensure that we
    are continually working with our sister Services, the OSD, the
    Department of Veteran Affairs (VA), Department of Labor, Office of
    Personnel Management, other Federal Government agencies, and non-
    federal entities in this effort.
        Our Wounded Warrior Training Programs have become a best practice
    across DOD. Our Veterans Individual Training Assistant Link is a
    special program to help wounded, severely ill, and injured marines and
    sailors, and other servicemembers while recovering in the MTFs to
    transition from a military career into the Federal Civil Service or
    other opportunities. While still receiving treatment in our MTFs,
    wounded, severely ill, and injured marines and sailors, and other
    servicemembers receive educational and employment counseling, are
    encouraged to enroll in schooling and, where practical, provided pre-
    employment job experience in a field that interests them. Our Career
    Learning and Employment Centers provide education and on-the-job
    training for disabled veterans. They also provide career assistance and
    other veteran support to assist the veteran to achieve their career
    goals. Through these effective training programs, Naval Sea Systems
    Command hired 282 wounded warriors and disabled veterans in fiscal year
    2010 with a goal of 365 in fiscal year 2011. the Navy hired 1,905
    wounded warriors and disabled veterans (30 percent and above disability
    rating) in fiscal year 2010.
        While it is the WII marine or sailor who physically endures
    recovery, rehabilitation, and reintegration, it is the family unit that
    serves as a critical support system for healing. To this end, families
    make many sacrifices. Oftentimes, it is the spouse of a recovering
    sailor or marine who is the breadwinner of the family. We have made
    progress in this area too. We are working with the Office of Personnel
    Management to remove the 2-year eligibility limitation for non-
    competitive appointment for spouses of certain deceased or 100 percent
    disabled veterans. This will help the wounded warrior families whose
    wounded family member is not able to return to full-time employment.
    Last year, President Obama signed the Caregivers and Veterans Omnibus
    Health Services Act that ensures that families of veterans severely
    wounded in Iraq and Afghanistan receive comprehensive, coordinated
    financial and other support that will enable them to provide these
    warriors with needed home-care. The Navy supports this and is standing
    by to ensure appropriate support for caregivers, to include special
    compensation for those caregivers who face financial hardships as a
    result of caring for their catastrophically injured sailor or marine,
    is received.
        By definition, post-traumatic stress disorder (PTSD) does not start
    until 30 days after the occurrence of the trauma and the onset may be
    delayed from weeks to years after the trauma. Many servicemembers may
    not experience the onset of PTSD symptoms until they have separated
    from the Service and are under the care of the VA. Because of this wide
    variability, calculation of an average time to onset is impractical.
    The Navy and the Marine Corps solution to this issue is a robust
    program for prevention, early detection, and treatment which makes
    every effort to remove the stigma and other barriers to servicemembers
    receiving care at the earliest possible time. The Navy and Marine Corps
    continue to search for ways to eliminate the stigma and help sailors
    and marines understand that asking for help is ``OK.'' We also need to
    ensure that employers of wounded warriors and their staff are educated
    on PTSD and Traumatic Brain Injury so they can better support our
    wounded warriors and succeed in the workplace.

        9. Senator Levin. Secretary Mabus, numerous studies document the
    need to reform DOD's disability evaluation system. The recently adopted
    Integrated Disability Evaluation System (IDES) has improved the system
    by integrating DOD and VA systems, but it still takes nearly a year to
    process through the system. What is your assessment of IDES?
        Mr. Mabus. The IDES process is achieving the primary goals that
    were intended when this process was designed in 2007. Most notable of
    these goals is that our sailors and marines receive both their post-
    service military and VA benefits on the first day authorized by law.
    This eliminates the ``benefits gap'' experienced under the previous DES
    system. To achieve this significant benefit, the IDES process has the
    secondary impact of keeping our servicemembers in uniform for a longer
    period of time. This is a concern because the length of time needed to
    process cases has direct proportional adverse impact on the Services'
    readiness for their military mission. Those in the IDES remain in
    uniform longer which, for any given end-strength, reduces the number of
    Active Duty available for unrestricted assignment. Therefore, the
    principle focus must be on reducing the amount of time consumed by the
    process itself without debasing what we do for our WII servicemembers.
        The simplest and most direct means of monitoring the IDES process
    is through the observation of case flow--the time servicemembers' cases
    spend transiting the IDES' waypoints. Tracking and evaluating process
    time brings clarity for resourcing decisions and process improvements.
    To this end, based on a review of data from IDES operations over the
    past 6 months (period ending March 31, 2011), we would like to reduce
    the average time taken by the Medical Evaluation Board (MEB) Phase of
    the IDES by approximately 100 days. However, since some of the
    processing events occurring within this phase are controlled by the
    MTFs and some are controlled by the VA, reducing the average MEB Phase
    time requires both departments to ensure resources and internal
    processes are aligned to support timeliness goal.

        10. Senator Levin. Secretary Mabus, how can we make this system
    better to support the needs of our wounded warriors?
        Mr. Mabus. As previously discussed in the response to question #9,
    the principle focus must be on reducing the amount of time consumed by
    the process itself without debasing what we do for our WII
    servicemembers. To significantly reduce the overall processing time,
    the Navy has recommended specific changes to ``remodel'' the IDES. This
    IDES remodel allows us to keep what is good about the current IDES
    process while making needed improvements and renovations. The
    recommended IDES remodel can be implemented under current laws, avoids
    any post-service benefit gap, maintains the servicemembers' due process
    rights, and can be completed in less than half the time required by the
    current IDES process. This remodel is currently under review by both
    DOD and the VA for possible near-term implementation. By seizing
    process design change opportunities, properly resourcing the processes
    we decide to deploy, and better leveraging existing capabilities, both
    the WII servicemember and readiness for our military mission will
    benefit.

                           FORCE SHAPING AUTHORITIES

        11. Senator Levin. Admiral Roughead, in your prepared statement,
    you said that: ``We will be challenged to meet our Active and Reserve
    end strength targets in fiscal year 2012 using existing force shaping
    measures. As a result of continued high retention and low attrition
    across the force, we are facing increasing pressure to use involuntary
    force shaping measures to remain within our authorized end strength.''
    What additional force shaping authorities will you need to shape a Navy
    with the right sailors with the skills and experience the Navy needs?
        Admiral Roughead. While the Navy will be challenged in meeting
    Active and Reserve congressional end strength limits for fiscal year
    2012, existing voluntary and involuntary force-shaping authorities are
    sufficient for this fiscal year. Navy will continue to monitor those
    levers against end strength. Should additional authorities be required,
    we will consult with Congress and utilize the legislative process as we
    develop any necessary authority changes.

        12. Senator Levin. Admiral Roughead, do you plan to ask Congress
    for this authority?
        Admiral Roughead. While the Navy will be challenged in meeting
    Active and Reserve congressional end strength limits for fiscal year
    2012, existing voluntary and involuntary force-shaping authorities are
    sufficient for this fiscal year. Navy will continue to monitor those
    levers against end strength. Should additional authorities be required,
    we will consult with Congress and utilize the legislative process as we
    develop any necessary authority changes.

        13. Senator Levin. General Amos, you state that you are
    ``determined to `keep faith' with [your] marines and their families by
    designing and executing a responsible drawdown from [your] current
    202,100 end strength such that [you] avoid reduction-in-force actions
    and early retirement boards.'' How do you plan to reduce the Active
    Duty Marine Corps end strength from 202,100 to 186,800, a reduction of
    15,300 marines, without using involuntary measures?
        General Amos. If the Marine Corps receives the authorities to draw-
    down over a 4-year period, normal manpower force shaping levers of
    reduced accession and reduced first term retention will provide the
    primary reduction methods. Additional shaping measures, such as
    adjusting high tenure policies, may be required to achieve proper grade
    and occupational specialty distribution as well as end strength
    targets. If used, these slight modifications to manpower policies will
    still provide every marine a competitive opportunity to continue
    serving.

        14. Senator Levin. General Amos, will you need additional
    legislative authority from Congress to do this?
        General Amos. We believe that given the proper time (i.e. 4 years),
    the Marine Corps will not need any additional authorities. However, we
    may require an extension of current and expired authorities relative to
    end strength to cover the period of the planned draw-down (i.e. fiscal
    year 2015-fiscal year 2018).

                             SERVICEMEMBER SUICIDE

        15. Senator Levin. General Amos, Congress remains extremely
    concerned, as I know you do, about the rates of servicemember suicide.
    While the numbers of suicides in 2010 among Navy and Marine Corps
    members appear to have decreased compared to 2009, February saw a spike
    in Navy suicides, so we must continue to focus on suicide prevention
    and resiliency programs. To what do you attribute the decrease in
    marine suicides?
        General Amos. Marine Corps leaders at all levels are fostering
    individual and unit resilience, and creating an environment that
    encourages marines to engage supporting resources before stress mounts
    to the risk of suicide. As they traditionally do, our NCOs have led the
    way by first undergoing our prevention and awareness training and then
    administering it to their junior marines. To assist them we included
    marines of every rank in the development and testing of our prevention
    courses. As a result, marines are better receiving the message that
    asking for help is a sign of strength and that getting help early can
    improve their careers and the readiness of the Corps overall. This
    effort also aims to reduce the traditional stigma to seeking mental
    health care.
        We continue to enhance our Operational Stress Control and Readiness
    Program, which embeds behavioral health providers in deployment and
    garrison unit settings, optimizing their proximity to and trust with
    marines. We train these providers and their support teams.
    Additionally, we recently began training 40-50 marines per deploying
    unit to recognize signs of stress and assist fellow marines in getting
    help when needed. The relationship between individual marines is a
    powerful tool in the effort to prevent suicide.
        Amidst these positive trends and developments, we are mindful that
    we have not ultimately solved the suicide problem. As such we will
    continue to learn, adapt and do whatever is necessary to combat this
    tragic and preventable loss of life.

        16. Senator Levin. Secretary Mabus and Admiral Roughead, how is the
    Navy addressing the recent rise in suicides that you saw last month?
        Mr. Mabus and Admiral Roughead. Current Navy suicide prevention
    initiatives include training aimed at front line supervisors to boost
    understanding of sailors under their command, recognize changes in
    their behavior and signs of concern, and engaging early with
    appropriate support when necessary. Leadership seminars focus leader
    attention during times of transition and stress due to loss, including
    loss of status or career standing, and address the concept of
    continuously building and reinforcing connections with families to
    facilitate communication in times of need. Recognizing that people
    exposed to suicide are an at-risk group, expanded postvention training
    and guidance has recently been added to assist leaders, in the
    aftermath of a tragedy, in preventing future suicides. Other specific
    actions include:

             Expanded surveillance and analysis of Navy Active Duty
            and selected Reserve suicide deaths and attempts.
             Support of command prevention and stress management
            programs with printed resource and innovative interactive
            training materials.
             Suicide prevention coordinator and first responder
            training worldwide and at Navy Reserve locations via Navy
            Reserve psychological health outreach teams.
             Navy representation in support of DOD, VA, and other
            cooperative efforts.
             Assistance with development of DOD response to
            recommendations from the DOD task force report on prevention of
            suicide among members of the Armed Forces.

        Additionally, due to the recent rise in suicides, we are
    intensifying suicide prevention communication efforts and assessing our
    current program to ensure we are executing it to the fullest, while
    incorporating recommendations and feedback from the DOD suicide
    prevention task force report, the RAND report and the recent DOD/VA
    suicide prevention conference.

                 IMPACT OF DEPLOYMENT OF MISSILE DEFENSE SHIPS

        17. Senator Levin. Secretary Mabus and Admiral Roughead, in the
    last few days, the United States deployed the USS Monterey, an Aegis
    ballistic missile defense (BMD) cruiser to the Mediterranean Sea as
    part of Phase 1 of the Phased Adaptive Approach (PAA) to missile
    defense in Europe. There will be additional deployments of improved
    Aegis BMD capability with each successive phase of the European PAA.
    How does the Navy plan to manage these deployments so it is able to
    accomplish all its assigned missions, including--but not limited to--
    missile defense?
        Mr. Mabus. DOD employs a comprehensive Global Force Management
    (GFM) process to allocate available assets, including BMD-capable Aegis
    ships, to meet Geographic Combatant Commanders (GCC) requirements, such
    as the European PAA. This process considers the GCC surface combatant
    requirements for all mission areas not just BMD.
        A key attribute of all Aegis ships is their multi-mission
    capabilities within the maritime domain, which allows the Navy to
    employ Aegis ships in multi-mission roles rather than for exclusive
    missions. These ships can perform a variety of other non-BMD missions
    such as strike warfare, air warfare, submarine warfare, surface
    warfare, information warfare, high value asset protection, or maritime
    interdiction either concurrently or sequentially as the GCC requires.
        The Navy is not large enough to deploy ships for single mission
    purposes, and thus, with the exception of deterrent patrols by SSBNs,
    does not advocate deploying warships for single mission tasking. Single
    mission use of our Aegis ships for BMD will result in shortages in
    other mission areas and a loss of operational flexibility for the GCCs.
        The Navy's operating concept for maritime BMD features a graduated
    readiness posture that allows BMD-capable Aegis ships to be on an
    operational tether and available for other tasking when not directly
    involved in active BMD operations. Aegis ships operating in support of
    a BMD mission do not lose the capability to conduct other missions;
    however, specific mission effectiveness may be affected by ships'
    position and/or application of ship resources to those missions.
        Admiral Roughead. The Navy currently has sufficient capacity to
    meet the most critical demands for multi-mission surface combatants;
    however, Navy does not have the capacity to meet all GCC demands, such
    as the European PAA, for BMD-capable ships without breaking currently
    established Chief of Naval Operations Personnel Tempo program limits.
    Based on threat analysis and current indications from GCCs, and
    assuming standard 6-month deployment lengths, Navy and MDA concluded
    that GCC demand for surface combatants with Aegis BMD capability will
    outpace capacity through approximately 2018.
        A key attribute of all Aegis ships is their multi-mission
    capabilities within the maritime domain, which allows the Navy to
    employ Aegis ships in multi-mission roles rather than for exclusive
    missions. These ships can perform a variety of other non-BMD missions
    such as strike warfare, air warfare, submarine warfare, surface
    warfare, information warfare, high value asset protection, or maritime
    interdiction either concurrently or sequentially as the GCC requires.
    The Navy is not large enough to deploy ships for single mission
    purposes, and thus, with the exception of deterrent patrols by SSBNs,
    does not advocate deploying warships for single mission tasking. The
    Navy's operating concept for maritime BMD features a graduated
    readiness posture that allows BMD-capable Aegis ships to be on an
    operational tether and available for other tasking when not directly
    involved in active BMD operations. Aegis ships operating in support of
    a BMD mission do not lose the capability to conduct other missions;
    however, specific mission effectiveness may be affected by ships'
    position and/or application of ship resources to those missions.

                     CONTINUED PRODUCTION OF SM-3 BLOCK IA

        18. Senator Levin. Admiral Roughead, the Missile Defense Agency
    (MDA) is not planning for additional production of the SM-3 Block IA
    interceptor for the Aegis BMD system, preferring instead to move to
    production of the next SM-3 variant that has increased capability, the
    Block IB. However, there have been technical delays with the Block IB
    which has resulted in production delays. Given that the regional
    combatant commanders are seeking increased inventories of SM-3
    interceptors, do you believe that we should consider additional
    production of the SM-3 Block IA if there continues to be delays with
    the Block IB interceptor?
        Admiral Roughead. Navy has a sufficient inventory of SM-3 missiles
    to satisfy the present global missile defense requirement. An
    additional delay in the production of SM-3 Block IB missiles would be a
    cause for concern. However, Navy and MDA are committed to delivering
    and fielding the significantly more capable SM-3 Block IB on schedule.
    We will keep Congress fully informed as these important programs
    progress.

                      ANTI-SHIP BALLISTIC MISSILE DEFENSE

        19. Senator Levin. Secretary Mabus and Admiral Roughead, there has
    been recent discussion of China's development of an anti-ship ballistic
    missile (ASBM) capability that could pose a risk to our aircraft
    carriers in the western Pacific. I know the Navy takes a strong
    interest in this issue. Without going into any sensitive information,
    what steps are we taking to protect our aircraft carriers from such a
    system?
        Mr. Mabus and Admiral Roughead. Our Navy has made a significant
    investment in new ships, sensors, weapons, and systems to counter a
    wide array of evolving threats. Additionally, we have invested heavily
    in Aegis modernization, to upgrade existing Aegis technology already in
    the Fleet. These initiatives involving the current and future Fleet
    will continuously improve our Integrated Air and Missile Defense
    capability, allowing our forces to continue to operate forward around
    the world.

                            STRIKE FIGHTER SHORTFALL

        20. Senator Levin. Admiral Roughead, we have had continuing
    discussions over the past several years about a potential strike
    fighter shortfall, with the estimates of that shortfall ranging as high
    at times as 250 aircraft. This year, we have seen yet another
    restructuring of the Joint Strike Fighter (JSF) program, with a
    reduction of 65 F-35 aircraft over the Future Years Defense Plan (FYDP)
    for the Navy and Marine Corps, with an increase in the number of 41 F-
    18s, an increase that does not match the loss of F-35 aircraft.
    Considered alone, that would be going in the wrong direction to try to
    reduce the gap. However, in addition this year, you have established a
    service life extension program (SLEP) for existing F-18 aircraft that
    may help ameliorate the gap. What is the Navy's current assessment of
    the maximum size of the strike fighter shortfall?
        Admiral Roughead. Based on the 2012 President's budget, the Navy
    projects it will experience a peak inventory shortfall of 65 aircraft
    in 2018, should the following conditions exist: accelerated transition
    of 10 F/A-18 legacy Hornet squadrons into Super Hornets; the service
    life extension of approximately 150 legacy Hornets; and procurement of
    a total of 556 F/A-18E/F Super Hornets. As I testified, this aircraft
    shortfall is manageable.

        21. Senator Levin. Admiral Roughead, in the face of such potential
    shortfalls, why did the Navy not increase F/A-18E/F procurement to
    compensate for the reduction in JSF procurement so that you would at
    least remain even in your numbers of strike fighter production?
        Admiral Roughead. The Navy's procurement objectives presented in
    the fiscal year 2012 President's budget include the procurement of 41
    additional F/A-18E/F for a total of 556. With the addition of 41 Super
    Hornets, Service Life Extension of 150 F/A-18 A-D aircraft to 10,000
    flight hours, and the accelerated transition of three additional legacy
    squadrons, the Navy was able to reduce the estimated strike fighter
    shortfall to the current value of 65 aircraft, occurring in 2018,
    without a one-for-one compensation for JSF reduction and F/A-18E/F
    procurement. This shortfall risk is manageable.

                          NUNN-MCCURDY RECERTIFICATION

        22. Senator Levin. General Amos, in February 2007, the Secretary of
    the Navy notified Congress that the Expeditionary Fighting Vehicle
    (EFV) program experienced what is known as a ``critical Nunn-McCurdy
    breach,'' meaning that unit costs grew at least 25 percent above the
    acquisition program baseline that was current at that time. When such a
    breach occurs, DOD is required to either cancel the program or to
    continue the program, to certify to Congress that: the program is
    essential to national security, there are no alternatives which will
    provide equal capability at less cost, the new cost estimates are
    reasonable, and the management structure is adequate to control costs.
    In June 2007, the Under Secretary of Defense for Acquisition provided
    that certification to Congress. In testimony to the House of
    Representatives at the end of June 2007, DOD witnesses explained that
    the Joint Requirements Oversight Council (JROC), chaired by the Vice
    Chairman of the Joint Chiefs of Staff, formally examined the
    requirements for the EFV as part of the Nunn-McCurdy process. The JROC
    concluded that the EFV requirements ``are essential to national
    security.'' A second DOD panel examined alternatives to the EFV and
    concluded that none existed that could meet the EFV requirements at
    equal or less cost. What has changed since the EFV went through the
    Nunn-McCurdy certification?
        General Amos. The requirement to field an amphibious vehicle has
    not changed. Based on the assessment conducted in support of Nunn-
    McCurdy certification requirements, the Vice Chairman of the Joint
    Chiefs of Staff validated that ``The Amphibious Joint Forcible Entry
    Operations capabilities defined by the EFV Capabilities Production
    Document remain essential to national security.'' However, since then,
    the operating environment and the increased cost of developing a modern
    combat vehicle have changed. Throughout the period when the EFV was
    being developed, threats in the littorals and U.S. capabilities to
    counter and overcome these threats have evolved. We now believe that
    our naval capabilities will allow us to launch an amphibious vehicle at
    a minimum required distance of 12 nautical miles from the coastline--a
    distance less than that forecasted when the EFV was developed. This
    launch distance mitigates the need for a high-speed component to a
    future amphibious tractor, greatly reducing vehicle complexity and
    cost.
        Improvised explosive device (IED) threats and the changing
    operating environment drove increased investments in vehicles to
    increase protection and network capability. Moreover, lessons learned
    from the dispersed nature of current operations have led to increased
    requirements for protective armor kits and network connectivity for all
    tactical and combat vehicles, adding cost to our entire Ground Combat
    and Tactical Vehicle (GCTV) portfolio. Today's fiscal environment and
    declining total obligation authority have pressurized all procurement
    investments, thus making affordability a driving requirement to balance
    programs and consider risk within the GCTV strategy.
        The Marine Corps is committed to the capability represented by the
    cancelled EFV program. As stated by the Secretary of Defense, we are
    firm in our requirement for an amphibious combat vehicle (ACV), which
    is essential to facilitating ship-to-shore operations in permissive,
    uncertain, and hostile environments; assuring access where
    infrastructure is destroyed or nonexistent; and creating joint access
    in defended areas.

              BUDGETING FOR AMPHIBIOUS ASSAULT VEHICLE PROCUREMENT

        23. Senator Levin. Secretary Mabus, the last time the Marine Corps
    bought a new amphibious assault vehicle (AAV) was almost 40 years ago.
    Buying a new armored assault vehicle is a rare event and a major
    undertaking, since it is a unique and critical element in the Nation's
    ability to project power ashore. Nonetheless, the Marine Corps and the
    Navy take the view that expenditures on a new vehicle, combined with
    expenditures on other needed ground vehicles, cannot exceed the
    historical average of what the Marine Corps spends year-to-year on
    ground vehicles. This seems strange and illogical. An important but
    rare investment would seem to demand an increase in average
    expenditures in a given budget account. This temporary increase in one
    area would be compensated for by temporary decreases in other areas
    where similar periodic investments have concluded. Why should the
    Marine Corps be forced--or be forcing itself--to make a major
    investment like the EFV fit within a set budget for a specific type of
    end article?
        Mr. Mabus. Marine Corps leadership made the recommendation to
    cancel EFV based upon recent program performance which included a Nunn-
    McCurdy breach and multiple schedule slips due to engineering issues
    with the pump-jet propulsion train. This termination was not
    necessitated by a need for the Marine Corps to fit programs within any
    pre-existing or historical level of funding.
        Since system development for EFV began in 2000, it has had severe
    cost growth and technological problems. The program experienced
    substantial cost overruns in 2007 and was then restructured, and EFV
    costs were growing at a rate we simply could not afford. Its primary
    technical challenges at this stage pertain to propulsion train and
    armor reliability. As a result, it was decided that no further
    investment should be committed to EFV due to current program
    performance.

        24. Senator Levin. Secretary Mabus, do other budget accounts, such
    as Shipbuilding and Conversion, Navy (SCN), vary from historical
    averages when the Navy makes large purchases, such as is the case with
    an aircraft carrier?
        Mr. Mabus. As described in the Report to Congress on the Annual
    Long-Range Plan for Construction of Naval Vessels for fiscal year 2011
    submitted in February 2010, DOD will average no more than $15.9 billion
    of annual funding (in fiscal year 2010 dollars) across the 30 years
    reflected in the report, including those years in which aircraft
    carrier funding is included. DOD utilizes incremental funding, as
    approved by Congress, as a mechanism to mitigate the impact of the
    carrier on the overall SCN appropriation. However, in those years where
    the carrier funding accounts for a larger percentage of the total SCN
    budget, the procurement of other shipbuilding platforms is adjusted in
    order to stay within available SCN funding.

        25. Senator Levin. Secretary Mabus, does the Navy increase the
    Aircraft Procurement, Navy (APN) account in terms of its share of the
    investment budget during the period when it is investing heavily in new
    aircraft such as the F-35?
        Mr. Mabus. The Navy's overall investment in the APN appropriation
    as a percentage of the total investment request varies year to year
    from fiscal year 2012 to fiscal year 2016, but it is consistently
    between 28 percent and 30 percent. The changes in the percentage and
    overall APN funding level is not solely attributable to JSF but is a
    combination of a number of factors and programs. For example, the P-8A
    investment steadily increases from fiscal year 2012 to fiscal year 2016
    as the program ramps up production. Others programs overall investment
    decline, such as the EA-18G program which will achieve its inventory
    objective in fiscal year 2014. The JSF APN request does steadily
    increase as a percentage of the APN request from 4.6 percent in fiscal
    year 2012 to 7.6 percent in fiscal year 2016 as the JSF program ramps
    up production. The table below shows the year-to-year percentages from
    fiscal year 2012 to fiscal year 2016 for the APN request as a
    percentage of the total Navy investment request and the JSF APN request
    as a percentage of the total APN request.

                      SYSTEM DEVELOPMENT AND DEMONSTRATION

        26. Senator Levin. Secretary Mabus, we do not yet know whether the
    Marine Corps can build a new AAV that would meet reduced EFV
    requirements for an amount that is significantly less than what the EFV
    would cost to finish. Before we irrevocably terminate work on the EFV,
    why not finish the System Development and Demonstration (SDD) phase
    over the next year while DOD conducts its studies of alternative
    solutions?
        Mr. Mabus. The cost of completing the SDD phase would require $242
    million in fiscal year 2011, $179 million in fiscal year 2012, and $37
    million in fiscal year 2013 for a total of $458 million. The program is
    not supportable within the context of likely Marine Corps procurement
    budgets. Even in the wake of the changes since 2007, the simple fact is
    that the procurement and operations and maintenance costs of this
    vehicle are onerous. We have examined multiple options to preserve the
    program, either by reducing the number of EFVs, cutting capabilities,
    or stretching out the production run. Unfortunately, none of these
    options meets what we consider reasonable affordability criteria. The
    program office continues to refine a cancelation plan for USD AT&L
    approval. This plan identifies which efforts on the EFV contract will
    be completed in order to better inform the requirements development
    team in support of the follow-on ACV. The remaining elements of the
    contract will be shut down using an orderly approach. In essence, we
    will simply complete those remaining tasks which provide best value to
    the government. The selected activities are designed to capture
    performance characterization and may include such things as water
    speed/power performance and tradeoffs; human factors considerations and
    performance; and subsystem designs (technologies) that address the AAV
    capability gaps (i.e., thermal imaging, inertial navigation, laser
    range finder, crew vision system). These technologies and performance
    characteristics will better inform requirements and allow us to
    identify tradeoffs as we develop a more affordable ACV solution.

        27. Senator Levin. Secretary Mabus, we understand that finishing
    the essential elements of the SDD phase will cost about the same as
    paying the termination liability. If that is true, we might get
    something more for the taxpayers' investment and we could preserve the
    option of going forward with the EFV or a variant of it if nothing
    better turns up. Are you evaluating that strategy?
        Mr. Mabus. We have evaluated that strategy. However, finishing the
    essential elements of the SDD phase does not cost the same as paying
    the termination liability. The cost to complete the SDD phase requires
    $242 million in fiscal year 2011, $179 million in fiscal year 2012, and
    $37 million in fiscal year 2013 for a total of $458 million. The cost
    to cancel the EFV program is $216 million--all of which is in fiscal
    year 2011. Furthermore, we designed ongoing work to optimally inform
    the future ACV program. By selectively testing and developing only
    relevant capabilities for the future we provide best value to the
    government and maximize the return on our EFV investment. Our aim is to
    drive termination costs to effectively zero by leveraging those aspects
    of the EFV program of continuing value.

        28. Senator Levin. Secretary Mabus, can you identify the relative
    costs of termination and finishing the essential elements of the SDD
    program?
        Mr. Mabus. The cost of EFV termination is $216 million in fiscal
    year 2011. The total cost to complete SDD is $458 million. Within the
    SDD completion figure, the cost of finishing essential elements and
    shutdown of EFV is $242 million in fiscal year 2011; $179 million in
    fiscal year 2012; $37 million in fiscal year 2013.

                       F136 SPECIAL SUPPORT REQUIREMENTS

        29. Senator Levin. Admiral Roughead, it has been stated by Navy and
    DOD officials over the past few budget cycles that by having two
    competing engines for the F-35, it would require having two sets of
    everything . . . things like two different sets of spare parts, two
    different sets of shipping containers, different tools, dual trained
    maintainers, et cetera. You have been quoted as saying that keeping two
    different engines for the F-35 on the decks of aircraft carriers would
    not be advisable as ``space is at a premium . . . therefore you can put
    me solidly in the one-engine camp.''
        As recently as 2001, the Navy was responsible for maintaining nine
    different type/model/series engines that could be utilized on a
    carrier. Each of these engines required its own set of unique support
    equipment, hand tools, intermediate level maintenance, training, et
    cetera. This situation was all very cumbersome and your argument would
    make sense from a legacy aircraft point of view. But the situation for
    the F-35 engine does not appear to present the same situation as that
    for the legacy aircraft systems to which you compare it. By 2020, and
    assuming the F136 competitive engine is fielded, the Navy would have to
    maintain five different type/model/series engines in a carrier strike
    group. The F/A-18 and the EA-18 will utilize the same engine. The F-35
    would have the choice of two interchangeable engines that enjoy 100
    percent commonality in hand tools, support equipment, and shipping
    containers.
        Of the four major modules that make up the F-35 propulsion system,
    two of them are 100 percent common between the F135 and F136. DOD had
    also planned that the same training courses would prepare maintenance
    personnel to support either or both engines in the fleet. By using this
    commonality approach, DOD had designed the program to require fewer
    uniquely qualified people and fewer unique tools, which would translate
    to fewer dollars necessary to support the engines. DOD also structured
    the program that way precisely to minimize the logistics footprint and
    the associated cost of maintaining a variety of engines on the carrier.
    Would you clarify why you conclude that you don't have room on the
    carriers to operate an alternate engine for the JSF?
        Admiral Roughead. The F135 and F136 engines constitute two
    different designs by two different manufacturers. The large size of the
    F135 and F136 (approximately 18.7 feet and weighs 9,300 lbs. in its
    container) necessitates greater sparing aboard ships as neither the
    assembled engine nor the power section module can currently be
    replenished underway. Similarly, due to the weight and height of
    critical engine spares, it is not feasible to store all JSF engine
    spares in legacy store rooms or stack them aboard ships as is done for
    legacy system. This would necessitate work-around in hangar deck spaces
    normally reserved to store and maintain tactical aircraft. Adding an
    alternate engine makes the shipboard logistics even more challenging as
    it is not a one-for-one exchange.
        While the F136 engine would be interchangeable, there are several
    engine components that are not interchangeable. The fan, gear box, and
    power section modules are unique by F135 and F136 propulsion systems.
    Only the augmenter and exhaust nozzle modules are common by F-35
    variant. Supporting two engines would require unique spares, unique
    support equipment, and unique training. The JSF specification only
    requires engines to perform to specified criteria and physically fit
    into the F-35. Maintenance/repair technical requirements are different,
    requiring different instructions and training with differences in
    assembly hardware and special tools for off-aircraft repair.

                          LPD-17 SHIPBUILDING PROBLEMS

        30. Senator Levin. Secretary Mabus, we have been experiencing
    significant problems with production of the LPD-17 amphibious transport
    dock program. There have been problems with manufacturing, design, and
    quality control, to the extent that upon delivery of one ship to the
    Navy, the Navy had to immediately place the ship in a separate shipyard
    availability period before the Navy could operate the vessel. What has
    gone so wrong with the construction management and oversight of the
    LPD-17 program that we have had such continuing problems with this
    acquisition?
        Mr. Mabus. Thorough reviews of LPD-17 class ships revealed issues
    in the areas of construction oversight, manning, and training, but
    corrective actions are now being implemented. Assessments of LPD-17
    ship class are now complete and necessary corrections are being
    implemented. The lessons learned with earlier ships in the class have
    been incorporated in later new-construction ships.
        Quality assurance (QA) and production oversight during ship
    construction were not sufficient by both the Supervisor of
    Shipbuilding, Conversion and Repair (SUPSHIP) and the shipbuilder
    impacting main propulsion diesel engines, lube oil systems, piping
    welds, and foundation bolts and power train alignment. However, the
    shipbuilder has now developed new procedures and training for its
    personnel and additional process QA checkpoints have been added to the
    shipbuilding inspection process. Additional staffing has been added to
    the SUPSHIP Gulf Coast staff with a focus on compliance and the Navy
    has instituted Comprehensive Quality audits of both SUPSHIP and the
    shipbuilder.
        The Navy is also strengthening LPD-17 class crew training by
    establishing more traditional shore-based schoolhouses that will result
    in a blended philosophy of classroom, on-ship and computer based
    training, rather than relying on the previous emphasis on computer-
    based shipboard training.
        Initial system reliability issues with the engine controls, ship
    controls, and interior communications systems have been addressed
    through major software upgrades to each system as well as the
    replacement of critical obsolete parts with more rugged current
    technology hardware. The ships' 1990s technology asynchronous transfer
    mode (ATM) shipboard wide area network (SWAN) is being replaced with a
    current Gigabit Ethernet technology network hardware and software.
        A LPD-17 Class Wholeness Task Force was formed by the Fleet to
    undertake a comprehensive assessment of the overall state of readiness
    for the entire LPD-17 class of ships. The task force is addressing
    shipboard manning, adequacy of shore-based infrastructure support,
    performance of critical mission and propulsion systems, spare parts
    support, and adequacy of maintenance resources.
        The combination of the above improvements are resulting in better
    reliability and operational availability of the currently commissioned
    ships of the class, while improving the projected operational
    availability of the ships currently under construction. Recent examples
    are LPD 21 (USS New York) completing in February a highly successful
    Bureau of Inspection and Survey final contract trials and LPD 19 (USS
    Mesa Verde) in March departing early for an overseas deployment in
    response to real world events.
                                     ______

                    Questions Submitted by Senator Jack Reed

                           LANDING CRAFT AIR CUSHION

        31. Senator Reed. Secretary Mabus and Admiral Roughead, the Landing
    Craft Air Cushion (LCAC) has been a workhorse of the amphibious force
    for moving vehicles and cargo from our amphibious ships to shore. They
    have been and continue to be heavily employed in missions from combat
    to humanitarian relief worldwide. Despite a Navy SLEP to extend their
    lives, the LCAC force is wearing out. The Navy budget request for
    fiscal year 2011 included buying the lead vessel of a new ship-to-shore
    connector (SSC) class in the Navy's research and development budget.
    Last year, the Navy planned to purchase the second SSC vessel of this
    class in 2013. This year, the budget request indicates that the Navy
    plans to delay building the second SSC vessel until 2014. This
    development is troubling, given the wearing out of the exiting LCAC
    fleet and the cancellation of the EFV, both of which would appear to
    increase the importance of fielding the new SSC program and argue to
    maintain the previous schedule, not delay it. Why has the Navy delayed
    the second SSC vessel a year?
        Mr. Mabus. The second SSC (LCAC 101) was delayed by 1 year to
    ensure that lessons learned during the construction of LCAC 100 were
    able to be applied to the follow-on vessels. Although a delay in the
    start of the second craft shifts IOC by 1 year, a SLEP is underway to
    extend the service life of a total of 72 LCAC from the original 20-year
    service life to 30 years.
        Additionally, a sustaining maintenance program is under development
    for implementation in the 2014-2015 timeframe to ensure that previously
    SLEPed LCACs remain serviceable until the SSC reaches full operational
    capability (FOC) in the 2027-2032 timeframe.
        Admiral Roughead. The Navy remains committed to our the ability to
    embark, transport, control, insert, sustain, and extract combat marines
    and sailors on missions that range from forcible entry to forward
    deployed crisis response. The second SSC (LCAC 101) was delayed by 1
    year to ensure that lessons learned during the construction of LCAC 100
    were able to be applied to the follow-on vessels.
        Although a delay in the start of the second craft shifts IOC by 1
    year, a SLEP is underway to extend the service life of a total of 72
    LCAC from the original 20 year service life to 30 years.
        After 30 years of service a craft is considered to be beyond
    designed service life and additional maintenance actions will be
    required to continue these craft in operation. Beginning in 2014 and
    each year thereafter, the active LCAC fleet will be populated with a
    growing percentage of craft that are expected to serve beyond the 30-
    year service life. A sustaining maintenance program is under
    development for implementation in the 2014-2015 timeframe to ensure the
    LCAC fleet remains serviceable until the SSC reaches FOC in the 2027-
    2032 timeframe.

        32. Senator Reed. Secretary Mabus and Admiral Roughead, will this
    delay lead to any gap in capability?
        Mr. Mabus. There will be no capability gap in the Navy's ship-to-
    shore portfolio and the 1 year delay in the SSC/LCAC 100 acquisition
    will have only a minor impact in the transition from LCAC to SSC/LCAC
    100. The Navy's transition plan combines SLEP for the current LCAC
    fleet, a post-SLEP LCAC maintenance and sustainment program, and a
    procurement profile for new connectors which replaces all legacy LCACs
    with new SSC/LCAC 100s by 2027. The SLEP and post-SLEP maintenance and
    sustainment program, currently under development, will ensure that
    legacy LCACs will remain operational until replaced by SSC/LCAC 100s
    sometime between now and 2027.
        Admiral Roughead. The Navy remains committed to our the ability to
    embark, transport, control, insert, sustain, and extract combat marines
    and sailors on missions that range from forcible entry to forward
    deployed crisis response. The 1 year of delay in the SSC acquisition
    will have an affect on the established mitigation plan to address the
    LCAC capability gap. However, this LCAC capability gap reflects
    continuation of the current capability with a number of older and
    potentially more maintenance intensive craft remaining in service while
    developing and fielding the successor platform.
        In 2014, the 72 LCAC fleet will begin to exceed its designed
    service life of 30 years. A number of LCAC will be required to remain
    in service in excess of the SLEP 30-year designed service life until
    the SSC reaches FOC in the 2027-2032 timeframe. A maintenance and
    sustainment program is being developed to retain these craft in service
    beginning in 2014-2015 timeframe until SSC attains FOC. Craft that
    operate beyond the design service life will require the additional
    maintenance prescribed and the overall availability of the LCAC fleet
    will be impacted.
                                     ______

                   Questions Submitted by Senator Mark Udall

                        RAND REPORT ON ALTERNATIVE FUELS

        33. Senator Udall. Secretary Mabus, recently, RAND published a
    study on alternative fuels that was intended to fulfill the requirement
    of section 334 of the National Defense Authorization Act (NDAA) for
    Fiscal Year 2009 for such a report. I am under the impression that
    there are aspects of the methodology, findings, and conclusions of the
    RAND report with which you disagree. Is my impression correct? If so,
    with what specifically do you disagree, and why do you disagree?
        Mr. Mabus. In the RAND report, some of the conclusions suggested
    that the alternative fuel industry is immature, could not scale up to
    make an appreciable difference as a domestic alternative, and
    recommended that DOD not invest in this market. We have found that the
    biofuel industry appears to be well-poised to be of commercial size and
    ready to meet Navy demands by 2016 for the Secretary of the Navy Great
    Green Fleet goal. According to Biofuels Digest, there are 110 companies
    that are currently working on various biofuel products including mixed
    alcohols, bio-crude oils, and drop-in fuels.
        The RAND study accurately states that the Navy's switch to
    biofuels, in and of itself, will not reduce the Nation's total energy
    consumption by a significant margin. However, the RAND report was not
    well researched and did not take into account the recent research and
    development advances in the biofuels technologies. RAND stated in their
    report that the Fischer-Tropsch coal-to-liquid/biomass-to-liquid fuels
    are the most promising near-term options for meeting DOD's needs
    cleanly and affordably. Currently, there are no Fischer-Tropsch plants
    here in the United States. Additionally, under the guidelines of the
    Energy Independence and Security Act (EISA) of 2007, Section 526, any
    replacement fuel has to have a greenhouse gas emission profile less
    than petroleum. In order to meet this guideline, any Fischer-Tropsch
    coal-to-liquid plant would have to have carbon capture and
    sequestration incorporated into this overall process. While there is
    important carbon capture and sequestration research and development
    ongoing at DOE, there has not been any carbon capture and sequestration
    process built to commercial scale in the United States. In summary, due
    to the EISA 2007, Section 526 guidelines and the cost prohibitive
    carbon capture and storage process, we feel that the Fischer-Tropsch
    coal-to-liquid/biomass-to-liquid fuels are not the most promising near-
    term option for meeting DOD's needs cleanly and affordably.
        While the use of alternative fuels can contribute toward
    guaranteeing our energy supplies, reducing our operational risks, and
    during volatile upward price swings in petroleum, could represent
    additional cost savings, the Navy's energy strategy has not been
    limited to alternative fuels. We have aggressively adopted proven
    energy efficient applications and practices commonly found in the
    commercial sector. We have funded both science and technology/research
    and development projects in pursuit of increased energy efficiency
    since these project can potentially and directly contribute to the
    combat capability of our operating forces by reducing our energy
    consumption both afloat and ashore, and by achieving significant cost
    savings.
        The Navy prefers to see itself as an ``early adopter'' of available
    biofuels. The military has often led in the development of new
    technologies where there was a compelling military use, even if the
    civilian use was ultimately greater (ex. GPS, the Internet). The
    operational use of alternative fuels by the Navy will be hastened by
    collaborating with Federal agencies and private industry at every step
    of the research, development, and certification process. The
    alternative fuel program establishes the Navy as an early adopter for
    investors in a nascent industry that could significantly enhance energy
    security, and thereby national security, in the mid- to long-term. By
    positioning itself as an early adopter by testing available biofuels
    and certifying them ``fit for use across our major platforms and
    leveraging test and certifications accomplished by the other services
    that meets our specifications,'' the Navy is better poised to reap the
    following benefits:

             Cost Savings. Increasing our use of alternative energy
            sources helps us achieve a level of protection from energy
            price volatility. For every $10 increase in the cost of a
            barrel of oil, the Navy spends an additional $300 million a
            year. Operating more efficiently saves money by reducing the
            amount we spend for fuel. Savings can be reinvested to
            strengthen combat capability. The cheapest barrel of fuel
            afloat or kilowatt-hour ashore is the one we will never use.
             Guaranteed Supply. Our reliance on energy can be
            exploited by potential adversaries. Efficiency and alternatives
            may be our best countermeasure. Energy efficiency increases our
            mission effectiveness by expanding our range and endurance, and
            reducing our need for logistics support. Efficiency
            improvements minimize operational risks of that logistics
            tether, saving time, money, and lives. Alternative fuels
            provide the Navy an `off-ramp from petroleum,' mitigating the
            risk to a volatile and ever more expensive petroleum market.
             Fossil Fuel Independence. The Navy recognizes that our
            dependence on fossil fuels and foreign sources of oil makes us
            more susceptible to price shocks, supply shocks, natural and
            man-made disasters, and political unrest in countries far from
            our shores.
             Combat Capability. Making our ships and aircraft more
            efficient improves their fuel economy. We can increase the days
            between refueling for our ships, improving their security and
            combat capability. We can also extend the range of our aircraft
            strike missions, allowing us to launch our aircraft farther
            away from combat areas. Increasing our efficiency and the
            diversity in our sources of fuel improves our combat capability
            strategically and tactically.

        34. Senator Udall. Secretary Mabus, section 334 of the NDAA for
    Fiscal Year 2010 required a related report. Are you aware of the status
    of that report?
        Mr. Mabus. The Navy is aware of this report being prepared by LMI.
    Our understanding is that this report is still undergoing review with
    all pertinent energy offices, and is expected to be out by the end of
    May.

                           ALTERNATIVE ENERGY SOURCES

        35. Senator Udall. Secretary Mabus, you have set as an ambitious
    goal: committing the Navy and Marine Corps to generate at least 50
    percent of all the energy you use to come from alternative sources no
    later than 2020. Can you speak to what qualifies as alternative
    sources, where you have had the most success and where you believe you
    will attain the remaining percentage under this goal?
        Mr. Mabus. The Navy has set two priorities that illustrate the
    Navy's role in investing in alternative sources of energy which are
    energy security and energy independence. The Navy will achieve energy
    security by utilizing sustainable sources that meet tactical,
    expeditionary, and shore operational requirements and force sustainment
    functions. This allows the ability to protect and deliver sufficient
    energy to meet operational needs. Second, energy independence is
    achieved when naval forces rely only on energy resources that are not
    subject to intentional or accidental supply disruptions. As a priority,
    energy independence increases operational effectiveness by making naval
    forces more energy self-sufficient and less dependent on vulnerable
    energy production and supply lines.
        The Navy uses many different types of alternative energy on our
    naval installations such as solar, wind, and waste to energy. We have
    over 100 MW of solar planned to be installed in the next few years, and
    we have 22 anemometer (wind) studies ongoing. On the operational energy
    front, we have flown an F/A-18 Hornet on blended fuel, operated a 50/50
    blend of biofuels on the Riverine Command Boat (RCB-X), and test flown
    a Seahawk helicopter on a 50/50 blend of biofuels. The Navy has also
    commissioned the USS Makin Island, which is designed with a gas turbine
    engine and electric auxiliary propulsion system. We also consider our
    nuclear fleet of aircraft carriers and submarines as part of our
    alternative energy program. In our expeditionary forward operating
    bases, we are using flexible solar panels to recharge batteries and
    light the inside of the tents with LED lighting. These are just a few
    examples of the different types of alternative energy sources that the
    Navy is currently using.
        Much of our success is in the technologies that are tried and
    true--solar, wind, and geothermal. We are continuing to explore
    geothermal resources on our installations in the southwest. We are
    making great strides in helping stand up a biofuels industry that will
    supply biofuels to the fleet. This effort will be a key factor in our
    overall success of the 50 percent goal. We have to continue to
    institute energy efficiency into our processes and programs. We are
    designing and constructing all of our new buildings to LEED Silver
    criteria. The bottom line is that the most efficient BTU or KW-hr is
    the one that is not used.

        36. Senator Udall. Secretary Mabus, in your testimony you said that
    you are actively exploring for new geothermal resources to augment our
    existing 270 MW geothermal power plant at China Lake. What technologies
    are you seeking to employ to expand geothermal energy use?
        Mr. Mabus. Currently our geothermal development program is seeking
    areas on our installations with medium to high temperature hydrothermal
    resources where there is adequate faulting or permeability of the rock
    to allow movement of the steam and available ground water. This `hot'
    geothermal is a large scale power source but the effectiveness of the
    use of geothermal heat depends on site specific characteristics. These
    locations are primarily in the western United States, although we have
    received requests to study geothermal potential in Guam and Japan.
    These requirements are necessary for conventional geothermal power
    plants, like the Navy's NAWS China Lake facility. Additionally, in
    locations with permeability with lower temperature hot water, we would
    use a binary system, but these systems have reduced power output.
        We are also concurrently monitoring the maturity of the Enhanced
    Geothermal System (EGS) which could have a much broader applicability
    throughout the United States. EGS would be used where we have heat but
    no faults or water, but this is a relatively new technology and issues
    pertaining to earthquakes and possible contamination of water supplies
    need to be resolved.
        Additionally, Navy is actively constructing numerous ``shallow-
    drill,'' lower temperature gradient geothermal systems to use renewable
    resources to partially replace fossil fuel consumption in our
    individual building heating and cooling systems. We are also installing
    innovative ``no-drill'' solutions wherever viable. Navy's Dam Neck
    ``no-drill'' system won a 2009 Presidential Award for Leadership in
    Federal Energy Management. Dozens of these active systems are employed
    by the Navy today utilizing simple ground-loop or shallow-vertical
    indirect (closed loop) heat exchange systems. These systems save over
    500 billion BTU annually, are a considerably lower risk to install,
    have minimal environmental impact, and have favorable ROI in most
    locations.

        37. Senator Udall. Secretary Mabus, are you considering shallow-
    drilling geothermal heat pump systems to power small-scale residential
    facilities and the like at domestic installations or are you exploring
    areas where you could tap hyper-deep geothermal energy resources and
    supply power to an entire installation?
        Mr. Mabus. The Navy has been installing geothermal systems of all
    types at our installations since the early 1980s. We have installed
    them for family housing and small office buildings, as well as whole-
    base solutions. Both hyper-deep and shallow-drill systems are a major
    part of the Navy's plans for future Renewable Energy development.
        The Navy is the lead service for hyper-deep geothermal energy
    production. Additional resource exploration is underway at NAS Fallon's
    Dixie Valley Bombing Ranges, NAF El Centro, and NAWS China Lake South
    Range. Our 270MW geothermal plant at NAWS China Lake is the third
    largest plant of its type in the United States.
        Additionally, Navy is utilizing ``shallow-drill'' geothermal
    systems, both large and small scale, to replace fossil fuel consumption
    with renewable energy. We are also installing innovative ``no-drill''
    solutions wherever viable. Some examples:

             Oceana shallow-drill geothermal systems save over
            210,000 MBTU and nearly 20 million gallons of water annually,
            by placing 470,000 square feet of Navy Facilities onto Ground
            Source Heat Pump (GSHP) systems. The second phase of this
            project recently became operational in January 2011, 6 months
            early. These systems enabled closure of the large, aging, and
            inefficient central steam system.
             Dam Neck Annex's ``no-drill'' system utilizes seasonal
            heating and cooling from the Hampton Roads Sanitation Division
            (HRSD) Atlantic Treatment Plant effluent to save 244,000 MBTU
            annually, as well as enabling demolition of the central heating
            system.

        Our most recent Annual Energy Management Report specifically
    identified approximately 12 other small-scale GSHP systems saving
    approximately 14,000 MBTU annually. Additional systems exist, but are
    often difficult to identify since they are often considered part of the
    building heating and cooling systems and not identified separately.

        38. Senator Udall. Secretary Mabus, are you aware of work within
    DARPA and/or collaborations with the Department of Energy's (DOE) ARPA-
    E program to advance the deployment of such technology?
        Mr. Mabus. The Navy does not use the term ``hyper-deep geothermal
    energy resources.'' The Navy was funded by Congress in 2001 to drill
    two 15,000-20,000 foot wells. The drilling failed due to instability
    and fractures in the holes. The Navy geothermal project at China Lake
    does have a 13,500 ft. deep well which is deeper than most commercial
    wells.
        Navy geothermal staff attended a DARPA geothermal meeting last
    year. The DARPA agenda was focused on EGSs, geothermal systems for
    forward operating bases, and geothermal systems for Guam. There was no
    discussion of hyper-deep wells.
        Our Navy geothermal office does share technical information with
    DOE and has offered to partner with them in proving new technical
    concepts for geothermal. We are not aware of any on-going work at DARPA
    or DOE on hyper-deep resources.

                EXPERIMENTAL FORWARD OPERATING BASE TECHNOLOGIES

        39. Senator Udall. Secretary Mabus and General Amos, the
    Experimental Forward Operating Base (exFOB) was cited by Secretary
    Mabus as a model for energy security in the theater. It is remarkable
    that such technologies allowed a foot patrol to operate for 3 weeks
    without battery resupply, reducing their burden by 700 pounds and
    saving more than $40,000. Is such a project scaleable to other FOBs as
    well?
        Mr. Mabus. Yes, the capability referenced--the backpack-portable
    solar powered battery recharger called Solar Portable Alternative
    Communications Energy System (SPACES)--is scalable and it makes sense
    to deploy it broadly to our FOBs and Marine units. We introduced SPACES
    to the Fleet via ExFOB in summer 2010, and India Company, 3rd
    Battalion, 5th Marines successfully used it in Afghanistan beginning in
    December 2010. As a result, and in response to the clear value
    demonstrated to the mission, we now have 1442 units in the operating
    forces, with 446 units in Afghanistan. We are accelerating deployment
    of this capability to our forces.
        General Amos. The capability referenced--the backpack-portable
    solar powered battery recharger called SPACES--is scalable, and it
    makes sense to deploy it broadly to our forward operating bases and
    units. We introduced SPACES to the Operating Forces via our ExFOB in
    the summer 2010, and an infantry company from 3rd Battalion 5th Marines
    successfully used it in Afghanistan in late 2010. As a result, and in
    response to the clear value demonstrated to the mission, we now have
    over 1,500 units in our Operating Forces for use in our Afghanistan
    force rotation and our training allowances.

        40. Senator Udall. Secretary Mabus and General Amos, what
    challenges do you foresee in expanding exFOB technologies?
        Mr. Mabus and General Amos. One challenge we face is how to rapidly
    transition new capabilities to our Operating Forces, and ultimately
    into fully supported programs of record. Our ExFOB is an effective
    process that brings together the key players from our combat
    development, acquisition, and science and technology communities to
    identify and evaluate new capabilities. It informs our requirements,
    mitigates investment risks, and builds marines' confidence with
    innovative capabilities. Consequently, ExFOB helps to bridge the so-
    called `valley of death' as it relates to technology transition.
    However, this process takes time, and these long lead times make it
    difficult for small companies seeking to do business with the Marine
    Corps, to engage in the process.

        41. Senator Udall. Secretary Mabus and General Amos, what are the
    benefits?
        Mr. Mabus and General Amos. The ExFOB capabilities we have
    evaluated in Afghanistan have helped our marines operate lighter, with
    less reliance on resupply. Our forces today are widely dispersed across
    the battle space: a company today may cover an area of 50 square miles
    or more, manning multiple outposts, and executing extensive dismounted
    operations. Our marines depend on communications gear and equipment,
    and rely on frequent resupply to support fuel, battery, water, and food
    needs. By providing a new source of power-solar and hybrid solar
    energy--and reducing the power demand of equipment, we have reduced
    mission risk, and increased our commanders' options. Ultimately, our
    goal is fewer marines at risk on the road hauling fuel and protecting
    fuel convoys.
        In less than a year, through our ExFOB process, we evaluated
    capabilities at Twentynine Palms and on the battlefield in Afghanistan
    with India Co. 3rd Battalion, 5th Marine Regiment. While engaged in
    nearly constant combat, these marines used small scale solar solutions,
    man portable solar battery rechargers, hybrid-solar generators, plus
    energy efficient lighting and shelters, with positive results:

             Two patrol bases operated completely on expeditionary
            solar power generators. They have done this even while engaged
            in near constant combat.
             Another patrol base reduced its fossil fuel need by
            approximately 90 percent--from 20 gallons of fuel a day to 2.5
            gallons a day.
             Using the SPACES back portable solar power system to
            recharge their radio batteries they were able to patrol for 3
            weeks with no battery resupply. Typical battery resupply is
            every 2-3 days.

        Because of the mission benefits we have seen, the Marine Corps is
    now looking at deploying these solutions broadly to our forward
    operating units in the coming months.

        42. Senator Udall. Secretary Mabus and General Amos, are you aware
    of any compromises to warfighting capability or strategic flexibility
    that were incurred as a result of utilizing the unique technologies at
    exFOB?
        Mr. Mabus. Prior to battlefield evaluation of new capabilities, we
    conduct detailed evaluations in the lab with actual users who employ
    the equipment in similar operating environments and under similar
    stresses. Mission effectiveness is a top priority; solutions that
    cannot perform required mission tasks do not progress beyond the lab.
    The exFOB capabilities meet our requirements and have benefited our
    warfighting capability.
        General Amos. ExFOB capabilities have benefited our warfighting
    capability. Prior to battlefield evaluation of new capabilities, we
    place them through detailed evaluations in our laboratory, with actual
    users who would employ the equipment in operating environments similar
    to that in Afghanistan, under similar stresses. Mission effectiveness
    is a top priority; solutions that fall short do not progress to the
    next level of our process.
                                     ______

                   Questions Submitted by Senator Joe Manchin

                           ALTERNATIVE ENERGY SOURCES

        43. Senator Manchin. Admiral Roughead, we've seen price
    fluctuations right now in foreign oil based on political instability in
    the Middle East and North Africa--I'd like to talk about using
    alternative energy sources from home. Will you speak about the costs of
    aviation fuel and alternative jet fuels--are you considering coal-to-
    liquid fuels?
        Admiral Roughead. The Navy fully supports the use of using
    alternative source aviation fuels that meet all military performance
    requirements and technical specifications and would prefer, wherever
    possible, that the United States be the source of these fuels. Testing
    and certification of coal-to-liquid fuels are not in the Navy Program
    of Record because of congressional restrictions prohibiting procurement
    of alternative source fuels that may have greenhouse gas emissions or a
    carbon footprint greater than the petroleum based fuels which they
    would replace. Capital costs associated with commercial coal-to-liquid
    plants are expected to be in the billions of dollars and the
    technological hurdles associated with carbon sequestration present
    enough unknowns that there is little commercial transportation industry
    interest in this approach. As the commercial transportation industry
    and the Navy have focused on the use of next generation biofuels
    engineered to mix seamlessly with existing fuel supplies. As with any
    commodity, the costs of any alternative fuels will be a function of
    supply and demand. Industry and academia forecast the future costs of
    these fuels will be competitive with petroleum based fuels.

        44. Senator Manchin. Admiral Roughead, what are the challenges
    using such fuels in the war zone?
        Admiral Roughead. Once the alternative fuels are certified in 2012,
    there will be no restrictions on using these fuels in combat. We will
    deliver the quantity and quality of fuels required to our forces when
    and where they are needed, and the source of these fuels will be
    transparent to the end users, the fuels will mix seamlessly with our
    existing fuel supplies, and the technical parameters of the fuels will
    deliver similar combat capability.
        The purpose of the Navy alternative fuels test and certification
    program is to certify that these alternative source fuels meet the
    specifications that our petroleum-based fuels must meet. The test and
    certification process of the fuels necessary for the Great Green Fleet
    is currently underway. Current funding puts the Navy on track to
    complete the fuel certification required for ship and aircraft systems
    to conduct the demonstration of the Green Strike Group in 2012. They
    will be functionally identical and `drop in' replacements to the
    current fuels that we use and will have no impact to the engines that
    use them.

        45. Senator Manchin. Secretary Mabus, you have pledged your
    commitment to have the Navy and Marine Corps accelerate the exploration
    and exploitation of new ways to ``procure, produce, and use energy.''
    You have also stated that your goals for energy security include a
    commitment to generate at least 50 percent of all the energy the Navy
    and Marine Corps use from alternative sources no later than 2020. What
    progress have you made in achieving this goal and what is the makeup of
    alternative energy sources?
        Mr. Mabus. The Navy has set two priorities that illustrate the
    Navy's role in investing in alternative sources of energy which are
    energy security and energy independence. The Navy will achieve energy
    security by utilizing sustainable sources that meet tactical,
    expeditionary, and shore operational requirements and force sustainment
    functions. This allows the ability to protect and deliver sufficient
    energy to meet operational needs. Second energy independence is
    achieved when naval forces rely only on energy resources that are not
    subject to intentional or accidental supply disruptions. As a priority,
    energy independence increases operational effectiveness by making naval
    forces more energy self-sufficient and less dependent on vulnerable
    energy production and supply lines.
        The Navy uses many different types of alternative energy on our
    naval installations such as solar, wind, and waste to energy. We have
    over 100 MW of solar PV projects planned to be installed in the next
    few years, and we have 22 anemometer (wind) studies ongoing. On the
    operational energy front, we have flown an F/A-18 Hornet on blended
    fuel, operated a 50/50 blend of biofuels on the Riverine Command Boat
    (RCB-X), and test flown a Seahawk helicopter on a 50/50 blend of
    biofuels. The Navy has also commissioned the USS Makin Island, which is
    designed with a gas turbine engine and electric auxiliary propulsion
    system. We also consider our nuclear fleet of aircraft carriers and
    submarines as part of our alternative energy program. In our
    expeditionary forward operating bases, we are using flexible solar
    panels to recharge batteries and light the inside of the tents with LED
    lighting. These are just a few examples of the different types of
    alternative energy sources that the Navy is currently using.
        Much of our success is in the technologies that are tried and
    true--solar, wind, and geothermal. We are continuing to explore
    geothermal resources on our installations in the southwest. We are
    making great strides in helping stand up a biofuels industry that will
    supply biofuels to the fleet. This effort will be a key factor in our
    overall success of the 50 percent goal. We have to continue to
    institute energy efficiency into our processes and programs. We are
    designing and constructing all of our new buildings to LEED Silver
    criteria. The bottom line is that the most efficient BTU or KW-hr is
    the one that is not used.

        46. Senator Manchin. Secretary Mabus, are each of these
    sustainable, especially in the war theater, and if not, why not?
        Mr. Mabus. Yes, they are all very sustainable in a war theater as
    well as elsewhere. A good example is that while deployed to the Sangin
    Province Afghanistan, India Company, Third Battalion, Fifth Marines (3/
    5) operated two patrol bases completely on renewable energy, offsetting
    100 percent of their potential fuel use. Based on reports from marines
    in the field it is estimated that each patrol base saved 12 gallons per
    day per location. This means that each month these two patrol bases
    would have offset approximately 744 gallons per month (31 days
     24 gals) or 8,928 gallons per year. It is evident that a
    small savings at a remote patrol base has significant impacts over the
    long term, not to mention immediate reduction in risk to our marines
    moving fuel in a very dangerous area.
        An example of the technology that they used is the SPACES, which is
    is an innovative family of mobile solar power and power distribution
    products. SPACES delivers portable power to charge batteries, operate
    communications equipment, and run small electronic accessories in
    tactical and remote environments.
        In addition to the patrol bases operated by India 3/5, they also
    employed renewable and energy efficient technologies at a company
    location, too. At the company location report fuel use was reduced from
    25 gallons per day to 2.5 gallons per day or an initial savings of 90
    percent. Targeting renewable and energy efficient technologies at
    remote outpost immediately reduce the risks to our forces and increases
    our combat effectiveness.
        Outside of those pursuits, we are making our Navy and Marine Corps
    more energy efficient. Making our ships and aircraft more efficient
    improves their fuel economy. We can increase the days between refueling
    for our ships, improving their security and combat capability. We can
    also extend the range of our aircraft strike missions, allowing us to
    launch our aircraft farther away from combat areas. Increasing our
    efficiency and the diversity in our sources of fuel improves our combat
    capability strategically and tactically.

                                     CHINA

        47. Senator Manchin. Secretary Mabus and Admiral Roughead, China
    has continued its military modernization effort, including its naval
    modernization. How should the U.S. military planners respond to China's
    improved military forces and how would this affect the Navy's budget?
        Mr. Mabus and Admiral Roughead. Our Navy has made significant
    investment in new technology to defeat the most likely evolving
    threats, including those of China. Also, the Navy has invested heavily
    into Aegis modernization which will upgrade existing Aegis technology
    to continually improve our integrated air and missile defense
    capability.

        48. Senator Manchin. Secretary Mabus and Admiral Roughead, how
    could the U.S.-Chinese military balance in the Pacific influence day-
    to-day choices made by other Pacific countries, especially our allies?
        Mr. Mabus. Sovereign nations throughout the Asia-Pacific region
    indicate they are reevaluating their political, economic, and military
    alignments as globalization continues, a multi-polar geo-political
    landscape emerges, and the world encounters an increasing number of
    diverse, concurrent crises. Considering this dynamic environment, the
    Navy is confident that its current force structure and forward posture
    serve to reinforce our longstanding commitment to the security and
    stability of the Asia-Pacific region as a whole, and our allies in
    particular.
        The Navy is mindful, however, of the need to respond to emerging
    challenges in this rapidly evolving security environment by
    strengthening our alliances and partnerships, modernizing our forces,
    fielding new capabilities and technologies, and developing new
    operational concepts.
        One specific initiative that will help preserve a favorable
    military balance in the Pacific, and assure our allies, is
    implementation of the Air-Sea Battle Concept--a limited operational
    concept that focuses the development of integrated air and naval forces
    on addressing the evolving anti-access/area denial (A2/AD) environment.
    The Air-Sea Battle Concept encompasses three key elements:

             Institutional cooperation will be enhanced by
            establishing an enduring organizational construct that will
            continue formal collaboration to address the A2/AD environment
            as it evolves over time.
             Conceptual alignment will be perpetuated through the
            operational design which describes how capabilities and forces
            are integrated to accomplish operational objectives in an A2/AD
            environment.
             Materiel solutions and innovations will be
            collaboratively vetted to ensure they are complementary where
            appropriate; redundant when mandated by capacity requirements;
            fully interoperable; and fielded with integrated acquisition
            strategies seeking efficiencies where they can be achieved.

        Air-Sea Battle implementation will ensure continued U.S. advantage
    against emerging threats that include long-range, precise, anti-ship
    and land attack ballistic and cruise missile systems; advanced combat
    aircraft and electronic warfare technologies; advanced Integrated Air
    Defense systems; submarines and subsurface warfare capabilities;
    surface warfare capabilities; C4ISR capabilities; and cyber warfare
    technologies. This advantage, coupled with enduring forward presence
    that supports robust training, exercises and military-to-military
    engagement, will promote choices among our allies and like-minded
    partners that advance our national interests in the Pacific.
        Admiral Roughead. Sovereign nations throughout the Asia-Pacific
    region indicate they are reevaluating their political, economic, and
    military alignments as globalization continues, a multi-polar geo-
    political landscape emerges, and the world encounters an increasing
    number of diverse, concurrent crises. Considering this dynamic
    environment, the Navy is confident that its current force structure and
    forward posture serve to reinforce our longstanding commitment to the
    security and stability of the Asia-Pacific region as a whole, and our
    allies in particular.
        The Navy is mindful, however, of the need to respond to emerging
    challenges in this rapidly evolving security environment by
    strengthening our alliances and partnerships, modernizing our forces,
    fielding new capabilities and technologies, and developing new
    operational concepts.
        One specific initiative that will help preserve a favorable
    military balance in the Pacific, and assure our allies, is
    implementation of the Air-Sea Battle Concept--a limited operational
    concept that focuses the development of integrated air and naval forces
    on addressing the evolving A2/AD environment. Air-Sea Battle
    implementation will ensure continued U.S. advantage against emerging
    threats that include long-range, precise, anti-ship and land attack
    ballistic and cruise missile systems; advanced combat aircraft and
    electronic warfare technologies; advanced Integrated Air Defense
    systems; submarines and subsurface warfare capabilities; surface
    warfare capabilities; C\4\ISR capabilities; and cyber warfare
    technologies. This advantage, coupled with enduring forward presence
    that supports robust training, exercises and military-to-military
    engagement, will promote choices among our allies and like-minded
    partners that advance our national interests in the Pacific.

                      TRANSPORTATION OF FUEL AND SUPPLIES

        49. Senator Manchin. General Amos, there are regular reports of
    fuel and supply chain interruptions over land routes in Pakistan and
    Afghanistan. In some cases, U.S. taxpayers' dollars are being siphoned
    off to insurgents to secure the safety of the fuel and food supplies.
    Please give me a detailed assessment of the risks marines are facing by
    hauling fuel and water to forward bases.
        General Amos. Day-to-day marines courageously operate in a high-
    risk environment to ensure the timely delivery of logistics support to
    the many combat outposts, patrol bases, and forward operating bases
    throughout Regional Command-Southwest (RC-SW). Fuel, food, water, and
    ammunition continue to be the most critical items required for
    delivery. Harsh terrain and enemy activity, highlighted most by IEDs,
    take a significant toll on both marines and their equipment. However,
    we mitigate these risks by providing marines with the best possible
    equipment. Our Mine Resistant Ambush Protected (MRAP) vehicles,
    augmented with Counter Radio-Controlled Electronic Warfare systems,
    help to defeat radio-controlled IED threats. We also outfit our
    vehicles with Vehicle Optics Sensor Systems to scan for IED threats
    during day and night operations. We also maintain dedicated Route
    Clearance Teams comprised of engineers, explosive ordnance disposal
    personnel, mechanical devices, and specialized robotics to help thwart
    ambushes, clear natural or manmade obstacles, and detect IEDs.
        We reduce the exposure of our marines by using a wide range of
    delivery options. Air delivery using Air Force and Marine Corps fixed-
    wing aircraft are used to drop supplies to remote locations. We also
    employ contracted rotary wing assets to deliver cargo. Where the enemy
    threat is less severe, contracted trucks provide direct delivery of
    fuel and water to many of our bases allowing us to make the most
    effective use of our tactical distribution assets. Finally, we are
    continuously examining ways to reduce the amount of fuel and water
    delivered to our marines by providing capabilities such as the Tactical
    Water Purification System and Lightweight Water Purification System to
    produce water onsite. We are also fielding systems such as the Ground
    Renewable Expeditionary Energy System and the SPACES to reduce the
    demand for fuel at our remote patrol bases.
        The siphoning of U.S. tax dollars to insurgents is a significant
    threat in a number of functional areas including logistics; however,
    this activity is not significant in RC-SW. There are isolated reports
    of extortion along heavily traveled routes, but this activity is
    assessed as low when compared to other regional commands. Pilferage is
    only a minor concern as vendors in RC-SW are paid for delivery vice
    transport. This policy creates an incentive for the shipping companies
    to ensure that loads arrive intact. Overall, we do not assess RC-SW to
    be experiencing significant supply chain interruptions due to enemy
    activity, corruption, or criminality.

        50. Senator Manchin. General Amos, can you tell me about the Marine
    Corps' Bases to Battlefield Expeditionary Energy Strategy and how this
    strategy will affect the logistic concerns surrounding the transport of
    fuel and supplies?
        General Amos. On March 21, I announced the Marine Corps
    Expeditionary Energy Strategy and Implementation Plan that specifically
    directs the Corps to increase energy efficiency on the battlefield by
    50 percent, and to reduce the fuel used by each marine per day by 2025
    by the same amount as well. My intent for this strategy is to increase
    combat effectiveness and reduce our need for logistics support ashore.
    The priority is to save lives by reducing the number of marines at risk
    on the road hauling fuel and water. Our objective is to allow marines
    to travel lighter--with less--and move faster through the reduction in
    size and amount of equipment and the dependence on bulk supplies.
        Based on a 2010 study that we conducted, we determined that marines
    in Afghanistan use about 200,000 gallons of fuel a day to power
    warfighting capabilities and sustain our forces. About 70 percent of
    our logistics requirements are fuel and water. This demand for
    resources increases risk and constrains our operations. It also costs
    lives: 6 marines were wounded over a 3-month period in 2010 while
    supporting 299 fuel/water convoys. This roughly equates to 1 marine
    wounded per every 50 fuel and water convoys.
        Demand for battlefield energy has increased exponentially in the
    last 10 years and is rising, driven by enhancements to communications,
    computers, command and control, and information capabilities (C\4\I),
    vehicles, and weapons systems. We recognize that these warfighting
    assets have made our combat forces more lethal, but they also have come
    with a grave unintended consequence--our logistics trains are at
    greater risk.
        Our strategy, therefore, concentrates on three major areas:

        (1)  We will increase the energy efficiency of our equipment,
    platforms, and systems;
        (2)  We will increase our use of renewable energy, and thereby
    increase self sufficiency in our battlefield sustainment; and
        (3)  We will change the way we think about energy-equating
    efficient use of resources with increased combat effectiveness.

        The Marine Corps Expeditionary Energy Strategy calls on the Marine
    Corps to build Marine Expeditionary Forces capable of maneuvering from
    the sea and sustaining C\4\I and life support systems in place. The
    target date for this goal is 2025.
        In addition to the ``Bases to Battlefield'' strategy, we are now
    taking the critical step to institutionalize change in our energy usage
    by establishing formal requirements via the Expeditionary Energy,
    Water, and Waste Initial Capabilities Document to drive our investments
    in equipment, training, and manning. These requirements aim to reduce
    energy demand in our platforms and systems, increase the use of
    renewable energy, and build an ethos around energy efficiency in the
    Corps.

                                    BAHRAIN

        51. Senator Manchin. Admiral Roughead, news sources continue to
    report on political problems in Bahrain, where the 5th Fleet is
    currently operating. I recently met with political leaders in the
    region who expressed their genuine concern for the political stability
    of the monarchy in Bahrain. What can you tell me about your security
    concerns for U.S. forces in Bahrain?
        Admiral Roughead. To date, there are no known credible threats to
    U.S./coalition forces or bases. There has been no change in the status
    of the relationship between Commander, U.S. Naval Central Command
    (CENTCOM)/C5F and the Government of Bahrain. The Government of Bahrain
    continues to fully support hosting Naval Support Activity-Bahrain (NSA-
    Bahrain) and its tenant commands. We do not expect a change in the
    Bahraini Government's attitude toward hosting NSA-Bahrain. The King and
    Crown Prince have stated their continuing support to the U.S. Navy
    presence in the Kingdom of Bahrain.

                                     LIBYA

        52. Senator Manchin. Secretary Mabus, taking into account the
    extent of the U.S. military commitment in Afghanistan, Pakistan, and
    Iraq, do you believe it would be more difficult for the United States
    to operate a no-fly zone (NFZ) in Libya, and if so, why?
        Mr. Mabus. As was demonstrated by U.S. and coalition forces
    operating from European bases, establishing a NFZ in Libya was not
    difficult. The Navy/Marine Corps team readily executed the NFZ with the
    air combat element aboard our amphibious ships in conjunction with
    shore-based intelligence, surveillance, and reconnaissance, missile
    attacks from surface combatants and submarines and electronic attack
    aircraft. Our sea-based forces again exploited their inherent
    flexibility to respond to crises and conduct operations largely
    independently from third-country basing requirements.
                                     ______

                  Question Submitted by Senator Jeanne Shaheen

                    GAO RECOMMENDATIONS FOR PUBLIC SHIPYARDS

        53. Senator Shaheen. Secretary Mabus, the Navy's four public
    shipyards--Portsmouth Naval Shipyard, Puget Sound Naval Shipyard, Pearl
    Harbor Naval Shipyard, and Norfolk Naval Shipyard--are critical to the
    readiness, sustainability, and continued endurance of America's
    unparalleled naval power. I am very concerned about the backlog of
    restoration and modernization projects at the four public shipyards.
    According to the Navy, as of October 2009, the backlog consisted of
    nearly $3.1 billion. In addition, according to the Government
    Accountability Office (GAO), the Navy's estimate of $3.1 billion
    actually underestimates the total shipyard backlog. The GAO report made
    a series of four recommendations ``to improve the overall visibility of
    the Navy shipyards' restoration and modernization needs and quality of
    life issues.'' In written comments on this report, DOD concurred with
    all four recommendations. Please comment on each recommendation listed
    below and address how the Navy intends to implement each accepted
    recommendation:

        A.  Develop guidance that lays out the requirement for the shipyard
    to develop strategic plans that address their future restoration and
    modernization needs and that reflect the seven essential elements of a
    comprehensive strategic planning framework;
        B.  Develop and document a method for systematically collecting and
    updating the Navy's configuration and condition information, including
    establishing measurable goals and timeframes for updating its processes
    so that the data are complete and accurate;
        C.  Submit documentation to the Office of the Deputy Under
    Secretary of Defense for Installations and Environment to update the
    replacement unit cost factor for dry docks so that plant replacement
    value calculations for dry docks, and subsequent restoration and
    modernization cost calculations, more accurately reflect the shipyards'
    unique infrastructure needs; and
        D.  Develop guidance for the shipyards to systematically collect
    information on and document corrective actions to prioritize and
    address identified quality of life issues.

        Mr. Mabus.

        A.  The Navy's Ship and Submarine Global Shore Infrastructure Plan
    (GSIP), which serves as a higher order strategic document that provides
    the context for the individual shipyard plans, is being finalized. Once
    the GSIP is finalized, Naval Sea Systems Command (NAVSEA) will develop
    guidance to align the individual shipyard plans and the Depot
    Maintenance Infrastructure Plan (DMIP) with the GSIP and the 2011 Naval
    Shipyard Business Plan. The guidance will reflect the seven essential
    elements of a comprehensive strategic planning framework.
        B.  The Infrastructure Condition Assessment Program (ICAP) is in
    place to ensure assessment of the condition of all shipyard buildings
    and waterfront structures (piers, wharfs, et cetera). Additionally,
    waterfront structures receive a structural inspection on a 6-year
    cycle. The Navy will add conduct a pilot program assessment of dry
    docks to evaluate the associated costs for inclusion into the ICAP
    process. Finally, the shipyard utility infrastructure is being
    evaluated for potential assessment in the next few years. Updated
    condition ratings from these inspections will be uploaded into the
    internet Navy Facilities Asset Data Store (iNFADS) annually. The Navy
    currently plans to have all waterfront infrastructure (to include dry
    docks) evaluated and relevant data systems updated by fiscal year 2013.
    Additionally, a majority of configuration (functionality) ratings are
    currently available in iNFADS, which will be updated as necessary via
    the ongoing asset evaluation program.
        C.  The Navy is committed to accurately reflecting the magnitude of
    the dry-dock backlog. Navy is pursuing a reassessment of the
    Replacement Unit Cost factors and plans to provide this information to
    DUSD(I&E) no later than 9 months after receiving funds.
        D.  With workforce safety, health, and quality of life as top
    priorities, the Navy develops comprehensive restoration and
    modernization (RM) projects, based primarily upon the ICAP and Asset
    Evaluation (AE) program data. These assessments and subsequent projects
    specifically address improvements for people and processes in support
    of the shipyard mission.

        The Navy cannot address every shortfall in the desired timeframe
    due to fiscal constraints, so shipyard projects are evaluated and
    prioritized with all Navy RM projects, in accordance with the Navy's
    shore investment strategy. Our shore investment strategy provides shore
    infrastructure that is properly sized and aligned to enable warfighting
    and joint capabilities, minimizes the decline of critical mission-
    essential and quality of life infrastructure, and optimizes warfare
    enterprise outputs and quality of service.
        The Navy is exploring methods to collect additional information on
    shipyard quality-of-life and quality-of-service issues.
                                     ______

               Questions Submitted by Senator Kirsten Gillibrand

                                ENERGY SECURITY

        54. Senator Gillibrand. Secretary Mabus, as you stated, you have
    set a goal of having at least half the Navy and Marine Corps total
    energy coming from non-fossil fuel sources by 2020. As the price of oil
    continues to rise due to conflicts in the Middle East, replacing costly
    fossil fuels with proven and effective renewable energy technologies is
    a necessary move, for the taxpayers' pocketbook and our Nation's energy
    security. I want to commend you on the extensive number of renewable
    energy projects you have implemented both on Navy and Marine Corps
    installations at home and at forward deployed locations. As the Navy
    and Marine Corps continue to procure renewable energy technology, what
    efforts, if any, is DOD taking to provide the proper guidance to the
    energy managers to emphasize American renewable technology in their
    procurement portfolios?
        Mr. Mabus. The Navy is emphasizing American renewable technology in
    all its actions related to energy. We do not want to trade dependence
    on foreign oil for dependence on foreign technology. The Federal
    Acquisition Regulation clause requiring compliance with the Buy
    American Act (BAA) is placed in all applicable Navy contracts.
    Additionally, DOD and the Navy have issued separate internal guidance
    documents on their energy programs emphasizing both renewable energy
    technologies and energy efficiency. These vision and guidance documents
    provide direction and meet or exceed all of the energy mandates and
    legislation.
        The Navy has set two priorities that illustrate the Navy's role in
    investing in alternative and renewable sources of energy which are
    energy security and energy independence. The Navy will achieve energy
    security by utilizing sustainable sources that meet tactical,
    expeditionary, and shore operational requirements and force sustainment
    functions. This allows the ability to protect and deliver sufficient
    energy to meet operational needs. Second energy independence is
    achieved when naval forces rely only on energy resources that are not
    subject to intentional or accidental supply disruptions. As a priority,
    energy independence increases operational effectiveness by making naval
    forces more energy self-sufficient and less dependent on vulnerable
    energy production and supply lines.
        The Navy uses many different types of alternative energy on our
    naval installations such as solar, wind, and waste to energy. We have
    over 100 MW of solar PV projects planned to be installed in the next
    few years, and we have 22 anemometer (wind) studies ongoing. We are
    working with American companies to develop ocean power systems (wave,
    tidal ocean thermal) that can be used in the future to power our island
    and coastal installations from ocean resources. On the operational
    energy front, we have flown an F/A-18 Hornet on blended fuel, operated
    a 50/50 blend of biofuels on the Riverine Command Boat (RCB-X), and
    test flown a Seahawk helicopter on a 50/50 blend of biofuels. The Navy
    has also commissioned the USS Makin Island which is designed with a gas
    turbine engine and electric auxiliary propulsion system. We also
    consider our nuclear fleet of aircraft carriers and submarines as part
    of our alternative energy program. In our expeditionary forward
    operating bases, we are using flexible solar panels to recharge
    batteries and light the inside of the tents with LED lighting. These
    are just a few examples of the different types of alternative energy
    sources that the Navy is currently using.
        Much of our success is in the technologies that are tried and
    true--solar, wind, and geothermal. We are continuing to explore
    geothermal resources on our installations in the southwest. We are
    making great strides in helping stand up a biofuels industry that will
    supply biofuels to the fleet. This effort will be a key factor in our
    overall success of the 50 percent goal. We have to continue to
    institute energy efficiency into our processes and programs. We are
    designing and constructing all of our new buildings to LEED Silver
    criteria. The bottom line is that the most efficient BTU or KW-hr is
    the one that is not used.

        55. Senator Gillibrand. Secretary Mabus, what is DOD's process to
    track the country of origin of technologies procured? Specifically, I'm
    not referring to where a renewable energy technology may have been
    substantially transformed but the origination--for instance, in the
    solar industry, what is the country of origin of the solar cells in
    solar panels that are eventually installed on Navy installation
    facilities?
        Mr. Mabus. The Federal Acquisition Regulation clause requiring
    compliance with the BAA is placed in all applicable Navy contacts.
    Contract awardees provide product submittals during the design and
    construction phase to certify compliance with the provisions of the
    act. The Navy does not apply any additional criteria such as country of
    origin, as long as BAA requirements are met. Neither does the Navy
    centrally track the country of origin of any installed technologies,
    but manages these requirements at the contract level.

        56. Senator Gillibrand. Secretary Mabus, as the world's largest
    consumer of energy, spending over $20 billion a year, DOD has a special
    responsibility to lead by example when greening the government. Its
    enormous purchasing power helps create new markets for renewable energy
    technology products, making them more affordable for everyone. However,
    when DOD makes its renewable energy procurement decisions, are the
    implications of those purchases on our Nation's energy security
    considered? Specifically, some of the largest solar PV projects within
    the military rely heavily on foreign-manufactured renewable energy. I
    am interested to know if the Navy is purchasing foreign-manufactured
    solar panels. If yes, were American-manufactured options considered in
    such instances? If yes, why were they rejected? If such options were
    rejected on price or efficiency alone, could you please explain if that
    determination was made on a cost-per-panel basis or on a total-system-
    of-cost-per-watt basis?
        Mr. Mabus. When a procurement requires that the Navy own PV panels,
    the Navy includes the BAA requirement in its contract and requires that
    all contractors comply. When procuring services, which will include PV
    panels that the Navy will not own, the Navy will apply the test
    criteria and follow the requirements of the 2011 NDAA, as amended to
    include Section 846. BAA requirements do allow the Navy to purchase
    foreign manufactured solar panels if the cost of a particular domestic
    construction material exceeds the cost of foreign material by more than
    6 percent.

                                BUY AMERICAN ACT

        57. Senator Gillibrand. Secretary Mabus, DOD, along with all
    Federal agencies, must abide by the BAA when purchasing products for
    the agency. I am advised that DOD, instead of direct procurement, has
    increasingly begun to rely on financing vehicles such as Power Purchase
    Agreements (PPA) to fund renewable energy investments because of their
    attractive financing features. However, the BAA did not apply to this
    financing agreement until it was extended to do so by the NDAA for
    Fiscal Year 2011 for solar PV panels on DOD facilities. As DOD moves
    forward to implement the new contracting rule, what efforts and
    guidance will you be providing installation commanders, energy
    managers, and contracting officers within the Navy and Marine Corps to
    ensure they fully implement the BAA provisions?
        Mr. Mabus. As DOD moves forward to implement the new contracting
    rule, all contracting officers will continue to require BAA compliance
    when applicable in procuring PV panels. As with all NDAA sections
    impacting DOD procurement procedures, we are waiting for uniform DOD
    guidance prior to instructing the Navy procurement officials on any
    specific implementation requirements. Until then, we will advise
    contracting officers to apply the 2011 NDAA test criteria when
    contemplating the acquisition of PV panels.

                          MILITARY BASE ENERGY SAVINGS

        58. Senator Gillibrand. Secretary Mabus, the Defense Science Board
    Task Force has recognized the Navy's Incentivized Energy Conservation
    (i-ENCON) program, a program that allows ship commanders to keep a
    portion of the money saved through operational efficiency measures and
    use it for morale, welfare, and recreation or investments in further
    efficiency measures, as one of the few successes in helping DOD meet
    its energy efficiency goals. Would you please comment on how the i-
    ENCON program came to fruition, how it has led the Navy to be the lead
    military department in energy efficiency, and make suggestions on how
    DOD can adopt this program agency-wide?
        Mr. Mabus. In 1975, the Navy developed the Steam System computer
    model to determine energy savings available by procedural and equipment
    modifications. In the 1980s, the Navy initiated the Ship Energy
    Conservation Assist Team (SECAT) program to demonstrate and introduce
    individual ship commands to known energy conserving techniques without
    adding equipment complexity or additional maintenance burden. The
    biggest lesson learned from SECAT was that ships were significantly
    more likely to emphasize energy savings, when it was incentivized
    (i.e., some portion of the savings went to ships' Operating Target
    (OPTAR) accounts).
        In the early 1990s, as a result of the Gulf War's impact on oil
    prices, NAVSEA piloted the i-ENCON program which was implemented Fleet-
    wide in 1999. Today, the i-ENCON program is a major initiative of the
    Navy's Energy Conservation Program. During fiscal year 2010, Navy ships
    achieved a net fuel cost avoidance of $68 million compared to the
    average burn rate from fiscal year 2007-fiscal year 2009. I-ENCON has
    helped the Fleet accomplish increased steaming hours at no extra cost
    by managing fuel consumption and transit speeds and eliminating
    unproductive energy expenditures.
        NAVAIR is currently working with the Fleet to develop a similar
    type ENCON program for naval aviation. The Air Force has also been
    briefed by NAVSEA's i-ENCON Program Manager to assist them with
    establishing a program as well. Other DOD components will likely find
    that incentivized programs will yield similar results with getting
    their commands to adopt best practices in procedural and technical
    specifications that measurably result in energy cost avoidance.
                                     ______

                   Questions Submitted by Senator John McCain

                    SSBN(X) OHIO-CLASS SUBMARINE REPLACEMENT

        59. Senator McCain. Secretary Mabus and Admiral Roughead, one area
    of the Navy's budget that I am very concerned about is the amount of
    funding needed for ship construction going forward. With about half of
    the Navy's construction and development dollars being needed to build
    extraordinarily expensive nuclear submarines, I am concerned that our
    commitment to building new submarines may be crowding out funding
    needed to modernize the surface fleet. Do you share that concern? If
    so, how do you intend to address it?
        Mr. Mabus. Yes, there is concern. The fiscal year 2011 Shipbuilding
    Plan included, and Navy planning will continue to include, the
    provision for funding SSBN recapitalization from the Navy's expected
    shipbuilding funds. The need to fund SSBN recapitalization will result
    in some risk to the Navy's shipbuilding plan in the years outside the
    FYDP. The Navy's Shipbuilding Plan has balanced the anticipated risk in
    the period with the uncertainties of the future to achieve the best
    balance of missions, resources, and requirements possible.
        The strategic necessity of recapitalizing the SSBN force will
    impact the Navy's ability to procure other ship classes as significant
    resources are allocated to the Ohio Replacement program. The lower
    build rates while the Ohio Replacement is being procured will result in
    reduced force structure in the far-term. While the threats, demands,
    and mission requirements for this far-term planning period are not well
    understood, the Navy will continue to consider mitigation strategies
    for these anticipated shortfalls in future plans. Additionally, the
    Navy must strike a balance between investing in new ships more capable
    for meeting current and future requirements and maintaining ships to
    their expected service life. The Navy has made a conscious decision to
    deactivate older, less capable ships that have become increasingly
    expensive to maintain and operate in order to support those investments
    in our future Fleet.
        The Navy is planning to manage the service lives and modernization
    of legacy ships during this period to prevent block obsolescence
    causing unacceptable gaps in capability and capacity. During the far-
    term period, we have assumed a procurement strategy based on sustaining
    procurement rates. As requirements, resources and the industrial
    landscape come into better focus for the post-2020 timeframe, the Navy
    will address these issues working with combatant commanders, Congress,
    and industry to fulfill the mission requirements on this distant
    horizon for these ships. Annual procurement and funding levels have
    been leveled to the greatest extent possible, and annual production
    rates are often at minimum sustaining rates. While this plan is
    fiscally prudent, it will likely cause some increases in ship unit
    costs due to production inefficiencies.
        Affordability is the key challenge. During the past year, the Ohio
    Replacement Program has been thoroughly reviewed. All aspects of the
    program (warfighting requirements, program execution, design and
    construction efforts) were aggressively challenged to drive down non-
    recurring engineering and construction costs while meeting the core
    military requirements for a survivable nuclear deterrent. The Navy
    continually strives to reduce the costs of all of its shipbuilding
    programs, specifically through design and development to reduce total
    ownership cost and acquisition cost, analysis of operational and
    maintenance requirements, and planning for future disposal
    requirements.
        If additional funding was provided to fund SSBN(X) procurement
    during this time period, the Navy would be able to apply its
    shipbuilding funds to raise other ship procurement rates to reduce the
    impact on the shipbuilding industry and to increase the overall
    battleforce inventory. Additional ships would include guided missile
    destroyers and attack submarines. Additional funding would help reduce
    future ship inventory shortfalls and provide more stable production
    base.
        Admiral Roughead. I remain committed to ensuring we maintain
    undersea dominance. This is best done with our unequalled submarine
    fleet. However, starting in the 2020s, many of our existing cruisers,
    destroyers, and submarines will reach the end of their service lives.
    During this period, it will be particularly critical to procure
    sufficient numbers of new ships to offset these decommissionings to
    avoid a rapid decline in force structure. At the same time, we will
    begin to replace our Ohio-class ballistic missile submarine, the most
    survivable leg of our Nation's nuclear deterrent triad. While we have
    reduced the cost of that submarine substantially, our total
    shipbuilding budget will be pressurized in that decade as we seek to
    recapitalize our surface and submarine forces while sustaining
    warfighting readiness and supporting our people. I am confident our
    near-term force structure plans provide the capability and capacity we
    need to meet demands today, but in this decade we must address how to
    best resource the shipbuilding programs required in the 2020s.
        The Navy will continue to consider mitigation strategies for these
    anticipated changes. Additionally, the Navy must strike a balance
    between investing in more capable new ships for meeting future
    requirements and maintaining ships to their expected service life. The
    Navy has made a conscious decision to deactivate older, less capable
    ships that have become increasingly expensive to maintain and operate
    in order to support those investments in our future Fleet. The Navy
    will manage the service lives and modernization of legacy surface ships
    during this period to prevent block obsolescence causing unacceptable
    gaps in capability and capacity. In the far-term, we have assumed a
    procurement strategy based on sustaining procurement rates.
        If additional funding were to be provided to fund SSBN(X)
    procurement during the 15-year construction phase of this national
    security asset, the Navy would be able to apply its shipbuilding funds
    to raise other ship procurement rates to reduce potential capacity gaps
    and minimize the impact on the shipbuilding industry and the overall
    battleforce.

        60. Senator McCain. Admiral Roughead, a couple of weeks ago in New
    York you said that the ballistic missile submarine replacement
    program--a 12-submarine $60 billion acquisition program--``is a
    strategic national asset that should not necessarily be funded in the
    shipbuilding account.''
        I too am troubled by the fact that Ohio-class replacement nuclear
    ballistic submarines are estimated to cost at least $7 billion each and
    the cost to operate them will cost $347 billion over the life of the
    submarines. Should the Ohio-class submarine replacement program be
    funded in the shipbuilding account or in a separate account where it
    does not compete with other critical shipbuilding modernization needs?
        Admiral Roughead. During the development of the future budget
    submissions, Navy will continue to engage with OSD leadership to
    develop a well-informed and executable strategy for the procurement of
    Ohio Replacement SSBNs that includes some form of above top line relief
    for Navy shipbuilding.
        The Ohio Replacement Program has been thoroughly reviewed. All
    aspects of the program (warfighting requirements, program execution,
    design and construction efforts) were aggressively challenged to drive
    down nonrecurring engineering and construction costs. The Navy
    estimates that the average Ohio Replacement cost for hulls 2-12 will be
    $5.6 billion with a goal of reducing this to $4.9 billion. The Navy
    continually strives to reduce the costs of all of its shipbuilding
    programs, specifically through design and development to reduce total
    ownership cost and acquisition cost, analysis of operational and
    maintenance requirements, and planning for future disposal
    requirements.

        61. Senator McCain. Admiral Roughead, were Secretary Gates' or
    Deputy Secretary Lynn's views on funding the ballistic missile
    submarine replacement program outside the shipbuilding budget?
        Admiral Roughead. I believe that the Secretary and Deputy Secretary
    understands the Navy's challenges to recapitalizing the Nation's sea-
    based strategic deterrent force while maintaining investments in our
    future battle force. During the development of the future budget
    submissions, Navy will continue to engage with DOD leadership to
    develop a well-informed and executable strategy for the procurement of
    Ohio Replacement SSBNs that includes some form of above top line relief
    for Navy shipbuilding.

        62. Senator McCain. Admiral Roughead, you've made some comments
    lately about the option of funding the procurement of the Navy's new
    ballistic missile submarines outside the Navy's budget--so as to
    preserve Navy shipbuilding funding for other shipbuilding programs.
    Please expound on those comments.
        Admiral Roughead. Recapitalization of the Nation's sea-based
    strategic deterrent within the Navy shipbuilding account over a 15-year
    period (fiscal year 2019-fiscal year 2033) creates significant
    challenges to conventional Navy shipbuilding goals. The fiscal year
    2011 Shipbuilding Plan included funding for Ohio Replacement from
    within its anticipated Total Obligation Authority. During the years in
    which the new submarine is being procured, the procurement of other
    ship types will be reduced resulting in force level and industrial base
    impacts. This plan will achieve a peak battle force of 320 ships in
    fiscal year 2024, after which the force level drops as legacy cruisers,
    destroyers, submarines, and amphibious ships retire, falling to a low
    of 288 ships in fiscal year 2032 and then ramping back up to 301 ships
    by fiscal year 2040.
        If additional funding were to be provided for Ohio Replacement
    procurement during this time period, the Navy would be able to apply
    its shipbuilding funds to raise other ship procurement rates to include
    DDGs and submarines. This would also reduce the impact of this time
    period on our shipbuilding industry and raise our overall battle force
    inventory.
        During the development of the future budget submissions, Navy will
    continue to engage with OSD leadership to develop a well-informed and
    executable strategy for the procurement of Ohio Replacement SSBNs that
    includes some form of above top line relief for Navy shipbuilding.

        63. Senator McCain. Admiral Roughead, how likely do you think it is
    that the Navy will be able to win support from OSD for funding these
    submarines outside the Navy's budget?
        Admiral Roughead. Because of the national strategic mission of the
    sea-based deterrence force, the Navy will work with OSD leadership to
    develop a well-informed and executable strategy for the procurement of
    Ohio Replacement SSBNs that includes some form of above top line relief
    for Navy shipbuilding.

        64. Senator McCain. Secretary Mabus, according to recent press
    reports, the Navy recently rejected the recommendation of U.S.
    Strategic Command (STRATCOM) to design the next generation ballistic
    missile submarines with 20 missile tubes, instead opting for only 16
    per boat. What is the basis for the Navy's decision of 16 tubes?
        Mr. Mabus. The Navy conducted an in-depth, extensive review of the
    capability requirements for the Ohio Replacement SSBN in parallel with
    development of the Service Cost Position required at Milestone A. This
    analysis concluded that a force of 12 Ohio Replacement SSBNs with 16
    missile tubes can carry all the sea-based warheads and maintain excess
    capacity in the event of a fundamental deterioration of the security
    environment or as a hedge against technical challenges within one or
    more of the other legs of the triad. A force of 12 SSBNs with 20
    missile tubes could carry the Nation's entire operationally-deployed
    warheads with excess capacity remaining. These conclusions are based on
    the current requirements of the New START treaty.
        It is the Navy's judgment that the Nation's sea-based strategic
    requirements can be met with a force of 12 Ohio Replacement SSBNs with
    16 tubes. Given the substantial budgetary pressures facing DOD and Navy
    Shipbuilding a 20 tube Ohio Replacement SSBN would inappropriately
    sacrifice other conventional shipbuilding requirements for unneeded
    excess capacity. OSD, Joint Staff, and STRATCOM have since concurred
    with the Navy's position on this military requirement.

        65. Senator McCain. Secretary Mabus, aside from cost, which is
    reduced significantly at 16 tubes per submarine, in what ways will such
    a decision impact the overall nuclear force structure and the
    associated flexibility of the commander of STRATCOM?
        Mr. Mabus. The decision to develop the Ohio Replacement SSBN with
    16 missile tubes is consistent with the guidance in the 2010 Nuclear
    Posture Review and current requirements of the New START treaty. A
    force of 12 Ohio Replacement SSBNs with 16 missile tubes can carry all
    the sea-based warheads and maintain excess capacity in the event of a
    fundamental deterioration of the security environment or as a hedge
    against technical challenges within one or more of the other legs of
    the triad. OSD, Joint Staff, and STRATCOM have concurred with the
    Navy's position on this military requirement.

                        AEGIS BALLISTIC MISSILE DEFENSE

        66. Senator McCain. Admiral Roughead, the 2012 budget request
    provides for an additional Aegis class destroyer, increasing the total
    number of ballistic missile capable ships to 41 by the end of the 5-
    year budget plan. However, significant concerns remain about the
    overall stresses on the Aegis fleet as the missile defense mission
    continues to grow. What is the current status of the Aegis destroyer
    and cruiser fleet?
        Admiral Roughead. The 2012 budget request represents the combined
    efforts of the Navy and the MDA to build the afloat BMD capacity needed
    to meet combatant commander demands and meet the President's Phased
    Adaptive Approach (PAA) on schedule.
        Of the 22 cruisers and 58 destroyers in service today, 5 cruisers
    and 16 destroyers have been modified to be BMD capable. This year, Navy
    will conduct three destroyer BMD installations (USS Barry, USS Laboon,
    and USS Cole) and one cruiser upgrade (USS Shiloh). The Aegis
    modernization program, which is planned to add BMD capability to all 62
    original DDGs and 9 Baseline IV CGs, and new construction of Aegis
    ships, will add BMD capacity and capability to the Fleet.
        To improve the operational readiness of BMD ships, Navy is
    providing tailored pack-up kits of critical repair parts to deploying
    BMD ships, to ensure that mission performance remains at the optimal
    level. USS Monterey recently deployed to execute the Phase I of PAA for
    the defense of Europe mission with a pack-up kit onboard.

        67. Senator McCain. Admiral Roughead, how has the missile defense
    mission impacted overall availability?
        Admiral Roughead. The Navy currently has sufficient capacity to
    meet the most critical demands for multi-mission surface combatants;
    however, Navy does not have the capacity to meet all GCC demands for
    BMD-capable ships without breaking currently established Chief of Naval
    Operations Personnel Tempo program limits. Based on threat analysis and
    current indications from GCCs, and assuming standard 6-month deployment
    lengths, Navy and MDA concluded that GCC demand for surface combatants
    with Aegis BMD capability will outpace capacity through approximately
    2018.
        A key attribute of all Aegis ships is their multi-mission
    capabilities within the maritime domain, which allows the Navy to
    employ Aegis ships in multi-mission roles rather than for exclusive
    missions. These ships can perform a variety of other non-BMD missions
    such as strike warfare, air warfare, submarine warfare, surface
    warfare, information warfare, high value asset protection, or maritime
    interdiction either concurrently or sequentially as the GCC requires.
        The Navy is not large enough to deploy ships for single mission
    purposes, and thus with the exception of deterrent patrols by SSBNs,
    does not advocate deploying warships for single mission tasking. The
    Navy's operating concept for maritime BMD features a graduated
    readiness posture that allows BMD-capable Aegis ships to be on an
    operational tether and available for other tasking when not directly
    involved in active BMD operations. Aegis ships operating in support of
    a BMD mission do not lose the capability to conduct other missions;
    however, specific mission effectiveness may be affected by ships'
    position and/or application of ship resources to those missions.

                  SM-3 MISSILES FOR BALLISTIC MISSILE DEFENSE

        68. Senator McCain. Secretary Mabus and Admiral Roughead, the MDA
    recently identified technical issues that may result in a 12-month
    delay for the initial production decision of the SM-3 Blk IB missile.
    Despite the anticipated delay, I understand that MDA does not intend to
    procure any additional SM-3 Blk IA and instead intends to let elements
    of the production line close as they await certification of IB. Does
    the Navy support a production break in SM-3 missiles?
        Mr. Mabus and Admiral Roughead. Navy supports the MDA decision to
    focus efforts on production of the SM-3 Blk IB. We need to move to the
    next generation of missile to ensure we are pacing growing ballistic
    missile threats. Navy and MDA are working closely together to develop
    and field this vital capability on schedule. We will keep Congress
    fully informed as these important programs progress.

        69. Senator McCain. Admiral Roughead, does the Navy have enough SM-
    3 missiles to satisfy global missile defense requirements?
        Admiral Roughead. Navy has a minimum sufficient inventory of SM-3
    missiles to satisfy the present global missile defense requirement. To
    meet these requirements, we are using the GFM system to provide an
    adequate inventory of SM-3s to deploying ships. In concert with the
    MDA, Navy is building additional SM-3 missiles which will permit
    increased loadouts aboard deploying ships.

        70. Senator McCain. Admiral Roughead, would an additional delay in
    SM-3 IBs--without a plan to produce additional IAs--be a cause for
    concern?
        Admiral Roughead. An additional delay in the production of SM-3 Blk
    IB missiles would be a cause for concern. However, Navy and MDA are
    committed to delivering and fielding the significantly more capable SM-
    3 Blk IB on schedule. We will keep Congress fully informed as these
    important programs progress.

                        RAND REPORT ON ALTERNATIVE FUELS

        71. Senator McCain. Secretary Mabus, the Navy has put a fair amount
    of effort recently into developing alternative fuels. A recent RAND
    report, however, raises specific questions about the Navy's efforts to
    develop such fuels. The report would have the Navy spend its resources
    on using energy more efficiently in weapon systems and at military
    installations rather than developing new alternatives. According to
    press reports, the Navy has taken issue with some aspects of the RAND
    report. What is your perspective on the RAND report, particularly in
    terms of where you disagree with the report?
        Mr. Mabus. In the RAND report, some of the conclusions suggested
    that the alternative fuel industry is immature, could not scale up to
    make an appreciable difference as a domestic alternative, and
    recommended that DOD not invest in this market. We have found that the
    biofuel industry appears to be well-poised to be of commercial size and
    ready to meet the Navy demands by 2016 for the Secretary of the Navy
    Great Green Fleet goal. According to Biofuels Digest, there are 110
    companies that are currently working on various biofuel products,
    including mixed alcohols, bio-crude oils, and drop-in fuels.
        The RAND study accurately states that the Navy's switch to
    biofuels, in and of itself, will not reduce the Nation's total energy
    consumption by a significant margin. However, the RAND report was not
    well-researched and did not take into account the recent research and
    development advances in the biofuels technologies. RAND stated in their
    report that the Fischer-Tropsch coal-to-liquid/biomass-to-liquid fuels
    are the most promising near-term options for meeting DOD's needs
    cleanly and affordably. Currently, there are no Fischer-Tropsch plants
    here in the United States. Additionally, under the guidelines of the
    EISA of 2007, section 526, any replacement fuel has to have a
    greenhouse gas emission profile less than petroleum. In order to meet
    this guideline, any Fischer-Tropsch coal-to-liquid plant would have to
    have carbon capture and sequestration incorporated into this overall
    process. While there is important carbon capture and sequestration
    research and development ongoing at DOE, there has not been any carbon
    capture and sequestration process built to commercial scale in the
    United States. In summary, due to the EISA 2007, Section 526 guidelines
    and the cost prohibitive carbon capture and storage process, we feel
    that the Fischer-Tropsch coal-to-liquid/biomass-to-liquid fuels are not
    the most promising near-term option for meeting DOD's needs cleanly and
    affordably.
        While the use of alternative fuels can contribute toward
    guaranteeing our energy supplies, reducing our operational risks, and
    during volatile upward price swings in petroleum, could represent
    additional cost savings, the Navy's energy strategy has not been
    limited to alternative fuels. We have aggressively adopted proven
    energy efficient applications and practices commonly found in the
    commercial sector. We have funded both science and technology/research
    and development projects in pursuit of increased energy efficiency
    since these projects can potentially and directly contribute to the
    combat capability of our operating forces by reducing our energy
    consumption both afloat and ashore, and by achieving significant cost
    savings.
        The Navy prefers to see itself as an ``early adopter'' of available
    biofuels. The military has often led in the development of new
    technologies where there was a compelling military use, even if the
    civilian use was ultimately greater (ex. GPS, the Internet). The
    operational use of alternative fuels by the Navy will be hastened by
    collaborating with Federal agencies and private industry at every step
    of the research, development, and certification process. The
    alternative fuel program establishes the Navy as an early adopter for
    investors in a nascent industry that could significantly enhance energy
    security, and thereby national security, in the mid- to long-term. By
    positioning itself as an early adopter by testing available biofuels
    and certifying them ``fit for use across our major platforms and
    leveraging test and certifications accomplished by the other Services
    that meets our specifications,'' the Navy is better poised to reap the
    following benefits:

             Cost Savings. Increasing our use of alternative energy
            sources helps us achieve a level of protection from energy
            price volatility. For every $10 increase in the cost of a
            barrel of oil, the Navy spends an additional $300 million a
            year. Operating more efficiently saves money by reducing the
            amount we spend for fuel. Savings can be reinvested to
            strengthen combat capability. The cheapest barrel of fuel
            afloat or kilowatt-hour ashore is the one we will never use.
             Guaranteed Supply. Our reliance on energy can be
            exploited by potential adversaries. Efficiency and alternatives
            may be our best countermeasure. Energy efficiency increases our
            mission effectiveness by expanding our range and endurance, and
            reducing our need for logistics support. Efficiency
            improvements minimize operational risks of that logistics
            tether, saving time, money, and lives. Alternative fuels
            provide the Navy an `off-ramp from petroleum,' mitigating the
            risk to a volatile and ever more expensive petroleum market.
             Fossil Fuel Independence. The Navy recognizes that our
            dependence on fossil fuels and foreign sources of oil makes us
            more susceptible to price shocks, supply shocks, natural and
            man-made disasters, and political unrest in countries far from
            our shores.
             Combat Capability. Making our ships and aircraft more
            efficient improves their fuel economy. We can increase the days
            between refueling for our ships, improving their security and
            combat capability. We can also extend the range of our aircraft
            strike missions, allowing us to launch our aircraft farther
            away from combat areas. Increasing our efficiency and the
            diversity in our sources of fuel improves our combat capability
            strategically and tactically.

        72. Senator McCain. General Amos, please describe the alternative
    you are pursuing to reduce our reliance on fuel on the battlefield, and
    which of those initiatives do you think hold the most promise?
        General Amos. We are aggressively pursuing alternative energy
    capabilities, which will reduce the requirement for liquid fuel
    logistics. Our objective is to increase our self sufficiency in
    battlefield sustainment and to reduce our expeditionary footprint.
        Currently we are pursuing innovative renewable energy capabilities
    to support the small unit level operations at the forward edge in
    Afghanistan. Last year, through our ExFOB process, marines of India
    Company, 3rd Battalion 5th Marine Regiment (3/5) trained and deployed
    to Afghanistan with solar and hybrid solar power generation
    capabilities. As of January 2011, two patrol bases were operating
    entirely on renewable energy--while engaged in near constant combat. A
    third base reduced its fuel requirement by approximately 90 percent.
    This unit also used flexible solar/backpack portable battery
    rechargers, enabling a foot patrol to operate for 3 weeks without
    battery resupply whereas typical resupply occurs once every 2 to 3
    days. This unit experienced a reduced burden by an estimated 700 pounds
    and saved an estimated $40,000.
        Our focus on renewable energy aims to increase combat
    effectiveness. India Company's experience--and leadership--show us that
    increasing energy efficiency and using renewable energy sources extends
    a marine unit's sustainability in an expeditionary environment,
    bringing about a leaner, lighter force. Most importantly, it may also
    save lives by getting marines off the road hauling fuel and water.
        In our experience, locally-sourced alternative fuel has the
    potential to offset demand for petroleum at the tactical level. Reduced
    demand for fuel that must be transported to the battlefield means fewer
    marines at risk on the road in convoys.
        In short, solar and hybrid solar capabilities for the small unit
    have proven valuable; we are planning to accelerate them into the
    force. This summer the ExFOB will focus on the activities of a
    battalion-level command operations center. Taking a systems approach,
    we will evaluate renewable and hybrid power solutions together with
    energy efficient shelters and equipment. Solutions that demonstrate
    promise will be carried through for further evaluation. In addition, we
    are focused on leveraging every opportunity to harvest energy from all
    available renewable sources.

                FUTURE NAVAL FORCES AND FUTURE SECURITY THREATS

        73. Senator McCain. Admiral Roughead, you've given some speeches in
    recent months presenting your views on the value of naval forces in
    defending U.S. interests in coming years, particularly in light of
    trends you are seeing in the international security environment. What
    are your views on that matter?
        Admiral Roughead. America's prosperity depends upon the seas: 90
    percent of world trade moves on the world's oceans and underwater
    telecommunications cables facilitate about $3.2 trillion of commerce
    each year. The modern world is a complex, open system comprised of
    interdependent networks of trade, finance, information, law, people,
    and governance. The stability and security of that system depends upon
    U.S. leadership, U.S. cooperation with global partners, and America's
    tireless service as a global security provider.
        Our prosperity and security are inextricably linked, and the
    maritime commons will continue to support the stability of the global
    system. The ocean will remain the primary domain from which naval and
    joint forces project and sustain military power. Seapower allows our
    Nation to maintain U.S. presence and influence globally and, when
    necessary, project power without a costly, sizeable, or permanent
    footprint ashore. Seapower strengthens international and regional
    security, and provides the United States, our allies, and partners the
    means to deter and defeat aggression globally.
        The future security environment will continue to be dynamic and
    characterized by disruption and disorder as state and non-state actors
    compete for resources and influence. Global trends in economics,
    demographics, resources, and climate change portend an increased demand
    for maritime power and influence. We will continue to maintain a
    forward-deployed presence around the world to prevent conflict,
    increase interoperability with our allies, enhance the maritime
    security and capacity of our traditional and emerging partners,
    confront irregular challenges, and respond to crises. As we plan for
    the Navy of the future, we must take a realistic view of that future
    and ensure a dominant Fleet continues to provide the six core
    capabilities we set forth in our Maritime Strategy. If history and our
    current operations are a guide, demand for what we provide the Nation
    will remain undiminished, and may very well increase in the years
    ahead.

                          FISCAL YEAR 2012 NAVY BUDGET

        74. Senator McCain. Admiral Roughead, you've made some comments
    lately about the need for possibly having to reopen the 2012 budget, as
    you put it--by which I take it you mean the Navy later this year might
    have to submit an amended 2012 budget to Congress--depending on what
    happens regarding 2011 Navy funding. Could you expand on that?
        Admiral Roughead. The President's budget for 2012 was built on the
    President's budget for 2011 foundation. The CR drastically affects the
    Navy's accounts and will continue to do so until an appropriation bill
    is enacted. For example, in shipbuilding, the Navy's plan for fiscal
    year 2011 included the procurement of two Arleigh Burke-class guided
    missile destroyers. The second ship of the planned procurement is in
    jeopardy as there was only one ship budgeted in the 2010 cycle.
    Additionally, we planned to start the procurement of two Virginia-class
    submarines, but a CR permits us to procure only one. The lead Mobile
    Landing Platform would be delayed since the lead ship is planned for
    procurement in 2011. Lastly, there is significant increased risk to the
    Gerald R. Ford (CVN-78)-class aircraft carrier program, development for
    the Ohio Replacement Program, and procurement of the amphibious assault
    ship (LHA-7).

        75. Senator McCain. Admiral Roughead, what kinds of changes to the
    2012 budget might we see?
        Admiral Roughead. Until the final budget for 2011 is determined, it
    is difficult to speculate on what the cascading changes might be.
    However, Navy will be able to recover, but there are some programs that
    may not be executable on the same schedule and may require
    modification. There may also be additional costs incurred due to delays
    in meeting contract requirements. Our Navy's budget submitting offices
    are currently working to mitigate these issues. For these reasons, we
    may need to revisit some of our 2012 submissions to ensure that our
    vital programs, and their programmed funding levels, are appropriate
    with the realities of fiscal year 2011's appropriation.

         AIRCRAFT CARRIERS AND OTHER SURFACE SHIPS FACE GROWING THREATS

        76. Senator McCain. Admiral Roughead, there have been some press
    reports lately suggesting that China's new ASBM (called the Dong Feng
    21D) is going to compel our surface Navy to withdraw from certain parts
    of the Western Pacific. Do you agree with this view?
        Admiral Roughead. No. The DF-21D ASBM is but one system in China's
    arsenal that challenges naval operations in contested areas, and our
    Navy has made significant investment in kinetic and non-kinetic
    capabilities to counter ASBMs and advanced cruise missiles. We will
    sustain our forward presence in the Western Pacific and strengthen our
    alliances and partnerships in the region through robust training,
    exercises, and military-to-military engagement. Implementation of the
    Air-Sea Battle Concept, a limited operational concept that focuses the
    development of integrated air and naval forces on addressing the
    evolving anti-access/area denial environment, will help us preserve our
    access and advance our national interests in the Western Pacific while
    ensuring continued U.S. advantage against emerging anti-access threats.

        77. Senator McCain. Admiral Roughead, please tell me--in general
    terms, without getting into classified details--what the Navy is doing
    to counter the ASBM, and whether you are confident about the ability of
    our surface ships to continue operating in these parts of the Western
    Pacific.
        Admiral Roughead. Our Navy has made significant investments in new
    ships, sensors, weapons, and systems to counter a wide array of
    evolving threats. Additionally, Navy has invested heavily in Aegis
    modernization, to upgrade existing Aegis technology already in the
    Fleet. These initiatives involving the current and future Fleet will
    continuously improve our integrated air and missile defense capability,
    allowing our forces to continue to operate forward around the world.

        78. Senator McCain. Admiral Roughead, more broadly, please discuss
    in general terms what the Navy is doing to counter China's various
    maritime anti-access systems, and to preserve a military balance in the
    Western Pacific that is favorable to the United States and its allies.
        Admiral Roughead. The Navy has and will continue to develop
    programs and capabilities to address the anti-access/area denial
    challenges in the Western Pacific and other theaters of operation.
    Accordingly, we are mindful of the need to be prepared to respond to
    all challenges by strengthening our alliances and partnerships,
    modernizing our forces, fielding new capabilities and technologies, and
    developing new operational concepts.
        One specific initiative that will help preserve a favorable
    military balance in the Western Pacific and elsewhere is implementation
    of the Air-Sea Battle Concept--a limited operational concept that
    focuses the development of integrated air and naval forces on
    addressing the evolving anti-access/area denial environment. The Air-
    Sea Battle Concept encompasses three key elements:

             Institutional cooperation will be enhanced by
            establishing an enduring organizational construct that will
            continue formal collaboration to address the A2/AD environment
            as it evolves over time;
             Conceptual alignment will be perpetuated through the
            operational design which describes how capabilities and forces
            are integrated to accomplish operational objectives in an A2/AD
            environment; and
             Materiel solutions and innovations will be
            collaboratively vetted to ensure they are complementary where
            appropriate; redundant when mandated by capacity requirements;
            fully interoperable; and fielded with integrated acquisition
            strategies seeking efficiencies where they can be achieved.

        Air-Sea Battle will ensure continued U.S. advantage against
    emerging threats that include long-range, precise, anti-ship and land
    attack ballistic and cruise missile systems; advanced combat aircraft
    and electronic warfare technologies; advanced Integrated Air Defense
    systems; submarines and subsurface warfare capabilities; surface
    warfare capabilities; C\4\ISR capabilities; and cyber warfare
    technologies.

                          NAVY SURFACE SHIP READINESS

        79. Senator McCain. Admiral Roughead, I understand that the Navy
    recognizes that it needs to improve maintenance on its surface ships to
    repair problems that have developed over the last several years in
    surface ship materiel readiness. However, the Navy's budget request
    shows funding for ship maintenance declining from 100 percent of
    projected requirements in 2010 to 97 percent in the 2011 request and 94
    percent in the 2012 budget request. The total amount of ship
    maintenance funding is going down, from $7.5 billion in 2010, to $7.3
    billion in the 2011 request, and $7.2 billion in the 2012 request.
    Equally troubling is the amount of annual deferred maintenance is
    increasing from zero in 2010 to $172 million in 2011, and $367 million
    in the 2012 budget request. Since funding for maintenance on submarines
    and aircraft carriers is traditionally protected, this downward trend
    in funding looks like it could fall more heavily on the Navy's surface
    combatants. Why does the Navy's budget not reverse the upward trend of
    deferred maintenance?
        Admiral Roughead. Both the fiscal year 2011 and fiscal year 2012
    baseline ship maintenance budget submissions are significantly higher
    than the fiscal year 2010 submission, reflecting our commitment to
    improving the baseline ship maintenance funding posture. Our combined
    fiscal year 2012 OMN baseline and OCO budget submission reflects the
    best balance of risk and available resources across the Navy portfolio.
    It funds 94 percent of the projected depot ship maintenance
    requirements necessary to sustain our Navy's global presence. To
    enhance the materiel readiness of our Fleet, we are improving our
    ability to plan and execute maintenance by increasing manning at our
    Regional Maintenance Centers (RMC), and by institutionalizing our
    engineered approach to surface ship maintenance, converting the
    successes of our Surface Ship Lifecycle Maintenance (SSLCM) initiative
    I began 2 years ago into the Surface Maintenance Engineering Planning
    Program Activity (SURFMEPP). These initiatives combined with our
    enhanced assessments of the materiel condition of our surface ships
    provides us with more insight on how to manage the risk and ensure the
    deferred work is properly documented and completed in future
    availabilities. Navy remains committed to sustaining the force
    structure required to implement the Maritime Strategy and will ensure
    we minimize the impacts and continue the gains we have made in surface
    ship readiness over the last several budget cycles.

        80. Senator McCain. Admiral Roughead, is the Navy's 2012 budget
    request consistent with its goals of improving surface ship readiness?
        Admiral Roughead. Our combined fiscal year 2012 baseline and OCO
    budget submissions fund 94 percent of the projected depot ship
    maintenance requirements necessary to sustain our Navy's global
    presence and continue to improve overall surface ship readiness. This
    represents the best balance of risk and available resources across the
    Navy portfolio. Additionally, the investments we have made in the past
    several budget cycles in SURFMEPP and enhanced assessments of our
    surface ships provide us with more insight on how to manage the risk
    and ensure the work is appropriately apportioned across maintenance
    availabilities. However, Navy remains committed to sustaining the force
    structure required to implement the maritime strategy and will ensure
    we minimize the impacts and continue the gains we have made in surface
    ship readiness over the last several budget cycles.

        81. Senator McCain. Admiral Roughead, how much risk is the Navy
    taking on in terms of surface ship readiness with its current year
    budget submission?
        Admiral Roughead. Our combined fiscal year 2012 baseline and OCO
    budget submissions fund 94 percent of the projected depot ship
    maintenance requirements necessary to sustain our Navy's global
    presence. The resultant shortfall of $367 million equates to deferral
    of 44 surface ship availabilities (34 surface ship non-docking
    availabilities, 3 surface ship docking availabilities, and 7 CVN
    private sector carrier incremental availabilities). This represents the
    best balance of risk and available resources across the Navy portfolio.
    Additionally, the investments we have made in the past several budget
    cycles in SURFMEPP and enhanced assessments of our surface ships
    provides us with more insight on how to manage the risk and ensure the
    deferred work is properly documented and completed in future
    availabilities. Navy remains committed to sustaining the force
    structure required to implement the maritime strategy and will ensure
    we minimize the impacts and continue the gains we have made in surface
    ship readiness over the last several budget cycles.

                  COMMANDING OFFICERS' FIRINGS ON THE INCREASE

        82. Senator McCain. Admiral Roughead, there have been a number of
    reported cases in recent months of Navy commanding officers being
    relieved of duty for various reasons relating to their personal
    behavior. The case of the commanding officer on the aircraft carrier
    was well publicized, but there have been a number of additional cases
    as well. Have these removals become more frequent?
        Admiral Roughead. In 2010, we saw an increase in the number of
    commanding officers that have been detached for cause (DFC); however,
    since 2005, less than 1 percent of all our commanding officers have
    been detached for cause, most for issues involving personal misconduct.
    After observing the increase in the number of commanding officers DFC
    cases in 2010, we conducted a review and have taken corrective actions.
    The number of commanding officers detached for cause are:

    ------------------------------------------------------------------------
                                                Commanding Officers Detached
                       Year                               for Cause
    ------------------------------------------------------------------------
    2007......................................  13
    2008......................................  12
    2009......................................  14
    2010......................................  29
    2011......................................   1
                                               -----------------------------
      Total...................................  69
    ------------------------------------------------------------------------

        83. Senator McCain. Admiral Roughead, how do you explain this
    trend?
        Admiral Roughead. While 99 percent of our commanding officers
    continue to be successful, the increase of commanding officers relieved
    for misconduct in 2010 is a concern. In my review, the increase in DFC
    resulted from personal behavior and misconduct more than professional
    performance. The Navy continues to review and make changes to
    leadership training to improve the success rate of commanding officers.
    There is no simple explanation for this trend, and we have focused our
    efforts on the education, training, and selection of our commanding
    officers. The emphasis is on the personal character, integrity, and
    accountability we expect of our commanders.

        84. Senator McCain. Admiral Roughead, is there an actual increase
    in misconduct by the Navy's commanding officers or is the media just
    paying more attention to them lately?
        Admiral Roughead. The number of commanding officers relieved for
    misconduct in 2010 is an increase. In my review, the increase in DFC
    resulted from personal behavior and misconduct more than professional
    performance. The Navy continues to review and make changes to
    leadership training in order to improve the success rate of commanding
    officers. There is no simple explanation for this trend, and we have
    focused our efforts on the education, training, and selection of our
    commanding officers. The emphasis is on the personal character,
    integrity, and accountability we expect of our commanders.
        There have been 69 commanding officers officially detached for
    cause for the 5-year period from January 2007 to present. Out of the 69
    DFCs since 2007, 36 cases were related to personal misconduct. There
    are currently 5 cases that are pending a final decision, including the
    commanding officer of the aircraft carrier mentioned in your earlier
    question. Reasons for DFC included: (1) Abused position for personal
    gain; (2) Misconduct--fraternization/sexual misconduct; (3)
    Misconduct--otherwise; (4) Inability to provide effective leadership;
    (5) Collision/Grounding; and (6) Requested to be relieved. Personal
    misconduct incidents are reflected in the first three reasons.

    ------------------------------------------------------------------------
                                       Total Detachments       Personal
                  Year                    For Causes          Misconduct
    ------------------------------------------------------------------------
    2007............................                 13                   7
    2008............................                 12                   9
    2009............................                 14                   4
    2010............................                 29                  15
    2011............................                  1                   1
                                     ---------------------------------------
      Total.........................                 69                  36
    ------------------------------------------------------------------------

        The public sensitivity to alleged misconduct by military and
    government officials may generate media attention. In fiscal year 2010,
    media reporting on these issues did increase. With the widespread use
    of electronic devices today, it is far easier to substantiate claims of
    misconduct through the use of email, photographic, and video evidence.

        85. Senator McCain. Admiral Roughead, are you concerned that these
    removals reflect problems in the way the Navy is selecting and training
    its commanding officers?
        Admiral Roughead. I'm confident that the Navy is choosing the best
    officers based on documented performance. The Navy's process of
    selecting and training commanding officers is rigorous and sound. Over
    the last 6 years, 99 percent of commanding officers have successfully
    completed their command tours. The recent DFC trend has largely been a
    result of personal misconduct issues rather than professional
    shortcomings. As a result of this trend, we have incorporated training
    that specifically addresses this matter into the training curriculum
    all prospective commanding officers must complete prior to assuming
    command. The Navy sets high standards of conduct for its commanding
    officers, and will continue to hold them fully accountable.

                        MARINE CORPS ROLES AND MISSIONS

        86. Senator McCain. General Amos, it appears that a number of
    investments associated with the Marine Corps' ability to put troops
    ashore and then properly support them in combat operations have in
    recent years been reduced or put on hold. For example: The Navy's long-
    range shipbuilding plan does not include enough amphibious ships to
    maintain a force of 33 amphibious ships. The Navy's planned force of
    155mm Advanced Gun Systems, which were central at one point to DOD's
    plans for providing the Marines Corps with adequate naval surface fire
    support, has been greatly reduced in number due to the truncation of
    the DDG-1000 program. The planned 12-ship MPF(F) squadron has been set
    aside in favor of a less ambitious plan to reinforce the three existing
    maritime prepositioning ship squadrons--and the 2012 budget request now
    plans to reduce that capability by putting one of those three squadrons
    into reduced operating status. The STOVL version of the JSF, for which
    the Marine Corps is to be the primary user--has been put on a 2-year
    probation. The 2012 budget request proposes to cancel the EFV in favor
    of a less-capable replacement system. In light of all these
    developments, do you believe that the Marine Corps' program needs are
    being sufficiently supported by the Navy and the DOD?
        General Amos. There is increasing awareness within the Navy and DOD
    regarding challenges to operational access and power projection.
    Amphibious ships are the cornerstone of our Nation's ability to respond
    to crisis and protect our citizens and interests globally. Today we
    have agreement within the Navy on a requirement of 38 amphibious ships
    and a minimum inventory of 33 ships. While we will not realize the
    floor of 33 immediately, we have committed to reverse this trend to
    increase our amphibious capabilities.
        Additionally, we are working to balance capabilities developed
    since September 11 with the need to expand our engagement efforts,
    respond to crisis, and still be able to project power for the most
    dangerous but less likely threat scenarios. We have greatly improved
    and will continue to improve our maritime prepositioning ship
    squadrons. We have developed an ability to transfer equipment at sea
    and have ensured we can reinforce amphibious forces without a port. We
    continue to look for innovative solutions to meet our naval surface
    fire support requirements, and in that regard the DDG-1000 provides an
    enhancement, and we look to further development of the Long Range Land
    Attack Projectiles. We continue to work with the Navy to enhance our
    connectors and landing craft that form the backbone of our heavy-lift,
    surface, ship-to-shore movement capability from amphibious ships. The
    LHD Capstone Upgrade to Ship Self Defense System Mk 2 provides another
    example of forward momentum to enhance our amphibious capabilities.
        Establishing a period of scrutiny for the F-35B program was a
    prudent decision in light of the progress the JSF program had made to
    date. The identified technical challenges of a Short Take-Off and
    Vertical Landing (STOVL) aircraft are typical of the developmental
    stage of a program of this complexity, yet none of the currently known
    issues are considered to be insurmountable. Corrective actions have
    either already been incorporated into production aircraft, or they are
    being proactively analyzed and will soon be resolved.
        We now have the time to focus resources, ensure solutions are
    effective, and incorporate them in the most efficient means possible
    with the least disruption to schedule, while avoiding the potential of
    costly improvements later in the service life of the aircraft.
    Implications of not having a STOVL tactical aviation capability reach
    far beyond the Marine Corps, and directly affect our ability to support
    national strategy. I am confident the F-35B will surpass expectations
    during this period of focused scrutiny and be a key resource in our
    arsenal of expeditionary capabilities. Once the F-35B platform is fully
    fielded aboard our LHD and LHA ships, the Nation will have 22 capital
    ships--11 amphibious assault and 11 carrier--with 5th generation assets
    aboard.
        I recommended cancellation of the EFV after careful evaluation of
    affordability, fiscal reality, and future operating challenges.
    Although the EFV program has been cancelled, both the Secretary of
    Defense and the Secretary of the Navy have reaffirmed the necessity of
    the Marine Corps amphibious assault capabilities as a component of the
    larger amphibious operations mission set. As the Secretary of Defense
    stated, we are firm in our requirement for an ACV. It is the key to
    conducting ship-to-shore operations in permissive, uncertain, and
    hostile environments; assuring access where infrastructure is destroyed
    or nonexistent; and creating joint access in defended areas. Throughout
    the period when the EFV was being developed, threats in the littorals
    and U.S. capabilities to counter and overcome these threats evolved. We
    now believe that improvements in our capabilities fielded and in
    development mitigate the threat to amphibious forces from anti-access
    and area denial threats to an acceptable level of risk for a naval
    force operating at a 12 nautical mile stand-off range.

        87. Senator McCain. General Amos, and if this trend toward program
    reductions and deferrals continues, what is going to happen over the
    long run to the Marine Corps' ability to put troops ashore and then
    properly support them there in combat operations?
        General Amos. The contributions of amphibious forces to the
    strategic mission of the United States are possible only by the
    maintenance of robust amphibious capabilities--the ships, aircraft,
    connectors, ground vehicles, and forces that conduct sea-based
    operations. In 2010, the Navy-Marine Corps team returned to conducting
    large-scale Marine Expeditionary Brigade/Expeditionary Strike Group
    exercises to hone these critical amphibious skills. While these
    exercises are critical to enhancing our proficiency in large-scale
    amphibious operations, they also serve as a valuable platform to test
    new concepts and potentially lead to the development of updated joint
    doctrine.
        Future amphibious operations will require improvements in mobility,
    command and control, intelligence, fires, sea-based logistics,
    organization, doctrine, training, and education. Amphibious landing
    forces require surface and vertical assault systems with the speed,
    range, precision location and navigational capabilities, protection,
    and firepower to launch from over-the-horizon positions, maneuver
    through tactical points of entry, and achieve the objective regardless
    of the threat. The technologies required to enhance these capabilities
    are under development, and the combat systems implementing these
    technologies are the highest priority in the Marine Corps.
        Our force structure review completed last fall proposed the
    reestablishment of standing Marine Expeditionary Brigade headquarters,
    each under the command of a brigadier general. These command elements
    will increase responsiveness to GCC needs and align with the Navy's
    Expeditionary Strike Group headquarters. The goal of this alignment is
    to provide a more integrated naval approach for amphibious training and
    innovation, while also establishing headquarters capable of commanding
    and controlling larger amphibious operations.

    REDESIGNATING THE DEPARTMENT OF THE NAVY TO THE DEPARTMENT OF THE NAVY
                                AND MARINE CORPS

        88. Senator McCain. Secretary Mabus, what is your view of the
    proposal to redesignate the Navy as the Navy and Marine Corps, and to
    redesignate the person in charge of that department from Secretary of
    the Navy to Secretary of the Navy and Marine Corps?
        Mr. Mabus. I oppose the redesignation of the Navy. Although the
    intent of the proposal is to provide for specific recognition of the
    Marine Corps, it may result in a less effective Navy and Marine Corps
    team. The Navy represents one unified team, with the Marine Corps as a
    fully integrated and equal part of that team. The name of the
    department has not underserved the Marine Corps as a Service, and
    suggestions to the contrary undermine the sense of unity and jointness
    that have been the hallmark of the Navy for over 200 years. Dictating
    such a name change creates the impression that a problem exists and
    could have the deleterious effect of suggesting a step away from the
    heritage and tradition of a strong Navy and Marine Corps team. Thus, I
    oppose the redesignation.

                        REQUIREMENT FOR A 313-SHIP NAVY

        89. Senator McCain. Admiral Roughead, for the past few years Navy
    has justified to Congress a need for 313 ships; does this budget
    support that requirement?
        Admiral Roughead. Yes. This budget supports and will allow the Navy
    to reach a battle force inventory of 313 ships. The President's budget
    for 2012 achieves a balanced and executable shipbuilding program which
    provides additional capability while gaining efficiency in the
    shipbuilding industrial base. The requirement of 313 ships remains the
    floor and the Navy is committed to building to that floor.
        The Navy was able to budget for a total of 55 ships in the
    President's budget 2012 FYDP. These ships include: a continuation of
    the fiscal year 2010 restart of the DDG-51 program; an additional LCS
    in fiscal year 2012 to support an acquisition strategy of dual contract
    awards totaling 10 ships of each design; continuation of the SSN-774
    program at 2 ships per year through fiscal year 2016; acceleration of
    the new MLP program aimed at increasing the capacity and capability of
    the existing Maritime Prepositioning Ship fleet; continuation of the
    CVN-78 program; procurement of the 11th LPD-17 ship, addressing the
    Marine Corps lift requirements for this class of ship; and a
    substantive increase in the Navy's ability to meet theater cooperation
    demands and intra-theater lift requirements through increased
    procurements of the Joint High Speed Vessel (JHSV) program. Overall,
    the fleet additions represented by the additions to the President's
    budget 2012 FYDP will position the Navy to meet its obligations and
    mission requirements through the next decade.

        90. Senator McCain. Admiral Roughead, I'm concerned that cost
    overruns in shipbuilding programs will undermine future plans. What
    specific actions is the Navy taking to mitigate cost overruns in
    shipbuilding programs?
        Admiral Roughead. The Navy recognizes that building the required
    force structure will largely depend on controlling shipbuilding costs
    (including combat systems). The Navy is addressing this in three ways.
        First, the Navy continues to look for further affordability and
    efficiency opportunities as we go forward with the shipbuilding plan,
    such as revising the acquisition strategy for the Littoral Combat Ship
    (LCS) to maximize the advantage of the competitive pricing we received
    and enable us to gain an additional DDG-51 ship within the FYDP.
        Second, the Navy is continuing to emphasize the use of fixed-price
    contracts as a cost control mechanism, when technical risk is low and
    when a ship's design is mature prior to the start of fabrication.
        Third, prior to Milestone A approval for the Ohio Replacement
    submarine, the Navy evaluated numerous capability trades to reduce
    costs. As a result, the Navy made trades in the number of ballistic
    missile tubes, the diameter of those tubes, the number of torpedoes to
    be carried, acoustic sensors, and other defensive features throughout
    the design. These trades made the submarine more affordable while
    maintaining the necessary level of capability, resulting in a reduction
    of the projected cost to a target cost of $4.9 billion (fiscal year
    2010 dollars) for the follow on hulls 2-12.

                            SHIPYARD INDUSTRIAL BASE

        91. Senator McCain. Secretary Mabus, for more than a decade, six
    major shipyards have met most of the shipbuilding needs of the Navy. In
    fact, some experts have said that our industrial base today has been
    established to support a 600-ship Navy, but those needs are declining,
    even as the Navy builds up to a 313-ship fleet. Is the planned number
    of ships enough to keep those six shipyards in business?
        Mr. Mabus. The fiscal year 2012 President's budget request balances
    capability, affordability, and industrial base considerations in
    determining the force structure necessary to meet maritime security
    requirements. Striking that balance requires the Nation to maintain
    adequate capacity and capability by the industrial base to produce the
    ship classes in the plan. It also requires that we preserve
    competition, where practical, and incentivize industry to invest in the
    tools and training required to achieve the affordability, performance,
    and innovation needed to maintain our naval superiority.
        Within this overarching framework, the Navy looks to the
    shipbuilding industry to adopt processes and optimize facilities to
    affordably build the future fleet. The private sector industrial base
    has done so since the Navy build up in the 1980s. Business decisions
    regarding capital investment, consolidation, overhead reductions, et
    cetera--particularly where industry has opportunity to compete for
    naval or commercial ship construction contracts--are largely left to
    industry to determine based on the individual shipbuilder assessment of
    its future business base, and the cost performance it needs to achieve
    to be affordable and competitive for ships in the Navy's budget.
        A recent example of adjustments in the shipbuilding industrial base
    is the Northrop Grumman Corporation (NGC) decision to spinoff its
    shipbuilding sector. Navy evaluated this complex corporate transaction
    and negotiated with NGC to ensure that the reorganized entity,
    Huntington Ingalls Industries (HII), would start as a financially
    viable company capable of performing current and future Navy
    shipbuilding programs. This spin-off is now complete.

        92. Senator McCain. Secretary Mabus, in both the current budget
    request and in terms of a more general policy, what (if anything) is
    the Navy doing to support the shipbuilding industrial base?
        Mr. Mabus. DOD and Navy face the challenge of ensuring that the
    defense industrial base can meet the current and future requirements
    for systems and support while maintaining cost effectiveness,
    competition, and the necessary skills and technology base. To help meet
    this challenge, the Assistant Secretary of the Navy (Research,
    Development, and Acquisition) has engaged an outside entity to develop
    and provide a publicly available, comprehensive, and independent
    assessment of the Navy shipbuilding industrial base.
        The Navy seeks an industrial base analysis that focuses on the
    essential capabilities and capacities needed to support Navy ship
    construction. The objective of the study is to identify the challenges
    facing the Navy and the strategies for mitigating the effects of those
    challenges, across a variety of issue areas such as cost, schedule,
    technical, infrastructure, and workforce capability. This may include
    recommendations to change/improve policies, standards, contract
    elements, performance benchmarks, government and industry practices,
    and oversight that define the effective delivery of quality products,
    platforms, and systems (including combat systems).
        Recent examples of what the Navy has done to support the industrial
    base include:

        1.  In Title II of Public Law 109-234, Section 2203, Congress
    directed that at least $140 million be made available for
    infrastructure improvements at Gulf Coast shipyards that have existing
    Navy shipbuilding contracts and that were damaged by Hurricane Katrina
    in calendar year 2005. In 2010, DOD awarded an additional $39.5 million
    in infrastructure improvement projects to Gulf Coast shipyards that
    support the Navy shipbuilding industrial base. These projects focus on
    expediting recovery of shipbuilding capability, increasing efficiency,
    and preventing further hurricane damage to Gulf Coast shipyards.
        2.  The production of the double-hulled fleet oiler T-AO(X) was
    accelerated from 2017 to 2014 in the fiscal year 2012 budget
    submission. This allows the Navy to acquire this important capability 3
    years earlier while bringing greater stability and promoting
    competition in the shipbuilding industry.
        3.  A recent adjustment in the shipbuilding industrial base is the
    NGC decision to spinoff/sell its shipbuilding sector. Navy evaluated
    this complex corporate transaction and negotiated with NGC to ensure
    that the reorganized entity, HII, would remain a financially viable
    company capable of performing current and future Navy shipbuilding
    programs. This reorganization is now complete, after Navy completed its
    evaluation and announced its position supporting this reorganization
    and finding HII a responsible contractor. The Navy is also prepared to
    provide an agreement, in accordance with the Shipbuilding Capabilities
    Preservation Act (SCPA), that would assist in making HII more
    competitive for commercial shipbuilding work. The purpose/benefits of
    an SCPA is to facilitate a shipbuilder's entry into private sector work
    and reduce that shipbuilder's reliance on the DOD industrial base. U.S.
    commercial shipbuilding accounts for approximately 1 percent of world
    commercial shipbuilding output; 80 percent of this comes from the mid-
    tier sector.
        4.  Of the Big Six shipyards, only General Dynamics NASSCO has
    recently competed in the commercial shipbuilding industry. However,
    NASSCO currently has only U.S. Navy shipbuilding and repair work at the
    shipyard. In 2010, the Navy signed an SCPA agreement with NASSCO and
    the company is pursuing commercial contracts.

        93. Senator McCain. Secretary Mabus, are there any plans, for
    example, such as helping to convert existing shipyards into ship repair
    yards?
        Mr. Mabus. There are existing construction shipyards that are
    capable of performing repair work also, and some currently are Navy
    prime contractors for repair, maintenance, and modernization of Navy
    surface ships, aircraft carriers, and submarines.
        Geographic restrictions. For long-term availabilities, 10 U.S.C.
    7299a (section 7299a) prohibits geographic restrictions when assigning
    ship conversion, alteration, or repair projects. For short-term
    availabilities (<6 months), however, section 7299a requires geographic
    restriction of performance to the ship's homeport if there is adequate
    competition to perform the work in the homeport. If homeport
    competition exists, then the Navy shall issue solicitations and award
    contracts only to firms that will perform the work at the vessel
    homeport.
        The Secretary of the Navy Homeport Policy provides additional
    definitions and guidance in applying section 7299a, as follows:

             For long-term availabilities, the work will be
            competed ``coast-wide,'' unless the ASN(RDA) determines ``that
            competition is infeasible or special conditions exist.''
             For short-term availabilities: (i) ``homeport area,''
            for solicitation purposes, is defined as a grouping of ports
            within a 75 mile radius of, and less than 1.5 hours one way
            travel from, the naval facility where the ship is homeported;
            (ii) ``adequate competition'' is defined as the presence of two
            or more qualified bidders that can perform in the homeport; and
            (iii) requires that, if adequate competition is not available
            in the homeport, the geographic area for solicitation will be
            expanded equally in all directions until adequate competition
            is achieved.
             For short-term availabilities for submarines, the
            Secretary of the Navy waives the requirement for competition
            and allows performance to be performed sole source in the
            homeports of New London, CT, and Norfolk, VA. This waiver is
            necessary because General Dynamics Electric Boat and Huntington
            Ingalls Industries (Newport News) are the only private sources
            that can perform short-term, non-refueling availabilities for
            nuclear submarines.

        Multi-Ship/Multi-Option (MSMO) contracts. The Navy uses MSMO
    contracts to accomplish surface ship maintenance and modernization.
    These contracts are awarded for a specific ship class in a homeport in
    accordance with the Secretary of the Navy Homeport Policy. New
    construction shipyards that are located in a Navy homeport area have
    been awarded MSMO contracts. For example, NASSCO currently holds the
    MSMO contracts for LPD, LSD, LHA, LHD classes of ships in San Diego,
    CA, and Vigor Shipyards (formerly Todd Pacific Shipyards) holds the
    MSMO contracts for docking availabilities for FFG and DDG classes of
    ships in Puget Sound, WA.

        94. Senator McCain. Secretary Mabus, I understand that an outside
    study being done for the Navy on the health of the Navy shipbuilding
    industrial base is just about finished. Can you share any of the
    findings of that report?
        Mr. Mabus. The Assistant Secretary of the Navy (Research,
    Development, and Acquisition) has engaged an outside entity to develop
    and provide a publicly available, comprehensive, and independent
    assessment of the Navy shipbuilding industrial base.
        The Navy seeks an industrial base analysis that focuses on the
    essential capabilities and capacities needed to support Navy ship
    construction. The objective of the study is to identify the challenges
    facing the Navy and the strategies for mitigating the effects of those
    challenges, across a variety of issue areas such as cost, schedule,
    technical, infrastructure, and workforce capability. This may include
    recommendations to change/improve policies, standards, contract
    elements, performance benchmarks, government and industry practices,
    and oversight that define the effective delivery of quality products,
    platforms, and systems (including combat systems). The study is
    expected to be completed shortly.

      HOME-PORTING FOR THE NAVY'S VERSION OF THE F-35 JOINT STRIKE FIGHTER

        95. Senator McCain. Admiral Roughead, I understand that the Navy
    plans to begin replacing 109 F/A-18C Hornets on the West Coast with 100
    F-35C JSF carrier variant aircraft over the next 10 years, beginning in
    2015. Where are you now in determining where those JSF squadrons will
    be home-based and, as a general proposition, what criteria will
    determine the outcome of that decision?
        Admiral Roughead. An Environmental Impact Statement (EIS) is
    underway to assess the impact of homebasing seven F-35C squadrons and
    one Fleet Replacement Squadron (FRS) in a single West Coast location to
    replace the FA-18C. The EIS is evaluating two locations--Naval Air
    Station (NAS) Lemoore, CA, and Naval Air Facility (NAF) El Centro, CA.
    The Navy will make a final homebasing decision after the EIS is
    complete and a Record of Decision (ROD) is signed. Homebasing decisions
    take into account a wide range of possible considerations and factors
    including combatant commander requirements, strategic guidance (QDR,
    Naval Operations Concept, et cetera), threat/risk of natural or manmade
    disaster, proximity to training and operating areas, maintenance
    schedules, existing infrastructure, quality of life for sailors and
    their families, cost, environmental impacts (per the National
    Environmental Policy Act (NEPA)), joint efficiencies and synergies, and
    port/airfield loading.

                         SUSTAINING LEVEL OF COMMITMENT

        96. Senator McCain. Admiral Roughead, the Navy is now required to
    have aircraft carriers in Middle Eastern waters for 9 months out of
    every year, a heavier constant commitment beyond the temporary surging
    of carrier battle groups in the region over the past decade. Will the
    Navy be able to sustain that level of commitment in 5th Fleet with only
    11 aircraft carriers?
        Admiral Roughead. Navy's force generation model, the Fleet Response
    Plan (FRP), structures operational and maintenance cycles to provide
    full spectrum operational capability across all Navy deployable force
    structure. By leveraging the inherent flexibility of the FRP, the Navy
    can sustain current combatant command demand for carrier presence with
    11 operational aircraft carriers for a relatively short and defined
    period of time.

        97. Senator McCain. Admiral Roughead, how difficult will it be to
    sustain that level of commitment when USS Enterprise retires in 2012
    and the Navy has just 10 aircraft carriers?
        Admiral Roughead. Despite being below our required 11 carrier force
    structure, the Navy will be able to meet operational commitments with
    the carriers that remain in service without undue burden on the sailors
    and families of the carrier fleet when the USS Enterprise decommissions
    in 2012. The Navy has put in place measures to minimize the impact of
    the 10-carrier window during the 33 months between the inactivation of
    USS Enterprise (CVN-65) and commissioning of CVN-78 in 2015. We are
    taking advantage of the flexibility of our FRP to ensure that the
    carriers are delivered to combatant commanders in a material condition
    to support all tasks and with a crew that is properly trained. After
    the delivery of CVN-78, we will maintain an 11-carrier force through
    the continued refueling program for Nimitz-class ships and the delivery
    of our Ford-class carriers at 5-year intervals starting in 2020.

                       JOINT STRIKE FIGHTER EXTRA ENGINE

        98. Senator McCain. Admiral Roughead, just a few weeks ago, the
    House of Representatives voted to end funding for the extra engine to
    the JSF. The extra engine has even less support here in the Senate and
    probably would not survive a vote here, if one should occur. What is
    your reaction to having a program that has siphoned hundreds of
    millions of scarce dollars away from other priority requirements
    finally terminated?
        Admiral Roughead. I concur with DOD's belief that the JSF alternate
    engine program is unnecessary, too costly, and risks diverting needed
    resources from other programs. The fiscal year 2012 President's budget
    does not request funding for the development and procurement of the
    F136 extra engine. DOD has concluded that maintaining a single engine
    supplier provides the best balance of cost and risk. Our assessment is
    that the benefits that might theoretically accrue with a second engine
    are more than offset by excess cost, complexity, and associated risks,
    and will divert precious modernization funds from other more pressing
    priorities.

        99. Senator McCain. Admiral Roughead, do you have a sense of when
    Secretary Gates and President Obama will officially announce the
    termination of this program?
        Admiral Roughead. It is the view of DOD that the Alternate Engine
    Program is a waste of taxpayers' money that can be used to fund higher
    departmental priorities, and should be ended now. The administration
    and the DOD strongly oppose the extra engine program, as reflected in
    the President's fiscal year 2012 budget proposal that was recently
    submitted to Congress, which does not include funding for the program.
    DOD issued a stop-work order 24 March 2011 in connection with the JSF
    extra engine program.
        The House of Representatives has recently expressed its own
    opposition to the extra engine in its passage of H.R. 1, including the
    adoption of the Rooney Amendment which removed all fiscal year 2011
    funding for this program. In addition, funding for the extra engine was
    not authorized in the NDAA for Fiscal Year 2011, enacted in January. In
    light of these recent events, congressional prerogatives, and the
    administration's view of the program, we have concluded that a stop-
    work order is now the correct course. The stop-work order will remain
    in place pending final resolution of the program's future, for a period
    not to exceed 90 days, unless extended by agreement of the government
    and the contractor.

        100. Senator McCain. Admiral Roughead, to continue funding this
    wasteful program at $28 million per month--or $14 million per each 2-
    week CR--when it is now clear this program is effectively dead, makes
    little sense. Has a stop-work order been issued for this program yet?
    If not, do you have a sense of when that may be done?
        Admiral Roughead. DOD issued a stop-work order 24 March 2011 in
    connection with the JSF extra engine program. The administration and
    the DOD strongly oppose the extra engine program, as reflected in the
    President's fiscal year 2012 budget proposal that was recently
    submitted to Congress, which does not include funding for the program.
    It is the view of DOD that the Alternate Engine Program is a waste of
    taxpayers' money that can be used to fund higher departmental
    priorities, and should be ended now.
        The House of Representatives has recently expressed its own
    opposition to the extra engine in its passage of H.R. 1, including the
    adoption of the Rooney Amendment which removed all fiscal year 2011
    funding for this program. In addition, funding for the extra engine was
    not authorized in the NDAA for fiscal year 2011, enacted in January. In
    light of these recent events, congressional prerogatives, and the
    administration's view of the program, we have concluded that a stop-
    work order is now the correct course. The stop-work order will remain
    in place pending final resolution of the program's future, for a period
    not to exceed 90 days, unless extended by agreement of the government
    and the contractor.

                             MARINES IN AFGHANISTAN

        101. Senator McCain. General Amos, since this time last year, the
    number of marines in Afghanistan has nearly doubled from about 10,600
    to nearly 20,000. During that period, marines have taken on the Taliban
    in their heartland in Helmand province. It appears we may have turned
    the tide against the Taliban in Helmand this winter, but we know there
    will be heavy fighting ahead in spring and summer. What has to happen
    to keep the momentum we have achieved from being reversed?
        General Amos. U.S. Marines, along with our Afghan, NATO, and
    international partners, will maintain the momentum in the Helmand and
    Nimruz Provinces this spring and summer. We will do so by deepening our
    hold in critical districts, expanding governance and security presence
    into previously uncontested areas, and supporting the Afghan
    Government's plans to transition identified municipalities, districts,
    and provinces to host nation lead throughout the summer and into the
    fall. Each of these three activities, supported in partnership by each
    member of the Regional Command Southwest Combined Team, will enable the
    Afghan Government to maintain its momentum throughout 2011.

        102. Senator McCain. General Amos, what do you think will happen as
    we approach the July 2011 timeframe when many Taliban thought we would
    be pulling out of Afghanistan?
        General Amos. Taliban senior leaders have commented on the planned
    withdrawal of U.S. forces from Afghanistan on several occasions
    referencing late 2014 as stated in both U.S. and international press.
    Most Taliban are aware of the new timeline just as they were aware of
    the initial 2011 target date. With President Karzai's announcement this
    past March of his intent to transition key districts within
    Afghanistan, most Taliban will expect to see the presence of coalition
    forces wane in those areas.
        A precondition for the Taliban to reconcile or negotiate with the
    Afghan Government is the exodus of all foreign entities within
    Afghanistan. As such, we anticipate there will be little reaction from
    low to mid-level Taliban fighters and operational leaders. We also
    expect to see increased rhetoric with regards to coalition partners
    withdrawing troops and subsequent praise of those countries.
    Additionally, once coalition countries have departed, the Taliban
    likely will demonize the remaining U.S. presence for any actions
    perceived as a sleight against Islam.

        103. Senator McCain. General Amos, how much of the load are Afghan
    troops carrying in Helmand and other places in Afghanistan where they
    are partnered with marines?
        General Amos. The Afghan National Security Forces (ANSF) are taking
    steps to develop the capability to lead their own operations. In some
    areas, the ANSF are able to plan and execute their own operations while
    in other places they are heavily involved in planning, coordination,
    and execution. During March 2011, we saw an increase in the overall
    number of ANSF-led operations within Helmand Province.
        As the Afghan National Police (ANP) and Afghan National Army (ANA)
    continue to grow and mature as a force, we must continue to be mindful
    that the ANA 215th Corps, which is the primary ANA element in Helmand
    Province, was stood up just over 1 year ago and that we are still
    building both the ANP and ANA at the same time that they are fighting
    an active insurgency. As we continue to assist in the manning,
    training, and equipping of the ANSF, we anticipate that they will
    further improve their capability to take the lead in executing
    operations. This will lead to a more secure operating area, bringing us
    closer to a transition period where coalition forces can operate from
    an overwatch posture.

        104. Senator McCain. General Amos, are we being successful in
    training the ANA and ANP?
        General Amos. Through the Regional Training Center and the Joint
    Security Academy Southwest (JSAS), Regional Command Southwest has
    established a benchmark in terms of training and building capability
    and proficiency within the ANSFs. We are seeing dividends in our
    investment as we have been able to build upon ANSF basic proficiency
    levels through our leadership and specialty courses to include the
    Afghan Uniform Police Basic Course that we developed.
        The limiting factor to our efforts has been the number of troops
    available to attend these courses. Namely, given the kinetic nature of
    operations in Helmand Province, it is difficult to remove ANSF troops
    from the battlefield for specialized training without simultaneously
    detracting from current operational capabilities or readiness. In this
    regard, our initiatives to hold sustainment and basic training packages
    onsite have enabled improvements and a more combat capable Afghan
    force. As we continue to assist in building ANSF capacity and
    capability, JSAS will continue to provide the key elements for
    continued development. Examples of this include JSAS led training
    programs that will continue to focus on NCO development as well as
    future training targeting junior officers.

        105. Senator McCain. General Amos, how do the local Afghans view
    the marines? Are they willing to throw in their lot with us or are they
    just waiting for us to leave?
        General Amos. In general, reporting indicates increased Afghan
    support for U.S. Marine Corps and coalition forces in areas where we
    have a significant presence. Depending on the quality of local ANSF in
    an area, marines are somewhat more accepted than their ANA or ANP
    counterparts. In other areas, the ANSF are preferred.
        In general, local nationals appreciate the security provided by
    marines and coalition forces, allowing for development projects in the
    areas of education, health care, agriculture, infrastructure, and
    business development. Relations have improved significantly in some
    areas such that patrols are invited into local Afghan homes. Overall,
    the increase in cellular telephone service penetration throughout
    Helmand Province, coupled with a greater confidence in coalition
    forces, has increased the number of tips on insurgent movements and IED
    emplacements.
        In many cases we have seen that as coalition forces initially move
    into an area, the atmospherics are often quite hostile, with Afghan
    nationals often avoiding coalition force patrols. However, our
    experience has been that atmospherics improve as more Afghans interact
    with coalition forces. As security grows and the Afghans become more
    accustomed to coalition forces, they are more likely to greet coalition
    forces personnel, speaking freely with them in the open.

                              WITHDRAWAL FROM IRAQ

        106. Senator McCain. General Amos and Admiral Roughead, in your
    personal opinion, do you think that Iraq will be able to take over the
    logistics, intelligence, and air sovereignty missions that U.S. forces
    have been doing for Iraq by the December 31 deadline for all of our
    combat troops to leave Iraq?
        General Amos. Given that the preponderance of Marine Corps forces
    exited Iraq by January 2010 and that there are only 18 marines left in
    Iraq at this time, U.S. Army units are conducting the preponderance of
    training missions with Iraqi Army at this time. As such, senior
    leadership from the U.S. Army and those from CENTCOM are in the best
    position to provide assessments of the current and future projected
    capabilities of Iraqi Security Forces.
        Admiral Roughead. Iraqi security forces appear to have sufficient
    capabilities to confront Sunni and Shia extremist groups and to provide
    for their internal security, but gaps in their external defense
    capabilities will exist after U.S. combat forces depart. By the end of
    the year the Iraqi Navy will be manned, equipped, and trained to
    effectively patrol their internal waterways and to defend their
    critical infrastructure in the northern Arabian Gulf. Continued
    training to enhance the logistics, sustainment, and intelligence
    capabilities that support such riverine and maritime security
    operations would benefit the Iraqi Navy. Iraq will not be able to fully
    enforce its air sovereignty for some time. Scheduled, rotational
    deployments of our normal forces, to include carriers, to the Arabian
    Gulf in support of our national interests in the region could provide
    the means to help the Iraqi Air Force develop its own air defense
    capabilities.

        107. Senator McCain. General Amos and Admiral Roughead, if it were
    your decision to make, what sort of troops or capabilities do you think
    would continue to be valuable in Iraq?
        General Amos. [Deleted.]
        Admiral Roughead. Navy training teams have been tasked as part of
    OND to train the Iraqi Navy in two general mission areas--riverine
    warfare and maritime security operations. The riverine training mission
    was declared complete in November 2010 by USF-I, but periodic training
    with the Iraqis could be beneficial. In maritime security, the Iraqi
    Navy has assumed force protection responsibilities for one of their two
    major oil platforms. Responsibility for the second platform will be
    transferred to the Iraqis in summer 2011, with U.S. Navy ships
    remaining within range to respond to a threat, if required. By the end
    of 2011, U.S. naval forces will remain on station in the North Arabian
    Gulf in international waters, with the Iraqi Navy fully responsible for
    maritime infrastructure protection within their territorial waters. The
    Navy currently has a robust exercise program with the Iraqi Navy and
    Coast Guard, and will continue these efforts as they stand up their
    capabilities at sea. The most significant challenge facing the Iraqi
    Navy is maintenance of their patrol boats. There will be a continued
    need for U.S. training in this regard and to work with the Iraqis in
    developing the requisite logistical expertise to sustain these craft
    which are used to protect the oil platforms. When Iraqi Navy capability
    and capacity permit, the focus of the Navy's security assistance and
    security cooperation activities could expand to include maritime
    sovereignty enforcement, joint defense of Iraq from external
    aggressors, and advanced interoperability with coalition forces to
    enable the Iraqi Navy to contribute to regional maritime security
    initiatives such as counter-piracy operations.

        108. Senator McCain. General Amos and Admiral Roughead, how do you
    see Iran's influence in Iraq changing after December 31?
        General Amos. [Deleted.]
        Admiral Roughead. From a maritime perspective, Iran is likely to
    continue its assertiveness in the maritime domain. Iran, however, will
    encounter a stronger and more capable Iraqi Navy with the capability to
    defend its critical maritime infrastructure and ultimately the full
    extent of its territorial waters in the Northern Arabian Gulf. By 31
    December 2011, the Iraqi Navy will be capable of effectively patrolling
    the waters surrounding two of Iraq's most important oil terminals, as
    well as the Shatt al-Arab waterway forming the border between Iraq and
    Iran. Complimenting Iraq's recent patrol boat acquisitions, and
    improvements in coordination between the Iraqi Navy and other regional
    coalition forces, is the strategic partnership between Iraq and the
    United States, which is expected to extend well beyond 31 December
    2011, and should counter continuing Iranian assertiveness in the
    maritime domain.

        109. Senator McCain. General Amos and Admiral Roughead, what was
    the toll on Marine Corps equipment from duty in Iraq?
        General Amos. Our equipment returned from Iraq required extensive
    depot level maintenance or replacement in order to meet future demands
    for use by our operational forces. Approximately half the items
    returned from Iraq to the United States required maintenance reset
    actions at the depot or field levels of repair. We replaced a
    significant portion of the remaining equipment due to obsolescence. A
    very small portion required no reset actions and was returned to our
    operating forces.
        Admiral Roughead. I defer to the Commandant for the current
    disposition and location of Marine Corps equipment returning from Iraq
    as the status of Marine Corps equipment falls within his man, train,
    and equip responsibilities.

        110. Senator McCain. General Amos and Admiral Roughead, how much
    was sent to Afghanistan and how much was sent back to the United
    States?
        General Amos. Approximately 40 percent of the current equipment
    density list supporting the Marines in Afghanistan today is comprised
    of equipment shifted directly from Iraq to Afghanistan during the 2009
    surge. The balance of equipment in Iraq was redeployed to the United
    States.
        The equipment redeployed from Iraq to Afghanistan included most of
    our deployed medium tactical vehicle fleet, the majority of our MRAP
    vehicle fleet, light armored reconnaissance vehicles, other hard-to-
    move equipment items, and many theater-specific items. This same
    equipment comprises a significant portion of our total service level
    reset liability. Thus, much of our reset requirement will remain
    deferred as long as this equipment continues to be used in Afghanistan.
    Moreover, our future reset costs will grow exponentially as long as the
    war continues.
        Admiral Roughead. I defer to the Commandant for the current
    disposition and location of Marine Corps equipment returning from Iraq
    as the status of Marine Corps equipment falls within his man, train,
    and equip responsibilities.

                                     LIBYA

        111. Senator McCain. General Amos, I understand the USS Kearsarge
    and USS Ponce are now in the Eastern Mediterranean with about 1,400
    marines standing by to assist should events in Egypt, Libya, or Tunisia
    take a turn for the worst. In your professional military opinion, would
    a no-fly zone over Libya be something that could be done from our ships
    and bases in the Mediterranean?
        General Amos. Marine Corps forces, currently embarked aboard
    amphibious shipping, could contribute significantly to the
    establishment of a no-fly zone. However, they likely would require
    augmentation from other U.S. or coalition assets. The limited number of
    fixed-wing aviation assets embarked aboard the USS Kearsarge precludes
    the Marine Corps from providing 24/7 coverage of desired air spaces. In
    that regard, additional Navy or Air Force assets can also provide
    airborne or sea-based command, control, and communication coverage and
    surveillance beyond the organic capability of Marine assets.
        Marine aviation assets, operating from amphibious ships in close
    proximity to coastlines, provide an extremely rapid response to
    fleeting air threats, and can prove invaluable in the recovery of
    personnel that have been isolated as a result of an aircraft crash or
    pilot ejection. This was evidenced most recently in the successful
    recovery of a U.S. airman from Libyan soil after his aircraft
    experienced a mishap. Sea-based aviation assets also help to obviate
    complex basing, over-flight, and staging arrangements with adjacent
    nations.

        112. Senator McCain. General Amos, what do you think a no-fly zone
    would do to the combat effectiveness of Libya's air force?
        General Amos. Coalition air operations under UNSCR 1973 have
    rendered the Libyan Air Force incapable of sustained attacks on
    opposition forces, or disrupting coalition aviation operations. To
    date, coalition air power continues to operate with no aircraft or
    personnel losses resulting from hostile fire, attesting to the
    ineffectiveness of Libya's air force due to the coalition's
    establishment and enforcement of a no-fly zone.

        113. Senator McCain. General Amos, how could the marines now
    standing off shore in the Mediterranean be used to help out should
    events in North Africa deteriorate?
        General Amos. In general, a Marine Expeditionary Unit (MEU) is able
    to provide an array of 12 missions across the range of military
    operations to include limited objective raids or stability operations
    such as humanitarian assistance, non-combatant evacuation, and security
    assistance.
        A MEU also can provide a fixed-wing strike capability, tactical
    recovery of aircraft and personnel support, such as the 26th MEU
    recently conducted in support of a downed U.S. Air Force F-15E in
    Libya.

        114. Senator McCain. General Amos, I understand that the marines on
    Kearsarge and Ponce were actually just recently flown over to meet the
    ships. Where are the marines who deployed on those ships?
        General Amos. The USS Ponce and USS Kearsarge are two of the three
    vessels that comprised the Kearsarge Amphibious Ready Group (ARG). The
    Kearsarge (ARG) contained embarked marines from the 26th MEU, whose
    primary Ground Combat Element (GCE) was Battalion Landing Team 3d
    Battalion, Eighth Marine Regiment (BLT 3/8). Based on a request from
    the Commander, CENTCOM, in January 2011, BLT 3/8 deployed temporarily
    from the Kearsarge ARG to southwestern Afghanistan in order to
    consolidate gains and success.
        When conditions began to deteriorate in the Middle East and North
    Africa in February and it became clear that Marine forces organic to
    the 26th MEU were needed for crisis response, we determined the need to
    backfill BLT 3/8. Within 20 hours of notice, elements of 1st Battalion,
    2d Marine Regiment deployed from Camp Lejeune, NC, to Souda Bay, Crete
    where they linked up with the USS Kearsarge and the USS Ponce, thus
    reconstituting a portion of the MEU's GCE at sea. Since that time, the
    26th MEU redeployed to the United States and was relieved in place by
    the 22nd MEU, whose GCE is 2d Battalion, 2d Marine Regiment, also from
    Camp Lejeune, NC. The 22nd MEU continues the same missions that the
    26th MEU conducted in support of Operation Unified Protector.

                                  END STRENGTH

        115. Senator McCain. General Amos, Secretary Gates' efficiency
    plans call for reducing the size of the Marine Corps by about 15,000
    from its current level of about 202,000, beginning as we plan to reduce
    the number of troops in Afghanistan in 2014. What happens if something
    else we haven't planned for comes up before 2014?
        General Amos. Secretary Gates directed the Marine Corps to not
    begin reducing our overall end-strength until after the draw-down of
    the approximately 20,000 marines present today in Afghanistan.
    Therefore, we will remain prepared to respond to crises and maintain
    our commitment to Afghanistan between now and 2014.

        116. Senator McCain. General Amos, can you cut 15,000 troops
    without breaking faith with those who served so well?
        General Amos. Yes. However, until we draw down from Afghanistan, we
    cannot significantly reduce our overall end strength. When we do reduce
    our end strength, we will need to do so in a measured way so as not to
    break faith with the marines who have done so much over the past 10
    years. The number of marines that we can draw down in any given year is
    directly related to the number of marines we enlisted 4 years prior.
    This number is somewhere in the vicinity of 4,000 and represents the
    maximum number of marines that can be drawn down in a given year
    without breaking faith.

                              STRESS ON THE FORCE

        117. Senator McCain. General Amos, I understand your most stressed
    military occupational specialties continue to be intelligence analysts,
    imaging specialists, signals collection operators, UVA operators and
    mechanics, and linguists. What is being done to train more people in
    these fields or expand the number in inventory?
        General Amos. We continue to use Enlistment and Selective
    Reenlistment Bonuses as the primary incentives to attract and retain
    the most qualified marines needed to meet this demand. Due to the time
    required to train these fields, our Operating Forces do not immediately
    see adjustments in the number of personnel in these fields following
    these adjustments.

              STATUS OF REALIGNMENTS OF FORCES ON OKINAWA AND GUAM

        118. Senator McCain. Secretary Mabus, I have a question about the
    decision to relocate 8,000 marines and their families from Okinawa to
    Guam. Your Record of Decision last year related to the environmental
    impact on Guam did not consider two major issues--potential damage to
    coral reefs in the Apra Harbor and the impact to cultural resources
    from the acquisition of private land for Marine Corps training ranges.
    Both issues, as well as the adequacy of Guam's civilian infrastructure,
    are of significant concern to Guam residents and should be of equal
    concern to DOD. Does DOD have a firm plan to ensure the marines have
    the training land they need to meet their needs on Guam? If so, what is
    that plan?
        Mr. Mabus. Over the past year, DOD has engaged the Government of
    Guam to better understand the community's concerns, identify potential
    solutions, and develop a way forward. From these discussions we now
    better understand concerns regarding issues such as access to cultural
    sites and the expansion of DOD's footprint. As training on Guam is
    essential for Marine Corps forces, DOD is working diligently to ensure
    their training requirements will be met.
        Senior DOD officials and Guam's leaders are discussing ways to
    resolve issues related to the site proposed for a live-fire training
    range complex. Our preferred training site is located on the eastern
    shore of Guam near Andersen Air Force Base South and adjacent to Route
    15. DOD has committed to four principles for reaching a negotiated
    settlement for acquiring the Route 15 property:

             One Guam: Address infrastructure improvements outside
            the fence that are directly related to the buildup, and work
            with other Federal agencies to identify solutions for
            addressing Guam's needs indirectly or unrelated to the military
            realignment.
             Green Guam: Develop the most energy efficient base
            possible and support Guam's efforts to develop sustainable and
            renewable energy projects.
             Unfettered Access to Pagat Village and Cave: Conduct
            training activities in a manner which will allow access to the
            Pagat Village and Pagat Cave historical sites 24 hours per day,
            7 days per week, as it is today.
             Net Negative: Following the completion of the
            realignment, DOD will have a smaller footprint than it has
            today. This commitment will directly address concerns regarding
            an expanding DOD footprint on Guam. This concept is currently
            in the early stage of development. Studies will be conducted to
            determine if missions can be relocated and assess any
            potentially underutilized properties.

        As a result of these discussions with Guam's leaders, the Governor
    of Guam has stated publicly his willingness to discuss land use issues
    with DOD. We will continue to have discussions with the Governor and
    Guam Legislature with a goal of being ready to commence formal land
    negotiations once appropriate congressional approval for land
    acquisition has been received. DOD will continue to update Congress on
    land use matters and the status of informal discussions with the
    Government of Guam.

        119. Senator McCain. Secretary Mabus, will that plan meet the
    Marine Corps' requirements?
        Mr. Mabus. Yes. Developing an achievable plan for delivering
    required training capabilities on Guam to support the realignment of
    Marine Corps forces from Okinawa is a priority. The Route 15 area
    remains the Navy's preferred alternative for the location of a live-
    fire training range complex. As we negotiate with the Government of
    Guam over this site, DOD has committed to conduct training activities
    in a manner which will allow unfettered access to the Pagat Village and
    Pagat Cave historical sites. This commitment, which was made in the
    Programmatic Agreement, can be kept without compromising Individual
    Training Standards (ITS) for marines on Guam. Regarding the timing for
    land acquisition, our focus is on ensuring training ranges are in place
    by the time relocating units will need them.

        120. Senator McCain. Secretary Mabus, why were military
    construction funds originally planned for fiscal year 2012 to acquire
    training lands not included in the budget request for 2012?
        Mr. Mabus. Based on the lack of a Programmatic Agreement under the
    National Historic Preservation Act (NHPA), the lack of a Record of
    Decision (ROD) selecting the final site for the live fire training
    range complex, and other factors, the budget request for fiscal year
    2012 was reevaluated and it was determined that budgeting for land
    acquisition to support a live fire training range complex would be
    premature.

        121. Senator McCain. Secretary Mabus, shouldn't we ensure we have
    the training lands issues resolved before investing hundreds of
    millions of dollars to improve other areas on Guam for the marines?
        Mr. Mabus. The projects appropriated in fiscal year 2010, those
    authorized for appropriation in fiscal year 2011, and those requested
    in fiscal year 2012 are necessary to enable subsequent vertical
    construction and to support Marine Corps operations. Waiting to begin
    military construction projects until after training range land
    acquisition issues are resolved would create a significant bottleneck
    in Guam's limited construction capacity by delaying a large volume of
    site preparation and other preliminary development necessary to support
    follow-on vertical construction of the new Marine Corps base. The force
    flow of Marines to Guam will be based upon the availability of
    requisite facilities and infrastructure. Therefore, a delay in the
    early horizontal construction stage of the program will potentially
    delay the Marines' ability to relocate from Okinawa in fulfillment of
    our international agreement with Japan.

             RELOCATION OF MARINE CORPS AIR STATION FUTENMA, JAPAN

        122. Senator McCain. Secretary Mabus, part of our agreement with
    the Government of Japan to realign forces on the Island of Okinawa was
    to relocate the Marine Corps Air Station (MCAS) at Futenma up north to
    Camp Schwab. What is the status of this initiative?
        Mr. Mabus. Some construction on the ground at Camp Schwab, which
    will enable the airfield construction to move forward more rapidly, has
    been underway for the past few years. We expect agreement on a
    configuration for the runway at the ``2+2'' (Secretary of Defense,
    Secretary of State, Minister of Defense, Minister of Foreign Affairs)
    meeting, which has been postponed due to the earthquake, tsunami, and
    nuclear events. The 2+2 meeting is now expected to be held in May or
    June. We do not yet have a firm timetable for the landfill permit
    process, but in our judgment the Japanese remain committed to the
    roadmap.

        123. Senator McCain. Secretary Mabus, how does the Navy define
    tangible progress by the Government of Japan to carry out this
    relocation?
        Mr. Mabus. We see tangible progress on the Futenma Replacement
    Facility (FRF), not as a single specific event, but rather as a series
    of steps taken roughly in parallel between Japan and the United States,
    as spelled out in our bilateral understandings on the realignment. As
    the Government of Japan makes progress on the FRF, the United States
    will take associated steps to move forward on Guam. There are a number
    of different indicators of this progress, starting with the decision on
    the runway configuration that we expect at the upcoming 2+2 meeting
    with Japan, the issuance of the landfill permit, the construction of
    the sea wall, and progress on the landfill itself.
        An essential point of our realignment understanding with Japan is
    that preparations for facilities on Guam need to begin well in advance
    of the actual construction of the replacement facility at Camp Schwab.
    It is necessary to ensure that when we are satisfied with the progress
    Japan has made on the FRF, suitable facilities will be available on
    Guam to allow the phased relocation of Marines from Okinawa, such that
    any relocation can be sequenced to maintain unit cohesion and
    operational readiness.

                  EMINENT DOMAIN SEIZURE OF GOLIAD AIRPORT, TX

        124. Senator McCain. Secretary Mabus, your staff recently notified
    this committee of DOD's intent to use the Federal Government's
    authority to seize a deed to private property through eminent domain in
    order to establish an outlying landing field at Goliad, TX, supporting
    T-6 operations at Naval Station Corpus Christi. The local community had
    rejected previous offers by the Navy to buy the airport, citing
    concerns with significant increase in noise and a loss of potential
    economic development. Statutes require you to certify to Congress that
    you have pursued, to the maximum extent practicable, all other
    available options for the acquisition or use of the land, such as the
    purchase of an easement or the execution of a land exchange. Can you
    describe how you complied with this provision of law the extent of all
    other available options you pursued for the acquisition of the land?
        Mr. Mabus. In September 2006, the Airspace/Air Field Usage Working
    Group (AFUWG) was established in response to selection of the T6-Texan
    as the new aviation training platform. The AFUWG looked at all region
    air space issues associated with this new platform and it was concluded
    in October 2007 that Outlying Landing Field (OLF) Goliad is the only
    option. The Navy reviewed other options, including Aransas County
    Airport, NALFs Waldron and Cabaniss, NAS Kingsville, Victoria Airfield,
    NOLF Orange Grove, and Beeville Airport, for an OLF, but none fully met
    the operational requirements of the T-6.
        Negotiations with Goliad County, the owner of the subject property,
    began in July 2008 when the county made an unsolicited offer to sell
    the subject property to the Navy for $675,000, which was later
    rescinded. Since July 2008, all efforts to acquire fee simple title by
    means of a negotiated sale have been unsuccessful. During negotiations
    with Goliad County, the Navy tendered an offer in an amount equal to
    the appraised fair market value (FMV). The county did not accept the
    initial FMV offer and subsequently rejected a second offer to acquire
    the property by sale for FMV, which also included a commitment by the
    Navy to examine and consider the following additional items of
    importance as expressed by the county: (1) Specific county/private use
    of some land within the airfield footprint; (2) Water rights; (3)
    Future county use of the airfield for an annual revenue producing
    event; (4) Potential development of revenue stream for the county; (5)
    Joint use of the airfield; and (6) Development of WIFI for external
    use.
        On 27 September 2010, in an extraordinary effort to avoid
    condemnation, Mr. Roger Natsuhara, PDASN (EI&E), attended the meeting
    of the Commissioners' Court of Goliad County and provided a statement
    outlining the Navy's requirement and expressing the Navy's willingness
    to work with the local community, but the commissioners took no action
    and the Navy's second offer letter expired on 28 September 2010.
    Condemnation of fee simple title of the 1,136+ acres of land and
    improvements is necessary. Execution of an easement, lease, land
    exchange, or other real estate instrument is not feasible in this
    instance as an exclusive use T-6 OLF with substantial military
    construction (MILCON) investment is required by September 2012.

        125. Senator McCain. Secretary Mabus, the long-term viability and
    safe operation of an outlying landing field requires the cooperation of
    the local community to protect approach zones and accident potential
    zones through compatible local zoning. How does the Navy plan to ensure
    the local development of land around Goliad is compatible with Navy T-6
    operations?
        Mr. Mabus. The Navy has completed a draft Air Installations
    Compatible Use Zone (AICUZ) Study for NOLF Goliad, which is under final
    review prior to release. The Goliad AICUZ study is based on statistical
    predictions of accident potential zones (APZ) and scientifically
    derived day-night average noise contours (using the DOD Noisemap
    Program). The AICUZ program is designed to help State and local
    governments promote compatible land use and development near military
    air installations. The goal of the program is to protect military
    operational capabilities as well as the health, safety, and welfare of
    the public by achieving compatible land use patterns and activities in
    the vicinity of military installations. The AICUZ program recommends
    community land uses that are compatible with noise levels, APZs, and
    flight clearance requirements associated with military airfield
    operations with the goal that the information will be incorporated into
    local community planning programs. With final review and release of the
    AICUZ study, Navy will work with the local community leadership and
    landowners to coordinate acceptable and compatible land use.

        126. Senator McCain. Secretary Mabus, given the current antagonism
    with the local community, how do you plan to work with the local
    community in the future to protect the Navy's investment at Goliad?
        Mr. Mabus. Our policy is always to act as good neighbors with the
    local community, through frequent contact and working together on any
    issues of concern. In addition, the Navy will, to the fullest extent
    possible without interfering with the primary mission of training our
    pilots, look for opportunities to allow traditional community
    activities that occurred on the airfield to continue. Naval Air Station
    Corpus Christi will continue to engage with local leaders to foster
    mutual understanding and trust. Our civilian liaison planning officer
    for that area will develop relationships with Goliad County officials
    and leaders, and, with base leadership, look for ways to build
    relationships and reduce misunderstandings. The Navy and Goliad have a
    long history in the 20th century, and we trust that we will have a win-
    win relationship with the county in the 21st century.

                            MOBILIZATION AUTHORITIES

        127. Senator McCain. Admiral Roughead, reliance on the Navy Reserve
    has grown, and it now looks like key capabilities, such as naval
    construction battalions, riverine squadrons, and maritime expeditionary
    security forces will increasingly become part of the Reserve Forces. Do
    you see the need for statutory changes that would enhance the ability
    to mobilize and use Navy Reserve Forces?
        Admiral Roughead. Yes, I do see a need for statutory changes that
    would enhance the ability to deploy Navy Reserve Forces. Demand for
    Navy capabilities will remain the same or increase in the future, and
    Navy Reserve will play a vital role in Navy's Total Force that will
    deliver these capabilities. As stated in the 2010 Quadrennial Defense
    Review (QDR) Report, ``prevailing in today's wars requires a Reserve
    component that can serve in an operational capacity--available,
    trained, and equipped for predictable routine deployment. Preventing
    and deterring conflict will likely necessitate the continued use of
    some elements of the Reserve component, especially those that possess
    high-demand skills, in an operational capacity well into the future.''
    Current statutes, however, do not allow for the involuntary activation
    of members of the Reserve component for routine deployments in times of
    non-emergency steady-state security environments. Addressing this gap
    would provide the following benefits:

             Enhances Total Force capacity by allowing Reserve
            component units and members to be included in long-range
            planning processes;
             Allows Reserve component units with high-demand skill
            sets to maintain a higher overall readiness level, preventing
            those skills from atrophying and ensuring a more robust Total
            Force response capacity for future contingency operations; and
             Provides predictability of future routine military
            obligations to the individual Reserve members, their families,
            and their employers.

        128. Senator McCain. General Amos, do you see a changing role for
    the Marine Corps Reserve?
        General Amos. Sustained combat operations and worldwide theater
    security cooperation and training commitments over the last decade
    point towards an essential requirement for the Marine Corps Reserve to
    continue focusing at the operational, rather than strategic, level of
    warfare.
        The transition in use of the Marine Corps Reserve from a strategic
    to an operational perspective, as affirmed by our force structure
    review, expands our ability to perform as America's Expeditionary Force
    in Readiness. Sharing the culture of deployment and expeditionary
    mindset that has dominated Marine Corps culture, ethos and thinking
    since our beginning more than two centuries ago, the Marine Corps
    Reserve is optimally organized, equipped, and trained to perform as an
    operational Reserve.
        A future role of the Marine Corps Reserve should remain consistent
    with the Marine Corps Total Force construct, supported by current force
    planning goals of creating and maintaining capabilities within the
    Reserve component to support the augmentation, reinforcement, or
    reconstitution of the Active component. The Marine Corps aims to
    continue managing the use of the Reserve component through the
    Service's existing force allocation processes, developing the best
    available sourcing solutions in support of validated combatant
    commander requirements.

          WALTER REED NATIONAL MILITARY MEDICAL CENTER AT BETHESDA, MD

        129. Senator McCain. Secretary Mabus, in August 2010, DOD submitted
    to Congress the second part of the Comprehensive Master Plan for the
    National Capital Region Medical which detailed the plan to ensure a
    world-class medical center is available for our wounded military
    personnel at the Walter Reed National Military Medical Center at
    Bethesda, MD. The plan identified construction and renovation projects
    totaling over $829 million to be completed by 2018 at Bethesda, MD, to
    achieve a world-class standard. Do you support the goal to establish
    world-class medical facilities at Bethesda?
        Mr. Mabus. I, along with the Chief of Naval Operation and
    Commandant of the Marine Corps, strongly believe we are currently
    delivering world-class healthcare to our sailors, marines, their
    families, and all our beneficiaries at the National Naval Medical
    Center, Bethesda. I am privileged to witness this exemplary level of
    care firsthand when I visit our wounded warriors and their families.
    This commitment will not waiver with the opening of the Walter Reed
    National Military Medical Center later this year.

        130. Senator McCain. Secretary Mabus, understanding that cost
    estimates are still begin refined, what is the current cost estimate to
    carry out the projects required to achieve world-class facilities?
        Mr. Mabus. As described in the comprehensive Master Plan provided
    to Congress by the Deputy Secretary of Defense in 2010, the current
    estimate to complete the projects required to achieve world-class
    facilities at Walter Reed National Military Medical Center in Bethesda,
    MD, is $816 million from fiscal year 2012 through fiscal year 2017. The
    Joint Task Force National Capital Region Medical reports that this
    amount is over and above anticipated routine restoration and
    modernization projects for the hospital, totaling roughly $300 million
    annually.

        131. Senator McCain. Secretary Mabus, is funding contained in the
    budget request for fiscal year 2012 that would be used to carry out
    projects to achieve that goal? If so how much? If not, why not?
        Mr. Mabus. The President's 2012 budget requested the projects
    listed below to be included in the Defense Health Program for fiscal
    year 2012:

             $66 million in MILCON funding to commence/continue the
            designs for the construction projects identified in the Walter
            Reed National Military Medical Center Comprehensive Master
            Plan. These projects include a new clinical building, child
            development center, traffic/parking improvements and parking
            expansion, utility upgrades, associated demolition,
            renovations, temporary facilities, and installation appearance.
             $18 million in MILCON funding for the construction of
            the child development center.
             $25 million in operation and maintenance funding to
            continue planning and execute projects addressing campus
            wayfinding, Americans with Disabilities Act accessibility, and
            other pedestrian improvements.

        132. Senator McCain. Secretary Mabus, is the Navy committed to
    meeting the goal of 2018 for completion of the projects?
        Mr. Mabus. The Office of the Assistant Secretary of Defense for
    Health Affairs (ASD(HA)) is budgeting and managing these projects
    rather than Navy. That being said, ASD(HA), the Navy, and Joint Task
    Force National Capital Region Medical are committed to the goal of 2018
    to complete the Comprehensive Master Plan for the National Capital
    Region provided to Congress in 2010.

        133. Senator McCain. Secretary Mabus, can you explain why the Navy
    believes an EIS is required to carry out projects which will not change
    or add to the primary mission of the medical center at Bethesda?
        Mr Mabus. The Navy recommended an EIS be required for the Walter
    Reed National Naval Medical Center (WRNNMC) due to the potential for
    individual and cumulative impacts to historical features, traffic
    concerns, and the surrounding community. Environmental counsel has
    reviewed and concurs with this course.
        The communities surrounding the WRNNMC are very sensitive to the
    constant recent construction and its impact on their quality of life.
    Through an open and ongoing public engagement process, the Navy has
    maintained a positive and understanding relationship with the
    surrounding community. The EIS drafting process will provide
    opportunities for public review and input and facilitate dialogue
    regarding the need for, and impacts of, these projects among the
    WRNNMC, its neighbors, and other stakeholders.

                            CAMP LEMONNIER, DJIBOUTI

        134. Senator McCain. Secretary Mabus, the Ike Skelton NDAA for
    Fiscal Year 2011 contained language expressing concerns with the safety
    and security of U.S. forces stationed at Camp Lemonnier, Djibouti, due
    to cramped conditions and the lack of deliberate planning to address
    vulnerabilities. Congress asked for a master plan that would include
    options for expanding the footprint of the base in order to allow for
    greater separation of functions and a better opportunity to meet anti-
    terrorism/force protection standards for almost $500 million worth of
    facilities planned for construction at the base over the next 5 years.
    Will you review the master plan to ensure adequate measures and
    planning have been incorporated to provide for the safety and security
    of U.S. forces deployed to Camp Lemonnier?
        Mr. Mabus. The Camp Lemonnier Master Plan will be reviewed and
    staffed to ensure that it provides the measures and planning details
    for modern, secure facilities that will protect U.S. military personnel
    and support enduring operations throughout the Horn of Africa.

        135. Senator McCain. Secretary Mabus, will the Navy proceed with
    construction activities without your approval of the master plan?
        Mr. Mabus. Previously authorized and appropriated construction
    activities can proceed at Camp Lemonnier without my approval of the
    master plan.

                             TRAINING LANDS ON GUAM

        136. Senator McCain. General Amos, on the issues of the relocation
    of 8,000 marines from Okinawa to Guam, in your opinion, are we on
    course on Guam to provide the Marine Corps with the ranges needed on
    the island for Marine Corps training requirements?
        General Amos. The ranges on Guam are critical to the future
    training and readiness of marines scheduled to relocate there. The
    Marine Corps position is that the relocation cannot commence until the
    ranges are in place. The programmatic agreement signed in March was a
    step forward in meeting this requirement. Our understanding is that the
    Navy will release a Training Record of Decision this summer that will
    identify the location of the ranges. Once that occurs the Navy can
    request the funds to obtain the land needed to build the ranges.
    Assuming that funding occurs during fiscal year 2013, I am satisfied
    the ranges can be constructed in time to support the relocation.

        137. Senator McCain. General Amos, where are you on the proposal to
    update the composition of Marine Corps forces moving from Okinawa to
    Guam in order to provide the Commander of Marine Corps Forces Pacific
    with a force posture meeting Marine Corps doctrine for command and
    control?
        General Amos. The Marine Corps continues to analyze and refine
    alternative lay-down concepts. Much of this effort remains conceptual
    and pre-decisional; however, we are working with U.S. Pacific Command
    (PACOM) and OSD on a lay-down that provides the combatant commander
    with maximum operational viability and command and control capability.
    Upon OSD approval, I expect DOD and the Department of State will then
    reach consensus with the Government of Japan. Once an agreement between
    the two governments is reached, Congress will be formally briefed on a
    decision that will maximize the strategic presence of U.S. forces in
    the region for the foreseeable future.

           RESET AND RECONSTITUTION OF EQUIPMENT FOR THE MARINE CORPS

        138. Senator McCain. General Amos, your written statement describes
    very clearly your priority to ensure adequate funding in this budget
    and future budgets to reset Marine Corps equipment being used overseas
    and to reconstitute home-station equipment. You state that
    approximately 68 percent of non-deployed Marine Corps units report
    degraded levels of readiness. Given the fact that Marine Corps units
    are called upon to serve our country with very little notice, this high
    rate of degraded levels increases the risk that these units may be
    deployed in the future without the equipment they need. You state that
    the budget request for fiscal year 2012 includes $2.5 billion for reset
    and $253 million for reconstitution against total bills of $7.5 billion
    for reset and $5 billion for reconstitution. Do you need more funding
    in fiscal year 2012 to address reconstitution requirements? If not, why
    not?
        General Amos. The Marine Corps' $2.5 billion request in fiscal year
    2012 for reset is directly related to the repair and replacement costs
    of overseas contingency operations in Iraq and Afghanistan. In many
    ways our ability to conduct reset in fiscal year 2012 is constrained by
    the lack of equipment that has returned for reset actions. The
    equipment redeployed from Iraq to Afghanistan in support of the 2009
    surge included most of our deployed medium tactical vehicle fleet, the
    majority of our MRAP vehicle fleet, light armored reconnaissance
    vehicles, other hard-to-move equipment items, and many theater-specific
    items. This same equipment comprises a significant portion of our total
    reset liability. Thus, much of our reset requirement will remain
    deferred as long as this equipment continues to be employed in
    Afghanistan. Moreover, our future costs for reset will grow
    exponentially as long as the war continues.
        The reconstitution requirement of $5 billion is an amount entirely
    separate from our reset costs. This requirement specifically relates to
    table of equipment shortfalls. Therefore, if this amount is funded,
    there will be concurrent increases in our non-deployed readiness
    levels. While we have begun to address our reconstitution shortfall by
    requesting $253 million in fiscal year 2012 for equipment procurement,
    the Marine Corps does have many more equipment deficiencies (as
    evidenced by the degraded state of non-deployed Marine Corps unit
    readiness) that additional funding could be applied against
    immediately.
        As a forward-deployed and expeditionary force, the Marine Corps
    must be able to meet and sustain known operations and respond to new
    requirements. Within the past year, the Marine Corps has successfully
    responded to multiple crises and new operational requirements (e.g.
    Haiti, Pakistan, the Philippines, Japan, Libya, and the introduction of
    a seventh Marine battalion task force into Afghanistan) despite the
    personnel and equipment shortfalls affecting the non-deployed force.
    The primary concern is our ability to respond to a second, major
    contingency (planned or unforecasted). Each new crisis diminishes the
    pool of ready, available forces to respond, which is reflected in the
    current degraded state of readiness of non-deployed units. This
    increases risk in the timely execution of large-scale contingencies.

        139. Senator McCain. General Amos, what rate of funding over the
    next 3 years for reconstitution will raise your nondeployed unit
    readiness levels to acceptable levels?
        General Amos. Our estimate to reconstitute our tables of equipment
    is $5 billion, which is an amount entirely separate from our reset
    costs. This requirement specifically relates to table of equipment
    shortfalls. Therefore, if this amount is funded, there will be
    concurrent increases in our non-deployed readiness levels. While we
    have begun to address our reconstitution shortfall by requesting $253
    million in fiscal year 2012 for equipment procurement, the Marine Corps
    does have many more equipment deficiencies (as evidenced by the
    degraded state of non-deployed Marine Corps unit readiness) that
    additional funding could be applied against over the next 3 years.

        140. Senator McCain. General Amos, are you concerned that your
    future reset and reconstitution requirements may be funded from Marine
    Corps accounts included in the base budget at the sacrifice of other
    Marine Corps priorities?
        General Amos. Once drawdown from Afghanistan commences, the rapid
    reset of equipment and its swift reintegration into the inventory of
    our Operating Forces is the single-most critical factor in our ability
    to successfully reconstitute after the war. Thus, funding for repair or
    replacement of equipment returning from combat is not optional. If
    adequate supplemental funding for reset is not available in the future,
    we will be forced to fund reset within our baseline service budget.
    This will have three primary impacts:

        (1)  It will increase the amount of time required to complete reset
    operations and as a result, prolong the already degraded readiness
    status of our Operating Forces.
        (2)  It will force the Marine Corps to delay or defer critical
    modernization programs as a result of having to divert base budget
    funds for reset.
        (3)  It will create a potential decision point on budgeting for
    these items at the expense of our manpower accounts.

        One final consideration is that the harsh environments and tempo of
    operations in Iraq and Afghanistan through nearly 10 years of constant
    combat have accelerated wear and tear on our equipment. Our equipment
    returning from Iraq has required extensive depot level maintenance or
    replacement. Approximately half the items returned from Iraq to the
    United States required either depot level or field levels of
    maintenance as part of their reset actions. Our planning estimates for
    equipment returning from Afghanistan lead us to predict even greater
    depot level repair requirements and greater wash-out rates than was
    experienced from equipment returning from Iraq.

                             MILITARY CONSTRUCTION

        141. Senator McCain. General Amos, the Marine Corps has requested
    over $440 million in fiscal year 2011 and fiscal year 2012 to construct
    or improve facilities at MCAS, Yuma, AZ, and at the Barry M. Goldwater
    Range in order to support the stationing of multiple F-35 B squadrons.
    Does the delay in the acquisition plan for the Marine Corps variant of
    the F-35 affect the need for the MILCON projects?
        General Amos. Changes in the acquisition plan for the Marine Corps
    variant of the F-35 do not affect the need nor the programming schedule
    of the projects requested in fiscal year 2011 or fiscal year 2012. MCAS
    Yuma will continue to serve as the primary location for aviation pre-
    deployment training and large-scale aviation exercises besides having
    dedicated operational squadrons. Dedicated aircraft hangars, apron, and
    training facilities are needed to support permanently based squadrons
    and transient aircraft that are deployed to MCAS Yuma on a regular
    basis.
        Since the JSF is not comparable to existing legacy aircraft and
    cannot operate in a legacy hangar due to different power requirements,
    maintenance and security requirements, and higher level of security,
    MILCON must be completed prior to F-35 aircraft arrival. The estimated
    timeframe to complete an F-35 hangar (construction, outfitting, and
    security certification) is 3 years as follows: (1) 3 months for design
    utilizing a design/build construction contract acquisition strategy;
    (2) 24 months for construction; and (3) 6 to 9 months for outfitting
    and security certification.
        Between fiscal year 2012 and fiscal year 2016, approximately 30 JSF
    aircraft will arrive at MCAS Yuma. These aircraft will fully resource
    two squadrons and partially resource a third squadron. Three hangar
    modules are required by fiscal year 2015 to support these three
    permanently-based Yuma squadrons. One hangar module was requested in
    fiscal year 2011. However, due to the fiscal year 2011 CR, this project
    cannot be awarded for construction, thereby impacting our ability to
    support the initial operational capability (IOC) of the first squadron
    scheduled for fiscal year 2012. Two hangar modules requested in fiscal
    year 2012 are required to support two squadrons, which will reach IOC
    in fiscal year 2015/2016. Appropriate utilities infrastructure and
    training facilities (e.g. simulator buildings, Field Carrier Landing
    Practice training facilities) also are needed to support the F-35.

     INDEPENDENT REVIEW PANEL TO STUDY THE JUDGE ADVOCATE REQUIREMENTS OF
                           THE DEPARTMENT OF THE NAVY

        142. Senator McCain. Secretary Mabus, on February 22, 2011, the
    members of the Independent Review Panel to Study the Judge Advocate
    Requirements of the Navy submitted to the Secretary of Defense the
    report required by section 506 of the NDAA for Fiscal Year 2010. The
    panel was composed of experts in military law and took extensive
    testimony about the requirements for judge advocates in the Navy and
    Marine Corps. Among other witnesses, General David Petraeus, Commander,
    CENTCOM; VADM Harry Harris, USN, Commander, U.S. Sixth Fleet; VADM John
    Bird, USN, the Director of the Navy Staff; and Lt. Gen. John F. Kelly,
    USMC, Commander, Marine Forces Reserve and Commander, Marine Forces
    North, testified about the current and growing need for judge advocates
    in military operations.
        The panel concluded that there is a requirement in the Navy for
    approximately 950 Active Duty judge advocates and a requirement in the
    Marine Corps for approximately 550 Active Duty judge advocates. The
    panel noted that the Marine Corps is on track to maintain a target
    inventory of 550 judge advocates over the next 5 years. Surprisingly,
    the panel also noted that the Navy, which has 811 judge advocates on
    Active Duty at the end of fiscal year 2010, is planning to reduce the
    inventory of its judge advocates over the next 5 years to 747 in fiscal
    year 2016. How would you evaluate the contribution by Navy and Marine
    Corps judge advocates to the mission of the Navy and Marine Corps in
    OEF, OIF, and OND, to individual sailors, marines, and their families,
    and to the ability the Navy overall in performing its mission?
        Mr. Mabus. Navy and Marine judge advocates are involved in every
    aspect of operations in support of OEF, OIF, OND, and dozens of other
    operations across the globe.
        In an operational environment that has become increasingly complex
    and legally intensive, the ability of judge advocates to identify legal
    and related policy issues in divergent areas (e.g., rules of
    engagement, international law, domestic law, and U.S. policy) and
    synthesize the issues rapidly in order to give timely and coherent
    legal advice to military commanders, staffs, seniors civilians, and
    tactical forces is paramount to mission success. These personnel
    understand, rely on, and demand the counsel they receive from their
    judge advocates.

             Across the CENTCOM AOR and other parts of the globe,
            wherever U.S. forces are engaged in military activities and
            contingency operations, Navy and Marine Corps judge advocates
            are involved at every step of an operation--from tactical
            guidance to strategic level planning.
             Through the administration of a fair and balanced
            military justice system, as well as through the provision of
            legal assistance to sailors, marines, and their families, judge
            advocates ensure command and individual readiness, which is
            essential to accomplishment of the overall Navy mission.
             Not only are judge advocates meeting the day-to-day
            legal demand signal of individual sailors, marines, and their
            families, they also respond effectively and efficiently to the
            uptick in legal demand generated by natural disasters (e.g.,
            Hurricane Katrina, flooding in Millington, TN, earthquakes and
            tsunamis in Indonesia (2006) and Japan (2011)) and global
            conflict (e.g., pre-deployment, deployment, and post-deployment
            of individual augmentees), allowing sailors, marines, and their
            families to receive the legal support they need in order to
            focus effectively on the Navy's overall mission.

        143. Senator McCain. Secretary Mabus, in view of the conclusions of
    the panel regarding the requirements for Active Duty judge advocates in
    the Navy and Marine Corps, what measures are you taking with respect to
    the growth--or reduction--of judge advocates in the Navy JAG Corps?
        Mr. Mabus. Navy plans to fund, within our base program, 31 JAG
    Corps billets, currently detailed to the Office of Military Commissions
    until the end of fiscal year 2015, and continue increasing the number
    of JAG Corps billets to 821 over the FYDP. This is consistent with the
    number of Active Duty JAG officer billets Vice Admiral Houck testified
    before the 506 Panel are needed to meet baseline mission requirements.
    We have also begun to train enlisted members of the Legalman rating to
    obtain certification through the American Bar Association as
    paralegals, which will gradually ease much of the administrative
    burdens currently levied on JAG Corps officers.

        144. Senator McCain. Secretary Mabus, what other actions are you
    taking in response to the panel's findings and recommendations?
        Mr. Mabus. In direct response to the recommendations made by the
    Independent Review Panel, I have approved revisions to Secretary of the
    Navy Instruction 5430.27C ``Responsibility of the Judge Advocate
    General of the Navy and the Staff Judge Advocate to the Commandant of
    the Marine Corps for Supervision and Provision of Certain Legal
    Services.''
        The revisions will:

             institutionalize the Military Justice Oversight
            Council (MJOC) and the JAG's Annual Report on the State of
            Military Justice within the Navy;
             clarify and strengthen the role of the Staff Judge
            Advocate (SJA) to Commandant of the Marine Corps (CMC);
             establish a direct relationship between the Secretary
            of the Navy and the SJA to CMC;
             provide the SJA to CMC with authority and
            responsibility to supervise the administration of military
            justice and legal assistance in the Marine Corps, including the
            authority to conduct frequent inspections in accordance with
            title 10, section 806 of the U.S. Code; and
             make the SJA to CMC responsible for the professional
            and technical supervision of Marine judge advocates.

        The panel recommended that implementation of a single court-martial
    case tracking system could improve the Navy's military justice
    practice. I am committed to pursuing an integrated Navy and Marine
    Corps case management system. An ongoing Center for Naval Analyses
    (CNA) study is assisting in identifying potential options for an
    integrated Navy and Marine Corps system. Once CNA provides final
    recommendations, the Navy will make an overall assessment of the IT
    system(s) to pursue.

        145. Senator McCain. Admiral Roughead, what is your view of the
    validity of the panel's conclusion that the Navy should have
    approximately 950 Active Duty judge advocates to meet its requirements
    for legal services?
        Admiral Roughead. We have experienced increased demand for JAG
    Corps officers in areas such as operational law and support for sailors
    and their families. Based on Navy's internal assessment that was
    provided to the Independent Review Panel by Vice Admiral Houck, I
    intend to increase the number of JAG Corps billets to 821 across the
    FYDP.

        146. Senator McCain. Admiral Roughead, do you support current Navy
    personnel planning that will reduce the number of Active Duty judge
    advocates from 811 to 747 over the next 5 years?
        Admiral Roughead. In fiscal year 2011, Navy's program of record was
    to decrease our Judge Advocate General Corps (JAGC) officers from 801
    to 747 by fiscal year 2016. I plan to fund, within Navy's baseline
    budget, an additional 31 JAG Corps billets which are currently detailed
    to the Office of Military Commissions until the end of fiscal year 2015
    to meet the 821 JAGC officers required to meet baseline requirements
    over the FYDP.

        147. Senator McCain. General Amos, what is your view of the
    validity of the panel's conclusion that the Marine Corps should have
    approximately 550 Active Duty judge advocates to meet its requirements
    for legal services?
        General Amos. I am confident in the validity of the Panel's
    conclusion that the Marine Corps requires approximately 550 Active Duty
    judge advocates. My confidence results from the Panel's conclusion
    based on determinations made by the Marine Corps' force structure and
    manpower management systems, with the considered input of the SJA to
    the CMC.
        As noted by the Panel, Marine Corps judge advocate requirements are
    driven by the Marine Corps organizational force structure, the
    requirement to fill a proportionate share of non-legal assignments
    (``B-billets''), and the need to maintain a sufficient inventory to
    sustain the force (e.g. at any given time there are a required number
    of student judge advocates in the accessions pipeline, and a required
    number of career judge advocates attending in-service, resident
    training and education). The force structure requirement is determined
    by the Total Force Structure Division (TFSD), under the Deputy
    Commandant for Combat Development and Integration, in concert with
    subject matter experts and functional advocates. The requirement for B-
    billets and sustainment are determined by Manpower Management (MM)
    Division, under the Deputy Commandant for Manpower and Reserve Affairs.
    These requirements are continuously reviewed to ensure structured
    requirements meet mission requirements.
        The SJA to the CMC, as the Occupational Field Manager and
    Functional Advocate for the Marine legal community, is formally
    integrated into this process, working with TFSD and MM to ensure we get
    it right. This process determined that an inventory of approximately
    550 judge advocates would be needed to meet Service, Department, and
    Joint legal billet requirements, as well as requirements for non-legal
    assignments and sustainment overhead for the next 5 years. Recent
    studies and reviews by both the Judge Advocate Division as well as
    successive Uncompensated Review Boards, which the Panel found
    ``realistic and useful,'' served to buttress this determination.

        148. Senator McCain. General Amos, how will the recently completed
    Force Structure Review, and projected reductions in end strength,
    affect the Marine Corps ability to increase substantially the number of
    Active Duty judge advocates?
        General Amos. It should be noted that judge advocate structure,
    which largely determines required inventories, has had modest, yet
    steady, increases over the past 5 years (i.e. average 2 percent
    annually), and is projected to have continued, yet modest, increases in
    fiscal year 2012 (2 percent) and fiscal year 2015 (8 percent). This has
    led to corresponding increases in accessions, which in turn have led to
    increases in the inventory of Active Duty judge advocates. As such,
    current, as well as projected, inventories are already meeting these
    requirements.
        That being said, the Panel noted several factors, which if they
    occur, could affect projected requirements for judge advocates
    including: (1) a significant increase in the military justice mission
    once marines redeploy from Afghanistan; (2) structured operational law
    requirements continuing to increase at or near the same rate as has
    been experienced since September 11, 2001; (3) the SJA to CMC being
    provided additional authority to supervise Marine judge advocates and
    the delivery of legal services; or (4) a significant reduction in
    Marine Corps total officer and enlisted end strength. I concur that
    these factors could, if and when they occur, affect the Marine Corps'
    requirements for judge advocates.
        The Report of the 2010 Marine Corps Force Structure Review Group
    (FSRG), published in March 2011, depicts a reduced end strength in the
    Marine Corps Active component from 202,000 to approximately 186,800
    personnel following the completion of operations in Afghanistan.
        This reduced end strength will not necessarily result in a
    reduction of the judge advocate inventory. On this point, I note the
    Panel's observation that ``overall legal requirements do not
    necessarily or directly correlate to force structure or total end-
    strength.'' For example, as the Panel observed ``[t]here are certain
    inviolate costs associated with operating a comprehensive military
    justice system worthy of our men and women in uniform, such as
    maintaining independent trial and appellate judiciaries;.maintaining a
    cadre of qualified military counsel capable for trying complex cases;
    and maintaining SJA offices that have the capability to effectively
    discharge military justice responsibilities despite competing wartime
    demands.''
        As the FSRG recommendations are implemented, we will continuously
    manage the number of Active Duty judge advocates to ensure a total
    inventory sufficient to fulfill the manpower requirements for the
    overall legal mission and requirements of the Marine Corps.
                                     ______

                 Questions Submitted by Senator James M. Inhofe

                           MARINE CORPS END STRENGTH

        149. Senator Inhofe. General Amos, what effect will a reduction of
    15,300 have on dwell time ratios?
        General Amos. Assuming operational demands do not increase but the
    Marine Corps is allowed to reduce the force at a measured and
    responsible pace, dwell time ratios should not be significantly
    affected. A 4-year timeline would allow for reductions in end strength
    and force structure to be executed in conjunction with reducing
    operational requirements.

        150. Senator Inhofe. General Amos, what was the driver behind the
    decision to increase the Marine Corps 4 years ago?
        General Amos. In January 2007, the Secretary of Defense authorized
    both the Army and Marine Corps to increase their respective Active
    components to sustain combat operations in Iraq. Warfighting units
    within both Services had been on a 1:1 deployment-to-dwell ratio which
    placed serious stress on the force and families. The Marine Corps'
    growth to 202,100 personnel was designed not only to reduce stress on
    the force by achieving a 1:2 deployment-to-dwell ratio, but also to
    allow the Marine Corps to continue training to other missions across
    the Range of Military Operations rather than those solely focused on
    counterinsurgency and irregular warfare. This end strength growth also
    helped to create three balanced Marine Air-Ground Task Forces to better
    support Overseas Contingency Operations.

        151. Senator Inhofe. General Amos, what conditions have changed?
        General Amos. Looking ahead to the end of combat operations in
    Afghanistan, the Marine Corps has determined that a smaller force makes
    more sense from an operational perspective. A future end strength of
    186,800 marines provides the country a ``middleweight'' force that is
    forward deployed and forward engaged, and ready to conduct complex
    expeditionary operations across the range of military operations in
    accordance with National Strategy. A reduction in end strength also
    frees resources for much-needed modernization, reset, and
    reconstitution efforts.

        152. Senator Inhofe. General Amos, what types of challenges will
    the Marine Corps face if required to reduce the strength by 15,300 in a
    2-year time span?
        General Amos. Significant involuntary separations would be required
    to reduce the force in a 2-year timeframe. A rapid draw-down throughout
    the Active component could decrease dwell time among our most heavily
    deployed and stressed occupational fields.

        153. Senator Inhofe. General Amos, will this have an impact on
    future retention?
        General Amos. The actions necessary to achieve a 2-year draw-down
    may have a negative impact on future retention, primarily due to the
    perception that the Marine Corps is willing to break faith with its
    career force. Additionally, excessively small accession cohorts, needed
    to facilitate a rapid drawdown, would result in insufficient retention
    populations at the 4-year reenlistment point.

        154. Senator Inhofe. General Amos, what risks are associated with
    reducing the Corps' size?
        General Amos. The planned reduction of Marine Corps personnel in
    the Active component from 202,000 to 186,800 personnel is based on
    mission requirements beyond OEF. The imperative for the Marine Corps is
    to preserve capabilities developed since September 11, expand our
    engagement efforts, respond to crisis, and still be able to project
    power for the most dangerous threat scenarios. To that end we will
    accept a degree of risk by reducing our Active component capacity for
    conducting multiple, sustained operations ashore, relying on an
    operationalized Reserve component to mitigate that risk. Of necessity,
    our force structure represents many judiciously considered factors and
    makes pragmatic trade-offs in capabilities and capacities to achieve a
    posture that creates opportunity and provides an operational stance
    that enables flexibility and rapid response. The Marine Corps does not
    plan on reducing end strength until it has withdrawn combat units from
    OEF. A 186,800 force will provide the United States a middleweight
    force capable of operating across the range of military operations.

        155. Senator Inhofe. General Amos, how will a reduction in the size
    of the Marine Corps affect the Corps' ability to sustain combat
    operations in the future?
        General Amos. The 2010 Marine Corps Force Structure Review Group
    developed the organization, posture, and capabilities to reshape and
    enhance America's Expeditionary Force in Readiness in a fiscally-
    constrained, post-OEF environment.
        Reshaping the Marine Corps from a wartime footing of 202,000
    marines to a force of approximately 186,800 imposes some risk. We
    wargamed all proposed force structure changes against approved DOD
    scenarios and select operation plans. We determined that the resulting
    force would be capable of operating across the range of military
    operations. However, we assumed some risk in our capacity to conduct
    sustained or simultaneous major operations and campaigns.

        156. Senator Inhofe. General Amos, what assurances do we have that
    we will not need a larger Marine Corps in the future?
        General Amos. There is no assurance. However, the 2010 Marine Corps
    Force Structure Review Group developed the organization, posture, and
    capabilities to reshape and enhance America's Expeditionary Force in
    Readiness in a fiscally-constrained, post-OEF environment. We wargamed
    all proposed force structure changes against approved DOD scenarios and
    select operation plans. We determined that the resulting force would be
    capable of operating across the range of military operations. However,
    we assumed some risk in our capacity to conduct sustained or
    simultaneous major operations and campaigns.

                      MARINE CORPS PREPOSITIONING PROGRAM

        157. Senator Inhofe. General Amos, it is my understanding that to
    support recent Marine Corps combat operations, the Marine Corps has
    drawn from its propositioned stock sets, and reset of these stocks is
    underway and will be done in conjunction with the Marine Corps
    procurement programs. Last year, this committee was briefed that in
    Norway, the current percentage of on-hand major end-item equipment was
    47 percent of authorized allowances and the percentage of on-hand
    supplies was 78 percent. What is the current status of the Marine Corps
    prepositioned stocks?
        General Amos. When measured against authorized allowances, the
    percentage of major end item equipment (Class VII) currently present in
    the Maritime Prepositioning Force program is 97 percent, and the
    percentage of all starter stocks currently present is in excess of 95
    percent.\1\ Starter stocks represent the initial supplies (e.g. food
    stores, ammunition, medical supplies) needed in the first 30 days to
    supply a Marine Expeditionary Brigade (MEB).
    ---------------------------------------------------------------------------
        \1\ Data as of 2 August 2011.
    ---------------------------------------------------------------------------
        In Norway, the current percentage of on-hand major end-item
    equipment (Class VII) measured against authorized allowances is 51
    percent; the percentage of on-hand sustainment is 85 percent.\2\
    ---------------------------------------------------------------------------
        \2\ Data as of 2 August 2011.

        158. Senator Inhofe. General Amos, is there adequate funding in the
    near- or far-term to fully restock propositioned equipment and
    supplies?
        General Amos. Yes. The Marine Corps has adequate operations and
    maintenance funding to support the annual maintenance of existing
    equipment and the rotation/replenishment of supplies and materials.
        Our prepositioning programs have been used to source equipment for
    forward-deployed and deploying units. As a result, the Marine Corps has
    assumed risk within its Maritime Prepositioning Force (MPF) program and
    Marine Corps Prepositioning Program in Norway while supporting ongoing
    Overseas Contingency Operations.
        When measured against authorized allowances, the percentage of
    major end-item equipment (i.e. Class VII) currently present in the MPF
    program is 97 percent; the percentage of all starter stocks (e.g.
    initial sustainment) currently present is in excess of 95 percent.\3\
    Starter stocks represent the initial supplies (e.g. food rations,
    medical supplies, ammunition) needed in the first 30 days to supply a
    Marine Expeditionary Brigade (MEB). In Norway, the current percentage
    of Class VII equipment measured against authorized allowances is 51
    percent while the percentage of on-hand sustainment is 85 percent.\4\
    ---------------------------------------------------------------------------
        \3\ Data as of 2 August 2011.
        \4\ Ibid.
    ---------------------------------------------------------------------------
        We anticipate restoring our prepositioned stocks to 100 percent at
    the end of our Afghanistan force drawdown once remaining equipment,
    currently in combat, undergoes reset.

                                     AFRICA

        159. Senator Inhofe. Secretary Mabus and Admiral Roughead, I
    understand the Navy is expanding its survey of ports in Africa in order
    to initiate more contact with African countries through port visits,
    continuing to build relationships with our African partners. How do you
    view the importance of continued Navy operations in and around the
    African continent?
        Mr. Mabus. The Navy's presence and maritime security force
    assistance initiatives within U.S. Africa Command's area of
    responsibility continue to grow in strategic importance. A number of
    African partners have measurably improved their maritime security
    capacity as a result of training provided through Africa Partnership
    Station and other Navy efforts conducted throughout the continent.
        The practical value of such initiatives is exemplified by the
    Africa Maritime Law Enforcement Partnership (AMLEP), a joint Navy and
    Coast Guard initiative that began in 2008. To date, five separate AMLEP
    training events have been conducted. Participating African partners
    have disrupted illegal fishing within their Economic Exclusion Zones
    and seized a total of five vessels that were violating national fishing
    laws. These successes reinforce the rule of law; reduce lost revenue
    and food supplies by states that were incapable of enforcing their
    maritime rights; and generate revenue from fines that can be used to
    sustain and enhance the maritime security capacity of their Navy and
    Coast Guard forces. Importantly, the basic capabilities and proficiency
    that enable offshore fisheries enforcement also underpin counter-
    piracy, counter-trafficking, and critical infrastructure protection
    operations, leading to enhanced national and regional maritime security
    that benefits not only the African states, but also the global economy.
        Africa Partnership Station missions, as well as focused, shorter
    duration maritime security force assistance events, are designed to
    incorporate subject matter experts from other U.S. agencies (e.g. Coast
    Guard, National Oceanic and Atmospheric Administration, U.S. Agency for
    International Development, and the Departments of State, Energy,
    Homeland Security, and Transportation), who work alongside the Navy in
    a comprehensive U.S. Government approach to building partner capacity.
    The Navy provides expeditionary capability that efficiently extends the
    reach of U.S. agencies as well as that of numerous nongovernmental
    organizations, international organizations, and other nations' naval
    personnel. In this way, Africa Partnership Station deployments foster
    and sustain cooperative relationships that enhance national and
    international effectiveness during crisis response operations.
        The Navy appreciates the importance of sustained, predictable
    engagement in Africa and will work to increase the maritime security
    capacity of the African littoral states for the foreseeable future.
        Admiral Roughead. The Navy's presence and maritime security force
    assistance initiatives within U.S. Africa Command's area of
    responsibility continue to grow in strategic importance. A number of
    African partners have measurably improved their maritime security
    capacity as a result of training provided through the Africa
    Partnership Station and other Navy efforts conducted throughout the
    continent.
        The practical value of such initiatives is exemplified by the
    AMLEP, a joint Navy and Coast Guard initiative that began in 2008. To
    date, five separate AMLEP training events have been conducted.
    Participating African partners have disrupted illegal fishing within
    their Economic Exclusion Zones and seized a total of five vessels that
    were violating national fishing laws. These successes reinforce the
    rule of law; reduce lost revenue and food supplies by states that were
    incapable of enforcing their maritime rights; and generate revenue from
    fines that can be used to sustain and enhance the maritime security
    capacity of their Navy and Coast Guard forces. Importantly, the basic
    capabilities and proficiency that enable offshore fisheries enforcement
    also underpin counter-piracy, counter-trafficking, and critical
    infrastructure protection operations, leading to enhanced national and
    regional maritime security that benefits not only the African states,
    but also the global economy.
        Africa Partnership Station missions and focused, shorter duration
    maritime security force assistance events, are designed to incorporate
    subject matter experts from other U.S. agencies (e.g. Coast Guard,
    National Oceanic and Atmospheric Administration, U.S. Agency for
    International Development, and the Departments of State, Energy,
    Homeland Security, and Transportation), who work alongside the Navy in
    a comprehensive U.S. Government approach to building partner capacity.
    The Navy provides expeditionary capability that efficiently extends the
    reach of U.S. agencies as well as that of numerous nongovernmental
    organizations, international organizations, and other nations' naval
    personnel. In this way, Africa Partnership Station deployments foster
    and sustain cooperative relationships that enhance national and
    international effectiveness during crisis response operations.

        160. Senator Inhofe. Secretary Mabus and Admiral Roughead, the
    commander of U.S. Naval Forces Africa is also the commander of U.S.
    Naval Forces Europe and has an area of responsibility that covers all
    of Russia, Europe, and nearly the entire continent of Africa--105
    countries, more than one billion people, 20 million square miles of
    ocean, and a landmass of over 14 million square miles. Given current
    and forecasted defense budgets coupled with increase demand for Navy
    assets, is the Navy adequately resourced to increase the activity and
    operations around the continent of Africa?
        Mr. Mabus. The Navy's force structure supports a forward naval
    posture to meet warfighting and peacetime requirements across the
    entire spectrum of current and future conflicts. This force structure
    meets the minimum demands as generated through the Combatant Commander
    and Service capability identification process through the 2020
    timeframe; however, simultaneously sourcing all of the COCOM demands,
    including those of AFRICOM, for warfighting, deterrence, security
    objectives, and prompt response to all possible crises would require a
    larger Navy than is currently resourced. The risk resides primarily in
    meeting portions of the security objectives and prompt response to a
    crisis with forces already in theater. As mitigation, DOD will employ a
    comprehensive GFM process to most effectively allocate naval forces to
    the highest priority COCOM requirements.
        The Navy's President's budget for 2012 continues support for the
    Africa Partnership Station (APS), a collaborative strategy designed to
    help coastal nations in West and Central Africa achieve safety and
    security in the Gulf of Guinea as well as cooperative training for East
    Africa. APS missions include maritime training, collaboration,
    infrastructure-building, and cross-border cooperation to assist African
    nations in securing maritime regions and sovereign waters. These
    efforts address criminal activity, piracy, environmental and fisheries
    violations, resource theft, arms smuggling, and narcotics and human
    trafficking. APS is a direct response to the growing international
    interest in forming cooperative global maritime partnerships to ensure
    global maritime security.
        Admiral Roughead. The Navy's force structure meets the minimum
    demands currently identified by combatant commanders, including
    AFRICOM. DOD utilizes a comprehensive GFM process to most effectively
    allocate naval forces to the highest priority COCOM requirements as the
    security environment evolves.

                                MISSILE DEFENSE

        161. Senator Inhofe. Secretary Mabus and Admiral Roughead, I
    continue to have concerns about our current missile defense plan. While
    the SM-3 Block IB will be tested this year and hopefully fielded in
    2015, the SM-3 Block IIA is in design with a 2018 projected fielding
    date and the SM-3 Block IIB is still only a concept. However,
    intelligence estimates state that Iran may have a long-range ballistic
    capability by 2015. What is current level of confidence in being able
    to deploy the SM-3 Block IIA by 2018 and the SM-3 Block IIB by 2020?
        Mr. Mabus. The MDA, which is responsible for developing and
    procuring BMD missiles, is working closely with Navy to deliver the SM-
    3 Block IIA by 2018 and the SM-3 Block IIB by 2020. We will keep
    Congress fully informed as these important programs progress.
        Admiral Roughead. The Navy and MDA are working closely to develop,
    procure, and deliver the SM-3 Block IIA by 2018 and the SM-3 Block IIB
    by 2020. We will keep Congress fully informed as these important
    programs progress.

        162. Senator Inhofe. Secretary Mabus and Admiral Roughead, the 2010
    Ballistic Missile Defense Review notes, ``the demand for missile
    defense assets within each region over the next decade will exceed
    supply.'' Do we have enough Aegis ships and missiles to not only
    protect Europe from an Iranian threat but also have Aegis ships
    deployed around the globe to conduct its missile defense mission as
    well as its maritime security, anti-submarine warfare, and surface
    warfare missions?
        Mr. Mabus. The Navy currently has sufficient capacity to meet the
    most critical demands for its multi-mission Aegis ships; however, Navy
    does not have the capacity to meet all GCC demands for BMD-capable
    ships without breaking established Personnel Tempo program limits.
        The Navy has a sufficient inventory of SM-3 missiles to satisfy
    global missile defense requirements today. However, given the
    relatively small number of missiles in the current inventory (76), we
    are using the Global Force Management system to provide a ``fair
    share'' of SM-3s to deploying ships and then shifting those missiles to
    successive ships as deployment rotations occur. Ultimately, the MDA
    plans to procure a total of 523 SM-3 missiles, which will permit
    increased loadouts aboard deploying ships and obviate the requirement
    to transfer missiles in theater in the future. This increased inventory
    will also provide for contingency surge readiness and an adequate war
    reserve of SM-3 missiles.
        To meet the increasing demand for these ships and reduce the risk
    to our long-term force structure caused by the increased operational
    tempo from longer deployment lengths, the Navy, working in conjunction
    with MDA, has established a plan to increase the number of BMD-capable
    Aegis ships from 23 in fiscal year 2011 to 41 in fiscal year 2016 (see
    Figure 1 below). This plan balances the need for meeting current
    operational requirements against the need to upgrade existing BMD-
    capable Aegis ships to pace the future threat. Included in this plan
    are increases in the Navy's capacity and the capabilities of Aegis
    ships through the installation of an Aegis BMD 3.6.1/4.0.1 suite, the
    Aegis Modernization program, or new construction (commencing with DDG-
    113).
        A key attribute of all Aegis ships is their multi-mission
    capabilities within the maritime domain, which allows the Navy to
    employ Aegis ships in multi-mission roles rather than for exclusive
    missions. These ships can perform a variety of other non-BMD missions
    either concurrently or sequentially as the GCC requires.
        The Navy's operating concept for maritime BMD features a graduated
    readiness posture that allows BMD-capable Aegis ships to be on an
    operational tether and available for other tasking when not directly
    involved in active BMD operations. Aegis ships operating in support of
    a BMD mission do not lose the capability to conduct other missions;
    however, specific mission effectiveness may be affected by ships'
    position and/or application of ship resources to those missions.
        The Navy is not large enough to deploy ships for single mission
    purposes, and thus with the exception of deterrent patrols by SSBNs,
    does not advocate deploying warships for single mission tasking. Single
    mission use of our Aegis ships for BMD will result in shortages in
    other mission areas and a loss of operational flexibility for the GCCs.

        Admiral Roughead. The Navy currently has sufficient capacity to
    meet the most critical demands for its multi-mission Aegis ships;
    however, we do not have the capacity to meet all GCC demands for BMD
    without exceeding established Personnel Tempo program limits for
    deployment lengths, dwell tempo, or homeport tempo. Based on threat
    analysis, and current indications from GCCs, and assuming standard 6-
    month deployment lengths, the Navy and the MDA concluded that GCC
    demand for surface combatants with Aegis BMD capability will outpace
    capacity through approximately 2018.
        Single mission use of our Aegis ships for BMD will result in
    shortages in other mission areas and a loss of operational flexibility
    for the GCCs. To ensure GCCs demands are met, the Navy employs Aegis
    ships in multi-mission roles rather than for exclusive missions on an
    enduring basis. These ships can perform a variety of other non-BMD
    missions such as strike warfare, air warfare, submarine warfare,
    surface warfare, information warfare, high value asset protection, or
    maritime interdiction either concurrently or sequentially as the GCC
    requires. The Navy has created a flexible operating concept for
    maritime BMD which features a graduated readiness posture that allows
    BMD-capable Aegis ships to be on an operational tether and available
    for other tasking when not directly involved in active BMD operations.
    Aegis ships operating in support of a BMD mission do not lose the
    capability to conduct other missions; however, specific mission
    effectiveness may be affected by ships' position and/or application of
    ship resources to those missions.
        To meet the increasing demand for these ships and reduce the risk
    to our long-term force structure caused by the increased operational
    tempo from longer deployment lengths, the Navy, working in conjunction
    with MDA, has established a plan to increase the number of BMD-capable
    Aegis ships from 23 in fiscal year 2011 to 41 in fiscal year 2016 (see
    Figure 1 above). This plan balances the need for meeting current
    operational requirements against the need to upgrade existing BMD-
    capable Aegis ships to pace the future threat. Included in this plan
    are increases in the Navy's capacity and the capabilities of Aegis
    ships through the installation of an Aegis BMD 3.6.1/4.0.1 suite, the
    Aegis Modernization program, or new construction (commencing with DDG-
    113). The current CR and the President's budget for fiscal year 2012
    may impact this plan.
        The Navy has a sufficient inventory of SM-3 missiles to satisfy
    global missile defense requirements today. However, given the
    relatively small number of missiles in the current inventory (76), we
    are using the Global Force Management system to provide a fair share of
    SM-3s to deploying ships and then shifting those missiles to successive
    ships as deployment rotations occur. Ultimately, the MDA plans to
    procure a total of 523 SM-3 missiles, which will permit increased
    loadouts aboard deploying ships and obviate the requirement to transfer
    missiles in theater in the future. This increased inventory will also
    provide for contingency surge readiness and an adequate war reserve of
    SM-3 missiles.

        163. Senator Inhofe. Secretary Mabus and Admiral Roughead, how is
    the Navy managing the limited number of Aegis BMD ships when demand is
    greater than supply?
        Mr. Mabus. All Aegis ships are allocated to the GCCs through the
    DOD Global Force Management (GFM) process, which takes into
    consideration GCC surface combatant requirements in all mission areas.
    The Navy employs the FRP as the framework to provide a structured
    process to prepare and posture Navy forces to meet GFM requirements,
    including but not limited to BMD. The FRP balances the need to maintain
    and upgrade equipment, train for the full spectrum of operations, and
    deploy in support of GCC requirements.
        Admiral Roughead. The Navy currently has sufficient capacity to
    meet the most critical demands for its multi-mission Aegis ships;
    however, we do not have the capacity to meet all GCC demands for BMD
    without exceeding established Personnel Tempo program limits for
    deployment lengths, dwell tempo, or homeport tempo. Based on threat
    analysis and current indications from GCCs, and assuming standard 6-
    month deployment lengths, the Navy and the MDA concluded that GCC
    demand for surface combatants with Aegis BMD capability will outpace
    capacity through approximately 2018.
        The Navy employs the FRP as the framework to provide a structured
    process to prepare and posture Navy forces to meet GFM requirements,
    including but not limited to BMD. The FRP balances the need to maintain
    and upgrade equipment, train for the full spectrum of operations, and
    deploy in support of GCC requirements.
        To meet the increasing demand for these ships and reduce the risk
    to our long-term force structure caused by the increased operational
    tempo from longer deployment lengths, the Navy, working in conjunction
    with MDA, has established a plan to increase the number of BMD-capable
    Aegis ships from 23 in fiscal year 2011 to 41 in fiscal year 2016 (see
    Figure 1 above). This plan balances the need for meeting current
    operational requirements against the need to upgrade existing BMD-
    capable Aegis ships to pace the future threat. Included in this plan
    are increases in the Navy's capacity and the capabilities of Aegis
    ships through the installation of an Aegis BMD 3.6.1/4.0.1 suite, the
    Aegis Modernization program, or new construction (commencing with DDG-
    113).

        164. Senator Inhofe. Secretary Mabus and Admiral Roughead, why are
    Aegis ships which are configured to carry 20 missiles only carrying 10
    to 11 missiles?
        Mr. Mabus and Admiral Roughead. Currently deployed Aegis ships are
    carrying a limited number of SM-3 missiles due to the still growing
    inventory of BMD weapons in our Navy. Given the combatant commander
    demand for Navy BMD ships on station, we are utilizing the Global Force
    Management process to provide a fair share of existing inventory to
    deploying BMD capable ships. Ship loadouts will be increased as
    additional SM-3 missiles are procured and the overall Navy BMD
    inventory increases.

        165. Senator Inhofe. Secretary Mabus and Admiral Roughead,
    according to a June 2010 Defense News article, the Aegis radar systems
    are ``in their worst shape ever, raising questions about the surface
    fleet's ability to take on its high-profile new mission next year
    defending Europe from ballistic missiles.'' The article describes a
    Fleet Review Panel assessment, started in September 2009 by the head of
    Fleet Forces Command, that Aegis ``SPY manpower, parts, training, and
    performance are in decline,'' and suggests that these deficiencies
    would affect the Navy's ability to meet its missile defense mission
    requirements, including the European PAA. Are there Aegis readiness
    concerns?
        Mr. Mabus. Today's Aegis Fleet is heavily stressed by the pace of
    operations around the globe. This has led to a decline in Aegis
    readiness that we are addressing by increasing our investment in Aegis-
    specific equipment, training, and spare parts in a coordinated effort
    to sustain this vital system at optimal readiness.
        Admiral Roughead. Today's Aegis Fleet is heavily stressed by the
    pace of operations around the globe. This has led to a decline in Aegis
    readiness. We are addressing these issues through investment in Aegis-
    specific equipment, training, and spare parts in a coordinated effort
    to sustain this vital system at optimal readiness. We are moving
    approximately 1,900 sailors from shore billets onto our ships to meet
    operational demands while maintaining acceptable Fleet readiness levels
    and sailor dwell time. To enhance the material readiness of our Fleet,
    we are improving our ability to plan and execute maintenance by
    increasing manning at our RMCs, and by institutionalizing our
    engineered approach to surface ship maintenance, converting the
    successes of our SSLCM initiative I began 2 years ago into the
    SURFMEPP. I remain focused on ensuring our Navy has a force that is
    maintained and trained to provide the capability and forward presence
    required in the two areas of interest identified in our Maritime
    Strategy, the Western Pacific, and the Arabian Gulf, while preserving
    our ability to immediately swing from those regions and our Fleet
    concentration areas in the United States to respond to contingencies
    globally.

                                      F-35

        166. Senator Inhofe. Secretary Mabus, Admiral Roughead, and General
    Amos, what is your assessment of the F-35 restructure and what impact
    will it have on Navy and Marine Corps strike aircraft capabilities?
        Mr. Mabus. The F-35 restructure was based upon the most in-depth,
    bottoms-up Technical Baseline Review (TBR) of the F-35 program to date.
    The TBR involved more than 120 technical experts investigating all
    aspects of the program which enabled us to assess the overall progress
    and current status of the F-35 program. Based on this review, we
    support the Secretary of Defense assessment that the F-35 Systems
    Development and Demonstration (SDD) phase should be restructured;
    variants of the F-35 aircraft decoupled; and the production ramp
    reduced to mitigate concurrency. Impacts of the F-35 program delays
    have been accounted for in the Navy's Strike Fighter Inventory
    Management (SFIM) plan, which shows that the Navy is required to
    resource a SLEP for legacy Hornet aircraft and procure additional F/A-
    18E/F Super-Hornets. Additional SFIM plan details have been provided to
    Senior Professional Staff Members. While F-35 has been challenged this
    past year, and additional developmental challenges may arise, we remain
    strongly committed to the F-35 program as it is essential to our long-
    term national security as the future backbone of U.S. combat air-
    superiority and the core of Navy and Marine aviation.
        Admiral Roughead. Navy remains strongly committed to the F-35
    program as an essential element to our long-term national security
    serving as the backbone of U.S. combat air-superiority and the core of
    Navy and Marine Corps aviation. The TBR conducted last year involved
    more than 120 technical experts investigating all aspects of the
    program which enabled us to assess the overall progress and current
    status of the F-35 program. Based on the recommendations from the TBR,
    Navy supports the Secretary of Defense assessment that the F-35 SDD
    phase should be restructured; variants of the F-35 aircraft decoupled;
    and the production ramp reduced to mitigate concurrency. Impacts of the
    F-35 program delays due to restructuring have been accounted for in the
    Navy's SFIM plan, which shows that the Navy is required to resource a
    SLEP for legacy Hornet aircraft and procure additional F/A-18E/F Super-
    Hornets.
        General Amos. There are three factors impacting the delivery of all
    JSF variants: (1) production delivery delays; (2) flight test progress;
    and (3) the rate of software development. The restructure of the F-35
    program was designed to provide the time necessary to remedy these
    deficiencies while retaining capabilities the aircraft requires to
    perform in support of operational tasking. The slower production rate
    impacts our rate of transition from an aging legacy aircraft inventory.
    Currently, we are successfully managing our strike fighter aircraft
    inventory to meet our operational commitments.

        167. Senator Inhofe. Secretary Mabus, Admiral Roughead, and General
    Amos, what risks do you see that could make the strike fighter
    shortfall rise even higher in the years ahead?
        Mr. Mabus. The Navy's plan to mitigate the strike fighter shortfall
    is to procure a total of 556 F/A-18E/Fs, which is 41 above the previous
    program of record and to extend the service life of 150 F/A-18A-D
    aircraft in the Navy and Marine Corps. This will lower the projected
    peak shortfall from about 100 to 65 in 2018. The key risk to this plan
    is the ability to extend the service life of the F/A-18A-D aircraft
    from 8,000 to 10,000 flight hours. The Naval Air Systems Command
    (NAVAIR) has extensive expertise in the field of extending the service
    life of tactical aircraft and processes for managing the risk of these
    programs.
        The first step is to extend the aircraft service life from 8,000 to
    8,600 flight hours with the High Flying Hour (HFH) inspection program
    and then induct the aircraft in the SLEP to achieve an additional 1,400
    hours to 10,000 flight hours. The HFH Revision A inspection extending
    the aircraft 600 flight hours is now completing the Validation and
    Verification process. Until our technical knowledge increases with the
    completion of more HFH inspections, unknown schedule and cost risks
    will remain. To extend the service life from 8,600 to 10,000 flight
    hours, select aircraft will be inducted into the SLEP for depot
    inspection and modification. The first SLEP candidate aircraft will be
    inducted in fiscal year 2012.
        Admiral Roughead. The Navy's plan to mitigate the strike fighter
    shortfall is to procure a total of 556 F/A-18E/Fs, which is 41 above
    the previous program of record and to extend the service life of 150 F/
    A-18A-D aircraft in the Navy and Marine Corps. This will lower the
    projected peak shortfall to 65 in 2018.
        The NAVAIR, my executive agent for the service life extensions, has
    extensive expertise in the field of extending the service life of
    tactical aircraft and the processes for managing risk related to SLEPs.
        General Amos. The two most significant factors affecting the strike
    fighter shortfall are operational demand and the corresponding
    utilization of the remaining service life on our legacy F/A-18 Hornet
    aircraft. Our Hornets are reaching the end of their effective service
    life at the same time as we are procuring F-35B replacement aircraft.
        Delays in the JSF program have created a gap in available aircraft.
    The Marine Corps is addressing this issue by means of an aggressive
    service life management program for legacy F-18C/D aircraft. The
    current shortfall is manageable; however, risk will arise if further F-
    35B procurement delays occur, utilization rates on our legacy aircraft
    increase, and/or if there is a reduction of funding for necessary
    SLEPs.

        168. Senator Inhofe. Admiral Roughead, in light of the results of
    the F-35's TBR, does the Navy still believe it can achieve F-35 IOC in
    2016?
        Admiral Roughead. Due to the recent JSF TBR and program
    restructuring efforts, the F-35C IOC has not yet been determined. We
    are reviewing the results of the TBR and restructuring to determine
    when IOC will be achieved. The Navy's IOC requirements will remain
    unchanged and will be based on the level of capability delivered at the
    completion of the initial operational test and evaluation of the F-35C
    equipped with Block 3 software.
        The Navy's intent is to stand up squadrons as aircraft become
    available and declare IOC when sufficient capability is tested and
    delivered. IOC requires the following:

             All key performance parameter thresholds must be met
             Sufficient aircraft quantity (10 Primary Aircraft
            Authorized)
             Mission planner; and adequate trainers, spares,
            support equipment, and publications
             Fully functional Autonomic Logistics Information
            System (ALIS) installed and available aboard a nuclear powered
            aircraft carrier (CVN)
             Adequately trained aircrew, maintainers, and support
            personnel
             Desired capability to conduct all Operational
            Requirements Document missions, to include air interdiction
            (AI); offensive counter-air (OCA); defensive counter-air (DCA);
            Close Air Support (CAS); suppression of enemy air defenses/
            destruction of enemy air defenses (SEAD/DEAD); and combat
            search and rescue (CSAR) in a denied, near-peer environment
            better than legacy aircraft
             Completion of all ship qualifications and
            certification to deploy aboard CVN
             Completion of operational test (all mission
            capabilities)

        169. Senator Inhofe. General Amos, how has the F-35B 2-year
    probationary period and decrease of F-35B procurement in the FYDP
    affected the Marine Corps' strike fighter shortfall?
        General Amos. Slowing the production rate of the F-35B to allow for
    the responsible design and incorporation of technical adjustments was a
    prudent decision in light of the progress the JSF program had made to
    date. However, this slower production rate concurrently slows down our
    rate of transition from legacy aircraft to ones with fifth generation
    capabilities.
        Currently, we are successfully managing our legacy strike fighter
    aircraft inventory to meet operational commitments through a variety of
    service life management initiatives until the F-35B is fielded.
    Additionally, our procurement of some F-35Cs within the FYDP will
    ensure that we meet our enduring commitment to carrier-based Tactical
    Aircraft Integration, while partially off-setting the delay in F-35B
    procurement.

        170. Senator Inhofe. Secretary Mabus, Admiral Roughead, and General
    Amos, when does the Marine Corps plan to achieve F-35B LOC?
        Mr. Mabus. The Navy's plan for Limited Operational Capability (LOC)
    is to maintain F-35B operational requirements and field F-35B when the
    inherent capabilities of the aircraft are cleared for operational use;
    pilots are trained; and a support infrastructure is in place. An LOC
    date is still to be determined as it will depend upon the outcome of
    Service and Program Office F-35B technical and sustainment reviews, to
    include the results of flight test, aircraft delivery schedules, and
    implementation of the F-35 sustainment strategy.
        Admiral Roughead. The Marine Corps' plan for the F-35B is to
    maintain its operational requirements, field the aircraft, train to the
    capabilities as they are cleared for operational use, and achieve IOC
    when they are delivered the aircraft without limitations. An IOC date
    is still to be determined as it will depend upon the outcome of Service
    and Program Office F-35B technical and sustainment reviews, to include
    the results of flight test, aircraft delivery schedules, and software
    development progress.
        General Amos. An IOC date has not yet been determined and will
    depend upon the outcome of technical and sustainment reviews being
    conducted both at the Service and Program Office level. These reviews
    include the results of flight testing, aircraft delivery schedules, and
    software development progress and the like. Current projections from
    the Joint Program Office and from Lockheed Martin suggest that IOC can
    occur in 2014. As a result, the Marine Corps is targeting June 2014 as
    an objective IOC date with June 2015 as a threshold IOC date.
    Nonetheless, delivery of aircraft to the first training squadron will
    occur later this year with delivery of the first Marine Corps
    operational aircraft beginning in 2012.

               CANCELLATION OF THE EXPEDITIONARY FIGHTING VEHICLE

        171. Senator Inhofe. General Amos, the EFV fulfilled a new
    requirement to enable marines to be delivered from Navy ships that were
    25 nautical miles from the shore. This was based on the threat of new
    enemy anti-ship missiles. The new requirement drops the 25-nautical-
    mile requirement in favor of the old 15-nautical-mile requirement. Does
    cancelling the EFV mean that the threat of anti-ship missiles was
    overstated?
        General Amos. Cancelling the EFV does not mean the threat of anti-
    ship missiles was overstated. Rather, over the years subsequent to the
    establishing of EFV performance requirements, the threats in the
    littorals and U.S. capabilities to counter and overcome those threats
    have evolved. We now believe that improvements in the capabilities
    fielded or currently in development mitigate the threat to an
    acceptable level of risk for a naval force operating at a 12-nautical-
    mile stand-off range.

        172. Senator Inhofe. General Amos, does the Marine Corps still see
    amphibious warfare as its primary mission?
        General Amos. With a naval tradition as the foundation of our
    existence, the Marine Corps remains firmly partnered with the Navy with
    the ability to come from the sea rapidly to project power across the
    global commons. As America's Expeditionary Force in Readiness, the
    Marine Corps is forward deployed and forward engaged: shaping,
    training, deterring, and responding to all manner of crisis and
    contingency operations. We stand ready to conduct complex expeditionary
    operations across the Range of Military Operations regardless of the
    threat envelope.

        173. Senator Inhofe. General Amos, what will replace the Amtrack?
        General Amos. The Marine Corps will pursue an integrated new
    vehicle program, crafted from the beginning for affordability and
    taking advantage of the investment made in the EFV. The Marine Corps
    intends to mitigate risks associated with a new vehicle program and to
    maximize value by the use of an integrated acquisition portfolio
    approach. This approach is comprised of three efforts: (1) an
    acceleration of the planned procurement of Marine Personnel Carriers
    (MPC); (2) investment in a SLEP and upgrades for a portion of the
    existing AAVs; and (3) the development of a new ACV. This new
    amphibious vehicle, known currently as the ACV, and the MPC represent
    the modern, enduring, and complementary capability solution that
    ultimately will replace the AAV.

                        REPEAL OF DON'T ASK, DON'T TELL

        174. Senator Inhofe. Admiral Roughead and General Amos, there is
    legislation being considered that would add the requirement for the
    Service Chiefs to certify along with the Secretary of Defense, the
    Chairman of the Joint Chiefs of Staff, and the President that repeal of
    DADT will not degrade combat readiness or recruiting and retention.
    What are your personal thoughts regarding legislation requiring Service
    Chiefs' certification that repeal of DADT will not degrade combat
    readiness or recruiting and retention?
        Admiral Roughead. I am confident my assessment of Navy's readiness
    for repeal will be carefully considered by the Secretary of Defense and
    the Chairman during the certification process, and I do not believe it
    is necessary to provide additional or separate input outside of this
    process. My recommendation to the Secretary of Defense and the Chairman
    of the Joint Chiefs of Staff will be based on my assessment of
    objective and subjective data, to include the number of individuals and
    units trained, policies ready for issue to the force, reports from
    commanders regarding observed impacts to effectiveness, readiness,
    recruiting, and retention, and repeal-related incidents, as well as a
    review of force-wide personnel readiness data, retention data, and our
    regular surveys of the force. I provide regular updates on Navy's
    progress to the Secretary of Defense and the Chairman, and will remain
    personally engaged with them throughout this process.
        General Amos. I believe requiring my certification is unnecessary.
    I have had sufficient opportunity to openly communicate with the
    Chairman of the Joint Chiefs of Staff and with the Secretary of Defense
    on this issue. OSD and the Services meet regularly to have frank and
    honest discussions on this issue and will continue to do so between now
    and certification.

        175. Senator Inhofe. Admiral Roughead and General Amos, how is the
    Navy and Marine Corps handling the more difficult aspects of the repeal
    of DADT: concerns about individual privacy, fairness in providing
    benefits to heterosexual and gay and lesbian families, the process for
    reentry of servicemembers separated under DADT, and fair treatment for
    individuals with strongly held religious beliefs concerning
    homosexuality, to include military chaplains?
        Admiral Roughead. Sexual orientation remains a personal and private
    matter. Commanders may not establish practices that segregate
    servicemembers according to sexual orientation. Consistent with current
    policy, commanders will continue to maintain the discretion to alter
    berthing or billeting assignments in accordance with Navy policy in the
    interest of maintaining morale, good order and discipline, and
    consistent with performance of the mission.
        There will be no changes at this time to eligibility standards for
    military benefits. The Defense of Marriage Act currently prohibits
    extension of many military benefits to same-sex couples. All
    servicemembers will continue to have various benefits for which they
    may designate beneficiaries in accordance with the rules governing each
    program, to include Servicemembers' Group Life Insurance beneficiary,
    G.I. Bill death beneficiary, Thrift Savings Plan beneficiary, and
    Wounded Warrior Act Designated Caregiver.
        Upon repeal, former servicemembers who were discharged solely under
    10 U.S.C. section 654 may apply to reenter the Armed Forces. They will
    be evaluated according to the same criteria and requirements applicable
    to all prior servicemembers seeking reentry into the military at that
    time. Sexual orientation will not be a factor.
        Sailors with different religious beliefs already work, live, and
    fight together. Existing policies regarding individual expression and
    free exercise of religion are adequate and will not change. The
    Chaplain Corps' First Amendment freedoms and their duty to care for all
    will not change. Military personnel who do not uphold these standards
    are subject to discipline under the Uniform Code of Military Justice.
        General Amos. The Marine Corps is addressing these concerns through
    leadership, training, and a rigorous service policy review and
    reconciliation. The law has not changed in regard to benefits, and we
    continue to follow guidance from OSD as we address such issues. The
    reentry of servicemembers, who have been discharged under the current
    law, has not begun because they are prohibited from reentry until
    repeal occurs. For all persons of faith, we continue to uphold the
    highest standards of fair treatment. We have confidence in our leaders
    at all levels that they will handle these issues with professionalism
    to ensure all marines are treated with dignity and respect.

        176. Senator Inhofe. Admiral Roughead and General Amos, what
    aspects of the implementation of repeal of DADT have been sources of
    concern?
        Admiral Roughead. I am not concerned with any aspect of the
    implementation of the repeal of DADT. Feedback from our sailors
    indicates the training they are receiving is comprehensive, well-
    delivered, and effective. Additionally, we have not observed any
    impacts to readiness, effectiveness, cohesion, recruiting, or
    retention. We are on track to complete our training by July 1, 2011.
        General Amos. Our main concern centered on impacts to the readiness
    and cohesion of our combat units. Other concerns centered on matters of
    billeting and benefits. I am confident that the detailed work of DOD's
    Comprehensive Review Working Group, and the guidance issued by the
    Secretary of Defense have addressed these concerns. We also feel that
    the extensive DADT related training we have conducted to date has
    mitigated these concerns. (Note: The Marine Corps is complete with Tier
    1 (special staff) and Tier 2 (leadership) training. As of 30 June 2011,
    Tier 3 (Marines) training is 95 percent complete.)
                                     ______

                 Questions Submitted by Senator Saxby Chambliss

                            OHIO REPLACEMENT PROGRAM

        177. Senator Chambliss. Secretary Mabus and Admiral Roughead, the
    Ohio Replacement Program will replace the 14 Ohio-class ballistic
    missile submarines with 12 next generation SSBN(X)s. The Navy is
    estimating that each SSBN(X) will have 16 tubes as opposed to the 24
    currently on Ohio-class submarines. With implementation of New START,
    the Navy will inactivate 4 tubes per submarine so that only 20 missiles
    are aboard each SSBN, bringing the fleet capacity down to 240
    submarine-launched ballistic missiles. These steps will eventually take
    our sea-launched ballistic missile fleet from 336 missiles to 192
    missiles. SSBNs represent the most survivable leg of the triad. The
    Navy has campaigned for 16 tubes per SSBN to lower procurement costs;
    however, I understand STRATCOM wants 20 tubes per SSBN, an additional
    48 missiles total, and STRATCOM campaigned for more tubes because it
    gives them more flexibility and resilience.
        Other than cost concerns, the Navy's desire for fewer tubes is also
    based on the presumption that the world's largest nuclear powers will
    continue the trend toward reducing their arsenals. Regarding
    procurement cost, arguments have surfaced that reducing the number of
    tubes will do relatively little to reduce procurement cost. With a
    growing threat of strategic nuclear advancement in countries such as
    Iran, and with SSBNs accounting for the most survivable leg of the
    triad, does this reduction in SLBMs make sense, and how will it affect
    our ability to provide strategic deterrence for the United States and
    our allies?
        Mr. Mabus. The Navy conducted an in-depth, extensive review of the
    capability requirements for the Ohio Replacement SSBN in parallel with
    development of the service cost position required at Milestone A. This
    analysis concluded that a force of 12 Ohio Replacement SSBNs with 16
    missile tubes can carry all the sea-based warheads and maintain excess
    capacity in the event of a fundamental deterioration of the security
    environment or as a hedge against technical challenges within one or
    more of the other legs of the triad. A force of 12 SSBNs with 20
    missile tubes could carry the Nation's entire operationally deployed
    warheads with excess capacity remaining. These conclusions are based on
    the current requirements of the New START treaty.
        It is the Navy's judgment that the Nation's sea-based strategic
    requirements can be met with a force of 12 Ohio Replacement SSBNs with
    16 tubes. Given the substantial budgetary pressures facing DOD and Navy
    shipbuilding, a 20-tube Ohio Replacement SSBN would inappropriately
    sacrifice other conventional shipbuilding requirements for unneeded
    excess capacity. OSD, Joint Staff, and STRATCOM have since concurred
    with the Navy's position on this military requirement.
        Admiral Roughead. The Navy conducted an in-depth review of the
    capability requirements for the Ohio Replacement SSBN in parallel with
    development of the Service Cost Position required at Milestone A. This
    analysis concluded that a force of 12 Ohio Replacement SSBNs with 16
    missile tubes can carry the sea-based warheads required and maintain
    excess capacity in the event of a fundamental deterioration of the
    security environment or as a hedge against technical challenges within
    one or more of the other legs of the triad. A force of 12 SSBNs with 20
    missile tubes could carry the Nation's entire operationally deployed
    warheads with excess capacity remaining. These conclusions are based on
    the current requirements of the New START treaty. To meet the
    operational requirement to deploy SSBNs to both the Atlantic and
    Pacific oceans, a force of at least 12 operational submarines is
    required.
        It is the Navy's judgment that the Nation's sea-based strategic
    requirements can be met with a force of 12 Ohio Replacement SSBNs with
    16 tubes. Given the substantial budgetary pressures facing DOD and Navy
    shipbuilding, a 20-tube Ohio Replacement SSBN would inappropriately
    sacrifice other conventional shipbuilding requirements for unneeded
    excess capacity. OSD, Joint Staff, and STRATCOM have since concurred
    with the Navy's position on this military requirement.

                                     RESET

        178. Senator Chambliss. General Amos, in your prepared statement
    you discuss the Marine Corps' significant backlog in resetting your
    equipment based on nearly 10 years of war and redeploying equipment
    from Iraq to Afghanistan which resulted in deferring previously-planned
    reset actions. I am extremely impressed with what the Marine Corps has
    been able to accomplish--with both your people and your equipment. It
    is a testimony to your leadership and can-do attitude. However, this
    bill is going to come due and--as you say in your statement--the bill
    for resetting your equipment is $10.6 billion, most of which is not yet
    funded. Looking forward, and assuming you get the money you need to
    perform this reset and regeneration work, do you have the people and
    other resources you need to perform this work? You only have two Marine
    Corps depots--one of which is in Georgia--and I'm curious if you've
    thought about whether you can accomplish all your reset and
    regeneration requirements with the people and resources you have, or
    might more be required?
        General Amos. As long as sufficient funding resources are
    available, Marine Corps depot activities have the ability to expand and
    contract as necessary to meet workload requirements. There are multiple
    options to adjust capacity, including implementation of overtime and/or
    multiple shifts, hiring of contract and/or temporary labor, hiring full
    time additional labor or contracting with commercial vendors.
        We can also utilize capacity at other service depots. As an
    example, Marine Corps Logistics Command, Maintenance Centers in Albany,
    GA, and Barstow, CA, increased production in 2008 and executed 4.4
    million direct labor hours. In 2009, the Marine Corps estimated a
    requirement for 5.45 million direct labor hours in preparation for the
    influx of equipment returning from Iraq. Both depots hired additional
    personnel for those years in accordance with section 2472 of title 10,
    U.S.C., with the expectation that the workload, and therefore the
    workforce, would remain throughout reset. However, the calendar year
    2009 workload did not materialize due to harvesting of significant
    amounts of equipment in Iraq to support Afghanistan surge requirements.
        Once the timelines and rate of drawdown from Afghanistan are known,
    Marine Corps Logistics Command will conduct reset workload forecasts
    and develop plans to expand depot capacity using the options described
    above.
                                     ______

                   Question Submitted by Senator Scott Brown

                           OPEN ARCHITECTURE SOLUTION

        179. Senator Brown. Secretary Mabus, the Navy has been providing
    quarterly reports to Congress regarding its progress in implementing an
    open architecture solution across the surface ship Navy. What are your
    views on the successes and status of this effort to date and the
    implementation plan for the next 3 years for large surface combatants,
    including DDG-51 Flight 3, amphibious ships, and any future new
    construction ships?
        Mr. Mabus. Naval programs have made progress in implementing OA
    practices and principles in recent years in the areas of policy and
    guidance creation and adoption, competitive contracting, component
    reuse, and open system development, testing, and fielding. Within the
    surface ship Navy, Advanced Capability Builds (ACB) deliver an
    integrated combat system capability to the Surface Navy in an
    effective, safe, reliable, and readily producible manner.
        The Ship Self Defense System (SSDS) Combat System was designed from
    the beginning with its software decoupled from hardware, based on non-
    standard open architecture software and COTS hardware components.
    However, from its inception, SSDS has incorporated a common source
    library (CSL) approach where the software for all ship classes
    employing SSDS comes from a single source library (SSL). This permits
    new capability development investments to be applicable across all
    SSDS-based combat system baselines. When a new SSDS software component
    is developed, it is placed in the SSDS SSL and is then available to
    other SSDS-based combat system configurations. Beginning in fiscal year
    2008, SSDS was modified to become compliant with Open Architecture
    Computing Environment standards. SSDS combat systems software in the
    SSL has evolved to align to middleware standards and toward future
    commonality with Aegis combat system software.
        Eight different SSDS configurations are supported by the SSL:

             SSDS MK 2 Mods 1, 1A, and 1B for CVN-68 Nimitz-Class
            Aircraft Carriers
             SSDS MK 2 Mods 2, 2A, and 2B for LPD-17 San Antonio-
            Class Amphibious Transport Docks
             SSDS MK 2 Mod 3A for LHD-1 Wasp-Class Amphibious
            Assault Ships
             SSDS MK 2 Mod 4B for LHA-1 Tarawa-Class Amphibious
            Assault Ships

        The following configurations are under development as part of SSDS
    ACB 12 and will be added to the SSL upon completion:

             SSDS MK 2 Mod 6C for CVN-78 Gerald R. Ford-Class
            Aircraft Carriers
             SSDS MK 2 Mod 2C for LPD-17 San Antonio-Class
            Amphibious Transport Docks
             SSDS MK 2 Mod 3C for LHD-1 Wasp-Class Amphibious
            Assault Ships
             SSDS MK 2 Mod 5C for LSD-41 Whidby Island- and LSD 49
            Harpers Ferry-Class Landing Ship Docks

        Over the next 3 years SSDS systems will be fielded on the following
    ships:

             Fiscal year 2012--USS Harry S. Truman (CVN-75) and PCU
            Arlington (LPD-24)
             Fiscal year 2013--USS Theodore Roosevelt (CVN-71), USS
            Tortuga (LSD-46), USS New Orleans (LPD-18), USS Iwo Jima (LHD-
            7), PCU Arlington (LPD-24), PCU Somerset (LPD-25), and PCU
            America (LHA-6)
             Fiscal year 2014--USS Wasp (LHD-1) and PCU John P.
            Murtha (LPD-26)

        The Aegis combat system was initially designed as an integrated and
    tightly coupled hardware and software combat system. As the Aegis
    combat system is modernized and transitions to a network-based
    commercial off-the-shelf (COTS) computing environment it will use a CSL
    to support an affordable and sustainable ACB process. The actual rate
    of modernization will be driven by fleet availability and future
    budgets. Over the next 3 years, ACB12 in conjunction with the CSL is
    being used across multiple programs (Aegis Modernization, DDG-113, and
    Aegis Ashore) and is planned for installation on the following Aegis
    ships:

             Fiscal year 2012--USS Normandy (CG-60), USS
            Chancellorsville (CG-62), and USS John Paul Jones (DDG-53)
             Fiscal year 2013--USS Princeton (CG-59), USS Cowpens
            (CG-63), USS Gettysburg (CG-64), USS Barry (DDG-52), and USS
            Benfold (DDG-65)
             Fiscal year 2014--USS Chosin (CG-65), USS Hue City
            (CG-66), USS Cape Saint George (CG-71), and USS Arleigh Burke
            (DDG-51)

        Commencing in fiscal year 2012, five different Aegis combat system
    configurations will be supported from a CSL:

             Baseline 9A--CG without the Multi-Mission Signal
            Processor (MMSP) and without BMD capability (CG-59-64)
             Baseline 9B--CG with MMSP and integrated BMD
            capability (CG-65-73)
             Baseline 9C--DDG with MMSP and integrated BMD
            capability (DDG-51-112)
             Baseline 9D--DDG-113 + New Construction with MMSP and
            integrated BMD capability (DDG-113 and follow)
             Baseline 9E--Aegis Ashore with MMSP and integrated BMD
            capability
                                     ______

                   Questions Submitted by Senator John Cornyn

                          CHINA'S NAVAL MODERNIZATION

        180. Senator Cornyn. Admiral Roughead, reports indicate that over
    the past 2 decades, the People's Liberation Army's Navy (PLAN) has
    added more submarines to its fleet than any other country in the world,
    in addition to 15 guided missile destroyers; a similar number of
    frigates; more than four dozen high-speed cruise-missile armed patrol
    craft; and scores of new amphibious ships. The PLAN is also reportedly
    moving forward with an aircraft carrier program. According to DOD's
    2010 Report on the Military Power of the People's Republic of China,
    the PLAN's investments ``suggest that China is seeking to support
    additional missions beyond a Taiwan contingency.'' Given China's naval
    build-up, how much emphasis should be placed on U.S. Navy programs and
    spending for countering improved Chinese naval forces in the coming
    years?
        Admiral Roughead. China's naval procurements and military
    modernization are noteworthy and rapid. Absent greater transparency
    from China, China's efforts have significant implications for regional
    stability and they challenge conducting naval operations in contested
    areas. Our Navy has made significant investments in kinetic and non-
    kinetic capabilities to address anti-access challenges (specific
    investments are best provided in a classified setting). Our President's
    budget for 2012 submission achieves the optimal balance among building
    sufficient capability and capacity to meet the most likely threats,
    ensuring effective operations and maintenance of our forces, and taking
    care of our people.

        181. Senator Cornyn. Admiral Roughead and General Amos, according
    to the DOD's 2010 Report on the Military Power of the People's Republic
    of China, the PLAN's ``primary focus will remain on preparing for
    operations within the `first and second island chains,' with emphasis
    on a potential conflict with U.S. forces over Taiwan.'' In 1996, China
    conducted a series of provocative missile tests for the purpose of
    influencing Taiwan's first direct presidential election. In response,
    in March 1996, President Clinton ordered two U.S. aircraft carriers
    into the Taiwan Strait to send the Chinese a message. Shortly
    thereafter, Taiwan conducted its first presidential election
    peacefully. Considering China's dramatic enhancement of its naval and
    anti-access capabilities, coupled with its aggressive rhetoric on
    Taiwan, if a scenario similar to the one that occurred in 1996 arose
    again in the immediate future, would today's U.S. Navy be able to react
    as it did in 1996, without exposing our forces to undue levels of risk?
        Admiral Roughead. Today's Navy is a more formidable and capable
    force than it was in 1996. Inherent in today's force structure is the
    ability to respond quickly with flexible and adaptive force packages
    that are tailored to deliver effects across the full range of military
    operations--from demonstrations as was done in 1996 to major combat
    operations in today's evolving, sophisticated anti-access/area denial
    environments.
        There are an increasing number of foreign capabilities that have
    the potential to cause our forces to operate from distances further
    from a crisis than desired, or to slow or disrupt the deployment of
    friendly forces into the theater. Capabilities that impact our forces
    in this manner are termed anti-access capabilities and include long-
    range, precise, anti-ship and land attack ballistic and cruise missile
    systems; advanced combat aircraft and electronic warfare technologies;
    advanced Integrated Air Defense systems; submarines and subsurface
    warfare capabilities; surface warfare capabilities; C\4\ISR
    capabilities and cyber warfare technologies.
        The Navy has and will continue to develop programs and capabilities
    to address the anti-access environment emerging in the Western Pacific
    and other theaters of operation. Accordingly, we are strengthening our
    alliances and partnerships, modernizing our forces, fielding new
    capabilities and technologies, and developing new operational concepts.
        One specific initiative that will help preserve access in the
    Pacific is implementation of the Air-Sea Battle Concept. Air-Sea Battle
    implementation will ensure continued U.S. advantage against emerging
    anti-access threats. This does not mean the risks associated with
    conducting naval operations in an anti-access/area denial environment
    will be eliminated. Rather, comprehensive implementation of the joint
    Doctrine, Organization, Training, Materiel, Leadership and Education,
    Personnel, and Facilities (DOTMLPF) actions that comprise the Air-Sea
    Battle Concept initiatives will enable enduring forward presence;
    robust training, exercises and military-to-military engagement with our
    allies and like-minded partners; and crisis response operations
    necessary to protect our national interests in the Pacific within
    tolerable risk levels.
        General Amos. The Marine Corps maintains rotational MEU Amphibious
    Ready Group forces in the PACOM Area of Responsibility (AOR) consisting
    of marines embarked aboard naval amphibious shipping. There are Marine
    Corps forces also arrayed in Japan, Okinawa, and Hawaii. Collectively,
    these marines are able to respond to crises or operational missions
    throughout the AOR when directed.

                             AIR-SEA BATTLE CONCEPT

        182. Senator Cornyn. Admiral Roughead and General Amos, the 2010
    QDR directs the development of a joint Air-Sea Battle (ASB) concept
    between the Navy and the Air Force. In his speech last week at the U.S.
    Air Force Academy, Secretary Gates said this new doctrine recognizes
    ``the enormous potential in developing new joint warfighting
    capabilities--think of naval forces in airfield defense, or stealth
    bombers augmented by Navy submarines--and the clear benefits from this
    more efficient use of taxpayer dollars.'' What is the current status of
    the development and implementation of the ASB concept?
        Admiral Roughead. ASB is a limited operational concept that focuses
    the development of integrated air and naval forces on addressing the
    evolving anti-access/area denial (A2/AD) environment. The Navy, Marine
    Corps, and Air Force Service Chiefs recently signed the ASB Concept,
    and the Services are now refining and synchronizing the DOTMLPF,
    initiatives necessary to implement the concept. This effort will
    continue in a deliberate manner for a number of years.
        General Amos. The Marine Corps has participated in the development
    of the ASB concept and is a full partner in the ASB office that will
    continue concept and capability development. We will integrate ASB
    tenets into our force development process after appropriate validation
    through experimentation and wargaming with our Navy and Air Force
    counterparts. Innovative, new, joint capabilities have been
    incorporated into the ASB concept. Some of these new capabilities are
    already showing potential, and recent operations in Libya have relied
    upon forward-leaning capabilities that are part of the Marine Corps
    Program of Record. The recent tactical rescue of an Air Force F-15E
    conducted from Navy amphibious ships by Marine Corps V-22 tilt-rotor
    and fixed wing platforms to affect the rescue of Air Force personnel
    deep in Libyan territory is an example of such innovative joint
    capability sets.
        With the introduction of the F-35B STOVL JSF, marines will be
    optimized for the type of engagements envisioned in ASB. The enhanced
    Anti-Access and Area Denial systems, platforms, and forces of potential
    adversaries, such as precision ballistic missiles, will make fixed
    bases and airfields problematic. The ability of STOVL aircraft to
    readily disperse, operate from short and degraded runways, and double
    the number of capital ships--11 aircraft carrier and 11 amphibious--
    capable of fixed wing provide a significant contribution to the force
    by preserving its ability to generate tactical air integration sorties
    in Anti-Access and Area Denial environments. Marine capabilities to
    rapidly build and operate expeditionary airfields in austere locations
    will provide the combatant commander with a force that can shape and
    improve his posture as he prosecutes the ASB, as will the traditional
    capability of marines to seize and hold critical terrain that enables
    sea-control. I have recently joined with the Chief of Naval Operations
    and Chief of Staff of the Air Force in signing the ASB concept, and we
    are now engaged together in the establishment of the ASB office which
    will oversee the continued development of the concept and related
    initiatives.

        183. Senator Cornyn. Admiral Roughead and General Amos, to what
    extent has the ASB concept already influenced the investment decisions
    reflected in the Navy's fiscal year 2012 budget request and the latest
    FYDP, and to what extent will it guide investment decisions in the
    future?
        Admiral Roughead. The ASB concept was still under joint development
    by the Navy and Air Force throughout the POM12 cycle. However, the
    discussions and preliminaries decisions indirectly informed the fiscal
    year 2012 budget. POM12 was primarily focused on implementing the 2010
    QDR and the DOD-wide efficiency initiatives. Many of the ASB themes are
    consistent with established CNO/Fleet warfighting priorities for POM12;
    investments made across these areas in PB12 have given the Navy a head-
    start on programmatic requirements that aid in implementing the ASB
    concept.
        The Navy continues to assess POM13 and make investment decisions to
    help support the ASB concept within the constraints of our current
    fiscal environment.
        General Amos. The Marine Corps force development process is concept
    based. Ideally, we begin with a concept, such as ASB and then conduct a
    robust wargaming and experimentation effort to validate the concept and
    gain insights on the functional capabilities that are required to
    implement it. The concept experimentation phase affords a more refined
    understanding of operational and systems requirements and the necessary
    changes necessary to support them (i.e. DOTMLPF process). With the
    knowledge gleaned from experimentation and wargaming, we are better
    prepared to propose programs and acquisition initiatives. We believe
    this deliberate process affords the best use of the resources entrusted
    to Marine Corps. We are still early in the concept experimentation and
    validation phase regarding ASB. Once we have validated the triservice
    requirements for ASB, those shared requirements will influence our
    future investment decisions, the extent of which cannot be determined
    until that time.

                          INDEPENDENT PANEL ASSESSMENT

        184. Senator Cornyn. Admiral Roughead, the Independent Panel
    Assessment of the 2010 QDR recommended a Navy fleet of 346 ships, yet
    the Navy's current plans are for only a 313-ship fleet. In fact, in
    your testimony, you referred to 313 ships as the ``minimum'' our Navy
    needs. If Congress were to appropriate the funding necessary for the
    Navy to buy an additional 33 ships, beyond the planned 313 ships, what
    type and mix of ships would you recommend?
        Admiral Roughead. To propose a force structure for a 346-ship Navy,
    further study and analysis must be conducted to determine: (1) the
    additional missions expected of a 346-ship battle force; (2) the actual
    break-down of ship types, quantities, and capabilities to be procured
    and; (3) the associated cost and effects on the shipbuilding industrial
    base in procuring a proposed 346-ship fleet.
        I have stated that the Navy requires a minimum of 313 ships to meet
    operational requirements globally. This minimum remains valid; however,
    we are continually evaluating this requirement to address increased
    operational demands and expanding requirements for BMD, intra-theater
    lift, and forces capable of confronting irregular challenges. 313 ships
    remain the floor. The Navy remains committed to building a 313-ship
    fleet by 2020, as detailed in our Long-Range Plan for Construction of
    Naval Vessels for fiscal year 2011.
        Beyond the FYDP, the need to fund SSBN recapitalization will result
    in some risk to the Navy's fiscal year 2011 Shipbuilding Plan to
    maintain the 313-ship floor. While the SSBN(X) is being procured, the
    Navy will be limited in its ability to procure other ship classes. The
    lower build rates in the fiscal year 2022 to fiscal year 2031 timeframe
    will result in reduced force structure in the fiscal year 2032 to
    fiscal year 2040 timeframe. If additional funding were to be provided
    to fund SSBN(X) procurement during this time period, the Navy would be
    able to apply its shipbuilding funds to raise other ship procurement
    rates to reduce the impact on the shipbuilding industry and to increase
    the overall battleforce inventory. Additional ships would include
    guided missile destroyers and attack submarines. Additional funding
    would help reduce future ship inventory shortfalls and provide a more
    stable production base.

                     WIND FARM IMPACT ON FLIGHT OPERATIONS

        185. Senator Cornyn. Admiral Roughead, in a response to a recent
    request for information from my office, the Navy stated that ``wind
    turbine operations may create harmful interference to National Airspace
    System Sensors, hindering safe airspace operation and aircraft
    separation and control.'' It is apparent that the systems most
    adversely affected are air traffic control radars and approach systems
    (e.g., Precision Approach Radar). Due to the rotating windmill blades,
    these systems can be degraded by false targets, shadowing, and target
    loss. What steps is the Navy taking to ensure that wind farm
    encroachment around naval and MCASs does not hinder or completely
    degrade the ability of bases to complete their mission?
        Admiral Roughead. There are several means by which Navy attempts to
    ensure that wind farm encroachment around Navy and MCASs does not
    hinder or completely degrade the ability of bases to complete their
    mission:

             Navy implements an Encroachment Management Program
            focused on systematic identification, quantification, and
            mitigation of encroachment concerns. Navy partners with
            communities, State, and local governments, and conservation
            organizations to preserve training and operations by
            implementing land use controls. To this end, Navy has already
            acquired over 9,000 acres of restrictive easements to reduce
            incompatible development near installations.
             The Joint Land Use Study (JLUS) Program enables
            cooperative agreements between Navy and local governments. When
            the potential for incompatible development, such as wind farms,
            is identified, Navy may partner with the Office of Economic
            Adjustment to initiate a JLUS. JLUS implementation measures may
            involve land exchanges; transfer of development rights; and
            revisions to a community comprehensive plan and can take the
            form of traditional land use and development controls, such as
            zoning and structural height restrictions.
             When appropriate, the Navy and the Marine Corps
            participate in the Federal Aviation Administration's (FAA)
            Obstruction Evaluation/Airport Airspace Analysis (OE/AAA)
            process to review proposed construction projects for
            navigational safety hazards. This process has provided DOD
            awareness and influence on potential wind farm encroachment.
            However, it does not include all potential wind turbine
            hazards, nor does it provide FAA or DOD authority to prohibit
            construction.
             Navy is participating in the processes of the recently
            established DOD Energy Siting Clearinghouse, which will monitor
            energy project compatibility and gather compatibility
            evaluations from the Navy and the other Services. Compatibility
            reviews will include consideration of all potential conflicts
            with military missions and activities from wind farm
            development.
             Through the Bureau of Ocean Energy Management
            Regulation and Enforcement's (BOEMRE) Renewable Energy State
            Task Force process, the Navy and OSD evaluate areas of the
            outer continental shelf for renewable energy opportunities,
            while minimizing potential conflict with training and
            operational missions. For example, Navy and OSD successfully
            liaised with BOEMRE to prevent leasing operational range space
            in the VACAPES operating area, Atlantic Test Range, and
            Atlantic Coast Warning Areas, to preserve critical offshore
            training and testing operational areas.

        186. Senator Cornyn. Admiral Roughead, Section 358 of the NDAA for
    Fiscal Year 2011 gives DOD 30 days to assess renewable energy proposals
    that have unacceptable impacts on military operations. In response to a
    recent request for information from my office, the Air Force stated
    that, ``proposals that are found to present significant operational
    impacts will be hard-pressed to meet the new requirements within 30
    days.'' Do the NDAA for Fiscal Year 2011 provisions provide the Navy
    with adequate time to conduct a thorough analysis and make informed
    objections to proposed wind farm developments, when necessary, because
    of impacts on military operations?
        Admiral Roughead. The NDAA for Fiscal Year 2011 provisions provide
    Navy with enough time to do a preliminary assessment of the impact.
    Thirty days is not enough time to conduct a thorough analysis of
    whether the proposal creates an ``unacceptable risk to national
    security.'' The NDAA does not require this latter finding within 30
    days.
        Section 358(e)(1) of the 2011 NDAA gives DOD 30 days to conduct a
    ``Preliminary Assessment.'' This document would assess the level of
    risk of adverse impact on military operations and readiness that would
    arise from the project and discuss the extent of mitigation that may be
    needed to address such risk. I believe this can be done in the 30 days.
        Section 358(e)(2) sets forth procedures under which DOD could make
    a ``Determination of Unacceptable Risk'' regarding a proposed energy
    project. Such a determination can only be made upon a finding of
    ``unacceptable risk to the national security of the United States.'' In
    contrast to a Preliminary Assessment, this section has no time limit.
    However, I recognize the national interests in developing renewable
    power and will strive to conduct a thorough and timely analysis when a
    complete assessment is required.
        In 2006, the ``Report to the Congressional Defense Committees, The
    Effect of Windmill Farms on Military Readiness,'' informed Congress
    that among other things, site and project specific studies are required
    for complete analysis of impacts and of potential mitigations. This is
    not possible in 30 days. The 2006 study is available online at
    www.defense.gov/pubs/pdfs/windfarmreport.pdf.

        187. Senator Cornyn. Admiral Roughead, do the NDAA for Fiscal Year
    2011 provisions take into account the electromagnetic effects of wind
    turbines on radar systems and provide adequate protection for Navy-
    owned radars and other sensors?
        Admiral Roughead. The 2011 NDAA provisions account for the
    electromagnetic effects of wind turbines on radar systems by asking for
    an assessment of the risk associated with electromagnetic interference
    on military readiness, including the effects on testing and evaluation
    ranges. However, the provisions also establish a very high standard for
    DOD objection to a proposed renewable energy project, requiring a
    finding of ``adverse effect on national security.'' Once DOD makes such
    a determination, the provisions do not empower either the DOD or the
    FAA to prevent construction of wind turbines based on that finding. The
    current FAA process only provides for notice of hazard.

        188. Senator Cornyn. Admiral Roughead, when a wind farm is
    proposed, an application must be submitted to the FAA. In response, the
    FAA determines whether or not a hazard to aviation exists. However, in
    its review process, the FAA fails to take into account the
    electromagnetic effects of wind turbines on radar systems when the
    proposed wind farm would be within line of sight of a military radar
    tower. In your opinion, does the FAA's ``OE/AAA'' process need to be
    revised to account for the impact of electromagnetic (or any other)
    interference on airport surveillance and long-range radars?
        Admiral Roughead. I am interested in coordinating with the FAA to
    revise the OE/AAA process to improve electromagnetic effect screening
    tools for military airport surveillance radars and update military
    airport obstruction criteria to ensure Special Use Airspace and
    Military Training Routes are properly identified. The FAA OE/AAA
    process provides for a review of proposed construction projects and
    makes a hazard determination for projects evaluated as a navigational
    safety hazard. Although impacts of interference on airport surveillance
    and long-range radars are considered during the evaluation process, it
    is limited to navigational safety, rather than preserving military
    airspace needed for unique training requirements such as low-level
    training routes or student jet pilot training. This includes military
    and special use airspace, not associated with airports or runways, but
    is critical to Navy training and readiness.

        189. Senator Cornyn. Admiral Roughead, there is clear evidence that
    the electromagnetic effect of wind turbines can have a negative impact
    on the military's ability to conduct air operations. Does the Navy
    believe that some form of Military Impact Statements (MIS) should be
    required for renewable energy projects? If so, what would be the most
    appropriate time in the certification process to require the MIS?
        Admiral Roughead. Several studies indicate that electromagnetic
    effects from wind turbines could adversely affect Navy's ability to
    conduct air missions. Some form of MIS should be included as part of
    the siting process for renewable energy projects. Our experience with
    the BOEMRE process in assessing offshore mineral and wind energy
    development leasing blocks shows that many areas can be compatible for
    development if certain conditions can be met. In some instances, it can
    be as little as moving one or two wind turbines in a project, or as
    substantial as blocking off large areas. While there is not a single
    process for approving renewable energy projects, early notification is
    critical. Navy must be able to provide an initial assessment, and then
    be allowed additional time and resources to conduct compatibility
    analyses if the process is to maximize available wind resources without
    impacting military readiness. The Navy would like to work with DOD to
    develop a screening tool that would show which areas within which wind
    turbine development could be excluded.

        190. Senator Cornyn. Admiral Roughead, what type of mandatory
    information would be most appropriate for inclusion in the MIS?
        Admiral Roughead. A MIS would be an entirely new process and set of
    requirements. A proper recommendation of what should be included
    requires significant coordination throughout Navy and the other
    Services. Fundamentally, the MIS should contain an assessment by all
    branches of the military of a proposed project's impact on training,
    testing, and operations. The exact elements of a MIS must consider the
    level of effort and resourcing that will be required, and should
    provide a proportionate legal mechanism capable of preventing
    incompatible construction. I appreciate any opportunity to assist in
    developing or reviewing such a concept.

                              JOINT STRIKE FIGHTER

        191. Senator Cornyn. Admiral Roughead, compared to the F-35A and F-
    35B, the aircraft carrier variant F-35C has received relatively little
    attention in the media as of late. It is my understanding that we will
    see the first F-35C operational squadron in 2015. This critical
    platform will replace aging F-18s and soon become the backbone of the
    Navy's Tactical Aviation Enterprise. Please provide an update on this
    critical variant of the JSF and its importance to the future of our
    Navy.
        Admiral Roughead. The first F-35C SDD aircraft (CF-1) delivered to
    NAS, Patuxent River in November and has been actively clearing the
    flight envelope, demonstrating flight to just above supersonic and an
    altitude of 30,000 feet. As of early March, CF-1 has flown a total of
    40 sorties for 59 hours. The next two F-35C aircraft are also expected
    to be delivered to NAS Patuxent River by the summer of 2011.
        Testing and analysis model verification also continues with F-35C
    variant specific ground testing. Drop testing of the ground test
    article, CG-1, has demonstrated carrier landings up to 26.4 feet per
    second and has been reconfigured to conduct static testing of the F-35C
    aircraft. Static testing of the aircraft catapult and arrestment has
    been completed. These tests support our early efforts toward ship
    integration and lay the foundation for jet blast deflector and other
    ship suitability testing this summer at Naval Air Engineering Station
    (NAES) Lakehurst. This series of tests fully transitions our focus on
    F-35 air/ship integration as we strive to refine analysis and validate
    with formal test results. To date, there are no known air/ship
    integration issues which we cannot overcome.
        The Navy remains committed to the JSF program. The F-35C will
    provide the Carrier Strike Group commanders a survivable, ``day-one''
    strike capability in a denied access environment with the tactical
    agility and strategic flexibility to counter a broad spectrum of
    threats and win in operational scenarios that cannot be addressed by
    current legacy aircraft. While the overall F-35 program has been
    challenged this past year, the Navy strongly supports the F-35 program
    as an essential element to our long-term national security and the
    future backbone of combat air-superiority and the core of Navy and
    Marine Corps Aviation.

        192. Senator Cornyn. Admiral Roughead, when do you expect to
    conduct carrier testing of the F-35C, and what obstacles might it
    encounter during this testing?
        Admiral Roughead. The F-35C carrier suitability testing will be
    conducted using multiple F-35C test assets aboard a CVN. Test planning
    continues to be refined based on the overall program restructure, but
    shipboard testing will be conducted in three phases. The first is
    expected to occur in May 2013 with test aircraft CF-3 and CF-5.
    Subsequent test periods will investigate ever increasing carrier-based
    operations and are scheduled approximately 1 year apart in order to
    more completely expand the F-35C operational envelope.
        One focus area will be to collect environmental data surrounding
    the jet blast deflectors (JBD). The thermal impacts of the JSF on the
    CVN are currently being studied by modeling exhaust impacts on the JBD
    and flight deck systems. Preliminary data is positive and indicates
    additional ship-based cooling infrastructure may not be necessary. The
    land-based testing at NAES Lakehurst is necessary to validate modeling
    and determine the scope of shipboard modifications.

        193. Senator Cornyn. Admiral Roughead and General Amos, due to the
    limited space aboard Navy ships, it is vital to consider the size and
    weight of equipment that is brought on board. The fate of the F136, the
    extra engine for the JSF is still in question. However, if its
    development continues, it is possible that the Navy might eventually be
    forced to carry two different engines and the accompanying support
    equipment aboard its aircraft carriers, instead of just the one. What
    issues, if any, might an extra engine cause on an aircraft carrier,
    where space is limited?
        Admiral Roughead. The F135 and F136 engines constitute two
    different designs by two different manufacturers. While the F136 engine
    would be interchangeable, there are several engine components that are
    not interchangeable. The Fan, Gear Box, and Power Section modules are
    unique by F135 and F136 propulsion systems. Only the Augmenter and
    Exhaust Nozzle modules are common by F-35 variant. Supporting two
    engines would require unique spares, unique support equipment, and
    unique training. The JSF specification only requires engines to perform
    to specified criteria and physically fit into the F-35. Maintenance/
    repair technical requirements are different, requiring different
    instructions and training with differences in assembly hardware and
    special tools for off-aircraft repair.
        The large size of the F135 and F136 (approximately 18.7 feet and
    weighs 9,300 lbs in its container) necessitates greater sparing aboard
    ships as neither the assembled engine nor the power section module can
    currently be replenished underway. Similarly, due to the weight and
    height of critical engine spares, it is not feasible to store all JSF
    engine spares in legacy store-rooms or stack them aboard ships as is
    done for legacy system. This would necessitate work-around in hangar
    deck spaces normally reserved to store and maintain tactical aircraft.
    Adding an alternate engine makes the shipboard logistics even more
    challenging as it is not a one-for-one exchange.
        General Amos. The JSF engine is the largest tactical fighter engine
    in size and overall logistics footprint (LFP) in the history of DOD. In
    comparison to the Model F414 engine of the F/A-18E/F, the F135 engine
    of an F-35 is approximately twice its size. While the performance of
    the F135 engine brings significant performance gains and warfighting
    advantage for the JSF, it also presents a logistical challenge for all
    the Services, which perhaps is most pronounced in the Navy and Marine
    Corps, whose aircraft for expeditionary operations are housed in
    already constrained spaces aboard L-class amphibious shipping and CVN
    aircraft carriers.
        The Navy has indicated that the implementation of two JSF engines
    onboard aircraft carriers is suboptimal due to increased operational
    LFPs. Both JSF engines are currently too large to fit within the
    aviation bulk storage or jet shop, and so there is a resulting LFP
    challenge posed to existing hangar deck space. The LFP problem
    compounds in cases where both the F135 and F136 engines would be afloat
    on the same ship given that each engine has unique support equipment
    and tools, increasing the required LFP. Storing and supporting two
    engines would negatively affect hangar bay aircraft spotting and
    maintenance operations.

                         EXPEDITIONARY FIGHTING VEHICLE

        194. Senator Cornyn. General Amos, the fiscal year 2012 DOD budget
    request seeks to halt the EFV program. It is my understanding that, in
    its place, the Marine Corps would pursue three separate acquisition
    efforts: (1) the creation of a New Amphibious Vehicle; (2) the service
    life extension and improvement of the AAV; and (3) the acceleration of
    the MPC. Please list the order of priority on these three efforts? What
    is your general vision for these efforts and how they will complement
    each other?
        General Amos. As we move forward, we intend to mitigate risks
    associated with a new vehicle program and to maximize value by using an
    integrated acquisition portfolio approach. This approach will have
    three efforts: (1) an acceleration of the planned procurement of MPC;
    (2) investment in a SLEP and upgrades for a portion of the existing
    AAVs; and (3) the development of a new ACV.
        From an investment perspective and understanding the imperative for
    a modern amphibious vehicle capability, the ACV emerges as our priority
    effort. From the perspective of current operations and near-term
    relevance, the AAV SLEP is a near-term operational priority. We must
    upgrade a portion of the current inventory of AAVs now in order to
    provide a more survivable capability until the ACV is fielded. The
    complementary capability to achieve greater protection for our forces
    is the MPC.
        The ACV and the MPC represent the modern and enduring capability
    solution. The ACV will provide the surface amphibious assault
    capability and will be the heavy armored combat vehicle during
    sustained operations ashore. The MPC will provide armored mobility for
    the reinforcing element of the amphibious assault and also will provide
    armor protected mobility during sustained operations ashore. As the MPC
    is a wheeled vehicle, we envision it as a versatile platform capable of
    employment across the range of military operations and in urban
    settings. It will incorporate the high levels of underbody protection
    needed in an irregular warfare environment. Together, the ACV and MPC
    will satisfy our lift requirement to support 12 Infantry Battalions--8
    Battalions supported by ACV and 4 by MPC.

                                 SHIP RECYCLING

        195. Senator Cornyn. Secretary Mabus and Admiral Roughead, Navy
    ship recycling creates local jobs in places like South Texas, provides
    materials for construction, stimulates local economies, and provides
    the government with economic incentive and a best value solution. In
    the last year, the Navy has released seven ships for recycling.
    However, in the fiscal year 2012 budget request, only one Navy ship is
    slated for recycling. At a time when Congress is looking to maximize
    each and every taxpayers' dollar, how much funding would go to maintain
    the Navy's so-called ghost Fleet under the fiscal year 2012 budget
    request?
        Mr. Mabus. The fiscal year 2012 budget request for conventionally
    powered ship disposal focuses on the dismantling of the aircraft
    carrier ex-Forrestal (AVT-59). The Navy also plans to dismantle other
    ships under sales contracts solicited through the General Services
    Administration (GSA) for combatant ships and the Maritime
    Administration (MARAD) for merchant-type vessels. Using the budget for
    ship disposal, the Navy will continue to provide full-time, on-site
    surveillance of ship dismantling awarded under sales contracts.
        The fiscal year 2012 budget request for conventionally powered ship
    disposal focuses on the dismantling of the aircraft carrier ex-
    Forrestal (AVT-59). However, the Navy also plans to dismantle non-
    carriers under sales contracts solicited through GSA for combatant
    ships and the MARAD for merchant-type vessels. Using the budget for
    ship disposal, the Navy will continue to provide full-time, onsite
    surveillance of ship dismantling awarded under sales contracts.
        As of March 30, 2011, the Navy's inventory of conventionally-
    powered inactive ships consists of 49 ships. Of this number, 14 are
    designated for dismantling, consisting of 4 aircraft carriers, 6
    combatant ships, and 4 merchant-type ships. Of the remaining inventory,
    10 are retention assets for possible future reactivation, 11 are
    designated for foreign military transfer, 3 are logistic support assets
    to support the Active Fleet, 7 are available for donation as a museum/
    memorial, and 4 are designated as targets for Fleet training exercises.
        The fiscal year 2012 budget is $10.6 million for operation of the
    government-owned, contractor-operated inactive ship maintenance
    facilities at Philadelphia, PA, Bremerton, WA, and Pearl Harbor, HI;
    the maintenance of those inactive ships in conformance with
    environmental laws and CNO policies; and the maintenance of eight Navy-
    owned vessels at MARAD's Beaumont, TX, Reserve Fleet and two Navy-owned
    vessels at MARAD's Suisun Bay, CA, Reserve Fleet.
        Admiral Roughead. The fiscal year 2012 budget is $10.6 million for
    operation of the government-owned, contractor-operated inactive ship
    maintenance facilities at Philadelphia, PA, Bremerton, WA, and Pearl
    Harbor, HI, and the maintenance of eight Navy-owned ships at MARAD's
    Beaumont, TX, Reserve Fleet and two Navy-owned ships at MARAD's Suisun
    Bay, CA, Reserve Fleet. The maintenance of those inactive ships is in
    conformance with environmental laws and CNO policies.
        As of March 30, 2011, the Navy's inventory of conventionally-
    powered inactive ships consists of 49 ships. Of this number, 14 are
    designated for dismantling, consisting of 4 aircraft carriers, 6
    combatant ships, and 4 merchant-type ships. Of the remaining inventory,
    10 are retention assets for possible future reactivation, 11 are
    designated for foreign military transfer, 3 are logistic support assets
    to support the Active Fleet, 7 are available for donation as a museum/
    memorial, and 4 are designated as targets for Fleet training exercises.

        196. Senator Cornyn. Secretary Mabus and Admiral Roughead, would it
    not be more cost-effective for the Navy to release more ships for
    recycling in the near future?
        Mr. Mabus and Admiral Roughead. The Navy must reduce the inactive
    ships inventory in a cost-effective manner while maintaining strict
    compliance with environmental and occupational safety regulations.
    Maintaining ships in the inactive inventory drains fiscal resources
    while not contributing to operational readiness. Of the 14
    conventionally-powered ships designated for dismantling 4 carriers and
    2 non-carriers are ready for solicitation. The Navy is actively
    pursuing getting these six ships under contract for dismantlement.
        The Navy is currently soliciting the dismantling of ex-Saratoga
    (CV-60), the first Forrestal-class aircraft carrier to be dismantled.
    Forrestal-class aircraft carriers have classified side protection
    systems in the structure of the hulls, requiring a dismantling
    contractor to obtain a confidential facility security clearance, its
    employees must be U.S. citizens, and its employees having access to
    classified areas of the ship must obtain confidential security
    clearances. The Navy will incorporate lessons learned from the results
    of this solicitation into plans for the dismantling of three additional
    aircraft carriers currently designated for dismantling. The request for
    proposal for dismantling ex-Saratoga (CV-60) is anticipated to be a
    fiscal year 2011 award utilizing fiscal year 2011 O&MN budgeted
    funding.
        Among the 10 non-carriers in the inventory that are designated for
    dismantling, 2 ships recently completed disposal preparations
    (including equipment stripping) and are ready for solicitation. The
    remainder are not yet ready for solicitation; two were recently removed
    from active service and are completing inactivation work; four are
    undergoing equipment stripping to support Active Fleet requirements;
    one was recently redesignated from a logistic support asset and is
    undergoing disposal preparations; and one is subject to a recently
    executed Memorandum of Agreement with the Advisory Council on Historic
    Preservation addressing stipulations to mitigate the adverse effects of
    the Navy's plan to dismantle the ship.
        A 5-year Indefinite-Delivery, Indefinite Quantity (IDIQ) contract
    (non-carrier) expired in July 2010. The Navy is developing contracting
    strategies for dismantling of additional non-carrier inactive ships,
    utilizing GSA sales contracting officers for combatant ships and MARAD
    sales contracting for non-combatant ships. Agreements with GSA and
    MARAD are not yet finalized.
        As of March 30, 2011, the Navy's inventory of conventionally-
    powered inactive ships consists of 49 ships. The inactive ships
    inventory at the end of fiscal year 2012 is projected to be 42. This is
    a significant reduction from the peak of nearly 200 inactive ships in
    1997 and considering the additions to the inventory resulting from ship
    decommissionings since 1997.
        Of the current inventory of 49 ships, 14 are designated for
    dismantling, 10 are retention assets for possible future reactivation,
    11 are designated for foreign military transfer, 3 are logistic support
    assets to support the Active Fleet, 7 are available for donation as a
    museum/memorial, and 4 are designated as targets for Fleet training
    exercises.

        [Whereupon, at 12:44 p.m., the committee adjourned.]

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                   2012 AND THE FUTURE YEARS DEFENSE PROGRAM

                                  ----------

                            THURSDAY, MARCH 17, 2011

                                           U.S. Senate,
                                   Committee on Armed Services,
                                                        Washington, DC.

                          DEPARTMENT OF THE AIR FORCE

        The committee met, pursuant to notice, at 9:34 a.m., in
    room SD-G50, Dirksen Senate Office Building, Senator Carl Levin
    (chairman) presiding.
        Committee members present: Senators Levin, Lieberman,
    Akaka, Nelson, Udall, Hagan, Begich, Manchin, Shaheen,
    Blumenthal, McCain, Inhofe, Sessions, Chambliss, Brown,
    Portman, Ayotte, and Collins.
        Committee staff members present: Richard D. DeBobes, staff
    director; and Leah C. Brewer, nominations and hearings clerk.
        Majority staff members present: Jonathan D. Clark, counsel;
    Madelyn R. Creedon, counsel; Creighton Greene, professional
    staff member; Jessica L. Kingston, research assistant; and
    Jason W. Maroney, counsel.
        Minority staff members present: David M. Morriss, minority
    staff director; Christian D. Brose, professional staff member;
    Pablo E. Carrillo, minority investigative counsel; Daniel A.
    Lerner, professional staff member; and Christopher J. Paul,
    professional staff member.
        Staff assistants present: Christine G. Lang, Brian F.
    Sebold, and Breon N. Wells.
        Committee members' assistants present: Christopher Griffin,
    assistant to Senator Lieberman; Nick Ikeda, assistant to
    Senator Akaka; Ann Premer, assistant to Senator Nelson; Patrick
    Day, assistant to Senator Webb; Casey Howard, assistant to
    Senator Udall; Michael Harney, assistant to Senator Hagan;
    Joanne McLaughlin, assistant to Senator Manchin; Anthony
    Lazarski, assistant to Senator Inhofe; Lenwood Landrum,
    assistant to Senator Sessions; Clyde Taylor IV, assistant to
    Senator Chambliss; Joseph Lai, assistant to Senator Wicker;
    Charles Prosch, assistant to Senator Brown; and Brad Bowman,
    assistant to Senator Ayotte.

           OPENING STATEMENT OF SENATOR CARL LEVIN, CHAIRMAN

        Chairman Levin. Good morning, everybody.
        I want to welcome our witnesses here today, Secretary
    Donley and General Schwartz. They are coming back to the
    committee this morning to testify on the plans and programs of
    the Air Force and our review of the fiscal year 2012 annual
    budget and Overseas Contingency Operations (OCO) requests.
        Gentlemen, please extend, on behalf of the committee, our
    gratitude to the men and women of the Air Force and their
    families for the many sacrifices that they have made on behalf
    of our Nation. Thanks to both of you for your long careers of
    leadership and service.
        We are truly mindful this morning, as we meet here, of the
    terrible devastation that the Japanese people have experienced
    with the earthquake and the tsunami that struck that nation.
    Our thoughts and our prayers go out to them. Such incidents
    remind us just how indiscriminate natural disasters can be, and
    they provide us the opportunity to once again demonstrate
    America's commitment to support our valued ally in the Pacific.
        The Department of Defense (DOD) has already been providing
    support to the Japanese people, and that effort will increase
    over the coming weeks. We know that the Air Force has played a
    critical role in supporting previous relief efforts around the
    world, and that is the case again in Japan.
        We applaud those efforts. This committee stands ready to
    work with DOD to ensure that the Department, and the Air Force
    as part of that Department, is able to continue to provide
    support to this critical humanitarian disaster response effort
    in the weeks and the months ahead.
        We are also very mindful that DOD maintains a number of
    facilities in Japan, including Air Force bases in Yokota,
    Misawa, and Kadena. These bases provide opportunities for U.S.
    Forces to support the government and the people of Japan. But
    we are also concerned about the safety of our own service
    personnel and their families that are stationed there, and we
    hope that you will tell us more about the situation this
    morning from your perspective and based on what you know.
        There is a number of ongoing critical issues that confront
    the Air Force. We know that the Air Force is providing forces
    to the U.S. Central Command's (CENTCOM) war efforts in a number
    of traditional roles but is also providing airmen in support of
    land component tasks. So, we expect this morning to hear about
    how the Air Force is supporting these current operations while
    preparing its forces to deal with other demands and with future
    demands.
        This committee has sought to ensure that our combatant
    commanders have what they need to succeed in those conflicts,
    including technologies to counter improvised explosive devices
    and intelligence, surveillance, and reconnaissance (ISR)
    assets. This committee will continue to support the needs of
    our warfighters in those conflicts.
        I would note that, in particular, the new budget will
    continue the expansion of ISR orbits within the theater, with
    the goal of achieving 65 orbits in fiscal year 2013. Each orbit
    consists of two to three air vehicles and the appropriate
    ground support equipment necessary to operate them.
        The committee has been pressing DOD in general and the Air
    Force in particular to field more unmanned aerial vehicles
    (UAV) for at least the last 15 years and has regularly provided
    additional funds for that purpose. I should note the fact that
    General Schwartz has been taking extra steps to accelerate that
    fielding by altering Air Force approaches to pilot training and
    accelerating production of Predator and Reaper UAVs.
        The Air Force has included funding in its fiscal year 2012
    budget request to begin a new bomber program that will be both
    conventional and nuclear capable. The goal is to utilize mature
    technologies to increase the likelihood that the new bomber is
    fielded on time and on budget.
        In addition, the Air Force has proposed to reduce a small
    number of B-1 bombers, while modernizing and sustaining all
    three bomber aircraft, the B-1, B-2, and B-52. The committee
    needs a detailed explanation of this new proposal to develop a
    new long-range strike system.
        After a significant number of failures a few years ago, the
    Air Force has refocused on managing nuclear forces. The Global
    Strike Command is now in place to do that. There has been a lot
    of hard work on the part of dedicated professionals, but recent
    incidents have shown that the force structure itself needs
    attention. We are interested in the plans to improve the
    critical nuclear infrastructure.
        The Air Force has made some recent changes to deal with the
    management of space programs, including bringing acquisition of
    space programs under the regular Air Force acquisition process.
    In reviewing the cost of buying space programs, however, it has
    become clear that a different approach needs to be developed to
    prevent these programs from becoming unaffordable.
        The committee has encouraged the Air Force to look at ways
    to buy space systems that reduce cost and technical risks in
    these very complicated systems. To that end, the Air Force is
    evaluating a variety of approaches that might achieve the cost
    savings and program stability goals, and we look forward to
    receiving a proposal and any legislation needed to implement
    it. I expect that we will be hearing more about the Air Force's
    current thinking on that issue as well this morning.
        Another acquisition challenge, which is facing the Air
    Force, is the stretching out of production lines which delay
    modernization programs. Foremost among these is the Joint
    Strike Fighter (JSF) program.
        Given recent identification of additional troubles and
    delays with the system design and demonstration phase of the
    JSF program by the new program manager, the Air Force is
    apparently responding by extending the service lives for
    existing fighters, including the F-16 and the F-15 fighter
    fleets, and we need to hear more about that.
        One acquisition program that appears to be moving forward
    as planned is the Strategic Tanker Modernization Program. The
    Air Force determined a winner of the tanker competition in late
    February, and apparently, the other bidder is not protesting
    the contract award.
        We look forward to receiving more details from the Air
    Force this morning on its plans for executing that program.
        Underlying all of these major acquisition concerns is an
    acquisition management issue. Secretary Donley, we hope that
    you will tell us this morning about your efforts to bolster the
    numbers within and the quality of the Air Force Acquisition
    Corps.
        Part of improving the acquisition process is an extensive
    effort to hire additional acquisition personnel, including
    additional technically qualified personnel, so that the Air
    Force will be a smart buyer of weapon systems and provide
    better oversight of the contractors. We would also like to hear
    how that effort is progressing and whether or not it has been
    impacted by recent hiring and salary freezes.
        The Weapon System Acquisition Reform Act (WSARA) of 2009
    has required DOD to make significant changes in its regulations
    and procedures governing the acquisition system. But this
    legislation will fully address past problems only if there are
    concerted efforts within the executive branch to implement that
    legislation and improve past behavior within DOD.
        We look forward to hearing how the Air Force is proceeding
    to implement the provisions of the WSARA.
        On the subject of current operations, a significant
    readiness concern continues to be the inadequate levels at
    which the Air Force funds their weapon system sustainment
    accounts. For several years now, the Air Force has funded these
    accounts at less than 100 percent of the stated requirement. It
    is my understanding that the fiscal year 2012 budget request
    only provides for meeting 84 percent of the sustainment
    requirement, even if we include the OCO funding in the base
    budget request.
        During last year's budget review cycle, this committee
    authorized additional resources for sustainment that were
    identified as an unfunded requirement by General Schwartz. So
    we will be interested in hearing from our witnesses what
    maintenance and readiness shortfalls exist, if any, for the Air
    Force and what amount of funding would be needed to address any
    potential backlogs, along with any plans and cost to address
    readiness shortfalls during the budget year and the rest of the
    Future Years Defense Program (FYDP).
        Senator McCain.

                    STATEMENT OF SENATOR JOHN McCAIN

        Senator McCain. Thank you, Mr. Chairman.
        I want to thank the witnesses for being here this morning
    and thank you for their outstanding service.
        I had planned this morning to ask questions concerning the
    tanker program and the recent decision there, our continued
    frustration concerning the F-35 JSF--I understand there is
    another setback because of an oil leak--the Advanced Extremely
    High Frequency Satellite program, and the Global Hawk program
    and others.
        But I am going to seize this opportunity this morning to
    try to find out what the capability of the U.S. Air Force is in
    order to impose a no-fly, no-drive program, course of action
    over Libya.
        We are seeing the momentum and the success of Muammar
    Gaddafi and his killers massacring people while we sit idly by.
    One of the arguments used is that we somehow can't do it,
    despite the fact that General Odierno just a few days ago said
    that it would take a very short period of time in order to
    impose a no-fly zone.
        I want to know about the assets we have in the region, our
    bases at Aviano and in Sicily, and our capabilities there. Let
    us have no illusion about what is happening in Libya.
        This morning's L.A. Times carries a story concerning the
    government troops' attack on Ajdabiya, one of the towns closer
    to Benghazi. A woman said, ``The shelling went on until 3 a.m.
    When it stopped, we saw people dead in the streets and cars
    destroyed. There were snipers on rooftops with red lasers on
    their guns, and they shot teenage boys who raised their arms.''
        A massacre is about to take place if the Libyan forces take
    Benghazi. I think the American people deserve to know what
    course of action we are going to take. I understand the United
    States finally, following the leadership of France and Britain,
    is going to the United Nations (U.N.) Security Council today.
        I think the American people need to know what our
    capabilities are. Obviously, the imposition of such a
    restriction or attempt to stem the tide of Gaddafi and his
    murderers is dependent upon our air assets, as well as our
    naval assets.
        So when it comes time for my questioning, Mr. Chairman, I
    will want to know from the Chief of Staff and the Secretary
    what we can do and how quickly in order to try to prevent at
    the 11th hour the fall of Benghazi, which would effectively
    allow Gaddafi to obtain an overwhelming victory when the
    President of the United States' stated policy is that Gaddafi
    must go.
        So I thank the witnesses. General, I hope you are prepared
    to give us a little straight talk on what we can do, if
    necessary, to prevent the massacre that is taking place as we
    speak.
        Thank you, Mr. Chairman.
        Chairman Levin. Thank you very much, Senator McCain.
        I understand we have a briefing also for all Senators this
    afternoon, which will involve DOD personnel, as well as State
    Department personnel. I don't know that the location has been
    set, but I believe the time is 2 p.m.
        Secretary Donley?

    STATEMENT OF HON. MICHAEL B. DONLEY, SECRETARY OF THE AIR FORCE

        Secretary Donley. Thank you, Chairman Levin, Senator
    McCain, members of the committee.
        It is a pleasure to be with you today, representing more
    than 690,000 Active Duty, Guard, Reserve, and civilian airmen.
    I am also honored to be here with my teammate and a tireless
    public servant, General Norty Schwartz.
        We are pleased to report that America's Air Force continues
    to provide the Nation's unmatched global vigilance, reach, and
    power as part of the joint team, with an uncompromising
    commitment to our core values of integrity, service before
    self, and excellence in all we do.
        We are requesting $150 billion in our baseline budget for
    fiscal year 2012 and $16 billion in the OCO supplemental
    appropriation to support this work. This budget represents a
    careful balance of resources among Air Force core functions
    necessary to implement the President's national security
    strategy and between today's operations and investment for the
    future.
        Before discussing our fiscal year 2012 budget request, I
    would like to address some unfinished business from fiscal year
    2011 and also set in context the changes in your Air Force over
    the last several years.
        First, operating without a defense appropriation bill in
    fiscal year 2011 is having a significant impact on our Air
    Force. The decision to extend the continuing resolution at
    fiscal year 2010 levels through the remainder of this year will
    delay our ability to reach and sustain the Secretary of
    Defense's directed goal of 65 MQ-1/9 combat air patrols by 2013
    in support of operations in Afghanistan.
        It will cause a production break and a likely increase in
    the unit cost of the Wideband Global Satellite Communications
    Satellite, the F-15 radar modernization, and other programs.
    Deeper reductions to our modernization programs would be
    required to fund over $4 billion in must-pay bills for urgent
    operational needs in Afghanistan and Iraq, for military
    healthcare, and the military pay raise of 1.4 percent, which
    Congress authorized but has not funded.
        Without fiscal year 2011 appropriations, we face delay or
    cancellation of some depot maintenance, weapon system
    sustainment, and other day-to-day activities in order to
    prioritize our most critical needs under the lower funding
    levels in a full-year continuing resolution.
        Finally, fiscal year 2011 appropriations are also required
    for 75 military construction projects now on hold, which
    support ongoing operational needs and improve the quality of
    life for airmen and their families. Passing a fiscal year 2011
    defense appropriations bill is essential to avoid these severe
    disruptions, and we appreciate the efforts currently underway
    by members of this committee and others to resolve this
    situation.
        Over the past decade, the Air Force has substantially
    reshaped itself to meet the immediate needs of today's
    conflicts and position itself for the future. While we have
    grown in some critical areas, it has been at the expense of
    others.
        We have added ISR capacity with 328 remotely piloted
    aircraft (RPA) and over 6,000 airmen to collect, process,
    exploit, and disseminate intelligence. We have added over 17
    aircraft and over 2,400 airmen to bolster special operations
    capacity necessary in the counterinsurgency operations we now
    face.
        We have added over 160 F-22s now and 120 C-17s to our
    inventory. We have funded over 30 satellites and added 2,200
    airmen for critical nuclear and cyber operations and
    acquisition support.
        In this same period, however, we have retired over 1,500
    legacy aircraft. We have canceled or truncated procurement of
    major acquisition programs. We have shed manpower in career
    fields less critical for the fight and deferred much-needed
    military construction in order to balance these capabilities
    within the resources available.
        In all, during the last 7 years, the size of the Active
    Duty Air Force has been reduced from 359,000 in 2004 to about
    333,000 today. The Air Force's baseline budget, when adjusted
    for inflation and setting aside the annual wartime supplemental
    appropriations, has remained flat.
        Looking ahead, we face a multiyear effort to recapitalize
    our aging tanker, fighter, bomber, and missile forces; to
    continue modernizing critical satellite constellations and meet
    dynamic requirements in the cyber domain; and replace aging
    airframes for pilot training and presidential support.
        We continue to recognize the requirement for fiscal
    constraint and are committed to remaining good stewards of
    every taxpayer dollar, improving management and oversight at
    every opportunity. The fiscal year 2012 budget request
    incorporates over $33 billion in efficiencies across the FYDP,
    which will be shifted to higher priority combat capability by
    reducing overhead costs, improving business practices, and
    eliminating excess troubled or lower priority programs.
        By consolidating selected organizational structures,
    improving our processes in acquisition, procurement, and
    logistics support, and streamlining operations, we have been
    able to increase investment in core functions, such as global
    precision attack, integrated ISR, and space and air
    superiority, reducing risk by adding tooth through savings in
    tail.
        We are fully committed to implementing these planned
    efficiencies, and I have already assigned responsibilities to
    senior officials and put in place the management structure to
    oversee this work and track progress on a regular basis. Having
    faced the need to reshape our force structure and capabilities
    within constrained manpower and resources over the past several
    years, we do not view the current need for efficiencies as a
    singular event, but as an essential and continuing element of
    prudent management in the Air Force.
        Our investment priorities remain consistent with minimizing
    risk and maximizing effectiveness and efficiency across the
    full spectrum of potential conflict. Proceeding with
    development and production of the KC-46 tanker aircraft,
    implementing the JSF restructuring, meeting the combatant
    commanders' need for more ISR, investing in the long-range
    strike family of systems, including a new penetrating bomber,
    and enhancing space control and situational awareness all
    remain critical capabilities for both today's and tomorrow's
    Air Force.
        In addition to these investments, we will continue to
    address challenges in readiness--in particular the slow, but
    persistent decline in materiel readiness most notable in our
    nondeployed forces--and the personnel challenges across 28
    stressed officer and enlisted career fields, both of which are
    the result of today's high operational tempo.
        Of course, we will continue to support our Active, Guard,
    Reserve, and civilian airmen and their families with quality
    housing, healthcare, schools, and community support.
        With respect to healthcare, I would like to convey the Air
    Force's support for DOD's TRICARE reforms that will modestly
    increase premiums for working-age retirees, premiums that have
    not changed since they were initially set in 1995. Going
    forward, we must continue to seek and develop reforms in the
    benefits that our men and women in uniform earn to make them
    economically sustainable over the long term.
        Mr. Chairman, good stewardship of the Air Force is a
    responsibility that General Schwartz and I take very seriously.
    We remain grateful for the continued support and service of
    each member of this committee, and we look forward to answering
    any questions you may have.
        Thank you.
        [The joint prepared statement of Secretary Donley and
    General Schwartz follows:]

     Joint Prepared Statement by Hon. Michael B. Donley and Gen. Norton A.
                                 Schwartz, USAF

                                  INTRODUCTION

        The United States faces diverse and complex security challenges
    that require a range of agile and flexible capabilities. From the
    ongoing conflicts in Afghanistan and Iraq, to potential confrontation
    with aggressive state and non-state actors, to providing humanitarian
    assistance, the U.S. Air Force continues to provide capabilities across
    the full spectrum of potential military operations. The Air Force's
    fiscal year 2012 budget request aims for balance and versatility to
    meet the demands of this environment. We believe the request enables
    our efforts to prevail in today's wars, prevent and deter conflict, and
    prepare to defeat adversaries across the range of military operations--
    all the while preserving and enhancing the All-Volunteer Force.
        We remain mindful of our Nation's budgetary challenges and fiscal
    constraints, because fiscal responsibility is a national security
    imperative. This environment requires that we balance our capabilities
    between current combat operations and the need to address emerging
    threats and challenges. We continue to pursue cost-effective systems
    that leverage existing capabilities and maximize interoperability and
    integration of legacy and future systems. The commitment of the Air
    Force to collectively discern, access and provide tailored and scalable
    effects with Global Vigilance, Reach, and Power virtually anywhere in
    the world is reflected in our acquisition priorities. These priorities
    are:

             Tanker Recapitalization (KC-X);
             Joint Strike Fighter (F-35) Restructure and F-16
            Service Life Extension Program (SLEP);
             Intelligence, Surveillance, and Reconnaissance (ISR)
            Systems;
             Long-Range Strike Family of Systems; and
             Space Systems and Launch Capability Acquisition
            Strategy.

        Global Vigilance is the ability to provide surveillance around the
    world. As the demand for ISR continues to grow, the Air Force is
    aggressively fielding enhanced ISR capability and capacity across the
    widest range of military operations to counter threats and defeat our
    adversaries. The Air Force will continue to enhance space control and
    situational awareness capabilities, as well as space management, to
    ensure we operate effectively in the increasingly competitive,
    congested and contested space domain. This includes implementing the
    Evolutionary Acquisition for Space Efficiency (EASE) concept to drive
    down costs, improve stability in the fragile space industrial base,
    invest in technology that will lower risk for future programs, and
    achieve efficiencies through block buys of satellites. There is also an
    ongoing collaboration between the Air Force, the National
    Reconnaissance Office (NRO) and the National Aeronautics and Space
    Administration (NASA) to maintain a healthy industrial base to meet
    government launch and range requirements in an efficient manner.
        Global Reach is the ability to project capability responsively and
    advantageously without regard to distance. Air Force mobility assets
    are essential to Joint, Interagency and Coalition operations in peace
    and war as we provide critical supplies and personnel through strategic
    and tactical delivery--airlift and airdrop. Air refueling aircraft play
    an integral role by providing reach and persistence for aircraft to
    operate inter-theater and intra-theater, alike. As such, the
    procurement of the KC-X remains the top acquisition and
    recapitalization priority for the Air Force.
        Global Power is the ability to hold at risk any target in the
    world. The Air Force must continue to modernize and recapitalize our
    aircraft inventory to remain effective against global and regional
    competitors as they continue to modernize and improve their own air
    defense capabilities and harden valued targets. We will continue to
    work with Congress to enhance capabilities in our existing fighter and
    bomber fleets to mitigate delays in the F-35 development and
    procurement programs. One key to that mitigation effort is a focused F-
    16 SLEP. We must sustain our ability to consistently hold any target on
    the planet at risk with the development of a Long-Range Strike Family
    of Systems capability--including a new penetrating bomber--to create
    desired effects across the full range of military operations in both
    permissive and contested environments. Lastly, a multi-faceted effort
    is underway to enhance our air superiority legacy fighters, maximize
    the capabilities of the F-22 fleet, invest in preferred air-to-air
    munitions, and optimize our electronic warfare systems.
        The Air Force must take the necessary steps today that will allow
    future generations to continue to provide consistent, credible, and
    effective air, space, and cyber capabilities on which our Nation
    depends. Our ability to do so is constrained by the increasing costs to
    design and build platforms and by the accelerating costs of personnel
    benefits and other must-pay operational bills in a particularly
    challenging budget environment. We will ensure we maximize combat
    capability out of each taxpayer dollar by identifying waste,
    implementing efficiencies, pursuing continuous process improvement
    initiatives and making smart investments. We will provide the necessary
    capability, capacity and versatility required to prevail today and in
    the future.
        Lastly, our fiscal year 2012 budget request recognizes the need to
    properly manage our force structure. We recognize that our most
    valuable assets--our people--are critical to achieving our broadest
    strategic goals, and our near- and far-term mission success is
    inextricably linked to the overall well-being of our airmen and their
    families.

                             CONTINUING RESOLUTION

        Operating without a defense appropriations bill in fiscal year 2011
    is having a significant impact on the Air Force. Under a Continuing
    Resolution (CR), we are unable to raise procurement to requested levels
    in several critical areas. Constraining MQ-9 procurement to 24 aircraft
    versus the 48 requested will delay our ability to reach the Secretary
    of Defense's directed goal of 65 MQ-1/9 Combat Air Patrols (CAPs) by
    2013 in support of ongoing operations in Afghanistan. The inability to
    initiate a contract for the Wideband Global SATCOM (WGS)-7 satellite
    will cause a production break and a likely increase in unit cost.
    Production breaks and delayed procurements will also negatively affect
    the Joint Air-to-Surface Standoff Missile (JASSM), F-15 active
    electronically scanned array (AESA) radar, F-15 APG 63 radar, and other
    programs. In addition to these impacts, deeper reductions to our
    modernization programs would be required to fund over $3 billion in
    must-pay bills for urgent operational needs in Afghanistan and Iraq,
    military healthcare, and the military pay raise of 1.4 percent, which
    was authorized by Congress and is being implemented, but was not
    funded. Fiscal year 2011 appropriations are also required for 75
    military construction (MILCON) projects, now on hold, which support
    ongoing operational needs and improve the quality of life for Air Force
    personnel and their families. Lastly, the Air Force would have to delay
    or cancel some depot maintenance, weapon system sustainment and other
    day-to-day activities in order to prioritize our most critical needs
    under the lower funding levels in a full year CR.
        In summary, continuing the CR far beyond March 4 would severely
    impact program and budget execution in the Air Force, delaying
    modernization and causing significant restructuring and potential cost
    increases to many acquisition programs, and creating larger backlogs
    for maintenance and other operations. Passing a fiscal year 2011
    defense appropriations bill is essential to avoid these severe
    disruptions.

                         EFFICIENCIES AND ENHANCEMENTS

        In June 2010, the Secretary of Defense challenged the Services to
    increase funding for mission activities by identifying efficiencies in
    overhead, support and other less mission-essential areas. The
    efficiency target for the Air Force was $28.3 billion across this
    Future Years Defense Program (FYDP). The Air Force is committed to
    enhancing capabilities by reducing expenses allocated to overhead and
    support functions, while shifting resources to modernization and
    readiness programs.
        As part of the fiscal year 2012 budget, the Air Force exceeded our
    efficiency target by $5 billion and identified $33.3 billion in
    efficiencies in an effort to make resources available to better support
    warfighter and readiness programs across the FYDP. Examples of these
    efficiencies include:

             Consolidating 3 Numbered Air Forces with colocated
            Major Command staff and consolidating the activities of 4 Air
            and Space Operations Centers into 2, thereby achieving a
            redistribution of 347 military authorizations (228 in fiscal
            year 2012 and 119 in fiscal year 2013) across the FYDP and
            eliminating 212 civilian authorizations beginning in fiscal
            year 2013 which will save $100.1 million across the FYDP;
             Consolidating installation support management to
            improve Air Force-wide standardization and prioritization;
             Reallocating 5,600 active duty billets over the FYDP
            from lower priority support functions to higher priority,
            growth areas;
             Saving more than $3 billion from anticipated growth in
            Weapon System Sustainment (WSS) portfolio efficiencies across
            the FYDP by reviewing operational requirements, depot processes
            and the sustainment of the supply chain without degrading
            operational capabilities or support to the warfighter;
             Reducing fuel consumption within the Mobility Air
            Forces by leveraging proven commercial aviation practices for
            flight planning and weight reduction, and implementing other
            initiatives to save $715 million (net) across the FYDP;
             Reducing acquisition costs by consolidating services,
            scrutinizing contracts, reducing contract support, and more
            efficiently using resources to deliver capabilities and support
            to the warfighter;
             Reducing information technology costs by more than
            $1.2 billion over the FYDP by adopting DOD-level Enterprise
            Information Services including enterprise core services,
            consolidating and standardizing the network information
            technology infrastructure from nine Air Force and Air National
            Guard Regional Processing Centers to five centrally controlled
            centers, and migrating current and developmental applications,
            services and data to DOD-provided enterprise computing centers;
            and
             Improving our procurement of satellites with a new
            acquisition strategy which, subject to congressional approval,
            will lower procurement costs and stabilize the defense
            industrial base.

        The realization of these efficiencies allowed the Air Force to
    reallocate funding to modernize and recapitalize weapons systems,
    improve capabilities and enhance warfighter operations. Examples of
    these enhancements include:

             Investing in the Long-Range Strike Family of Systems,
            including a new penetrating bomber as a key component of the
            joint portfolio;
             Investing an additional $3.5 billion to fund the
            Evolved Expendable Launch Vehicles (EELV) program to the Office
            of the Secretary of Defense (OSD) Independent Cost Assessment,
            with the Department of Defense (DOD) committed to buying five
            boosters per year to meet national space launch requirements
            and stabilize the industrial base;
             Repurposing 5,600 active duty billets over the FYDP to
            support ISR capability, U.S. Pacific Command force structure
            requirements, Total Force Integration, the U-2 continuation,
            building partnership capacity, increasing support to the Air
            Force District of Washington UH-1N mission, among other
            increases;
             Procuring an additional 16 simulators for F-35 aircrew
            training bringing the total procurement to 30 simulators to
            ensure an effective training pipeline throughput and
            operational unit pilot proficiency and cost control;
             Recapitalizing the aging Special Operations Forces MC-
            130H/W aircraft;
             Improving the aircraft computer infrastructure of the
            B-52 to enable more rapid machine-to-machine retargeting;
             Enhancing combat capability of the F-15C and F-15E
            with additional AESA radars and electronic protection software
            upgrades;
             Continuing to fund the development of next-generation
            Global Positioning System (GPS) III Operational Control
            Segment;
             Researching and developing electronic protection and
            suppression of enemy air defense (SEAD) capabilities for the F-
            22;
             Transitioning MC-12W Liberty Project from Overseas
            Contingency Operations (OCO) funding into the Air Force
            baseline budget beginning in fiscal year 2013;
             Continuing maximized production of the MQ-9 Reaper to
            ensure delivery of 65 CAPs by the end of fiscal year 2013;
             Extending U-2 operations through fiscal year 2015 to
            ensure a smooth high-altitude transition; and
             Baselining the Air Sovereignty Alert program across
            the FYDP to solidify support to homeland security operations.

        The Air Force leadership recognizes the importance of achieving
    planned efficiencies to avoid future bills and a negative impact to our
    mission and our airmen. We are taking a long-term view of this
    initiative and will address our efficiency targets annually to further
    refine and identify follow-on opportunities. We assigned responsibility
    for initiatives to individual senior leaders who are developing their
    detailed implementation plans to oversee our efforts. Quarterly
    executive-level reviews will monitor plans and progress, and ensure
    that efficiency initiatives do not inadvertently impact readiness,
    mission performance, or quality of life for our airmen. Our continuous
    process improvement program, Air Force Smart Operations for the 21st
    Century (AFSO21), is well-established and provides our airmen with the
    tactics, techniques, and procedures to improve performance while
    achieving efficiencies.
        In order to ensure Air Force leadership has reliable and relevant
    financial information to monitor our efficiency goals, we are further
    emphasizing our work in Financial Improvement and Audit Readiness. In
    fiscal year 2012, the Air Force is dedicating $29 million to audit
    readiness and validation and $327 million to modernize our business
    systems.

                            PERSONNEL AND READINESS

        Mission effectiveness of the Air Force is linked to the overall
    well-being of our airmen and their families. The Air Force will
    continue to find innovative and efficient ways to provide and sustain
    programs that support our airmen and their families, including our
    critical civilian personnel. We must ensure programs and services
    foster a greater sense of community, strengthen a sense of belonging
    and value to the Air Force, and improve airman and family resiliency.
        As mission demands continue to evolve and budgets flatten, the Air
    Force is making key strategic choices to leverage the collective talent
    and experience of our Total Force. Through improved integration across
    the Total Force Enterprise of Active, Guard, and Reserve Forces, we are
    seeking greater Service-wide efficiencies and effectiveness to maximize
    combat capability for the joint warfighter. We are developing business
    case analyses to inform decisions on how best to structure Active and
    Reserve component relationships, especially in new areas. As missions
    such as cyber and dynamic battlefield ISR mature, so too will the Total
    Force investment in these areas.

    End Strength, Retention, and Recruiting
        The overall programmed Air Force end strength for fiscal year 2012
    is more than 690,000 personnel. This includes 332,800 active duty,
    71,400 Reserve, 106,700 Air National Guard, and more than 182,000
    civilian personnel. To support the efforts of our airmen and to recruit
    and retain the highest quality Air Force members, the fiscal year 2012
    budget request includes $30.2 billion in military personnel funding and
    a military pay raise in fiscal year 2012 of 1.6 percent.
        The retention rates in the Air Force are the highest they have been
    in 16 years and recruiting has also been successful. Therefore, the
    $626.6 million requested in the fiscal year 2012 budget for recruiting
    and retention bonuses is highly targeted. Bonuses are proposed for
    specific career fields with critical wartime skills including pilots,
    control and recovery, intelligence, contracting, security forces,
    health professionals, civil engineering, special operations, and
    explosive ordnance disposal.
        In addition, the current economy has slowed attrition from the Air
    Force and had the effect of increasing active duty manning above
    planned levels. As a result, the Air Force is making difficult, but
    fiscally responsible decisions to implement force management programs
    that allow us to remain within authorized end strength ceilings.
    Specifically, we continue to progress toward an active duty end
    strength goal of 332,800 by the end of fiscal year 2012. To address
    excess end strength, particularly in the officer force, we will reduce
    accessions, continue to waive Active Duty Service Commitment and Time
    in Grade requirements for voluntary separations and retirements,
    continue to conduct enlisted Date of Separation rollbacks, and
    institute involuntary separation and retirement programs for officers
    through Selective Early Retirement, Reduction in Force and Force
    Shaping boards. We will also work with OSD to seek additional
    legislative authority to help the Air Force meet end strength ceilings
    by the end of fiscal year 2012 and maintain the appropriate level in
    fiscal year 2013 and beyond.

    Civilian Workforce
        The Secretary of Defense has limited our civilian workforce to
    fiscal year 2010 levels, with limited growth allowed for specific
    priorities like the acquisition workforce. This policy will require
    significant changes to previously planned civilian growth. The Air
    Force will also conduct an enterprise-wide review of civilian personnel
    end strength to facilitate DOD's efforts for efficiencies and
    reinvestment possibilities.
    Contractor Reductions
        The Air Force is looking at the way we utilize the contract
    workforce as we answer the Secretary of Defense's challenge to find
    efficiencies and to reduce duplication, overhead, and excess, and
    reinforce our culture of efficiency and restraint across the Air Force.
    This will impact the service support contract workforce in the
    following areas:

             Reduce our staff support contractor workforce by 10
            percent per year, over the next 3 years in accordance with
            DOD's guidance with an estimated fiscal year 2012 savings of
            $127 million; and
             Reduce the funding for advisory studies by 25 percent
            from the fiscal year 2010 levels over the FYDP with an
            estimated fiscal year 2012 savings of $41 million.

        The Air Force identified two other areas that will result in
    reductions to its headquarters contract workforce and release resources
    for warfighter use. These include:

             Knowledge-based services estimated at $252 million in
            fiscal year 2012; and
             Program Management Administration estimated at $191
            million in fiscal year 2012.

    Man-Days
        Active Duty Operational Support days play a critical role in
    resourcing extended military operations. They allow for the active duty
    appropriation to pay for temporary use of National Guard and Reserve
    personnel to support military missions beyond the regular component's
    capability. In support of the Secretary of Defense's efficiency
    initiative, the Air Force reduces, by 1,250 work years, the Reserve
    component fiscal year 2012 man-day program that supports noncritical
    administrative and overhead activities.
        The demand for global mobility and related airlift support remains
    high in fiscal year 2012 as the Air Force will continue to support a
    large footprint in Afghanistan. The Air Force identified $1.4 billion
    to support fiscal year 2012 OCO requirements. Our reliance on the Total
    Force is by design, and we recognize and value the contributions of the
    members of the Reserve components who have performed tirelessly in
    support of our Nation. The Air Force will continue to prioritize
    Reserve component requirements prudently and in accordance with mission
    needs as we transition to a lower steady state tempo.

    Diversity
        The Air Force widened the aperture beyond traditional views of
    diversity, and defined it to include personal life experiences,
    geographic background, socioeconomic background, cultural knowledge,
    educational background, work background, language abilities, physical
    abilities, philosophical/spiritual perspectives, age, and more. We
    declared diversity a military necessity, as both a source of greater
    combat effectiveness and as means toward a force that more closely
    mirrors American society. Deliberate plans are being developed to
    attract, recruit, develop, and retain a more diverse force.
    Repeal of ``Don't Ask, Don't Tell''
        The Air Force will execute the plan established by OSD for the
    effective implementation of the repeal of section 654 of title 10 of
    the U.S.C., known as ``Don't Ask, Don't Tell.'' We are also developing
    strategic communications, and we will provide initial and sustainment
    education and training at all levels.

    Readiness
        With Air Force personnel deployed to more than 135 locations
    worldwide on an average day, we rely heavily on the Total Force.
    Currently, more than 37,000 airmen are deployed and more than 57,000
    are forward-stationed. In addition, approximately 134,000 airmen are
    directly supporting combatant commander requirements from their home
    stations daily. These airmen contribute in a variety of ways, to
    include operating the Nation's space and missile forces, processing and
    exploiting remotely collected ISR data, providing national intelligence
    support, operating and defending our networks, and executing air
    sovereignty alert missions.
        The Air Force has flown more than 419,000 sorties in support of
    Operations Iraqi Freedom and New Dawn and more than 244,000 sorties in
    support of Operation Enduring Freedom since September 11, 2001. During
    this time, we delivered over 6.3 million passengers and 3.3 million
    tons of cargo, employed almost 23,800 tons of munitions, flew more than
    15,750 personnel recovery sorties recording over 2,900 saves and 6,200
    assists, and transported more than 85,000 patients and more than 15,400
    casualties from the U.S. Central Command alone. In 2010, our airmen
    averaged approximately 400 sorties every day.
        This level of activity reflects our commitment to provide Global
    Vigilance, Reach, and Power in today's joint fight. However, our high
    operations tempo (OPTEMPO) has also had some detrimental effects on our
    overall readiness. Readiness for full spectrum military operations is a
    challenge for our combat air forces and some other limited-supply/high-
    demand aviation units. Since 2003, we have seen a slow but steady
    decline in reported readiness indicators. Our OPTEMPO since 2001 has
    produced lower deploy-to-dwell ratios for high-demand skills. At
    present, 19 enlisted and 9 officer career fields are ``stressed.'' We
    have improved funding to WSS; however, sustainment challenges continue
    as we field new weapon systems and balance contract versus organic
    sources of repair. To address these readiness issues, we must keep
    aircraft recapitalization and procurement programs on track and
    continue managing our force to ensure the right numbers and mix of
    skills in our highly tasked and highest priority mission areas.

                            AIR FORCE CORE FUNCTIONS

        The Air Force Core Functions, assigned by the Secretary of Defense
    and recognized by the joint community, provide a framework for
    balancing investments across Air Force capabilities. While this
    document describes the Core Functions individually, we recognize the
    inherent interdependence of these capabilities within the Air Force,
    the Joint Force, and throughout the U.S. Government. When considered
    together, the Core Functions encompass the full range of Air Force
    capabilities. The budget request in this posture statement provides an
    appropriate balance of investment across our Core Functions. The table
    below depicts the fiscal year 2012 budget request and the projected
    allocation of resources across the FYDP, by Air Force Core Function.

                            [In billions of dollars]
    ------------------------------------------------------------------------
                                                   Fiscal Year
              Air Force Core Function                2012 PB         FYDP
                                                     Request
    ------------------------------------------------------------------------
    Nuclear Deterrence Ops.....................           $ 5.2       $ 28.0
    Global Precision Attack....................           $16.0       $ 93.7
    Air Superiority............................           $ 9.2       $ 46.1
    Rapid Global Mobility......................           $15.9       $ 89.5
    Global Integrated ISR......................           $ 8.2       $ 41.4
    Space Superiority..........................           $11.6       $ 56.2
    Cyberspace Superiority.....................           $ 4.6       $ 21.9
    Command and Control........................           $ 6.3       $ 33.5
    Special Operations.........................           $ 1.4       $  6.5
    Personnel Recovery.........................           $ 1.6       $  9.0
    Building Partnerships......................           $ 0.5       $  1.9
    Agile Combat Support.......................           $33.8      $175.0
    ------------------------------------------------------------------------
    Note 1: This table does not include OCO, Non-Blue or classified
      programs.
    Note 2: The funding for Nuclear Deterrence Operations includes weapon
      systems, support systems, as well as nuclear command, control, and
      communications requirements.

    Nuclear Deterrence Operations
        Continuing to strengthen our nuclear enterprise remains the number
    one Air Force priority, and we have taken positive steps within the
    fiscal year 2012 budget request to continue to strengthen and improve
    this Core Function.
        Air Force Global Strike Command achieved full operational
    capability (FOC) on September 30, 2010, moving all Air Force nuclear-
    capable bombers and Intercontinental Ballistic Missiles (ICBMs) under
    one command. The Air Force Nuclear Weapons Center continues to pursue
    vital and deliberate sustainment of the nuclear enterprise through
    efforts such as the Air Force Comprehensive Assessment of Nuclear
    Sustainment process. Bomber force modernization continued in an effort
    to maintain a viable force beyond 2030. We have completed the
    transition to four B-52 operational squadrons with the addition of the
    69th Bomb Squadron at Minot Air Force Base, ND. ICBM modernization and
    sustainment also continued with investments in new test equipment and
    launch facility environmental control systems. Although an initial
    study for the Ground Based Strategic Deterrent to replace the Minuteman
    III will begin in fiscal year 2011, we must continue sustainment
    efforts to ensure Minuteman III viability through 2030.
        An important event for the ICBM force in 2010 was a temporary loss
    of the ability to monitor the status of 50 missiles at F.E. Warren Air
    Force Base, WY. At no time was there any danger to the public or to the
    safety and security of the weapon system. The missiles are protected by
    multiple and redundant safety, security, and command and control
    features. The root cause of this communication interruption was
    identified, and the necessary technical and procedural changes to
    prevent future occurrences have ensued. In addition, the Air Force has
    completed a number of assessments including initiatives to address
    systemic issues with ICBM infrastructure and operating procedures as
    well as a report on the age and pedigree of the infrastructure and
    equipment associated with the ICBM system. Based on these assessments,
    it is clear that a significant portion of the existing infrastructure
    will eventually require modernization or complete replacement in the
    years ahead.
        The fiscal year 2012 budget request of $5.2 billion continues to
    invest in the future of nuclear deterrence. The Air Force is committed
    to sustaining the ICBM force through 2030 with investment including
    command and control, cryptographic improvements and ballistic missile
    fuze sustainment. Bomber modernization and sustainment efforts include
    the B-52 Combat Network Communications Technology program, the B-2
    Extremely High Frequency communications program and the Defensive
    Management Systems program. The Air Force removed early-to-need
    procurement funding in bomber extremely high frequency communications
    and the ground element of the Minimum Essential Emergency
    Communications Network program due to program delays. The Air Force is
    committed to continuing to strengthen the nuclear enterprise through
    other programs such as the tail kit portion of the B61 nuclear weapon
    life extension program, the future long-range standoff weapon, and the
    Common Vertical Lift Support Platform. Beyond weapon system sustainment
    and modernization, the Air Force is focusing on human capital as we
    carefully balance requirements for our limited, intensively
    scrutinized, high-demand airmen in the nuclear enterprise.
        The Air Force is prepared for a new verification regime and is
    planning for the elimination and conversion of launchers under the New
    Strategic Arms Reduction Treaty. We will work with the OSD and U.S.
    Strategic Command to identify and assess options for future force
    structure adjustments consistent with the Treaty provisions.

    Global Precision Attack
        Many of our global precision attack forces are meeting the current
    requirements of ongoing contingency operations by performing precision
    strike and ISR support roles. However, the proliferation of anti-access
    and area-denial capabilities will challenge the ability of current
    fourth-generation fighters and legacy bombers to penetrate contested
    airspace in the longer term.
        The Air Force used a balanced approach across the global precision
    attack portfolio in fiscal year 2011, prioritizing investment in fifth-
    generation aircraft while sustaining legacy platforms as a bridge to
    the F-35, Joint Strike Fighter. We continue to modernize our bomber
    fleet to sustain our capability and capacity as we invest in a Long-
    Range Strike Family of Systems.
        The fiscal year 2012 budget request for this Core Function is $16
    billion. Investments in global precision attack will fund modernization
    of legacy fighters and the B-1B, development and procurement of the F-
    35A, preferred munitions, and simulators for Tactical Air Control
    System training. The fiscal year 2012 budget request adds $15 million
    to begin design and development of structural and capability
    modifications for the F-16 Block 40/42/50/52 fleet. The SLEP
    initiatives for the F-16 airframe are scalable and responsive to the
    Air Force's total fighter requirements. The Air Force is also studying
    F-16 modernization efforts, to include a new AESA radar, center
    displays, electronic warfare defensive suite, and an improved data-link
    in anticipation of F-35A delivery delays.
        The multi-role F-35A is the centerpiece of the Air Force's future
    precision attack capability. In addition to complementing the F-22's
    world class air superiority capabilities, the F-35A is designed to
    penetrate air defenses and deliver a wide range of precision munitions.
    This modern, fifth-generation aircraft brings the added benefit of
    increased allied interoperability and cost-sharing across Services and
    partner nations. It will also serve to fulfill our commitment to NATO's
    dual-capable aircraft mission. The fiscal year 2012 budget includes
    $5.3 billion for continued development and procurement of 19 F-35A,
    Conventional Take-Off and Landing (CTOL), production aircraft.
        The F-35A program team achieved a number of accomplishments over
    the past year, including the first flight of the first mission systems
    aircraft, arrival of the first four F-35A test aircraft at Edwards Air
    Force Base, CA, completion of F-35A static structural testing 5 months
    ahead of schedule with no failures, roll out of the first Low Rate
    Initial Production (LRIP) F-35A, completion of 410 total F-35 test
    flights in 2010 of which 171 were F-35A flights, negotiation of the
    first fixed price type production contract (LRIP Lot 4 - 10 CTOL
    aircraft), and the signing of a Letter of Acceptance to procure the F-
    35A by Israel.
        Also in 2010, the Air Force announced the preferred alternatives
    for F-35A operational and training bases. Those bases are Hill Air
    Force Base, UT, and Burlington Air Guard Station, VT, for operational
    squadrons and Luke Air Force Base, AZ, for training.
        The program continues to experience challenges as it transitions
    from development to production despite the significant accomplishments.
    The Secretary of Defense announced a program restructure in February
    2010. The restructure resulted in increased funding for development and
    production in accordance with Joint Estimate Team II estimates, reduced
    procurement by 122 aircraft over the FYDP in the fiscal year 2011 PB,
    upgraded the Program Executive Office position from a 2-star to 3-star
    flag rank, extended development by 13 months, added an additional LRIP
    lot prior to entering full rate production, and reduced the ramp rate
    to less than 150 percent of the previous year's production. Program
    cost growth, including growth from the restructure, resulted in a
    critical Nunn-McCurdy breach in March 2010. The Under Secretary of
    Defense for Acquisition, Technology, and Logistics subsequently
    certified the program in accordance with the Nunn-McCurdy statute,
    allowing the F-35 program to continue.
        The DOD tasked the program office to perform a bottom-up review of
    the remaining development effort after the program Nunn-McCurdy
    certification. This Technical Baseline Review (TBR), completed in
    November 2010, became the basis for additional program restructuring
    within the fiscal year 2012 PB. The TBR informed the need for an
    additional $4.6 billion to complete the joint development effort. To
    fund this new development effort, and recognizing a continued lagging
    performance in production, the DOD reduced procurement by 124 aircraft
    over the FYDP in the fiscal year 2012 PB, 57 of which were F-35As.
        The Air Force intends to accelerate the procurement of the F-15E
    AESA radar modernization program, funding 88 radars and electronic
    protect software upgrades across the FYDP to keep our legacy platforms
    viable well into the future. Other legacy fighter improvements in the
    fiscal year 2012 budget include the continuation of the A-10C wing
    replacement program.
        The fiscal year 2012 budget request includes funds to modernize the
    B-1B fleet, including the central integrated test system, fully
    integrated data link, and vertical situation display unit. To provide
    the funds to modernize the B-1B fleet, the fiscal year 2012 budget
    request also reduces B-1B force structure by 6 primary aircraft
    authorizations leaving 60 B-1Bs in our inventory. Investing in a new
    penetrating bomber is critical to maintaining our long-range strike
    capability in the face of increasing risk associated with anti-access
    and area-denied environments.
        To this end, the Secretary of Defense announced on January 6, 2011,
    that the Air Force will invest in a new long-range, penetrating, and
    nuclear-capable bomber capable of both manned and unmanned operations.
    A major focus of this program is to develop an affordable, long-range
    penetrating strike capability that delivers on schedule and in
    quantity. This aircraft will be designed and built using proven
    technologies, will leverage existing systems to provide sufficient
    capability, and allow growth to improve the system as technology
    matures and threats evolve. This program should start now to ensure
    that the new bomber can be ready before the current aging B-52 and B-1
    bomber fleets go out of service. The follow-on bomber represents a key
    component of a Joint portfolio of conventional deep-strike
    capabilities, an area that must be a high priority for future defense
    investment given the anti-access challenges our military faces. It is a
    central element in a Family of Systems that includes enabling
    electronic warfare, ISR, and communications capabilities, as well as
    new weapons.
        Anti-access and area-denial challenges have also caused us to
    pursue the Air-Sea Battle concept in partnership with the U.S. Navy and
    Marine Corps, so that together we can preserve and bolster our Nation's
    freedom of action in the air, maritime, space, and cyberspace domains.
    Once implemented, Air-Sea Battle will guide us to develop a more
    permanent and better-institutionalized relationship between Departments
    that will ultimately shape our Service organizations, inform our
    operational concepts, and guide our materiel acquisitions.
        This budget request also includes Developmental Test (DT)/
    Operational Test (OT) and procurement of the Joint Air-to-Surface
    Stand-off Missile baseline and Extended Range programs. As Small
    Diameter Bomb (SDB)-1 production concludes in fiscal year 2011, the Air
    Force plans to transition to development and production of the SDB-II
    in fiscal year 2012. Additionally, the fiscal year 2012 budget request
    continues funding for integration of the Hard Target Void-Sensing Fuze
    onto the BLU-113 and BLU-109 weapons, and funds weapon DT/OT for the
    Massive Ordnance Penetrator.
        Fiscal year 2012 budget investments in global precision attack
    reflect the requirement to win today's fight while recognizing that
    proliferation of anti-access and area-denial capabilities will
    increasingly challenge America's ability to penetrate contested
    airspace. The Air Force continues to modernize the legacy fighter and
    bomber fleet to maintain sufficient capability and capacity as we
    transition to a fully operational F-35A fleet and field a modern Long-
    Range Strike Family of Systems.

    Air Superiority
        Air superiority is crucial in modern warfare. It enables air, land,
    and maritime operations in support of our joint, interagency, and
    coalition partners. For over 5 decades, Air Force investments,
    expertise and sacrifice in achieving air superiority have ensured that
    friendly ground forces operate without threat of attack from enemy
    aircraft. Airspace control remains vitally important in all operating
    environments to ensure the advantages of rapid mobility, ISR and
    precision strike are broadly available to the combatant commander.
    Ongoing air defense modernization efforts by global and regional
    competitors will challenge the Air Force's ability to attain the same
    degree of control in the future. The fiscal year 2012 budget request
    for air superiority is $9.2 billion.
        We plan to continue upgrading to a fifth-generation fleet with F-22
    modifications to provide fleet commonality and ensure the viability of
    our legacy weapons systems. We will also continue the development of
    preferred air-to-air munitions and defenses such as the AIM-9X, AIM-
    120D and electronic warfare capabilities.
        We are currently modernizing our legacy fleet of F-15 fighter
    aircraft with AESA radars to ensure their viability well into the
    future. Other F-15C/D modernization programs underway include an
    advanced display core processor upgrade with vertical situation
    display, beyond line of sight radios, and Link-16 cryptographic
    upgrades. The fiscal year 2012 budget request continues funding for the
    F-15C/D AESA radar modernization program. The Air Force has recently
    restructured this program, procuring 90 radars across the FYDP and an
    additional 8 radars in fiscal year 2017.
        The Air Force is also incrementally modernizing the F-22 Block 30/
    35 aircraft and requests funding in the fiscal year 2012 budget for the
    F-22 Block 20/30/35 Common Configuration, Reliability and
    Maintainability Maturation Program and enhancement of the air-to-air
    and SEAD capabilities on F-22 Block 30/35 aircraft.
        Select electronic warfare enhancements continue in fiscal year
    2011, including EC-130H Compass Call fleet upgrades, and a flight deck
    and mission crew simulator to increase training capacity. The fiscal
    year 2012 budget request begins funding 13 electronic attack pod sets
    for MQ-9s and the conversion of a C-130 to EC-130H Compass Call
    aircraft, adding two mission aircraft authorizations across the FYDP.
    The fiscal year 2012 budget also funds concurrent production of
    Miniature Air-Launched Decoy (MALD)/MALD-Jammer (MALD-J) and
    development of MALD-J Increment II to improve the system's electronic
    warfare capabilities.
        The Air Force continues to enhance development, production, and
    integration of critical munitions for air superiority. The fiscal year
    2012 budget requests funds for the development and full-rate production
    of the AIM-9X Block 2; development, integration, and production of the
    AIM-120D; and development and integration of the AGM-88 HARM control
    section modification. The fiscal year 2012 budget also requests
    research and development funding for the ``Next Generation Missile,''
    an air launched missile to replace both the AIM-120D and the AGM-88.
    This funding will provide for a competitive prototype demonstration and
    technical development preceding entrance into the Engineering and
    Manufacturing Development phase of the program.
        Other key enhancements in the fiscal year 2012 budget request
    include the development and fielding of new training range equipment
    and updates to threat systems to provide realistic combat training.
    Among these are the P5 Combat Training System and Joint Threat
    Emitters. Also, the fiscal year 2012 budget request provides
    procurement of F-16 Block 40/50 Full-Mission Simulators, affording
    high-fidelity simulation for use in Distributed Mission Operations.
    Enhanced opportunities to migrate aircrew training into high fidelity
    simulators will help realize efficiencies in the peacetime flying hour
    program, as well as support energy efficiency.
        The proposed fiscal year 2012 investments will sustain America's
    air superiority advantage and expand the multi-role capability of the
    Air Force's most advanced aircraft. Additionally, these investments
    continue the development and procurement of electronic warfare
    capabilities and preferred air-to-air munitions.

    Rapid Global Mobility
        The Air Force continues to provide unparalleled airlift and air
    refueling capability to support our national defense. Mobility forces
    provide a vital deployment and sustainment capability for joint and
    coalition forces, globally delivering equipment, personnel, and
    materiel essential for missions ranging from major combat to
    humanitarian relief operations worldwide.
        The Air Force is accelerating the retirement of our oldest legacy
    airlifters, the C-5A and C-130E, in fiscal year 2011. Airlift capacity
    and capability will be maintained through continued recapitalization
    and modernization. The Air Force will take delivery of seven C-130Js,
    and continue to ensure worldwide airspace access through avionics
    modernization of C-130H2/3, KC-10, and the C-5. In 2010, the C-27J
    completed transition from a joint to an Air Force-led program, and we
    continued C-27J procurement as an investment in overall fleet
    viability.
        The fiscal year 2012 budget request balances tanker and airlift
    requirements to ensure that we sustain the critical needs of the
    warfighter. This is accomplished by prioritizing recapitalization of
    the tanker aircraft while ensuring the continued viability of the
    legacy fleet. Tanker capability investments of $877 million are heavily
    weighted toward our top acquisition priority, the KC-X program. The Air
    Force submitted a Request for Proposal for a KC-X replacement tanker in
    February 2010, and is anticipating contract award in early 2011. While
    moving aggressively to recapitalize the tanker fleet, we also continue
    maintaining the health of legacy aircraft. The budget includes $147.4
    million in fiscal year 2012 for the airspace access requirement and
    sustainment of the KC-10 and KC-135 fleets.
        In conjunction with the continued procurement of C-130Js, the
    fiscal year 2012 budget continues to modernize C-130Hs through the
    Avionics Modernization Program, ensuring continued global airspace
    access. Similar efforts to modernize C-5 avionics remain on track and
    the C-5B/C Reliability Enhancement and Re-engine Program (RERP) has
    completed operational testing. In October 2010, OSD approved RERP for
    full rate production with the final C-5M ``Super Galaxy'' scheduled for
    delivery in the third quarter of fiscal year 2016. Additionally, in
    accordance with the results of the Mobility Capabilities and
    Requirements Study 2016, and subject to authorization by Congress, we
    intend to retire some of the oldest, least capable C-5As and C-130H1s.
    The C-17 Globemaster III remains the backbone of our Nation's strategic
    airlift fleet, and the Air Force takes delivery of 11 new C-17s in
    fiscal year 2011 and 8 in fiscal year 2012. These additions bring the
    total C-17 fleet to 221 aircraft. The Air Force will continue to
    modernize its mature C-17s to the production line standard by
    accelerating the Block 13-17 upgrade program, and retrofitting the
    aircraft with extended range fuel tanks and an improved on-board inert
    gas generating system.
        Efforts to increase direct support airlift continue, with plans to
    beddown 38 C-27Js in the Air National Guard. The Air Force continues
    Operational Support Aircraft/Very Important Person Special Airlift
    Mission modernization with the upgrade of VC-25 avionics, with
    completion in fiscal year 2018 enabling unrestricted global access for
    the Presidential aircraft.

    Global Integrated Intelligence, Surveillance, and Reconnaissance
        The Air Force continues to rapidly increase its ISR capability and
    capacity to support all military operations. Air Force ISR provides
    timely, fused, and actionable intelligence to the Joint force from
    forward-deployed locations and distributed processing centers around
    the globe.
        The exceptional operational value of Air Force ISR assets has led
    Joint Force Commanders in Iraq, Afghanistan, and the Horn of Africa to
    continually increase their requests for support. To help meet this
    demand, the Air Force currently has more than 90 percent of all
    available ISR assets deployed. Over the last 2 years, the Air Force
    increased the number of remotely piloted aircraft (RPA) and completed
    deployment of 30 MC-12W Project Liberty aircraft to theater to
    complement remotely piloted capabilities. This is being accomplished as
    we transitioning MC-12W Liberty Project from OCO funding into the Air
    Force baseline budget beginning in fiscal year 2013. Additionally, the
    Air National Guard, already full partners in the RPA enterprise, has
    also deployed the RC-26B in support of operations in Iraq. Finally,
    both the Air Force and Air National Guard operate the RC-135 Rivet
    Joint and Senior Scout, respectively, in support of global signals
    intelligence taskings.
        In fiscal year 2011, we will increase the number of CAPs in theater
    to 50, maximize the MQ-9 production rate to 48 per year, complete the
    procurement of 11 RQ-4 Block 40, and will deliver 5 additional MC-12W
    aircraft. We also will maintain our current Joint Surveillance Target
    Attack and Radar System-based Ground Moving Target Indicator (GMTI)
    capability as we complete an Analysis of Alternatives to determine the
    future of GMTI.
        Our fiscal year 2012 ISR budget request of $8.2 billion fully
    supports the Joint force emphasis on ISR capacity and allows the Air
    Force to sustain maximum MQ-9 production and achieve 65 RPA CAPs in
    theater by the end of fiscal year 2013. In intelligence production, we
    corrected an internal Operation and Maintenance shortfall within the
    Air Force Distributed Common Ground System to sustain intelligence
    analysis and dissemination. The budget request also continues support
    for the U-2 Dragon Lady manned aircraft through the end of fiscal year
    2015 to ensure a smooth high-altitude transition to the unmanned RQ-4
    Global Hawk. This extension enables a measured reduction of the U-2
    program as RQ-4 Block 30 aircraft become operational and ensures
    continued support to national leadership, combatant commanders, and
    joint warfighters.
        The fiscal year 2012 ISR budget also realigns resources within the
    RQ-4 program to correct a $979 million diminishing manufacturing
    sources disconnect across the FYDP. To optimize our support of the
    overall RQ-4 program, the Air Force decided to curtail production of
    the RQ-4 Block 40 at eleven aircraft. This decision allows the Air
    Force to fully support and sustain the required RQ-4 Block 40
    capability already procured and concentrate on fielding effective Block
    30 multiple intelligence platforms on time.

    Space Superiority
        The DOD, civilian agencies, and our Nation rely on space
    capabilities developed and operated by the Air Force. The fiscal year
    2012 space superiority budget request of $11.6 billion will enable the
    Air Force to field, upgrade, and sustain vital space systems for the
    joint warfighter. As part of the Joint Force, we integrate and operate
    these capabilities to execute the space support, force enhancement,
    space control, and force application missions; and, as launch agent for
    both the defense and intelligence sectors, provide reliable and timely
    space access for national security purposes.
        Space capabilities provide the United States and our allies'
    unprecedented national security advantages in national decisionmaking,
    military operations, and homeland security. The Air Force's budget
    priorities align closely with the goals and principles outlined in the
    National Space Policy (NSP) and support the DOD's National Security
    Space Strategy (NSSS) and the National Military Strategy with specific
    emphasis on building international partnerships to establish mutually
    beneficial space capabilities and developing a better understanding of
    the space domain. International agreements are being pursued to expand
    space-based communication capability through the procurement of a ninth
    Wideband Global SATCOM satellite (WGS-9), and to meet National Search
    and Rescue requirements by working to integrate the Canadian-provided
    Distress Alerting Satellite Systems as a secondary payload on GPS Block
    III Increment B&C satellites. Additionally, realizing the space domain
    is becoming increasingly congested, contested and competitive, we will
    continue efforts to establish a Space Situational Awareness (SSA)
    partnership with Australia by jointly employing and operating a space
    object detect and track radar in Australia. This system will provide
    better understanding of the current and future strategic space
    environment and establish a foundation for continuing nation-to-nation
    cooperation.
        In close cooperation with OSD and the Office of Management and
    Budget, the fiscal year 2012 Air Force budget request proposes a new
    acquisition strategy for buying military spacecraft, Evolutionary
    Acquisition for Space Efficiency (EASE). The current practice of
    procuring satellites one-at-a-time or on a just-in-time basis has
    inadvertently increased costs due to production line breaks, parts
    obsolescence, and inefficient use of labor. Numerous space experts and
    congressional committees have expressed concern with the inefficiency
    and disruption caused by the status quo approach to procuring
    satellites. EASE is an acquisition strategy that encompasses the
    following tenets: block buys of satellites, fixed price contracting,
    stable research and development investment, and a modified annual
    funding approach. We believe this approach will result in savings that
    can be reinvested in research and development that will further improve
    the performance and lower the cost of follow-on systems. Commitment to
    satellite production and reinvestment in technology development
    provides stability and predictability for a fragile space industrial
    base.
        The Air Force budget request reflects the use of EASE for
    acquisition of the next blocks of Advanced Extremely High Frequency
    (AEHF) protected communications satellites in fiscal year 2012 and
    Space Based Infrared System (SBIRS)-Geosynchronous missile warning
    satellites in fiscal year 2013. Once the EASE approach is proven, we
    will examine the application of this acquisition strategy to a wider
    portfolio of space programs. Relying on a combination of regular
    appropriations, advance appropriations, and multi-year procurement
    authority, the EASE proposal is consistent with the full funding
    principle and is a critical part of the Air Force's efficiency agenda.
    The Air Force recognizes the need to work with Congress to define and
    obtain the necessary legislative authorities to achieve our vision.
        Spacelift is a critical component of the national security space
    enterprise. Despite our having achieved a record 76 consecutive
    successful launches since 1999, spacelift is still a complex and costly
    undertaking. Three recent launch studies reached the same conclusion
    that immediate commitment to a fixed annual production rate for launch
    vehicles is imperative to sustain the industrial base and control
    costs. To ensure this commitment, the fiscal year 2012 budget
    submission requests an additional $3.5 billion across the FYDP to
    procure five DOD launches each year. In addition, the Air Force is
    working aggressively to reduce the cost of providing this critical
    launch capability. Additionally, the Air Force is collaborating with
    the NRO and NASA to explore synergistic solutions to maintain a healthy
    industrial base and meet government launch requirements.
        Our combatant commanders and national leadership rely on satellite
    communications for continuous secure communications around the world.
    In fiscal year 2010, we successfully launched the third Wideband Global
    SATCOM (WGS) satellite and first AEHF satellite. AEHF will provide ten
    times the throughput and greater than five times the data rate of the
    current MILSTAR II Satellite Communication System. To increase the
    effectiveness of our Joint warfighting operations, we are expanding
    communications capability with the launch of another WGS satellite in
    fiscal year 2012. Each WGS satellite delivers the equivalent capacity
    of the entire existing Defense Satellite Communications System
    constellation. WGS has become the keystone for international
    cooperation measures in space, with our Australian allies funding the
    sixth WGS satellite in return for a portion of the overall bandwidth.
    We requested $469 million in the fiscal year 2012 budget request to
    fully fund WGS to meet combatant commander's bandwidth requirements.
    These essential systems provide our forces the vital communications
    needed to remain effectively coordinated, synchronized, and responsive
    in global operations.
        For over 20 years, GPS has been the global standard for
    positioning, navigation and timing (PNT) and is used in everything from
    consumer automobiles, precision farming and smart phones, to enabling
    the Nation's most sophisticated weaponry and financial systems. In
    fiscal year 2011, we will continue to launch GPS Block IIF satellites
    to maintain the constellation as a global utility. The fiscal year 2012
    budget request includes $1.7 billion for PNT capability and
    incorporates initial funding of the next generation GPS III satellite
    production, development of the next-generation operational control
    segment and upgraded military user equipment.
        Our fiscal year 2012 budget request also includes $87 million for
    the Operationally Responsive Space program to pursue innovative
    capabilities that can be rapidly developed and fielded in months rather
    than years to respond to combatant commanders' immediate space
    requirements. In the critical areas of missile warning and SSA, we
    requested $1.2 billion for the SBIRS program, which will launch the
    first geosynchronous satellite in fiscal year 2011 to begin our
    transition to a highly effective space-based missile warning system,
    and $122.1 million for the Joint Space Operation Center Mission System.
    We will continue to improve SSA ground-based systems and space-based
    capabilities to ensure continued freedom to operate in the space
    domain. The Air Force also recognizes that space capabilities are
    essential to the nuclear enterprise for its operational readiness,
    providing key decisionmaking information through missile warning and
    nuclear event detection, along with essential communications. Weather
    and forecasting data is another important source of information for our
    forces in peacetime and in conflict. We requested $444.9 million for
    the Defense Weather Satellite System in fiscal year 2012. This system
    will replace the Defense Meteorological Satellite Program in the early
    morning orbit slot, ensuring continuity of detailed overhead weather
    imagery and sensing information. All elements of space capability must
    operate through the full spectrum of potential contingencies.
        While participating, last year, in the DOD's development of the
    national long-term space strategy as part of the Space Posture Review
    and Quadrennial Defense Review, the Air Force recognized a need to
    review our own internal space governance structure to better position
    us to properly execute the direction resulting from these reviews.
    During our review, the position of the Under Secretary of the Air Force
    was identified as the focal point for oversight of all Air Force space
    activities. In addition, space acquisition responsibilities were
    consolidated in the office of the Assistant Secretary of the Air Force
    for Acquisition. At the DOD level, the Secretary of the Air Force was
    revalidated as the DOD Executive Agent (EA) for Space. The EA is
    charged with the integration and assessment of the DOD overall space
    program, the conduct and oversight of long-term space planning and
    architecture development, and the facilitation of increased cooperation
    with the intelligence community. The EA also chairs the newly
    established Defense Space Council with representatives from across the
    DOD, and was directed to establish a jointly manned space office to
    restructure and replace the current National Security Space Office.
    This organization will not only better position the DOD to coordinate
    implementation of space policy and strategy, it will also provide the
    framework for the DOD's support for development of new national
    security space capabilities. Furthermore, the Secretary of the Air
    Force, in his role as the EA for Space is fully engaged with the DOD in
    the implementation of the recent NSP and NSSS.

    Cyberspace Superiority
        The Air Force fiscal year 2012 budget request includes $4.6 billion
    to sustain and maintain our critical cyberspace capabilities and to
    enable Air Force expeditionary and CONUS-based operations in support of
    Joint Force Commanders. The Air Force contributes to the Joint force by
    developing, integrating, and operating cyberspace capabilities in three
    mission areas: support, defense, and offense.
        Cyberspace superiority enables precise force application in all
    domains, generates effects across the full spectrum of operations, and
    preserves an agile and resilient cyberspace infrastructure for assured
    mission execution.
        Access to cyberspace is increasingly critical to meet joint and
    allied requirements for freedom of maneuver in all domains. Air Force
    networks face a continuous barrage of assaults from state-sponsored
    actors, terror networks, international criminal organizations,
    individual hackers, and all level of threats in between. We are
    expanding collaboration with Service, Joint, Interagency, academic, and
    international partners on several cyber initiatives to safeguard our
    access to the cyberspace domain. To this end, we are operationalizing
    our approach to cyberspace with emphasis in this budget request on
    protecting the Air Force infrastructure, developing expertise to meet
    mission needs, and accelerating our acquisition processes.
        The 24th Air Force, the Air Force component of U.S. Cyber Command,
    achieved FOC on October 1, 2010, and the Air Force will expand the
    cyber rapid acquisition process to cope with constantly evolving
    technologies. The Air Force is also aligning education and training
    programs with our operational approach to cyberspace to properly
    develop our cyberspace professionals. In December 2010, we graduated
    our first cadre of cyberspace operators. Additionally, efforts to
    enhance the cyber-related investigative and forensic capabilities
    resident in the Air Force are forging a solid foundation for Service
    and joint cooperation. For example, Air Force Space Command
    transitioned the Defense Cyber Crime Center back to the Air Force
    Office of Special Investigations to help strengthen the ties.
        The Air Force has strengthened its efforts in the support mission
    area by continuing work on the Single Air Force Network migration,
    which increases situational awareness of Air Force networks while
    securely improving information sharing and transport capabilities.
    Examples of this support are reflected in several investments in this
    budget. The Air Force continues to support its capability for live,
    virtual, and constructive simulation and training. Based on the Fort
    Hood follow-on review, enhancements were made to the Installation
    Emergency Management system to ensure a standardized, robust emergency
    notification system.
        For the defense mission area, the Air Force invested in additional
    network defenders to increase protection of information vital to Joint
    Force operations. The Air Force continues to invest in network defense
    tools and other advanced technologies to monitor and secure classified
    and unclassified networks.
        In the offensive mission area, the Air Force seeks to field
    appropriate and sanctioned capabilities supporting assigned missions.
    The Air Force established formal training programs for both initial and
    mission qualification to provide trained forces to U.S. Cyber Command
    when tasked. Additionally, as the lead support agency to U.S. Cyber
    Command, the Air Force is responsible for the construction and
    installed infrastructure for the new U.S. Cyber Command Integrated
    Cyber Center at Fort Meade, MD.

    Command and Control
        Command and Control (C2) of our forces has never been more vital or
    more difficult than in the 21st century. Supporting the National
    Security Strategy requires commanders to integrate operations in
    multiple theaters, at multiple levels, and across the full range of
    military activity. Secure strategic and nuclear C2 remains an Air Force
    priority. The Air Force must sustain, modify, and enhance current
    command and control systems, and develop deployable, scalable, and
    modular systems that are interoperable with joint, interagency, and
    coalition partners.
        In fiscal year 2011, we will improve assured communication links
    for U.S. Strategic Command's Distributed Command and Control Node and
    U.S. Northern Command's National Capital Region-Integrated Air Defense
    System. The Air Force has also done the following: expanded the
    training pipelines for Joint Terminal Attack Controllers (JTACs); began
    fielding advanced video downlinks, and airborne radio and datalink
    gateways to improve the connectivity of air support operations centers
    and JTACs; and modernized the 1970s-era technology of the E-3 airborne
    C2 node with the Block 40/45 program. In addition, the Air Force
    created pipeline training in support of the warfighting elements of the
    Commander, Air Force Forces theater staff.
        In fiscal year 2012, the Air Force requests $6.3 billion for full
    spectrum C2 sustainment, replacement, and development efforts. Of note,
    $19.1 million is requested to bolster the Air and Space Operations
    Center's (AOC) C2 capability and interoperability with programmed Joint
    systems to execute the Integrated Air and Missile Defense mission.
    Secure and reliable strategic level communications are improved with a
    $53.2 million request for modernization to Senior Leader Command and
    Control Communication Systems for senior leader support aircraft and
    the E-4 National Airborne Operations Center. Support to combatant
    commanders is also enhanced with almost $60 million in fiscal year 2012
    for improved airborne and mobile C2 systems. The Air Force maintained
    our commitment to the Joint development of the Three-Dimensional
    Expeditionary Long-Range Radar. Three-Dimensional Expeditionary Long-
    Range Radar will be the future long-range, mobile ground-based sensor
    for detecting, identifying, tracking, and reporting aircraft and
    missiles in defended airspace. Additionally, the United States secured
    a cooperative development position in the NATO Airborne Warning and
    Control System avionics and navigation modernization program.

    Special Operations
        Geographic Combatant Commanders and U.S. Special Operations Command
    rely heavily on Air Force Special Operations (AFSOC) capabilities to
    support missions worldwide. As the DOD continues to develop
    capabilities effective against irregular and hybrid threats, increased
    Air Force Special Operations close air support, foreign internal
    defense, and ISR capabilities will be required.
        In fiscal year 2011, the Air Force will continue procurement of
    five CV-22s and MC-130Js for the recapitalization of AFSOC's MC-130E/P
    and AC-130H aircraft. The fiscal year 2012 budget request includes an
    investment of $503.7 million toward recapitalization of AFSOC's MC-
    130H/W fleet, with an additional investment of $26 million across the
    FYDP to align MC-130J program funding with OSD cost estimates.
    Additional investments were made to enhance CV-22 mission capability
    with upgraded cockpit data recording and Communication Navigation
    System/Air Traffic Management modifications. Finally, a low-cost engine
    wiring modification allowed the Air Force to realize a $9.6 million
    efficiency and reduce MC-130J spare engine inventories.

    Personnel Recovery
        Personnel recovery (PR) remains a vital core function in support of
    every contingency operation. The increased utilization of military and
    civilian personnel in support of OCO has significantly increased the
    demand for Air Force rescue forces beyond the conventional combat
    search and rescue mission. Air Force PR forces are fully engaged in
    Afghanistan, Iraq and the Horn of Africa, accomplishing lifesaving
    medical and casualty evacuation missions, while also supporting
    domestic civil land and maritime search and rescue, humanitarian
    assistance/disaster relief (HA/DR) and mass casualty evacuation
    missions.
        In fiscal year 2011, the Air Force will continue to recapitalize
    HC-130N/P aircraft and procure H-60 Blackhawk helicopters under the
    operations loss replacement (OLR) program to restore the fleet to 112
    HH-60G aircraft. The fiscal year 2012 request funds four HH-60G OLR
    aircraft, and provides a $2 billion investment for procurement of 54
    HH-60 replacement aircraft across the FYDP. We will also accelerate the
    procurement of our HC-130J rescue/tanker aircraft by procuring 3
    aircraft in fiscal year 2012 to replace the 1960s-era HC-130P fleet on
    a one-for-one basis, up to 37 aircraft. Finally, the fiscal year 2012
    budget funds $73 million for the Guardian Angel program which will
    standardize and modernize mission essential equipment for an additional
    five pararescue teams.

    Building Partnerships
        Developing mutually beneficial partnerships with militaries around
    the world is vital for the Air Force. Successful partnerships ensure
    interoperability, integration and interdependence between coalition
    forces while providing our partner nations the capability and capacity
    to resolve their own national security challenges. Today's engagements
    require airmen to perform their duties effectively and achieve
    influence in culturally-complex environments around the globe.
        The Air Force continues to emphasize extensive language skills and
    regional knowledge in its growing cadre of Regional Affairs
    Strategists. These personnel possess a regionally-focused advanced
    academic degree and language proficiency. They work with partner
    nations as attaches and Security Cooperation Officers. Political-
    Military Affairs Strategists and best-fit officers also fill positions
    requiring in-depth understanding of the interagency processes key to
    building partnerships. The Air Force has also increased the culture and
    language content of selected pre-deployment training courses and
    recently inaugurated a new language learning program--the Language
    Enabled Airman Program. This program provides an opportunity to create
    a cadre of language-capable airmen who are deliberately developed for
    requirements, leverages the capability attained in foreign language
    accession programs, and provides a systemic opportunity for these
    airmen to maintain these skills throughout their careers. Our fiscal
    year 2012 budget request includes funding to expand foreign language
    instruction for officer commissioning programs as well.
        The Air Force continues to engage our international partners across
    the spectrum of operations. The fielding of the F-35, Joint Strike
    Fighter, will further our partnerships with more established allies,
    while the 3 C-17s procured for the 12-nation Strategic Airlift
    Capability are fully operational and currently meeting the airlift
    requirements of our European allies. We are funding new initiatives
    which support longer term Building Partnerships Capacity (BPC) efforts.
    For instance, $65.7 million was budgeted toward the procurement of 15
    Light Mobility Aircraft (LiMA) to assist partner nations in building
    their airlift capability in fiscal year 2011. These aircraft are
    scheduled to be fielded and achieve initial operating capability (IOC)
    in the second quarter of fiscal year 2012. We are also requesting $159
    million in fiscal year 2012 to procure the first 9 of 15 Light Attack/
    Armed Reconnaissance (LAAR) aircraft. These LAAR aircraft will be used
    to train a cadre of pilots who will subsequently export their BPC
    aviation skills to international partners who may operate the same or
    similar platforms. To ensure the proper capability is provided to build
    partner capacity by Contingency Response Forces, LiMA and LAAR
    personnel, we funded the formal establishment of an Air Advisor Academy
    in fiscal year 2011 to expand our current efforts that include training
    air advisors heading to Iraq and Afghanistan and training air advisors
    for engagements globally. English language proficiency is a
    prerequisite to nearly all of the education and training that the
    Services provide to our partner nations. To meet increasing partner
    demand for English language training, the fiscal year 2012 Air Force
    program expands the capacity at the Defense Language Institute English
    Language Center.

    Agile Combat Support
        Underpinning the work of all Air Force Core Functions are the
    capabilities included in agile combat support (ACS). ACS is the ability
    to create, protect, and sustain air and space forces across the full
    spectrum of military operations and spans a diverse set of Air Force
    functional capabilities. The fiscal year 2012 budget request of $33.8
    billion for ACS accounts for efforts affecting our entire Air Force--
    from the development and training of our airmen to regaining
    acquisition excellence.
        Airmen and Families
        The Air Force is proud of its commitment to supporting its airmen
    and families. The nearly 2 decades of sustained combat operations has
    imposed extraordinary demands on them and underscores the need to
    remain focused on sustaining quality of life and supporting programs as
    a top priority. To help address the demands, in 2010 the Air Force
    executed the Year of the Air Force Family and highlighted support
    programs focused on three outcomes:

             Fostering a Strong Air Force Community;
             Strengthening an Airman's Sense of Belonging; and
             Improving Airman and Family Resiliency.

        The Year of the Air Force family deepened leadership's
    understanding of current support services and capabilities and what
    needs to be done in the future to maintain and improve outcomes in the
    three primary focus areas.
        First, the Air Force will maintain an enduring emphasis on airmen
    and families by actively engaging the entire Air Force Community: Total
    Force airmen, Department of the Air Force civilians, single and married
    personnel, primary and extended family members, retirees, and on- and
    off-base community partners. The Air Force will maintain an atmosphere
    that is supportive, team-oriented, and inclusive, but diverse enough to
    meet the current and emerging needs of the entire Air Force Community.
    Policy and process priorities have been translated into actions and
    tasks that will be accomplished over the next few years, perpetuating
    the Air Force's commitment to strengthening our ties to one another,
    improving our operational abilities and ensuring our Air Force
    Community is best positioned to meet future commitments and
    requirements.
        Second, we continue to strengthen our Air Force Community by
    expanding child care through different programs such as the Extended
    Duty Program, Home Community Care, Missile Care, and the new
    Supplemental Child Care initiative to provide flexibility in meeting
    child care needs. In fiscal year 2011, the Air Force will continue to
    demonstrate our commitment to military child education, funding full
    time School Liaison Officers (SLO) Air Force-wide. SLOs and our new Air
    Force Exceptional Family Member Program Coordinators will work in close
    collaboration to address educational and other assistance for families
    with special needs. The Air Force fiscal year 2012 budget request
    includes $4 million to assist with respite child care for military
    family members with special needs children.
        Third, the budget reflects a $4.4 million increase to our Air Force
    Mortuary Affairs program, supporting travel for family members from
    home of record to Dover Port Mortuary to receive and honor fallen loved
    ones. Increases also reflect our commitment to maintaining the Port
    Mortuary's Center for the Families of the Fallen, used as the reception
    facility and host site for visiting family members at Dover Air Force
    Base, DE.
        Airman dining facilities remain an important commitment of the Air
    Force as we plan to increase funding for dining facilities at basic
    military training and technical training bases by $14.9 million in
    fiscal year 2012. In fiscal year 2011, we launched the Food
    Transformation Initiative (FTI) to address airmen's concerns with
    dining facility closings, lack of healthy food options, and
    insufficient hours of operation. FTI is designed to enhance food
    quality, variety and availability while maintaining home base and
    warfighting capabilities.
        The Air Force continues to expand our efforts to improve resiliency
    of airmen and their families before, during, and after deployments and
    has significantly expanded capabilities to ensure support and
    reintegration of our Total Force. In continuing its efforts to improve
    the resiliency of airmen and their families, the Air Force moved
    forward with several initiatives in 2010.
        We established a new Resiliency Division at the Air Force level to
    take the lead and develop an overarching Air Force Resiliency Roadmap.
    The Deployment Transition Center (DTC) was established at Ramstein Air
    Base, Germany on July 1, 2010. The DTC and Chaplain Corps Care for the
    Caregiver programs provide valuable decompression, reintegration and
    resiliency training for those exposed to significant danger and stress
    in combat zones. To support these efforts, the Air Force fiscal year
    2012 budget request includes $8 million for the Air Force Resiliency
    Program for research, curriculum development, materials and
    intervention training for the DTC. We will continue to develop our
    Airman Resiliency Program by identifying needs, researching best
    practices, partnering with internal and external organizations, and
    developing targeted and tiered training that is integrated into an
    airman's career to allow a building block approach that leads to life-
    long resiliency that benefits both airmen and their families. We are
    also requesting an increase in the Chaplain Recruitment program by $1.5
    million in fiscal year 2012 to better provide for religious
    accommodation and support of airmen. This includes chaplain-led
    MarriageCare Retreats, that help heal and save marriages, and
    deployment reintegration programs expanded to meet the needs of
    redeploying airmen.
        The Air Force is highly committed to the Wounded Warrior Program
    that ensures access to medical and rehabilitation treatments for the
    ill and wounded. The Air Force Warrior and Survivor Care Division is
    dedicated to building a culture of understanding and concern for
    wounded, ill, and injured airmen. The Air Force has hired 33 Recovery
    Care Coordinators and a Program Manager to support 31 locations across
    the Air Force. Recovery Care Coordinators serve as the focal point for
    non-clinical case management, development of comprehensive recovery
    plans and creation of timelines for personal and career
    accomplishments. Additionally, the Air Force has implemented new
    personnel policies regarding retention, retraining, promotions,
    assignments and evaluation of Wounded Warriors. In fiscal year 2012,
    the Air Force is requesting $2.8 million for additional case workers
    and program managers to provide non-clinical case management services
    to meet the growing demands of the Wounded Warrior population.
        Healthcare Initiatives and Costs
        As key team members of the Federal and Military Health System
    (MHS), the Air Force Medical Service (AFMS) is seeking innovative
    solutions to deliver world class care while slowing the rising costs of
    healthcare. For example, the AFMS is taking the lead in building the
    largest patient centered medical home capability in the DOD over the
    next 12 months. This includes the Family Health Initiative, designed to
    improve continuity of care and healthier outcomes. Additional emphasis
    is being placed on delivering better care by streamlining our hospital
    surgical operations and improving the experience of care. Current
    efforts have demonstrated recapture of services in key market areas
    with the overall results of reduced cost, increased currency of our
    surgeons, and improved patient satisfaction. In addition, the AFMS is
    transitioning from healthcare delivery to delivering health. Through
    patient-centered care, improved teamwork with our patients, and
    leveraging partnerships with DOD, VA and civilian institutions, Air
    Force medicine is shaping the future of healthcare.
        Our strategy to control DOD healthcare costs is the right approach
    to manage the benefit while improving quality and satisfaction.
    Adjustments to the benefit such as raising TRICARE enrollment fees for
    working retirees, phasing out enrollment for some high-cost health
    plans, paying community hospital Medicare rates, and incentivizing the
    use of the most effective outlets for prescriptions is prudent. There
    will be limited impact (prescription only) on active duty family
    members. By implementing these important measures, we will be able to
    positively address the rising costs of healthcare and improve the
    health of our population.
        Suicides
        Air Force suicide rates have been on the rise since 2007, although
    primary risk factors for suicide among airmen remain the same. The most
    commonly identified stressors and risk factors have remained the same
    over the last 10 years: relationships, financial problems and legal
    problems. Although deployments can stress airmen and their families,
    deployment does not seem to be an individual risk factor for airmen--
    many airmen who have committed suicide have never deployed. The Air
    Force is providing additional support to our most at-risk airmen by
    providing additional frontline supervisor suicide prevention training
    to all supervisors in career fields with elevated suicide rates. In
    addition, mental health providers are based in primary care clinics
    across the Air Force to counsel patients who may not otherwise seek
    care in a mental health clinic because of the perceived stigma. The Air
    Force has significantly expanded counseling services in addition to
    those available through the chaplains or the mental health clinic.
        Other helpful programs that provide non-medical counseling include
    Military Family Life Consultants, which can see individuals or couples,
    and Military OneSource, which provides sessions for active duty for up
    to 12 off-base sessions.
        Fort Hood
        In the wake of the Fort Hood shooting, the Secretary of Defense
    directed the Air Force to conduct a follow-on review to identify ways
    to better protect airmen and families. Our review yielded 118 findings
    and 151 recommendations. The key revelation of the study is that we
    must do a better job of preventing and responding to violence.
    Specifically, we must improve our ability to identify indicators of
    potential violence and share that information with those who are best
    positioned to prevent a violent outcome. This will require improved
    understanding, education, processes and training, as well as more
    integrated processes at both the installation and interagency levels.
    To undertake these efforts, the fiscal year 2012 budget request
    includes $37 million across the FYDP. We anticipate that our resource
    requirements will increase as we refine the implementation of our
    recommendations. We are confident that the resources Congress provides,
    coupled with our sustained effort, will help the Air Force reduce the
    likelihood of tragedies like Fort Hood and position us to respond more
    effectively should prevention fail.
        Information Protection
        The Air Force will enhance its capabilities to assess and mitigate
    risks to national security information across the enterprise. It will
    advance efforts to identify risks that reduce the surety of research,
    development, and acquisition and operations or enable potential
    opponents to illicitly increase their technological capabilities. These
    efforts will enable commanders to effectively execute intelligence-led,
    risk based protection across the Air Force.
        Science and Technology
        Air Force warfighting capabilities have a proud heritage of being
    born from the very best science and technology (S&T) our Nation can
    produce. The creation of the Air Force is closely intertwined with the
    development of advances in S&T. In 2010, the Air Force presented the
    .Technology Horizons Study. to serve as a roadmap for guiding Air Force
    science and technology investments during the next 20 years. Despite
    current fiscal constraints, the Air Force is increasing its investment
    in basic research by $18 million and in Advanced Technology Development
    by $76 million, while continuing fiscal year 2011-level investment in
    Applied Research.
        Acquisition Excellence
        The Air Force continues to strive for acquisition excellence by
    increasing the rigor and transparency of its processes and by
    stabilizing requirements and funding. As one of our top five Air Force
    priorities, we have taken a multi-faceted approach to recapturing
    acquisition excellence to include:

             Rebuilding the acquisition workforce;
             Delivering a fully implemented Acquisition Improvement
            Plan (AIP) to guide and shape current and future efforts;
             Creating a foundation for a robust Continuous Process
            Improvement (CPI) function within acquisition; and
             Implementing approximately 75 efficiency initiatives
            that range in scope and impact throughout the acquisition
            enterprise.

        Continued improvements support moving resources from ``tail to
    tooth'' to fully support the Air Force's direct mission activities.
    Efficiency savings in overhead, support and other less mission-
    essential areas will increase funding available for our critical
    mission functions. The Air Force, as a good steward of taxpayer
    resources, is committed to delivering products and services that
    perform as promised--on time, within budget, and in compliance with all
    laws, policies, and regulations.
        An example of the successful implementation of recapturing
    acquisition excellence is the consolidation of fiscal year 2008 OCO,
    fiscal year 2009 OCO and base-year funding, fiscal year 2010 base-year
    funding, and Foreign Military Sales C-130J contracts into one
    negotiation. By taking advantage of economies of scale, the Air Force
    realized a savings and was able to procure two additional C-130Js. This
    effort reduced the number of aircraft the Air Force needs to buy in the
    out years to meet its requirement.
        Installations and Operational Energy
        The Air Force views energy efficiency as a mission enabler that can
    increase combat effectiveness, expand reach and minimize operational
    risks. The Air Force is integrating energy considerations across the
    Air Force enterprise with a three-pronged approach: reduce demand,
    increase supply, and culture change. We can identify efficiencies that
    increase our capabilities and reduce our costs, while also increasing
    and diversifying our energy supply to improve our energy security and
    our ability to meet our critical operational requirements. Finally, by
    creating a culture that makes energy a consideration in everything we
    do, and that values energy as a limited mission-critical resource, we
    ensure enduring and far-reaching utilization improvements and savings.
        As part of our institutional effort to utilize energy to maximize
    mission effectiveness, the Air Force is requesting over $550 million
    for energy initiatives in fiscal year 2012. Initiatives include
    investments in reliable alternative energy resources, enhancing energy
    efficiency, and reducing environmental impacts and life cycle costs. In
    addition, the Air Force is continuing to take steps to reduce mission
    risk by increasing critical infrastructure resiliency to ensure
    reliable energy availability at Air Force installations.
        We have reduced energy use at facilities by nearly 15 percent since
    2003, and expect to achieve nearly a 30 percent reduction by 2015. In
    addition, we have instituted a number of fuel saving initiatives and
    reduced the amount of fuel our aircraft have consumed by over 46
    million gallons since 2006, despite increased operational requirements
    associated with ongoing operations. The Air Force is continuing to
    explore opportunities to reduce demand for aviation fuel. For example,
    the 618th Tanker Airlift Control Center is optimizing flying routes by
    working clearances to allow flights to transit through previously
    denied airspace. We can save the Air Force an estimated 2.6 million
    gallons of fuel per year by optimizing our flight routes and
    clearances. Some of the initiatives we will pursue to achieve fuel
    efficiencies are:

             Providing aircrews in-flight guidance on the optimum
            airspeed and altitude based on current flight conditions;
             Expanding the use of simulators to conduct training;
             Implementing a program, already an industry standard,
            that cleans components allowing the engine to run cooler saving
            fuel and prolonging engine life; and
             Refining fuel and cargo policies to reduce carrying
            costs and potentially the number of missions required to
            support the combatant commanders.

        We are also increasing the energy supplies we can use to meet our
    mission. We have certified over 99 percent of our aircraft fleet for
    unrestricted operational use of a synthetic aviation fuel blend. This
    fuel can be produced domestically, and we are looking to industry to
    help us meet our needs. We are in the process of certifying our fleet
    to use biofuel blends as well. These alternatives provide our fleet
    with additional flexibility and enable our freedom of action. The Air
    Force is also looking at alternative sources for energy at our
    facilities. In the upcoming years, we will quadruple on-base solar
    energy production and dramatically increase the amount of wind energy
    consumed. These clean sources of energy will serve to enhance our
    energy security.
        The Air Force is working cooperatively with the Army and the
    Marines to reduce fuel requirements at forward operating bases by
    decreasing energy demand, utilizing efficient power distribution and
    increasing alternative supplies. These bases require generators,
    typically running on diesel, that require fuel to be brought in by
    convoy. We are working to improve the energy efficiency of our Basic
    Expeditionary Airfield Resources assets, commonly called BEAR, in the
    expeditionary environment. One of the Air Force's efforts is focused on
    reducing the energy demand for expeditionary shelters by 50 percent,
    while using photovoltaic tent flys to generate a minimum of three
    kilowatts per shelter. We are also working with industry to design a
    portable, expandable microgrid for our remote airfields. The system
    will integrate solar, wind and other renewable sources of energy into
    the existing BEAR power grid, reducing the system's reliance on
    traditional, carbon-based fuel by as much as 25 percent. It will be
    able to withstand the harsh conditions in which our military operates.
    More importantly, it will help reduce the inherent wartime dangers that
    come with delivering the fuel by convoy.
        We have made significant and positive progress in reducing our
    consumption, increasing the energy available to the operational Air
    Force and changing the culture within the Air Force to ensure energy is
    a consideration in everything we do. Energy availability and security
    impact all Air Force missions, operations and organizations. The Air
    Force will increase warfighting capabilities, and efficiency, and help
    the Nation reduce its dependence on imported oil by continuing to
    ensure energy availability and re-engineering our business processes to
    become more efficient.
        Reducing Excess Physical Plant and Infrastructure
        The fiscal year 2012 budget request includes a $300 million
    demolition and $100 million consolidation investment to reduce long-
    term fixed costs through the consolidation and demolition of unneeded
    facilities and infrastructure. In line with the June 10, 2010
    presidential memorandum, the Air Force intends to reduce energy use and
    curtail unnecessary sustainment activities by eliminating physical
    plant that is no longer needed.
        MILCON
        The Air Force's fiscal year 2012 $1.4 billion MILCON request
    provides funding for our most critical requirements including new
    construction aligned with weapon system deliveries and the Combatant
    Command priorities. This includes projects supporting beddowns and
    upgrades for F-22, F-35, HC-130J, EC-130H, RPA and B-52, as well as
    projects supporting our mission support facilities most in need of
    recapitalization. The Air Force MILCON program supports the U.S.
    Strategic Command Headquarters replacement facility in three increments
    beginning in fiscal year 2012, the new U.S. Cyber Command Headquarters
    in fiscal year 2013, an additional phase of the Blatchford Preston
    Dormitory Complex at Al Udeid, Qatar, and an air freight terminal on
    Guam.
        Additionally, the budget request sustains our effort to provide
    quality housing for airmen and funds $254 million in improvements to
    meet DOD performance standards to provide 90 percent of our permanent
    party dorm rooms in good or fair (Q-1 or Q-2) condition. The Air Force
    investment strategy is to fund improvements in all Q-3 and Q-4 dorms,
    referred to as Tier 1 dorms in the 2008 Dorm Master Plan, by 2017.
        The Air Force recognizes the critical role MILCON holds in
    successful mission execution and is taking action to increase MILCON
    funding in the near years of the FYDP--the Air Force proposes to
    increase MILCON in fiscal year 2012, fiscal year 2013, and fiscal year
    2014 by a combined $1.8 billion over the fiscal year 2011 PB
    submission.
        Finally, in an effort to ensure the most critical mission and
    infrastructure projects are funded first, the Air Force used asset
    management and efficient facility operations processes to evaluate
    MILCON requirements. In essence, the Air Force is considering how these
    projects and programs help reduce our out-year investment needs as part
    of our overall cost control strategy.
        Logistics
        WSS is a vital element in sustaining Air Force readiness. The Air
    Force faced a $7 billion increase in WSS requirements across the FYDP
    at the beginning of the fiscal year 2012 budget cycle, largely due to
    increasing numbers of weapon systems, such as C-17, F-22, and MQ-1/9
    aircraft that use contractor logistics support. We recognized that we
    cannot sustain that kind of growth in requirements, so we implemented a
    WSS end-to-end assessment to identify efficiencies with respect to
    supply chain management, centralized asset management, and depot
    performance.
        We were able to reduce WSS investment from $7 billion to $4 billion
    through efficiencies in depot and supply chain processes identified in
    the assessment. While we will still experience growth, this $3 billion
    FYDP offset represents important savings that the Air Force applied
    elsewhere. Prior to the WSS end-to-end assessment, the sustainment
    funds requested in fiscal year 2012 would have supported 80 percent of
    the WSS requirement. Following the assessment, and the resulting
    reduction in growth, the same amount of funds requested will actually
    support 84 percent of the fiscal year 2012 WSS requirement.
        While the peacetime flying hour program is fully funded,
    reprogramming may be necessary to cover increased fuel costs due to the
    volatility of fuel prices. Over the longer term, enactment of the DOD's
    legislative proposal for the Refined Petroleum Products Marginal
    Expense Transfer Account would reduce disruptions to operations and
    investment programs by providing the flexibility to meet fuel price
    fluctuations.
        The Air Force is successfully fielding a pilot of the first
    increment of the Expeditionary Combat Support System (ECSS). We will
    conduct an independent cost estimate as part of, and in conjunction
    with, the ongoing Critical Change Review to assess the cost
    effectiveness of proceeding with additional ECSS releases that support
    retail and wholesale supply and depot maintenance activities. The Air
    Force will continue to maintain legacy logistics support systems while
    determining the best course of action for developing information
    technology tools to enhance the visibility and management of supplies
    and equipment.
        Financial Improvements
        The Chief Financial Officers' Act provides direction for achieving
    a clean audit through leadership commitment, modernized government
    financial management systems, and strengthened financial reporting.
    Sound financial management helps to ensure the maximum combat
    capability for each taxpayer dollar. The Air Force is committed to
    achieving the legislative requirement for a clean audit by 2017. While
    2017 is a challenging deadline for a military organization as large and
    diverse as the Air Force, the strong engagement of Air Force
    leadership, additional financial resources provided in recent years,
    and focus on fielding effective financial systems will help achieve it.
    We are focusing our efforts on the information most relevant to
    decisionmakers, and the Air Force Financial Improvement Plan is closely
    aligned with the DOD strategy to achieve a clean audit.
        Strategic Basing
        In 2009, the Air Force established a standardized, repeatable, and
    transparent Strategic Basing Process. Guided by the Strategic Basing
    Executive Steering Group and coordinated through the lead major
    commands, over 115 basing actions have been accomplished ensuring that
    mission and combatant commander requirements are linked to installation
    attributes that identify those locations that are best suited to
    support any given mission. This process supports IOC, aircraft
    delivery, personnel movement, and other mission requirements. Recent
    improvements in the process have formalized actions to expedite simple,
    specialized or particularly time-sensitive basing initiatives, to
    support more timely decisions.
        During 2011, the Air Force will utilize the Strategic Basing
    Process to support basing decisions for the MQ-1/9, LiMA, LAAR, and KC-
    X.

                                   CONCLUSION

        In developing our fiscal year 2012 budget request, we looked at
    ways to maximize combat capability out of each taxpayer dollar by
    identifying waste, implementing efficiencies, pursuing continuous
    process improvement initiatives and making smart investments.
    Recognizing the need to shift resources from ``tail to tooth,'' the Air
    Force identified efficiencies across the enterprise that will enable
    investments in enhancements to increase our warfighting capabilities.
    This includes the continued pursuit of cost-effective systems that
    leverage existing capabilities and maximize interoperability and
    integration of legacy and future systems.
        Our ability to project Global Vigilance, Reach, and Power is
    constrained by the increasing costs to design and build platforms in a
    particularly challenging budget environment. Our fiscal year 2012
    budget request reflects the difficult choices that will allow the Air
    Force to provide the necessary capability, capacity, and versatility
    required to prevail in today's wars, prevent and deter conflict,
    prepare to defeat adversaries and succeed across the range of potential
    military operations--all the while preserving and enhancing the All-
    Volunteer Force.
        We are confident in our airmen. They are the best in the world, and
    we rely on them to meet any challenge, overcome any obstacle and defeat
    any enemy as long as they are given adequate resources. We are
    committed to excellence and we will deliver with your help. We ask that
    you support the Air Force budget request of $119 billion for fiscal
    year 2012.

        Chairman Levin. Thank you, Mr. Secretary.
        General Schwartz?

     STATEMENT OF GEN. NORTON A. SCHWARTZ, USAF, CHIEF OF STAFF OF
                             THE AIR FORCE

        General Schwartz. Mr. Chairman, Senator McCain, members of
    the committee, I am privileged to be here today with Secretary
    Donley representing the men and women of the U.S. Air Force.
        Our airmen continue to inspire us with their dedication and
    their service and define us with their many accomplishments.
    Quietly and proudly serving alongside their Army, Marine, Navy,
    and Coast Guard teammates, airmen every day act on behalf of
    the American people as stewards of the Nation's trust and
    defenders of her security.
        This budget request, fully appreciating the Nation's
    extraordinary fiscal condition, supports our airmen in their
    continuing efforts to structure the force for maximum
    versatility across the spectrum of operations for today's
    requirements and for future challenges.
        Because of intense budgetary pressures, I echo Secretary
    Donley's concern about operating under a continuing resolution.
    Without a 2011 appropriations bill, we will have to further
    reduce flying hours, cancel training and exercise
    opportunities, delay or cancel weapon system sustainment and
    depot maintenance activities, and disrupt a multitude of other
    day-to-day operations.
        Current reductions to the President's budget request not
    only create inefficiencies that basically reverse the
    efficiency measures that the Secretary of Defense has directed,
    they adversely affect readiness as well. We appreciate your
    efforts to pass an appropriations bill to provide for these
    critical needs of our uniformed men and women.
        Consistent with the National Security Strategy and the
    Quadrennial Defense Review, our national military objectives
    are to counter violent extremism, deter and defeat aggression,
    strengthen international and regional security, and shape the
    future force.
        Airmen now are committed to the task of leveraging air and
    space power with all of its inherent versatility and presenting
    to the President and the national leadership a range of
    strategic options to meet these objectives, calibrated as our
    Nation continues to grapple with substantial deficits and
    related national debt.
        To counter violent extremism, airmen continue to make vital
    contributions to our Nation's strategic objective of
    disrupting, dismantling, and defeating al Qaeda and its
    affiliates in Afghanistan and elsewhere, thereby inhibiting
    their return to former sanctuaries.
        More than 37,000 airmen, about 6 percent of the force, are
    forward deployed worldwide. Of this group, nearly 30,000 are
    continually rotating to directly contribute to operations in
    the CENTCOM area of responsibility (AOR), including 10,000
    airmen in Afghanistan, providing close air support to U.S. and
    coalition ground forces, airlifting or refueling, personnel
    rescue, aero-medical evacuation from hostile battle space,
    leadership of provincial reconstruction teams, and training and
    exercise opportunities to develop partner air forces.
        An additional 57,000 total force airmen, or about 11
    percent of the force, are forward stationed overseas, providing
    capabilities in direct support of combatant commander
    requirements.
        From their home stations in the United States, over 200,000
    airmen, 43 percent of the force, provide daily support to
    worldwide operations, from standing nuclear alert to commanding
    and controlling our satellites, to analyzing ISR data, and
    much, much more.
        To deter and defeat aggression, we maintain vigilance
    across the entire spectrum of conflict and will employ multi-
    role systems with capabilities that can flex to fulfill
    different warfighting requirements. At the upper end of the
    spectrum, we continue to provide two of our Nation's three arms
    of nuclear deterrence, with steadfast excellence, precision,
    and reliability.
        Across the remainder of the operational spectrum, we will
    continue to leverage air and space power that are vital to our
    Nation's ability to sustain a robust conventional deterrent.
    This requires the ability to rapidly project power through the
    global commons and in the globally interconnected domains of
    air, space, and cyber space.
        Therefore, in addition to leveraging air power, we will
    also magnify our efforts to reinforce our cadre of space and
    cyber professionals. We will continue to ensure precision
    navigation and timing, secure satellite communications,
    timeliness of warning, and global environmental sensing for our
    joint teammates, while we enhance our space situational
    awareness that is vital to attributing space-borne threats and
    protecting our systems and capabilities.
        We will also continue to support the whole-of-Nation effort
    to team with international partners in strengthening space
    architecture resiliency, establishing and reinforcing norms for
    space and cyber activity, and ultimately developing a broader
    range of options to ensure our Nation's access to and freedom
    of action in both domains.
        To strengthen international and regional security, the Air
    Force will translate air power's inherent ability to traverse
    vast distances with unmatched speed, ensuring the U.S. Forces
    are globally available, yet through that inherent versatility
    can be tailored in scale to be regionally focused.
        Through a whole-of-Nation approach and with mutually
    supporting strategies toward this objective, the Air Force and
    the joint team will underwrite defense, diplomatic, and
    developmental efforts to help address the root causes of
    radicalism and aggression and not just the violent
    manifestations thereof. For instance, nearly 300 airmen are
    deployed as members of the Iraq Training and Advisory Mission-
    Air Force, supporting the development of counterpart
    capabilities in more than 425 specialties.
        Similarly, the airmen supporting the Combined Air Power
    Transition Force not only advise and train Afghanistan airmen,
    they help to set the conditions for a viable and self-
    sustaining Afghan army air force to meet a range of security
    requirements. Ultimately, these and coordinated efforts to
    build international partner capabilities can help to prevent
    lower-intensity problems from escalating into full-scale
    crises.
        Finally, to shape the future force, we will work to ensure
    readiness, training, and equipage while contending with serious
    budgetary pressures. Our systems and capabilities must be ever
    more adaptable to be employed across the full range of
    operations, while agile command and control capabilities ensure
    interoperability with our joint and coalition partners.
        Flexible air, space, and cyber capabilities require
    resilient airmen. They are the lifeblood of our Air Force, to
    whom we owe our fullest commitment, and particularly our
    wounded warriors and their families.
        During this time of sustained and frequent deployments, we
    will bolster our capacity to provide assistance to our airmen
    in both managing the obvious and the less obvious challenges of
    returning home from war. Since July 1, 2010, we have made
    progress in this regard with the establishment of the
    Deployment Transition Center at Ramstein Air Base in Germany,
    where nearly 1,200 personnel attended programs to decompress
    and begin a healthy reintegration into family and unit of
    assignment.
        We intend to continue this progress. As deployment tempos
    remain high, we will further strengthen our efforts to develop
    the core components of the Air Force resiliency program and its
    ongoing assessment of the fitness of the force. This will
    inform our efforts as we continue to improve the quality of our
    airmen and family services and support from child education to
    base fitness centers to transition assistance programs.
        In closing, sir, I would like to reaffirm my personal
    support for the efforts to better control the cost of DOD
    healthcare. I respect and I celebrate the service and sacrifice
    of our retirees. They are and always will be honored members of
    the Air Force family, but I do believe the current DOD
    proposals are both modest and responsible.
        The Secretary and I are watching the crisis in Japan very
    closely. The Department of State has authorized the voluntary
    departure of family members and dependents of U.S. officials
    who wish to leave northeast Japan.
        To date, airmen and their families are not at risk on our
    bases. We are working closely with the U.S. Pacific Command to
    ensure that they have the resources they need when they need
    them and will support the voluntary departure of U.S. family
    members to the fullest extent.
        Mr. Chairman, committee members, the Air Force remains
    steadfastly committed to global vigilance, reach, and power for
    America. Thank you for your continued support of the Air Force,
    for our airmen, and certainly for their families.
        I look forward to your questions, sir.
        Chairman Levin. Thank you very much, General.
        Let us try a 7-minute round for the first round of
    questioning. Secretary or General, what is the support which we
    are providing to the Japanese now, and what are the plans for
    the next few weeks?
        Secretary Donley. Mr. Chairman, there are about 30,000 Air
    Force personnel and dependents in Japan. About half of those
    are on the main island between the two locations you mentioned,
    Yokota and Misawa, in the far north.
        We are bringing to bear all the capabilities that we have
    in Japan. We have moved capability from Kadena up to Yokota and
    elsewhere to support ongoing humanitarian relief and disaster
    assistance.
        We are using C-17s and other assets to help move search and
    rescue capabilities from the United States to Japan. We have
    used both helicopter and fixed-wing airlift capabilities to
    move food and water, equipment, and key personnel around the
    main island, all in support of the local requirements as
    defined by the Japanese officials.
        We have also provided ISR coverage through Global Hawk
    missions, which have helped to define the scope of the problem
    for our Japanese allies. Of course, we are also taking the
    preparatory and prudent steps to make sure that we have in
    place all the capabilities and accoutrements that go with
    radiation-related defensive measures.
        The decontamination teams and capabilities are in place, if
    needed. The dosimeters are being distributed to forces when
    that is appropriate. Medical backup is being lifted into the
    island. So I think we are prepared for future contingencies as
    they might develop.
        There is a continuous reading of the health situation on an
    ongoing basis at both Misawa and Yokota. As General Schwartz
    indicated, there is no threat to our personnel there, although
    radiation readings across Japan are spiking temporarily, based
    on the local conditions at the nuclear reactors involved and
    also the prevailing weather. There are little spikes up and
    down, depending on where you are, but no immediate threats.
        Chairman Levin. Have any of those spikes been noticed at
    our three facilities?
        General Schwartz. Mr. Chairman, no, sir, they have not.
        Chairman Levin. Okay. On the JSF delays, the testing
    program for the Air Force variant, the F-35A, has been
    proceeding ahead of schedule, and yet the 5-year defense plan
    cuts out 47 production aircraft compared to last year.
        The Marine Corps version has had problems. They were cut as
    well. The Navy version was reduced by only two aircraft. So why
    is the Air Force making such a large reduction in the plans to
    buy F-35As, given the fact that the testing program is
    proceeding even better than expected?
        General Schwartz. Sir, there are a couple aspects to this.
    One is the way the program was sequenced. It happened that the
    C models, the Navy version of the aircraft, were toward the
    back end of the procurement cycle within the 5-year defense
    plan. So, there were fewer reductions simply because of the
    sequencing.
        As you suggested, the airplane is testing well, despite the
    fact that we did have a generator anomaly recently that caused
    a temporary grounding of the fleet. This is the kind of
    discovery that occurs in test. But the major cause for the
    reduction simply was a factor of producibility and the ability
    of the factory to put out aircraft and not to take too much
    risk on fulfilling the delivery requirements.
        Chairman Levin. On the engine issue, press reports indicate
    that the development costs for the F-135 engine have increased
    by about $1 billion since last year. That is the so-called
    first engine.
        The Pratt & Whitney program manager has been quoted as
    saying that one-third of those costs are related to shortfalls
    in meeting specifications, two-thirds related to improvements
    beyond specification. So we have about a $300 million to $400
    million cost overrun on that engine that is not related to
    improvements beyond the specifications.
        What is going on? Why are we accepting those kind of cost
    overruns in this engine?
        General Schwartz. Sir, there are development issues that
    arise that one must deal with. I have to say that I wouldn't
    expect the situation with the proposed second engine to be a
    lot different.
        The bottom line is that the F-135 engine is based on the F-
    119, which is currently in the F-22 aircraft. I have confidence
    that these developmental issues will be overcome. As I have
    indicated in the past, my personal conviction is that one
    engine is sufficient for the F-35 program.
        Chairman Levin. I understand that. But I am talking about
    the cost overrun in that one engine, and why is that
    acceptable? Why do we not have a fixed cost at this time on an
    engine where these problems, at least the $300 million to $400
    million of this additional billion, are not a result of any new
    specifications but meeting the existing specification? Is that
    acceptable to you?
        General Schwartz. It is not. I don't offer an excuse for
    it, Mr. Chairman.
        We are moving into an era of more and more fixed-price
    contracts. The KC-46 is a case in point, and we understand your
    intent.
        Chairman Levin. Okay. Thank you. My time is up.
        Senator McCain.
        Senator McCain. Thank you, Mr. Chairman.
        General Schwartz, last week General Clapper and General
    Burgess testified before this committee, and when asked, they
    said that if events in Libya continued as the way they were,
    that Gaddafi would prevail.
        Given their view and the assessment of the situation on the
    ground today, do you agree with that?
        General Schwartz. Sir, my own view is that he has certain
    advantages; interior lines and the capacity to bring forces to
    bear. That is a clear advantage of those resources in Libya,
    which are better supplied and better equipped.
        Senator McCain. In recent days, they have achieved
    significant successes. I think that is fairly obvious, wouldn't
    you say?
        General Schwartz. They have reestablished control over
    larger areas in Libya. Yes, that is correct.
        Senator McCain. One of the ways of achieving this is
    through coordination of both air assets, land assets, and sea
    assets. Is that a correct assessment?
        General Schwartz. I don't have particular insight into the
    level of synchronization amongst their assets.
        Senator McCain. But factors have been control of the sea
    and the air?
        General Schwartz. Senator McCain, they have been operating
    in the air. That is certainly the case.
        Senator McCain. What is your assessment of the capability
    of their air assets? In other words, how many combat aircraft
    do they have, and how many combat helicopters do they have?
        General Schwartz. They have multiple tens of combat
    aircraft and certainly I would say in the low hundreds of
    helicopter rotary-wing aircraft.
        Senator McCain. Of those that we have seen operational,
    there is a relatively small number.
        General Schwartz. They have been flying in the neighborhood
    of tens of sorties a day.
        Senator McCain. Do you agree with General Odierno's
    assessment and others that we could install a no-fly zone over
    Libya in a matter of a few days?
        General Schwartz. I think that is overly optimistic,
    Senator McCain. But it is clear that we could establish a no-
    fly zone if that was the mission that was assigned.
        Senator McCain. How long would that take, in your view?
        General Schwartz. I think it would take upwards of a week
    to do that.
        Senator McCain. We would be using assets that are now in
    the region? I am talking about Air Force assets.
        General Schwartz. Sir, it would undoubtedly require
    resources in Europe, as well as those that are based in the
    United States. I would like to say, however, that, for me, the
    question is not can we do it, but should we? If so, how?
        Senator McCain. If there was a declaration of a no-fly
    zone, it would be a motivating factor to the Libyan pilots not
    to fly. Would you agree with that?
        General Schwartz. If the President assigns the mission to
    maintain a no-fly zone, clearly that would have an influence on
    the thinking of Libyan pilots.
        Senator McCain. Is it your assessment that the situation
    has deteriorated to the point where it probably would require
    more than just a no-fly zone to reverse the momentum that the
    Gaddafi forces have obtained?
        General Schwartz. Sir, that is exactly my point. The
    question is, is a no-fly zone the last step, or is it the first
    step?
        Senator McCain. What is your assessment of the battlefield
    situation at this point to reverse the momentum?
        General Schwartz. A no-fly zone, sir, would not be
    sufficient.
        Senator McCain. Thank you. As opposed to a couple of weeks
    ago, when probably it would have been.
        Also, isn't it true that we do have significant
    capabilities to jam the communications that the Gaddafi forces
    have?
        General Schwartz. We have some capability in that regard
    for military communications.
        Senator McCain. I thank you.
        In order to impose a no-fly zone and perhaps other
    impositions on the enemy, it would require assets from the
    United States as well?
        General Schwartz. It would, sir.
        Senator McCain. It would not require assets taken from
    Afghanistan or Iraq?
        General Schwartz. I would not agree with that necessarily.
    Again, it depends on the mission that is assigned. But there
    are limited ISR assets, for example. As you are well aware, we
    have devoted virtually everything we have to the CENTCOM AOR.
    There might well be some implications there.
        With regard to lift, there is a limited amount of lift.
    There is some being allocated to the Japanese mission, some
    being allocated to CENTCOM, and in Libya, there would be some
    trade-offs involved, sir.
        Senator McCain. With regards to Iraq, the Iraqi Government
    has made it clear that they would like to develop an air force
    that would at least have the capability to defend the skies
    over Iraq. Isn't that true?
        General Schwartz. They have indicated as much, sir.
    However, they have made choices not to put the resources behind
    that aspiration.
        Senator McCain. I see. If they put the resources behind it,
    could they do it by themselves?
        General Schwartz. We believe that with appropriate training
    and so on, they could provide for their own air sovereignty.
    Yes, sir.
        Senator McCain. Their own air sovereignty. But training,
    could they do that by themselves?
        General Schwartz. Sir, we have a training mission in Iraq,
    and part of the effort would be to qualify the Iraqi pilots.
        Senator McCain. I guess my point is if all of the U.S.
    Forces are withdrawn from Iraq, I think it would, at least in
    the words of General Austin before this committee, be very
    difficult for them to stand up an air capability. Do you agree
    with that?
        General Schwartz. Presumably, there will be a training
    mission after combat forces exit Iraq, sir.
        Senator McCain. That would be necessary?
        General Schwartz. I believe it would.
        Senator McCain. Thank you.
        Thank you very much, Mr. Chairman.
        Chairman Levin. Thank you, Senator McCain.
        Senator Lieberman.
        Senator Lieberman. Thanks, Mr. Chairman.
        Thanks, Mr. Secretary and General. Good to see you again.
        I want to pick up at the outset of my time on some of the
    questions Senator McCain asked about Libya because it is a
    matter of such urgency.
        It was just a week ago that General Clapper, the Director
    of National Intelligence, responded to a question I asked him,
    essentially saying that over time, assuming there were no new
    factors on the ground and no outside assistance, that Gaddafi's
    forces would prevail over the opposition forces simply because
    they were so much better equipped, and have better logistics,
    command and control, and the like.
        I know he took some abuse for that statement, but it is
    clear now that in merely the passage of a week, which was
    quicker than I assumed General Clapper meant, and maybe quicker
    than he meant, the Gaddafi forces now have moved very rapidly
    and are approaching Benghazi, which was the stronghold of the
    opposition.
        The New York Times reports today what it calls, ``a
    striking shift in tone from the administration,'' produced by
    the prospect of a deadly siege of the rebel stronghold of
    Benghazi.''
        This is a newspaper report, but also a suggestion that the
    administration may now be negotiating around a resolution
    introduced by Lebanon, France, and the United Kingdom in the
    Security Council to not just give authority to impose a no-fly
    zone, but to authorize aerial bombing of Libyan tanks and heavy
    artillery to try to halt the advance of Gaddafi's forces.
        This is also from the newspaper this morning. It says that
    administration officials, after heated internal debate, have
    now decided that a no-fly zone would be, ``too little, too
    late.''
        I wanted to ask you, from the Air Force point of view, if
    asked to participate--and I will get to whether we do it with
    some allies in a moment--in the aerial bombing of Libyan tanks
    and heavy artillery to try to halt the advance of Gaddafi's
    forces on Benghazi, how soon that could be carried out if
    authorized, and how it would compare as a mission to imposing a
    no-fly zone both in terms of its feasibility, the risk, et
    cetera.
        General Schwartz. First of all, a mission as you describe
    it, were it to be assigned, would require preparation of the
    battle space. That is, sanitizing ground-to-air threats to the
    various aircraft. That clearly would require both electronic
    and kinetic action against air defense systems.
        With respect to interdicting ground targets, that is
    certainly within our capability to do so with precision. In
    non-urban areas, that certainly is a capability that we have.
    We can do it in urban areas, but clearly with the concerns
    about collateral damage and so on.
        Senator Lieberman. Right.
        General Schwartz. I think the key thing here is, we, as the
    uniformed military, are planning. We are working to provide the
    civilian leadership with options, and ultimately, the President
    will decide what he wants us to do.
        Senator Lieberman. Understood.
        General, Secretary Clinton said yesterday that a turning
    point of the administration's consideration of what its options
    were and what it might do with regard to Gaddafi's advancing
    forces was the Arab League resolution over the weekend calling
    for a no-fly zone.
        I know, and you know better than I, that some of our allies
    in the Arab world have impressive air assets and capabilities.
    Have we begun at all to discuss with our Arab allies the
    possibility of them working with us in either of these
    options--the no-fly zone or some other use of air power--
    against Gaddafi in Libya?
        General Schwartz. Senator, I have not done that. That would
    be within the realm of CENTCOM and U.S. Africa Command. So I
    cannot give you a definitive indication whether that has
    occurred. But I agree with you that there are nations within
    the Arab League with capable air forces that, under the right
    circumstances, might be brought to bear.
        Senator Lieberman. I appreciate those answers very much.
        I am going to go to a very different kind of question,
    which may be relevant to what we are talking about, and that is
    one that I have been interested in, which is the Joint
    Surveillance Target Attack Radar System (JSTARS) program.
        General, in earlier testimony before this committee, you
    stated that your Ground Moving Target Indicator analysis of
    alternatives (AOA) would be used beginning for fiscal year 2013
    to guide Air Force investment in ISR weapon systems like
    JSTARS, which have this remarkable capability to chart what is
    happening on the ground and then advise our troops.
        You also stated that the report would be ready at least in
    interim form by this spring, and I wanted to get a progress
    report from you on how that is doing.
        General Schwartz. Sir, the AOA is on track. Preliminary
    information is coming up from Air Combat Command, where the
    people are working on it. It will be in final form in the fall.
        Senator Lieberman. So you would say it is pretty much on
    schedule? Okay. I appreciate it.
        I just would add by way of advocacy, from what we have
    heard, JSTARS continues to be doing well in supporting our
    troops in Southwest Asia and has been called into action in
    recent months in other trouble spots around the world. Does
    that sound right?
        General Schwartz. Ground Target Moving Indicator capability
    is an important part of our surveillance repertoire.
        Senator Lieberman. Right.
        General Schwartz. The real question is how do we go
    forward? You can depend on us to maintain the current JSTARS
    capability until and if we decide to migrate to another
    capability.
        Senator Lieberman. Thank you. My time is up. Thank you both
    very much.
        Chairman Levin. Thank you, Senator Lieberman.
        Senator Brown.
        Senator Brown. Thank you, Mr. Chairman. I appreciate it.
        General Schwartz, you indicated that when the chairman was
    questioning the overruns, that there is no excuse for the
    overruns, the $300 million. But what are you doing about it?
        I mean it is great not to have an excuse, but what actually
    is happening? Is there any type of recourse? What is the
    conversation? Where do we go?
        Either one.
        Secretary Donley. I think Admiral Venlet has outlined this
    in his testimony a little bit. I would defer to that, if we can
    get you a more specific answer for the record?
        Senator Brown. Okay. Yes.
        [The information referred to follows:]

        $893 million was added to the F135 program to complete System
    Development and Demonstration (SDD) as a result of the Technical
    Baseline Review (TBR). The TBR recommended adding $131 million for cost
    growth of previously planned content, $342 million for risk reduction
    measures, $341 million for the manpower and engines necessary to extend
    the flight test schedule by 2 years, and $79 million for management
    reserve. The TBR did not recommend changing the propulsion
    specification; therefore there is no funding for improvements beyond
    the specification.
        Cost growth refers to increases in the cost of work previously
    agreed to by the contractor, generally due to suboptimal performance.
    Risk reduction measures refer to items that were previously removed
    from the program but are now being put back in to ensure the
    development program will complete on time with minimal risk.

        Secretary Donley. The Joint Program Office is managing this
    program.
        Senator Brown. I am just reflecting on the comments that
    General Schwartz made that there has been no excuse. You were
    just talking about it and saying you didn't ask the chairman to
    refer to another report. So I would like to kind of know what
    is being done about it.
        General Schwartz. Clearly, the folks that are managing this
    program are focused on that to make sure that the contractor
    delivers what the contract requires. It is my understanding
    this is not a fixed-price contract. So there is some room there
    for developmental issues and a cost share between the
    Government and the contractor.
        The key point here is that we, as customers, need to be
    demanding. We need to write the right kind of contracts. We
    need to make sure that the terms are enforceable, and that
    certainly is our conviction as an Air Force.
        Senator Brown. In light of the recent delays in the JSF
    program, not to mention the cost overruns in the F-135 engine
    program, we have seen positive results from competition in the
    Navy with some of the projects that they are working on, and it
    does work. I hear it regularly. I was just at the Army
    breakfast this morning, and they were talking about
    competition, and et cetera, et cetera.
        Do you have any comments on the competition when you have
    one engine that is being overrun with costs and delay, and you
    have another one that is ahead of schedule and under budget? Do
    you have any comments on that at all?
        General Schwartz. I am not sure that I would agree that the
    other engine is under cost and so on.
        Senator Brown. But what about the concept of competition?
        General Schwartz. The concept of competition certainly is
    valid, as the KC-46 outcome demonstrates. But I think I would
    make the one case, sir, that the issue is current or near-term
    cost versus future soft savings. In the situation we find
    ourselves, while competition may, in fact, have benefits down
    the road, the question is what can we afford to do now?
        Senator Brown. Okay. The Air National Guard (ANG) and Air
    Force Reserve have played an integral part of the war effort.
    The Air Force Reserve mans 14 percent of the total Air Force,
    but only constitutes 6 percent of the total Air Force personnel
    budget. Obviously, these figures represent significant cost
    savings and really a good bang for your buck.
        With the Reserve components being such an effective and
    cost-efficient component, can you comment on the types of roles
    and responsibilities that will be expected among the ANG and
    Reserve over the next 3 years?
        General Schwartz. There is virtually no mission or very few
    missions where the Reserve component does not contribute in our
    Air Force. From kinetic missions, fighter, airlift, space, and
    cyber, there isn't a mission where our Reserve components don't
    contribute. We certainly value that contribution.
        Senator Brown. On the C-5Ms, I am just curious as to your
    thoughts on the performance thus far, in light of the ongoing
    Reliability Enhancement and Re-engine Program (RERP). Since the
    Air Force is likely to have a number of C-5As in service for
    the next 30-plus years, does it make sense that that inventory
    in the ANG and Air Force Reserves should also be included in
    the modernization effort?
        Secretary Donley. Sir, I think the Guard and Reserve are
    included in the modernization of the C-5M. It has performed
    very well, and it is going to be part of our inventory going
    forward. It has provided a lot more operational flexibility and
    reliability to what is inherently an older airframe. So the C-
    5M has been a successful program for us.
        Senator Brown. I am not sure if you are aware, I am going
    to be the ranking member of Airland Subcommittee with Senator
    Lieberman, and I am looking forward to working on a lot of
    these issues. I appreciate your time.
        Thank you, Mr. Chairman.
        Chairman Levin. Thank you very much, Senator Brown.
        Senator Akaka.
        Senator Akaka. Thank you very much, Mr. Chairman.
        Mr. Secretary and General Schwartz, thank you so much for
    your service to our country. Under your leadership, the Air
    Force has secured the Nation's nuclear arsenal and restored
    public confidence.
        I know the Air Force's operational tempo has been high, and
    I want to thank the men and women of the Air Force, and their
    families as well, for their sacrifice.
        General Schwartz, deployed airmen performing the search and
    rescue mission play a critical role in saving lives. They
    completed over 9,700 personnel recovery sorties in 2010 alone,
    and their expertise makes the goal of the golden hour medical
    evacuation a reality.
        Can you talk about the casualty evacuation mission and how
    the rescue assets are holding up to the harsh environment we
    face?
        General Schwartz. Senator, our combat rescue community is
    one of those communities in greatest demand that has
    essentially a 1-to-1 tempo, time at home to time deployed. They
    are, in fact, contributing to the Secretary of Defense's
    mandate for recovery of our wounded within that golden hour.
        They are a very capable force, and clearly, this is a core
    mission for the Air Force. That is personnel recovery
    operations in denied areas. That is our special expertise. To
    have the right kind of medical capability onboard to stabilize
    patients and to get them back to higher-level care.
        We are in the midst of replacing combat losses. Of note, we
    had 19 HH-60 aircraft in 2010 that sustained battle damage. We
    are replacing, through the operational loss replacement
    program, some aircraft which had been total losses. We are
    looking forward to the HH-60 recapitalization program to move
    to a successor platform for the rescue mission.
        Senator Akaka. We thank you so much. Certainly, the program
    has saved many lives.
        General Schwartz, the Navy recently completed a critical
    design review for a maritime surveillance RPA and a realized
    cost and schedule savings in research and development (R&D) by
    leveraging the thousands of hours flown by the Global Hawk. Do
    you foresee future opportunities for joint acquisitions,
    operations, maintenance, or training in the RPA arena to find
    efficiencies?
        General Schwartz. We certainly do, sir. Global Hawk and the
    Navy equivalent program, Broad Area Maritime Surveillance
    (BAMS), is just a case in point, and not the only one, where
    the fundamental question is why should we have two different
    depots? Why should we have two different training pipelines or
    even, for that matter, based at different locations?
        In fact, we will probably base both BAMS and Global Hawk at
    Sigonella in the European theater, as an example of our putting
    these things together. Certainly, we shouldn't have two
    different ground stations.
        Gary Roughead and I are committed in that area and others,
    in part as a result of our effort on air-sea battle, to make
    sure that where we have these synergies, we maximize them. BAMS
    and Global Hawk is just a very good example.
        Senator Akaka. Thank you.
        Secretary Donley, DOD spends about $16 billion a year for
    fuel, with the Air Force as the largest military consumer. The
    C-17 was recently certified to use biofuels. Can you discuss
    any preliminary results and any plans for biofuel usage in
    other aircraft?
        Secretary Donley. The Air Force has had a comprehensive
    program for the last several years to make sure that we certify
    engines on all our Air Force platforms for alternative fuel
    blends, whether it be from Fischer-Tropsch processes or from
    biofuel processes. So, we have been stepping through that
    certification program.
        The issues in front of us, I think, now more relate to the
    national marketplace and who will be the producers and what
    will be the supply chain that feeds alternative fuels as a
    cost-effective alternative, which we can pursue in the mid-
    teens. So I think that is the primary challenge in front of us.
        We are, as you suggested, the largest consumer of fuel in
    DOD. From exceptional efforts in fuel management and in changes
    in operations, we have been able to reduce our demand over the
    last several years by about 2 percent.
        So the number of gallons used has gone down, but the cost
    has continued to go up. This is a continuing challenge. We also
    have a number of efforts underway at the installation level as
    well, in addition to aviation fuels, to get more renewable
    energy into our bases.
        Senator Akaka. Secretary Donley, 35 percent of the fiscal
    year 2012 budget request will be dedicated to quality of life
    projects, including dorms, training facilities, and child
    development centers. My question is what are the top three
    family issues that you are trying to resolve with the budget
    request?
        Secretary Donley. Sir, as you suggest, we have a number of
    programs underway. We have used the Year of the Air Force
    Family, which really is over the last 15 months or so, to help
    refine our programmatic focus going forward.
        We have started to not just support sustaining programs,
    such as you have mentioned--the dormitory modernization
    program, the child development centers, manning the child
    development centers, and getting the hours of operations
    right--but we have started to fine-tune where we put the
    limited, marginal dollar to help with family issues.
        One example is our Exceptional Family Member Program, where
    we have airmen and families with exceptional needs and also
    focusing on school liaison support, which is so vital to airmen
    and their families, providing for education for their kids.
    Those are a couple of areas that we are focusing additional
    attention on.
        Senator Akaka. Thank you very much for your responses.
        Thank you, Mr. Chairman.
        Chairman Levin. Thank you very much, Senator Akaka.
        Senator Ayotte.
        Senator Ayotte. Thank you, Mr. Chairman.
        Secretary Donley, General Schwartz, it is an honor to be
    here with you. I have a particular affinity for the Air Force,
    given that I am married to an A-10 pilot. So it is really an
    honor. Thank you both for your distinguished service to our
    country.
        I wanted to mention up front that I also had the privilege
    of attending the Army breakfast this morning and then hearing
    both of your comments about where we stand right now with the
    continuing resolution, that I would like to say that I hope
    that leadership within the Senate and also in the House brings
    forward funding for the rest of the year for a defense
    appropriations.
        We are at a time of war. I heard loud and clear what you
    had to say today. I know that members of this committee are
    very concerned about this as well. But please know that we want
    a full-year defense appropriation for the rest of fiscal year
    2011 to come forward.
        Thank you for bringing those comments forward to let people
    know what the consequences are of having these short-term
    resolutions when we are at war.
        Understanding that it was a long and arduous process with
    lessons learned along the way, I would like to congratulate the
    Air Force on recently completing the tanker competition. The
    fact that the European Aeronautic Defence and Space (EADS)
    company has decided not to contest your decision I think is a
    testament to the quality of the process that you followed
    during this bidding round. So thank you, and that was a very
    good thing that they decided not to contest what had happened.
        In your posture statement, General, you rightly state that
    the new air refueling tanker remains the top acquisition and
    recapitalization priority for the Air Force. The current fleet
    of Eisenhower-era KC-135s are averaged over 48 years old, and
    they are long overdue for replacement.
        Without refuelers, you can't run your fighters. You can't
    run the rest of them. So it is so integral to the Air Force.
        General Schwartz. Or a no-fly zone.
        Senator Ayotte. Exactly. Some of the key missions that we
    need to accomplish.
        I am aware that you are now in the process of the early
    stages of the strategic basing process that will determine
    where the KC-46A will be stationed. I wanted to ask you about
    that. I am sure you are aware we have the Pease ANG that is a
    very vital part of the KC-135 mission and has a very close
    proximity to air fueling tracks and also has run those missions
    very cost effectively.
        I wanted to ask you, I know that you haven't announced the
    criteria yet, but will that criteria be merit based and on
    proximity to refueling air tracks? How do you anticipate that
    process coming forward and what will the timing be for
    announcing those criteria?
        Secretary Donley. We will start to look at those criteria
    later this year. I will say this is a multi-year process, and I
    think General Schwartz and I have been very clear from the
    beginning that we don't want to get too far out in front.
        This is a 179-aircraft program. It will take over a decade
    to play out. We do not want to commit too far in advance to
    future basing and tie the hands of our successors or the
    operational commanders who will benefit from this capability
    later.
        Our plan is to look at the first bed-down issues later this
    year, and we will do those on a couple of year increments at a
    time, slowly building up the basing decisions. Obviously, we
    will want to take advantage of the capability of the aircraft
    and understand how it differs and will perform differently than
    the KC-135s. We will also look to Air Force operational needs
    and also the needs of the regional combatant commanders and how
    they define those requirements.
        So there are a number of tanker bases that are interested
    in being the first on the block, if I may put it that way. We
    understand that. We will work through this process very
    deliberately, as we have in previous bed-down decisions.
        Senator Ayotte. I appreciate that, and you know we are very
    proud of the work that Pease is doing. I hope that you will
    consider, of course, that what we want is a transparent, merit-
    based process. I think that is what everyone would hope in how
    you make your decisions.
        I hope that you will consider, and I assume you would just
    based on cost effectiveness, the proximity to air refueling
    tracks.
        Thank you.
        Secretary Donley. Just to respond again, this is a multi-
    year process. There are 179 aircraft for this KC-46 program,
    plus we will probably have roughly 200 more tankers to be
    modernized in the mid- to late '20s and beyond. So this is a
    long-term proposition.
        The point I would like to leave with you is that even as we
    make the first decisions about where the first airplanes will
    go, it is not a reflection on the value that we put on the
    refueling mission at the locations in which they are now
    serving. It is a little bit like the F-35 decisions we made
    last year, where we announced just the first few bases. But our
    intent is to buy over 1,700 JSFs. Eventually, we will get those
    fighters bedded down at fighter bases around the country. The
    same with the refueling capability, I think.
        So if you are not the very first, please don't take that as
    some context of some negative ranking of some sort. This is
    going to take a while to field this capability across our Air
    Force.
        Senator Ayotte. Thank you. I do appreciate it. I know that
    the process will be open, and it will be merit based. I think
    that is all that we can hope for in how you make your decision.
    I appreciate that.
        Senator Brown and I are sponsoring a bill. It involves
    giving the authorities in Afghanistan an opportunity to
    terminate contracting funds as soon as possible whenever we
    learn that the contractor is collaborating with the enemy or,
    in other words, working to undermine our mission there.
        One of the issues that came up is that CENTCOM has asked at
    least twice for additional contracting officers for Afghanistan
    to be able to perform oversight over those contracts, which is
    going to be key, with our legislation, to give you the tools
    you need to make sure the money gets in the right hands. I
    wondered what the status was of the Air Force officers because,
    as I understand it, those contracting officers are a very
    important piece of that oversight.
        General Schwartz. Ma'am, we are providing roughly 70
    percent of the joint contracting capability. So we have a major
    piece of this.
        One of the two flag officers in CENTCOM is an Air Force
    brigadier. So we have a stake in this. Our people understand
    the mission, and we are truly all in at 70 percent of the
    workload.
        Senator Ayotte. Thank you, General. I appreciate that.
        If there is feedback that you have and tools that we could
    provide you to make sure that you have the ability to terminate
    funds to contractors where the money shouldn't go, so it
    doesn't get in the hands of our enemy, I know that I am very
    interested and Senator Brown is, as I am sure others are, in
    working with you to make sure that you have the tools that you
    need.
        Secretary Donley. We would be happy to provide comments on
    that legislation.
        [The information referred to follows:]

        We have reviewed the proposed legislation S.341.IS, titled ``No
    Contracting with the Enemy Act of 2011.'' The proposed legislation
    prohibits the awarding of Federal contracts to enemies of the United
    States and provides that any Federal contract with an enemy of the
    United States shall be null and void and may be immediately terminated
    or rescinded. The Air Force agrees that we should not award contracts
    to enemies of the United States.
        The Federal Acquisition Regulation (FAR) provides uniform policies
    and procedures for acquisitions by executive agencies of the Federal
    Government. FAR Part 49 covers termination of contracts and provides
    the contracting officer policies and procedures relating to termination
    of contracts.
        Another safeguard was incorporated in the Department of Defense FAR
    Supplement in January 2009. DFARS 252.209-7001 states ``In accordance
    with 10 U.S.C. 2327, no contract may be awarded to a firm or a
    subsidiary of a firm if the government of a terrorist country has a
    significant interest in the firm or subsidiary or, in the case of a
    subsidiary, the firm that owns the subsidiary, unless a waiver is
    granted by the Secretary of Defense.'' The Air Force will continue to
    award contracts in accordance with the FAR and its' supplements.

        Senator Ayotte. Thank you. My time is up. I just wanted to
    thank you both for your distinguished service to our country.
        Chairman Levin. Thank you, Senator Ayotte.
        Senator Nelson.
        Senator Nelson. Thank you, Mr. Chairman.
        Let me add my appreciation for your service, and all the
    men and women wearing the Air Force blue, supporting all the
    efforts around the world.
        This is to both of you, Secretary Donley and General
    Schwartz. For a number of years now, the need for a U.S.
    Strategic Command (STRATCOM) new headquarters has been
    understood and has become more apparent as time has gone by
    with the deterioration of the building, I think, but also with
    the inadequacy of the building for the current mission of
    STRATCOM.
        The deterioration is well known, but what I would like to
    do today is focus on how a new headquarters will facilitate the
    changing nature of the mission of STRATCOM in today's complex
    world, consisting not only of traditional military operations,
    but also with cyber, and with space.
        Secretary Donley, I know you were just there recently, as
    we got together, please consider this area and explain why you
    think it is necessary. Then, General Schwartz, maybe you could
    give us more of the detail on what the new command operation
    will be and why a new facility is necessary for that?
        Secretary Donley?
        Secretary Donley. Sir, the new STRATCOM headquarters is one
    of our largest and most important military construction
    (MILCON) projects. The committee has seen that material before,
    and we continue to stand behind the need to get on with that
    work. The recent flooding that we had at the STRATCOM
    headquarters has only reinforced that need.
        We have had the discussions, as you suggest, with both
    General Chilton and now General Kehler, about the changing
    nature of the requirements at that headquarters. One of the
    things that had evolved at Offutt Air Force Base (AFB) was that
    the headquarters was designed for a very different period,
    decades ago.
        We are focused on the nuclear mission, of course. But in
    the intervening years the capability to support the space
    mission and now to support the cyber mission assigned to
    STRATCOM has evolved ad hoc in various buildings and locations
    on site, and the new headquarters will give us the opportunity
    to build and integrate some new capabilities that we have not
    had there before.
        I know STRATCOM is looking forward to this opportunity.
    There are additional resources that will be required for the
    fitting out of the facility later. It is not inconsequential.
    It will require lots of information technology (IT), as you
    understand.
        Senator Nelson. General Schwartz?
        General Schwartz. I would just reinforce that STRATCOM has
    become increasingly an IT, cyber-intensive mission, and the
    building simply was not designed for that. It was designed in
    an analog age. We, as an Air Force, certainly are committed
    over several years with substantial MILCON in the hundreds of
    millions of dollars in order to see that through.
        Senator Nelson. Thank you.
        A major argument for the new tanker that has been described
    is the 1960s vintage KC-135 airframes are wearing out. A lot of
    our ISR capability is on that same airframe, including RC-135s,
    which are operated by the 55th Wing at Offutt AFB.
        Are the RC-135 airframes showing the same kinds of issues
    as the KC-135s?
        General Schwartz. Senator, in general, no. They tend to
    operate in a somewhat more benign environment and with weight
    distribution that produces less fatigue on the airframe
    compared to the air refueling mission.
        But they are still older assets, and ultimately, we will
    have to recapitalize those machines. Although that is not in
    the near-term horizon for us, we will have to look at that
    seriously. Perhaps the KC-46 airframe will be a candidate for
    that, as the 707 was. But that is a choice to be made somewhat
    down the road.
        Senator Nelson. While it is not a current issue that has to
    be decided at the moment, it is something that the Air Force is
    considering in the longer term, recognizing that we don't want
    to get to that date without a plan in place. Is that accurate?
        General Schwartz. That is certainly the case, sir.
        Senator Nelson. The next generation tanker contract has
    been awarded, and I congratulate you on that, do you have any
    estimated timeline, a strategic vision for how the ANG units
    that have KC-135s might be rolled into the fielding plan?
        I heard what you said to Senator Ayotte. But I am
    wondering, as it relates to National Guard units, is there a
    plan for fielding that you are considering?
        Secretary Donley. Sir, as we go through this process very
    deliberately, we will work the Guard and Reserve capabilities
    into this and the overseas capabilities required as well. As we
    have done and we will continue to do on the JSF, for example.
    Our initial decisions on the JSF included the Guard, and I
    would expect we would take a similar approach as we field the
    tanker.
        Senator Nelson. Changing direction just a bit here, I think
    everybody is familiar with the Government Accountability Office
    (GAO) report that was just issued earlier this month on March
    1. It details the opportunities to reduce potential duplication
    in Government programs, and of course, GAO continues to look
    for those areas of duplication.
        It reported the findings it made to Congress ever since
    2005, that there is negative duplication of efforts among the
    Services in the efficient use of ISR capabilities. In the
    fiscal year 2012 budget request, the Army has requested $1
    billion to buy 36 MQ-1 RPAs, and they plan to operate 133 of
    these aircraft by 2015. The Air Force has requested $1.4
    billion to purchase 48 MQ-9 RPAs as part of its program, that
    will spend $7.4 billion on 396 MQ-9s over that same period.
        They are very similar aircraft; they are medium altitude,
    long duration, and remotely piloted. Is the Air Force working
    jointly with the Army, trying to avoid unnecessary duplication
    and costs that come from unnecessary duplication, research,
    development, and in the planning stages?
        General Schwartz. Senator, absolutely. I think the key
    point here is that this has been a growth industry. The Army
    and the Air Force apply these assets in somewhat different
    ways. Their Predator equivalents tend to be organic brigade
    combat teams. Ours, on the other hand, are more theater-level
    assets and are applied through the process in terms of tethered
    operations, that are line of sight. We clearly operate our
    birds from positions here in the continental United States.
        It is a different application and a different approach to
    processing the data stream and so on. The bottom line is there
    is plenty of work to do here, as is reflected by the demand on
    these assets, that we went from 32 to 48 and now to 65 Combat
    Air Patrols (CAP). I think DOD clearly has a focus on not
    allowing pockets of capability to develop that are not
    accessible for combatant commander use.
        But, like with the Navy, we have a commitment with the Army
    to try to minimize the expense, standardize the ground
    stations, and so on and so forth.
        Senator Nelson. The standardization where standardization
    can work should be an economic efficiency as well. But,
    obviously, we want to have the diverse capabilities that are
    required by the aircraft, and we need to accomplish that as
    well.
        So I hope as these programs continue and the use of this
    airframe develops even greater that we will continue to work
    together to make sure that we don't have unnecessary
    duplication and have coordination wherever it works.
        Thank you, Mr. Chairman.
        Thank you, gentlemen.
        Chairman Levin. Thank you, Senator Nelson.
        Senator Sessions.
        Senator Sessions. Thank you, Mr. Chairman.
        We thank both of you for your service to your country. I
    have gotten to know both of you, respect you, and know how hard
    you work to try to do the right thing for our country.
        I would like to ask a few questions about the tanker
    competition, since the loser would have built that aircraft in
    my hometown of Mobile, AL. I don't think that disqualifies us
    in this body to ask questions. In fact, I think other Senators
    expect those of us who have an interest in it to raise those
    questions and make sure that everything is handled in an up-
    and-up way.
        I would congratulate you on the fact that the bids came in
    low, that the Air Force got a lower cost. I won't go into
    detail, but I remain convinced that the criteria that were
    changed when this administration took office too much reduced
    the advantage the more capable aircraft would have.
        In other words, you made it a price shootout, but if you
    buy an automobile, just because they have seats, tires,
    windshield wipers, and an accelerator doesn't mean they are the
    same. It is the same with aircraft. I am confident the Alabama
    aircraft would have been more capable. Besides that, now that
    the bid has been awarded, some people are anxious as to how it
    may be supervised in the future, and they want to see integrity
    in it.
        Secretary Donley, isn't it a fact, when you have
    essentially a commercial aircraft and people give a firm fixed-
    price bid, that the Air Force expects them to produce on that
    bid? Unlike in a development situation where maybe extra money
    has to be paid because difficulties occur in development, this
    bid put the burden on both bidders to honor their bid, and if
    they have difficulties, it is their own problem, and they have
    to pay for it out of their money. If that principle is
    violated, it actually violates the integrity of the bid
    process.
        Secretary Donley. Yes, we have a much stronger contract
    structure for this program, and that was one of the changes we
    made in the request for proposal (RFP), to move from cost-plus
    to fixed-price incentives across the program.
        Senator Sessions. My question, though, was, isn't it now
    incumbent on the Air Force that you require this winner to
    fulfill the competition, and if they are given change orders or
    other kinds of advantages in the months and years to come, it
    would violate the integrity of the contract that has been
    awarded?
        Secretary Donley. We have had that discussion internally.
    The discussions with Boeing on the development program just
    started this week, but we have already discussed within the Air
    Force the need to not only execute the program as planned on a
    timely schedule and within the costs that have been allotted,
    but that we hold the contractor to the terms of the contract
    and the plan and the RFP as we have outlined it.
        Make sure that we have a very tight control over any
    changes that are made in the Air Force, that we elevate that
    absolutely to the highest level and make that very, very, very
    difficult to change our plan for the way forward on this
    program.
        Senator Sessions. General Schwartz, would you comment on
    that as to how you want to ensure that the winner complies with
    the terms of the bid?
        General Schwartz. This is by watching microscopically what
    occurs to make sure that at every level there is interaction to
    make sure that the offerer delivers what he promised.
        As the Secretary suggested, the level of approval for
    engineering change orders is not going to be at the program
    office level. We haven't decided where it will be yet. It might
    be at our level. But the bottom line is we intend to maintain
    discipline on this like you expect.
        Senator Sessions. Thank you very much. I appreciate that.
        General Schwartz as the representative of the warfighter,
    the airmen who fly these planes, isn't there some tension
    between purely the lowest bid price and the quality and
    capability of the aircraft that the Air Force is looking for?
        Don't we have to be sure in the future that when we bid
    these contracts that we also provide some mechanism that
    enhanced capabilities are given some credit so that you get the
    best buy, not just the lowest price?
        General Schwartz. Senator Sessions, I would argue that this
    was a best value approach.
        Senator Sessions. Well, just talk about that general
    principle.
        General Schwartz. Sure. I think what we want is value,
    absolutely. I think we got that, sir. What we ended up with, we
    looked at the capacity of the machines to carry fuel, to
    offload and so on. We looked at their cost effectiveness over a
    period of years. We obviously looked at price as well.
        But the bottom line was there was a synthesis of that, and
    in the end, there was a substantial difference, as you are
    aware. So, yes, value matters. But I think it is important that
    the Air Force have that opportunity to define how value is
    measured and to make sure that the offerers understand that
    explicitly so that we can avoid protests and so on.
        Senator Sessions. I appreciate that.
        I would just note, Mr. Chairman, that you and Senator
    McCain deserve credit after the ill-fated lease deal. I don't
    know how many billion dollars the Air Force will save as a
    result of this competition, but it is billions, and it was a
    fierce competition. Both people went as low as they could go.
        Does anybody have an estimate of how much the United States
    benefited by having this competition?
        Secretary Donley. No, sir, I don't think we have an exact
    number here. But if you provide a specific question here, we
    would be happy to try to answer it.
        Senator Sessions. General Schwartz, you have any idea?
        General Schwartz. It is in the billions.
        Senator Sessions. Well, I remember the first GAO report
    showed $7 billion. I remember saying that you refer to the $6
    million man, but I could describe Senator McCain as a $7
    billion man. But actually, it has gone beyond that, and I think
    the leadership of the committee in a bipartisan way moved this
    forward. I just do believe that an Alabama EADS aircraft on
    every objective criteria was at least somewhat better, in some
    areas significantly more capable than the other.
        Can you tell us what the bid price was? We have heard
    general numbers, but I would like to know what you can tell us
    about that.
        Secretary Donley. I am not in a position to do that. I can
    tell you the value of the engineering, manufacturing, and
    development contract, which was the contract that was signed,
    was $4.4 billion.
        Senator Sessions. For how many aircraft?
        Secretary Donley. Those are for the first four airplanes.
        Senator Sessions. What do you expect per copy the aircraft
    will be, say, when the first tranche is completed?
        Secretary Donley. I think it still depends on some options
    that are to be exercised. Let me get you a number for the
    record on that. The requirement is the first 18 aircraft by
    2017.
        [The information referred to follows:]

        The Office of the Secretary of Defense and Air Force
    representatives have met with congressional defense committee staff on
    several occasions to provide source selection and proprietary
    information since the contract award, and are willing to brief you on
    the bids at your convenience.

        Senator Sessions. Thank you for sharing these comments with
    us. I still want to know more about it and will be looking at
    it.
        We just feel like when I was a U.S. attorney and had to be
    involved with some city and government bid contracts, and
    favored people would bid low. They would get the contract, and
    they would get change orders and make a lot of money. A lot of
    good and decent contractors quit even bidding, they told me
    they were not going to fool with them. They would be
    mistreated.
        So, you have to maintain the integrity. You can't just let
    the person get a low bid and then run up the price in the years
    to come. Otherwise, you will undermine any ability to get the
    kind of competition that you need.
        Thank you, Mr. Chairman.
        Chairman Levin. Thank you, Senator Sessions. Thank you for
    pointing out the value here of competition, which has clearly
    produced some real gains, and also the importance that this not
    be a buy-in.
        Senator Sessions. Mr. Chairman, let us just say one thing
    that is put on the table. EADS is a European ally of ours.
    Europe is an ally in so many ways. They buy more military
    equipment from us than we buy from them. They were the only
    possible competitor to the Boeing aircraft. So to have
    competition, we had to have that.
        Then for people to come in and say, ``Well, they can't
    bid,'' when they were going to build the aircraft in the United
    States using American workers, to me, didn't reflect an
    understanding of the nature of this competition. So, I would
    just share that.
        Thank you, Mr. Chairman.
        Chairman Levin. Thank you very much.
        Senator Udall.
        Senator Udall. Thank you, Mr. Chairman.
        Good morning, gentlemen. Thank you for your service.
        I did want to point out that in Colorado, we are very
    fortunate to have so many outstanding Air Force units and
    personnel, including the Air Force Academy.
        General Schwartz, I know you are aware of some controversy
    about plans for a low-altitude navigation training corridor in
    southern Colorado. I just want to, for the record, say that I
    know we are going to be able to work through these issues
    together. To you, Mr. Secretary, as well.
        Let me turn to computer and cyber networks. I am concerned
    about vulnerabilities there. I would want to acknowledge that
    the 24th Air Force was activated last October, and we have just
    graduated the first class of cyber space operators. I think in
    a few years, we will look back and say, ``Boy, that was a
    historic event.''
        Like you, I want to make sure we have the right kind of
    recruiting pipeline that will bring young Americans into the
    military, and I understand some of those students aren't
    traditional Air Force recruits. Could you talk about cyber
    recruiting programs and how you are bringing bright young
    computer scientists into the cyber security world?
        General Schwartz. Sir, there are a couple of aspects to
    this. Certainly, as you indicated, we have 24th Air Force,
    which is our component of the U.S. Cyber Command, and they
    provide the expertise and the wherewithal to monitor our
    networks, to secure them, to maintain them as hard as we need
    to, and to respond to developments within the network, either
    manmade or otherwise.
        We have transformed the training for the folks that do this
    work. It is more technical. It certainly is more digital, and
    it is bringing folks on that certainly understand these things
    better than my generation did. The first class out of Keesler
    is a case in point, and certainly that will continue.
        I think the other aspect that is important here is that we
    need to provide venues how the most capable Americans can help
    us with this work. DOD does not lead in cyber. This is largely
    something where the commercial world is pushing the envelope.
        So, the Secretary has made it possible for our National
    Guard and Reserve to recruit folks who are current in the
    discipline, who do this work on a daily basis, but that are
    willing to serve and share their expertise with the Service. So
    that is the other aspect of this, which is to bring
    professionals who are current in the industry onboard through
    the Reserve and the National Guard to also support our mission.
        Senator Udall. Mr. Secretary, do you have anything to add?
        Secretary Donley. Specifically, we have been building
    Reserve component units in the Silicon Valley area and in the
    Northwest.
        I would like to go back just to foot-stomp the very
    important point you made not only about the standup of 24th Air
    Force last year, but the creation of new career fields for
    these disciplines, which collapsed several functional
    specialties in a way that provides for the long-term continuity
    of this workforce into the future.
        I would say we are also working with outside groups like
    the Air Force Association, which has sponsored cyber patriot
    programs focused on youngsters in high schools. Certainly, it
    is that generation that is, in a sense, also leading the way in
    terms of cultural and technological changes, the abilities to
    multi-task, et cetera. But, we are seeding the pipeline with
    some very important capability for the country going forward.
        Senator Udall. Somebody said recently, ``digital, baby,
    digital,'' and that is what I hear both of you saying.
        Let me turn to space situational awareness. We have
    vulnerabilities. We have significant new capacities, and these
    capacities have taken on real importance for our warfighters
    and our security.
        We are home in Colorado to Air Force Space Command, and I
    want to make sure we defend those assets. I understand that the
    funding for improved space situational awareness, space
    control, and counter-space is approximately 27 percent lower
    than last year. If I could, I would direct three succinct
    questions to you.
        Does that reduction reflect a decrease in focus on space
    situational awareness? How will the activities that you are
    funding in fiscal year 2012 affect the vulnerability of our
    space assets? Perhaps most importantly, I know, to you both and
    many of the rest of us, should we expect service disruptions to
    troops on the ground?
        Secretary Donley. A couple of points, sir. The funding
    change that you notice in the fiscal year 2012 budget is the
    result of one programmatic adjustment, a large programmatic
    change that we made.
        The Space-Based Surveillance System, which was launched
    just last year, had a second bird coming behind it. We decided
    to terminate that. We did not think the cost was worth the
    benefit in that case. But we have a requirement to come back
    and develop alternatives for a way forward with respect to that
    specific program.
        At the policy level, I would like to take this opportunity
    to reinforce the importance of the space domain, both as
    reflected in the National Security Space Strategy, which has
    just come out recently, and in the Air Force's response to that
    work. Space situational awareness and space protection work,
    which has been done by both Air Force Space Command and the
    National Reconnaissance Office, are really new missions for the
    space domain, areas of our work here that we did not have to
    worry about 10, 20, or 30 years ago.
        We have always had communications, weather, ISR assets, and
    missile warning. These kinds of missions have always been part
    of the space domain. But space situational awareness and space
    protection are of growing importance and represent new work for
    us.
        So there is a lot of emphasis. There are resources going to
    this, and it is getting a lot of attention in the Air Force.
        Senator Udall. The Air Force is clearly undergoing some
    significant changes. I want to salute you both for your
    leadership in meeting those head on. Change can be both
    rewarding and challenging, and count on me to be there with you
    as we meet what I see are many, many opportunities to enhance
    our security and protect the warfighter.
        Thanks again for your service. Thank you.
        Chairman Levin. Thank you, Senator Udall.
        Senator Chambliss.
        Senator Chambliss. Thanks, Mr. Chairman.
        Gentlemen, let me echo the sentiments of my colleagues in
    thanking you for your leadership of the U.S. Air Force.
        General Schwartz, I think you pretty well responded in
    sufficient detail to Senator Lieberman on the JSTARS issue. But
    I take it from your comment, when you say that irrespective of
    what the AOA study comes out, that you are going to maintain
    the current JSTARS platform going forward. Which I am taking
    your comment to assume that on the reengining issue, which I
    have dialogued with both of you about over the last several
    years, is going to continue to be maintained as it is currently
    funded and will be funded in the future.
        General Schwartz. Sir, as we made the commitment, we
    certainly will fulfill the guidance we have from DOD on the
    four ship sets. As you are well aware, there is an
    appropriations issue in this respect in 2011, and hopefully,
    that is addressed in the coming weeks.
        Senator Chambliss. Right. To both of you, Senator Levin
    mentioned this issue of weapon sustainment in his opening
    remarks, and I want to echo his concerns here. We are flying
    airplanes more than we ever anticipated. We fly them, whether
    it is a tactical aircraft, transport, or whatever, and we are
    fast wearing those airplanes out.
        We have three excellent depots in the Air Force that are
    providing the kind of maintenance we need to have done on those
    airplanes. But frankly, because of the workload demands coming
    from the customer, we have a backlog at every depot right now.
        I notice that you are only funded currently at 84 percent
    of your requirement. At first glance, this doesn't seem to be a
    step in the direction of getting ourselves healthy in this
    arena. Because we have these backlogs, why are we not funded at
    100 percent of the requirement?
        Secretary Donley. Sir, we cannot afford to put the
    resources against what would be 100 percent of the requirement.
    Just in the last budget cycle, for example, just to stay even
    with growing demand, the initial estimate was that it would
    cost us an extra $7 billion across the FYDP to fund a
    continuation of capability at 80 or 82 percent, roughly.
        It is not just the older aircraft that are challenging us
    in this respect. We are also taking ownership of new aircraft
    for which we are relying on lots of contractor support. So
    these will be new deliveries of C-17s, new deliveries of F-22s,
    the MQ-1s and 9s that are coming on board, and the MC-12, for
    example. But all of these are heavily reliant on contractor
    support, and the cost of supporting those incoming aircraft has
    gone north very quickly.
        We are very interested in restoring materiel readiness to
    the fleet. There is no question that we have challenges there,
    and we are concerned about them. But we also need to push the
    logistics and support community to make sure we are getting the
    best value that we can.
        We need to work through the issues of overtime. We need to
    work through the issues of supply chain in the depots so that
    we get more efficient in this work and we drive harder bargains
    with our contractors as well. But there is no question that we
    need to get materiel sustainment north of where it is today.
        Senator Chambliss. You mentioned that supply chain issue.
    Of course, we made a change in that chain and incorporated the
    Defense Logistics Agency (DLA) to provide the parts, which
    sounds like a good idea. But very honestly, we know we have had
    some significant problems there.
        If folks can't have the part in hand when they are ready to
    put that part on the airplane, then our folks wind up sitting
    around, waiting on delivery of the parts. Where are we with
    respect to improving that transition to DLA?
        General Schwartz. Admiral Thompson and I have had that
    conversation eyeball-to-eyeball.
        Senator Chambliss. Good.
        General Schwartz. We are relying on him to allow us to do
    the organic work that needs to be done. Just as you suggest,
    Senator, if the part is not in the bin when it is needed, it
    results in change work, which is more expensive. So I have
    expressed my expectation to him on exactly what is required.
        Senator Chambliss. I hope you will stay in touch with us on
    that. From a policy standpoint, however we need to be engaged,
    we stand ready to do so.
        Secretary Donley, in a recent hearing, Lieutenant General
    Shackelford indicated that the Air Force is leaning toward a
    competition for the Common Vertical Lift Support Platform
    helicopter acquisition program. Can you confirm that there will
    be a competition and that any competition will be fair and
    allow commercial, off-the-shelf, nondevelopmental products to
    be considered? Will overall acquisition and life-cycle cost
    also factor prominently in the Air Force's decision?
        Secretary Donley. Sir, the Chief and I are going to get the
    acquisition strategy on vertical lift later this month. I am
    absolutely sure that competition will be involved in that.
        As you are probably aware, we are working the
    recapitalization of the rescue fleet, the recapitalization of
    the helicopter fleet that supports the missile fields, and also
    handfuls of other vertical lift requirements in the Air Force
    that are now fulfilled by the very old and venerable UH-1 Huey.
    So we are trying to work those requirements in combination to
    get the most capability, the most value out of the mix, and the
    most efficiency that we can in this competition.
        Senator Chambliss. We just talked about the competition in
    the tanker and the results that were achieved there. So I hope
    we will make sure that competition is exactly comparable to
    that.
        General Schwartz, you talked a little bit in response to
    Senator McCain about the no-fly zone issue in Libya. We know
    that they have a very capable surface-to-air missile (SAM)
    capability, probably about as good as anybody in that part of
    the region, maybe with the exception of Egypt.
        If we did have to, if the President makes a decision,
    Secretary Gates says, ``Guys, we are going to enforce a no-fly
    zone over Libya,'' what kind of assets and what platforms would
    you put in there to enforce that no-fly zone?
        General Schwartz. It would entail numerous assets,
    certainly fighter aircraft, F-16, and F-15, and both air-to-
    ground and anti-radiation capabilities.
        Senator Chambliss. How are you going to send an F-15 and an
    F-16 in there with the SAM capability they have and expect them
    to fly in a safe and secure manner?
        General Schwartz. Sir, I understand. Let me roll this out.
    Certainly, that is the fighter portion of the fleet. You are
    going to have RC-135s. You are going to have surveillance kinds
    of capabilities that would be used to surveil both the
    integrated air defense system and other areas as tasked.
        You will have tankers to support the short-legged
    platforms. You would have Compass Call and other capabilities
    that can jam communications and affect the effectiveness of the
    integrated air defense and so on. You would have, undoubtedly,
    some bomber aircraft that would give you long dwell over
    specified target areas.
        So this would be a total force application of our air and
    space capabilities.
        Senator Chambliss. General, isn't this exactly what the F-
    22 was designed to do and has the capability of doing?
        General Schwartz. No doubt that it would be useful, and I
    would have the expectation that at least in the early days, it
    certainly would be used.
        Senator Chambliss. Thank you, Mr. Chairman.
        Chairman Levin. Thank you, Senator Chambliss.
        Senator Hagan.
        Senator Hagan. Thank you, Mr. Chairman.
        Thanks to both of you for being here today and the great
    work that you are doing for our country.
        In your prepared statement, Secretary Donley and General
    Schwartz, you indicated that the Air Force's high operations
    tempo has significantly impacted the overall readiness for the
    full spectrum of military operations, due to, among other
    things, the limited supply of combat air forces and the high-
    demand aviation units. This has caused lower deploy-to-dwell
    ratios for the high-demand skills.
        Can you provide some thoughts on how to rectify the steady
    decline in reported readiness indicators, particularly among
    career fields that are so stressed?
        General Schwartz. Ma'am, we have transitioned people from
    within our Air Force, from lower-stressed career fields to
    higher-stressed career fields. ISR is the best example.
        Four thousand faces and spaces have migrated into that
    high-demand area from other parts of our Air Force. So, we have
    retooled and adjusted ourselves internally to try to size the
    talent pools for the demand signals that we face. That is the
    major strategy.
        The truth is that we cannot afford to grow as an Air Force.
    Our personnel ceiling is at about 332,000 Active Duty. It is
    106,000 Guard. It is about 70,000 Air Force Reserve. Within
    that pool, we have to apply our manpower to the missions that
    we have undertaken, and we are doing that.
        Senator Hagan. Secretary Donley, any comments?
        Secretary Donley. As the Chief suggested, we have reapplied
    manpower in some areas. We are still stressed in explosive
    ordinance disposal. We are stressed in contracting. We are
    stressed in joint tactical air controllers and other
    specialized fields.
        We have increased authorizations, but these are actually
    some of the most skilled airmen that we have, for which the
    pipeline is very long. We continue to work those issues, and we
    have also applied reenlistment bonuses where we can to help
    induce airmen to stay in with that mission.
        Senator Hagan. General Schwartz, you mentioned the ISR. In
    the prepared statements, you indicated that the Air Force
    continued to rapidly increase its ISR capability and the
    capacity to support the military operations.
        Combat air patrols play a critical role in the current
    warfight, as you mentioned, and I understand that for fiscal
    year 2012, the budget request fully supports the ISR capacity
    needs, sustains the maximum production, and achieves 65 RPA
    combat air patrols in the CENTCOM theater by the end of 2013.
        What additional efforts are being done in the interim to
    mitigate this shortfall? How is the Air Force and the Joint
    Chiefs of Staff working with CENTCOM to ensure the timely and
    effective distribution of the resources?
        General Schwartz. Ma'am, the 65 CAPs, for the time being,
    are concentrated on the CENTCOM AOR. But clearly, when the
    missions subside there, they will be used more broadly by the
    other combatant commanders who have legitimate requirements,
    but have been out-prioritized, obviously, by the missions in
    CENTCOM.
        I think a key aspect here is, and it was suggested in an
    earlier question, the Air Force isn't the only provider of ISR
    capability. There are capabilities in the other Services. The
    joint team needs to have access to them as well. In the case of
    Afghanistan, that is seven shadow platoons from the Army, for
    example. So there is an effort across the team to provide all
    the ISR capability that we possibly can.
        As you can imagine, we have needs for Japan surveillance.
    We have requirements for surveillance in the Mediterranean.
    Obviously, the missions in Iraq and Afghanistan. So our
    youngsters are putting out at the moment.
        Senator Hagan. As you mentioned the situation in Japan, how
    can you ensure the safety of the pilots?
        General Schwartz. We have a surveillance process underway,
    and of the 34 aircraft that have operated in and around the
    areas of concern, we have confirmed that they were not
    contaminated. We have equipped our people with the detection
    capability to warn of contamination.
        We are monitoring the installations carefully, certainly
    Misawa, Yokota, and Kadena, but elsewhere in the Pacific,
    because the plume has the potential of moving elsewhere,
    depending on weather and so on. So the bottom line is there are
    protocols. We know what they are, and we are implementing them
    properly.
        Senator Hagan. Thank you.
        The well-being of our airmen and their families is
    fundamental to the mission effectiveness of our Air Force. It
    is important that these programs strengthen the Air Force
    community and enhance resiliency.
        I think some of the questions might have addressed this,
    but can you provide some insights regarding some of the
    innovative and efficient ways that the Air Force is looking to
    provide and sustain programs that will support the airmen and
    their families? We are all, obviously, always concerned about
    the families and the sacrifices that they also are making.
        General Schwartz. The Secretary mentioned a couple of the
    major themes. Clearly, military family housing is one area that
    we have had considerable success with respect to privatized
    housing and so on.
        A second one is education. Perhaps the most important
    family issue is the quality of education for our youngsters. If
    we want to have thriving installations, we need to make sure
    that the schools that serve those installations are places
    where our families want to send their youngsters. We have
    worked hard to establish school liaison capability to make sure
    that our needs are understood by boards of education, by
    superintendents, and so on.
        Another area the Secretary mentioned is the exceptional
    family member. We were not doing as well as we should have. For
    an exceptional family that relocates from Virginia to Texas, it
    is a stressful time because they have certain support structure
    here. The issue is what is available in Wichita Falls, in
    Texas?
        We weren't providing the backstop for that. We are now. We
    are helping our exceptional families with connecting with the
    support services that are at their future destination by
    coordinators at each base.
        Finally, child care. That is the fourth major theme. In the
    next 2 years, we will meet the demand for child care at our
    installations.
        Senator Hagan. Thank you.
        Thank you, Mr. Chairman.
        Chairman Levin. Thank you, Senator Hagan.
        Senator Shaheen.
        Senator Shaheen. Thank you, Mr. Chairman.
        Secretary Donley and General Schwartz, thank you for being
    here before us.
        I would just pick up on the comment you made about child
    care. In my former life as Governor in New Hampshire, I worked
    a lot on early childhood education and the importance of
    quality child care. We looked at the military as the model for
    the private sector because you all have been real leaders in
    recognizing how important the early years in a child's life
    are. So thank you very much for that commitment.
        I am sorry to have missed much of the discussion. I had
    another hearing. So I will try not to repeat what has been said
    by my colleagues, except for one issue. I do want to reiterate
    what my colleagues Senator Ayotte and Senator Nelson raised
    with respect to the basing of the KC-46A.
        I know that I echo what you have heard from others about
    how pleased we all are that the decision on procurement has
    finally been made and the importance of the deliberation and
    transparency of that process and the thoroughness. I very much
    appreciate that and look forward to working with you on a
    similar transparent and thorough process as you make the
    decision on where to base these planes.
        You won't be surprised to hear that, as a Senator
    representing New Hampshire, I think Pease National Guard Base
    is one of the places that you should look at very carefully,
    and we look forward to working with you on that. I know that
    they will score very well on any objective criteria. So we look
    forward to that.
        There is a lot of work in R&D and innovation that goes into
    new systems for the military, new planes, and any of the
    initiatives that you have. New Hampshire has a very important
    defense industry that has done a lot of that innovation.
        I wonder if you could speak to how comfortable you are that
    in the current budget situation that we are facing in this
    country, that the R&D that needs to happen in order to provide
    the innovation that the Air Force is going to be relying on is
    going to continue to happen despite this tight budget
    situation?
        Secretary Donley. This is a very important issue for us,
    Senator. The Secretary of Defense has reinforced it by ensuring
    that we spend about 3 percent of our top line on R&D going
    forward. He has put focus on fencing resources to make sure we
    do not, in the vernacular, eat our seed corn going forward.
        Just last year, we completed a broad review in the Air
    Force of our future R&D requirements, titled ``Technology
    Horizons.'' It is something that the Air Force has done on a
    decade-by-decade timeline. We have just been through this
    process to help identify promising technologies that we think
    will bridge various aspects of our work going forward so,
    therefore, they represent good investments.
        Certainly, the IT pieces of what we have been working on
    and the development of the cyber community over the last 5 to
    10 years are critical to much of that work. The materials,
    engines, and propulsion systems that are more efficient and
    capable also are coming along well. Also, directed energy work,
    which has long been of interest in the Air Force, continues to
    progress as well.
        There are a variety of areas here. We recognize the
    importance of making sure that we continue to develop the
    technological edge that sets our Air Force apart.
        Senator Shaheen. Can you talk a little bit more about what
    have been the most helpful tools in leveraging some of those
    new technologies? For example, one of the things we are
    considering right now in the Senate is the Small Business
    Innovation Research Program, of which DOD spends probably the
    biggest piece in encouraging small businesses to develop new
    technologies in areas that you have an interest in.
        So are there initiatives like that you feel are
    particularly important? Or have you developed other mechanisms
    internally that help drive this technological development?
        Secretary Donley. We do watch carefully to make sure small
    businesses, especially with unique and new capabilities, have a
    way of entering our market, if you will, our R&D process. So
    this is something that does get attention.
        Senator Shaheen. Thank you.
        Finally, as we talk about R&D and new technologies, one
    area, obviously, that we are all very concerned about right now
    is energy. When the Secretary of the Navy was here last week,
    he talked about some of the new energy advances they are doing
    to reduce their energy consumption.
        I wonder if you could speak to what you are doing in the
    Air Force and also how you are cooperating with other branches
    of the military so that you are taking advantage of the
    progress that each of you are making?
        Secretary Donley. There is a Deputy Under Secretary at the
    DOD level that helps to coordinate work across the Services in
    this respect. She is doing some excellent work in getting us
    focused, especially on operational energy and support of the
    warfight, and how we can be more efficient down range in moving
    critical energy assets around the theater.
        But more broadly, as one of your colleagues had mentioned
    earlier, we are the largest user of energy in DOD, and aviation
    fuel dominates that. We have been able to internally reduce
    demand for energy for aviation fuel by 2 percent over the last
    couple of years. It has leveled off. But our challenges with
    the prices have continued to outpace our reductions.
        Nonetheless, going forward, fuel efficiencies is a
    significant part of our planned efficiencies over the next 5
    years. Air Mobility Command is leading that work. We think
    there are further adjustments that we can make in flight
    planning and bringing on commercial best practices. So we think
    there is more work that can and should be done.
        A couple of other things. We have been working methodically
    to certify all the engines in the Air Force inventory to
    operate on fuel blends, if you will, from alternative sources
    of energy, including biofuels. But I would note that as far as
    we have come in getting those engines certified, I think the
    challenge in front of us really is, who will be the producers
    and suppliers in bulk quantities of those new innovative fuels?
        Which ones will we choose generally as the best practice or
    the best of many alternatives for aviation fuel going forward?
    Who will produce that, and when will that production capability
    come up to a level where we can start tapping it at an
    economical rate?
        We are very anxious to get about that work, but it is a
    DOD-wide issue, and it is also an issue with the Department of
    Energy and others, including the U.S. aviation industry.
        Senator Shaheen. It is really a national challenge. Thank
    you very much.
        Chairman Levin. Thank you, Senator Shaheen.
        Senator Begich.
        Senator Begich. Thank you very much.
        I will actually follow up on that. I know, Mr. Chairman,
    you have been generous with requests that I made. I know, as
    time progresses here, we might come to the conclusion that it
    seems every meeting we have had there are some elements of
    energy that we are talking about.
        It seems like we should probably have a more robust
    discussion about energy needs because you hit it on the head.
    It is supply that is critical. Of course, from Alaska, we would
    argue that gas-to-liquid is a great opportunity in the future
    of clean-burning fuel and for aviation fuel there is a huge
    opportunity.
        As I just read, yesterday or the day before, just in DOD,
    the fuel budget is now $1 billion over because of the high cost
    or, in some cases, the inability to get the volumes you need.
    Therefore, you pay a higher price for it.
        So I look forward to that because we have to be serious
    about a long-term energy plan that has a diversified energy
    resource from a national security perspective as its first
    priority. Second is economic security.
        But I am sure you don't want to see fuel in our lines
    coming from Iran, which we do have, or fuel coming from
    countries that may not have the most stable governments, as we
    are now experiencing $100 per barrel. Or waiting for the Saudis
    to tell us what price they will give us based on the volume
    they will produce, which is dangerous for us security-wise and
    economically.
        I look forward to an opportunity to bring in the person
    that is coordinating the new position, which is a great new
    position, to coordinate and discuss those issues. So I will
    hold that, but I just want to follow up on what was asked
    there.
        The no-fly zone discussion that occurred; this is a budget
    hearing. Obviously, there is public policy there. I understand
    that. But there is cost. There is cost in real dollars that
    have to come from somewhere, right?
        The aviation issue alone, the fuel cost to fund such a
    thing or the allocation of resources from scarce resources or
    limited resources that we are utilizing now have a push-and-
    pull effect in Afghanistan, Iraq, and elsewhere. Is that a fair
    statement?
        General Schwartz. Depending on the mission assigned and its
    scope and scale, it could have an effect on either assets
    currently in theater or those that are bound for the theater.
        Senator Begich. But even if it is minimal, there is a cost
    that will be required out of your budget that we don't have
    budgeted today.
        General Schwartz. No question.
        Senator Begich. So somewhere, someone has to write a check?
        General Schwartz. Right.
        Senator Begich. Okay. Sometimes we get a little excited
    about ideas, but we forget that there is a check that has to be
    written by somebody. We are experiencing that now with the
    Afghanistan war, and the Iraq war. They require lots of money,
    lots of lives, and a lot of issues here that in the front end,
    we are now realizing there is a cost.
        As we consider these issues, we have to also consider that
    piece of it. Because if we tell you here is a new policy, you
    are going to have to move some assets around. I just want to
    make sure I am not misstating that, that there is cost, no
    matter what level of an idea might or might not materialize.
        General Schwartz. What we do is not free.
        Senator Begich. Okay. You summarized it very well.
        Let me go to a couple just quick questions. One is about
    total force integration. In Alaska, Elmendorf-Richardson is
    working phenomenally and I consider it the model of joint base
    operations. That is not necessarily the case everywhere, but I
    think we really have a great model. You know it well, being up
    there.
        The Active Duty and the Reserve, they work hand-in-hand.
    But I have to say there are some issues. There is a disconnect.
    I want to give you just a quick analysis or comment and then
    maybe ask some questions.
        There is kind of a disconnect between the policies and the
    resourcing of the initiative. Reserve components have to
    request military personnel appropriations (MPAs) for mandates
    to meet anything above and beyond regular requirements. Under
    the total force integration, these initiatives, on many
    occasions, are above normal requirements. But yet getting the
    MPA allocation is extremely difficult.
        I am going to give you an example. The 477th Fighter Group
    in Alaska was scheduled to deploy in support of theater
    security cooperation agreement. Reservists plan months ahead,
    and get everything geared up. It is not something they can just
    flip tomorrow and do. They get things all lined up. Then, 10
    days before, they were told, ``Sorry, we don't have the MPA.''
        So then, as you can imagine, they start ratcheting down.
    Then, a few days before, they are told, ``Nope, now we have
    it.''
        I think that is unacceptable, especially with reservists
    who have a different scenario in what they have to get prepared
    for to get ready to be on the front lines. Are you aware of
    this? What steps, if you are aware of it, are you taking to
    help resolve this issue, especially with the reservists that I
    think are coming under incredible pressure? This is just one
    example.
        General Schwartz. Sir, this is a manifestation of the fact
    that the supplementals are contracting. In this case, it was a
    theater security cooperation mission, it was not related to
    CENTCOM operations, and so it had a lower priority. Ultimately,
    we found MPA resources to make it go.
        But you are right. There was this uncertainty about whether
    that was going to be the case. I think it is important to
    understand that as the supplementals subside or the OCO
    accounts subside, there is going to be less MPA available, and
    we are going to do less with less. We are going to have to
    recognize that for this decade, people have gotten used to
    being on long-term Active Duty. We are going to have less of
    that.
        We are going to have to be very surgical about where we use
    MPA. For example, the surge that we now have underway in Japan,
    and if we do something for Libya, we will naturally allocate
    what MPA we have to those missions. So, others who might have
    planned to have a training mission or something along those
    lines will be displaced.
        Senator, I think the key thing here is that we understand
    completely, particularly on these associated missions, that MPA
    is how the Reserves function. At the same time, I think we need
    to reset our thinking a little bit about how readily available
    MPA will be.
        Senator Begich. If I can hold you there, and my time is up,
    but I just have one comment after this. What I am hearing is
    you recognize this kind of back and forth or ricochet is
    something that has to be addressed around the Reserves,
    recognizing the new economics or budgeting that we are in, as
    well as other missions that are pressuring against it. You
    recognize that is something we have to deal with?
        General Schwartz. It is a management obligation.
        Senator Begich. Okay. Last thing, I would not want to let
    Senator Shaheen walk away with the tanker concept alone.
        I know in the RFP there was like nine locations identified.
    We would hope that you would do your due diligence, and there
    is no better place that can touch so many places in this world
    than Alaska.
        As many in the Air Force know, it touches everywhere. We
    have members now in Japan serving the needs that are there,
    which we are very grateful of our troops to be doing that, but
    also around the world. We would not want to be excluded from
    any due diligence process that the Air Force and DOD would do.
        Senator Shaheen. We have a longer runway.
        Senator Begich. They have a long runway. We keep our
    airports open no matter when it snows. I will leave it at that.
    [Laughter.]
        Thank you, Mr. Chairman.
        Chairman Levin. It is the advantages of competition we
    talked about before. [Laughter.]
        General Schwartz. It is wonderful to be popular.
        Senator Begich. Thank you.
        Chairman Levin. I just have a few more questions for a
    second round. We have had a recent lawsuit filed in Federal
    court alleging that DOD failed to protect its personnel from
    being raped and sexually assaulted.
        Two of the plaintiffs were from the Air Force, and I am
    wondering if you can give us an assessment of the Air Force's
    Sexual Assault Prevention and Response Program. Is it having
    any impact that you can see? Secretary Donley, let me start
    with you.
        Secretary Donley. Sir, as you are probably aware, we have a
    slight increase in our sexual assaults reported for fiscal year
    2010. This is of concern to us.
        We have known for a long period of time that sexual
    assaults are among the least reported crimes in the United
    States and in the military as well. This is of management
    concern in our Air Force because for the most part, it reflects
    airman-on-airman violence, which is absolutely anathema to our
    core values and completely inconsistent with the respect that
    we expect airmen to reflect in their daily business with
    others. So we recognize this is an issue.
        We did commission last year an independent review by the
    Gallup organization, and you will be getting the results of
    this fairly soon, in which we asked them to survey across our
    Air Force what the prevalence and the incidence of sexual
    assaults probably is, based on a scientific survey. It is, as
    the criminologists and psychologists have told us for years,
    higher than is reported.
        You will see data there indicating that in the last year,
    as much as 3 percent of the female population and 0.5 percent
    of the male population believes that they have been victims of
    sexual assaults of one sort or another. This is a serious issue
    for us.
        We are reinvigorating our oversight, our management of
    this, and it is a very important issue for us going forward. We
    are increasing frontline training on this subject, and we are
    seized with the need to get a better handle on this.
        Chairman Levin. General Schwartz, do you want to add
    anything to that?
        General Schwartz. Sir, I would only say that it is a crime.
    We don't beat up on our spouses. We don't beat up on our kids,
    and we don't assault each other. That is the message that we
    have sent out.
        Chairman Levin. On the acquisition personnel issue that I
    made reference to before, the Air Force has made reforming its
    acquisition process a high priority. One of the elements is the
    hiring of more acquisition professionals, including personnel
    that are technically qualified to oversee programs.
        What is the current status of the efforts to meet the goal,
    which was identified in 2009?
        Secretary Donley. Sir, my recollection off the top of my
    head--we will correct this for the record if I am off base
    here--but I believe we have hired about 8,000 people into the
    acquisition workforce over the last couple of years.
        We have focused in our acquisition improvement plan that
    General Schwartz and I put in place at the end of 2008, early
    2009. The focus of that was strengthening the workforce. So we
    think this is a very important priority, to get the right
    people in, get the right skills in, in both the financial
    management side and the systems engineering side that support a
    strong acquisition management.
        We have been very focused on that.
        Chairman Levin. Would you get us for the record the details
    on that? What was the goal in 2009, and where are you in
    meeting that goal?
        Secretary Donley. We will.
        [The information referred to follows:]

        The Air Force is committed to maintaining our efforts to recapture
    acquisition excellence that we started October 2008, carried forward in
    the Air Force Acquisition Improvement Plan (AIP) dated 4 May 2009, and
    programmed in the fiscal year 2010 PB and fiscal year 2011 PB. One of
    the cornerstones of Acquisition Excellence and the AIP was to
    revitalize our acquisition workforce to ensure that it is appropriately
    sized to perform essential, inherently governmental functions and is
    flexible enough to meet continuously evolving demands. The AIP
    established a goal to increase and fund military and civilian personnel
    authorizations as required, and to increase the manning priority for
    civilian and military acquisition authorizations, supporting our
    Acquisition Human Capital Strategic Plan goal to increase the size of
    the acquisition workforce to levels commensurate with workload.
        Consistent with Department of Defense terminology, our acquisition
    workforce is defined as those personnel who encumber an acquisition
    coded position (in accordance with the Defense Acquisition Workforce
    Improvement Act). Bottom-line, we have increased our acquisition
    workforce by 8,478 personnel as described below:

             Starting Position: Personnel on board 30 Sep 08--Military
            8,762/Civilian 16,080/Total 24,842
             Ending Position: Personnel on board 31 Mar 11--Military 9,065/
            Civilian 24,255/Total 33,320

        As a result of the fiscal environment shifting in the Federal
    Government and within the Department of Defense, we are assessing the
    impact of a straight-lined civilian workforce at the fiscal year 2010
    levels with exceptions for modest growth in strategically important
    areas--including Air Force planned Defense Acquisition Workforce
    Development Fund (DAWDF) hiring of just under 1,500 positions. The Air
    Force is performing a zero-based review of our entire workforce to
    strategically implement these new civilian constraints. While the
    planned DAWDF hiring is assured, we are looking at the broader impact
    to our acquisition workforce in the context of this review.

        Chairman Levin. Thank you.
        Finally, General Schwartz, let me ask you about the Don't
    Ask, Don't Tell (DADT) issue. Where are you in terms of the
    implementation of the policy? Have you seen any problems in the
    repeal of DADT?
        General Schwartz. Sir, we have begun the internal training
    process. There were three tiers: the first are so-called
    experts, the attorneys, the clergy, medics, and so on; the
    second tier being the leadership; and the third tier being the
    broader airmen population. We have trained about 2,100
    individuals so far, and that process will accelerate.
        We will complete the first two tiers here in a matter of a
    couple of months. We will certainly strive to move through the
    larger body of airmen as quickly as we can.
        We have made it clear that what this is about is treating
    each other with dignity and respect, that some of us in the
    Super Bowl were Pittsburgh fans and some of us were Green Bay
    fans, and that is the way it is amongst airmen, but it doesn't
    affect how we do our jobs. Likewise, we are not about changing
    what people believe, but we are about maintaining Air Force
    standards, and that is what we are communicating.
        Chairman Levin. Do you think you are going to be able to
    successfully implement that policy change?
        General Schwartz. We will advise the chairman and the
    Secretary when that training is complete. They will certify, as
    you are aware, and we will move on, yes, sir.
        Chairman Levin. Are you confident that is going to be able
    to be done without any major problem?
        General Schwartz. We have some one-offs, Senator. We can
    talk about that, if you would like, off-line.
        Chairman Levin. Sure.
        General Schwartz. But generally speaking, we will deliver
    on this.
        Chairman Levin. Thank you both.
        It has been a very good hearing, and we appreciate
    everything you do for the Nation and for the men and women that
    you serve with, and your families, we thank them especially.
        We will stand adjourned.
        [Questions for the record with answers supplied follow:]

                   Questions Submitted by Senator Mark Begich

                   MILITARY PERSONNEL APPROPRIATION MAN-DAYS

        1. Senator Begich. Secretary Donley and General Schwartz, the
    classic associate between the 477th Fighter Group (FG) and 3rd Wing at
    Joint Base Elmendorf-Richardson is phenomenal. They work hand-in-hand
    to meet contingency and steady state mission requirements. However,
    there is no formal process for allocating man-days to the 477th FG so
    they can fulfill their requirements under the Total Force Integration
    initiative. A process is needed to appropriately manage the money,
    contingency, and steady state requirements, and most importantly the
    people in associate units. For instance, the 477th FG was scheduled to
    deploy in support of a theater security package (TSP) in January. The
    reservists planned for months to prepare by taking leave from their
    jobs, finding babysitters, and making other necessary preparations. Ten
    days before their scheduled deployment date they were told there were
    no resources to support the deployment. A few days before the
    deployment they were told they would, in fact, deploy in support of the
    mission. It is unacceptable to manage people and missions this way.
    TSPs are a known U.S. Pacific Command (PACOM) biannual requirement.
    This is just one example of how the lack of process creates unnecessary
    challenges for Active Duty and Reserve component personnel in
    fulfilling taskings. A functionally integrated unit, the 3rd Wing
    relies on their Reserve component counterpart to meet demands. In fact,
    because of the contribution by the 477th FG, the 3rd Wing plans to
    decrease Active Duty billets by 75 positions. Therefore, it is
    imperative to implement a process for allocation of man-days based on
    requirements. For steady state requirements this should be done well in
    advance of the year of execution. Are you aware of the challenges
    associate units face due to the lack of a formal requirements-based
    process for allocating military personnel appropriation (MPA) man-days?
        Secretary Donley and General Schwartz. We share your concerns about
    ensuring resources are available to access Air Reserve Forces in
    support of our most critical missions, and that requirements-based
    decisions are made in a timely manner. The Air Force transitioned to a
    requirement-based process for budgeting MPA man-days during the fiscal
    year 2012 Program Objective Memorandum (POM) exercise in 2010. During
    the budget exercise, Major Commands identified their MPA man-day
    requirements including any Total Force Enterprise units within their
    commands. Requirements were then evaluated based on Air Force Planning
    and Programming Guidance priorities, and vetted through the Air Force
    Corporate Structure for funding. This process identifies requirements
    and establishes funding levels for MPA man-days 2 years prior to
    execution of the man-days as part of the overall budget request.
        The recent 477th FG shortfall was a result of the fact that
    supplemental funding is shrinking, and the theater security mission
    they were supporting was not related to Central Command (CENTCOM)
    operations and therefore could not be funded with overseas contingency
    operations (OCO) funds. Given the importance of this mission, the Air
    Force reprioritized steady state man-day requirements funded through
    the baseline MPA to support this deployment.

        2. Senator Begich. Secretary Donley and General Schwartz, what are
    you doing to address this issue?
        Secretary Donley and General Schwartz. As supplemental funding
    subsides, there will be fewer MPA funds available. We need to reset our
    thinking about how readily available MPA will be in the future. We are
    working with the Major Commands, Air National Guard, and Reserve
    commanders to communicate to the Force the decreased level of MPA
    funding and its impact on our citizen airmen. We are going to have to
    be very surgical about where and when we use MPA man-days.
        Even with our recently established requirements-based process for
    programming and allocating MPA man-days, we have to maintain the
    flexibility to respond to real-world events. We continuously monitor
    execution and changing demands to ensure MPA resources are applied to
    the most critical missions. For example, with the surge that we now
    have underway in Japan and Libya, we are allocating what MPA man-days
    we have to support these missions. This will likely require a
    reprioritization of MPA resources.

        3. Senator Begich. Secretary Donley and General Schwartz, how are
    you ensuring major commands, like Air Combat Command and in the case of
    Alaska-Pacific Air Force, understand and support associate unit need
    for MPA man-days to meet both steady state and contingency
    requirements?
        Secretary Donley and General Schwartz. The fiscal year 2013 Air
    Force Planning and Programming Guidance issued to the Major Commands
    identifies Total Force Enterprise requirements as the second highest
    priority for the allocation and use of steady state MPA man-days after
    non-OCO Aerospace Expeditionary Force deployments. In our recently
    established requirements-based process, the Air Force evaluates the
    Major Commands' requests for steady-state MPA man-days based primarily
    on Air Force Planning and Programming Guidance priorities.

        4. Senator Begich. Secretary Donley and General Schwartz, if the
    plan is to proceed with a requirements-based process, when will it be
    implemented?
        Secretary Donley and General Schwartz. The Air Force implemented
    the requirements-based process for the MPA man-days during the fiscal
    year 2012 POM build which began in fiscal year 2010. Commands will have
    the final allocation by the end of June 2011. We intend to continue
    this process as we build future budgets.

        5. Senator Begich. Secretary Donley and General Schwartz, what
    specific actions need to be taken to implement the process and what is
    the timeline for completion?
        Secretary Donley and General Schwartz. The Air Force has fully
    implemented our requirements-based process to prioritize and allocate
    the MPA man-day funding during the building of our fiscal year 2012 POM
    in 2010. The resulting MPA disbursements will be distributed to the
    Major Commands by the end of June 2011.
        We are applying the same process for identifying and prioritizing
    MPA man-days during the fiscal year 2013 POM build.

                                 SPACE PROGRAMS

        6. Senator Begich. Secretary Donley and General Schwartz, how has
    the new National Space Policy, released in June 2010, and the National
    Security Space Strategy, released in January 2011, influenced Air Force
    space posture or investment plans; specifically utilization of
    commercial space ports like Kodiak Launch Complex (KLC) in Alaska?
        Secretary Donley and General Schwartz. In accordance with the 2010
    National Space Policy, the Air Force supports the purchase and use of
    commercial space capabilities and services to the maximum practical
    extent when such capabilities and services are available in the
    marketplace and meet U.S. Government requirements. The Air Force is
    cooperating with National Aeronautics and Space Administration (NASA)
    and the National Reconnaissance Office (NRO) to jointly develop a
    national launch infrastructure modernization plan in support of the
    National Space Policy. As currently envisioned, this plan will address
    state spaceports and make particular note of the KLC with its
    demonstrated capability to support national security launch and test
    requirements.
        The next Air Force launch from the KLC is the Operationally
    Responsive Space TacSat-4 mission. For all future launches, the Air
    Force will determine which spaceport to utilize based on required
    orbital profile, mission, and cost effectiveness. The KLC is part of
    the National Space Access capability and one of the spaceports
    considered for launch. While the Air Force recognizes the value of the
    KLC, we do not currently have launches planned from the KLC after
    TacSat-4 because upcoming missions do not require highly-inclined
    orbits.

        7. Senator Begich. Secretary Donley and General Schwartz, the
    Department of Defense (DOD) and the National Oceanic and Atmospheric
    Administration (NOAA) parted ways in last year's decision to
    restructure the joint National Polar-orbiting Operational Environmental
    Satellite System (NPOESS) program. The Air Force is now responsible for
    acquiring its satellites for a morning orbit, and NOAA is responsible
    for acquiring their own separate system for an afternoon orbit. These
    satellites are extremely important in Alaska. NOAA is facing an anomaly
    this year that most likely will hurt their ability to move forward with
    a new satellite. Do you have any concerns with their ability to meet
    weather and environmental requirements?
        Secretary Donley and General Schwartz. The Air Force has no reason
    to assert that the NOAA/NASA cannot meet their weather and
    environmental requirements. The Air Force supports the President's
    budget request for the NOAA/NASA program.

        8. Senator Begich. Secretary Donley and General Schwartz, do you
    have any concerns with the military's ability to meet those
    requirements?
        Secretary Donley and General Schwartz. The DOD component of the
    NPOESS restructure is called the Defense Weather Satellite System
    (DWSS). The program has made significant progress to date and all
    trends indicate that it will meet future milestones. The Air Force does
    not have any concerns with the military's ability to meet weather and
    environmental requirements for the Executive Office of the President
    (EOP)-directed early morning orbit.

        9. Senator Begich. Secretary Donley and General Schwartz, has the
    relationship between DOD and NOAA/NASA improved since this
    restructuring?
        Secretary Donley and General Schwartz. The Air Force is building an
    excellent relationship with the NOAA and NASA between our staff and
    product teams. DOD, NOAA, and NASA continue to cooperate on finalizing
    the transition of non-DOD content from the NPOESS contract to NASA
    contracts and defining the technical baseline for the satellite ground
    system.
                                     ______

                   Questions Submitted by Senator Joe Manchin

                           FUEL COST AND CONSUMPTION

        10. Senator Manchin. Secretary Donley, you have testified that the
    Air Force is committed to reduce its fuel consumption and the cost of
    the fuel it buys. Please tell me about the Air Force experience with
    coal-to-liquid (CTL) fuel and about how those experiences may
    ultimately affect the availability of this fuel in the U.S. market.
        Secretary Donley. The Air Force is currently certifying its
    aircraft and associated vehicles, equipment and infrastructure for
    unrestricted operational use of two 50/50 alternative fuel blends: JP-8
    and synthetic fuel produced via the Fischer-Tropsch (FT) process; and
    JP-8 and biofuel produced via ``hydroprocessed renewable jet'' (HRJ)
    process. FT fuel can be produced from coal, natural gas or biomass.
        Since certifying the B-52 to use the synthetic fuel blend in August
    2007, the Air Force has certified over 99 percent of its fleet for
    unrestricted operational use of a 50/50 synthetic fuel blend.
    Certification activities are expected to be completed for the synthetic
    fuel blend by the end of 2011 completion. To date, no performance or
    safety-of-flight anomalies have been determined.
        The Air Force fuel demand, by itself, is most likely too small to
    create a market; however, as the Air Force will be a consumer, and not
    a producer, of synthetic fuel blends, the Air Force will ultimately be
    dependent on commercial suppliers for fuel production and availability.
    The Air Force will be prepared to use CTL fuel blends if industry can
    produce sufficient quantities of CTL fuel at a cost competitive price,
    while being compliant with all applicable Federal laws and mandates.

        11. Senator Manchin. Secretary Donley, if the United States could
    produce CTL fuel, would you buy it?
        Secretary Donley. For DOD, the Defense Logistics Agency is the
    mandated agency chartered with the purchase of bulk liquid fuels. The
    Air Force does not determine the source of its fuel supply and is only
    concerned that the fuel has the desired performance, environmental and
    safety specifications. By going through the test and certification
    process, the Air Force is positioning itself to integrate cost
    competitive, environmentally friendly, domestically produced
    alternative fuel blends by 2016. The Air Force will not be a producer
    of fuel, but will use what the market competitively offers and provides
    the best stewardship of taxpayer dollars.
        Currently, over 99 percent of the Air Force fleet is certified for
    unrestricted operational use of a 50/50 synthetic fuel blend, where the
    synthetic component is produced via the Fischer-Tropsch (FT) process.
    FT synthetic fuel can be produced from coal, natural gas or biomass.
        The alternative aviation fuel certification process increases the
    types of fuel Air Force aircraft can use. Once the commercial market is
    ready, the Air Force will be positioned to use those fuels, as long as
    they meet the technical, environmental and economic requirements.
    Having the ability to use nontraditional aviation fuels provides the
    Air Force with an improved energy security posture and increased
    protection from the fiscal uncertainties that result from market
    fluctuations.

                                   C-5 FLEET

        12. Senator Manchin. General Schwartz, what is the current status
    of our modernization program for C-5s?
        General Schwartz. C-5 modernization consists of two programs, the
    Avionics Modernization Program (AMP) and the Reliability Enhancement
    and Re-engining Program (RERP). We will install the AMP modification on
    all C-5s retained in the Air Force inventory. To date, 75 of 80 C-5s
    have received the AMP modification. The last C-5 AMP modification is
    planned for completion in March 2012. Additionally, AMP is a
    prerequisite for RERP. A total of 52 C-5s will receive the RERP
    modification. Once modified, they will be redesignated as the ``C 5M.''
    As of April 19, 2011, five C-5Ms have been delivered to the Air Force.
    The last of the remaining 47 modified aircraft will be delivered by the
    third quarter of fiscal year 2016.

        13. Senator Manchin. General Schwartz, how does the Air Force
    envision the C-5 mission in future years?
        General Schwartz. We do not anticipate a significant change in the
    operational execution of the C-5 mission. The C-5 provides a unique
    capability to move large amounts of outsized and oversized cargo very
    quickly over strategic distances. The only significant change we see
    for the C-5 is in the actual fleet size. Mobility Capabilities
    Requirement Study 2016 (MCRS-16) established the strategic airlift
    requirement at 32.7 Million Ton Miles per Day (MTM/D) to meet National
    Military Strategy goals. The current strategic fleet of C-17s and C-5s
    provides our Nation with excess airlift capability. As a result of this
    excess capacity and our desire to effectively manage taxpayer
    resources, the Air Force would like to retire up to 32 C-5A aircraft by
    fiscal year 2014. However, we are prohibited by National Defense
    Authorization Act (NDAA) language to decrease our strategic airlift
    fleet below 316 without relief from Congress. We urge the Congress'
    favorable consideration of our fiscal year 2012 legislative request.
    Without this relief, the Air Force will be forced to maintain a
    strategic airlift fleet in excess of our stated requirement resulting
    in the diversion of scarce resources. The Air Force would like the
    authority to manage the strategic fleet to meet our National Military
    Strategy in the most cost effective manner.

        14. Senator Manchin. General Schwartz, will the C-5 fleet be used
    for supply or reset missions in Afghanistan, or will we need to
    contract with the Russians for additional capability?
        General Schwartz. The Air Force will continue to use the C-5 fleet
    for both supply and reset missions in Afghanistan. However, civil
    carriers provide additional flexibility to the strategic airlift fleet.
    The Air Force continually monitors operations to ensure both efficiency
    and effectiveness. At times, utilizing commercial carriers can be more
    advantageous and /or economical when used to augment the strategic
    airlift fleet.
                                     ______

                   Questions Submitted by Senator John McCain

          FUNDING FOR THE MODERNIZATION OF THE NUCLEAR WEAPONS COMPLEX

        15. Senator McCain. Secretary Donley and General Schwartz, I
    appreciate the comments in your prepared remarks emphasizing the
    continued strengthening of the nuclear enterprise as the #1 Air Force
    priority. However, I am significantly concerned by the fact that both
    the House and Senate Appropriations Committees did not meet the
    President's full fiscal year 2011 request for the National Nuclear
    Security Administration (NNSA) in either version of the full year
    continuing resolution (CR). Despite the commitment made during debate
    of the New Strategic Arms Reduction Treaty (START) for the long-term
    modernization of the nuclear weapons complex, this failure to recognize
    the National security importance of NNSA funding is very troubling. Do
    you share similar concerns?
        Secretary Donley and General Schwartz. Our efforts to strengthen
    the Air Force nuclear enterprise are important for national security
    and require a partnership with the National Nuclear Security
    Administration (NNSA). Funding delays or shortfalls for either
    organization could lead to program delays and added costs. In fiscal
    year 2011, we are relying on NNSA to complete the ongoing life
    extension study for the B61 and to initiate a life extension concept
    study for the W78 intercontinental ballistic missile warhead. These
    efforts will be at risk if NNSA's funding in fiscal year 2011 is less
    than requested.

        16. Senator McCain. Secretary Donley and General Schwartz, do you
    agree that sustained support for the modernization of the nuclear
    weapons complex is a national security priority?
        Secretary Donley and General Schwartz. Yes. DOD recognizes
    maintaining an adequate stockpile of safe, secure, reliable nuclear
    warheads requires a strong partnership with the Department of Energy.
    The DOD has demonstrated its commitment to the nuclear weapons complex
    by transferring $5.7 billion to the National Nuclear Security
    Administration in the fiscal year 2011 budget process and a further
    $2.5 billion in the fiscal year 2012 budget process. This transfer
    supports critical nuclear weapons programs and infrastructure
    modernization in fiscal year 2011 through fiscal year 2016.

                      AERIAL REFUELING TANKER COMPETITION

        17. Senator McCain. Secretary Donley, what lessons-learned from
    previous efforts to award a tanker contract did the Air Force leverage
    to structure and conduct a competition here to withstand a high-profile
    bid protest?
        Secretary Donley. The Air Force process for this tanker competition
    was driven by clearly stated requirements defined by the warfighter,
    more objective evaluation criteria and a fixed-price contract structure
    that would deliver the Air Force a capable aircraft at the most
    competitive price for our taxpayer's dollars. The Air Force is now in
    the process of officially documenting the lessons learned from the
    previous efforts and how those lessons were successfully applied to
    this competition. We anticipate this to be complete in Fall 2011 and
    would be happy to share these results with the committee at that time.

        18. Senator McCain. Secretary Donley, what lessons-learned does the
    Air Force intend to apply to similar future procurements?
        Secretary Donley. The Air Force is drafting a final lessons learned
    paper from the KC-X procurement. Once completed and released, the Air
    Force will share these insights with the defense committees and will
    implement those lessons-learned on all applicable future procurements.

        19. Senator McCain. Secretary Donley, do you have a sense of how
    much the taxpayer might save by buying these tankers under full-and-
    open competition and a fixed-price development contract (as is the case
    now with the program) compared to a sole-source lease, using a cost-
    reimbursable development contract (as was originally proposed in 2002)?
        Secretary Donley. There are many factors that make comparing costs
    from the varied structures of the proposed tanker lease in 2002, the
    KC-45 competition in 2008 and the current KC-46 competition in 2010-
    2011 very difficult. However, it is safe to say that the Department has
    reaped a substantial savings for the taxpayer by buying these tankers
    under the current full-and-open competition and fixed-price development
    contract.
        The Office of the Secretary of Defense (OSD) and Air Force
    representatives have met with congressional defense committee staff on
    several occasions to provide source selection and proprietary
    information since the contract award, and are willing to brief you on
    the bids and resulting cost savings from past competitions, at your
    convenience.

        20. Senator McCain. Secretary Donley, now that we have a winner,
    with a reportedly aggressive bid price, how will the Air Force ensure
    that the tankers come in at that price?
        Secretary Donley. While the tanker source selection resulted in an
    aggressive competition, the Department's Independent Cost Estimate
    (ICE) and Air Force's Service Cost Position were both in line with
    Boeing's proposed prices.
        The 372 mandatory requirements were clearly defined and approved by
    the Air Mobility Command Commander. These warfighter requirements were
    closely coordinated upfront with the acquisition program office--this
    was done to eliminate the need for post-award Engineering Change
    Proposals (ECPs). The development contract and options for production
    are fixed-price, which encourages requirements stability and is
    reflective of our belief that the requirements for the KC-46A are well
    defined and stable.
        KC-46 program execution will be carefully watched by the Air Force
    and the DOD leadership to make certain The Boeing Company delivers what
    it promised during the source selection. The Air Force program office
    has established a new Program Control unit to specifically manage a
    stable program baseline and a Joint Configuration Change Board with
    Boeing to rigorously review and control baseline changes. As an added
    measure to ensure the tankers come in at the negotiated price, the
    Secretary of the Air Force directed a policy that requires the Service
    Acquisition Executive to approve level 1 changes impacting the KC-46
    program cost, schedule or performance baseline.

        21. Senator McCain. Secretary Donley, you're on a tight timeline.
    How concerned are you about the overlap between production and
    development, that is, the concurrency, that's built into this program?
        Secretary Donley. Last year, DOD announced a well-conceived source
    selection strategy to determine whether or not the proposals
    demonstrated the ability of an offeror to deliver all 372 mandatory
    requirements, with the first 18 aircraft delivered within 78 months
    after contract award. Both offerors' proposals were thoroughly
    evaluated by a team of acquisition, maintenance and operational
    experts. Boeing's schedule, as proposed, was considered awardable with
    a low-to-moderate risk schedule and development approach.
        Furthermore, because Boeing is contractually bound to deliver 18
    operational aircraft within 78 months after contract award, and because
    the Air Force has negotiated fixed prices for all production aircraft,
    Boeing has a significant financial incentive to execute the baseline
    schedule. Should Boeing need to make changes to the aircraft
    configuration to be compliant with the system specification after
    production begins, the KC-46 Engineering and Manufacturing Development
    contract requires Boeing to modify the production aircraft to be
    compliant with the final aircraft configuration, at no additional cost
    to the Air Force.
        The Air Force is now focused on ensuring The Boeing Company
    executes to the KC-46 program cost, schedule, and performance baseline
    negotiated in the fixed-price contract. The Air Force program office
    has established a new Program Control team to specifically manage a
    stable program baseline, and a Joint Configuration Change Board, with
    Boeing, to rigorously review and control baseline changes. As an added
    measure, to ensure the tankers come in at the negotiated price, the
    Secretary of the Air Force directed a policy that requires the Service
    Acquisition Executive to approve all level 1 changes impacting the KC-
    46 program cost, schedule, or performance baseline.

        22. Senator McCain. Secretary Donley, the Pentagon's recent
    experience with concurrent development in, for example, the F-35 Joint
    Strike Fighter (JSF) and the Future Combat System (FCS) programs, has
    been awful. Why did the Air Force choose that approach here and why
    should we not be concerned about the risk of delays and possible
    retrofits with the development of Boeing's tanker?
        Secretary Donley. Boeing's schedule, as proposed, was deemed to
    have met the 372 mandatory requirements and was considered awardable
    with a low-to-moderate risk schedule and development approach.
        Because Boeing is contractually bound to deliver 18 operational
    aircraft within 78 months after contract award, and because the Air
    Force has negotiated fixed prices for all production aircraft, Boeing
    has a significant financial incentive to execute the baseline schedule.
    Should Boeing need to make changes to the aircraft configuration to be
    compliant with the system specification after production begins, the
    KC-46 Engineering and Manufacturing Development contract requires
    Boeing to modify the production aircraft to be compliant with the final
    aircraft configuration, at no additional cost to the Air Force.
        The Air Force is now focused on ensuring The Boeing Company
    executes to the KC-46 program cost, schedule and performance baseline
    negotiated in the fixed-price contract. The Air Force program office
    has established a new Program Control team to specifically manage a
    stable program baseline, and a Joint Configuration Change Board, with
    Boeing, to rigorously review and control baseline changes. As an added
    measure, to ensure the tankers come in at the negotiated price, the
    Secretary of the Air Force directed a policy that requires the Service
    Acquisition Executive to approve level 1 changes impacting the KC-46
    program cost, schedule or performance baseline.

        23. Senator McCain. Secretary Donley, given how long it took to get
    us to this point, and the age of the KC-135 and KC-10 fleets, when do
    you expect to start the KC-Y and KC-Z procurements?
        Secretary Donley. As noted in the Aircraft Procurement Plan--fiscal
    years 2012-2041, ``The Air Force has begun recapitalizing the tanker
    fleet with plans to develop and procure 124 KC-46A tankers by 2021. The
    KC-46A fleet will reach 179 aircraft in 2027.'' Given the age of the
    KC-135 aircraft at that time (2027) and the anticipated demand, the Air
    Force would address plans to replace the remaining KC-135 inventory
    with follow-on air refueling platforms. The current plan is to align
    the KC-Y with the final procurement of the KC-46A. Further study will
    need to occur to refine the total number and composition of the tanker
    fleet.

        24. Senator McCain. Secretary Donley, I understand that, as a
    result of the contract award, Boeing will sign a fixed-price contract
    valued at over $3.5 billion to develop and deliver 18 aircraft by 2017.
    To be clear, exactly what does ``over $3.5 billion'' mean for the
    tanker development contract?
        Secretary Donley. The publically released target price of the
    Engineering and Manufacturing Development (EMD) contract is $4.4
    billion. The EMD contract requires design, development, test,
    verification, certification, and delivery of four tanker aircraft. The
    EMD contract also requires pre-operational support; development,
    management and conduct of type 1 training; and provision of operations,
    maintenance, installation, and training data, as required. Eighteen
    operational aircraft will be available to the warfighter 78 months
    after contract award.

        25. Senator McCain. Secretary Donley, I understand that the
    configuration of Boeing's tanker will involve putting a digital 787
    cockpit into an analog 767 aircraft and a modified KC-10 boom to meet
    the gallon-per-minute offload requirement. What else can you tell us
    about the configuration of Boeing's aircraft at this point and what
    does the design entail in terms of risk reduction on the platform or on
    the mission systems?
        Secretary Donley. All configuration differences between the U.S.
    Air Force KC-46 and the baseline Boeing 767-200/KC-767 were evaluated
    as being in the category of low to moderate risk. All are considered
    well within the design capability of the commercial/military large
    aircraft industries. Some of the more significant changes, in addition
    to the ones mentioned in the question, include:

             Increased wing strength and landing gear (both from existing
            designs)
             Digital flight deck with large displays (both from existing
            designs)
             Auxiliary fuselage fuel tanks (from existing similar designs)
             Cargo floor and door (from existing designs)
             Aeromedical and passenger features (leveraged from existing
            military systems)
             Infrared defensive system (leveraged from existing military
            systems)
             Radio Frequency situational awareness system
             Electro-Magnetic Pulse hardening
             Night Vision Imaging System and covert operations
            compatibility
             Flight deck armor protection
             Chemical/biological weapons compatibility
             Flash blindness compatibility
             Laser eye protection compatibility
             Alert operation features
             Military voice and data communications
             Tanker unique flight management functionality

        26. Senator McCain. Secretary Donley, has any work begun under the
    contract?
        Secretary Donley. Yes. The KC-46 Engineering and Manufacturing
    Development contract was awarded on February 24, 2011. As of March 17,
    2011, the Air Force has obligated approximately $392 million of fiscal
    year 2010 and fiscal year 2011 funding to incrementally fund Boeing's
    execution of the contract for design, development, test, verification,
    certification, and delivery of the first four tanker aircraft.

                  BUYING SATELLITES UNDER MULTIYEAR CONTRACTS

        27. Senator McCain. Secretary Donley and General Schwartz, I am
    gratified by the OSD's decision not to approve the Air Force's proposal
    to execute a multiyear contract in connection with the Advanced
    Extremely High-Frequency (AEHF) satellite program. As you know, to help
    ensure that DOD realizes the substantial savings it expects from using
    a multiyear contract in a given case, multiyear contracting
    opportunities should be Reserved for only the most stable and best
    performing programs. That is a requirement reflected in law. The AEHF
    program, which has chronically overrun in cost and schedule and has, to
    this day, failed to deliver promised capability, is not such a program.
    I understand that OSD will, nonetheless, help you think about a more
    appropriate, conservative block-buy approach that would make more sense
    for this program and for military satellite programs in general that,
    while continuing to only promise the delivery of much needed
    capability, are impinging on those resources that have been
    appropriated for the Air Force to buy satellites. We will help OSD
    think that through. What principles do you feel should guide a
    responsible block buy strategy for highly risky, very expensive, and as
    yet unproven military satellite programs?
        Secretary Donley and General Schwartz. The principles that should
    govern a decision for satellite block buys are stable requirements, a
    stable design, completed development, and readiness for steady state
    production. This is what is currently envisioned in the fiscal year
    2012 President's budget request for the Advanced Extremely High
    Frequency (AEHF) satellite program.

                      AIR FORCE SPACE ACQUISITION PROPOSAL

        28. Senator McCain. Secretary Donley, I appreciate the stated goals
    of the Air Force's newly announced Evolutionary Acquisition for Space
    Efficiency (EASE) initiative for procuring satellite systems. However,
    I continue to be concerned with the overall track record of cost
    overruns and schedule delays for space systems. One of the selling
    points of EASE, which calls for, among other things, the use of block
    buys for military satellites, is the potential for savings. How does
    the Air Force intend to conclusively determine that expected savings
    have been realized?
        Secretary Donley. The Air Force is confident that the AEHF program
    has established stable requirements and a stable design, has completed
    development, and is ready for steady state production. Given this
    confidence, the Air Force is prepared to negotiate a fixed-price
    incentive fee contract for the AEHF-5 and -6 block buy included in the
    fiscal year 2012 President's budget. The estimated savings for the AEHF
    block buy in fiscal year 2012 is greater than ten percent but is
    contingent on contract negotiations. These savings are measured against
    the traditional approach to acquiring satellites; therefore, the Air
    Force will achieve these savings at AEHF contract award in fiscal year
    2012. At that time, cost of the awarded contract can be contrasted with
    the Cost Assessment and Program Evaluation estimate of the purchase
    under the prior status quo approach, yielding a measure of savings.
    Savings realized through block buys are intended to be reinvested in
    research and development for technology enhancement to advance mission
    area capabilities.

                JOINT STRIKE FIGHTER OPERATING AND SUPPORT COSTS

        29. Senator McCain. General Schwartz, as you know, last year U.S.
    Naval Air Systems Command (NAVAIR) effectively determined that the
    Marine Corps and the Navy's versions of the JSF may end up being too
    expensive to operate. Specifically, it found that, with each flight-
    hour possibly costing about $31,000 in 2029, compared with about
    $19,000 per flight hour for current F/A-18 Hornets and AV-8B Harriers,
    the operating cost associated with the Navy's versions of the JSF may
    be considerably higher than the costs to operate the legacy aircraft
    they are intended to replace. Has the Air Force reviewed and
    independently validated NAVAIR's analysis; and, if so, do you agree
    with its finding on the expected operating costs of the JSF?
        General Schwartz. The Air Force has reviewed NAVAIR analysis and
    determined that the operating costs for all three of the JSF variants
    are higher than originally estimated. The OSD Cost Assessment and
    Program Evaluation (CAPE) also conducted an Operations and Sustainment
    cost estimate for JSF and their estimate is consistent with the
    previous Air Force and Navy cost estimates.

        30. Senator McCain. General Schwartz, what does that mean for the
    viability of the Air Force's JSF program and what kind of mix we can
    expect in terms of the Air Force's future strike fighter force?
        General Schwartz. The Air Force, along with our F-35 sister
    Services and international partners, recognizes that life cycle
    sustainment costs for the F-35 program must remain affordable to the
    warfighter. The Air Force is continuously engaged with the Program
    Office and the prime contractor, Lockheed Martin, to investigate
    opportunities to reduce overall operations and sustainment costs, in
    order to capture the most affordable solution with the greatest
    capability. Additionally, the F-35 Program Office has several efforts
    underway to review methods to reduce sustainment costs, including:

             A Sustainment Cost Benefit Analysis (CBA) that will
            compare service organic logistics capability against the
            Program of Record (POR) contractor-provided supply chain
            management construct.
             A Carrier Strike Group focused sustainment wargame.
             A ``deep dive'' of the Autonomic Logistics Information
            System (ALIS) capabilities and challenges.

        The Air Force will gradually replace our F-16 and A-10 fleet with
    F-35As as we transition to a fifth generation fleet of tactical
    fighters. We will be required to maintain a mix of legacy and fifth
    generation tactical assets as we procure a more capable fighter force
    structure.

        31. Senator McCain. General Schwartz, to what extent is NAVAIR's
    assessment (and the Air Force's validation of that assessment)
    reflected in the Air Force's current budget proposal?
        General Schwartz. The Air Force's fiscal year 2012 budget proposal
    is in line with the NAVAIR assessment and is consistent with the OSD
    guidance to fund the program to the OSD Cost Assessment and Program
    Evaluation estimate.

                    F-35 LIGHTENING II JOINT STRIKE FIGHTER

        32. Senator McCain. General Schwartz, over the last few weeks, the
    media has been reporting that the Air Force may extend by more than 2
    years the date by which it intends to deploy a squadron with initial
    operating capability (IOC). With the Air Force having stated as
    recently as last month that the F-35 will reach its IOC by mid-2013, we
    may now be looking at no earlier than 2015. I understand that to
    mitigate most cost effectively any potential gap in tactical fighter
    capability, a fleet viability board is performing structural evaluation
    tests on its F-16s to see if they can fly longer than planned. By when
    will that board conclude its work?
        General Schwartz. First, for clarification, the Fleet Viability
    Board does not perform structural tests, but rather is an independent
    assessment body evaluating fleet technical health, availability, and
    cost of continued ownership. The Board recently concluded its
    assessment on the older pre-Block fleet (Blocks 25/30/32), and while
    the final results are still pending, initial results indicate that the
    aircraft will reach their certified service life of 8,000 equivalent
    flight hours.
        The Board is in the process of performing an assessment of the
    newer post-Block fleet (Blocks 40/42/50/52), which should be final this
    fall. Additionally, the Program Office contracted with Lockheed Martin
    to perform a full scale durability test (FSDT) on a Block 50 aircraft
    with results anticipated in 2016. The fiscal year 2012 President's
    budget adds $15 million to begin Research, Development, Test and
    Evaluation for structural modification and avionics modernization as
    part of the Block 40/50 service life extension. The FSDT, along with
    strong engineering data, will inform future decisions regarding the
    service life of these aircraft.

        33. Senator McCain. General Schwartz, what are the preliminary
    findings of the board?
        General Schwartz. The older F-16 pre-Block fleet (Blocks 25/30/32),
    used primarily for test, training, or operationally within the Guard
    and Reserve, has sufficient structural service life remaining to meet
    the current retirement plans. However, the Board assessment concluded
    that, if needed, the F 16 pre-Block fleet can extend its service life
    and be made more capable, but will require significant, associated
    investment cost and reduced aircraft availability.
        The Board assessment of the newer F-16 post-Block fleet (Blocks 40/
    42/50/52) is ongoing. Additionally, we are proceeding with a full scale
    durability test, and its resultant service life extension plan, in an
    effort to operate these aircraft longer than originally scheduled. Due
    to substantial design differences from older pre-Block aircraft, this
    durability test will be specific to the newer post-Block fleet.

                                RQ-4 GLOBAL HAWK

        34. Senator McCain. Secretary Donley and General Schwartz, I
    understand that you are planning to reduce the number of Global Hawk
    unmanned aerial vehicles (UAV) from 22 to 11. By how much will that
    reduction in the number of Global Hawk aircraft the Air Force intends
    to buy increase the cost of each Global Hawk vehicle?
        Secretary Donley and General Schwartz. The December 2010 Selected
    Acquisition Report (SAR) reflected Average Procurement Unit Cost (APUC)
    growth from $90.8 million to $111.6 million (+22.9 percent) and Program
    Acquisition Unit Cost (PAUC) growth from $150.1 million to $171 million
    (+14 percent). The subsequent draft program office cost estimate
    revealed a critical APUC breach from $90.8 million to $113.9 million
    (+25.4 percent) and significant PAUC breach from $150.1 million to
    $173.3 million (+15.5 percent).
        Cost growth was driven by program quantity/schedule changes,
    engineering and requirements changes, support changes, and general cost
    growth.

        35. Senator McCain. Secretary Donley and General Schwartz, will
    that increase in cost trigger any of the cost-growth thresholds under
    the Nunn-McCurdy law? If so, please explain.
        Secretary Donley and General Schwartz. Yes. The Secretary of the
    Air Force notified Congress of a critical unit cost breach of over 25
    percent in APUC and over 15 percent in PAUC on 6 April 2011. The
    December 2010 Selected Acquisition Report (SAR) reflected APUC growth
    from $90.8 million to $111.6 million (+22.9 percent) and PAUC growth
    from $150.1 million to $171 million (+14 percent). The subsequent draft
    program office cost estimate revealed a critical APUC breach from $90.8
    million to $113.9 million (+25.4 percent) and significant PAUC breach
    from $150.1 million to $173.3 million (+15.5 percent).
        Cost growth was driven by program quantity/schedule changes,
    engineering and requirements changes, support changes, and general cost
    growth.

                   SECRETARY GATES' AIR FORCE ACADEMY SPEECH

        36. Senator McCain. Secretary Donley and General Schwartz, in his
    speech at the Air Force Academy on March 4th, Secretary Gates expressed
    the fear that once he departs and once U.S. forces drawdown in Iraq and
    Afghanistan, there are those who look forward to getting back to what
    he called ``real Air Force normal.'' Do you agree with Secretary Gates'
    views about the future of conflict and likely implications for the Air
    Force in the competition for limited defense dollars?
        Secretary Donley and General Schwartz. We are committed to
    providing the most capable Air Force in the world, while continuing to
    be good stewards of our National resources. This involves not only the
    analysis of current and future threats, but balancing requirements,
    risks, and limited resources to meet those threats. We must also
    maintain the ability to provide first class support to our personnel
    and the infrastructure required to operate in today's global
    environment. As always, we are committed to working with our sister
    Services and the Secretary of Defense to build budgets that reflect the
    delicate balance between current operations and future requirements
    within assigned obligation authority.

        37. Senator McCain. Secretary Donley and General Schwartz, what do
    you see as the Air Force's primary missions after Operation Enduring
    Freedom (OEF) is completed and the most important contingencies Air
    Force leaders should be preparing for in the future?
        Secretary Donley and General Schwartz. In a post-OEF world, the
    United States faces a complex and uncertain strategic landscape with a
    vast array of diverse and complex security challenges. Threats created
    by aggressive state and non-state actors, as well as continuing
    counter-insurgency challenges and the proliferation of weapons of mass
    destruction, will continue to undermine global security and complicate
    efforts to sustain peace.
        Other powerful trends will add complexity to the security
    landscape. A rising China with potential aims of creating its own
    Pacific region sphere of influence, increasing demand for resources,
    rapid urbanization of littoral regions, the emergence of new strains of
    disease, and cultural and demographic tensions are just some of the
    trends whose complex interplay may spark or exacerbate future
    contingencies that require Air Force, Joint Service, allied and partner
    nation involvement.
        Air Force preparation for the future will seek to sustain
    advantages and provide combatant commanders with capabilities to defeat
    increasingly capable adversaries across the full spectrum of military
    conflict, while at the same time, maximizing combat effectiveness and
    efficiency from every taxpayer dollar entrusted to us. Pursuing a range
    of adaptable and efficient mission capabilities embedded within our 12
    Air Force Core Functions will further the enduring advantages of Global
    Vigilance, Reach and Power, and adequately prepare the Air Force for an
    uncertain future.

        38. Senator McCain. Secretary Donley and General Schwartz, what
    changes, if any, in training, equipment, and force structure should the
    Air Force be making now to prepare for these likely contingencies?
        Secretary Donley and General Schwartz. The Air Force is committed
    to preparing for future contingencies through improvements to training,
    equipment and force structure while remaining ever mindful of our
    Nation's fiscal challenges. Air Force training initiatives must prepare
    airmen for future contingencies across the range of military
    operations, and continue to foster mutually beneficial partnerships
    around the world. Successful partnerships will ensure interoperability,
    integration, and interdependence between coalition forces and provide
    our partner nations the capability and capacity to solve their own
    national security issues. The Air Force will continue to promote cross-
    cultural competence as a critically important skill for all airmen, and
    further emphasize language skills and regional knowledge. The Air Force
    will also increase the culture and language content of pre-deployment
    training and promote new language learning programs. The most valuable
    Air Force asset is our people and we will make every effort to further
    prepare our professional, all-volunteer force.
        The Air Force is committed to enhancing our capabilities to support
    the Joint force. We will ensure that we're providing the right
    capabilities with our long-range strike, fighter force, strategic
    airlift and Intelligence, Surveillance and Reconnaissance (ISR)
    platforms and ensure our space-based assets continue to deliver needed
    capabilities in the future. We will modernize where we can, but where
    modernization no longer is cost-effective, we will pursue
    recapitalization. As you know, one of our primary efforts includes
    retiring and recapitalizing legacy fighters and tankers and replacing
    them with F-35s and KC-46s. We will mitigate near-term fighter risk
    through aggressive management of F-35 production, legacy fleet review
    and sustainment, along with selected service life extension and
    modernization programs. We will continue to develop and invest in
    cyberspace capabilities and expertise to meet emerging mission needs,
    as well as expand collaboration with Joint, Inter-agency, academic, and
    international partners. We will continue to enhance ISR capabilities
    and increase Processing, Exploitation and Dissemination capacity to
    support combatant commander needs, as well as revise education and
    training programs to develop cyberspace professionals.
        While the current environment requires the Air Force to accept
    reasonable levels of risk as we balance our capabilities to address
    emergent threats and challenges, we will continue to pursue cost-
    effective training, weapon systems and equipment that leverage existing
    capabilities, incorporate innovative solutions, and maximize Joint
    interoperability and integration of legacy and future systems. The Air
    Force will continue to support assessments of the future joint
    operating environment, which will enable the Air Force to provide a
    balanced force with a relevant spectrum of capabilities, seamlessly
    integrated with our Joint and coalition partners, to meet national
    strategic objectives and the requirements of future contingency
    operations.

                    AIR FORCE END STRENGTH AND FORCE SHAPING

        39. Senator McCain. General Schwartz, in 2007, the Air Force was
    implementing a goal of reducing the number of Active-Duty airmen to
    316,000, a goal that Secretary Gates rescinded. Despite stability in
    end strength and even a 600-airman increase planned for in the fiscal
    year 2012 budget, the Air Force plans to reduce its numbers in certain
    officer military occupational specialties (MOS), conduct a reduction in
    force, and use other means to involuntarily separate hundreds of
    currently serving Air Force officers. Please explain why the Air Force
    is taking these personnel measures and what the scope and duration of
    the force shaping measures will be and what the ultimate result will be
    for the Air Force, particularly the officer corps.
        General Schwartz. The previous reduction of Active Duty airmen was
    associated with a reduction to authorized Air Force end strength to the
    316,000 level. Since then, Air Force mission requirements have resulted
    in an increase in our authorization end strength to 332,800, as of
    fiscal year 2012. We appreciate your support of this higher end
    strength level and are committed to operating within authorized levels.
    It is for this reason the Secretary and I approved a Force Management
    Plan that will size and shape the force to our authorized end strength
    ceiling by the end of fiscal year 2012.
        While our Air Force is fortunate to have so many dedicated airmen
    wanting to serve, a 16-year record high retention has caused our
    Active-Duty Force to exceed our authorized end strength level. As a
    result, starting in fiscal year 2010, we have implemented several
    measures to reduce officer and enlisted airmen. We have been successful
    in reaching our enlisted end strength, but remain approximately 2,300
    officers over strength, as of the end of fiscal year 2010.
    Consequently, we made the difficult decision earlier this year to
    continue Force Management measures necessary to reach authorized levels
    by the end of fiscal year 2012.
        In order to minimize the impact on our current force, we have
    reduced active duty accessions and extended those voluntary separation
    programs implemented in fiscal year 2010. Even with these actions, our
    over-strength situation has required use of involuntary programs to
    include rollback of enlisted dates of separation to help balance
    enlisted end strength. To balance officer end strength, we had to
    utilize officer retention boards, reduced officer promotion
    opportunities along with force shaping, reduction-in-force and
    selective early retirement boards in 2010 with separations and
    retirements in fiscal year 2011. We must conduct the same in 2011
    through early 2012 to meet our authorized end strength by the end of
    fiscal year 2012.
        At the same time, we are focused on shaping our force to ensure we
    have the critical skills and capabilities required now and over the
    next few years. To this end, we are cross-training officers and
    enlisted airmen from over-manned career fields into those with greater
    needs. We are also prudently using bonuses to target critical skill
    areas where we are undermanned and retention is low.

        40. Senator McCain. General Schwartz, what legislative tools, if
    any, do you need to accomplish the force shaping goals you have in
    mind?
        General Schwartz. Congressional authorities are key to successfully
    sizing and shaping our force. We are using existing authorities to the
    maximum extent; however, renewed and expanded measures would enable us
    to be even more effective in shaping our force. Thank you for the NDAA
    for Fiscal Year 2011 renewed authority to allow prior enlisted
    officers, with 20 or more years of total service, to retire with eight
    versus ten years of commissioned service. We implemented this authority
    in our current Force Management strategy to help manage our end
    strength for fiscal year 2011 and may continue it, if our request for
    another extension is granted beyond September 2013.
        In coordination with our sister Services, we worked closely with
    the OSD to request additional legislative authorities. As you may be
    aware, our authorities to shape our mid-grade officers by offering
    voluntary separation pay and conducting an involuntary reduction in
    force board expire in December 2012. We have successfully implemented
    these authorities over the past year, and have requested they be
    extended. For officers with more than 15, but less than 20 years of
    service, we are requesting a Temporary Early Retirement Authority.
    Additionally, to incentivize officers to retire in skills excess to Air
    Force requirements, we request the authority to offer a voluntary
    retirement incentive pay. While we currently have the authority to
    selectively retire lieutenant colonels and colonels early, the existing
    authority is limited. Renewing the enhanced selective early retirement
    authority will allow the Air Force to manage our lieutenant colonels
    and colonels more precisely. We also request the flexibility to adjust
    the maximum years of active commissioned service for lieutenant
    colonels and colonels. For officers in the regular grade of lieutenant
    colonel, we request the authority to adjust the maximum years of
    service from 28 years to no less than 25 years. For officers in the
    regular grade of colonel, we request the authority to adjust the
    maximum years of service from 30 years to no less than 27 years.
        Lastly, we are requesting an extension to the Career Flexibility to
    Enhance Retention beyond December 2012. This would allow us to continue
    to authorize servicemembers' inactive status while serving on active
    duty in order to meet personal or professional needs and then return to
    active duty at the end of the period of inactivation.
        We requested all these legislative authorities through the OSD.
    Each of these authorities will provide all of the Services with
    additional tools to size and shape the Armed Forces to best meet
    current and future mission requirements.

        EFFICIENCIES EFFORT AND REDUCTION IN NUMBER OF GENERAL OFFICERS

        41. Senator McCain. General Schwartz, the Secretary of Defense
    initiated an efficiency review several months ago that included the
    goal of reducing the grades and number of general and flag officers
    throughout the Services. What was your recommendation to the Secretary
    of Defense regarding Air Force general officers in this regard?
        General Schwartz. In accordance with the initial guidance received
    from the Secretary of Defense in August 2010, the Air Force did a
    thorough scrub of all of our internal general officer positions. The
    Air Force completed this review and initially identified 18 positions
    that could be eliminated from the general officer ranks based on
    changing operational requirements and internal restructuring. There is
    risk associated with each of these eliminations, but on a case by case
    basis, the Air Force can assume that risk and still accomplish our
    mission.
        Subsequent to our input, the Secretary of Defense's Efficiencies
    Task Force identified four additional positions for reduction. These
    positions are the Secretary of the Air Force Legislative Liaison Deputy
    and the Judge Advocates General for Air Combat Command, Air Force
    Materiel Command and Air Mobility Command. The latter reductions take
    the number of Brigadier General positions in Judge Advocate General
    Corps from four to one. We have since provided justification for
    maintaining each of these positions including the need for a pathway to
    grow flag officers with experience in the legislative process, as well
    as, senior military attorneys who are experts in application of lethal
    force, transportation, and aviation and acquisition law specialties,
    respectively.

        42. Senator McCain. General Schwartz, would you prefer to see more
    reductions in joint billets that would be filled by Air Force general
    officers, or, rather, in institutional billets throughout the Air
    Force?
        General Schwartz. In addition to the 22 internal Air Force general
    officer billets, another 17 Joint positions were identified, for a
    total of 39 positions eliminated from our headspace. While we
    understand that many of these joint positions are tied to operations in
    Iraq and Afghanistan, a reduction of this size concerns us greatly. The
    Air Force values Joint participation and it is our desire to be strong
    contributors to the joint fight.

        43. Senator McCain. General Schwartz, what is your opinion about
    the appropriate number of Air Force general officers by grade?
        General Schwartz. See response to question #42.

        air force implementation of don't ask, don't tell policy repeal
        44. Senator McCain. General Schwartz, DOD has finalized its plans
    for training military personnel under the new policy that will allow
    individuals who are gay or lesbian to serve openly. Training of senior
    leaders has already begun. What is your assessment of the validity of
    the plan for the Air Force?
        General Schwartz. The DOD-developed training plan delivers a solid
    foundation of knowledge and guidance to our airmen. Policies were
    examined for required changes and these updated policies were
    incorporated into a training program that informs, while emphasizing
    leadership, professionalism, discipline, and respect. Leadership from
    Air Force commanders and senior leaders is the key to successful
    implementation. Our Air Force leaders are clearly articulating upcoming
    policy changes and preparing the force for repeal--consistent with
    standards of military readiness, effectiveness, unit cohesion,
    recruiting and retention. Within this context, and guided by our core
    values, I am confident the Air Force will successfully implement this
    policy change with the same professionalism we demonstrate in all of
    our daily endeavors.

        45. Senator McCain. General Schwartz, what criteria will you use
    when the Secretary of Defense solicits your view, as Chief of Staff,
    about the readiness of the Air Force for openly gay and lesbian airmen
    to serve?
        General Schwartz. Notably, the plan laid out by the OSD, does not
    require 100 percent of airmen to be educated and trained prior to
    certification. Instead, it ensures the execution of actions leading to
    certification is underpinned with a solid foundation consistent with
    standards of military readiness, effectiveness, unit cohesion,
    recruiting and retention. Within this context, I have tasked my senior
    leaders, commanders, chiefs, first sergeants, and supervisors, in
    addition to my experts, to be fully educated and trained prior to
    certification. Further, to assist us with recording training and
    tracking issues that could affect readiness and esprit-de-corps, I
    receive biweekly progress updates on policy development, training
    execution, and percent of the force trained. I also receive Major
    Command-level subjective feedback on training effectiveness, readiness,
    unit cohesion, recruiting and retention.
        I plan to utilize the Major Command commander assessments, along
    with a minimum of 75 percent of the force trained, as my criteria for
    recommending certification to the Secretary of Defense and the Chairman
    of the Joint Chiefs of Staff.

        46. Senator McCain. General Schwartz, what steps are you taking to
    ensure that Air Force units and personnel who are currently deploying,
    or will be deployed when repeal takes place, and who are or will be
    experiencing the most austere, most demanding combat conditions are
    ready for this change?
        General Schwartz. For all airmen preparing to deploy, commanders
    will ensure they receive the appropriate training. For all airmen
    currently deployed to locations where training may have an adverse
    mission impact, commanders have the discretion to schedule training
    within 60 days of redeployment. Computer-based training is available
    for all those airmen that do not fall within the previous category, or
    they may elect to attend a sister Service training program.

                      SAVINGS AND EFFICIENCIES INITIATIVE

        47. Senator McCain. Secretary Donley, at Secretary Gates' direction
    to the Military Services to find $100 billion in efficiency savings
    between fiscal years 2012 and 2016, the Air Force has found $3.4
    billion in efficiencies in 2012 and a total of $33.4 billion over the
    next 5 years. I understand that Secretary Gates is allowing the Air
    Force to reinvest that efficiency money to, for example, fund a next-
    generation bomber, upgrade the radar system for F-15 aircraft, develop
    simulators for the JSF, and improve the B-52s' computer infrastructure.
    Which elements of savings or efficiency that the Air Force has
    identified is the riskiest, in terms of not being achievable?
        Secretary Donley. First, we have mitigated risk in our efficiency
    plans through a variety of strategies including ramping up expected
    efficiencies further out in the Future Years Defense Plan (FYDP)
    allowing additional time for planning and execution of the plans;
    selecting by-name owners of our initiatives to ensure responsibility
    remains at a personal level of accountability; and, by weaving
    efficiency planning and execution process into existing Air Force
    Corporate Structure to ensure efficiency plans are aligned with Air
    Force strategy and get reviewed on a regular basis. However, we are
    unable to eliminate risk completely due to a variety of factors.
        The majority of risk we currently assess in our efficiencies comes
    from external sources and is generally a product of assumptions made in
    the planning process. Commodity prices, for example, represent great
    risk to energy efficiencies in both the aviation and facility areas.
    Rising fuel prices could completely eliminate all dollar savings from
    efficiencies. Our business process efficiencies are based on a
    projected level of demand for service. Real-world contingencies could
    significantly challenge those projections and drive additional manpower
    requirements to meet those needs in spite of the process efficiencies
    we were able to garner. The same contingencies would also use our
    equipment at greater rates than currently projected which would require
    adjustments to acquisition strategies and replacement profiles. We
    monitor risk on a monthly basis, and therefore the type of risk and
    amount associated with that risk varies as we actually execute the
    efficiency plans. Currently, the Air Force assesses risk in the
    following areas that translate to $1.2 billion across the FYDP in
    efficiency plan shortfalls, and an additional amount of approximately
    $1 billion based on actual cost of fuel:

             Installation Support/Communication Issues: Current
            restructure plans for installation support result in efficiency
            estimates that are less than originally anticipated. The Air
            Force is developing alternative approaches to mission support
            that will allow us to make up the difference.
             Logistics and Installation Efficiencies and MAF Fuel
            Efficiencies: We can take actions through smart investments and
            standard operating policies to reduce energy consumption, but
            we cannot control the price of energy. Recent increases in oil
            prices highlight the inherent risk in achieving financial
            savings based on fuel and energy efficiencies. We expect to
            reduce energy consumption and reduce gallons/energy consumed.
            However, as price of fuel varies, it will impact our ability to
            achieve financial savings.
             Weapon System Sustainment: Our aging platforms and
            equipment create upward pressure on costs--obsolescence is a
            continuing management challenge
             The DWSS: Decisions were made to enhance funding to
            this program in finalizing the fiscal year 2012 President's
            budget submission which impacts projected savings associated
            with this program across the FYDP. We are doing assessments
            within this program, our space portfolio, and broader
            acquisition efficiencies as a means to fill this efficiency
            target gap

        The process for managing efficiencies has considered that fact of
    life issues are inevitable. The ability to fill gaps quickly when they
    arise is essential and is part of the ongoing management process. The
    Air Force will be proposing additional efficiencies to fill any
    shortfalls in executing fiscal year 2012 and in building the fiscal
    year 2013 budget.

        48. Senator McCain. Secretary Donley, the Air Force's chief deputy
    management officer was recently quoted as saying that if the Service
    does not meet those efficiency goals, it could be pressed to remove
    money from areas it had not planned to cut, making the Air Force both
    less efficient and less capable. Do you agree with that assessment?
        Secretary Donley. Yes, I agree. The Air Force gave careful
    consideration to the development of efficiency initiatives and the
    application of savings to support mission and force structure
    requirements. Continuing our longstanding commitment to fiscal
    responsibility and operational efficiency, the Air Force is committed
    to a deliberate process to enhance capabilities by reducing expenses
    allocated to overhead and support functions while shifting resources to
    the modernization and readiness programs. If we find any portion of the
    efficiencies cannot be achieved in execution, we will find and execute
    another form of efficiency to ensure we preserve the critical
    warfighting enhancements included in the fiscal year 2012 President's
    budget request.

        49. Senator McCain. Secretary Donley, exactly how will you ensure
    that the Air Force actually holds those lines, so that money doesn't
    migrate back into those accounts where it intended to spend less?
        Secretary Donley. The Air Force comptroller is assisting with the
    means to track actual expenditures and ensure resources are not
    migrated back into efficiency areas. Efficiency initiatives that cannot
    be readily reported through Air Force financial systems or other
    sources will be reported to the comptroller through senior leadership
    assigned to those respective priority areas. The Air Force Audit Agency
    will be assessing the adequacy of financial controls to assure accurate
    financial data on the results of efficiency initiatives beginning in
    fiscal year 2012.
        The Air Force will use its existing corporate governance structure,
    the Air Force Board and Council, to regularly review status towards
    achieving identified efficiencies by measuring specific progress
    against the implementation plans. The Air Force Deputy Chief Management
    Officer is leading the Air Force Board, attended by flag officers/
    senior executives from across Headquarters Air Force and Major
    Commands, in monthly reviews of the execution status of efficiency
    efforts.
        On a quarterly basis, the Air Force Council, co-chaired by the
    Under Secretary of the Air Force and the Vice Chief of Staff, will
    monitor plans and progress to ensure efficiency outcomes are being
    delivered and will also review readiness and performance data to ensure
    Air Force Efficiencies are not inadvertently impacting mission
    performance or the quality of life of airmen.

        50. Senator McCain. Secretary Donley, did the Air Force put
    together a ``Plan of Action and Milestones'' document, which would help
    ensure that the Air Force has identified and will eliminate and capture
    cost-savings for reinvestment? If so, please provide a copy.
        Secretary Donley. The Air Force has established detailed
    implementation plans, which are the responsibility of senior
    leadership, to ensure results against programmed efficiencies. We are
    compiling and will track updates to plans through an Integrated Master
    Schedule. The Air Force can share the IMS which should be initially
    completed in May 2011, as well as individual plans (if desired). Please
    realize that some plans are more developed than others with ongoing
    updates as efficiency initiatives are implemented.

        COMMON VERTICAL LIFT SUPPORT PLATFORM/COMBAT SEARCH AND RESCUE
                             HELICOPTER REPLACEMENT

        51. Senator McCain. Secretary Donley, in this budget, the Air Force
    begins acquisition of a new support helicopter, the Common Vertical
    Lift Support Platform (CVLSP) to replace its UH-1 Hueys, principally at
    the missile fields. The Air Force has not announced an acquisition
    strategy, yet the budget includes money to acquire the first two
    helicopters. Please elaborate on what the Air Force intends to do here.
        Secretary Donley. The Air Force plans to conduct a full and open
    competition for the CVLSP program and award a contract to initiate
    procurement in fiscal year 2012. We intend to purchase a Non-
    Developmental Item/Off-The-Shelf (NDI/OTS) aircraft that will allow us
    to meet the warfighter requirement for an initial operational
    capability in fiscal year 2015.

        52. Senator McCain. Secretary Donley, since there is no money for
    development or testing, but money for procurement, is it safe to say
    you intend to buy a helicopter the military already operates?
        Secretary Donley. The Air Force intends to purchase a NDI/OTS
    aircraft to accelerate fielding to the warfighter. Minimal Research,
    Development, Test and Evaluation (RDT&E) funding is required for
    operational test and evaluation to validate aircraft performance
    against key performance parameters. To clarify, there is RDT&E funding
    for CVLSP in the fiscal year 2012 President's budget FYDP, specifically
    $4.0 million in fiscal year 2011, $5.365 million in fiscal year 2012,
    $7.44 million in fiscal year 2013, and $8.934 million in fiscal year
    2014.

        53. Senator McCain. Secretary Donley, since we just took 10 years
    to buy a tanker, do you believe you can develop a requirement, run a
    competition, select a winner, and buy the first helicopters all in 1
    year?
        Secretary Donley. Yes. The Air Force intends to purchase a NDI/OTS
    aircraft, and we are confident we can conduct a source selection and
    award a contract on schedule.

        54. Senator McCain. Secretary Donley, won't buying off-the-shelf
    (as reflected by the absence of development or testing money sought for
    this program), limit the possible competitors?
        Secretary Donley. Yes. The need to field a platform that meets the
    warfighter's requirements and target Initial Operational Capability of
    fiscal year 2015 will limit the potential common vertical lift support
    platform competitors to those that have already developed a helicopter
    that can meet the user's needs with little or no modifications, i.e. a
    non-developmental, off-the-shelf solution. However, market research and
    industry responses to requests for information indicate there are
    several potential competitors.

        55. Senator McCain. Secretary Donley, how will you know you're
    getting the right aircraft?
        Secretary Donley. We will conduct a full and open competition that
    will evaluate the capabilities of each offeror's platform based on the
    warfighter's requirements.

        56. Senator McCain. Secretary Donley, you said in testimony before
    the House that the Air Force is looking to address the CVLSP
    requirement and the longstanding need to replace our combat search-and-
    rescue helicopters with a common aircraft. But the requirements for
    range, speed, and payload would seem to be rather different between
    moving a squad around a domestic missile field and penetrating enemy
    territory. How do you reconcile those missions into a single airframe,
    especially given the timeline this budget establishes for procurement?
        Secretary Donley. The Air Force reviewed many options in the
    process of deciding on the acquisition strategy for the HH-60
    Recapitalization and CVLSP programs, including the potential merits of
    combining the program requirements and/or source selections. After
    reviewing these options, we have decided to keep the acquisition
    programs separate.

                   PRESIDENTIAL AIRPLANE REPLACEMENT PROGRAM

        57. Senator McCain. Secretary Donley, we hear rumors or trial
    balloons about a replacement for the VC-25s that will serve as Air
    Force One. Where is that effort?
        Secretary Donley. The two VC-25 (Boeing 747-200) Presidential
    support aircraft will be 30 years old in 2017, the planned service life
    stated in the original operational requirement. We have established a
    Presidential Aircraft Replacement (PAR) program team to conduct
    preliminary acquisition planning and develop life cycle cost estimates,
    alternative acquisition strategies, and risk reduction analyses in
    anticipation of direction to proceed with an acquisition program. In
    addition to the items mentioned above, live fire test and evaluation,
    noise abatement, and facilities planning studies are also underway.

        58. Senator McCain. Secretary Donley, when do you anticipate asking
    for funding for a replacement?
        Secretary Donley. The Presidential Aircraft Recapitalization (PAR)
    Program (VC-25 replacement) is currently funded at $7-7.5 million
    annually to facilitate capability definition, acquisition strategy
    development, risk reduction, and facilities studies. The Air Force
    plans to request a funding increase in fiscal year 2016 and fiscal year
    2017 to facilitate contract award and initial aircraft procurement in
    order to meet a fiscal year 2023 initial operating capability (IOC).

                   F-22 RAPTOR TOOLING PRESERVATION STRATEGY

        59. Senator McCain. General Schwartz, with Secretary Gates' having
    decided last year to have the Air Force stop buying more F-22 Raptor
    fighter aircraft, what is the Air Force's strategy for preserving
    unique tooling for that aircraft?
        General Schwartz. All government-owned F-22 tooling is being
    preserved by dismantling and storage in CONEX containers at Sierra Army
    Depot (SIAD). The first of these CONEX containers was shipped to SIAD
    on February 25, 2011. The last shipment will occur in December 2012. As
    part of the effort to dismantle and store F-22 tooling, production
    processes are being documented using video and written documents to
    support sustainment. The program office has an active program to
    review, manage, and dispose of production tooling it determines is
    unnecessary for sustainment.

        60. Senator McCain. General Schwartz, is it intended to accommodate
    possible restart of the program or is it sustainment-only?
        General Schwartz. The current F-22 shutdown strategy is
    sustainment-only. There is no provision for restart.

                        F-22 RAPTOR SUSTAINMENT STRATEGY

        61. Senator McCain. General Schwartz, what is the sustainment
    strategy for the F-22 program going forward and, in particular, to what
    extent will that strategy use competition (or the option of
    competition) to drive down costs?
        General Schwartz. The sustainment strategy going forward is to
    transition to a joint contractor/government support integration team.
    This transition will occur as the program implements the plan based on
    the findings of the 2009 F-22 Sustainment Business Case Analysis. The
    plan was approved by the Secretary of the Air Force in 2010 and is
    currently being implemented. The projected net savings are more than $1
    billion over the life of the F-22. Additionally, the F-22 program
    office has ongoing efforts to assess opportunities to compete elements
    of F-22 sustainment work. Follow-On Agile Sustainment for the Raptor
    (FASTeR) is a 10-year (2008 through 2017) Performance Based Logistics
    (PBL) business arrangement with Lockheed Martin Aeronautics. Annual
    FASTeR contract awards will implement the transition to a joint
    contractor/government support integration team.

                            AVIATION INDUSTRIAL BASE

        62. Senator McCain. Secretary Donley and General Schwartz, with the
    major design of the F-35 and for the new tanker (at least
    theoretically) done, today we have no new fighters under development in
    this country. We have no cargo aircraft under development. Aside from
    the KC-46, we have no tankers under development. I don't know the last
    time that was true. The F-22 and C-17 lines are getting ready to close,
    and the F-15 line is at very minimal rates. Maybe this is the natural
    consequence of the defense industry consolidations of the last decade.
    And maybe it's just cyclical. To what extent does this development
    concern you?
        Secretary Donley and General Schwartz. The Air Force is very
    concerned about the current and projected state of the domestic
    industrial base, particularly with respect to its capabilities to
    support emerging Air Force requirements across all three Air Force
    domains--air, space, and cyber. Our pursuit of the new long-range
    strike bomber program will alleviate some of those concerns. This
    program will help keep engineers and other professionals engaged in the
    design and production of stealth and other sophisticated technologies
    critical to America's military superiority. We recognize the current
    and projected fiscal environment will drive some very difficult budget
    choices. In that regard, it becomes even more critical for the Air
    Force to make data-driven investment decisions whether on research,
    engineering design and development, sustainment, or weapon systems
    upgrades. An example is the new long-range strike bomber program where
    the Air Force is going to make informed, tough capability tradeoffs to
    hold costs down so the Air Force can procure a sufficient and
    sustainable inventory over the long term.
        The Air Force is working with the OSD as it leads a sector-by-
    sector, tier-by-tier review of the current network of the Department's
    suppliers. We expect this initial review, and subsequent updates, to
    provide all of DOD with a shared view of how the industrial base
    segments interface to support each of our capabilities. With this
    knowledge of the industrial base, the Air Force will be better informed
    so that our investment decisions can preserve the critical domestic
    industrial base capabilities needed for the range of Air Force
    missions.

        63. Senator McCain. Secretary Donley and General Schwartz, does the
    Air Force have a notion of what minimum capabilities or surge capacity
    it would like maintained in industry?
        Secretary Donley and General Schwartz. In terms of minimum
    capabilities, some sectors of the industrial base quickly come to mind,
    such as aerospace engineering and design capabilities, while the impact
    of other areas on Air Force capabilities may be more subtle. As
    reported in the Quadrennial Defense Review (QDR), DOD recognizes that a
    hands-off approach to the industrial base is no longer viable. However,
    we do not yet have the knowledge base needed to inform a more active
    approach to shaping the industrial base. Following the QDR, the Air
    Force initiated several industrial base studies, specifically to
    evaluate the aircraft and munitions industrial bases. We expect the
    results of those studies to be complete later this year. The Air Force
    is also working with the OSD to develop this knowledge through a sector
    by sector, tier by tier review of the industrial base. To fly, fight,
    and win in air, space, and cyberspace, the Air Force draws on the
    industrial base for a broad array of products and services that enable
    the Air Force to perform its Core Functions. The Air Force looks to
    maintain our technological edge, particularly in stealth and other
    capabilities that ensure military superiority. Looking ahead to future
    investments, such as the Common Vertical Lift Support Program, the KC-
    46A, and the new long-range strike bomber, the Air Force expects some
    of these to be provided solely through domestic industrial sources,
    some to be provided with the support of our allies, while the global
    commercial market will provide the balance. The Air Force expects the
    OSD-led review to help inform Air Force choices in this regard.

        64. Senator McCain. Secretary Donley and General Schwartz, do you
    have a plan for how to maintain that capacity?
        Secretary Donley and General Schwartz. The Air Force does not yet
    have the knowledge base needed to inform a more active approach to
    shaping or maintaining the industrial base. Each of the three Air Force
    domains--air, space, and cyber--has a discrete set of requirements
    which can be expressed in terms of industrial capacity. However, there
    are some common needs that cut across all three domains, such as the
    need for assured integrated circuits. As the Air Force works with the
    OSD to develop a knowledge-based approach to our industrial base
    network of suppliers and better understand how that network matches up
    to current and planned capabilities, we will improve our ability to
    make definitive plans for shaping industrial capacity. The Air Force
    intent is to take that developing knowledge of industrial base
    suppliers, view it through the lens of Air Force requirements, and
    develop focused efforts to maintain, in sufficient capacity, those
    domestic industrial capabilities essential for the range of Air Force
    missions and future investments, such as the Common Vertical Lift
    Support Program, the KC-46A, and the new long-range strike bomber.

                          AIR FORCE NEW BOMBER PROGRAM

        65. Senator McCain. Secretary Donley, at an April 6, 2009, news
    conference on recommendations he was making for the proposed 2010
    defense budget, Secretary Gates announced, among other things, that he
    would recommend deferring the start of a new bomber program, since much
    of today's inventory will remain relevant through 2040. As DOD
    modernizes the existing bomber fleet to provide long-range strike
    capability, simultaneous investments in development for a follow-on
    bomber will be required. In your view, does Secretary Gates' decision
    last year on the new bomber require upgrading the current B-52, B-l,
    and B-2 fleets? If so, how is that reflected in your budget request?
        Secretary Donley. Yes, we must continue to upgrade and sustain the
    B-52, B-1, and B-2 fleets as we simultaneously invest in the
    development of the new long-range strike bomber. Modernization of the
    current fleet is critical to keeping those platforms flyable, relevant,
    and fully integrated into Air Force and Joint operations. These upgrade
    programs ensure our legacy bomber fleet remains relevant through 2040
    and, together with the new long-range strike bomber, continues to
    provide an integrated long-range strike capability.
        The budget request in the fiscal year 2012 President's budget
    reflects over $4.14 billion in investment funds for these bomber
    upgrade programs. The Air Force is currently executing multiple
    sustainment and modernization upgrades to the bomber forces, to include
    upgrades or replacement of cockpit displays, tactical and strategic
    communications and data links, navigation and positioning systems,
    radar and advanced targeting pods, weapons integration, and defensive
    systems.

        66. Senator McCain. Secretary Donley, are there sufficient
    resources in the fiscal year 2011 budget to sustain the long-range
    strike aircraft fleet?
        Secretary Donley. Yes, the B-52, B-1, and B-2 fleets are adequately
    funded in the fiscal year 2012 budget.
        The Air Force will invest over $1.1 billion for B-52 bomber
    modernization over the current Fiscal Year Defense Plan and over $3.0
    billion for operation and maintenance.

                                                [In millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                           Fiscal Year                      Fiscal
                                                       --------------------------------------------------    Year
         B-52 Fiscal Year 2012 President's Budget                                                           Defense
                                                          2012      2013      2014      2015      2016    Plan Total
    ----------------------------------------------------------------------------------------------------------------
    RDT&E.............................................     133.3      78.4      74.0      69.6      45.6       400.9
    Procurement.......................................     108.4     156.2     198.6     135.4     115.2       713.8
    O&M...............................................     562.1     513.7     621.8     655.0     670.4     3,023.0
    ----------------------------------------------------------------------------------------------------------------

        The Air Force will invest over $719 million for B-1 bomber
    modernization over the current FYDP and over $3.0 billion for operation
    and maintenance.

                                                [In millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                           Fiscal Year                      Fiscal
                                                       --------------------------------------------------    Year
          B-1 Fiscal Year 2012 President's Budget                                                           Defense
                                                          2012      2013      2014      2015      2016    Plan Total
    ----------------------------------------------------------------------------------------------------------------
    RDT&E.............................................      33.0       3.8       0.1       0.1       0.1        37.1
    Procurement.......................................     198.0     173.1     120.6      81.1     108.7       681.5
    O&M...............................................     495.9     458.5     479.1     676.6     932.2     3,042.3
    ----------------------------------------------------------------------------------------------------------------

        The Air Force will invest over $2.3 billion for B-2 bomber
    modernization over the current FYDP and almost $2.6 billion for
    operation and maintenance.

                                                [In millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                           Fiscal Year                      Fiscal
                                                       --------------------------------------------------    Year
          B-2 Fiscal Year 2012 President's Budget                                                           Defense
                                                          2012      2013      2014      2015      2016    Plan Total
    ----------------------------------------------------------------------------------------------------------------
    RDT&E.............................................     340.8     432.2     423.0     361.6     271.4     1,829.0
    Procurement.......................................     113.7     110.1     101.3      79.5      75.3       479.8
    O&M...............................................     448.3     498.1     546.7     538.3     544.8     2,576.1
    ----------------------------------------------------------------------------------------------------------------

        In addition, the Air Force will invest over $3.7 billion for
    development of the new long-range strike bomber over the current FYDP.

                                                [In millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                           Fiscal Year                      Fiscal
                                                       --------------------------------------------------    Year
         LRS-B Fiscal Year 2012 President's Budget                                                          Defense
                                                          2012      2013      2014      2015      2016    Plan Total
    ----------------------------------------------------------------------------------------------------------------
    RDT&E.............................................     197.0     294.0     550.3     999.5   1,699.8     3,740.7
    ----------------------------------------------------------------------------------------------------------------

        67. Senator McCain. Secretary Donley, where is the Air Force going
    to make these investments?
        Secretary Donley. The Air Force will invest roughly $4.14 billion
    across the FYDP to sustain and modernize the long-range strike aircraft
    fleet.
        The Air Force will invest over $1.11 billion in the B-52 bomber
    over the fiscal year 2012 President's budget (PB) FYDP. B-52
    sustainment and modernization efforts include:

             Combat Network Communications Technology (CONECT)
            program provides integrated communication and mission
            management system with machine-to-machine, beyond-line-of-sight
            datalink interfaces for weapons retargeting; also adds new
            color displays with moving map and digital interphone
             B-52 Extremely High Frequency (EHF) integrates the
            Family of Advanced Beyond-Line-of-Sight Terminals (FAB-T)
            providing secure, survivable two-way strategic command and
            control communications and upgrades the B-52 environment
            control system
             Strategic Radar Replacement (SR2) integrates modern
            non-developmental radar, replacing the legacy APQ-166 radar to
            address systemic sustainment issues
             MIL-STD-1760 Internal Weapons Bay Upgrade provides
            internal J-series weapons capability (i.e., JDAM, JASSM, and
            MALD) through modification of Common Strategic Rotary Launchers
            and upgrade of stores management and offensive avionics
            software
             Replacement of the legacy B-52 Anti-skid system with
            modernized system improving safety and cockpit display

        The Air Force will invest over $719 million in the B-1 bomber over
    the fiscal year 2012 PB FYDP. B-1 sustainment and modernization efforts
    include:

             Vertical Situation Displays Upgrade addresses
            sustainment issues with the current monochromatic pilot
            displays replacing them with color displays that provide
            primary flight information
             Central Integrated Test System addresses sustainment
            issues by replacing the onboard fault diagnostics computer used
            by aircrew and maintenance personnel
             Fully Integrated Data Link integrates line of sight
            and beyond line of sight Link-16 datalink communication,
            upgrades rear crew stations with color displays, automates
            retargeting capability, and provides Ethernet backbone for
            other aircraft modernizations
             Radar Maintainability and Improvement Program
            addresses sustainment issues by replacing two line replaceable
            units in the legacy B-1 radar
             Inertial Navigation System addresses sustainment
            issues by replacing the primary attitude control system
            consisting of three line replacement units
             Gyro Stabilization System addresses sustainment issues
            by replacing the secondary attitude control system consisting
            of four line replacement units

        The Air Force will invest over $2.31 billion in the B-2 bomber over
    the fiscal year 2012 PB FYDP. B-2 sustainment and modernization efforts
    include:

             B-2 Extremely High Frequency Satellite Communication
            and Computer (EHF SATCOM) Increment 1 replaces the current
            flight management processors and data buses and adds increased
            digital storage capacity laying the foundation for all
            subsequent B-2 avionics upgrades
             B-2 EHF Increment 2 installs B-2 ``low-observable''
            antennas and integrates the Family of Beyond-line-of-sight
            Terminal (FAB-T) to provide, secure, survivable strategic
            communication via AEHF SATCOM
             B-2 Defensive Management System Modernization (DMS-M)
            effort replaces the original DMS hardware to allow the B-2 to
            address modern, proliferating electronic threats
             B-2 Radar Modernization Program (RMP) moves the radar
            operating frequency to a band where DOD is primary user, by
            replacing the radar antenna with an active electronically
            scanned array (AESA)
             B-2 integration of the GBU-57 Massive Ordnance
            Penetrator (MOP)
             B-2 Alternate High Frequency Material (AHFM) program
            robotically applies magnetic radar absorbing material (MAGRAM)
            during B-2 aircraft planned depot maintenance. AHFM eliminates
            3,000 feet of tape and caulk and is credited with reducing low
            observable maintenance man-hours per flight hours by 39 percent
             Continuing efforts to improve B-2 maintainability,
            including depot activation for selected avionics components,
            low cost aircraft and engine efforts, and low observable
            signature and supportability efforts

        68. Senator McCain. General Schwartz, what sort of characteristics
    and requirements are the Air Force and the combatant commanders
    considering in a replacement aircraft for long-range strike?
        General Schwartz. The characteristics and requirements for the new
    long-range strike bomber will be refined over the next several years to
    balance capability requirements with costs. At this point, we envision
    the new bomber will be highly survivable, capable of manned or unmanned
    operations, and nuclear capable. It will be a central component in an
    overall family of systems of deep-strike and enabling capabilities.
    Secretary Donley and I have been directed to keep the new bomber
    program characteristics and requirements stable, manageable, and
    tradable to ensure overall program affordability.

        69. Senator McCain. General Schwartz, in the face of the decision
    on the next-generation bomber, what concerns, if any, do you have about
    increasingly relying on the old B-52 platform to satisfy our long-range
    strike capability beyond the 2018 threshold?
        General Schwartz. Our primary concerns are with sustaining the B-52
    and advancing its capabilities to fulfill the long-range strike role.
    Currently we are funding seven programs (communications, controls and
    displays, navigation, weapon delivery, target acquisition, airframe
    repair, etc.) with approximately $1.115 billion over the FYDP to
    achieve these goals. These investments will help ensure the continued
    relevance of the legacy fleet as we bring the new long-range strike
    bomber program along.

                 JOINT SURVEILLANCE TARGET ATTACK RADAR SYSTEM

        70. Senator McCain. General Schwartz, the E-8 Joint Surveillance
    Target Attack Radar System (JSTARS) aircraft has flown over 63,000
    combat hours and 6,000 combat missions over Iraq and Afghanistan. Have
    the JSTARS aircraft proven effective in these missions? Please explain.
        General Schwartz. The E-8 Joint Surveillance Target Attack Radar
    System (JSTARS) aircraft has consistently proven itself highly
    effective in direct support of ground combat operations in Iraq and
    Afghanistan. It is the primary theater provider of Ground Moving Target
    Indicator (GMTI) data. JSTARS supports both forensic and real time
    intelligence for joint and coalition activities. During 66,000 combat
    hours over Iraq and Afghanistan, JSTARS has collected more critical
    information on counter border activities, improvised explosive device
    networks, and troop over watch than any other GMTI system in theater.
    Additionally, JSTARS provides direct support, daily, to real time
    operations, on call requests, and troops in contact.

        71. Senator McCain. General Schwartz, I understand new engines will
    enable JSTARS platforms to last at least another 30 years and that
    development flight testing will be completed in 2011. Given that the
    Air Force has already invested over $500 million to refurbish the
    JSTARS fleet, including development and non-recurring engineering for
    the reengining program, wouldn't continuing the reengining program be
    cost-effective to the Air Force?
        General Schwartz. The Air Force will complete the Joint
    Surveillance Target Attack Radar System (JSTARS) re-engining System
    Development and Demonstration (SDD) phase. However, based on the fiscal
    year 2011 Defense Appropriation Act that eliminated funding for re-
    engining shipsets (#3 and #4) and rescinded funding for spare engines,
    the Air Force is ceasing actions to re-engine the operational fleet at
    this time. Regarding the cost-effectiveness, the Air Force will be
    unable to recoup the costs associated with the JT8D-219 program within
    the projected 30 years of life extension. The timeline for a payback is
    not economically prudent. This was captured in the May 2010 report to
    Congress, titled ``Replacing Engines On the E-8C JSTARS Aircraft.'' The
    Air Force will leverage the re-engining investments based on the
    results of the May 2010 report to Congress and Air Combat Command's
    GMTI Analysis of Alternatives.

        72. Senator McCain. Secretary Donley, since some prior year funding
    for JSTARS reengining was reprogrammed by the Air Force or allowed to
    expire at the end of fiscal year 2009 and 2011 funds may not be
    approved by the appropriators, what do you intend to do to address the
    shortfall in funds in meeting the JSTARS requirement?
        Secretary Donley. The requirement the Air Force is working to meet
    was laid out in the Sep 09 OSD for Acquisition, Technology, and
    Logistics (OSD/AT&L) Acquisition Decision Memorandum (ADM). This ADM
    directed the Air Force to ``continue the Joint Surveillance Target
    Attack Radar system (JSTARS) re-engining System Design and Development
    phase, including the development, flight testing, and production of the
    initial increment of re-engining shipsets.''
        We believe this requirement can be met with the two shipsets we
    have already procured and the funds programmed into the JSTARS
    Research, Development, Test, and Evaluation and Procurement lines. We
    do not see a shortfall in funds to meet the intent of the OSD/AT&L ADM.

        73. Senator McCain. Secretary Donley, do you anticipate that some
    funds may need to be reprogrammed for JSTARS reengining this year? If
    yes, how much? If no, why not?
        Secretary Donley. The Air Force does not anticipate reprogramming
    funds for Joint Surveillance Target Attack Radar System (JSTARS) re-
    engining this year because the program is fully funded to complete the
    activities mandated by the Sep 2009 OSD/AT&L Acquisition Decision
    Memorandum (ADM).

        unmanned intelligence, surveillance, and reconnaissance aircraft
        74. Senator McCain. Secretary Donley, in your prepared statement
    you indicate that the Air Force continues to rapidly increase its ISR
    capability and capacity to support combat operations in Afghanistan and
    Iraq regions. What is DOD's total level of investment in ISR in the
    fiscal year 2011 budget?
        Secretary Donley. I cannot speak to the entire DOD's level of
    investment, however, the Air Force's level of investment in ISR in the
    fiscal year 2011 budget is $14.351 billion. This total is inclusive of
    Air Force baseline funding ($12.912 billion) and Air Force OCO funding
    ($1.439 billion). This funding was requested in the Air Force National
    Intelligence Program, Air Force Military Intelligence Program, and Air
    Force ``blue'' total obligation authority (TOA) budget requests.
    Further breakout can be provided at the classified level.

        75. Senator McCain. General Schwartz, according to the fiscal years
    2011-2040 Aircraft Investment Plan, the Air Force plans to increase the
    number of unmanned Predator and Reaper platforms from a capacity of 50
    orbits in fiscal year 2011 to 65 orbits by fiscal year 2013. Does DOD's
    fiscal year 2011 budget request and the associated fiscal years 2011-
    2015 FYDP provide the requisite funding to implement the projected
    growth in unmanned aerial systems (UAS) and UAVs?
        General Schwartz. Yes, DOD's fiscal year 2011 budget request for
    fiscal years 2011 through 2015 includes the requisite funding and
    manpower to achieve 65 Combat Air Patrols (CAPs) of Unmanned Aerial
    Systems. The Air Force strategy continues MQ-9 Reaper aircraft
    procurement in addition to increased investments in the MQ-1 Predator
    as a part of a mixed fleet to achieve 65 CAPs by the end of fiscal year
    2013.

        76. Senator McCain. General Schwartz, do you anticipate a greater
    need for additional UASs?
        General Schwartz. The simple answer is yes, we do anticipate a
    greater need for more Unmanned Aerial Systems (UAS). Let me explain;
        The demand for ISR and strike from UAS is insatiable, but the need
    goes beyond the ISR or strike mission set. The Air Force is on-track to
    evolve to an Air Force where remotely piloted aircraft (RPA) are viable
    alternatives to a range of traditionally manned systems, and an Air
    Force that harnesses increasingly automated, modular and sustainable
    systems. This will result in a leaner, more adaptable, tailorable, and
    efficient force that offers unique combat capabilities for the Joint
    Force. These platforms can and will conduct a variety of missions, to
    include ISR, mobility, electronic attack/protection, and strike.
    However, broadening the mission set will pose numerous technical
    challenges.
        To reach this end state, the Air Force would have to develop
    follow-on RPA systems for our existing MQ-1/Predator, MQ-9/Reaper and
    RQ-4/Global Hawk systems. These current systems are performing
    brilliantly in permissive environments, fulfilling the combatant
    commanders demands for coverage. We must develop new capabilities in
    order to expand the mission sets of our current platforms and provide
    the ability to operate in contested or denied airspace. This leap to
    new missions and improved survivability poses the greatest technical
    challenges. However, balancing expanded mission sets for remotely
    piloted platforms, with the continued need for manned platforms with
    similar mission sets within today's fiscal environment, is an even
    greater challenge.
        We are considering how to pursue linear development of follow-on
    systems to replace the Reaper and Global Hawk. These MQ-M (medium) and
    MQ-L (large) programs seek to add increased loiter, refueling, and
    sensor capabilities and, for the MQ-M, improved strike capabilities. In
    order to achieve greater efficiencies and capabilities, and continue to
    operate in contested and denied airspace, we will need more capable
    systems. We are developing and testing the RQ-170--an RPA that will
    provide reconnaissance and surveillance in support of the Joint Forces
    Commander in less permissive environments. We are also working closely
    with our labs, Defense Advanced Research Projects Agency, and industry,
    to develop the technologies for enhanced stand-off capabilities such as
    high altitude, long endurance RPAs and to explore the potential for
    expendable systems linked to stand-off, loitering platforms.
        To employ RPAs across the full spectrum of conflict and in all
    environments, the Air Force requires a greater range of options for
    unmanned aircraft systems. To that end, we anticipate, and are planning
    for RPAs that will replace the existing systems and add new systems
    that will meet operational requirements that we are currently unable to
    fulfill.

        77. Senator McCain. General Schwartz, what strategic role do you
    believe UAVs will have in meeting near-term ISR, strike, cargo, and
    other capabilities supporting the current wars and other potential
    irregular campaigns?
        General Schwartz. The most widely-tasked mission for RPA continues
    to be ISR. We expect this trend to continue across the range of
    military operations (ROMO) in the short term. The Air Force's plan
    calls for growth in Predator and Reaper CAPs from 50 in fiscal year
    2011 to 65 by the end of fiscal year 2013. The Air Force will continue
    to work with DOD in assessing requirements and the need for more
    capacity in future plans.
        Beyond ISR, RPAs have most visibly been employed in strike
    operations in support of ongoing conflicts, and we see this role
    continuing to expand in the near term. RPA strike capabilities have
    been well documented, and these aircraft have been used successfully on
    targets within permissive environments. The Air Force continues to
    investigate the use of RPAs in global precision strike missions across
    the ROMO.
        While the Air Force has no plans to use RPAs in a cargo carrying
    role in the near term, we continue to investigate unmanned applications
    for air mobility. The Air Force's vision includes the development of a
    large-sized vehicle, the MQ-L, capable of assuming some of the airlift
    and air refueling workload after 2020. An additional RPA capability
    with strategic implications is the Airborne Infrared (ABIR) initiative.
    The Air Force is partnering with the Missile Defense Agency (MDA) in
    development and experimentation efforts leading to a demonstration of
    advanced sensors and targeting systems on MQ-9 Reaper RPA to meet
    ballistic missile defense early intercept and raid handling
    requirements.
        Another role where RPAs are currently supporting ongoing operations
    is as an airborne communications node. Two Global Hawk RPAs have been
    modified as a Battlefield Airborne Communications Node (BACN) in
    support of a CENTCOM Joint Urgent Operational Need (JUON). BACN
    provides a high-speed, IP-based airborne network infrastructure that
    extends communications ranges, bridges between radio frequencies, and
    ``translates'' among incompatible communications systems--including
    both tactical and civil cellular systems.
        Potential capabilities must also be balanced to achieve desired
    effects. For example, increased persistence is one of the greatest
    advantages of RPA employment. However, any additional pods, payloads,
    or weapons placed aboard an aircraft will result in diminished range
    and endurance. Additionally, our communications infrastructure is
    increasingly stressed. The data transfer requirements inherent in RPA
    operations translate to extreme amounts of communications bandwidth.

                       AIR FORCE STRIKE FIGHTER SHORTFALL

        78. Senator McCain. General Schwartz, is there a projected strike
    fighter shortfall for the Air Force? If there is, then what is that
    number?
        General Schwartz. In 2010, the Air Force provided Congress a
    comprehensive review of the current and projected force structure that
    revealed a shortfall of approximately 3-5 percent of the total strike
    fighter aircraft through the FYDP. This shortfall is based on the
    number of fighter aircraft required to execute the National Defense
    Strategy at moderate risk utilizing guidance provided by the
    Quadrennial Defense Review as well as data from in-depth campaign
    modeling. The Air Force has an ongoing process to assess and
    aggressively manage force structure. Recent review provides insights
    for potential improvements with respect to this shortfall; however this
    analysis is ongoing and is a continually evolving product based upon
    the health of our fleet, strategic guidance, and status of major
    factors, such as the F-35 program.

        79. Senator McCain. General Schwartz, in your opinion, what are the
    options to help mitigate the strike fighter shortfall?
        General Schwartz. In 2010, the Air Force provided Congress a
    comprehensive review of the current and projected force structure that
    revealed a shortfall of approximately 3-5 percent of the total aircraft
    through the FYDP. The F-35 program status remains the key variable in
    the fighter force structure forecast as the Air Force transitions to a
    predominantly fifth generation capability. F-35 delays are manageable
    across the FYDP, but have long term impacts that require mitigation.
    These impacts will be mitigated through aggressive management of F-35
    production, legacy fleet review and sustainment, along with selected
    service life extension and modernization programs.
        In the near-term, to maintain ``moderate'' risk, the Air Force will
    sustain the F-16 Block 25-32 to a planned 8,000 hrs via pre-block
    structural sustainment funded via the fleet management program. In the
    mid-term, we will continue to assess the legacy fighter fleet and
    invest in selected service life extension and modernization programs.
    Finally, in the far-term, we will continue to monitor F-35 progress and
    continue to assess force capacity/capability.

        80. Senator McCain. General Schwartz, in a limited defense budget,
    would buying more quantities of legacy aircraft such as F-15s or F-16s
    help mitigate a strike fighter shortfall in our tactical aviation
    wings?
        General Schwartz. A robust F-16 Service Life Extension Program
    (SLEP) and capability modernization programs will help mitigate the
    fighter force shortfall. F-16 Block 40/50 SLEP and modernization
    provides the same capability as new legacy aircraft procurement at
    substantially less cost. These cost savings generated from SLEP versus
    new procurement help ensure funding is not diverted from F-22
    modernization or F-35 acquisition.

      LIGHT-SQUARED AND POSSIBLE DISRUPTION TO GLOBAL POSITIONING SYSTEM
                                    SIGNALS

        81. Senator McCain. Secretary Donley, Deputy Secretary of Defense
    Lynn recently voiced significant concerns to the Chairman of the
    Federal Communications Commission (FCC) regarding the FCC's provisional
    authorization of LightSquared's new wireless broadband proposal and the
    potential for interference of Global Positioning System (GPS) signals.
    According to Secretary Lynn, there is a ``strong potential for
    interference to these critical national security systems.'' On that
    basis, Secretary Lynn strongly recommended that the FCC defer final
    action until proper interference analysis and mitigation studies can be
    conducted. Do you agree and share the concerns raised by Secretary
    Lynn? If so, why?
        Secretary Donley. Yes, I share the same concerns raised by Deputy
    Secretary Lynn. The FCC's Order and Authorization issued to
    LightSquared, LLC on 26 January 2011 established an aggressive schedule
    to evaluate interference potential to Global Positioning System (GPS)
    users, with a final report deadline of 15 June 2011. This was a ``fast-
    track approach'' to evaluating potential impacts to a system as
    critical as GPS, particularly when compared to similar, past requests.
    Given LightSquared's proposal and the potential effect it may have to a
    broad range of national security, civil and commercial GPS users, it is
    important for us to complete a careful review. The Air Force, in
    concert with other agencies, worked vigorously to produce reliable test
    results and to analyze the potential impacts to GPS as quickly and
    effectively as possible. In late March 2011, Air Force engineers
    organized a test team under the National Positioning, Navigation and
    Timing Engineering Forum (NPEF) with representatives from across DOD,
    Federal Departments and Agencies, academia and industry, along with
    support from LightSquared. On 14 June 2011, the DOD and Department of
    Transportation (DOT) submitted the NPEF test report to the National
    Telecommunications and Information Administration. Report results
    demonstrated there are significant detrimental impacts to GPS
    operations, including degradation or loss of GPS function at standoff
    distances of a few kilometers extending to space. Possible mitigations
    were identified and evaluated but were deemed impractical as they would
    require costly significant modification or complete redesign and
    replacement of currently fielded GPS equipment, which could take 10-15
    years or longer.

        82. Senator McCain. Secretary Donley, have you independently
    conveyed your concerns? If so, what did you say, and when did you
    convey them?
        Secretary Donley. The Air Force has conveyed these concerns through
    the National Telecommunications and Information Administration (NTIA),
    which serves as our liaison to the Federal Communications Commission.
    The Air Force Representative to NTIA's Interdepartment Radio Advisory
    Committee (IRAC) signed a joint letter with eight other Federal Agency
    IRAC representatives expressing concerns.
        When the Air Force became aware of potential interference to global
    positioning system (GPS) signals, which are recognized as the world's
    ``gold standard'' for space-based positioning, navigation and timing
    (PNT), Air Force engineers at our Space and Missile Systems Center
    organized a test team under the National Positioning, Navigation and
    Timing Engineering Forum (NPEF). In addition to the NPEF members, first
    responders, as well as several commercial companies, participated with
    support from LightSquared. On 14 June 2011, the DOD and DOT submitted
    the NPEF test report to the NTIA. Report results demonstrated there are
    significant detrimental impacts to GPS operations, including
    degradation or loss of GPS function at standoff distances of a few
    kilometers extending to space.

        83. Senator McCain. Secretary Donley, in your view, what are the
    National security implications of Light-Squared's proposal?
        Secretary Donley. Global Positioning System (GPS) technology is
    vital to our National security and is relied upon by our military for a
    wide array of capabilities. GPS is integrated into almost every aspect
    of U.S. military operations. For example, GPS is used to guide troop
    movement, ensure the accuracy of precision-guided munitions, and
    synchronize communications networks. While military applications of GPS
    technology continue to grow, we must also look at national security
    implications in broader terms. Although we are all familiar with the
    position and navigation aspects of GPS capability, much of our National
    infrastructure and commercial applications rely on the GPS' unique
    timing component. For example, Federal, civil and commercial
    enterprises worldwide use GPS to time-stamp business transactions,
    providing consistent, accurate record maintenance. Major investment
    banks use GPS to synchronize their network computers located around the
    world.
        It is for these and many more reasons that we are actively
    reviewing LightSquared's proposal to assess its affects, if any, on GPS
    receivers. The Air Force appreciates LightSquared's transparency and
    assistance in our efforts to evaluate military, civil and commercial
    GPS receivers.

                       EVOLVED EXPENDABLE LAUNCH VEHICLE

        84. Senator McCain. Secretary Donley, the fiscal year 2012 budget
    proposes to buy three less launch vehicles over the next 5 years yet
    will cost $3.4 billion more than what was planned in the fiscal year
    2011 budget. That is three less rockets but the cost will increase by
    $3.4 billion. The Chief Executive Officer of the launch vehicle
    provider reportedly said that the #1 cause of cost increases for the
    Evolved Expendable Launch Vehicle (EELV) is the uncertainty associated
    with NASA. And, according to United Launch Alliance (ULA), no major
    supplier of launch vehicles has right-sized their industrial base--
    leaving the Air Force to support it--when NASA used to support by more
    than 70 percent. In your view, is the uncertainty of NASA's future
    driving cost increases in the EELV program? If so, what, if anything,
    can be done to mitigate that negative impact?
        Secretary Donley. Yes, the uncertainty of NASA's future launch
    vehicle programs is contributing to cost increases to the Evolved
    Expendable Launch Vehicle (EELV) program. This uncertainty and the fly
    out of the Space Shuttle program have stressed the launch industrial
    base--particularly the liquid and solid rocket propulsion industry. For
    example, the percentage of overhead the DOD covers at Pratt and Whitney
    Rocketdyne has increased from approximately 30 to 75 percent as a
    result of the retirement of the Space Shuttle and uncertainty of future
    NASA business.
        The newly appointed Air Force Program Executive Office for Space
    Launch program is currently developing a new acquisition strategy for
    the EELV program, targeted to begin in fiscal year 2013. Key elements
    of the strategy are an initial Atlas V and Delta IV lot buy of
    sufficient size to ensure economic ordering and a steady launch vehicle
    production rate. An Air Force/NRO study team and the Broad Area Review
    2010 (BAR X) recommended an annual minimum production rate of eight
    launch vehicle cores plus associated upper stage engines, payload
    fairings, and solid rockets to sustain our spacelift industrial base. A
    recently conducted should cost review of the EELV program revealed 84
    cost reduction initiatives that are currently being implemented on the
    program. With lot buys and a steady production rate, and implementation
    of the should cost review initiatives, we believe the supplier base
    will be right sized and costs can be controlled.
        Additionally, the Air Force and NRO intend to team with NASA to
    certify new providers as part of this acquisition strategy. A joint
    effort will ensure a consistent position is communicated to all
    potential new entrants on opportunities, certification, and
    requirements. We envision the EELV strategy will allow new entrants to
    compete for near-term missions above our block-buy commitment.

                INTERCONTINENTAL BALLISTIC MISSILE MODERNIZATION

        85. Senator McCain. Secretary Donley, a key review board reportedly
    concluded that an equipment failure was responsible for an hour-long
    communication outage at F.E. Warren Air Force Base (AFB) that affected
    50 nuclear missiles last fall. Given the age of the current
    intercontinental ballistic missile (ICBM) infrastructure, some have
    speculated that the incident may be indicative of problems with an
    aging ICBM infrastructure. Do you believe the incident is indicative of
    such a broader problem or that it is isolated?
        Secretary Donley. Our newest Major Command, Air Force Global Strike
    Command, conducted an extensive review of last fall's event and
    determined this was an isolated incident and is not indicative of age
    related systemic problems within the Intercontinental Ballistic Missile
    (ICBM) force. Although this was an isolated event and the likelihood of
    a reoccurrence is remote, the Air Force is redesigning certain
    components to eliminate any possibility of a future like event. The
    Minuteman III (MMIII) ICBM weapon system alert rate exceeds 99 percent.
    The MMIII Weapon System continues to perform as a safe, secure and
    effective deterrent.
        Consistent with the NDAA section 1251 report, the Air Force,
    through the leadership of Air Force Global Strike Command, has
    developed sustainment and modernization plans, specified in the ICBM
    Master Plan, to ensure the infrastructure necessary to support and
    operate our ICBM fleet. We feel these plans will meet the challenges
    required to sustain the MMIII to 2030.

        86. Senator McCain. Secretary Donley, how confident are you that
    the Air Force will be able to sustain the current ICBM force through
    2030?
        Secretary Donley. We are confident the Air Force will be able to
    sustain the current Intercontinental Ballistic Missile (ICBM) force
    through 2030. The Air Force has developed a low-risk ICBM roadmap
    outlining robust sustainment and modernization plans. There are certain
    components we will need to modernize in order to get us to the 2030
    date, to include the fuze, the guidance system and the propulsion
    system. Infrastructure sustainment has been ongoing and will continue
    through 2030. Additionally, Congress has recently approved a study for
    a life extension program for the W78 warhead needed in the early 2020s.

        87. Senator McCain. Secretary Donley, when should a decision be
    made for pursuing the development of a follow-on ICBM?
        Secretary Donley. In accordance with direction from the Nuclear
    Posture Review, the Air Force has begun an initial study associated
    with a Follow-on Intercontinental Ballistic Missile (ICBM) capability.
    Pre-Materiel Solution Analysis efforts for the potential ICBM Follow-on
    are already underway, to include a Ground Based Strategic Deterrence
    Capabilities Based Assessment (GBSD CBA). These efforts will lead to a
    formal Analysis of Alternatives (AoA) beginning in fiscal year 2013.
    Based on the results of the AoA, a program decision will be made as to
    the direction the Air Force should take to maintain a ground-based
    strategic nuclear deterrent capability for the United States. Research
    and development is expected to take approximately 15 years to develop,
    acquire, and field an initial operational capability.

                         JOINT MILITARY MEDICAL COMMAND

        88. Senator McCain. Secretary Donley and General Schwartz, in its
    recent report titled, ``Opportunities to Reduce Potential Duplication
    in Government Programs, Save Tax Dollars and Enhance Revenue,'' the
    Government Accountability Office (GAO) cited realignment of military
    medical command structures as an opportunity to significantly reduce
    costs in military health care. Historically, the Air Force has opposed
    consolidation of Service medical programs, citing the unique
    relationship of Air Force medical assets to line commanders. Do you
    favor establishment of a unified military medical command among the
    military departments?
        Secretary Donley and General Schwartz. We do not favor the
    establishment of a unified military medical command.
        The vast majority of beneficiaries and related costs in the DOD
    healthcare system support military dependents and retirees. In this
    context, the administration of healthcare delivery is properly the
    responsibility of the military departments and a civilian defense
    agency. A military command is neither required nor appropriate for
    healthcare delivery, and we should not be expanding the Unified Command
    system in functional support areas not servicing the operational needs
    of combatant commanders. The Air Force Medical Service is fully
    integrated with the Line of the Air Force and medical personnel are
    considered key members of the wing commander's team in accomplishing
    the wing mission. When Air Force units deploy, their medics deploy with
    them. The unified medical command would sever this close relationship
    at the expense of our existing effective organizational structure.
        The Air Force fully supports joint operations. Unity of effort
    through synergy, interoperable, and interdependent, integrated parts
    ensures success in joint operations. Just as the Air Force provides
    lift, close air support, and battlefield situational awareness for
    joint ground forces, the Air Force Medical Service deploys over 1,707
    medics worldwide to jointly support ground troops and air evacuation.
        Service oversight of medical assets led to the most effective
    treatment of casualties in the history of warfare. Savings outlined in
    the GAO report are not likely to be realized by establishing an
    independent unified medical command. Joint commands tend to add expense
    with new headquarters and systems for oversight of their components.
    Costs for medical services can be reduced by reducing contract costs in
    both the direct care system and managed care support contracts.
    Simplifying oversight of Defense Health Program dollars with a single
    Service accounting system would save more dollars, through greater
    accountability and standardization, than a unified medical command.
        Former Chief of Staff of the Army, General Casey, and General
    Schwartz worked with our Surgeons General to set up the Joint
    healthcare system in San Antonio. In September 2010, we signed a
    Memorandum of Agreement that established the San Antonio Military
    Health System. The governance structure is rotationally shared with a
    mission to optimize deployment readiness, clinical currency, graduate
    medical education, and quality health care for the 220,000
    beneficiaries in the greater San Antonio area. There is no new or
    additional cost associated with this arrangement.
        Our successful Joint effort at Landstuhl Regional Medical Center in
    Germany integrated over 300 Air Force medical professionals, alongside
    Army and Navy medics to provide en route care for over 86,000 patients
    since the initiation of OEF and Operation Iraqi Freedom.
        Air Force medics are central players in the most effective Joint
    casualty care system in military history. Deployed to joint theater
    hospitals and supporting our air evacuation system, Air Force medics
    are saving lives of soldiers, sailors, marines, airmen, civilians,
    coalition forces, friend and foe alike.
        We can drive unity of effort and achieve a more efficient Joint
    medical system without the expense of establishing a unified medical
    command.

        89. Senator McCain. Secretary Donley and General Schwartz, if you
    support such a command, how would you recommend that it be structured
    to optimize governance, efficiency, and warfighter support? If you do
    not support establishment of a unified medical command, please state
    the reasons why such action would not be in the best interests of the
    United States.
        Secretary Donley and General Schwartz. The Air Force does not
    support a unified medical command and do not agree there would be cost
    savings by the creation of such a command.
        We believe a more effective and efficient Joint medical solution
    can be attained without the expense of establishing a unified medical
    command. Changes to doctrine can be made within current authorities and
    do not require the establishment of a new unified medical command. In
    order to achieve efficiencies, Service specific and Joint medical
    doctrine must be improved to assure Service capabilities are fully
    interoperable and interdependent to bolster unity of effort. The
    Services should continue integrating common medical platforms to reduce
    redundancy and lower costs.
        A unified medical command may not achieve the intended synergy or
    unity of effort that others suggest. All models of the unified medical
    command to date do not include medical forces intrinsic to Service line
    units. Medical forces will need to continue to serve in these line
    units--Air Force line supported medics represent five percent of Air
    Force medical personnel; Navy shipboard assets represent 25 percent of
    medical personnel; and Army line Tables of Organization and Equipment
    (TOE) supported medics represent 48 percent of Army Active Duty medics.
        Any new unified medical command will require new systems and
    structure to oversee component headquarters and assigned forces. This
    will drive even higher costs. If a unified medical command follows the
    example of the current Joint Task Force, national Capital Region
    Medical (JTF CAPMED), it is highly unlikely there will be any cost
    savings. There is no need for another military Service and establishing
    such, in the form of a unified medical command, without the discipline
    and historical rule sets that govern existing Services, will likely
    drive costs much higher. Even more critical, a unified medical command
    may not be as responsive to the needs of Service warfighters as is the
    current oversight by the Services.
        Base Realignment and Closure 2005 created many opportunities for
    Joint oversight of medics. Given time to mature, these initiatives,
    along with the Service Surgeon Generals efforts to consolidate
    oversight of common support functions (information management,
    contracting, military health facility construction and financial
    management) in the new co-located medical headquarters will reduce
    redundancies. Adoption of a single Service accounting system to
    allocate Defense Health Program dollars and improve accountability
    would do more to reduce costs than a unified medical command.

                        AIR FORCE EFFICIENCY INITIATIVES

        90. Senator McCain. Secretary Donley, the Air Force recently
    proposed an efficiencies initiative to consolidate two Air Operations
    Centers (AOC), the 601st at Tyndall AFB, FL, and the 612th AOC at Davis
    Monthan AFB, AZ. The Air Force is currently assessing the two AOC
    locations using their Strategic Basing process. I want to ensure that
    the process is fair and based on the most urgent long-term needs of the
    Air Force, the combatant commands, and national security. What is the
    projected savings from this AOC consolidation and how will the savings
    be achieved?
        Secretary Donley. The Air Force portion of the fiscal year 2012
    President's budget directed consolidation of four Air and Space
    Operations Centers (AOC) to two and the inactivation of three Numbered
    Air Forces as part of the DOD's efficiency initiative. The proposed
    consolidation of the 601st and 612th AOCs represents one of these
    planned efficiencies and is currently on hold pending further analysis.
    As the 601st/612th AOC consolidation effort moved forward, an
    enterprise-wide option emerged that is potentially more efficient and
    effective for operational command and control. The Air Force is
    currently studying this new option which, if chosen, may obviate the
    need to consolidate the 601st and 612th AOCs and still achieve the
    necessary efficiency savings.

        91. Senator McCain. Secretary Donley, since both AOCs have been
    operating with less manning than was planned and authorized, what
    manpower assumed savings were used to develop the initiative?
        Secretary Donley. The Air Force portion of the fiscal year 2012
    President's budget directed consolidation of four AOCs to two and the
    inactivation of three Numbered Air Forces as part of the DOD's
    efficiency initiative. The proposed consolidation of the 601/612 AOCs
    represents one of these intended efficiencies and is currently on hold
    pending further analysis. As the 601/612 AOC consolidation effort moved
    forward, an enterprise-wide option emerged as both more efficient and
    effective for operational command and control. The Air Force is
    currently studying this new option which, if chosen, may obviate the
    need to consolidate the 601/612 AOCs and still achieve the necessary
    efficiencies.

        92. Senator McCain. Secretary Donley, is the projected savings
    based on a final concept of operations for a consolidated AOC? If not,
    why not?
        Secretary Donley. The Air Force portion of the fiscal year 2012
    President's budget directed consolidation of four AOCs to two and the
    inactivation of three Numbered Air Forces as part of the DOD's
    efficiency initiative. The proposed consolidation of the 601/612 AOCs
    represents one of these intended efficiencies and the projected savings
    were based on manpower only. This concept is currently on hold pending
    further analysis. As the 601/612 AOC consolidation effort moved
    forward, an enterprise-wide option emerged as both more efficient and
    effective for operational command and control. The Air Force is
    currently studying this new option which, if chosen, may obviate the
    need to consolidate the 601/612 AOCs and still achieve the necessary
    efficiencies.

        93. Senator McCain. Secretary Donley, will the basing process be
    fair and transparent with the criteria made public, and subsequently
    the results of the assessment made available to Congress?
        Secretary Donley. In accordance with the Air Force Strategic Basing
    process, the process will be fair and transparent, the basing criteria
    will be made public through an announcement to Congress, and the
    results of the assessment made available to Congress at the end of the
    process.

        94. Senator McCain. Secretary Donley, as you know, the 601st AOC is
    collocated with 1st Air Force Headquarters, which also serves as the
    home of the Air Component Commander for U.S. Northern Command.
    Likewise, the 612th AOC is collocated with the 12th Air Force Commander
    and serves as the home for the Air Component Commander of U.S. Southern
    Command (SOUTHCOM). The consolidation will result in one Air Component
    Commander with no AOC on the same base to command and control air
    operations in their theater of operations. Why is this dislocation
    acceptable to the Air Force?
        Secretary Donley. The Air Force portion of the fiscal year 2012
    President's budget directed consolidation of four AOCs to two and the
    inactivation of three Numbered Air Forces as part of the DOD's
    efficiency initiative. The proposed consolidation of the 601/612 AOCs
    represents one of these intended efficiencies and is currently on hold
    pending further analysis. As the 601/612 AOC consolidation effort moved
    forward, an enterprise-wide option emerged as both more efficient and
    effective for operational command and control. The Air Force is
    currently studying this new option which, if chosen, may obviate the
    need to consolidate the 601/612 AOCs and still achieve the necessary
    efficiencies.

        95. Senator McCain. Secretary Donley, what will be the operational
    impact to the Air Component Commander supporting the two combatant
    commanders of not having an AOC at their location?
        Secretary Donley. The Air Force portion of the fiscal year 2012
    President's budget directed consolidation of four AOCs to two and the
    inactivation of three Numbered Air Forces as part of the DOD's
    efficiency initiative. The proposed consolidation of the 601/612 AOCs
    represents one of these intended efficiencies and is currently on hold
    pending further analysis. As the 601/612 AOC consolidation effort moved
    forward, an enterprise-wide option emerged as both more efficient and
    effective for operational command and control. The Air Force is
    currently studying this new option which, if chosen, may obviate the
    need to consolidate the 601/612 AOCs and still achieve the necessary
    efficiencies.

        96. Senator McCain. Secretary Donley, if this is a new concept of
    operations, should the Air Force be conducting other AOC
    consolidations?
        Secretary Donley. Yes. In addition to the Continental United
    States, the Air Force is consolidating two Air and Space Operation
    Centers (AOCs) in Europe. The Air Force currently has no plans to
    further consolidate AOCs. However, when and where operationally
    feasible and within an acceptable level of risk, the Air Force will
    consider additional consolidations.

        97. Senator McCain. Secretary Donley, DOD has proposed an
    efficiency initiative to reduce the number of Joint Task Forces (JTF).
    One of those being considered for consolidation is Joint Interagency
    Task Force (JIATF) South, which conducts counterdrug missions in
    primarily the SOUTHCOM area of responsibility. Has the Air Force been
    asked to consider the consolidation of JIATF South to either of the
    AOCs proposed for consolidation?
        Secretary Donley. No. At this time, the Air Force has not been
    asked to consider the consolidation of the JIATF South to the Air Force
    Air and Space Operation Centers proposed for consolidation.

                              F-16 PILOT TRAINING

        98. Senator McCain. Secretary Donley, at a time when the Air Force
    is being asked to find efficiencies in every activity, accepting risk
    in some cases by underfunding facility maintenance and flying hours, I
    am trying to understand the decision announced last year to move two F-
    16 training squadrons from Luke AFB, AZ, to Holloman AFB, NM. I realize
    that Luke AFB will receive up to five squadrons of F-35s, with the
    final number of training aircraft to be determined by the number of F-
    35s eventually in the Air Force inventory. I'm concerned that, like the
    F-22 Raptor, that number will shrink dramatically over time as the cost
    of the F-35 continues to rise. As it stands today, Luke AFB can
    accommodate up to eight squadrons of aircraft in existing facilities on
    the ramp. So, without knowing for sure how many F-35 squadrons will be
    stationed at Luke AFB, why spend funds and effort now to move two F-16
    squadrons to Holloman AFB?
        Secretary Donley. Relocating two F-16 squadrons from Luke Air Force
    Base to Holloman Air Force Base ensures the viability of a long-term
    strategic training location and the White Sands Missile Range (WSMR) as
    a national asset. Holloman also has the capacity to accept two training
    squadrons. This move capitalizes on existing airspace and range complex
    availability, including WSMR, and takes advantage of readily available
    Joint training opportunities at Fort Bliss.

        99. Senator McCain. Secretary Donley, is this split-base training
    of F-16 pilots efficient?
        Secretary Donley. The Air Force is moving active duty F-16 pilot
    training to Holloman Air Force Base, New Mexico in order to beddown
    pilot training for the F-35 Lightning II at Luke Air Force Base,
    Arizona. During the F-16 training transition, there will be a period
    where F-16 training squadrons operate at both Luke Air Force Base and
    Holloman Air Force Base. The staggered move will minimize the impact
    and loss of F-16 training. The disruption will be temporary, with all
    active duty Air Force F-16 pilot training consolidated at Holloman Air
    Force Base by approximately 2020.

        100. Senator McCain. Secretary Donley, as currently planned, does
    the timing of the move of F-16s protect operations at Luke AFB from
    being subjected to a bathtub effect, where the F-16s will leave well
    before the first F-35s arrive?
        Secretary Donley. The Air Force is diligently working to implement
    all fighter aircraft decisions made in July 2010, including minimizing
    manpower fluctuations across all installations. We are currently
    planning for the first of two F-16 FTU squadrons to transition from
    Luke AFB to Holloman AFB in the third quarter of fiscal year 2013. F-
    35As are programmed to arrive in the fourth quarter of fiscal year
    2013. This plan minimizes manpower and aircraft fluctuations at Luke
    AFB.

        101. Senator McCain. Secretary Donley, I see the Air Force has
    already requested three military construction (MILCON) projects
    totaling $18 million in the fiscal year 2012 budget request to prepare
    facilities at Holloman AFB for the arrival of the F-16s. Have the total
    costs for this move been determined? If so, please provide a
    comprehensive description of all one-time and recurring costs
    associated with the move.
        Secretary Donley. Our current validated estimate to relocate two F-
    16 squadrons from Luke Air Force Base to Holloman Air Force Base (a
    multi-year move) is $42.2 million. Of that total, $18 million is for
    three fiscal year 2012 military construction (MILCON) projects, $3.5
    million is for two fiscal year 2011 unspecified minor MILCON projects,
    $13.1 million is for 18 operation and maintenance (O&M) projects, and
    $7.6 million is for support requirements. Additionally, Air Education
    and Training Command has identified a potential requirement for
    additional MILCON, however those requirements have not yet been
    validated.
        To further refine requirements, a Housing Requirements Market
    Analysis study is underway at Holloman and should be complete by the
    end of June 2011. If additional requirements are identified, we will
    include them in future housing privatization negotiations, and through
    cooperation with the community. In addition, the dormitory master plan
    will be updated to account for potential changes in the base
    population. If requirements dictate, MILCON projects may be programmed,
    as appropriate. The most cost-effective means to fund all these
    requirements is still being determined, including capitalizing on
    existing equipment and facilities where possible.

        102. Senator McCain. Secretary Donley, can the Air Force adequately
    conduct its pilot training mission at Holloman AFB, given the fact that
    the range to be used for training is owned, managed, and controlled by
    the Army, and their test activities have primacy in the Triad
    prioritization process?
        Secretary Donley. The Air Force is able to adequately conduct its
    pilot training mission at Holloman Air Force Base using the TRIAD
    Military Operating Area (MOA), which consists of the White-Sands
    Missile Range (WSMR)/Holloman Air Force Base/Fort Bliss operating
    areas. There is adequate capacity at TRIAD MOA to meet all training
    requirements. The Air Force and Army have developed a new construct to
    provide a more effective and efficient use of the TRIAD.

        103. Senator McCain. Secretary Donley, why would the Air Force want
    to deliberately subject a tight F-16 pilot training syllabus to the
    impact of having to train on a range they do not own?
        Secretary Donley. The Air Force and Army are using a joint
    scheduling enterprise to effectively schedule White Sands Missile Range
    (WSMR) and do not anticipate difficulties in supporting F-16 training.
    The Air Force and the Army have developed a new construct to provide a
    more effective and efficient use of the WSMR/Holloman Air Force Base/
    Fort Bliss operating area named the TRIAD Military Operating Area
    (MOA).

                              F-35 PILOT TRAINING

        104. Senator McCain. Secretary Donley, what is the current status
    and timeline for the arrival of the F-35 to Luke AFB?
        Secretary Donley. As briefed to the SASC professional staff members
    and the State of Arizona staffers on 20 Jun 11, continued fluctuation
    in the F-35 program has resulted in changes to the aircraft delivery
    schedule. Luke AFB is currently scheduled to receive its first aircraft
    in the fourth quarter of fiscal year 2013.

        105. Senator McCain. Secretary Donley, what are the major
    milestones and estimated dates of completion for the environmental
    impact statement (EIS)?
        Secretary Donley. The Air Force has determined that the use of a
    more accurate noise model, recently made available, would be used in
    the F-35 Training EIS for Pilot Training Center (PTC)-1. The draft EIS
    will be released in the fall of 2011 and a Record of Decision (ROD)
    will be signed no earlier than March 2012. We will continue to keep you
    informed on these efforts.

        106. Senator McCain. Secretary Donley, when are the first jets
    scheduled to arrive?
        Secretary Donley. Based on adjustments to F-35 procurement included
    in the fiscal year 2012 budget, the Air Force is in the process of re-
    evaluating the F-35 aircraft delivery schedules. Luke AFB is currently
    scheduled to receive its first aircraft in the fourth quarter of fiscal
    year 2013.
                                     ______

                  Questions Submitted by Senator Jeff Sessions

                               TANKER COMPETITION

        107. Senator Sessions. Secretary Donley, what was the final bid
    price submitted by Boeing that ultimately won the most recent Air Force
    tanker competition?
        Secretary Donley. The publically released value of the Engineering
    and Manufacturing Development contract is $4.4 billion. The overall
    contract is valued at over $30 billion, with a final amount depending
    on the options exercised.

        108. Senator Sessions. Secretary Donley, what is the total
    estimated cost avoidance to the government that resulted from the
    cancellation of the 2001 congressionally-authorized Boeing lease
    proposal to the current fixed-price contract?
        Secretary Donley. There are many factors that make comparing costs
    from the varied structures of the proposed tanker lease in 2002, the
    KC-45 competition in 2008 and the current KC-46 competition in 2010-
    2011 very difficult. However, it is safe to say that the Department has
    reaped a substantial savings for the taxpayer by buying these tankers
    under the current full-and-open competition and fixed-price development
    contract.
        OSD and Air Force representatives have met with congressional
    defense committee staff on several occasions to provide source
    selection and proprietary information since the contract award, and are
    willing to brief you on the bids and resulting cost savings from past
    competitions, at your convenience.

        109. Senator Sessions. Secretary Donley, what is the projected unit
    price for the first 18 KC-46 aircraft?
        Secretary Donley. OSD and Air Force representatives have met with
    congressional defense committee staff on several occasions to provide
    source selection and proprietary information since the contract award,
    and are willing to brief you on the bids at your convenience.
                                     ______

                 Questions Submitted by Senator Saxby Chambliss

                               TACTICAL AIR FLEET

        110. Senator Chambliss. General Schwartz, in the past you have
    stated that the Air Force is accepting risk in its tactical air
    (TACAIR) fleet by forgoing the purchase of additional F-22s and,
    instead, extending the life of legacy 4th Generation Fighters. In light
    of continued delays in the F-35 program, can you give your current
    assessment of risk in this area?
        General Schwartz. OSD's decision to stop the purchase of F-22s at
    187 was based on the planned F-35 initial operational capability (IOC)
    at the time. As you are aware, the F-35 IOC has slipped. There is no
    doubt that the slip will force us to be smart about how we marshal our
    resources to operate and overcome an adversary in an Anti-Access/Area
    Denial environment. In the short term, our ability to perform our
    mission is healthy. Service life extension (SLEP) and modernization of
    select 4th generation aircraft provides a cost effective solution to
    the forecasted shortfalls in the fighter force structure due to the F-
    35 program delays. This solution can mitigate some risk until the F-35
    is fully capable and in sufficient numbers to perform its air
    superiority and global precision attack roles. Examples include
    upgrading the F-15 and F-16 fleets with advanced radars and self
    protection capabilities, and extending the F-16 service life. We are
    also making sure that the F-22's advanced capabilities are fully
    implemented.

        111. Senator Chambliss. General Schwartz, are there specific gaps
    that are of particular concern?
        General Schwartz. We are observing increasing deployment of
    adversary electronic attack capabilities that will place significant
    stress on the Air Force's ability to achieve and maintain air
    superiority. This problem will increase as these systems mature and
    proliferate globally. The Air Force ability to operate within some
    regions of the world is also challenged due to a growing ballistic
    missile threat. Ballistic missiles are not a new threat, but the latest
    versions are more accurate and, when combined with access to exquisite
    ISR, can significantly upset our ability to deploy into and conduct
    unfettered regional operations.
        New adversary electronic warfare capabilities, combined with
    integrated air defense systems create another challenge for the Air
    Force. Our ability to use the space and cyber domains to command and
    control our platforms and systems will be increasingly contested across
    the range of military operations. These problems will only get worse as
    time goes on unless we move forward and modernize our air, space and
    cyber capabilities. We must also continue to develop tactics and
    procedures to operate in these challenging and degraded environments.
    The F-35 combined with the F-22 and the Long-Range Strike Family of
    Systems along with new radar, electronic warfare capabilities and
    weapons will all serve to ensure that the Air Force remains capable of
    delivering air superiority and precision effects globally.

        112. Senator Chambliss. General Schwartz, would you ever recommend
    procurement of additional legacy 4th Generation Fighters to mitigate
    this risk? Why or why not?
        General Schwartz. Not at this time. Starting with the fiscal year
    2010 President's budget (PB), the Air Force committed to retire 250
    legacy fighters to fund a smaller and more capable force. As a bridge
    to the F-35, JSF, we will continue to sustain and modernize our legacy
    fighters and bombers in order to maintain our current capability and
    capacity.
        When the F-35 initial operational capability slipped, our mid-term
    risk increased. The Air Force will mitigate this risk through
    aggressive management of F-35 production and legacy fighter
    sustainment, along with selected service life extension programs (SLEP)
    and modernization outside the FYDP. The fiscal year 2012 PB plans for
    capability modifications and SLEP for the F-16 Block 40/42/50/52 fleet.
    Selected legacy SLEP of the most suitable F-16 Block 40s and 50s would
    add approximately 6-8 years to their anticipated service life and
    provides the most cost effective alternative to transition to a fifth
    generation capability. The Air Force also intends to accelerate the F-
    15E Active Electronically Scanned Array (AESA) radar modernization
    program and continue the A-10C wing replacement program. The Air Force
    will continue to monitor and assess the fighter force structure and
    will remain flexible to pursue all appropriate courses of action
    necessary to mitigate risk should the situation change.

        113. Senator Chambliss. General Schwartz, it is my belief that the
    original F-35 concept--recapitalizing U.S. and allied fleets with a
    single family of highly capable, interoperable, and affordable
    fighters--makes even more sense today than it did when this program
    began. While it was not unexpected that other countries would develop a
    fifth generation capability, as both China and Russia recently
    demonstrated, it does underscore the need for our own F-35 fifth
    generation aircraft to be fielded as quickly as is feasible. Please
    comment.
        General Schwartz. It is true that potential adversaries around the
    world are fielding capabilities that are increasing the threat to our
    legacy 4th generation fighters and bombers. These include fifth
    generation fighters, integrated air defense systems, better munitions
    and effective electronic warfare capabilities. An operationally
    effective F-35, in coordination with the F-22, B-2 and ultimately, the
    Long-Range Strike Family of Systems will be necessary to effectively
    counter these increasingly effective weapons systems. While the Air
    Force would prefer the F-35 to be fielded sooner rather than later in
    order to meet these looming global challenges, it is vital that we
    field an F-35 that has the proven avionics and weapons integration
    capabilities needed to be operationally effective. Getting the F-35 to
    full-rate production has been a greater challenge than anticipated.
    Given the recent Technical Baseline Review, the program is moving
    forward as fast as pragmatically possible.

                                 AIR DOMINANCE

        114. Senator Chambliss. General Schwartz, looking forward 10 to 15
    years, how confident are you in the Air Force's ability to maintain air
    dominance in the Pacific in the event of a major conflict?
        General Schwartz. Our ability to provide air superiority for
    operations in the Pacific will be significantly challenged in the next
    10 to 15 years. The Air Force will require robust tanker support and
    modernized fighter capability to ensure air superiority against rapidly
    evolving threats. Much of our ability will be dependent on the U.S.
    Navy's ability to dominate the sea in the Pacific. Working together,
    the Air Force and Navy complement each other and can create effects
    that neither service can do alone. That is why the Air Force and the
    Navy have been jointly pursuing the Air Sea Battle Initiative to ensure
    that a joint, integrated approach to the problem occurs.

        115. Senator Chambliss. General Schwartz, as other nations improve
    their air forces, air defenses, and are able to more effectively target
    our staging areas in that region, how much concern do these factors
    raise and are you concerned that certain courses of action or options
    the Air Force can offer the President today may not be available down
    the road?
        General Schwartz. Our primary concern is not that certain courses
    of action or options may be unavailable-rather, we must ensure the
    right courses of action are not delayed in the short-term. Potential
    adversaries are acquiring anti-access/area denial (A2/AD) capabilities,
    such as long range cruise and ballistic missiles, advanced surface-to-
    air missile systems, aircraft, surface ships, submarines, mines,
    counter-space systems and cyber warfare systems. Adversaries seek to
    use these capabilities to deny freedom of action to United States and
    partner nation militaries. Your inquiry directly addresses the issue of
    the A2/AD threat. The Air Force is acutely aware of the A2/AD threat
    and, partnering with the Department of the Navy, has developed the Air-
    Sea Battle (ASB) concept to address this future challenge.
    What is the A2/AD?
        Anti-access: Action intended to slow deployment of friendly forces
    into a theater or cause forces to operate from distances farther from
    the locus of conflict than they would otherwise prefer. A2 affects
    movement to a theater.
        Area-denial: Action intended to impede friendly operations within
    areas where an adversary cannot or will not prevent access. AD affects
    maneuver within a theater.
        Failure to effectively address such capabilities will result in a
    greater than desired risk for United States and partner nation forces
    operations both within the A2/AD environment and at extended distances
    from the area of conflict. Either circumstance puts at risk the ability
    of the Joint Force to accomplish its assigned operational objectives.
    Furthermore, the A2/AD environment, by its very nature, requires an Air
    Force that is strategic in character, built on a backbone of a Long-
    Range Strike Family of Systems designed to rapidly break down an A2/AD
    environment in order to allow other forces to push forward into the
    region to restore stability.
    Air Sea Battle (ASB)
        ASB is a unified Air Force and Navy approach to address the
    evolving A2/AD environment. ASB focuses on enhancing three levels of
    cooperation:

             Institutional Cooperation will be enhanced by establishing an
            enduring organizational construct that will continue formal
            collaboration to address the A2/AD environment as it evolves
            over time.
             Conceptual Alignment will be perpetuated through the
            operational design which describes how capabilities and forces
            are integrated to accomplish operational objectives in an A2/AD
            environment.
             Materiel solutions and innovations will be collaboratively
            vetted to ensure they are complementary where appropriate;
            redundant when mandated by capacity requirements; fully
            interoperable and fielded with integrated acquisition
            strategies seeking efficiencies where they can be achieved.
    Addressing the A2/AD Problem
        ASB utilizes the central operational design of ``networked,
    integrated, attack-in-depth to disrupt, destroy, and defeat A2/AD
    threats.

             Networked: A2/AD strategies require multiple networked systems
            to be effective. The best way to defeat an adversary's networks
            is with superior U.S. interconnected networks. Networked
            implies command, control, and communications capabilities to
            enable cross-domain advantage.
             Integrated: A2/AD strategies seek to exploit vulnerabilities
            in U.S. force integration. Integration of Air Force and Navy
            forces counters these vulnerabilities by combining the
            strengths of air and naval forces through shared innovation.
            This integration provides the offensive and defensive
            capabilities necessary to counter the spectrum of A2/AD
            threats.
             Attack-in-Depth is the method by which the United States
            defeats the adversary's A2/AD capabilities and restores air and
            sea control, enabling subsequent action. A multi-domain
            offensive or counter-offensive operation is necessary to attack
            adversary vulnerabilities across the depth of his battlespace.
             Disrupt, Destroy, Defeat: A2/AD environments will be shaped by
            conducting sequential or concurrent tasks:
             Disrupt: conduct offensive operations to disrupt the A2/AD
            adversary's command, control, communications, computer network,
            and ISR processes.
             Destroy: conduct offensive operations to seek out and destroy
            or neutralize any threatening A2/AD weapons systems within
            effective range of operating U.S. forces.
             Defeat: defeat the adversary's employed weapons to preserve
            essential Joint forces and their enablers in order to sustain
            offensive and defensive operations.

        Combatant commanders can apply these tasks-disrupt, destroy,
    defeat-to achieve campaign crisis management escalation, de-escalation
    aims. The ASB concept will apply a tailorable portfolio of cross-domain
    capabilities to deter, and if necessary, defeat an A2/AD adversary in
    combat.

                              EFFICIENCY MEASURES

        116. Senator Chambliss. Secretary Donley and General Schwartz,
    regarding the efficiencies you are finding in your fiscal year 2012
    budget and beyond, first I want you to know that I support your efforts
    and appreciate the fact that you are working to ensure every dollar you
    spend is a wise use of taxpayers' resources. To what extent are your
    efficiencies simply deferring expenditures to future years, versus real
    savings?
        Secretary Donley and General Schwartz. The Air Force identified
    corporate efficiency goals in ten overarching areas. Our efficiency
    goals represent real savings/reductions versus deferring expenditures
    to future years. Only 1 percent of our $33.3 billion in Air Force-
    identified efficiency initiatives are related to re-phasing of programs
    due to fact-of-life slips or program execution status. They include re-
    phasing war Reserve material stockpile and training munitions
    procurement; re-phasing Wide Area Airborne Surveillance (WAAS)
    procurement; re-phasing AFNet support; and Link 16 Crypto Modernization
    for B-1, B-2, F-15. and F-16 systems. Real savings generated by these
    and other efficiencies permitted funds to be realigned to increase
    mission core capabilities and will reduce programmed or budgeted costs
    across the FYDP.

        117. Senator Chambliss. Secretary Donley and General Schwartz,
    rather than just finding ways to conduct missions more efficiently,
    thus saving money, have you worked to identify missions that you can
    stop doing; areas of focus and investment for the Air Force that may be
    outdated and unnecessary?
        Secretary Donley and General Schwartz. The Air Force is prepared to
    react to changes in strategic direction and national strategy that
    would reshape our force to realign with current global threats and
    realities. However, any potential changes to Air Force roles and
    missions, as defined by the National Military Strategy, would need to
    be led by the President, the Secretary of Defense, and Chairman of the
    Joint Chiefs of Staff.
        In accordance with 10 U.S.C. 118b, DOD conducts a Quadrennial Roles
    and Missions Review (QRMR). The Secretary of Defense has always
    included Service participation in these reviews. One of the tasks of
    this review is to identify ``any unnecessary duplication of core
    competencies and capabilities between defense components.'' Using the
    guidance provided in the most current QRMR and Quadrennial Defense
    Review, the Air Force continues to focus its investment of limited
    resources on the most critical capabilities required to conduct our
    current roles and missions.
        Additionally, during development of the Air Force annual budget,
    every program and mission area is assessed to ensure that we are not
    wasting precious resources on outdated or unnecessary systems or
    processes. The next review is scheduled to take place in 2012 with the
    final report delivered to Congress in early 2013. Working in concert
    with the Secretary of Defense, the Chairman of the Joint Chiefs, and
    the other Services the Air Force will determine which, if any, missions
    it can stop doing.

        118. Senator Chambliss. Secretary Donley and General Schwartz, I
    believe we can be more efficient but at some point doing more with less
    becomes a self-defeating exercise. In areas that you are making cuts,
    particularly when it comes to cutting contractors, if the mission
    itself is not going away, how will you ensure that the mission gets
    done if the people doing it are gone?
        Secretary Donley and General Schwartz. The overall focus of our
    efficiency effort is to concentrate on reducing redundancy and
    management overhead without impacting the Air Force mission and
    services. The Air Force efficiency initiatives ensure that we could
    make changes in those areas without adversely affecting mission. The
    Air Force also considered external organization experiences and a
    review of our own internal practices. In the areas where we are
    reducing staff (either government or contractors), the Air Force plan
    is to either modify the work itself to eliminate unnecessary and
    redundant tasks or to stop doing a job altogether that is no longer
    deemed essential. This approach is a means to keep from getting into
    the trap of ``doing more with less.''
        The Air Force corporate structure will closely monitor progress on
    efficiency goals and, as importantly, mission performance. Mission
    performance should either improve or be maintained at current levels.

                                      C-5

        119. Senator Chambliss. General Schwartz, I understand there are
    now five operational C-5M Super Galaxies in service and the Air Force
    is using these assets to support combat unit moves to locations in
    Afghanistan. I have heard good things regarding the performance of the
    C-5M; in fact I've heard it described as a game changer. I would be
    interested in your thoughts on this new aircraft. In your words, how
    well are the C-5Ms performing?
        General Schwartz. The C-5M is indeed performing very well. The
    modified aircraft is able to operate from shorter runways and carry
    more cargo over farther distances and with greater reliability. The AMP
    upgrades the aircraft avionics and has increased safety, eased crew
    workloads, and enhanced situational awareness. The RERP provides
    higher-thrust and more reliable and environmentally friendly turbofan
    engines. The C-5M's most recent accomplishments were in direct support
    of operations in Libya, where they delivered 38 percent more cargo for
    every hour flown when compared to the other C-5 models. The
    modification plan calls for delivery of 52 C-5Ms by 2016. The C-5M
    upgrade is absolutely vital to our strategic airlift capability for
    years to come.

        120. Senator Chambliss. General Schwartz, are they meeting the Air
    Force's expectation set for the C-5 RERP?
        General Schwartz. The program is on track to meet our expectations.
    We expect to have an initial operational capability by 2013, at which
    time our first unit will be completely equipped with C-5Ms. At this
    time we see no obstacles that will keep us from meeting that target.

        121. Senator Chambliss. Secretary Donley, assuming that Congress
    grants the Air Force's request to retire some number of C-5As while the
    Air Force continues to comply with the NDAA for Fiscal Year 2010
    minimum number of strategic airlifters, can you provide the systematic
    approach and analysis that was used to comply with section 137 of the
    NDAA for Fiscal Year 2010 to consider making these excess C-5s
    available to Civil Reserve Air Fleet (CRAF) operators or international
    coalition partners?
        Secretary Donley. To comply with section 137 of the NDAA for Fiscal
    Year 2010, the Air Force compiled a ``Report on Retirement of C-5A
    Aircraft'' in October 2010. This report concludes that the benefits of
    transferring C-5A aircraft to CRAF are limited. The analysis behind
    this is based on the fact that the C-5 is a Category C aircraft,
    meaning it is a combat configured platform, and would have to be
    demilitarized prior to being transferring to the CRAF. Demilitarization
    would render the aircraft suitable for scrap recycling only.
    Additionally, Category C aircraft are determined to not have commercial
    application based upon their military design characteristics.
    Furthermore, according to DOD 4160.21-M, transferring possession of
    Category C aircraft outside of the Federal Government is only
    authorized for museums or static displays.
        The report also determines that no excess C-5 aircraft will be
    transferred to eligible international coalition partners due to the Air
    Force's requirements for spare parts and equipment. Currently, the
    demand for C-5 spare parts is significant, and in some cases supply
    chain backorders exceed 2 to 3 years. These retiring aircraft provide
    usable spare parts that will enable sustainment of the remaining active
    fleet.

        122. Senator Chambliss. Secretary Donley, you seemed to indicate in
    your March 17, 2011, testimony that Air National Guard and Air Force
    Reserve C-5As are already included in the C-5 RERP modernization, yet
    to date we have not received notification or documents to this effect.
    I understand that the Air Force already modified a C-5A to the C-5M
    Super Galaxy configuration and that its performance is comparable to
    any of the modernized C-5Bs (now C-5Ms). Since the Air Force is likely
    to have a number of C-5As in service for the next 30-plus years, it
    makes sense to me that the C-5 aircraft flown by our Air National Guard
    and Air Force Reserve should be modernized. For only $107 million
    investment for each RERP kit and installation, RERP pays for itself.
    Can you advise what the Air Force plans are for modernizing C-5As?
        Secretary Donley. All C-5As not programmed for retirement will
    receive the AMP configuration. Additionally, 16 Air Force Reserve
    Command C-5Bs will be upgraded with the RERP modification and
    redesignated as C-5Ms.

                        MULTIFUNCTION ADVANCED DATA LINK

        123. Senator Chambliss. General Schwartz, during our hearing
    several weeks ago with Secretary Gates, when I asked if DOD might be
    considering buying more F-22s, he indicated that there were ``hundreds
    of millions of dollars'' for F-22 upgrades in the budget request. While
    there are funds requested for F-22 squadrons, I do not find any funds
    for the Multifunction Advanced Data Link (MADL). In 2008, OSD published
    an Acquisition Decision Memorandum directing the MADL as the data link
    to provide the connectivity between our low observable (LO) aircraft
    beginning with the F-22. I understand that MADL is now deferred from
    the F-22 and I note that the most recent President's budget request
    includes no funding for MADL. It now appears that we are without a
    program to provide connectivity between our LO fighters and other
    platforms. I believe we must have a means by which our newest LO
    fighters can be identified and are able to collaborate with each other
    directly or through some sort of gateway connection to share position
    and sensor data appropriately among our own forces. This connectivity
    is needed to connect our latest generations of LO aircraft to conduct
    operations, provide necessary command and control, and prevent
    fratricide. What programs are included and what resources are provided
    in your budget request this year to ensure timely development of these
    capabilities?
        General Schwartz. The F-22 currently is able to use the IntraFlight
    Data Link (IFDL) that allows it to communicate with other F-22s. The
    MADL is still under development as part of the F-35 JSF program, as it
    was originally planned.
        As the result of a cost and risk analysis, the Air Force decided in
    the fiscal year 2012 budget to defer integration of MADL onto the F-22
    until MADL matures within the F-35. While this maturation occurs, the
    USAF will continue to assist the F-35 program office and the F-22
    program office to ensure smooth integration of MADL on the F-22. In
    fiscal year 2011, $24 million was requested for the MADL Enterprise for
    this effort.
        In addition to these efforts, the capability to share data between
    the F-22 and our current fleet of fighters has been demonstrated
    successfully in multiple exercises with the BACN IFDL Subsystem (BACN
    BIS), hosted on a business jet test aircraft. This capability was not
    tested on the BACN Global Hawk Block 20 and is not fielded. The
    business jets and the Global Hawks equipped with the BACN payload and
    flying today in Afghanistan do not, at this time, have this specific F-
    22 gateway capability installed, since there is no need in the current
    theater for this capability. We are currently studying the costs and
    risks of implementing a F-22 gateway capability. If the cost-risk
    analysis is favorable, the USAF can proceed to introduce this F-22
    gateway capability as an interim solution.

        124. Senator Chambliss. General Schwartz, in your view, are we
    doing enough, and proceeding rapidly enough, to acquire this
    capability?
        General Schwartz. Yes. We are proceeding in an effective manner to
    enable this capability. We are continuing to assess and balance the
    technical and cost risks and hope to deliver an interim capability as
    soon as possible.
                                     ______

                 Questions Submitted by Senator Roger F. Wicker

                                  GLOBAL HAWK

        125. Senator Wicker. Secretary Donley and General Schwartz, please
    provide an update on Global Hawk Operations in Libya and in Japan.
        Secretary Donley and General Schwartz. Our newest Global Hawk, the
    Block 30, a larger aircraft with improved sensors, flies almost daily
    in support of Operation Odyssey Dawn and Operation Unified Protector.
    At the same time, Global Hawk continues to support Japan with Operation
    Tomodachi relief efforts.
        In Libya, the Global Hawk served a key role in the battle to
    dismantle the regime's Integrated Air Defense System by providing both
    pre- and post-strike imagery of surface-to-air missile sites and
    airfields. Flying from Sicily, the aircraft was able to remain on
    station for over 24 hours at a time. This endurance, when combined with
    the Global Hawk's enhanced sensor capabilities, enabled it to obtain
    over 400 frames of still imagery per mission, thereby satisfying the
    need for near-real-time status updates of regime and opposition forces.
    The RQ-4 also supported the search and rescue operation that recovered
    our downed airmen following the F-15 mishap.
        In Japan, not only did the Global Hawk provide high-resolution
    imagery of earthquake and tsunami affected areas, but its infra-red
    imaging of damaged nuclear facilities enabled analysts to determine the
    temperature of various hot spots throughout the facility. In addition,
    the Global Hawk brought persistence and flexibility to the Pacific
    theater through its ability to fly to and from northern Japan from Guam
    (1,500 miles each way), while retaining the endurance to remain on
    station for 17 hours.

        126. Senator Wicker. Secretary Donley and General Schwartz, how
    well is the Global Hawk performing in theater from the warfighter
    perspective?
        Secretary Donley and General Schwartz. Global Hawk aircraft are
    flying continuously in CENTCOM providing critical ISR and
    communications relay support to warfighters in Afghanistan and Iraq.
    The ISR configured Global Hawks carry a combination of electro-optical,
    infra-red, and synthetic aperture radar (SAR) sensors on one platform
    to give the warfighter maximum flexibility to adapt to changing
    operational and environmental conditions during a single mission. The
    Block 10s currently in CENTCOM are on schedule to be replaced in May
    2011 by the larger Block 30 aircraft, which will carry a robust signals
    intelligence payload in addition to its imagery sensors.
        The Global Hawk Block 20 aircraft, equipped with the BACN payload
    are truly game changers and have been credited with saving lives in
    Afghanistan. Global Hawk BACN functionality reduces Command and Control
    issues associated with incompatible communications systems, adverse
    terrain, and distance. This payload extends communications ``reach''
    for systems like Link 16 and Situation Awareness Data Link (SADL) and
    has special utility as an Army ground force voice and data relay. This
    system reduces the kill chain timeline by 20 percent which enables a 40
    percent increase in kinetic effects against insurgents.
        The Block 30 Global Hawk is exceeding the performance of the Block
    10. We pressed the Block 30 into service sooner than anticipated due to
    urgent needs in Japan and Libya. Consequently, we are working through
    reliability issues discovered during Global Hawk test and development
    and are seeing the system prove itself in real world operations. During
    March 2011 alone, Block 10/20/30 Global Hawks flew 119 missions,
    logging 2,134.5 flight hours.

        127. Senator Wicker. Secretary Donley and General Schwartz, what is
    your assessment of how we can further enhance the capabilities of the
    Global Hawk in support of our warfighters at sea or on the ground?
        Secretary Donley and General Schwartz. Over the FYDP, we will field
    six CAPs of multi-Intelligence (INT) Block 30 aircraft, three of which
    are just beginning operations in CENTCOM, European Command/Africa
    Command, and PACOM. These six CAPs represent our objective force
    structure to fulfill the Nation's requirement for high-altitude ISR.
        Beginning in 2013, we will field the newest version of the Global
    Hawk, the Block 40. It will carry the Multi-Platform Radar Technical
    Insertion Program radar and provide a multi-mission capability to the
    Battle Management Command and Control infrastructure as well as the ISR
    community. The radar will provide GMTI and high-resolution SAR imagery
    simultaneously as part of our baseline capability. As funding becomes
    available, the radar will be upgraded to detect maritime and airborne
    targets and provide some classified capability similar to that provided
    by other state-of-the-art airborne radars.
        Our current budget plans include key enhancements necessary to
    achieve the optimum performance from both the Block 30 and Block 40
    assets. The first is our Ground Station Rearchitecture where we will
    replace the 13-year-old ground station technology and, at the same
    time, modernize the architecture to make it adaptable to emerging needs
    and, very important, make it compatible with the Navy's MQ-4C Broad
    Area Maritime Surveillance (BAMS) System. The second is our
    Communications System Rearchitecture project. This will enable the full
    use of all our Block 30 sensors simultaneously and make us compatible
    with the Wideband Global Satellite system for worldwide connectivity.
        Perhaps the greatest enhancement for the warfighter is the work we
    are doing with our Navy partner in achieving as much technical and
    operational synergy as possible between the RQ-4 and MQ-4C programs. We
    are working towards a common command and control ``core'' for our
    ground systems, enabling us to control each others' aircraft. We also
    plan to achieve commonality and cost savings in our communications
    systems. Finally, we have plans for Joint Global Hawk/BAMS basing,
    joint aircraft and maintenance training, and, if possible, a joint
    aircraft maintenance facility. Our success will pave the way for
    greater cooperation in mission operations for the benefit of the
    warfighter.

                             VERTICAL LIFT SUPPORT

        128. Senator Wicker. Secretary Donley and General Schwartz, I
    ardently believe that competition always provides best-value to the
    warfighter and the American taxpayers. What do you believe are key
    criteria in determining whether a program should be sole-sourced or
    competitively-bid?
        Secretary Donley and General Schwartz. The Federal Acquisition
    Regulation (FAR) Subpart 6 prescribes policies and procedures to be
    used to promote full and open competition. 10 U.S.C. 2304 and 41 U.S.C.
    253 require, with certain limited exceptions, that contracting officers
    shall promote and provide for full and open competition in soliciting
    offers and awarding Government contracts. Listed at FAR 6.302 are
    exceptions permitting other than full and open competitions:

         i.  Only one responsible source and no other supplies or services
    will satisfy agency requirements.
         ii.  Unusual and compelling urgency.
        iii.  Industrial mobilization; engineering, developmental or
    research capability; or expert services.
         iv.  International agreements.
         v.  Authorized or required by statute.
         vi.  National Security.
        vii.  Public Interest.

        Policies and procedures for contracting without full and open
    competition are prescribed in FAR Subpart 6 and Defense Federal
    Acquisition Regulation Supplement (DFARS) Subpart 206. In accordance
    with FAR Subpart 6, if any of the above listed exceptions to
    competition apply, the contracting officer shall not commence
    negotiations or award a sole source contract unless the contracting
    officer----
        Justifies the use of such actions in writing;

         i.  Certifies the accuracy and completeness of the justification;
         ii.  Obtains the appropriate level of approval for the proposed
    action--(levels are tied to dollar amounts and type exception).

        129. Senator Wicker. Secretary Donley and General Schwartz, please
    provide an update on the Air Force's acquisition plans for the Vertical
    Lift Support Platform helicopter.
        Secretary Donley and General Schwartz. The Air Force plans to
    conduct a full and open competition for the Common Vertical Lift
    Support Platform program and award a contract to initiate procurement
    in fiscal year 2012. We intend to purchase a Non-Developmental Item/
    Off-The-Shelf aircraft that will allow us to meet the warfighter
    requirement for an initial operational capability in fiscal year 2015.

        130. Senator Wicker. Secretary Donley and General Schwartz, will
    the program be competitively bid?
        Secretary Donley and General Schwartz. Yes. The Air Force will
    conduct a source selection for the Common Vertical Lift Support
    Platform program based on a full and open competition.
                                     ______

                   Questions Submitted by Senator John Cornyn

                        PROPOSED REDUCTION TO B-1 FLEET

        131. Senator Cornyn. General Schwartz, in a recent speech,
    Secretary Gates stated, ``The fact that we are a nation at war . . .
    calls for sustaining the current military force structure.'' The Air
    Force currently has a fleet of 66 B-1s, many of which are based in
    Texas at Dyess AFB. The fiscal year 2012 budget proposes to cut 6 B-1s
    from the fleet's 37 primary mission assigned aircraft--a 16 percent
    reduction in a fleet of combat aircraft that are heavily used in
    Afghanistan. In your view, how are the proposed cuts to the B-1 bomber
    fleet in the fiscal year 2012 budget consistent with Secretary Gates'
    message on the need to sustain the current military force structure
    during a time of war?
        General Schwartz. Secretary Gates' message to sustain force
    structure was accompanied by a similar call for ``maintaining modest
    but real growth in the defense top-line over the long term.'' \1\ In
    the same speech, Secretary Gates also acknowledged the Nation's current
    fiscal situation makes answering this call untenable as the Defense
    budget cannot be exempted from the scrutiny and pressure faced by the
    rest of our government. Furthermore, in line with the 2010 Quadrennial
    Defense Review, we must rebalance current capabilities to prevail in
    today's wars while building the capabilities needed to deal with future
    threats.\2\
    ---------------------------------------------------------------------------
        \1\ Secretary of Defense Statement on Department Budget and
    Efficiencies, 6 Jan. 2011.
        \2\ 2010 QDR, p. iii.
    ---------------------------------------------------------------------------
        The Air Force conducted a comprehensive review of current bomber
    force structure, existing capabilities, and future power projection
    requirements in determining the risk associated with a B-1 fleet
    reduction.
        The results of high-fidelity modeling and simulation analysis
    conducted by Air Force Studies and Analysis indicated a reduction of
    six B-1 primary aircraft authorizations involves an acceptable level of
    risk against OSD-approved warfighting scenarios designed to assess
    capacity and force sufficiency to achieve campaign objectives within
    the specified time period.
        The Air Force conducted comparative analysis between B-1, B-2, and
    B-52 current and historical fleet mission capable rates, as well as
    model driven variable cost per flying hour data using the Air Force
    Cost Analysis Agency's 2010 Air Force Cost and Performance tables, in
    order to support measured force structure adjustments. The B-1 in
    particular faces several grounding concerns due to a thin industrial
    base and avionics sustainment issues. In light of these facts, the Air
    Force determined a reduction of six B-1s is a prudent course of action
    to address these critical issues, thereby increasing the pool of
    equipment spares and freeing funds to source critical sustainment and
    capability modifications. The Air Force expects to achieve an increase
    in aircraft availability in the near-term as a result of these
    retirements, while bridging the gap to the future long-range strike
    bomber.

        132. Senator Cornyn. General Schwartz, what are your plans to
    replace the operational capability that would be lost through the
    proposed retirement of these six primary mission aircraft?
        General Schwartz. The results of tactical and campaign level
    analysis conducted by Air Force Studies and Analysis indicated a
    reduction of six B-1 primary aircraft authorizations can be taken with
    limited risk against currently approved OSD Analytic Agenda scenarios.
    Analysis focused on both mid-term (2016) and long-range (2024)
    scenarios that resulted in the optimum force structure composition
    based on the prevailing strategy and the force planning construct. Cost
    per flying hour and mission capable rate analyses further supported a
    modest B-1 reduction as a wise reinvestment strategy geared toward
    increasing the pool of equipment spares and freeing up funds to source
    critical sustainment and capability modifications. The Air Force
    expects to achieve an increase in aircraft availability in the near-
    term as a result of these retirements, and money saved will be used, in
    part, to continue to fund fleet modernization programs including fully
    integrated data link, vertical situation display, and central
    integrated test system upgrades, providing a capabilities-based bridge
    to the long-range strike bomber (LRS-B).

        133. Senator Cornyn. General Schwartz, exactly how much of the
    savings obtained from this cut will be reinvested in sustaining and
    improving the current B-1 fleet, to include enhancements to a new radar
    system?
        General Schwartz. The retirement of six B-1s will provide a total
    fiscal year 2012 savings of $61.9 million in procurement and
    sustainment funding. Of these savings, the Air Force will reinvest
    $32.9 million in fiscal year 2012 into critical B-1 sustainment and
    modernization programs to ensure the health of the remaining fleet.
        These programs include procurement and installation of Vertical
    Situation Display Upgrade and Central Integrated Test System
    sustainment efforts, Fully Integrated Data Link capability upgrade, and
    procurement of critical initial spares for these modifications. The
    ongoing Radar Maintainability and Improvement Program replaces two
    unsupportable Line Replaceable Units within the current radar system.
        The Air Force is assessing the remaining components of the B-1
    radar, with consideration to both supportability and performance. The
    Department applied the remainder of the savings from the B-1 reduction
    to other Air Force and DOD priorities to include continuing to
    strengthen the nuclear enterprise and investing in building
    partnerships.

        134. Senator Cornyn. General Schwartz, the B-1 has proven to be a
    critical component of our long-range strike operations overseas, and as
    I understand it, has been called upon to maintain a constant presence
    in the skies over Afghanistan. Air Force officials have testified that
    the B-1 has employed nearly 40 percent of all munitions in OEF, and
    senior U.S. military leaders have consistently acknowledged that the B-
    1 fleet is doing an outstanding job. General Petraeus has called the B-
    1 a great platform and a very capable bomber. How did you determine,
    and what analysis supports, the decision that six B-1 aircraft are
    extraneous to the current warfighting requirement?
        General Schwartz. While it is true that the B-1 is doing an
    outstanding job in the current fight, the fleet in general faces
    several grounding concerns due to a thin industrial base and avionics
    sustainment issues. In light of these facts, the Air Force determined a
    reduction of six B-1s is a prudent course of action to address these
    critical issues, thereby increasing the pool of equipment spares and
    freeing up funds to source critical sustainment and capability
    modifications. The Air Force expects to achieve an increase in aircraft
    availability in the near-term as a result of these retirements, while
    bridging the gap to the future long-range strike bomber.
        The Air Force conducted a comprehensive review of current bomber
    force structure, existing capabilities, and future power projection
    requirements in determining the risk associated with a B-1 fleet
    reduction.
        The results of high-fidelity modeling and simulation analysis
    conducted by Air Force Studies and Analysis indicated a reduction of
    six B-1 primary aircraft authorizations involves an acceptable level of
    risk against OSD-approved warfighting scenarios designed to assess
    capacity and force sufficiency to achieve campaign objectives within
    the specified time period.
        Additionally, the Air Force conducted comparative analysis between
    B-1, B-2, and B-52 current and historical fleet mission capable rates,
    as well as model driven variable cost per flying hour data using the
    Air Force Cost Analysis Agency's 2010 Air Force Cost and Performance
    tables, in order to support measured force structure adjustments.

        135. Senator Cornyn. General Schwartz, how will the proposed cuts
    to the B-1 fleet impact B-1 operations in Afghanistan in the years to
    come?
        General Schwartz. The proposed retirement of six B-1s will not
    impact ongoing theater operations. The Air Force expects to achieve an
    increase in aircraft availability in the near-term as a result of these
    retirements due to increased equipment spares availability, while
    freeing funds for critical sustainment and modernization efforts to
    bridge the gap to the future long-range strike bomber.

        136. Senator Cornyn. General Schwartz, in your testimony you were
    asked by Senator Chambliss about the type of aircraft that would be
    used to enforce a no-fly zone over Libya. You stated, ``and you would
    have, undoubtedly, some bomber aircraft that would give you long dwell
    over specified target areas.'' Considering the extensive role of the B-
    1 in Afghanistan and the potential that it could be used in future
    operations in Libya, is it prudent to consider any cuts to the B-1
    fleet at this time?
        General Schwartz. Recent aircraft availability statistics, near-
    term estimates indicating a declining trend in aircraft availability, a
    thin industrial base, and avionics sustainment issues support the Air
    Force's decision to commence a modest reduction in bomber force
    structure.
        The Air Force conducted a comprehensive review of current bomber
    force structure, existing capabilities, and future power projection
    requirements in determining the risk associated with a B-1 fleet
    reduction.
        The results of high-fidelity modeling and simulation analysis
    conducted by Air Force Studies and Analysis indicated a reduction of
    six B-1 primary aircraft authorizations involves an acceptable level of
    risk against OSD-approved warfighting scenarios designed to assess
    capacity and force sufficiency to achieve campaign objectives within
    the specified time period.
        The Air Force conducted comparative analysis between B-1, B-2, and
    B-52 current and historical fleet mission capable rates, as well as
    model driven variable cost per flying hour data using the Air Force
    Cost Analysis Agency's 2010 Air Force Cost and Performance tables, in
    order to support measured force structure adjustments. The B-1 in
    particular faces several grounding concerns due to a thin industrial
    base and avionics sustainment issues. In light of these facts, the Air
    Force determined a reduction of six B-1s is a prudent course of action
    to address these critical issues, thereby increasing the pool of
    equipment spares and freeing funds to source critical sustainment and
    capability modifications. The Air Force expects to achieve an increase
    in aircraft availability in the near-term as a result of these
    retirements, while bridging the gap to the future long-range strike
    bomber.

                               LONG-RANGE STRIKE

        137. Senator Cornyn. Secretary Donley, the fiscal year 2012 DOD
    budget request includes $197 million in Air Force research,
    development, test, and evaluation (RDT&E) funding to begin development
    of a new long-range bomber that we are told would be penetrating, carry
    precision-guided conventional weapons, and be nuclear-capable. In your
    testimony, you state that, ``investing in a new penetrating bomber is
    critical to maintaining our long-range strike capability in the face of
    increasing risk associated with anti-access and area-denied
    environments.'' In your opinion, given that the Air Force only has 96
    combat-coded bombers, would it be premature to retire any bomber
    aircraft before it is reasonably certain that a new long-range strike
    bomber will be fielded in the near future?
        Secretary Donley. The Air Force remains committed to the Core
    Functions of nuclear deterrence operations and global precision attack
    and will continue to evaluate the legacy bomber fleet in concert with
    the entire Combat Air Forces fleets. This will ensure the proper mix of
    assets are available to provide the capacity and capability required to
    support our National interests as we bridge the gap to the future long-
    range strike bomber.
        The Air Force conducted a comprehensive review of current bomber
    force structure, existing capabilities, and future power projection
    requirements in determining the risk associated with a B-1 fleet
    reduction.
        The results of high-fidelity modeling and simulation analysis
    conducted by Air Force Studies and Analysis indicated a reduction of
    six B-1 primary aircraft authorizations involves an acceptable level of
    risk against OSD-approved warfighting scenarios designed to assess
    capacity and force sufficiency to achieve campaign objectives within
    the specified time period.
        The Air Force conducted comparative analysis between B-1, B-2, and
    B-52 current and historical fleet mission capable rates, as well as
    model driven variable cost per flying hour data using the Air Force
    Cost Analysis Agency's 2010 Air Force Cost and Performance tables, in
    order to support measured force structure adjustments. The B-1 in
    particular faces several grounding concerns due to a thin industrial
    base and avionics sustainment issues. In light of these facts, the Air
    Force determined a reduction of six B-1s is a prudent course of action
    to address these critical issues, thereby increasing the pool of
    equipment spares and freeing funds to source critical sustainment and
    capability modifications. The Air Force expects to achieve an increase
    in aircraft availability in the near-term as a result of these
    retirements, while bridging the gap to the future long-range strike
    bomber.

        138. Senator Cornyn. Secretary Donley, according to a Defense News
    article on February 16, 2011, Major General David Scott, Director of
    Operational Capability Requirements for the Air Force, told the defense
    industry that if the long-range strike family of systems is, ``not
    affordable, we're not going to buy it, and it's going to just fall by
    the wayside like it has at a different time 2 years ago.'' What steps
    are you taking to ensure that the new long-range bomber does not fall
    by the wayside like the Air Force's next-generation bomber program that
    was deferred in fiscal year 2010?
        Secretary Donley. The new long-range strike bomber program is very
    much focused on affordability, constraining requirements, and lowering
    technological risk. The program will use a streamlined management and
    acquisition approach to balance capability with affordability. The new
    bomber will use existing, mature technologies and leverage systems and
    subsystems from other programs to the maximum extent possible.
    Additionally, the Air Force will limit requirements based on
    affordability using realistic cost targets to inform capability and
    cost trade-offs.

        139. Senator Cornyn. Secretary Donley, in January, you told
    reporters that while the new bomber would be able to carry nuclear
    weapons, it would not be immediately certified for nuclear weapons. Why
    will the new bomber not be certified at the outset to carry nuclear
    weapons?
        Secretary Donley. The Secretary of Defense directed that the new
    bomber be nuclear capable. The new long-range strike bomber will be
    designed from the outset to be survivable in a nuclear environment and
    capable of employing nuclear weapons. This includes compliance with
    Nuclear Weapons System Safety Rules, Nuclear Surety Directives, and
    applicable Military Standards during the engineering, manufacture, and
    design stages. Additionally, we will continue to sustain and maintain
    the existing bomber fleet. Given the timeline we envision for fielding
    the new long-range strike bomber, we have sufficient legacy capacity
    and capability to meet the Nation's nuclear requirements. Nuclear
    certification is a stringent process with strict requirements,
    requiring additional rigorous testing beyond what is normally necessary
    for conventional strike aircraft. To preserve our focus on
    affordability and fielding capabilities when they are necessary, we
    will work with the combatant commanders to ensure that the new long-
    range strike bomber will be ready for the nuclear mission when they
    require such a capacity.
        This approach allows future leaders to tailor the bomber force to
    meet both conventional and nuclear requirements within the constructs
    of national policy, emerging threats, and treaty compliance.

        140. Senator Cornyn. Secretary Donley, what plans, if any, are
    being made to enable the B-2 to be certified to deliver a nuclear air-
    launched cruise missile?
        Secretary Donley. Strengthening the nuclear enterprise remains the
    top priority of the U.S. Air Force. The Air Launched Cruise Missile is
    a critical part of that enterprise. We are committed to retaining this
    capability through the Long-Range Standoff Weapon (LRSO). The LRSO
    Analysis of Alternatives, scheduled to begin in August 2011, will look
    at alternatives that are suitable for internal carriage on the B-2, B-
    52, and the new long-range strike bomber.

                             AIR-SEA BATTLE CONCEPT

        141. Senator Cornyn. General Schwartz, the 2010 Quadrennial Defense
    Review (QDR) directs the development of a joint ASB concept between the
    Navy and the Air Force. Secretary Gates, in his recent speech at the
    U.S. Air Force Academy, said this new doctrine recognizes ``the
    enormous potential in developing new joint warfighting capabilities--
    think of naval forces in airfield defense, or stealth bombers augmented
    by Navy submarines--and the clear benefits from this more efficient use
    of taxpayer dollars.'' What is the current status of the development
    and implementation of the ASB concept?
        General Schwartz. The ASB Concept was approved and signed by the
    Chief of Naval Operations (CNO), Chief of Staff of the Air Force
    (CSAF), and the Commandant of the Marine Corps. Further, on June 2,
    2011, the Secretaries of the Air Force and Navy approved the concept
    and annexes and forwarded them to the Secretary of Defense. The
    approved annexes are: the Concept Initiative Categories annex; the
    Doctrine, Organization, Training, Materiel, Leadership and Education,
    Personnel and Facilities Initiative Actions/Near-Term annex; the
    Initiative Actions/Mid- and Far-Term annex; and the Initiative Actions/
    Spreadsheet. These annexes describe in detail the initiatives which
    allow air and naval forces to achieve ASB objectives, including the
    timing and relationships between all the actions identified. These
    documents will allow the ASB office, when activated, to lead the
    implementation of ASB throughout the Air Force, Navy, and Marine Corps.
        The ASB office, to be established by a multi-service Memorandum of
    Understanding and manned by elements of each Service, will advocate,
    facilitate, monitor, and assess the integrated implementation of the
    ASB concept and initiatives, while further developing the concept. In
    the ``facilitate, monitor, and assess'' roles, the ASB office will
    coordinate and synchronize force development activities throughout the
    Services and report progress back to the Headquarters. To ``further
    develop'' the concept, the ASB office will ensure Services provide
    combatant commanders with forces capable of addressing current and
    emerging A2/AD challenges.

        142. Senator Cornyn. General Schwartz, to what extent has the ASB
    concept already influenced the investment decisions reflected in the
    Air Force's fiscal year 2012 budget request and the latest FYDP, and to
    what extent will it guide investment decisions in the future?
        General Schwartz. The Air Force and the Navy are in the final
    stages of solidifying the ASB concept document that outlines the
    actions and capabilities that further integrate our air and naval
    forces to preserve and bolster our Nation's freedom of action in the
    air, maritime, space, and cyberspace domains. While the concept was
    still being fully developed during the fiscal year 2012 budget build,
    the Air Force budget request includes funding for a broad range of
    programs that support the concept and provide significant capabilities
    in the ASB arena.
        For example, this budget request includes $197 million in fiscal
    year 2012 for developing the Air Force's Long-Range Penetrating Bomber
    to provide enhanced capabilities to counter long-range integrated air
    defense systems. The Air Force budget request also includes an
    enhancement to the active Electronically Scanned Array radar
    improvement program that accelerates the procurement of these advanced
    radars on F-15C and F-15E aircraft by adding $240.9 million/FYDP. In an
    effort to move toward a shared organization and investment vision for a
    Distributed Common Ground System with the Navy, the Air Force requests
    $15 million in fiscal year 2012 for new critical ISR Tasking,
    Processing, Exploitation, and Dissemination capabilities. In supporting
    these and a multitude of other ASB initiatives, the Air Force seeks to
    enhance key mission areas while maintaining a broad range of agile and
    flexible capabilities to address emergent challenges posed by anti-air
    capabilities.
        ASB is informed by the fiscal constraints facing both the Federal
    Government in general and the DOD. ASB uses a portfolio of U.S. forces
    and enablers, organized across domains by mission. In fiscal year 2012,
    the Air Force invested significant resources within critical ASB
    mission areas to address evolving threats to access. Efficiency is a
    goal of the concept in that it will improve warfighter effectiveness
    and put in place the institutional foundations necessary to sustain the
    development of integrated air and naval forces. The concept will be one
    of many factors guiding the Air Force's investment decisions in fiscal
    year 2013 and beyond.

                                F-35 ACQUISITION

        143. Senator Cornyn. Secretary Donley, you note in your testimony
    that the multi-role F-35A is the centerpiece of the Air Force's future
    precision attack capability and will complement the F-22's world-class
    air superiority capabilities. The fiscal year 2012 budget request
    includes a major restructuring of the F-35 program that cuts
    procurement of the F-35 by 124 aircraft over the FYDP. Fifty-seven of
    the 124 aircraft to be cut are the Air Force variant, even though DOD
    has said that the F-35A is performing satisfactorily. Please provide an
    update on this critical program and its importance to the future of the
    Air Force.
        Secretary Donley. The F-35 remains the cornerstone of our future
    tactical aircraft (TACAIR) fleet and continues to perform
    satisfactorily. In the first quarter of 2011, the F-35A test fleet
    completed 82 test flights compared to the plan of 62 flights (the total
    program (F-35A/B/C) numbers for the quarter were 199 test flights
    compared to a plan of 142 test flights). The first two production
    aircraft (AF-6/7) flew seven acceptance flights in preparation for
    delivery to the Air Force at Edwards Air Force Base in April 2011.
        The Air Force has been and will continue to provide detailed
    program metrics to committee staff members on a monthly basis.

        144. Senator Cornyn. Secretary Donley, please comment on the
    immediate and near-term per unit cost impact for the Air Force as a
    result of this decision.
        Secretary Donley. The OSD CAPE is analyzing the detailed per unit
    cost impacts of the reduction of 124 aircraft throughout the FYDP in
    order to support the Milestone B Defense Acquisition Board, currently
    scheduled for no earlier than October 2011. We will have better
    definition of the immediate and near-term per unit cost impact
    associated with the reduction when OSD CAPE completes its analysis.

        145. Senator Cornyn. General Schwartz, on January 11, the new
    Chinese fifth-generation fighter, the Chengdu J-20, conducted a test
    flight. Analysts say the J-20, like our F-22, would be able to cruise
    at supersonic speeds at very high altitudes. Other reports indicate it
    would be able to carry more weapons, including air-to-air missiles with
    longer ranges than their U.S. counterparts; anti-ship and anti-surface
    weapons; and potentially weapons to destroy U.S. satellites. It is
    expected that the Chinese fighter will enter service in 5 to 7 years,
    when our F-22 Raptor is more than 15 years old. In light of these
    recent revelations and the potential threat environment, it seems to me
    we should be buying fifth-generation fighters such as the F-35 in
    greater, not fewer, numbers. Do you believe cutting the purchase of 57
    F-35As, and a total 124 F-35s, from the FYDP can be justified, given
    this potential threat?
        General Schwartz. Yes, cutting the purchase of 57 F-35As, and a
    total of 124 F-35s, from the FYDP is justified. DOD and the Air Force
    continually assess potential threats and the reduction in the number of
    fifth generation fighters across the FYDP does not significantly add
    risk to the Air Force's ability to meet national security objectives.
    Procurement of F-35 aircraft was reduced in order to place the program
    on more secure footing and cut concurrency risks. Reducing the
    procurement ramp provides appropriate time to develop and test the full
    warfighting capability of the F-35.

        146. Senator Cornyn. General Schwartz, in a recent speech at the
    U.S. Air Force Academy, Secretary Gates said, ``I believe that air
    supremacy--in all its components--will be indispensable to maintaining
    American military strength, deterrence, and global reach for decades to
    come.'' He went on to say, ``the F-22 is far and away the best air-to-
    air fighter ever produced, and it will ensure U.S. command of the skies
    for the next generation.'' In your opinion, do the recent revelations
    regarding the Chinese J-20 indicate that the decision to cancel the F-
    22 program may have been premature and based on flawed or incomplete
    intelligence?
        General Schwartz. The timeline for design and flight testing of the
    J-20 was ahead of intelligence estimates. However, analysis of future
    scenarios nonetheless incorporated possession of fifth generation
    capabilities by other nations. The size of the F-22 fleet is currently
    estimated as capable of supporting expected conflicts. As aircraft such
    as the J-20 come online, continued support of F-22 modernization to
    provide required capabilities versus the demonstrated rapidly evolving
    threat is key to gaining Air Superiority through the complementary
    capabilities of the F-22 and F-35.

                       BUDGET REQUEST FOR MUSEUM FUNDING

        147. Senator Cornyn. Secretary Donley, the Air Force's fiscal year
    2012 DOD budget request includes $14 million to fund preparation and
    delivery of a retired space shuttle at the National Museum of the U.S.
    Air Force (NMUSAF). At a time when Secretary Gates has promised to
    eliminate excess programs and reduce unnecessary expenditures, I am
    disappointed that the Air Force considers this project a priority,
    especially when NASA Administrator Bolden has not yet made a decision
    on the geographic allocation of retired NASA shuttles. Did you consult
    with NASA prior to making this request?
        Secretary Donley. No, the Air Force did not consult with NASA prior
    to making the request for funds; however, the Air Force was acting
    pursuant to NASA guidance. NASA issued a Request for Information to the
    public in January 2010 in which it required potential recipient
    organizations to demonstrate the capability to bear a $28.8 million
    cost to complete display preparation for an orbiter and ferry the
    orbiter to its ultimate display location. NASA plans to retire the
    orbiters beginning in fiscal year 2011 and deliver them and other
    equipment to recipients by the end of fiscal year 2012.
        Per the DOD budget process, any substantial known requirement must
    be included in the President's budget to prevent an unplanned execution
    year bill. Therefore, the Air Force incorporated the retired shuttle
    project in its fiscal year 2012 budget request.
        Ultimately, NASA did not select the NMUSAF as a site for one of the
    retired orbiters and, thus, the $14 million is no longer required.
    However, NASA did select NMUSAF to receive a crew training module and
    other smaller artifacts. The NMUSAF is developing, designing and
    implementing exhibits and Science, Technology, Education, and Math
    (STEM)-related activities as part of an Air Force/NASA partnership.
    Display of these artifacts will further educate the American and
    international public of our achievements in space. The Air Force will
    need as much as $2 million to transport NASA artifacts to the NMUSAF,
    and to purchase exhibit materials and interactive educational
    (especially STEM) displays.
        Space-associated artifacts provide learning opportunities for the
    history of the Air Force's involvement in space programs. NMUSAF
    artifacts and collections inform Air Force personnel and encourage and
    maintain the American public's support for its Air Force. NMUSAF
    provides unique STEM-related educational opportunities and important
    lessons for our servicemen and servicewomen, their families, and the
    general public. The museum is one of the most accessible parts of our
    military establishment and is a popular link between the public and
    military history.

        148. Senator Cornyn. Secretary Donley, how can you justify
    subsidizing this unnecessary museum project at a time when the Federal
    Government is racking up record deficits and when private funding is
    available?
        Secretary Donley. The Air Force is responsible to resource the
    interagency transfer of excess property it obtains from other Federal
    agencies. Per the DOD budget process, any substantial known requirement
    must be included in the President's budget to prevent an unplanned
    execution year bill. Therefore, the Air Force incorporated the retired
    orbiter project in its fiscal year 2012 budget request.
        Private funds were not available for obtaining a retired orbiter.
    The Air Force Museum Foundation, a private organization with IRS
    501(c)(3) status, is primarily chartered to provide for major
    construction needs for NMUSAF; however, its mission does not include
    funding for operations and maintenance functions.

                           T-38 REPLACEMENT AIRCRAFT

        149. Senator Cornyn. Secretary Donley, the average T-38 aircraft is
    over 40 years old. It is my understanding that the Chief of Air
    Education and Training is currently conducting an analysis to determine
    the way ahead for a T-38 replacement aircraft. One solution would be to
    embark on a joint effort to develop a T-38 replacement with a partner
    nation such as India, where a partnership already exists for the U.S.
    military to train Indian aviators. Benefits of a joint development
    effort would include a second stream of investment in the T-38
    replacement, reduction of costs for the Air Force, and strengthening of
    ties with a very important partner nation. Has the Air Force considered
    an effort with a partner nation to develop and deliver a replacement
    for the T-38?
        Secretary Donley. OSD is reviewing the sufficiency of the Analysis
    of Alternatives for the Advanced Pilot Trainer aircraft, which will
    replace the T-38. Once the analysis is complete and a Request for
    Information is sent out to the aviation industry, the Air Force can
    pursue an acquisition strategy that best fits the requirement for the
    replacement trainer.
        The Air Force has not pursued an effort to partner with another
    nation to develop a replacement for the T-38. Formalizing an
    arrangement with a partner nation, determining common requirements, and
    developing a suitable aircraft would take far longer than acquiring a
    currently available platform. A nondevelopmental aircraft offers the
    best opportunity to meet the Air Force's desired schedule.

        150. Senator Cornyn. Secretary Donley, what are the advantages and
    disadvantages of partnering with a nation such as India on the
    development and fielding of a non-combat aircraft such as the T-38?
        Secretary Donley. In general, non-combat aircraft procurement
    involves a commercially available platform that is tailored to meet
    military requirements, and as a result there is not an opportunity for
    joint development. If we were going to develop a new platform,
    potential benefits of a joint development effort include additional
    investment funds, reduction of costs for the Air Force, and
    strengthened ties with allied nations. The potential disadvantages
    include lengthened schedule time, challenge of achieving consensus on
    requirements, potential for one partner's requirements to drive costs,
    and time to develop necessary agreements.
        With respect to India, per its January 2011 Defense Production
    Policy, India prefers indigenous design, development, and manufacture
    of defense equipment, unless Indian industry is unable to make or
    procure the items from indigenous sources. India is developing the
    Indigenous Jet Trainer, HJT-36, which is expected to be operational
    later this year. The BAE Hawk Mk 132 currently serves as the Indian Air
    Force's advanced jet trainer. It entered service in 2010.

        [Whereupon, at 12:04 p.m., the committee adjourned.]